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UNITED STATES
 SECURITIES AND EXCHANGE
    COMMISSION
 Washington, D.C.
    20549
    FORM 10-K
  ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d)
 OF THE SECURITIES EXCHANGE ACT
    OF 1934
  For the fiscal year ended December 31, 2009
  Commission File number 001-34453
  HUDSON VALLEY HOLDING
    CORP.
 (Exact name of registrant as
    specified in its charter)
    New York(State or other jurisdiction of
    incorporation or organization)

13-3148745(I.R.S. Employer
    Identification No.)21 Scarsdale Road, Yonkers, New York(Address of principal executive
    offices)

10707(Zip Code)   Registrants telephone number, including area code:
    (914) 961-6100
  Securities Registered Pursuant to Section 12(b) of the
    Act:
  Name ofeach exchangeon whichTitle of each Class

registeredCommon Stock, ($0.20 par value per share)

The NASDAQ Stock Market LLC     Securities Registered Pursuant to Section 12(g) of the
    Act:
  o x
  o x
  x o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  o x o o
  Rule 12b-2 o x
   Outstanding atMarch 1,Class

2010Common Stock
    ($0.20 par value)

16,025,792      Documents incorporated by reference:




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##### 



FORM
    10-K
 TABLE OF CONTENTS
  Page No.PART IITEM 1

BUSINESS


1ITEM 1A

RISK FACTORS


13ITEM 1B

UNRESOLVED STAFF COMMENTS


24ITEM 2

PROPERTIES


24ITEM 3

LEGAL PROCEEDINGS


25ITEM 4

(REMOVED AND RESERVED)


25PART IIITEM 5

MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


26ITEM 6

SELECTED FINANCIAL DATA


28ITEM 7

MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


30ITEM 7A

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


70ITEM 8

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


72ITEM 9

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


107ITEM 9A

CONTROLS AND PROCEDURES


107ITEM 9B

OTHER INFORMATION


107PART IIIITEM 10

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


108ITEM 11

EXECUTIVE COMPENSATION


108ITEM 12

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT, AND RELATED STOCKHOLDER MATTERS


108ITEM 13

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


108ITEM 14

PRINCIPAL ACCOUNTANT FEES AND SERVICES


108PART IVITEM 15

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES


109SIGNATURES


111EX-10.3EX-10.5EX-10.6EX-10.7EX-11EX-12EX-21EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2




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##### Table of Contents



PART
    I ITEM
    1  BUSINESS  General
              Forward-Looking
    Statements
  Form 10-K
    
    our strategy, financial projections and estimates and their
    underlying assumptions;
    our plans, objectives, expectations or consequences of future
    transactions;
    our future performance, operations, products and services;
    our opportunities for growth, our plans for expansion (including
    opening new branches) and the competition we face in attracting
    and retaining customers;
    economic conditions generally and in our market area in
    particular, which may affect the ability of borrowers to repay
    their loans and the value of real property or other property
    held as collateral for such loans;
    demand for our products and services; 1




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
    future provisions for loan losses, increases in non performing
    assets, impairment of certain investments and our allowance for
    loan losses;
    interest rates;
    the regulatory environment in which we operate, our regulatory
    compliance and future regulatory requirements;
    our intention and ability to maintain regulatory capital above
    the levels required by the Office of the Comptroller of the
    Currency, or the OCC, for the Bank and the levels required for
    us to be well-capitalized, or such higher capital
    levels as may be required;
    proposed legislative and regulatory action affecting us and the
    financial services industry;
    future Federal Deposit Insurance Corporation, or FDIC, special
    assessments or changes to regular assessments;
    our use of the net proceeds from our offering of common
    stock; and
    limitations on dividends payable by the Company or the Bank.    Subsidiaries
    of the Bank
                         2




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Employees
    Our
    Market Area
  out-of-area
           3




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Competition
            not-for-profit
 4




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Lending
    Real estate


82.2
%Commercial and industrial


15.1Individuals


1.5Lease financing


1.2Total


100.0
%         (ii)
    the establishment of individual internal comfort levels of
    lending authority below HVBs legal lending authority,(iii)
    the involvement by senior management and the Board of Directors
    in the loan approval process for designated categories, types or
    amounts of loans,              Deposits
     5




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Portfolio
    Management Services
    Other
    Services
    Segments
    Supervision
    and Regulation
           6




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Emergency
    Economic Stabilization Act of 2008
   7




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Temporary
    Liquidity Guarantee Program
    American
    Recovery and Reinvestment Act of 2009
    Financial
    Regulatory Reform Proposals
    Regulation
    of HVB
    Dividend
    Limitations
   8




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Capital
    Standards
           9




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Insurance
    of Deposit Account
          Loans
    to Related Parties
    FIRREA
  FDIC-insured FDIC-insured
   10




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Community
    Reinvestment Act and Fair Lending Developments
    USA
    Patriot Act
    Sarbanes-Oxley
    Act of 2002
      
    a prohibition on personal loans made or arranged by the issuer
    to its directors and executive officers (except for loans made
    by a bank subject to Regulation O);
    independence requirements for audit committee members;
    independence requirements for company auditors;
    certification of financial statements within the Annual Report
    on
    Form 10-K
    and Quarterly Reports on
    Form 10-Q
    by the chief executive officer and the chief financial officer;
    the forfeiture by the chief executive officer and the chief
    financial officer of bonuses or other incentive-based
    compensation and profits from the sale of an issuers
    securities by such officers in the twelve month period following
    initial publication of any financial statements that later
    require restatement due to corporate misconduct; 11




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
    disclosure of off-balance sheet transactions;
    two-business day filing requirements for insiders filing on
    Form 4;
    disclosure of a code of ethics for financial officers and filing
    a Current Report on
    Form 8-K
    for a change in or waiver of such code;
    the reporting of securities violations up the ladder
    by both in-house and outside attorneys;
    restrictions on the use of non-GAAP financial measures in press
    releases and SEC filings;
    the formation of a public accounting oversight board;
    various increased criminal penalties for violations of
    securities laws; and
    an assertion by management with respect to the effectiveness of
    internal control over financial reporting.  Governmental
    Monetary Policy
      Investment
    Advisers Act of 1940
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K,
 12




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ITEM
    1A  RISK FACTORS  Risks
    Related to Our Business
  Further
    increases in our nonperforming loans may occur and adversely
    affect our results of operations and financial
    condition.
  30-89 days
      As
    regulated entities, the Company and the Bank are subject to
    extensive supervision and prudential regulation, including
    maintaining certain capital requirements, which may limit their
    operations and potential growth. Failure to meet any such
    requirements would subject us to regulatory action.
     13




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Further
    increases to the allowance for loan losses may cause our
    earnings to decrease.
    Our
    concentration of commercial real estate loans has resulted in
    increased loan losses and could result in further increases in
    future periods.
   14




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Declines
    in value may adversely impact the carrying amount of our
    investment portfolio and result in
    other-than-temporary
    impairment charges.
  other-than-temporary.
  A
    prolonged or worsened downturn in the economy in general and the
    real estate market in our key market areas in particular would
    adversely affect our loan portfolio and our growth
    potential.
  not-for-profit
     15




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Difficult
    market conditions have adversely affected our
    industry.
      Higher
    FDIC deposit insurance premiums and assessments could adversely
    affect our financial condition.
         16




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A
    substantial decline in the value of our Federal Home Loan Bank
    of New York common stock may adversely affect our financial
    condition.
    Certain
    of our goodwill and intangible assets may become impaired in the
    future.
    The
    opening of new branches could reduce our
    profitability.
    Our
    income is sensitive to changes in interest rates.
      We may
    need to raise additional capital in the future and such capital
    may not be available when needed or at all.
   17




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Our
    markets are intensely competitive, and our principal competitors
    are larger than us.
      Impact of
    inflation and changing prices
    Extensive
    Regulation and Supervision.
  and/or and/or
  Market
    reform efforts may result in our businesses becoming subject to
    extensive and pervasive additional regulations.
   18




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We may
    incur liabilities under federal and state environmental laws
    with respect to foreclosed properties.
  clean-up. clean-up
  Technological
    change may affect our ability to compete.
     19




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Changes
    in Accounting Policies or Accounting Standards.
      We Are
    Subject to Environmental Liability Risk Associated With Lending
    Activities.
    Actions
    in connection with stockholder preemptive rights may subject us
    to litigation and related costs.
   20




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Risks
    Relating to Our Common Stock
  Market
    conditions and other factors may affect the value of our common
    stock.
    
    conditions in the credit, mortgage and housing markets, the
    markets for securities relating to mortgages or housing, and
    developments with respect to financial institutions generally;
    interest rates;
    the market for similar securities;
    government action or regulation;
    general economic conditions or conditions in the financial
    markets;
    our past and future dividend practice; and
    our financial condition, performance, creditworthiness and
    prospects.    There may
    be future dilution of our common stock.
    Future
    offerings of debt, which would be senior to our common stock
    upon liquidation, or preferred equity securities that may be
    senior to our common stock for purposes of dividend
    distributions or upon liquidation, may adversely affect the
    market price of our common stock.
    winding-up
 21




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We may
    further reduce or eliminate the cash dividend on our common
    stock.
    Government
    regulation restricts our ability to pay cash
    dividends.
            Our
    common stock price may fluctuate due to the potential sale of
    stock by our existing stockholders.
   22




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Our
    earnings may be subject to increased volatility.
    
    a continuation of the current economic downturn, or further
    adverse economic developments;
    instability in the financial markets;
    our inability to generate or maintain creditworthy customer
    relationships in our primary markets;
    unexpected increases in operating costs, including special
    assessments for FDIC insurance;
    further credit deterioration in our loan portfolio or
    unanticipated credit deterioration, or defaults by our loan
    customers;
    credit deterioration or defaults by issuers of securities within
    our investment portfolio; or
    a decrease in our common stock price below its book value
    potentially impacting the valuation of our goodwill.  other-than-temporary),
  Our
    certificate of incorporation, the New York Business Corporation
    Law and federal banking laws and regulations may prevent a
    takeover of our company.
   23




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ITEM
    1B  UNRESOLVED STAFF COMMENTS   ITEM
    2  PROPERTIES      Address

City

County

State37 East Main Street

Elmsford

Westchester

New York61 South Broadway

Yonkers

Westchester

New York150 Lake Avenue

Yonkers

Westchester

New York865 McLean Avenue

Yonkers

Westchester

New York512 South Broadway

Yonkers

Westchester

New York21 Scarsdale Road

Yonkers

Westchester

New York664 Main Street

Mount Kisco

Westchester

New York369 East 149th Street

Bronx

Bronx

New York2256 Second Avenue

Manhattan

New York

New York     Address

City

County

State35 East Grassy Sprain Road

Yonkers

Westchester

New York403 East Sandford Boulevard

Mount Vernon

Westchester

New York1835 East Main Street

Peekskill

Westchester

New York500 Westchester Avenue

Port Chester

Westchester

New York501 Marble Avenue

Pleasantville

Westchester

New York328 Central Avenue

White Plains

Westchester

New York5 Huguenot Street

New Rochelle

Westchester

New York40 Church Street

White Plains

Westchester

New York875 Mamaroneck Avenue

Mamaroneck

Westchester

New York399 Knollwood Road

White Plains

Westchester

New York111 Brook Street

Eastchester

Westchester

New York3130 East Tremont Avenue

Bronx

Bronx

New York975 Allerton Avenue

Bronx

Bronx

New York1042 Westchester Avenue

Bronx

Bronx

New York16 Court Street

Brooklyn

Kings

New York60 East 42nd Street

Manhattan

New York

New York233 Broadway

Manhattan

New York

New York350 Park Avenue

Manhattan

New York

New York112 West 34th Street

Manhattan

New York

New York162-05 Crocheron Avenue

Flushing

Queens

New York254 South Main Street

New City

Rockland

New York1055 Summer Street

Stamford

Fairfield

Connecticut420 Post Road West

Westport

Fairfield

Connecticut500 West Putnam Avenue

Greenwich

Fairfield

Connecticut 24




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##### Table of Contents



Address

City

County

State200 Post Road

Fairfield

Fairfield

Connecticut2505 Main Street

Stratford

Fairfield

Connecticut54 Broad Street

Milford

New Haven

Connecticut          ITEM
    3  LEGAL PROCEEDINGS   ITEM
    4  (REMOVED AND RESERVED) 25




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PART
    II ITEM 5 
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER
    MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES      2009High


LowThird Quarter (from September 21, 2009)

$
27.67


$
25.50Fourth Quarter


28.57



22.32       Form 10-K.
  Form 10-K.
   26




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Stockholder
    Return Performance Graph
    Total
    Return Performance
  
  Period EndingIndex

12/31/04


12/31/05


12/31/06


12/31/07


12/31/08


12/31/09Hudson Valley Holding Corp.


100.00



89.01



95.94



121.50



119.14



66.96Russell 2000


100.00



104.55



123.76



121.82



80.66



102.58SNL Bank $1B-$5B


100.00



98.29



113.74



82.85



68.72



49.26    27




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ITEM 6 
    SELECTED FINANCIAL DATA  Form 10-K. Form 10-K. Form 10-K.
  Year Ended December 31,2009


2008


2007


2006


2005(000s except share data)Operating Results:Total interest income

$
136,579


$
140,112


$
150,367


$
141,157


$
110,364Total interest expense


22,304



30,083



46,299



41,600



25,306Net interest income


114,275



110,029



104,068



99,557



85,058Provision for loan losses


24,306



11,025



1,470



2,130



2,059Income before income taxes


26,322



46,523



52,742



52,094



46,983Net income


19,012



30,877



34,483



34,059



30,945Basic earnings per common share


1.53



2.58



2.91



2.86



2.60Diluted earning per common share


1.50



2.50



2.80



2.77



2.51Weighted average shares outstanding


12,404,305



11,969,937



11,844,712



11,915,980



11,885,403Diluted weighted average share outstanding


12,650,970



12,375,096



12,319,630



12,298,810



12,306,516Cash dividends per common share

$
1.27


$
1.68


$
1.50


$
1.33


$
1.15   December 31,2009


2008


2007


2006


2005Financial position:Securities

$
522,285


$
671,355


$
780,251


$
917,660


$
883,992Loans, net


1,772,645



1,677,611



1,289,641



1,205,243



1,009,819Total assets


2,665,556



2,540,890



2,330,748



2,291,734



2,032,721Deposits


2,172,615



1,839,326



1,812,542



1,626,441



1,407,996Borrowings


176,903



466,398



286,941



456,559



435,212Stockholders equity


293,678



207,501



203,687



185,566



169,789  28




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##### Table of Contents



Financial
    Ratios
    December 31,2009

2008

2007

2006

2005Earnings RatiosNet income as a percentage of:Average earning assets


0.79
%


1.39
%


1.59
%


1.64
%


1.67
%Average total assets


0.74



1.30



1.49



1.54



1.58Average total stockholders equity


8.74



14.76



18.03



19.40



18.77Adjusted average total stockholders equity(1)


8.78



14.55



17.61



18.57



18.54Capital RatiosAverage total stockholders equity to average total assets


8.43
%


8.79
%


8.27
%


7.95
%


8.44
%Average net loans as a multiple of average total
    stockholders equity


8.00



7.09



6.45



6.44



5.63Leverage capital


10.17
%


7.53
%


8.31
%


7.74
%


8.30
%Tier 1 capital (to risk weighted assets)


13.94



10.11



12.61



12.32



13.82Total risk-based capital (to risk weighted assets)


15.16



11.33



13.77



13.49



14.94OtherAllowance for loan losses as a percentage of year-end loans


2.13
%


1.33
%


1.33
%


1.37
%


1.32
%Loans (net) as a percentage of year-end total assets


66.50



66.02



55.33



52.59



49.68Loans (net) as a percentage of year-end total deposits


81.59



91.21



71.15



74.10



71.72Securities as a percentage of year-end total assets


19.59



26.42



33.48



40.04



41.02Average interest earning assets as a percentage of average
    interest bearing liabilities


145.87



146.90



146.83



148.34



153.96Dividends per share as a percentage of diluted earnings per share


84.67



67.20



53.57



48.01



45.82    (1)
    Adjusted average stockholders equity excludes unrealized
    gains, net of tax, of $981 in 2009 and unrealized losses, net of
    tax, of $2,955, $4,521, $7,846 and $2,108 in 2008, 2007, 2006
    and 2005, respectively. Management believes this alternate
    presentation more closely reflects actual performance, as it is
    more consistent with the Companys stated asset/liability
    management strategies, which have not resulted in significant
    realization of temporary market gains or losses on securities
    available for sale which were primarily related to changes in
    interest rates. As noted in the Companys 2010 Proxy
    Statement, which is incorporated herein by reference, net income
    as a percentage of adjusted average stockholders equity is
    one of several factors utilized by management to determine total
    compensation. 29




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ITEM 7 
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS  Form 10-K.
  Overview
    of Managements Discussion and Analysis
  Form 10-K. Form 10-K.
       30




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loan-to-value sub-prime
     31




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32




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Critical
    Accounting Policies
  Application of Critical Accounting Policies 
  Securities  other-than-temporary other-than-temporary other-than-temporary,
  Allowance for Loan Losses 
  and/or
 33




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Troubled-debt Restructurings 
  Other Real Estate Owned (OREO) 
  Goodwill and Other Intangible Assets and/or
 34




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Income Taxes 
  Stock-Based Compensation
  Results
    of Operations for Each of the Three Years in the Period Ended
    December 31, 2009
  Summary
    of Results
     35




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loan-to-value
  available-for-sale available-for-sale. available-for-sale
 36




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37




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Average
    Balances and Interest Rates
    (000s except percentages)Year ended December 31,2009


2008


2007Average





Yield/


Average





Yield/


Average





Yield/Balance


Interest(3)


Rate


Balance


Interest(3)


Rate


Balance


Interest(3)


RateASSETSInterest earning assets:Deposits in banks

$
35,508


$
81



0.23
%

$
5,362


$
152



2.83
%

$
10,537


$
527



5.00
%Federal funds sold


43,910



100



0.23



24,899



827



3.32



58,603



2,938



5.01Securities:(1)Taxable


413,781



18,077



4.37



507,943



24,873



4.90



665,761



32,868



4.94Exempt from federal income taxes


184,772



11,783



6.38



208,730



13,274



6.36



214,093



14,022



6.55Loans, net(2)


1,739,421



110,662



6.36



1,483,196



105,632



7.12



1,233,360



104,920



8.51Total interest earning assets


2,417,392



140,703



5.82



2,230,130



144,758



6.49



2,182,354



155,275



7.12Non interest earning assets:Cash and due from banks


43,197











49,786











51,887Other assets


118,118











105,478











85,390Total non interest earning assets


161,315











155,264











137,277Total assets

$
2,578,707










$
2,385,394










$
2,319,631LIABILITIES AND STOCKHOLDERS EQUITYInterest bearing liabilities:Deposits:Money market

$
787,347


$
9,145



1.16
%

$
642,784


$
10,498



1.63
%

$
560,325


$
15,052



2.69
%Savings


101,846



503



0.49
%


95,296



708



0.74



93,223



775



0.83Time


263,065



3,899



1.48



263,506



6,757



2.56



276,908



10,787



3.90Checking with interest


250,314



1,048



0.42



149,793



1,072



0.72



153,446



1,545



1.01Securities sold under repurchase agreements and other short-term
    borrowings


101,818



536



0.53



161,749



2,187



1.35



167,255



7,809



4.67Other borrowings


153,799



7,173



4.66



201,687



8,861



4.39



230,014



10,331



4.49Total interest bearing liabilities


1,658,189



22,304



1.35



1,514,815



30,083



1.99



1,481,171



46,299



3.13Non interest bearing liabilities:Demand deposits


675,953











625,630











612,346Other liabilities


28,049











32,797











30,292Total non interest bearing liabilities


704,002











658,427











642,638Stockholders equity(1)


216,516











212,152











195,822Total liabilities and stockholders equity(1)

$
2,578,707










$
2,385,394










$
2,319,631Net interest earnings





$
118,399










$
114,675










$
108,976Net yield on interest earning assets










4.90
%










5.14
%










4.99
%   (1)
    Excludes unrealized gains and losses on securities
    available for sale.(2)
    Includes loans classified as non-accrual.(3)
    The data contained in the table has been adjusted to a tax
    equivalent basis, based on the Companys federal statutory
    rate of 35 percent.(4)
    Effects of adjustments to a tax equivalent basis were increases
    of $4,124, $4,646 and $4,908 for the years ended
    December 31, 2009, 2008 and 2007, respectively. The effects
    of non-GAAP presentations described in (1) and (3) above are
    contained in the following table: 38




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HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
    Average Balances and Interest Rates
    Non-GAAP disclosures
 Year ended December 31,2009


2008


2007Total interest earning assets:As reported

$
2,418,855


$
2,225,320


$
2,174,862Unrealized gain (loss) on securities available-for-sale(1)


1,463



(4,810
)


(7,492
)Adjusted total interest earning assets

$
2,417,392


$
2,230,130


$
2,182,354Net interest earnings:As reported

$
114,275


$
110,029


$
104,068Adjustment to tax equivalency basis(2)


4,124



4,646



4,908Adjusted net interest earnings

$
118,399


$
114,675


$
108,976Net yield on interest earning assets:As reported


4.72
%


4.94
%


4.79
%Effects of (1) and (2) above


0.18
%


0.20
%


0.20
%Adjusted net interest earnings


4.90
%


5.14
%


4.99
%
  39




---



##### Table of Contents



Interest
    Differential
    (000s)2009 Compared to 2008


2008 Compared to 2007Increase (Decrease)


Increase (Decrease)Due to Change in


Due to Change inVolume


Rate


Total(1)


Volume


Rate


Total(1)Interest income:Deposits in banks

$
855


$
(926
)

$
(71
)

$
(259
)

$
(116
)

$
(375
)Federal funds sold


631



(1,358
)


(727
)


(1,690
)


(421
)


(2,111
)Securities:Taxable


(4,611
)


(2,185
)


(6,796
)


(7,791
)


(204
)


(7,995
)Exempt from federal income taxes


(1,524
)


33



(1,491
)


(351
)


(397
)


(748
)Loans, net


18,248



(13,218
)


5,030



21,253



(20,541
)


712Total interest income


13,599



(17,654
)


(4,055
)


11,162



(21,679
)


(10,517
)Interest expense:Deposits:Money market


2,361



(3,714
)


(1,353
)


2,215



(6,769
)


(4,554
)Savings


49



(254
)


(205
)


17



(84
)


(67
)Time


(11
)


(2,847
)


(2,858
)


(522
)


(3,508
)


(4,030
)Checking with interest


719



(743
)


(24
)


(37
)


(436
)


(473
)Securities sold under repurchase agreements and other short-term
    borrowings


(810
)


(841
)


(1,651
)


(257
)


(5,365
)


(5,622
)Other borrowings


(2,104
)


416



(1,688
)


(1,272
)


(198
)


(1,470
)Total interest expense


204



(7,983
)


(7,779
)


144



(16,360
)


(16,216
)Increase in interest differential

$
13,395


$
(9,671
)

$
3,724


$
11,018


$
(5,319
)

$
5,699   (1)
    Changes attributable to both rate and volume are allocated
    between the rate and volume variances based upon their absolute
    relative weights to the total change.  Net
    Interest Income
   40




---



##### Table of Contents



Average
    Balances and Interest Rates
     41




---



##### Table of Contents



42




---



##### Table of Contents



2009


2008


2007Average interest rate on:Total average interest earning assets


5.82
%


6.49
%


7.12
%Total average interest bearing liabilities


1.35



1.99



3.13Total interest rate spread


4.47



4.50



3.99     Provision
    for Loan Losses
    Non
    Interest Income
     43




---



##### Table of Contents



Non
    Interest Expense
       2009


2008


2007Employees at December 31,Full Time Employees


463



478



431Part Time Employees


35



55



40   44




---



##### Table of Contents



(000s except percentages)2009


2008


2007Salaries and Employee BenefitsSalaries

$
30,294


$
29,122


$
26,210Payroll Taxes


2,468



2,357



2,146Medical Plans


2,168



2,356



1,771Incentive Compensation Plans


780



4,839



4,320Employee Retirement Plans


2,536



2,661



2,267Other


442



522



859Total

$
38,688


$
41,857


$
37,573Percentage of total non interest expense


52.2
%


58.9
%


58.1
%            45




---



##### Table of Contents



2009


2008


2007(000s except percentages)Other Operating ExpensesOther insurance

$
100


$
163


$
65Stationery and printing


1,160



1,619



1,446Communications expense


779



890



1,411Courier expense


774



941



1,050Other loan expense


1,961



685



453Outside services


3,810



3,123



2,441Dues, meetings and seminars


289



463



560Other


1,984



2,394



2,723Total

$
10,857


$
10,278


$
10,149Percentages of total non interest expense


14.6
%


14.5
%


15.7
%       Income
    Taxes
      Financial
    Condition at December 31, 2009 and 2008
  Cash
    and Due from Banks
   46




---



##### Table of Contents



Securities
    Portfolio
            2009
    (000s)
  GrossUnrealized


Estimated FairClassified as Available for Sale

Amortized Cost


Gains


Losses


ValueU.S. Treasury and government agencies

$
4,995


$
33


$
20


$
5,008Mortgage-backed securities


312,996



5,600



2,208



316,388Obligations of states and political subdivisions


158,465



5,897



91



164,271Other debt securities


14,712



14



9,904



4,822Total debt securities


491,168



11,544



12,223



490,489Mutual funds and other equity securities


9,172



1,109



135



10,146Total

$
500,340


$
12,653


$
12,358


$
500,635Classified as Held to
    MaturityMortgage-backed securities

$
16,515


$
733


$
1


$
17,247Obligations of states and political subdivisions


5,135



346







5,481Total

$
21,650


$
1,079


$
1


$
22,728  47




---



##### Table of Contents



2008
    (000s)
  GrossUnrealized


Estimated FairClassified as Available for Sale

Amortized Cost


Gains


Losses


ValueU.S. Treasury and government agencies

$
45,206


$
288


$
79


$
45,415Mortgage-backed securities


371,963



3,487



1,313



374,137Obligations of states and political subdivisions


200,858



2,341



1,710



201,489Other debt securities


20,082



227



8,665



11,644Total debt securities


638,109



6,343



11,767



632,685Mutual funds and other equity securities


9,170



613



105



9,678Total

$
647,279


$
6,956


$
11,872


$
642,363Classified as Held to
    MaturityMortgage-backed securities

$
23,859


$
525


$
78


$
24,306Obligations of states and political subdivisions


5,133



108



1



5,240Total

$
28,992


$
633


$
79


$
29,546   2007
    (000s)
  GrossUnrealized


Estimated FairClassified as Available for Sale

Amortized Cost


Gains


Losses


ValueU.S. Treasury and government agencies

$
107,083


$
90


$
384


$
106,789Mortgage-backed securities


384,711



628



6,464



378,875Obligations of states and political subdivisions


204,184



3,555



191



207,548Other debt securities


22,231



39



791



21,479Total debt securities


718,209



4,312



7,830



714,691Mutual funds and other equity securities


31,145



682



25



31,802Total

$
749,354


$
4,994


$
7,855


$
746,493Classified as Held to
    MaturityMortgage-backed securities

$
28,626


$
41


$
178


$
28,489Obligations of states and political subdivisions


5,132



148







5,280Total

$
33,758


$
189


$
178


$
33,769     Within 1 Year


After 1 Year but Within 5 Years


After 5 Years Within 10 Years


After 10 Years


TotalAmount


Yield


Amount


Yield


Amount


Yield


Amount


Yield


Amount


YieldU.S. Treasuries and government agencies

$
2,002



4.61
%

$
2,994



0.74
%

















$
4,996



2.29
%Mortgage-backed securities


126,481



4.30
%


167,464



4.23
%

$
32,009



4.77
%

$
3,557



4.74
%


329,511



4.32
%Obligations of states and political subdivisions


45,696



6.49
%


91,555



6.22
%


22,544



5.82
%


4,179



6.88
%


163,974



6.26
%Other debt securities


13,825



2.20
%


8



7.64
%


504



7.64
%










14,337



2.40
%Total

$
188,004



4.68
%

$
262,021



4.89
%

$
55,057



5.23
%

$
7,736



5.90
%

$
512,818



4.86
%Estimated fair value

$
182,026






$
267,345






$
55,918






$
7,928






$
513,217  48




---



##### Table of Contents



49




---



##### Table of Contents



Loan
    Portfolio
  Real Estate Loans:
     50




---



##### Table of Contents



1-4 unit
  sub-prime loan-to-value
  Commercial and Industrial Loans:
 51




---



##### Table of Contents



Loans to Individuals and Leasing:
      
    Increases of $140.7 million and $287.9 million in 2009 and 2008,
    respectively, in commercial real estate mortgages. The increases
    were due to increased activity in commercial mortgages,
    Increases of $0.9 million and $43.0 million in 2009 and 2008,
    respectively, in construction loans. The increase in 2009
    resulted from a slightly higher volume of originations. The
    increases in 2008 resulted from a higher volume of originations.   
    Increases in residential real estate mortgages of $45.1 million
    and $84.9 million in 2009 and 2008, respectively, primarily as a
    result of increased activity principally in multi-family loans,
    Decreases of $83.2 million and $18.9 million in 2009 and 2008,
    respectively, in commercial and industrial loans. The decreases
    were primarily the result of the Companys greater emphasis
    on the origination of real estate secured loans, together with
    an increase in charge-offs.
    Increase of $5.5 million in 2009 and a decrease of $8.2 million
    in 2007  in loans to individuals, and
    Increases of $2.3 million and $6.0 million in 2009 and 2008,
    respectively, in lease financings.    (000s)2009


2008


2007


2006


2005Real Estate:Commercial

$
783,597


$
642,923


$
355,044


$
290,185


$
220,384Construction


255,660



254,837



211,837



252,941



178,731Residential


454,532



409,431



324,488



289,553



276,384Commercial and industrial


274,860



358,076



377,042



355,214



316,907Individuals


26,970



21,536



29,686



28,777



25,632Lease financing


20,810



18,461



12,463



8,766



8,348Total


1,816,429



1,705,264



1,310,560



1,225,436



1,026,386Deferred loan fees


(5,139
)


(5,116
)


(3,552
)


(3,409
)


(3,042
)Allowance for loan losses


(38,645
)


(22,537
)


(17,367
)


(16,784
)


(13,525
)Loans, net

$
1,772,645


$
1,677,611


$
1,289,641


$
1,205,243


$
1,009,819  52




---



##### Table of Contents



(000s except percentages)After 1Within


Year but


After1


Within


5Year


5 Years


Years


Total


PercentLoans:Real Estate  commercial

$
140,855


$
389,872


$
252,870


$
783,597



59.6
%Real Estate  construction


206,120



49,540







255,660



19.5Commercial & industrial


97,866



78,413



98,581



274,860



20.9Total

$
444,841


$
517,825


$
351,451


$
1,314,117



100.0
%Rate sensitivity:Fixed or predetermined interest rates

$
120,910


$
459,801


$
322,420


$
903,131



68.7
%Floating or adjustable interest rates


323,931



58,024



29,031



410,986



31.3Total

$
444,841


$
517,825


$
351,451


$
1,314,117



100.0
%Percent


33.9%



39.4%



26.7%



100.0%       (000s except percentages)December 31,2009

2008

2007

2006

2005Non-Accrual loans at period end

$
50,590


$
11,284


$
10,719


$
5,572


$
3,837Loans past due 90 days or more and still accruing


6,941



7,019



3,953



3,879



3,522Other Real Estate Owned


9,211



5,467











Additional interest income that would have been recorded if
    these borrowers had complied with contractual loan terms


3,032



875



933



474



283    53




---



##### Table of Contents



(000s except percentages)December 31,2009


2008


2007


2006


2005Loans Past Due 90 Days or More
    and Still Accruing:Real Estate:Commercial

$
6,210


$
897


$
1,865







Construction






5,797






$
894


$
3,190Residential


401



325



767







167Total Real Estate


6,611



7,019



2,632



894



3,357Commercial & Industrial


273







1,237



2,934



145Lease Financing and Individuals


57







84



51



20Total Loans Past Due 90 Days or
    More and Still Accruing


6,941



7,019



3,953



3,879



3,522Non-Accrual Loans:Real Estate:Commercial


20,957



2,241



143



658



496Construction


10,057



2,824



4,646



1,799



1,599Residential


15,621



4,618



340



761



845Total Real Estate


46,635



9,683



5,129



3,218



2,940Commercial & Industrial


3,821



1,601



5,590



2,346



894Lease Financing and Individuals


134











8



Total Non-Accrual Loans


50,590



11,284



10,719



5,572



3,834Other Real Estate Owned


9,211



5,467











Total Nonperforming Assets

$
66,742


$
23,770


$
14,672


$
9,451


$
7,356Nonperforming assets to total assets at year end


2.50
%


0.94
%


0.63
%


0.41
%


0.36
%   Non-accrual
  Non-accrual
  Non-accrual
  Non-accrual
 54




---



##### Table of Contents



Non-accrual
      loan-to-value sub-prime
         55




---



##### Table of Contents



Allowance
    for Loan Losses
        (000s)Change





ChangeDecember 31,


During


December 31,


During


December 31,2009


2009


2008


2008


2007ComponentsSpecific:Real Estate:Commercial


















Construction

$
125


$
125






$
(500
)

$
500Residential


2,478



2,478







(950
)


950Commercial and Industrial


496



496







(207
)


207Lease Financing and individuals


475



475







(120
)


120Total Specific component

$
3,574



3,574







(1,777
)

$
1,777Formula:Real Estate:Commercial

$
15,273


$
7,053


$
8,220


$
3,993


$
4,227Construction


5,677



2,007



3,670



509



3,161Residential


7,228



3,034



4,194



1,226



2,968Commercial and Industrial


6,830



558



6,272



1,227



5,045Lease Financing and individuals


63



(118
)


181



(8
)


189Total Formula component

$
35,071



12,534


$
22,537


$
6,947


$
15,590Total Allowance

$
38,645






$
22,537






$
17,367Net Change






16,108







5,170Net Charge-offs






(8,198
)






(5,855
)Provision for loan losses





$
24,306






$
11,025   56




---



##### Table of Contents



Change





Change





ChangeDuring


December 31,


During


December 31,


During


December 31,2007


2006


2006


2005


2005


2004ComponentsSpecific:Real Estate:Commercial

















$
(590
)

$
590Construction

$
500



















Residential


150


$
800


$



$
800



800



Commercial and Industrial


(471
)


678



525



153



153



Lease Financing and individuals


(197
)


317



(30
)


347



(678
)


1,025Total Specific component


(18
)

$
1,795



495


$
1,300



(315
)

$
1,615Formula:Real Estate:Commercial

$
550


$
3,677


$
678


$
2,999


$
500


$
2,499Construction


(811
)


3,972



732



3,240



540



2,699Residential


316



2,652



489



2,163



361



1,802Commercial and Industrial


394



4,651



858



3,793



633



3,161Lease Financing and individuals


152



37



7



30



5



25Total Formula component


601


$
14,989



2,764


$
12,225



2,039


$
10,186Total Allowance





$
16,784






$
13,525






$
11,801Net Change


583







3,259







1,724Amount Acquired


(887
)






1,529







Net Charge-offs

$
1,470







(400
)






(335
)Provision for loan losses









$
2,130






$
2,059       2009
  
    Economic and business conditions  The volatility in
    energy costs and the cost of raw materials used in construction,
    the demand for and value of real estate, the primary collateral
    for the Companys loans, and the 57




---



##### Table of Contents



level of real estate taxes within the Companys market
    area, together with the general state of the economy, trigger
    economic uncertainty. During 2009, these factors generally
    continued to worsen, particularly in the second quarter.
    Although there may be indications that the economic downturn has
    bottomed out, we believe any economic recovery will be a slow
    process. In addition, during the fourth quarter of 2008 and
    continuing through 2009, housing prices have significantly
    declined and the availability of mortgage financing continues to
    be limited. We have considered these trends in determining the
    formula component of the allowance for loan losses.  
    Concentration  The primary collateral for the
    Companys loans is real estate, particularly commercial
    real estate. The current economic downturn has had a severely
    negative effect on activity and values throughout the real
    estate industry, which has heightened risk associated with this
    concentration. Therefore, consideration of the changes in levels
    of risk associated with concentrations resulting from adverse
    conditions in the marketplace is part of the determination of
    the formula component of the allowance.
    Credit risk  Construction loans currently have a
    higher degree of risk than other types of loans which the
    Company makes, since repayment of the loans is generally
    dependent on the borrowers ability to successfully
    construct and sell or lease completed properties. Changes in
    concentration and the associated changes in various risk factors
    are considered in the determination of the formula component of
    the allowance. During the year ended December 31, 2009, the
    market for new construction has continued to slow significantly
    in the Companys primary market area. Houses are taking
    longer to sell and prices have declined. We have considered
    these trends in determining the formula component of the
    allowance for loan losses.
    Asset quality  Changes in the amount of nonperforming
    loans, classified loans, delinquencies, and the results of the
    Companys periodic loan review process are also considered
    in the process of determining the formula component. During the
    year ended December 31, 2009, nonperforming assets and
    delinquencies increased substantially. We believe the overall
    increase in nonperforming assets in 2009 is due to lagging
    effects of the economic downturn within the economy and our
    local market area.
    Loan Participations  We purchase loan participations
    from a number of banks, including some outside our primary
    market area. While we review each loan and make our own
    determination regarding whether to participate in the loan, we
    rely on the other banks knowledge of their customer and
    marketplace. Since many of these relationships are new, we do
    not yet have an established record of performance and,
    therefore, any probable losses with respect to these new loan
    participation relationships is considered in the determination
    of the formula component of the allowance for loan losses  2008
  
    Economic and business conditions  The volatility in
    energy costs and the cost of raw materials used in construction,
    the demand for and value of real estate, the primary collateral
    for the Companys loans, and the level of real estate taxes
    within the Companys market area, together with the general
    state of the economy, trigger economic uncertainty. During the
    year ended December 31, 2008, these factors have generally
    worsened. Further deterioration in the economy in general and
    business conditions in the Companys primary market area
    continue. During the fourth quarter, housing prices have
    significantly declined and the availability of mortgage
    financing is limited. We have considered these trends in
    determining the formula component of the allowance for loan
    losses.
    Credit risk  Construction loans currently have a
    higher degree of risk than other types of loans which the
    Company makes, since repayment of the loans is generally
    dependent on the borrowers ability to successfully
    construct and sell or lease completed properties. Changes in
    concentration and the associated changes in various risk factors
    are considered in the determination of the formula component of
    the allowance. During the year ended December 31, 2008, the
    market for new construction has slowed significantly in the
    Companys primary market area. Houses are taking longer to
    sell and prices have declined. We have considered these trends
    in determining the formula component of the allowance for loan
    losses.
    Asset quality  Changes in the amount of nonperforming
    loans, classified loans, delinquencies, and the results of the
    Companys periodic loan review process are also considered
    in the process of determining the 58




---



##### Table of Contents



formula component. During the year ended December 31, 2008,
    nonperforming assets increased. We believe this increase is due
    to current trends within the economy and our local market area.  
    Loan Participations  We will purchase loan
    participations from a number of banks, including some outside
    our primary market area. While we review each loan and make our
    own determination regarding whether to participate in the loan,
    we rely on the other banks knowledge of their customer and
    marketplace. Since many of these relationships are new, we do
    not yet have an established record of performance and,
    therefore, any probable losses with respect to these new loan
    participation relationships is considered in the determination
    of the formula component of the allowance for loan losses.  2007
  
    Economic and business conditions  Indications of
    increased inflation, such as the pronounced rise in energy
    costs, increases in the cost of raw materials used in
    construction and significant increases in real estate taxes
    within the Companys market area, together with the general
    slowdown in real estate activity and the recent crisis in the
    sub-prime mortgage market have had negative effects on the
    demand for and value of real estate, the primary collateral for
    the Companys loans, and the ability of borrowers to repay
    their loans. Consideration of such events that trigger economic
    uncertainty or possible slowing economic conditions are part of
    the determination of the formula component of the allowance.
    Concentration  Construction loans totaled
    $211.8 million or 16.4 percent of net loans at
    December 31, 2007. These loans currently have a higher
    degree of risk than other types of loans which the Company
    makes, since repayment of the loans is generally dependent on
    the borrowers ability to successfully construct and sell
    or lease completed properties. During the year ended
    December 31, 2007, the number of completed properties and
    their time on the market has increased and there has been
    further downward pressure on prices. Further exacerbating the
    ability to sell newly constructed homes and condominiums is the
    tightening of credit in the secondary markets for residential
    borrowers, particularly sub-prime borrowers and, recently, jumbo
    loan borrowers. Therefore, the borrowers ability to pay
    and collateral values may be negatively impacted. Such
    concentration and the associated increase in various risk
    factors is reflected in the formula component of the allowance.
    Therefore, consideration of concentrations is a part of the
    determination of the formula component of the allowance.
    Credit quality  The dollar amount of nonperforming
    loans increased to $10.7 million or 0.82 percent of
    total loans at December 31, 2007, compared to
    $5.6 million or 0.45 percent of total loans at
    December 31, 2006. Although the Companys regular
    periodic loan review process noted continued strength in overall
    credit quality, the continuation of recent trends of rising
    construction, energy and interest costs, as well as real estate
    taxes, an increase in the inventory of new residential
    construction and its time on the market and recent indications
    of a decline in real estate values in the Companys primary
    market area may negatively impact the borrowers ability to
    pay and collateral values. Certain loans were downgraded due to
    potential deterioration of collateral values, the
    borrowers cash flows or other specific factors that
    negatively impacted the borrowers ability to meet their
    loan obligations. Certain of these loans are also considered in
    connection with the analysis of impaired loans performed to
    determine the specific component of the allowance. However, due
    to the uncertainty of that determination, such loans are also
    considered in the process of determining the formula component
    of the allowance.
    Loan Participations  The Company expanded the number
    of banks from which we will purchase loan participations,
    particularly outside our primary market area. While we review
    each loan, we greatly rely on the other banks knowledge of
    their customer and marketplace. Since many of these
    relationships are new, we do not yet have an established record
    of performance and, therefore, any probable losses with respect
    to these new loan participation relationships are not reflected
    in the formula component of the allowance for loan losses. 59




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##### Table of Contents



(000s except percentages)2009


2008


2007


2006


2005Net loans outstanding at end of year

$
1,772,645


$
1,677,611


$
1,289,641


$
1,205,243


$
1,009,819Average net loans outstanding during the year


1,739,421



1,483,196



1,233,360



1,131,300



928,866Allowance for loan losses:Balance, beginning of year

$
22,537


$
17,367


$
16,784


$
13,525


$
11,801Amount acquired














1,529



Provision charged to expense


24,306



11,025



1,470



2,130



2,05946,843



28,392



18,254



17,184



13,860Charge-offs and recoveries during the year:Charge offs:Real estate:Commercial


(2,790
)


(78
)










Construction


(1,090
)


(775
)


(237
)






Residential


(1,173
)


(1,270
)


(16
)


(153
)


Commercial and industrial


(4,404
)


(3,422
)


(649
)


(216
)


(318
)Lease financing and individuals


(42
)


(632
)


(139
)


(76
)


(53
)Recoveries:Real estate:Commercial


















4Construction


1















Residential


14



180



20







Commercial and industrial


1,259



65



97



22



26Lease financing and individuals


27



77



37



23



6Net charge-offs during the year


(8,198
)


(5,855
)


(887
)


(400
)


(335
)Balance, end of year

$
38,645


$
22,537


$
17,367


$
16,784


$
13,525Ratio of net charge-offs to average net loans outstanding during
    the year


0.47
%


0.39
%


0.07
%


0.04
%


0.04
%Ratio of allowance for loan losses to gross loans outstanding at
    end of the year


2.13
%


1.33
%


1.33
%


1.39
%


1.32
%      60




---



##### Table of Contents



2009


2008Percentage








Percentageof Loans








of LoansAmount





in each


Amount





in eachof Loan


Loan


Category


of Loan


Loan


CategoryLoss


Amounts


by Total


Loss


Amount


by TotalAllowance


Category


Loans


Allowance


Category


LoansReal Estate:Commercial

$
15,273


$
783,597



43.14
%

$
8,220


$
642,923



37.70
%Construction


5,802



255,660



14.07
%


3,670



254,837



14.94Residential


9,706



454,532



25.02
%


4,194



409,431



24.01Commercial and Industrial


7,326



274,860



15.13
%


6,272



358,076



21.00Lease Financing and individuals


538



47,780



2.64
%


181



39,997



2.35Total

$
38,645


$
1,816,429



100.00
%

$
22,537


$
1,705,264



100.00
%   2007


2006Percentage








Percentageof Loans








of LoansAmount





in each


Amount





in eachof Loan


Loan


Category


of Loan


Loan


CategoryLoss


Amounts


by Total


Loss


Amounts


by TotalAllowance


by Category


Loans


Allowance


by Category


LoansReal Estate:Commercial

$
4,227


$
355,044



27.09
%

$
3,677


$
290,185



23.68
%Construction


3,661



211,837



16.16
%


3,972



252,941



20.64
%Residential


3,918



324,488



24.76
%


3,452



289,553



23.63
%Commercial and Industrial


5,252



377,042



28.77
%


5,329



355,214



28.99
%Lease Financing and individuals


309



42,149



3.22
%


354



37,543



3.06
%Total

$
17,367


$
1,310,560



100.00
%

$
16,784


$
1,225,436



100.00
%   2005Percentageof LoansAmount





in eachof Loan


Loan


CategoryLoss


Amounts


by TotalAllowance


by Category


LoansReal Estate:Commercial

$
2,999


$
220,384



21.47
%Construction


3,240



178,731



17.41
%Residential


2,963



276,384



26.93
%Commercial and Industrial


3,946



316,907



30.88
%Lease Financing and individuals


377



33,980



3.31
%Total

$
13,525


$
1,026,386



100.00
%    61




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##### Table of Contents



Deposits
        (000s)2009


2008Demand deposits

$
686,856


$
647,828Money market accounts


859,693



631,948Savings accounts


111,393



99,022Time deposits of $100,000 or more


144,817



156,481Time deposits of less than $100,000


61,231



138,504Checking with interest


308,625



165,543Total

$
2,172,615


$
1,839,326  62




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##### Table of Contents



December 31,2009


2008Time


Time





Time


TimeDeposits


Deposits


Total


Deposits


Deposits


Totalof $100,000


of $100,000


Time


of $100,000


of $100,000


Timeor More


or Less


Deposits


or More


or Less


Deposits(000s)3 months of less

$
94,450


$
20,140


$
114,590


$
92,298


$
104,103


$
196,401Over three months through 6 months


26,420



13,362



39,782



22,775



11,902



34,677Over 6 months through 12 months


23,705



9,691



33,396



37,849



7,457



45,306Over 12 months


242



18,038



18,280



3,559



15,042



18,601Total

$
144,817


$
61,231


$
206,048


$
156,481


$
138,504


$
294,985         (000s except percentages)Year ended December 31,2009


2008


2007Average


Average


AverageAmount


Rate


Amount


Rate


Amount


RateDemand deposits  Non interest bearing

$
675,953






$
625,630






$
612,346



Money market accounts


787,347



1.16
%


642,784



1.63
%


560,325



2.69
%Savings accounts


101,846



0.49



95,296



0.74
%


93,223



0.83
%Time deposits


263,065



1.48



263,506



2.56
%


276,908



3.90
%Checking with interest


250,314



0.53



149,793



0.72
%


153,446



1.01
%Total

$
2,078,525



1.07
%

$
1,777,009



1.07
%

$
1,696,248



1.66
%      63




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##### Table of Contents



Borrowings
        (000s except percentages)2009

2008

2007Average balance:


Short-term


$
101,818


$
161,749


$
167,255Other borrowings



153,799



201,687



230,014Weighted average interest rate (for the year):


Short-term



0.5
%


1.4
%


4.7
%Other borrowings



4.7
%


4.4



4.5Weighted average interest rate (at year end):


Short-term



0.2
%


1.0
%


2.6
%Other borrowings



4.9
%


4.3



4.4Maximum month-end outstanding amount:


Short-term


$
256,084


$
269,585


$
254,581Other borrowings



196,815



210,844



249,369  64




---



##### Table of Contents



and/or Borrower-in-Custody
  Capital
    Resources
    Form 10-K.
         65




---



##### Table of Contents



2009

2008

2007Tier 1 capital:Company


13.9
%


10.1
%


12.6
%HVB


11.4



9.9



12.4NYNB


13.4



10.1



11.3Total capital:Company


15.2
%


11.3
%


13.8
%HVB


12.7



11.1



13.5NYNB


14.7



11.4



12.6Leverage:Company


10.2
%


7.5
%


8.3
%HVB


8.4



7.4



8.1NYNB


8.3



6.7



7.1       Liquidity
   66




---



##### Table of Contents



and/or
    Borrower-in-Custody
       67




---



##### Table of Contents



Payments DueAfter


After1


3Year


Yearsbut


butWithin


Within


Within


After1


3


5


5Year


Years


Years


Years


TotalContractual Obligations:(1)Time Deposits

$
187,768


$
11,805


$
6,285


$
190


$
206,048FHLB Borrowings


36,016



71,287



42



16,437



123,782Operating lease and license obligations


3,547



5,653



4,085



9,317



22,602Total

$
227,331


$
88,745


$
10,412


$
25,944


$
352,432Credit Commitments:Available lines of credit

$
146,545


$
53,361


$
1,859


$
73,062


$
274,827Letters of credit


20,475



7,372











27,847Total

$
167,020


$
60,733


$
1,859


$
73,062


$
302,674               Quarterly
    Results of Operations
    2009 Quarters


2008 QuartersFourth


Third


Second


First


Fourth


Third


Second


FirstInterest income

$
34,194


$
33,839


$
33,910



34,636


$
35,670


$
35,776


$
33,565


$
35,101Net interest income


29,065



28,646



28,179



28,385



28,840



28,753



26,561



25,875Provision for loan losses


7,082



2,732



11,527



2,965



7,540



1,040



2,114



331Income (loss) before income taxes


7,527



10,324



(1,150
)


9,621



7,777



13,979



11,922



12,845Net income


5,212



6,898



310



6,592



5,485



9,049



7,896



8,447Basic earnings per common share


0.35



0.59



0.03



0.56



0.46



0.75



0.66



0.71Diluted earnings per common share


0.34



0.58



0.03



0.55



0.45



0.73



0.64



0.68  68




---



##### Table of Contents



Forward-Looking
    Statements
      
    unanticipated write-down or other-than-temporary impairment to
    investment securities;
    insufficient allowance for loan losses;
    a higher level of net loan charge-offs and delinquencies than
    anticipated;
    changes in loan, investment and mortgage prepayment assumptions;
    changes in monetary and fiscal policies of the
    U.S. Government, including policies of the
    U.S. Treasury, the Office of the Comptroller of the
    Currency and the Federal Reserve Board, and the impact of any
    policies or programs implemented pursuant to the Emergency
    Economic Stabilization Act of 2008.
    the extent and timing of legislative and regulatory actions and
    reform;
    competitive pressure on loan and deposit product pricing;
    other actions of competitors;
    adverse changes in economic conditions especially those
    effecting real estate;
    the extent and timing of actions of the Federal Reserve Board;
    a loss of customer deposits;
    changes in customers acceptance of the Banks
    products and services;
    regulatory delays or conditions imposed by regulators in
    connection with acquisitions or other expansion plans;
    increases in federal and state income taxes and/or the
    Companys effective income tax rate;
    difficulties in integrating acquisitions, offering new services
    or expanding into new markets;
    higher or lower cash flow levels than anticipated;
    a decrease in loan origination volume;
    a change in legal and regulatory barriers including issues
    related to compliance with anti-money laundering
    (AML) and bank secrecy act (BSA) laws;
    adoption, interpretation and implementation of new or
    pre-existing accounting pronouncements;
    the development of new tax strategies or the disallowance of
    prior tax strategies; and
    operational risks, including the risk of fraud by employees or
    outsiders and unanticipated litigation pertaining to our
    fiduciary responsibility. 69




---



##### Table of Contents



ITEM 7A
     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
    RISK             70




---



##### Table of Contents



Percentage Change

Percentage Changein Estimated

in EstimatedNet Interest

Net InterestIncome from

Income fromGradual Change in Interest Rates

December 31, 2009

December 31, 2008+200 basis points


2.1
%


(2.9
)%100 basis points


(1.1
)%


(0.5
)%              71




---



##### Table of Contents



ITEM
    8  FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
  REPORT OF INDEPENDENT REGISTERED PUBLIC
    ACCOUNTING FIRM


73CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2009 AND
    2008 AND FOR EACH OF THE THREE YEARS IN THE PERIOD ENDED
    DECEMBER 31, 2009:Consolidated Statements of Income


74Consolidated Statements of Comprehensive
    Income


75Consolidated Balance Sheets


76Consolidated Statements of Changes in
    Stockholders Equity


77Consolidated Statements of Cash Flows


78Notes to Consolidated Financial Statements


79  72




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                     73




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF INCOME
 For the years ended December 31, 2009, 2008 and
    2007
 Dollars in thousands, except per share amounts
  2009


2008


2007Interest Income:Loans, including fees

$
110,662


$
105,632


$
104,920Securities:Taxable


18,077



24,873



32,868Exempt from Federal income taxes


7,659



8,628



9,114Federal funds sold


100



827



2,938Deposits in banks


81



152



527Total interest income


136,579



140,112



150,367Interest Expense:Deposits


14,595



19,035



28,159Securities sold under repurchase agreements and other short-term
    borrowings


536



2,187



7,809Other borrowings


7,173



8,861



10,331Total interest expense


22,304



30,083



46,299Net Interest Income


114,275



110,029



104,068Provision for loan losses


24,306



11,025



1,470Net interest income after provision for loan losses


89,969



99,004



102,598Non Interest Income:Service charges


5,914



5,951



4,701Investment advisory fees


7,716



11,181



9,053Recognized impairment charge on securities available for sale
    (includes $13,829 of total losses less $8,333 of losses on
    securities available for sale, recognized in other comprehensive
    income at December 31, 2009)


(5,496
)


(1,547
)


(617
)Realized gains on securities available for sale, net


52



148



58Other income


2,308



2,871



1,626Total non interest income


10,494



18,604



14,821Non Interest Expense:Salaries and employee benefits


38,688



41,857



37,573Occupancy


8,272



7,490



6,437Professional services


4,447



4,295



4,704Equipment


4,354



4,219



3,289Business development


2,032



2,053



2,332FDIC assessment


5,491



893



193Other operating expenses


10,857



10,278



10,149Total non interest expense


74,141



71,085



64,677Income Before Income Taxes


26,322



46,523



52,742Income Taxes


7,310



15,646



18,259Net Income

$
19,012


$
30,877


$
34,483Basic Earnings per Common Share

$
1.53


$
2.58


$
2.91Diluted Earnings per Common Share


1.50



2.50



2.80    74




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE
    INCOME
 For the years ended December 31, 2009, 2008 and
    2007
 Dollars in thousands
  2009


2008


2007Net Income

$
19,012


$
30,877


$
34,483Other comprehensive income (loss), net of tax:Net change in unrealized gains (losses):Other-than-temporarily
    impaired securities available for sale:Total losses


(13,829
)


(1,547
)


(617
)Losses recognized in earnings


5,496



1,547



617Losses recognized in comprehensive income


(8,333
)






Income tax effect


3,417







Unrealized holding losses on
    other-than-temporarily
    impaired securities available for sale, net of tax


(4,916
)






Securities available for sale not
    other-than-temporarily
    impaired:Gains (losses) arising during the year


13,596



(1,909
)


5,629Income tax effect


(5,546
)


1,034



(2,443
)8,050



(875
)


3,186Gains recognized in earnings


(52
)


(148
)


(58
)Income tax effect


21



59



23(31
)


(89
)


(35
)Unrealized holding gains (losses) on securities available for
    sale not
    other-than-temporarily-impaired,
    net of tax


8,019



(964
)


3,150Unrealized holding gain (loss) on securities, net


3,103



(964
)


3,150Accrued benefit liability adjustment


2,049



309



(1,011
)Income tax effect


(820
)


(123
)


4041,229



186



(607
)Other comprehensive income (loss)


4,332



(778
)


2,543Comprehensive Income

$
23,344


$
30,099


$
37,026     ChangeDecember 31,


During


December 31,2009


Period


2008Unrealized gains (losses) on securities available for sale

$
236


$
3,103


$
(2,867
)Accrued benefit liability


(1,048
)


1,229



(2,277
)Total

$
(812
)

$
4,332


$
(5,144
)    75




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  CONSOLIDATED BALANCE SHEETS
 December 31, 2009 and 2008
 Dollars in thousands, except per share and share amounts
  2009


2008ASSETSCash and due from banks (Includes interest earning deposits of
    $127,659 in 2009 and $5,903 in 2008)

$
166,980


$
45,428Federal funds sold


51,891



6,679Securities available for sale, at estimated fair value
    (amortized cost of $500,340 in 2009 and $647,279 in 2008)


500,635



642,363Securities held to maturity, at amortized cost (estimated fair
    value of $22,728 in 2009 and $29,546 in 2008)


21,650



28,992Federal Home Loan Bank of New York (FHLB) stock


8,470



20,493Loans (net of allowance for loan losses of $38,645 in 2009 and
    $22,537 in 2008)


1,772,645



1,677,611Accrued interest and other receivables


15,200



16,357Premises and equipment, net


30,383



30,987Other real estate owned


9,211



5,467Deferred income taxes, net


20,957



14,030Bank owned life insurance


24,458



22,853Goodwill


23,842



20,942Other intangible assets


3,276



4,097Other assets


15,958



4,591TOTAL ASSETS

$
2,665,556


$
2,540,890LIABILITIESDeposits:Non interest-bearing

$
686,856


$
647,828Interest-bearing


1,485,759



1,191,498Total deposits


2,172,615



1,839,326Securities sold under repurchase agreements and other short-term
    borrowings


53,121



269,585Other borrowings


123,782



196,813Accrued interest and other liabilities


22,360



27,665TOTAL LIABILITIES


2,371,878



2,333,389Commitments and contingencies (Note 14)STOCKHOLDERS EQUITYPreferred Stock, $0.01 par value; authorized
    15,000,000 shares; no shares outstanding in 2009 and 2008,
    respectively






Common Stock, $0.20 par value; authorized 25,000,000 shares;
    outstanding 16,016,738 and 10,871,609 shares in 2009 and
    2008, respectively


3,463



2,367Additional paid-in capital


346,297



250,129Retained earnings


2,294



2,084Accumulated other comprehensive loss


(812
)


(5,144
)Treasury stock, at cost; 1,299,414 and 964,763 shares in
    2009 and 2008, respectively


(57,564
)


(41,935
)Total stockholders equity


293,678



207,501TOTAL LIABILITIES AND STOCKHOLDERS EQUITY

$
2,665,556


$
2,540,890    76




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CHANGES IN
    STOCKHOLDERS EQUITY
 For the years ended December 31, 2009, 2008 and
    2007
 Dollars in thousands, except share amounts
  AccumulatedNumber














Otherof








Additional





ComprehensiveShares


Common


Treasury


Paid-In


Retained


IncomeOutstanding


Stock


Stock


Capital


Earnings


(Loss)


TotalBalance at January 1, 2007


8,945,124


$
1,880


$
(14,804
)

$
202,963


$
2,437


$
(6,910
)

$
185,566Net income


















34,483







34,483Grants and exercises of stock options, net of tax


160,766



32







7,041











7,073Purchase of treasury stock


(193,361
)






(10,109
)














(10,109
)Sale of treasury stock


34,871







1,333



562











1,895Stock dividend


894,490



179







16,607



(16,786
)






Cash dividends ($1.50 per share)


















(17,765
)






(17,765
)Accrued benefit liability adjustment, net of tax






















(607
)


(607
)Net unrealized gain on securities available for sale






















3,151



3,151Balance at December 31, 2007


9,841,890



2,091



(23,580
)


227,173



2,369



(4,366
)


203,687Net income


















30,877







30,877Grants and exercises of stock options, net of tax


395,447



78







12,032











12,110Purchase of treasury stock


(366,365
)






(18,883
)














(18,883
)Sale of treasury stock


12,738







528



142











670Stock dividend


987,899



198







10,782



(10,980
)






Cash dividends ($1.68 per share)


















(20,182
)






(20,182
)Accrued benefit liability adjustment, net of tax






















186



186Net unrealized loss on securities available for sale






















(964
)


(964
)Balance at December 31, 2008


10,871,609



2,367



(41,935
)


250,129



2,084



(5,144
)


207,501Net income


















19,012







19,012Sale of common stock ($25.00 per share, gross)


3,993,395



799







92,522











93,321Grants and exercises of stock options, net of tax


30,843



6







815











821Purchase of treasury stock


(334,703
)






(15,631
)














(15,631
)Sale of treasury stock


52







2















2Stock dividend


1,455,542



291







2,831



(3,122
)






Cash dividends ($1.27 per share)


















(15,680
)






(15,680
)Accrued benefit liability adjustment, net of tax






















1,229



1,229Net unrealized gain on securities available for sale:Not
    other-than-temporarily
    impaired






















8,019



8,019Other-than-temporarily
    impaired (includes $13,829 of total losses less $5,496 of losses
    recognized in earnings, net of $3,417 tax) . .






















(4,916
)


(4,916
)Balance at December 31, 2009


16,016,738


$
3,463


$
(57,564
)

$
346,297


$
2,294


$
(812
)

$
293,678    77




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the years ended December 31, 2009, 2008 and
    2007
 Dollars in thousands
  2009


2008


2007Operating Activities:Net income


19,012


$
30,877


$
34,483Adjustments to reconcile net income to net cash provided by
    operating activities:Provision for loan losses


24,306



11,025



1,470Depreciation and amortization


3,864



3,554



2,878Recognized impairment charge on securities available for sale


5,496



1,547



617Realized gain on security transactions, net


(52
)


(148
)


(58
)Amortization of premiums on securities, net


624



32



389Increase in cash value of bank owned life insurance


(1,261
)


(943
)


(581
)Amortization of other intangible assets


821



821



822Stock option expense and related tax benefits


276



2,671



995Deferred taxes (benefit)


(9,855
)


(2,777
)


(998
)Increase in deferred loan fees


24



1,563



142Decrease (increase) in accrued interest and other receivables


1,157



(1,105
)


1,669(Increase) decrease in other assets


(11,367
)


(217
)


30Excess tax benefits from share based payment arrangements


(22
)


(2,075
)


(239
)(Decrease) increase in accrued interest and other liabilities


(5,305
)


87



4,410Decrease (increase) in accrued benefit liability adjustment


2,055



311



(1,012
)Net cash provided by operating activities


29,773



45,223



45,017Investing Activities:(Increase) decrease in short term investments


(45,212
)


92,375



(87,196
)Decrease (increase) in FHLB stock


12,023



(8,816
)


2,334Proceeds from maturities of securities available for sale


457,550



274,216



178,701Proceeds from maturities of securities held to maturity


7,337



4,800



6,205Proceeds from sales of securities available for sale


8,750



65,506



3,003Purchases of securities available for sale


(325,430
)


(239,115
)


(45,876
)Net increase in loans


(123,108
)


(406,025
)


(86,010
)Net purchases of premises and equipment


(3,260
)


(7,185
)


(8,565
)Premiums paid on bank owned life insurance


(344
)


(413
)


(10,403
)Increase in goodwill


(2,900
)


(5,565
)


(4,769
)Net cash used in investing activities


(14,594
)


(230,222
)


(52,576
)Financing Activities:Net increase in deposits


333,289



26,784



186,101Repayment of other borrowings


(73,031
)


(14,031
)


(38,527
)Net (decrease) increase in securities sold under repurchase
    agreements and short term borrowings


(216,464
)


193,488



(131,091
)Proceeds from issuance of common stock


93,866



9,439



6,078Proceeds from sale of treasury stock


2



670



1,895Cash dividends paid


(15,680
)


(20,182
)


(17,765
)Acquisition of treasury stock


(15,631
)


(18,883
)


(10,109
)Excess tax benefits from share based payment arrangements


22



2,075



239Net cash provided by (used in) financing activities


106,373



179,360



(3,179
)Increase (Decrease) in Cash and Due from Banks


121,552



(5,639
)


(10,738
)Cash and due from banks, beginning of year


45,428



51,067



61,805Cash and due from banks, end of year

$
166,980


$
45,428


$
51,067Supplemental Disclosures:Interest paid

$
24,364


$
31,396


$
45,428Income tax payments


15,851



17,751



19,452    78




---



##### Table of Contents



HUDSON
    VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Dollars in thousands, except per share and share
    amounts
  1  Summary
    of Significant Accounting Policies
  Description of Operations and Basis of
    Presentation 
  Securities  other-than-temporary other-than-temporary other-than-temporary,
  Loans 
  Allowance for Loan Losses 
 79




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  and/or
        Troubled-debt Restructurings 
  Income Recognition on Loans 
 80




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Premises and Equipment 
  Other Real Estate Owned (OREO) 
  Goodwill and Other Intangible Assets and/or
  Income Taxes 
  Stock-Based Compensation
  Earnings per Common Share 
 81




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2009


2008


2007Weighted average common shares:Basic


12,404,305



11,969,937



11,844,712Effect of stock options


246,665



405,159



474,918Diluted


12,650,970



12,375,096



12,319,630     Disclosures About Segments of an Enterprise and Related
    Information 
  Bank Owned Life Insurance 
  Retirement Plans 
  Recent
    Accounting Pronouncements
  No. 115-2 No. 124-2, Recognition and Presentation of Other-Than-Temporary
    Impairments (ASC 320-10), ASC 320-10
  No. 157-4, Determining Fair Value When the Volume and Level of Activity
    for the Asset and Liability Have Significantly Decreased and
    Identifying Transactions That Are Not Orderly (ASC 820-10).
 82




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    The FASB Accounting Standards Codification and the
    Hierarchy of Generally Accepted Accounting Principles, a
    Replacement of FASB Statement No. 162 The Hierarchy of Generally
    Accepted Accounting Principles, FASB Accounting Standards Codification
  Other 
  2  Securities
    (000s)2009


2008Estimated











EstimatedAmortized


Gross Unrealized


Fair


Amortized


Gross Unrealized


FairCost


Gains


Losses


Value


Cost


Gains


Losses


ValueClassified as Available for SaleU.S. Treasury and government agencies

$
4,995


$
33


$
20


$
5,008


$
45,206


$
288


$
79


$
45,415Mortgage-backed securities


312,996



5,600



2,208



316,388



371,963



3,487



1,313



374,137Obligations of states and political subdivisions


158,465



5,897



91



164,271



200,858



2,341



1,710



201,489Other debt securities


14,712



14



9,904



4,822



20,082



227



8,665



11,644Total debt securities


491,168



11,544



12,223



490,489



638,109



6,343



11,767



632,685Mutual funds and other equity securities


9,172



1,109



135



10,146



9,170



613



105



9,678Total

$
500,340


$
12,653


$
12,358


$
500,635


$
647,279


$
6,956


$
11,872


$
642,363   83




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  (000s)2009


2008Estimated











EstimatedAmortized


Gross Unrealized


Fair


Amortized


Gross Unrealized


FairCost


Gains


Losses


Value


Cost


Gains


Losses


ValueClassified as Held to MaturityMortgage-backed securities

$
16,515


$
733


$
1


$
17,247


$
23,859


$
525


$
78


$
24,306Obligations of states and political subdivisions


5,135



346







5,481



5,133



108



1



5,240Total

$
21,650


$
1,079


$
1


$
22,728


$
28,992


$
633


$
79


$
29,546   other-than-temporary
  other-than-temporary
  other-than-temporary
  Annual prepayment

1.00%Projected specific defaults/deferrals

15.0% - 69.0%Projected severity of loss on specific defaults/deferrals

25.0% - 95.0%Projected additional defaults:Year 1

3.00%Year 2

3.00%Year 3

2.50%Year 4

2.00%Year 5

1.00%Thereafter

0.25%Projected severity of loss on additional defaults

85.00%Present value discount rates

3m LIBOR+1.60%-2.25%  84




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Balance at January 1, 2009:Total OTTI credit losses at January 1, 2009

$
1,061Credit related impairment not previously recognized


5,492Increases to the amount related to the credit loss for which
    other-than-temporary impairment was previously recognized


4Balance at December 31, 2009

$
6,557        85




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    December 31,
    2009
 Duration of Unrealized LossGreater thanLess than 12 Months


12 Months


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Loss


Value


Loss


Value


LossClassified as Available for SaleU.S. Treasuries and government agencies









$
2,980


$
20


$
2,980


$
20Mortgage-backed securities

$
94,211


$
2,208











94,211



2,208Obligations of states and political subdivisions


2,055



12



2,889



79



4,944



91Other debt securities










4,433



9,904



4,433



9,904Total debt securities


96,266



2,220



10,302



10,003



106,568



12,223Mutual funds and other equity securities










128



135



128



135Total temporarily impaired securities

$
96,266


$
2,220


$
10,430


$
10,138



106,696


$
12,358Classified as Held to MaturityMortgage-backed securities

$
489


$
1


$



$



$
489


$
1Total temporarily impaired securities

$
489


$
1


$



$



$
489


$
1   December 31,
    2008
 Duration of Unrealized LossGreater thanLess than 12 Months


12 Months


TotalGross





Gross





GrossFair


Unrealized


Fair


Unrealized


Fair


UnrealizedValue


Loss


Value


Loss


Value


LossClassified as Available for SaleU.S. Treasuries and government agencies

$
11,700


$
79










$
11,700


$
79Mortgage-backed securities


84,610



472


$
79,505


$
841



164,115



1,313Obligations of states and political subdivisions


52,538



1,477



8,868



233



61,406



1,710Other debt securities


414



102



18,207



8,563



18,621



8,665Total debt securities


149,262



2,130



106,580



9,637



255,842



11,767Mutual funds and other equity securities


8,128



92



83



13



8,211



105Total temporarily impaired securities

$
157,390


$
2,222


$
106,663


$
9,650


$
264,053


$
11,872Classified as Held to MaturityMortgage-backed securities

$
1,621


$
73


$
974


$
5


$
2,595


$
78Obligations of states and political subdivisions


276



1











276



1Total temporarily impaired securities

$
1,897


$
74


$
974


$
5


$
2,871


$
79  86




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Available for Sale


Held to MaturityAmortized


Fair


Amortized


FairCost


Value


Cost


ValueContractual MaturityWithin 1 year

$
61,525


$
50,013







After 1 but within 5 years


89,660



95,616







After 5 years but within 10 years


22,808



24,006


$
4,895


$
5,222After 10 years


4,179



4,466



240



259Mortgaged-back Securities


312,996



316,388



16,515



17,247Total

$
491,168


$
490,489


$
21,650


$
22,728   3  Credit
    Commitments and Concentrations of Credit Risk
    2009


2008Contract


ContractAmount


AmountCredit commitments-variable

$
237,733


$
357,497Credit commitments-fixed


37,094



3,793Guarantees written


27,847



21,095      87




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Residential


CommercialProperty


Property


Total2009Loans

$
665,249


$
1,037,286


$
1,702,535Credit commitments


102,224



79,950



182,173$
767,473


$
1,117,236


$
1,884,7082008Loans

$
521,344


$
926,771


$
1,448,115Credit commitments


135,046



98,030



233,076$
656,390


$
1,024,801


$
1,681,191     4  Loans
    December 312009


2008Real Estate:Commercial

$
783,597


$
642,923Construction


255,660



254,837Residential


454,532



409,431Commercial and industrial


274,860



358,076Individuals


26,970



21,536Lease financing


20,810



18,461Total


1,816,429



1,705,264Deferred loan fees


(5,139
)


(5,116
)Allowance for loan losses


(38,645
)


(22,537
)Loans, net

$
1,772,645


$
1,677,611    88




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      December 312009


2008


2007Balance, beginning of year

$
22,537


$
17,367


$
16,784Add (deduct):Provision for loan losses


24,306



11,025



1,470Recoveries on loans previously charged-off


1,301



322



154Charge-offs


(9,499
)


(6,177
)


(1,041
)Balance, end of year

$
38,645


$
22,537


$
17,367         2009


2008


2007Amount

$
50,590


$
11,284


$
10,719Interest income recorded










Interest income that would have been recorded under the original
    contract terms


3,032



875



933        89




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   5  Premises
    and Equipment
    December 312009


2008Land

$
2,589


$
2,589Buildings


22,392



21,917Leasehold improvements


12,034



10,318Furniture, fixtures and equipment


17,315



16,490Automobiles


734



719Total


55,064



52,033Less accumulated depreciation and amortization


(24,681
)


(21,046
)Premises and equipment, net

$
30,383


$
30,987     6
    Goodwill
    and Other Intangible Assets          2009


2008Gross





GrossCarrying


Accumulated


Carrying


AccumulatedAmount


Amortization


Amount


AmortizationDeposit Premium

$
3,907


$
2,232


$
3,907


$
1,674Customer Relationships


2,470



998



2,470



808Employment Related


516



387



516



314Total

$
6,893


$
3,617


$
6,893


$
2,796  90




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Year

Amount2010

$
8222011


8222012


2642013


2642014


264     Balance at December 31, 2007

$
15,377Performance-based payment


5,565Balance at December 31, 2008


20,942Performance-based payment


2,900Balance at December 31, 2009

$
23,842     7
    Deposits    (000s)2009


2008Demand deposits

$
686,856


$
647,828Money Market accounts


859,693



631,948Savings accounts


111,393



99,022Time deposits of $100,000 or more


144,817



156,481Time deposits of less than $100,000


61,231



138,504Checking with interest


308,625



165,543Total Deposits

$
2,172,615


$
1,839,326         Year

Amount2010

$
187,9582011


7,8482012


3,9572013


3,1112014


3,174  91




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   8  Borrowings
        2009

2008

2007Average balance:Short-term

$
101,818


$
161,749


$
167,255Other Borrowings


153,799



201,687



230,014Weighted average interest rate (for the year):Short-term


0.5
%


1.4
%


4.7
%Other Borrowings


4.7
%


4.4



4.5Weighted average interest rate (at year end):Short-term


0.2
%


1.4
%


4.7
%Other borrowings


4,9
%


4.4
%


4.5
%Maximum month-end outstanding amount:Short-term

$
256,084


$
269,585


$
254,581Other Borrowings


196,815



210,844



249,369   and/or Borrower-in-Custody
 92




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    9  Income
    Taxes
    Years Ended December 312009


2008


2007Income tax at statutory rate

$
9,213



35.0
%

$
16,283



35.0
%

$
18,442



35.0
%State income tax, net of Federal benefit


977



3.7



2,330



5.0



2,704



5.0Tax-exempt interest income


(2,566
)


(9.7
)


(2,832
)


(6.1
)


(2,914
)


(5.5
)Non-deductible expenses and other


(314
)


(1.2
)


(135
)


(0.3
)


27



0.1Provision for income taxes

$
7,310



27.8
%

$
15,646



33.6
%

$
18,259



34.6
%     Years Ended December 312009


2008


2007Federal:Current

$
13,543


$
14,278


$
15,007Deferred


(7,736
)


(2,217
)


(880
)State and Local:Current


3,622



4,144



4,473Deferred


(2,119
)


(559
)


(341
)Total

$
7,310


$
15,646


$
18,259  93




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    December 31, 2009


December 31, 2008Asset


Liability


Asset


LiabilityAllowance for loan losses

$
15,470






$
9,010Supplemental pension benefit


3,871







3,242Interest on non-accrual loans


1,576







554Accrued benefit liability


698







1,518Deferred compensation


275







285Share based compensation costs


129







123Other


2,966







716Intangible Assets





$
2,413






$
2,063Property and equipment






1,555







1,403Securities available for sale






60



2,048Total

$
24,985


$
4,028


$
17,496


$
3,466Net deferred tax asset

$
20,957






$
14,030          94




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   10  Stockholders
    Equity
     95




---



##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Minimum to beMinimum for


Well Capitalized


EnhancedCapital Adequacy


Under Prompt


CapitalActual


Purposes


Corrective Action


RequirementCapital Ratios:

Amount


Ratio


Amount


Ratio


Amount


Ratio


Amount


RatioHVB Only:As of December 31, 2009:Total Capital (To Risk Weighted Assets)

$
233,080



12.7
%

$
146,999



8.0
%

$
183,749



10.0
%

$
220,499



12.0
%Tier 1 Capital (To Risk Weighted Assets)


210,102



11.4
%


73,500



4.0
%


110,249



6.0
%


183,749



10.0
%Tier 1 Capital (To Average Assets)


210,102



8.4
%


99,682



4.0
%


124,602



5.0
%


199,363



8.0
%As of December 31, 2008:Total Capital (To Risk Weighted Assets)

$
195,390



11.1
%

$
140,709



8.0
%

$
175,887



10.0
%Tier 1 Capital (To Risk Weighted Assets)


174,375



9.9
%


70,355



4.0
%


105,532



6.0
%Tier 1 Capital (To Average Assets)


174,375



7.4
%


94,258



4.0
%


117,823



5.0
%NYNB Only:As of December 31, 2009:Total Capital (To Risk Weighted Assets)

$
11,775



14.7
%

$
6,404



8.0
%

$
8,005



10.0
%

$
9,606



12.0
%Tier 1 Capital (To Risk Weighted Assets)


10,675



13.4
%


3,202



4.0
%


4,803



6.0
%


8,005



10.0
%Tier 1 Capital (To Average Assets)


10,675



8.3
%


5,185



4.0
%


6,482



5.0
%


10,371



8.0
%As of December 31, 2008:Total Capital (To Risk Weighted Assets)

$
10,619



11.4
%

$
7,455



8.0
%

$
9,319



10.0
%Tier 1 Capital (To Risk Weighted Assets)


9,444



10.1
%


3,727



4.0
%


5,591



6.0
%Tier 1 Capital (To Average Assets)


9,444



6.7
%


5,674



4.0
%


7,092



5.0
%   Minimum forCapital AdequacyActual


PurposesAmount


Ratio


Amount


RatioConsolidated:As of December 31, 2009:Total Capital (To Risk Weighted Assets)

$
290,633



15.2
%

$
153,335



8.0
%Tier 1 Capital (To Risk Weighted Assets)


267,120



13.9
%


76,667



4.0
%Tier 1 Capital (To Average Assets)


267,120



10.2
%


105,016



4.0
%As of December 31, 2008:Total Capital (To Risk Weighted Assets)

$
209,608



11.3
%

$
148,035



8.0
%Tier 1 Capital (To Risk Weighted Assets)


187,070



10.1
%


74,017



4.0
%Tier 1 Capital (To Average Assets)


187,070



7.5
%


99,412



4.0
%  96




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
     Rule 15c3-1
  Stock
    Dividend
    11  Stock-Based
    Compensation
     WeightedAggregate


AverageShares


Weighted Average


Intrinsic


RemainingUnderlying


Exercise Price


Value(1)


ContractualOutstanding Options

Options


Per Share


($000s)


Term (Yrs.)As of December 31, 2008


767,587


$
25.07Granted






Cancelled or expired


(11,206
)


29.49Exercised


(33,806
)


16.12As of December 31, 2009


722,575


$
25.42



(547
)


4.0Exercisable as of December 31, 2009


623,964


$
23.77



557



3.9Available for future grant


1,066,398    (1)
    The aggregate intrinsic value of a stock option in the table
    above represents the total pre-tax intrinsic value (the amount
    by which the current market value of the underlying stock
    exceeds the exercise price of the option) that would have been
    received by the option holders had all option holders exercised
    their options on December 31, 2009. This amount changes
    based on changes in the market value of the Companys stock.   Weighted AverageNumber


RemainingExercise Price


of


Life


ExerciseRange


Options


(yrs)


Price$
12.37


$
22.53



366,428



3.1


$
18.8322.67



29.27



216,364



5.6



26.1829.31



48.24



139,783



3.7



41.49Total Options Outstanding


12.37



48.24



722,575



4.0



25.42Exercisable


12.37



48.24



623,964



3.9



23.67Not Exercisable


22.70



47.79



98,611



4.3



35.85  97




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    Years Ended December 312008


2007Weighted average assumptions:Dividend yield


3.3
%


3.6
%Expected volatility


67.6
%


30.9
%Risk-free interest rate


0.3
%


3.8
%Expected lives (in years)


0.4



2.5       12  Fair
    Value
    Level 1:
  Level 2:
  Level 3:
     98




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
      Fair Value Measurements at December 31, 2009 Using:Quoted Prices in


Significant


SignificantActive Markets


Other


Unobservablefor Identical


Observable Inputs


InputsAssets (Level 1)


(Level 2)


(Level 3)


TotalMeasured on a recurring basis:Available for sale securitiesU.S. Treasury and government agencies





$
5,008






$
5,008Mortgage-backed securities






316,388







316,388Obligations of states and political subdivisions






164,271







164,271Other debt securities






884


$
3,938



4,822Mutual funds and other equity securities






10,146







10,146Total assets at fair value





$
496,697


$
3,938


$
500,635Measured on a non-recurringbasisImpaired loans(1)









$
16,921


$
16,921Other real estate owned(2)










9,211



9,211Total assets at fair value









$
26,132


$
26,132     (1)
    
    Impaired loans are reported at the fair value of the underlying
    collateral if repayment is expected solely from the collateral.
    Collateral values are estimated using Level 2 and Level 3 inputs
    which include independent appraisals and internally customized
    discounting criteria. The recorded investment in impaired loans
    subject to fair value measurement on December 31, 2009 was $20.5
    million for which a specific allowance of $3.6 million has been
    established within the allowance for loan losses.(2)
    
    Other real estate owned is reported at fair value less
    anticipated costs to sell. Fair value is based on third party or
    internally developed appraisals which, considering the
    assumptions in the valuation, are considered Level 2 or Level 3
    inputs.  99




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Fair Value Measurements at December 31, 2008 Using:Quoted Prices in


Significant


SignificantActive Markets


Other


Unobservablefor Identical


Observable Inputs


InputsAssets (Level 1)


(Level 2)


(Level 3)


TotalMeasured on a recurring basis:Available for sale securitiesU.S. Treasury and government agencies





$
45,415






$
45,415Mortgage-backed securities






374,137







374,137Obligations of states and political subdivisions






201,489







201,489Other debt securities






858


$
10,786



11,644Mutual funds and other equity securities






9,678







9,678Total assets at fair value





$
631,577


$
10,786


$
642,363Measured on a non-recurring basis:Impaired loans(1)









$
11,284


$
11,284Total assets at fair value









$
11,284


$
11,284     (1)
    
    Impaired loans are reported at the fair value of the underlying
    collateral if repayment is expected solely from the collateral.
    Collateral values are estimated using Level 2 and Level 3 inputs
    which include independent appraisals and internally customized
    discounting criteria. The recorded investment in impaired loans
    on December 31, 2008 was $11.3 million for which no specific
    allowance has been established within the allowance for loan
    losses.    Level 3 AssetsMeasured on a RecurringBasis For the Year EndedDecember 31,2009


2008(000s)Balance at beginning of period

$
10,786



Transfers into (out of) Level 3


174


$
19,887Net unrealized gain (loss) included in other comprehensive
    income(1)


(1,526
)


(7,568
)Principal payments






(472
)Recognized impairment charge included in the statement of
    income(2)


(5,496
)


(1,061
)Balance at end of period

$
3,938


$
10,786     (1)
    
    Reported under Unrealized (loss) gain on securities
    available for sale arising during the period.(2)
    
    Reported under Recognized impairment charge on securities
    available for sale, net. 100




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   13  Benefit
    Plans
            2009


2008Change in benefit obligation:Benefit obligation at beginning of year

$
11,754


$
11,570Service cost


1,006



448Interest cost


560



621Amendments


(1,156
)


(861
)Actuarial (gain) loss


(336
)


587Benefits paid


(668
)


(611
)Benefit obligation at end of year


11,160



11,754Change in plan assets:Fair value of plan assets at beginning of year






Actual return on assets






Employer contributions


668



611Benefits paid


(668
)


(611
)Fair value of plan assets at end of year






Funded  status at year end

$
11,160


$
11,754  101




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
    2009


2008Net actuarial loss

$
2,618


$
3,703Prior service cost


(872
)


92$
1,746


$
3,795     2009


2008Weighted average assumptions:Discount rate


5.25
%


5.25
%Expected return on plan assets






Rate of compensation increase


3.00
%


5.00
%Components of net periodic benefit cost and other amounts
    recognized in other comprehensive income:Service cost

$
1,006


$
448Interest cost


560



621Expected return on plan assets






Amortization of transition obligation






(603
)Amortization of prior service cost


(191
)


44Amortization of net loss


748



593Net periodic benefit cost

$
2,123


$
1,103Net (gain) loss


(2,240
)


(265
)Amortization of prior service cost


191



(44
)Total recognized in other comprehensive income


(2,049
)


(309
)Total recognized in net periodic benefit cost and other
    comprehensive income

$
74


$
794       Year

Pension Benefits2010

$
8672011


7522012


7522013


8662014


844Years 2015-2019


2,980  102




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   14  Commitments,
    Contingent Liabilities and Other Disclosures
    Year

Amount2010

$
3,5472011


3,2762012


2,3772013


2,1502014


1,935Thereafter


9,317Total minimum future rentals

$
22,602         Cash
    Reserve Requirements
    Restrictions
    on Funds Transfers
    15  Segment
    Information
     103




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
   16  Fair
    Value of Financial Instruments
      December 312009


2008Carrying


Estimated


Carrying


EstimatedAmount


Fair Value


Amount


Fair Value(In millions)Assets:Financial assets for which carrying value approximates fair value

$
218.9


$
218.9


$
52.1


$
52.1Held to maturity securities, FHLB stock and accrued interest


30.2



31.3



49.6



50.1Loans and accrued interest


1,770.4



1,769.9



1,698.4



1,700.7Liabilities:Deposits with no stated maturity and accrued interest


1,968.3



1,968.3



1,547.4



1,547.4Time deposits and accrued interest


206.3



205.9



295.7



294.8Securities sold under repurchase agreements and other short-term
    borrowings and accrued interest


53.1



53.1



269.6



269.6Other borrowings and accrued interest


124.4



119.2



197.7



186.1Financial liabilities for which carrying value approximates fair
    value














     Financial assets for which carrying value approximates fair
    value
  Held to maturity securities, FHLB stock and accrued
    interest
  Loans and accrued interest
  Deposits with no stated maturity and accrued
    interest
 104




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Time deposits and accrued interest
  Securities sold under repurchase agreements and other
    short-term borrowings and accrued
    interest
  Other borrowings and accrued
    interest
  17  Condensed
    Financial Information of Hudson Valley Holding Corp.
 (Parent Company Only)
  Condensed Balance Sheets
    2009


2008AssetsCash

$
46,707


$
3,787Investment in subsidiaries


246,214



202,906Other assets


72



120Equity securities


1,521



1,308Total Assets

$
294,514


$
208,121Liabilities and Stockholders EquityOther liabilities

$
836


$
620Stockholders equity


293,678



207,501Total Liabilities and Stockholders Equity

$
294,514


$
208,121   Condensed
    Statements of Income
    2009


2008


2007Dividends from subsidiaries

$
24,354


$
28,208


$
24,708Dividends from equity securities


78



85



65Other income










12Operating expenses


243



344



234Income before equity in undistributed earnings in the
    subsidiaries


24,189



27,949



24,551Equity in (overdistributed) undistributed earnings of the
    subsidiaries


(5,177
)


2,928



9,932Net Income

$
19,012


$
30,877


$
34,483  105




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##### Table of Contents



HUDSON VALLEY HOLDING CORP. AND SUBSIDIARIES
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
    (Continued)
  Condensed
    Statements of Cash Flows
    2009


2008


2007Operating Activities:Net income

$
19,012


$
30,877


$
34,483Adjustments to reconcile net income to net cash provided by
    operating activities:Equity in overdistributed (undistributed) earnings of the
    subsidiaries


5,177



(2,928
)


(9,932
)Increase in other assets


118



(95
)


(25
)Increase (decrease) in other liabilities


48



18



(20
)Other changes, net


11







(11
)Net cash provided by operating activities


24,366



27,872



24,495Investing Activities:Capital contribution to subsidiaries


(44,000
)






Proceeds from sales of equity securities






2



19Purchase of equity securities including acquisition of New York
    National Bank


(3
)


(85
)


(9
)Net cash (used in) provided by investing activities


(44,003
)


(83
)


10Financing Activities:Proceeds from issuance of common stock and sale of treasury stock


93,868



10,109



7,973Purchase of treasury stock


(15,631
)


(18,883
)


(10,109
)Cash dividends paid


(15,680
)


(20,182
)


(17,765
)Net cash provided by (used in) financing activities


62,557



(28,956
)


(19,901
)Increase (decrease) Cash and Due from Banks


42,920



(1,167
)


4,604Cash and due from banks, beginning of year


3,787



4,954



350Cash and due from banks, end of year

$
46,707


$
3,787


$
4,954  106




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##### Table of Contents



ITEM 9  CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.  CONTROLS
    AND PROCEDURES    Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
         ITEM 9B.  OTHER
    INFORMATION   107




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##### Table of Contents



PART
    III  ITEM 10.  DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE   ITEM 11.  EXECUTIVE
    COMPENSATION   ITEM 12.  SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT, AND
    RELATED STOCKHOLDER MATTERS      Number of





Number ofShares to





Shares Remainingbe Issued





Available forUpon Exercise


Weighted-Average Exercise


Future Issuance Underof


Price of


Equity CompensationPlan Category

Outstanding Options


Outstanding Options


PlansEquity compensation plans approved by stockholders


722,575


$
25.42



1,066,348Equity compensation plans not approved by stockholders










   Form 10-K.
 ITEM
    13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE   ITEM
    14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES   108




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##### Table of Contents



PART
    IV  ITEM 15.  EXHIBITS
    AND FINANCIAL STATEMENT SCHEDULES  1. Financial
    Statements
    
    Report of Independent Registered Public Accounting Firm
    Consolidated Statements of Income for the Years Ended
    December 31, 2009, 2008 and 2007
    Consolidated Statements of Comprehensive Income for the Years
    Ended December 31, 2009, 2008 and 2007
    Consolidated Balance Sheets at December 31, 2009 and 2008
    Consolidated Statements of Changes in Stockholders Equity
    for the Years Ended December 31, 2009, 2008 and 2007
    Consolidated Statements of Cash Flows for the Years Ended
    December 31, 2009, 2008 and 2007
    Notes to Consolidated Financial Statements  2. Financial
    Statement Schedules
   109




---



##### Table of Contents



3. Exhibits
    Required by Securities and Exchange Commission Regulation
    S-K
  Number


Exhibit Title3
.1


Restated Certificate of Incorporation of Hudson Valley Holding
    Corp.(4)3
.2


Amended and Restated By-Laws of Hudson Valley Holding
    Corp.(5)4
.1


Specimen of Common Stock
    Certificate(3)4
.2


Specimen Stock Restriction Agreement Between the Company and a
    Shareholder who Acquired Shares from the Company or a
    Shareholder Subject to the
    Agreement(2)4
.3


Form of Senior Debt
    Indenture(7)4
.4


Form of Subordinated Debt
    Indenture(7)4
.5


Form of Junior Subordinated Debt
    Indenture(7)10
.1


Hudson Valley Bank Amended and Restated Directors Retirement
    Plan Effective December 31,
    2008*(6)10
.2


Hudson Valley Bank Restated and Amended Supplemental Retirement
    Plan of
    1995*(3)10
.3


Form of Amendment No. 1 to Hudson Valley Bank Restated and
    Amended Supplemental Retirement Plan of
    1995*(8)10
.4


Hudson Valley Bank Supplemental Retirement Plan of
    1997*(3)10
.5


Form of Amendment No. 1 to Hudson Valley Bank Supplemental
    Retirement Plan of
    1997*(8)10
.6


Form of Amendment No. 2 to Hudson Valley Bank Supplemental
    Retirement Plan of 1995 and
    1997*(8)10
.7


Form of Amendment No. 3 to Hudson Valley Bank Supplemental
    Retirement Plan of 1995 and
    1997*(8)10
.8


Amended and Restated 2002 Stock Option
    Plan*(6)10
.9


Specimen Non-Statutory Stock Option
    Agreement*(3)10
.10


Specimen Incentive Stock Option
    Agreement*(1)10
.11


Consulting Agreement Between the Company and Director
    John A.
    Pratt, Jr.*(3)11



Statements re: Computation of Per Share
    Earnings(8)12



Computation of Ratios of Earnings to Fixed Charges
    (8)21



Subsidiaries of the
    Company(8)23
.1


Consent of Crowe Horwath
    LLP(8)31
.1


Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of
    2002(8)31
.2


Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of
    2002(8)32
.1


Certification of Chief Executive Officer Pursuant to 18 U.S.C.
    Section 1350, as Adopted Pursuant to Section 906 of the
    Sarbanes-Oxley Act of
    2002(8)32
.2


Certification of Chief Financial Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
    of the Sarbanes-Oxley Act of
    2002(8)     (1)
    Incorporated herein by reference in this document to the
    Form 10-K
    filed on March 11, 2005(2)
    Incorporated herein by reference in this document to the
    Form 10-Q
    filed on August 9, 2006(3)
    Incorporated herein by reference in this document to the
    Form 10-K
    filed on March 15, 2007(4)
    Incorporated herein by reference in this document to the
    Form 10-Q
    filed October 20, 2009(5)
    Incorporated herein by reference in this document to the
    Form 8-K
    filed on January 27, 2010(6)
    Incorporated herein by reference in this document to the
    Form 10-K
    filed on March 16, 2009(7)
    Incorporated herein by reference in this document to the
    Form S-3
    filed on August 7, 2009(8)
    Filed herewith 110




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##### Table of Contents



SIGNATURES       By:
    /s/  James
    J. Landy       James
    J. Landy
     Stephen
    R. Brown
      William
    E. Griffin
     James
    M. Coogan
     Mary
    Jane Foster
     Gregory
    F. Holcombe
     Adam
    Ifshin
     Michael
    J. Maloney
      Angelo
    R. Martinelli
     William
    J. Mulrow
     John
    A. Pratt Jr.
     Cecile
    D. Singer
     Craig
    S. Thompson
     Andrew
    J. Reinhart
     111