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Hudson Valley Bank Reports Costly SEC Investigation - cbl
Posted February 2, 2012
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James J. Landy
By Richard Rabicoff
Legal expenses from an SEC investigation of its A.R. Schmeidler & Co., Inc. (ARS) subsidiary contributed to Hudson Valley Holding Corp.'s (NYSE: HVB) disappointing fourth-quarter performance. In its SEC filing, Hudson Valley indicates that the quarter's non-interest expense of $19 million reflected the SEC's probe of ARS's investment advisory and brokerage practices.
Hudson Valley expects the investigation and concomitant legal expenses to continue indefinitely, and will include "certain remedial steps" and "certain costs" to settle the issue. The company company concludes that it cannot "predict how long the SEC investigation will last, the exact result, or what the final amount of costs and legal expenses will be."
Hudson Valley shares plunged more than 20 percent to $17.38 on Wednesday after the commercial banking company's earnings missed analyst estimates by roughly 14 cents a share. The Yonkers, New York-based parent of Hudson Valley Bank said it took charge-offs of $60.2 million reflecting a plan to sell $474 million in loans by the middle of this year to comply with an order from the Office of the Comptroller of the Currency to reduce its concentration in commercial real estate and classified loans.
The company regained some ground on Thursday, closing at $17.75, but that was still the lowest closing price since late November of 2011.
Founded in 1982, Hudson Valley Bank operates 36 branch offices, including 18 in Westchester County, 5 in Manhattan, and 4 in Bronx County. The company acquired New York-based A.R. Schmeidler in 2004. Hudson Valley is led by President and CEO James J. Landy.
SEC filing: http://tinyurl.com/7jbvyv8
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