FOR IMMEDIATE RELEASE

CONTACT:Walter E. Daller Jr., Chairman, President and CEO

PHONE:215-256-8851 ext. 2300

THIRD QUARTER EARNINGS UP 15.6%

AT HARLEYSVILLE NATIONAL CORPORATION

HARLEYSVILLE, PA (October 13, 2004) - Harleysville National Corporation (HNC) (NASDAQ: HNBC), today announced third quarter 2004 earnings of $10.2 million, a 15.6% increase over third quarter 2003 earnings of $8.8 million. Earnings for the nine-month period ending September 30, 2004, were $28.5 million, a 7.9% increase over earnings of $26.4 million for the nine-month period ending September 30, 2003.

The Company’s consolidated total assets were $2.98 billion at September 30, 2004, an increase of 18.0% or $453.2 million above the September 30, 2003, level of $2.52 billion. Of this increase, 9.2% or $231.3 million was attributable to the acquisition of Millennium Bank.

For the quarter ending September 30, 2004, diluted earnings per share of $.38 increased 11.8% over the $.34 earned during the third quarter of 2003, and basic earnings per share at $ .39 increased 8.3% over $ .36 earned in the third quarter of 2003. For the nine-month period ended September 30, 2004, diluted earnings per share of $1.07 were 4.9% higher than the $1.02 earned during the nine months of 2003, and basic earnings per share of $1.11 were up 4.7% from $1.06 during the nine months of 2003. The financial results for 2004 include the impact of operations from the acquisition of Millennium Bank effective April 30, 2004, and the related issuance of 946,000 common shares, as well as the issuance of 1,295,000 shares for a 5% stock dividend payable September 15, 2004. All share and per share information has been restated to reflect this stock dividend.

"We are certainly pleased to announce a double-digit percentage increase in earnings. And, we are especially happy to report core loan growth, which exceeded 15.2% for the most recent twelve months" said Walter E. Daller, Jr., President and CEO of HNC.

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Net interest income on a fully tax-equivalent basis in the third quarter of 2004 increased $2.5 million or 11.7% over the same period in 2003 and increased $4.5 million or 6.9% from the nine-month period ending September 30, 2003. This increase was primarily the result of higher earning asset volumes. The net interest margin for the third quarter of 2004 was 3.51%, compared to 3.71% for the third quarter of 2003, the decline being primarily due to the decline in loan yields. Average earning assets increased $397 million or 17.3% during the third quarter of 2004 versus the comparable period in 2003, while average loans increased $362.9 million or 26.8%. Loans totaling $157.1 million were acquired in the acquisition of Millennium Bank.

The company also experienced an improvement in loan quality during the third quarter of 2004, compared to the third and fourth quarters of 2003. Nonperforming assets decreased in the third quarter of 2004 by $1.5 million and $912,000 from the third and fourth quarters of 2003, respectively. The ratio of the allowance for loan losses to nonperforming loans (nonaccruing loans and loans 90 days or more past due) was 425.4% at September 30, 2004, compared to 371.7% at December 31, 2003, and 326.5% at September 30, 2003. Nonperforming assets, including nonaccrual loans, net assets in foreclosure and loans 90 days or more past due was .15% of total assets at September 30, 2004, an improvement from .22% at December 31, 2003, and .24% at September 30, 2003. The lower provision for loan losses for the three and nine- month periods ending September 30, 2004, compared to the same periods in 2003, is reflective of the improved loan quality and management’s continued analysis.

Core deposits increased 21.1% or $267.7 million, to $1.54 billion at September 30, 2004, from $1.27 billion at September 30, 2003. Of this increase, 4.7% or $59.8 million was due to the acquisition of Millennium Bank. Total deposits increased $218.9 million for the same period of which $151.2 million was due to the acquisition of Millennium Bank. Borrowings increased $183.7 million or 69.6% primarily due to loan growth and the Millennium Bank acquisition.

Trust and investment advisory services income for the quarter ending September 30, 2004 increased $924,000 or 96.9% from the same period a year ago. Of this amount, $676,000 or 70.9% was attributable to the acquisition of Millennium Bank. Total noninterest income of $6.7 million for the current quarter reflects an increase of $1.4 million from the comparable period in 2003, primarily due to an increase of $924,000 in trust and investment advisory fees and an increase of $680,000 in the gains related to the auto leasing portfolio,

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partially offset by a $247,000 decrease in the gain on sales of investment securities. For the first nine months of 2004, total noninterest income of $18.8 million decreased $3.7 million, or 16.3% from $22.4 million in the comparable period last year. This was mainly due to a decrease of $4.8 million on the sale of investment securities and a $1.1 million decrease in life insurance income, partially offset by an increase of $1.8 million in trust and investment advisory income and an increase of $680,000 in the gains related to the auto leasing portfolio.

Noninterest expense of $14.5 million increased $1.4 million or 10.5% from $13.1 million in the third quarter of 2003. The increase in noninterest expense was due to a $1.8 million increase in salaries and benefits primarily related to the acquisition of Millennium and a $427,000 increase in amortization of mortgage servicing rights, partially offset by a decrease in other expenses of $947,000. The decrease in other expenses was due to higher deferred loan expenses of $1.3 million, offset by an increase of $398,000 in marketing costs. For the first nine months of 2004, noninterest expense decreased $2.9 million, or 6.2%, to $42.9 million from $45.7 million in 2003. This decrease was mainly due to lower off-lease vehicle residual reserve of $2.6 million, a decrease of $2.6 million in Federal Home Loan Bank borrowings prepayment fees, and higher loan origination expense deferrals amounting to $2.4 million, partially offset by an increase of $3.2 million in salary and employee benefit expense and $493,000 in occupancy expense, mostly related to the Millennium acquisition and a new branch opening.

Harleysville National Corporation, with assets of $2.98 billion, is the holding company for Harleysville National Bank (HNB). Investment Management and Trust Services are provided through the Millennium Wealth Management and Private Banking Group, a division of HNB, with assets under management exceeding $1.4 billion. Cumberland Advisors, Inc., a registered investment advisor specializing in fixed-income money management and equities, using exchange-traded funds, is also a part of the Millennium Wealth Management and Private Banking Group. Harleysville National Corporation stock is traded under the symbol "HNBC" and is commonly quoted under Nasdaq National Market Issues. For more information, visit the HNC Web site at 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 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, including those detailed in the company’s filings with the Securities and Exchange Commission.

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Harleysville National Corporation
Consolidated Selected Financial Data
(Dollars in thousands, except per share data)
September 30, 2004
(unaudited)
For the period:	Three Months Ended
			Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,
			2004		2004		2004		2003		2003
Interest Income		$	33,366	$	30,994	$	29,173	$	30,287	$	28,439
Interest Expense			11,286		9,674		8,943		9,393		9,216
Net Interest Income			22,080		21,320		20,230		20,894		19,223
Provision for Loan Losses			499		497		489		641		630
Net Interest Income after
Provision for Loan Losses			21,581		20,823		19,741		20,253		18,593
Service Charges			2,000		1,929		1,925		2,081		2,007
Gains on Sales of Investment Securities, Net			112		641		900		164		359
Trust, Investment Services and Advisory Income			1,878		1,588		1,121		1,017		954
Bank-Owned Life Insurance Income			647		521		611		680		673
Other Income			2,056		1,608		1,226		1,274		1,259
Total Noninterest Income			6,693		6,287		5,783		5,216		5,252
Salaries, Wages and Employee Benefits			9,754		8,834		8,277		7,518		7,938
Occupancy			1,135		1,120		1,084		924		941
Furniture and Equipment			1,414		1,510		1,258		1,637		1,525
Other Expenses			2,174		3,129		3,198		3,812		2,694
Total Noninterest Expense			14,477		14,593		13,817		13,891		13,098
Income Before Income Taxes			13,797		12,517		11,707		11,578		10,747
Income Tax Expense			3,632		3,135		2,800		2,606		1,952
Net Income		$	10,165	$	9,382	$	8,907	$	8,972	$	8,795
Per Common Share Data:
Weighted Average Common Shares - Basic			26,240,616		25,861,549		25,128,032		25,029,504		25,003,053
Weighted Average Common Shares - Diluted			27,055,603		26,722,932		26,033,205		26,007,148		25,816,995
Net Income Per Share - Basic		$	0.39	$	0.37	$	0.35	$	0.35	$	0.36
Net Income Per Share - Diluted		$	0.38	$	0.35	$	0.34	$	0.35	$	0.34
Cash Dividend Per Share		$	0.18	$	0.16	$	0.16	$	0.18	$	0.15
Book Value		$	10.19	$	9.58	$	9.45	$	9.07	$	8.75
Market Value		$	24.51	$	24.38	$	26.50	$	28.67	$	22.28

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For the period:	Nine Months Ended
	September 30,
		2004			2003
Interest Income	$	93,533		$	88,913
Interest Expense		29,903			30,686
Net Interest Income		63,630			58,227
Provision for Loan Losses		1,485			2,559
Net Interest Income after
Provision for Loan Losses		62,145			55,668
Service Charges		5,854			5,774
Gains on Sales of Investment Securities, Net		1,653			6,449
Trust, Investment Services and Advisory Income		4,587			2,820
Bank-Owned Life Insurance Income		1,779			1,935
Income on Life Insurance		-			1,119
Other Income		4,890			4,325
Total Noninterest Income		18,763			22,422
Salaries, Wages and Employee Benefits		26,865			23,655
Occupancy		3,339			2,846
Furniture and Equipment		4,182			4,206
Prepayment Fee		-			2,594
Other Expenses		8,501			12,437
Total Noninterest Expense		42,887			45,738
Income Before Income Taxes		38,021			32,352
Income Tax Expense		9,567			5,991
Net Income	$	28,454		$	26,361
Per Common Share Data:
Weighted Average Common Shares - Basic		25,745,214			24,983,586
Weighted Average Common Shares - Diluted		26,614,877			25,782,847
Net Income Per Share - Basic	$	1.11		$	1.06
Net Income Per Share - Diluted	$	1.07		$	1.02
Cash Dividend Per Share	$	0.50		$	0.44
		2004			2004			2004			2003			2003
Asset Quality Data:		3Q			2Q			1Q			4Q			3Q
Nonaccrual Loans	$	3,235		$	3,245		$	3,645		$	3,343		$	3,962
90 + Days Past Due Loans		948			919			1,178			1,164			1,200
Nonperforming Loans		4,183			4,164			4,823			4,507			5,162
Net Assets in Foreclosure		347			389			423			935			893
Nonperforming Assets	$	4,530		$	4,553		$	5,246		$	5,442		$	6,055
Loan Loss Reserve	$	17,795		$	17,940		$	16,464		$	16,753		$	16,854
Loan Loss Reserve / Loans		1.00	%		1.07	%		1.15	%		1.19	%		1.22	%
Loan Loss Reserve / Nonperforming Loans		425.4	%		430.8	%		341.3	%		371.7	%		326.5	%
Nonperforming Assets / Total Assets		0.15	%		0.16	%		0.21	%		0.22	%		0.24	%
Net Loan Charge-offs	$	644		$	698		$	778		$	742		$	1,313
Net Loan Charge-offs (annualized)
/ Average Loans		0.15	%		0.18	%		0.22	%		0.21	%		0.39	%
		2004			2004			2004			2003			2003
Selected Ratios (annualized):		3Q			2Q			1Q			4Q			3Q
Return on Average Assets		1.40	%		1.37	%		1.43	%		1.41	%		1.44	%
Return on Average Shareholders' Equity		15.61	%		15.06	%		15.33	%		16.22	%		16.11	%
Return on Average Shareholders'
Realized Equity *		15.40	%		15.17	%		15.97	%		16.56	%		16.65	%
Yield on Earning Assets (FTE)		5.18	%		5.12	%		5.25	%		5.38	%		5.31	%
Cost of Interest Bearing Funds		2.01	%		1.82	%		1.86	%		1.88	%		1.95	%
Net Interest Margin (FTE)		3.51	%		3.62	%		3.73	%		3.82	%		3.71	%
Leverage Ratio		8.99	%		9.28	%		10.04	%		8.77	%		8.97	%
* Excluding unrealized gain (loss) on investment securities available for sale.

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		2004			2003
Selected Ratios (annualized):		Year-to-date			Year-to-date
Return on Average Assets		1.40	%		1.44	%
Return on Average Shareholders' Equity		15.42	%		16.32	%
Return on Average Shareholders'
Realized Equity *		15.57	%		16.99	%
Yield on Earning Assets (FTE)		5.19	%		5.51	%
Cost of Interest Bearing Funds		1.90	%		2.14	%
Net Interest Margin (FTE)		3.62	%		3.74	%
* Excluding unrealized gain (loss) on investment securities available for sale.
Balance Sheet (Period End):		2004			2004			2004		2003		2003
		3Q			2Q			1Q		4Q		3Q
Assets	$	2,976,173		$	2,865,949		$	2,542,328	$	2,510,939	$	2,523,002
Earning Assets		2,791,891			2,678,772			2,406,068		2,371,816		2,386,477
Investment Securities		975,750			957,398			948,749		924,874		915,832
Loans, Net of Unearned Fees		1,774,189			1,683,528			1,428,145		1,408,391		1,377,682
Other Earning Assets		41,952			37,846			29,174		38,551		92,963
Interest-Bearing Liabilities		2,332,102			2,218,687			1,930,052		1,940,016		1,970,774
Total Deposits		2,209,753			2,093,101			1,968,521		1,979,081		1,990,832
Noninterest-Bearing Deposits		325,132			345,191			317,566		294,121		283,886
Interest-Bearing Checking		320,276			258,739			268,110		283,607		276,941
Money Market		661,480			561,823			521,085		506,516		490,341
Savings		229,992			245,768			225,981		221,778		217,969
Time, under $100,000		527,971			523,587			481,400		491,740		506,976
Time, $100,000 or greater		144,902			157,993			154,379		181,319		214,719
Total Borrowed Funds		447,481			470,777			279,097		255,056		263,828
Federal Home Loan Bank		257,750			241,750			172,750		172,750		168,750
Other Borrowings		189,731			229,027			106,347		82,306		95,078
Shareholders' Equity		266,965			251,877			237,964		227,053		218,878
Balance Sheet (Average):		2004			2004			2004		2003		2003
		3Q			2Q			1Q		4Q		3Q
Assets	$	2,878,769		$	2,759,563		$	2,497,085	$	2,543,616	$	2,436,763
Earning Assets		2,695,579			2,593,105			2,365,497		2,408,967		2,298,565
Investment Securities		932,330			983,420			910,314		983,318		898,886
Loans, Net of Unearned Fees		1,717,245			1,572,830			1,414,802		1,389,595		1,354,394
Other Earning Assets		46,004			36,855			40,381		36,054		45,285
Interest-Bearing Liabilities		2,237,681			2,136,010			1,931,950		1,993,653		1,888,489
Total Deposits		2,154,443			2,048,279			1,961,481		1,976,616		1,906,373
Noninterest-Bearing Deposits		329,559			316,715			280,809		279,307		278,267
Interest-Bearing Checking		285,735			274,978			280,142		280,076		241,283
Money Market		620,420			537,614			517,846		501,127		479,375
Savings		237,463			239,971			222,807		221,116		219,778
Time, under $100,000		525,701			508,275			487,379		497,281		508,256
Time, $100,000 or greater		155,565			170,726			172,498		197,709		179,414
Total Borrowed Funds		412,797			404,446			251,278		296,344		260,383
Federal Home Loan Bank		255,837			187,608			172,750		172,750		164,728
Other Borrowings		156,960			216,838			78,528		123,594		95,655
Shareholders' Equity		259,035			250,504			232,386		221,236		218,396

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