HARLEYSVILLE, Pa., Feb. 2 /PRNewswire-FirstCall/ -- Harleysville National Corporation reported today net income of $3.8 million or $.11 per diluted share for the fourth quarter of 2008, compared to $6.2 million or $.20 per diluted share for the fourth quarter of 2007. For the year ended December 31, 2008, net income was $25.1 million or $.78 per diluted share compared to $26.6 million or $.90 per diluted share for the year ended 2007. Fourth quarter results include a non-cash other-than-temporary impairment charge of $1.9 million on collateralized debt obligation investments in pooled trust preferred securities. Fourth quarter results also include $2.5 million in merger expenses associated with the acquisition of Willow Financial Bancorp, which closed on December 5, 2008, and a $2.4 million gain on the sale of investment securities, which virtually offsets the one-time merger costs.
Paul D. Geraghty, President and CEO, Harleysville National Corporation, said, "2008 was a challenging year for all financial institutions, and Harleysville was no exception. However, we enjoyed healthy organic loan growth and substantial growth in fee income and new revenue sources in our retail banking business; as well as expansion of our net interest margin. These factors helped Harleysville deliver profitable results in a year when many of banking industry peers struggled to survive. In addition, we executed on the integration of the Willow Financial Bancorp acquisition, which transforms our franchise into the third-largest bank holding company headquartered in the Greater Philadelphia region. These are accomplishments that our entire team can be proud of, especially considering the overall macroeconomic environment."
Provision for Loan Losses
During the fourth quarter of 2008, provision for loan losses was $7.9 million, compared to $4.5 million in the fourth quarter of 2007. For the year ended December 31, 2008, the provision for loan losses was $15.6 million, compared to $10.6 million in 2007. The provision for loan losses during 2008 reflects an increase in non-performing assets to $78.5 million at year end and quarter end, up from $22.0 million at the end of 2007 and $38.8 million at the end of the third quarter of 2008.
Mr. Geraghty continued, "We continue to carefully monitor our positions in the loan portfolio. In light of current economic conditions, which impacted three large unrelated commercial credit exposures primarily in our real estate portfolio, we increased allowance for loan losses in this quarter. The increase in allowance for loan losses negatively impacted fourth quarter and full year financial results. To ensure that we continue to be well-equipped to deal with any deteriorating credit situations, we have added supplemental resources to our collections and workout areas. We continue to actively lend to creditworthy commercial and retail customers."
Total Risk Based Capital
Unprecedented upheaval in the economy that has negatively impacted the credit and capital markets is causing substantial "mark to market" discounts that give rise to significant purchase accounting adjustments in connection with our acquisition of Willow Financial Bancorp. Harleysville does not believe that these "mark to market" valuations reflect a reduction in the realizable value of Willow Financial's assets and expects to recover the discount through amortization in 2009 and beyond.
Purchase accounting adjustments related to the acquisition helped to push the Company's Total Risk-based Capital Ratio below the regulatory threshold for a "Well Capitalized" bank holding company. The following is a comparison of Harleysville National Corporation's capital metrics to regulatory thresholds for a "Well Capitalized" and "Adequately Capitalized" bank holding company.
Harleysville National Corporation Capital Measure Regulatory Standard Regulatory for Adequately Standard for Ratio Capitalized Well Capitalized Total Capital (to risk weighted assets) 8.88% 8.00% 10% Tier 1 Capital (to risk weighted assets) 7.73% 4.00% 6% Tier 1 Capital (to average assets) 8.19% 4.00% 5%
Metrics for Harleysville National Bank appear in the supplemental financial tables attached.
Harleysville continues to meet the definition of "Well Capitalized" for two of the measures above and "Adequately Capitalized" for the third. It has instituted a plan targeted to return the Company to "Well Capitalized" within the year.
Paul Geraghty stated, "While we are disappointed that 'mark to market' valuations caused by recent market volatility contributed to a short-term reduction in one of the three 'Well Capitalized' calculations, we are committed to returning the Company to 'Well Capitalized' this year. Moreover, the acquisition of Willow Financial is a key milestone in our continuing efforts to evolve and better compete in the changing market. We believe that the market opportunity for a strong locally-headquartered community bank with the scale, market presence, and sophisticated product set of the combined Harleysville National/Willow Financial Bancorp will be significant. As noted in our communications regarding the Willow Financial acquisition, we have identified $15 - $20 million of cost savings that we believe can be realized during 2009, and a well-executed integration process has put Harleysville on track to meet this goal. Additional revenue enhancement and cost savings opportunities are identified on an ongoing basis by Harleysville employees as part of our continued drive to enhance efficiency, effectiveness and performance."
First Quarter Dividend
Geraghty continued, "In the interest of shareholders, we believe it prudent to build balance sheet strength and liquidity in response to the negative economic outlook for 2009 forecast by many leading economists, especially with respect to the credit markets. After careful analysis of dividend yields, we reduced the quarterly dividend from $.20 per share to $.10 per share."
Accordingly, the Board of Directors of Harleysville National Corporation declared a regular cash dividend of $.10 per share on 42,977,569 shares of outstanding common stock as of January 22, 2009. The dividend is payable March 13, 2009, to shareholders of record on February 27, 2009.
Mr. Geraghty said, "Harleysville has always been committed to maintaining a dividend policy that provides an appropriate return for shareholders while enabling the bank to retain capital for reinvestment in the core banking business. We understand the importance of dividends to our shareholders, and as a factor of this, maintain a sharp focus on delivering value over the long-term. We believe that a $.10 per share dividend, which represents a 3.2% dividend yield at present, meets these objectives."
Key Financial Metrics The following is an overview of the key financial metrics for the quarter: -- Total assets were $5.5 billion at December 31, 2008, an increase of 40.7% or $1.6 billion over $3.9 billion at December 31, 2007. On December 5, 2008, the Corporation completed its acquisition of Willow Financial Bancorp, expanding Harleysville's branch network within Chester, Bucks, Montgomery and Philadelphia Counties by 29 branches. At closing, Willow Financial had approximately $1.6 billion of assets; loans of approximately $1.1 billion; and deposits of approximately $943 million. -- Loans increased approximately $1.2 billion and deposits grew $1.0 billion from the prior year. Adjusted for the Willow Financial acquisition, organic loan growth was $98.0 million, or a healthy 4.0%, while deposits remained relatively flat. -- Net interest income on a tax equivalent basis in the fourth quarter of 2008 increased $8.3 million or 36.0% from the same period in 2007. Net interest income on a tax equivalent basis increased $23.2 million or 26.2% for the year ended December 31, 2008, as compared to 2007. The net interest margin for the fourth quarter at 3.16%, was up 40 basis points from 2.76% for the fourth quarter of 2007. -- Nonperforming assets increased $56.6 million to $78.5 million at December 31, 2008, from $22.0 million at the end of 2007. Nonperforming assets as a percentage of total assets increased to 1.43% compared to .56% at the end of 2007. Net charge-offs totaled $5.9 million, a decline of $1.8 million during 2008 over 2007. -- Quarterly noninterest income decreased $827,000. Fourth quarter noninterest income includes a non-cash other-than-temporary impairment charge of $1.9 million on collateralized debt obligation investments in pooled trust preferred securities. One time gains from sales of investment securities in 2008 and gains from sales of facilities in 2007 reflect a net decline of $1.0 million in the current quarter over last year's quarter. Wealth management fee growth was $.7 million or 13.2%. Additionally, there was an increase in service charges on deposits of $.8 million or 27.7%. -- Quarterly noninterest expenses were up $7.7 million over the same period in the prior year. Driving these increases were salary and benefits expenses primarily due to higher staffing levels resulting from new branch openings, the East Penn acquisition which occurred during the fourth quarter 2007, and the Willow Financial acquisition closed in the fourth quarter of 2008. In addition, occupancy expenses increased due to new branch openings as well as the aforementioned acquisitions. Intangible asset amortization and valuation changes on mortgage servicing rights increased $1.8 million over the fourth quarter of 2007. Other expenses increased due to increased professional, consulting fees and merger costs of $2.5 million.
Harleysville National Corporation, with assets of $5.5 billion, is the holding company for Harleysville National Bank (HNB). Investment Management and Trust Services are provided through Millennium Wealth Management and Cornerstone, divisions of HNB, with assets under management of $2.6 billion. Harleysville National Corporation stock is traded under the symbol "HNBC" and is commonly quoted under NASDAQ Global Select Market(R). For more information, visit the Harleysville National Corporation website at http://www.hncbank.com/
This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. Such factors include the possibility that anticipated cost savings may not be realized, estimated synergies may not occur, increased demand or prices for the company's financial services and products may not occur, changing economic and competitive conditions, technological developments and other risks and uncertainties. Such risks, uncertainties and other factors that could cause actual results and experience to differ from those projected include, but are not limited to, the following: ineffectiveness of their business strategy due to changes in current or future market conditions; the effects of competition, and of changes in laws and regulations, including industry consolidation and development of competing financial products and services; interest rate movements; inability to achieve merger-related synergies; difficulties in integrating distinct business operations, including information technology difficulties; disruption from the transaction making it more difficult to maintain relationships with customers and employees, and challenges in establishing and maintaining operations in new markets; volatilities in the securities markets; and deteriorating economic conditions and other risks and uncertainties, including those detailed in the Corporation's filings with the Securities and Exchange Commission.
Harleysville National Corporation Consolidated Selected Financial Data (1) (Dollars in thousands, except per share data) December 31, 2008 (unaudited) For the period: Three Months Ended -------- Dec. Sep. Jun. Mar. Dec. 31, 30, 30, 31, 31, 2008 2008 2008 2008 2007 ---- ---- ---- ---- ---- Interest Income $54,583 $49,942 $49,353 $52,416 $51,133 Interest Expense 25,136 24,645 24,164 28,209 29,555 ------ ------ ------ ------ ------ Net Interest Income 29,447 25,297 25,189 24,207 21,578 Provision for Loan Losses 7,920 2,580 3,107 1,960 4,475 ----- ----- ----- ----- ----- Net Interest Income after Provision for Loan Losses 21,527 22,717 22,082 22,247 17,103 ------ ------ ------ ------ ------ Service Charges 3,666 3,424 3,312 3,113 2,870 Gains on Sales of Investment Securities, Net 2,417 - 97 128 657 Other-than- temporary Impairment of Available for Sale Securities (1,923) - - - - Gain on Sale-Leaseback of Bank Properties - - - - 2,788 Wealth Management Income 5,683 3,779 4,567 4,277 5,019 Bank-Owned Life Insurance Income 730 706 657 684 656 Other Income 2,771 2,536 2,963 2,630 2,181 ----- ----- ----- ----- ----- Total Noninterest Income 13,344 10,445 11,596 10,832 14,171 ------ ------ ------ ------ ------ Salaries, Wages and Employee Benefits 14,509 13,539 14,201 13,859 13,050 Occupancy 2,663 2,412 2,441 2,585 2,043 Furniture and Equipment 1,181 1,074 1,083 1,094 1,051 Intangibles expense 2,211 678 631 688 385 Merger Charges 2,456 974 - - 339 Other Expenses 8,273 6,476 6,102 5,492 6,711 ----- ----- ----- ----- ----- Total Noninterest Expense 31,293 25,153 24,458 23,718 23,579 ------ ------ ------ ------ ------ Income Before Income Taxes 3,578 8,009 9,220 9,361 7,695 Income Tax (Benefit) Expense (245) 1,370 1,893 2,057 1,514 ---- ----- ----- ----- ----- Net Income $3,823 $6,639 $7,327 $7,304 $6,181 ====== ====== ====== ====== ====== Per Common Share Data: ------------ Weighted Average Common Shares - Basic 34,695,062 31,385,257 31,359,011 31,346,833 30,075,054 Weighted Average Common Shares - Diluted 34,843,058 31,551,026 31,521,608 31,522,736 30,278,743 Net Income Per Share - Basic $0.11 $0.21 $0.24 $0.23 $0.20 Net Income Per Share - Diluted $0.11 $0.21 $0.23 $0.23 $0.20 Cash Dividend Per Share $0.20 $0.20 $0.20 $0.20 $0.20 Book Value $11.05 $9.90 $10.45 $10.95 $10.83 Market Value $14.44 $16.98 $11.16 $14.42 $14.57 For the period: Twelve Months Ended --------------- December 31, 2008 2007 ---- ---- Interest Income $206,294 $194,561 Interest Expense 102,154 112,127 ------- ------- Net Interest Income 104,140 82,434 Provision for Loan Losses 15,567 10,550 ------ ------ Net Interest Income after Provision for Loan Losses 88,573 71,884 ------ ------ Service Charges 13,515 9,690 Gains on Sales of Investment Securities, Net 2,642 1,187 Other-than-temporary Impairment of Available for Sale Securities (1,923) (55) Gain on Sale-Leaseback of Bank Properties - 2,788 Wealth Management Income 18,306 18,642 Bank-Owned Life Insurance Income 2,777 2,489 Other Income 10,900 8,597 ------ ----- Total Noninterest Income 46,217 43,338 ------ ------ Salaries, Wages and Employee Benefits 56,108 48,832 Occupancy 10,101 7,008 Furniture and Equipment 4,432 3,941 Intangibles expense 4,208 1,225 Merger Charges 3,430 423 Other Expenses 26,343 19,926 ------ ------ Total Noninterest Expense 104,622 81,355 ------- ------ Income Before Income Taxes 30,168 33,867 Income Tax Expense 5,075 7,272 ----- ----- Net Income $25,093 $26,595 ======= ======= Twelve Months Ended December 31, Per Common Share Data: 2008 2007 ----------------------- ---- ---- Weighted Average Common Shares - Basic 32,201,150 29,218,671 Weighted Average Common Shares - Diluted 32,364,137 29,459,898 Net Income Per Share - Basic $0.78 $0.91 Net Income Per Share - Diluted $0.78 $0.90 Cash Dividend Per Share $0.80 $0.80 Asset Quality 2008 2008 2008 2008 2007 Data: 4Q 3Q 2Q 1Q 4Q ------------- -- -- -- -- -- Nonaccrual Loans $75,060 $36,278 $36,284 $23,819 $21,091 90 + Days Past Due Loans 1,849 1,275 1,676 1,702 857 ----- ----- ----- ----- --- Nonperforming Loans 76,909 37,553 37,960 25,521 21,948 Net Assets in Foreclosure 1,626 1,221 1,189 1,536 28 ----- ----- ----- ----- -- Nonperforming Assets $78,535 $38,774 $39,149 $27,057 $21,976 ------- ------- ------- ------- ------- Loan Loss Reserve $49,955 $31,668 $31,174 $28,490 $27,328 Loan Loss Reserve / Loans 1.36% 1.25% 1.25% 1.15% 1.11% Loan Loss Reserve / Nonperforming Loans 65.0% 84.3% 82.1% 111.6% 124.5% Nonperforming Assets / Total Assets 1.43% 0.98% 1.01% 0.69% 0.56% Net Loan Charge- offs $2,558 $2,086 $423 $798 $3,019 Net Loan Charge-offs (annualized) / Average Loans 0.36% 0.33% 0.07% 0.13% 0.53% Selected Ratios 2008 2008 2008 2008 2007 (annualized): 4Q 3Q 2Q 1Q 4Q ---------------- -- -- -- -- -- Return on Average Assets 0.35% 0.68% 0.76% 0.75% 0.68% Return on Average Shareholders' Equity 4.40% 8.20% 8.79% 8.55% 7.74% Yield on Earning Assets (FTE) 5.69% 5.76% 5.80% 6.07% 6.28% Cost of Interest Bearing Funds 2.82% 3.10% 3.12% 3.60% 4.02% Net Interest Margin (FTE) 3.16% 3.02% 3.06% 2.91% 2.76% Leverage Ratio 8.19% 8.13% 8.18% 8.07% 8.72% 2008 2007 Selected Ratios (annualized): Year-to-date Year-to-date ---------------- ------------ ------------ Return on Average Assets 0.63% 0.79% Return on Average Shareholders' Equity 7.45% 8.91% Yield on Earning Assets (FTE) 5.83% 6.39% Cost of Interest Bearing Funds 3.15% 4.13% Net Interest Margin (FTE) 3.04% 2.82% Balance Sheet (Period End): 2008 2008 2008 2008 2007 ------------- 4Q 3Q 2Q 1Q 4Q -- -- -- -- -- Assets $5,490,509 $3,949,730 $3,882,232 $3,894,019 $3,903,001 Earning Assets 4,944,126 3,626,352 3,544,587 3,569,040 3,579,211 Investment Securities 1,231,661 983,349 1,014,134 1,048,915 982,915 Loans 3,685,244 2,539,037 2,501,968 2,481,930 2,460,823 Other Earning Assets 27,221 103,966 28,485 38,195 135,473 Interest- Bearing Liabilities 4,449,461 3,221,921 3,114,993 3,129,316 3,135,085 Total Deposits 3,938,432 3,018,276 2,865,148 2,987,907 2,985,058 Noninterest- Bearing Deposits 479,469 343,308 362,750 355,027 358,258 Interest- Bearing Checking 556,855 430,607 422,850 399,178 482,104 Money Market 1,042,302 727,693 756,588 854,831 796,325 Savings 270,885 182,342 183,226 171,337 145,681 Time Deposits 1,588,921 1,334,326 1,139,734 1,207,534 1,202,690 Total Borrowed Funds 990,498 546,953 612,595 496,436 508,285 Federal Home Loan Bank 522,671 213,755 223,764 208,774 216,785 Other Borrowings 467,827 333,198 388,831 287,662 291,500 Shareholders' Equity 474,707 310,994 327,910 343,282 339,310 Balance Sheet (Average): 2008 2008 2008 2008 2007 -------------- 4Q 3Q 2Q 1Q 4Q -- -- -- -- -- Assets $4,341,741 $3,899,593 $3,856,900 $3,890,959 $3,589,139 Earning Assets 3,956,963 3,580,454 3,552,208 3,590,965 3,326,663 Investment Securities 1,072,468 1,002,901 1,029,502 1,043,566 962,918 Loans 2,860,891 2,522,034 2,491,894 2,463,242 2,278,188 Other Earning Assets 23,604 55,519 30,812 84,157 85,557 Interest- Bearing Liabilities 3,550,359 3,158,464 3,114,520 3,151,996 2,914,269 Total Deposits 3,289,483 2,923,815 2,900,523 2,977,052 2,718,625 Noninterest- Bearing Deposits 445,495 348,183 340,802 324,120 313,556 Interest- Bearing Checking 444,141 428,078 415,398 436,828 480,003 Money Market 820,395 739,931 804,890 822,411 768,596 Savings 212,081 182,403 176,917 156,211 122,442 Time Deposits 1,367,371 1,225,220 1,162,516 1,237,482 1,034,028 Total Borrowed Funds 706,371 582,832 554,799 499,064 509,200 Federal Home Loan Bank 289,245 217,717 213,860 211,607 211,043 Other Borrowings 417,126 365,115 340,939 287,457 298,157 Shareholders' Equity 345,887 322,077 335,311 343,400 316,778 Average Balance Sheets and Interest Rates - Fully-Taxable Equivalent Basis ------------------------------------------- Three Months Ended December 31, 2008 ------------------------------------ Average Average Balance Interest Rate ------- -------- ---- Assets Earning assets: Investment securities Taxable investments $758,807 $10,301 5.40% Non-taxable investments (2) 313,661 4,820 6.11% ------- ----- ---- Total investment securities 1,072,468 15,121 5.61% Federal funds sold and deposits in banks 23,604 52 0.88% Loans(2) (3) 2,860,891 41,434 5.76% --------- ------ ---- Total earning assets 3,956,963 56,607 5.69% Noninterest-earning assets 384,778 ------- Total assets $4,341,741 ========== Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits: Savings and money market $1,476,617 5,604 1.51% Time 1,367,371 13,357 3.89% --------- ------ ---- Total interest-bearing deposits 2,843,988 18,961 2.65% Borrowed funds 706,371 6,175 3.48% ------- ----- ---- Total interest-bearing liabilities 3,550,359 25,136 2.82% Noninterest-bearing liabilities: Demand deposits 369,480 Other liabilities 76,015 ------ Total noninterest-bearing liabilities 445,495 ------- Total liabilities 3,995,854 Shareholders' equity 345,887 ------- Total liabilities and shareholders' equity $4,341,741 ========== Net interest spread 2.87% Effect of noninterest-bearing sources 0.29% ------- ---- Net interest income/margin on earning assets $31,471 3.16% ------- ---- Less tax equivalent adjustment 2,024 ----- Net interest income $29,447 ======= Three Months Ended December 31, 2007 ------------------------------------ Average Average Balance Interest Rate ------- -------- ---- Assets Earning assets: Investment securities Taxable investments $696,628 $8,982 5.12% Non-taxable investments (2) 266,290 4,000 5.96% ------- ----- ---- Total investment securities 962,918 12,982 5.35% Federal funds sold and deposits in banks 85,557 1,023 4.74% Loans(2) (3) 2,278,188 38,692 6.74% --------- ------ ---- Total earning assets 3,326,663 52,697 6.28% Noninterest-earning assets 262,476 ------- Total assets $3,589,139 ========== Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits: Savings and money market $1,371,041 10,768 3.12% Time 1,034,028 12,639 4.85% --------- ------ ---- Total interest-bearing deposits 2,405,069 23,407 3.86% Borrowed funds 509,200 6,148 4.79% ------- ----- ---- Total interest-bearing liabilities 2,914,269 29,555 4.02% Noninterest-bearing liabilities: Demand deposits 313,556 Other liabilities 44,536 ------ Total noninterest-bearing liabilities 358,092 ------- Total liabilities 3,272,361 Shareholders' equity 316,778 ------- Total liabilities and shareholders' equity $3,589,139 ========== Net interest spread 2.26% Effect of noninterest-bearing sources 0.50% ------- ---- Net interest income/margin on earning assets $23,142 2.76% ------- ---- Less tax equivalent adjustment 1,564 ----- Net interest income $21,578 ======= Twelve Months Ended December 31, 2008 ------------------------------------- Average Average Balance Interest Rate ------- -------- ---- Assets Earning assets: Investment securities Taxable investments $738,640 $39,195 5.31% Non-taxable investments (2) 298,472 18,110 6.07% ------- ------ ---- Total investment securities 1,037,112 57,305 5.53% Federal funds sold and deposits in banks 48,474 1,097 2.26% Loans(2) (3) 2,585,101 155,447 6.01% --------- ------- ---- Total earning assets 3,670,687 213,849 5.83% Noninterest-earning assets 327,285 ------- Total assets $3,997,972 ========== Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits: Savings and money market $1,409,941 25,140 1.78% Time 1,248,412 53,771 4.31% --------- ------ ---- Total interest-bearing deposits 2,658,353 78,911 2.97% Borrowed funds 586,088 23,243 3.97% ------- ------ ---- Total interest-bearing liabilities 3,244,441 102,154 3.15% Noninterest-bearing liabilities: Demand deposits 345,717 Other liabilities 71,160 ------ Total noninterest- bearing liabilities 416,877 ------- Total liabilities 3,661,318 Shareholders' equity 336,654 ------- Total liabilities and shareholders' equity $3,997,972 ========== Net interest spread 2.68% Effect of noninterest-bearing sources 0.36% -------- ---- Net interest income/margin on earning assets $111,695 3.04% -------- ---- Less tax equivalent adjustment 7,555 ----- Net interest income $104,140 ======== Twelve Months Ended December 31, 2007 ------------------------------------- Average Average Balance Interest Rate ------- -------- ---- Assets Earning assets: Investment securities Taxable investments $681,788 $34,803 5.10% Non-taxable investments (2) 262,676 15,849 6.03% ------- ------ ---- Total investment securities 944,464 50,652 5.36% Federal funds sold and deposits in banks 72,087 3,576 4.96% Loans(2) (3) 2,123,170 146,400 6.90% --------- ------- ---- Total earning assets 3,139,721 200,628 6.39% Noninterest-earning assets 231,583 ------- Total assets $3,371,304 ========== Liabilities and Shareholders' Equity Interest-bearing liabilities: Interest-bearing deposits: Savings and money market $1,381,582 47,980 3.47% Time 863,953 41,309 4.78% ------- ------ ---- Total interest-bearing deposits 2,245,535 89,289 3.98% Borrowed funds 471,296 22,838 4.85% ------- ------ ---- Total interest-bearing liabilities 2,716,831 112,127 4.13% Noninterest-bearing liabilities: Demand deposits 312,011 Other liabilities 44,069 ------ Total noninterest-bearing liabilities 356,080 ------- Total liabilities 3,072,911 Shareholders' equity 298,393 ------- Total liabilities and shareholders' equity $3,371,304 ========== Net interest spread 2.26% Effect of noninterest-bearing sources 0.56% ------- ---- Net interest income/margin on earning assets $88,501 2.82% ------- ---- Less tax equivalent adjustment 6,067 ----- Net interest income $82,434 ======= Regulatory Capital ------------------- To Be Well Capitalized Under Prompt For Capital Corrective Adequacy Action Actual Purposes Provision ------ ----------- ---------- As of December 31, 2008 Amount Ratio Amount Ratio Amount Ratio ----------------------- ------ ----- ------ ----- ------ ----- Total Capital (to risk weighted assets): Corporation $384,522 8.88% $346,333 8.00% $432,917 10.00% Harleysville National Bank 370,552 8.58% 345,536 8.00% 431,920 10.00% Tier 1 Capital (to risk weighted assets): Corporation 334,467 7.73% 173,167 4.00% 259,750 6.00% Harleysville National Bank 320,497 7.42% 172,768 4.00% 259,152 6.00% Tier 1 Capital (to average assets): Corporation 334,467 8.19% 163,315 4.00% 204,144 5.00% Harleysville National Bank 320,497 7.88% 162,689 4.00% 203,361 5.00% As of December 31, 2007 ----------------------- Total Capital (to risk weighted assets): Corporation $329,887 10.67% $247,273 8.00% $309,091 10.00% Harleysville National Bank 312,880 10.16% 246,286 8.00% 307,858 10.00% Tier 1 Capital (to risk weighted assets): Corporation 302,459 9.79% 123,637 4.00% 185,455 6.00% Harleysville National Bank 285,452 9.27% 123,143 4.00% 184,715 6.00% Tier 1 Capital (to average assets): Corporation 302,459 8.72% 138,795 4.00% 173,494 5.00% Harleysville National Bank 285,452 8.29% 137,722 4.00% 172,153 5.00% (1) Certain prior period amounts have been reclassified to conform to current period presentation. (2) The interest earned on nontaxable investment securities and loans is shown on a tax equivalent basis (tax rate of 35%). (3) Nonaccrual loans have been included in the appropriate average loan balance category, but interest on nonaccrual loans has not been included for purposes of determining interest income.
