EX-99.1 2 ex99-1.htm PRESS RELEASE ex99-1.htm




FOR IMMEDIATE RELEASE
CONTACT:                Deb M. Takes, Interim President and CEO
PHONE:                      215-513-2304


HARLEYSVILLE NATIONAL CORPORATION REPORTS
SECOND QUARTER EARNINGS OF $7.1 MILLION

HARLEYSVILLE, PA (July 20, 2007) - Harleysville National Corporation (NASDAQ: HNBC), today announced second quarter 2007 diluted and basic earnings per share of $.24 and $.25, respectively compared to $.32 for the second quarter of 2006.  Net income was $7.1 million for the second quarter of 2007 compared to $9.3 million during the same period in 2006.
For the six months ended June 30, 2007, diluted and basic earnings per share were $.45 and $.46, respectively, as compared to $.62 and $.63, respectively in the comparable period of 2006.  Net income for the six-month period ended June 30, 2007, was $13.2 million compared to $18.2 million during the comparable six-month period in 2006.
“Earnings growth has been challenging in the difficult environment.  We are encouraged by our progress in noninterest revenue with wealth management growth of 43% and bank service charges increasing 21% during the second quarter of 2007 over the comparable period in 2006.  Additionally, we are pleased to report loan growth of 2.4% and core deposit growth of 7.6% from June 30, 2006 as well as a reduction in non-performing assets of approximately $800,000 since March 31, 2007,” said Deb M. Takes, Interim President and Chief Executive Officer.
The Corporation’s consolidated total assets were $3.3 billion at June 30, 2007, an increase of 2.7% or $86.2 million over $3.2 billion in total assets reported at June 30, 2006.  This rise was primarily attributable to loan growth of $49.4 million and an increase in cash and investments of $22.6 million.  The growth in loans took place mainly in the Bank’s real estate and commercial loan portfolios.

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The financial results for 2007 reflect the issuance of 1,382,000 shares of the Corporation’s common stock for a 5% stock dividend payable September 15, 2006.  All share and per share information has been restated to reflect this stock dividend.

DETAILED REVIEW OF FINANCIAL RESULTS
Net interest income on a tax equivalent basis in the second quarter of 2007 decreased $1.2 million or 5.1% from the same period in 2006 and decreased $2.8 million or 6.1% from the six-month period ending June 30, 2006.  The decreases during 2007 were mainly attributable to higher deposit costs offset in part by increased loan and investment rates.  The net interest margin for the second and first quarters of 2007 was 2.82%, compared to 3.04% for the second quarter of 2006.  Due to market conditions, deposit rates increased faster than loan rates, resulting in a lower net interest margin compared to the second quarter of 2006.  Average earning assets increased $74.8 million or 2.5% during the second quarter of 2007 versus the comparable period in 2006.  Average loans grew by $55.4 million or 2.8% during the same period with average cash and investment securities increasing $19.4 million.  Average interest-bearing deposits were up $86.3 million or 4.1%, primarily as a result of growth in interest-bearing checking accounts.  Average borrowings increased $11.8 million or 2.7% with a higher level of long-term securities sold under agreement to repurchase offset in part by long-term Federal Home Loan Bank maturities as well as a reduced level of overnight funding replaced by deposit growth.
Nonperforming assets (including nonaccrual loans, net assets in foreclosure and loans 90 days or more past due) were .57% of total assets at June 30, 2007, compared to .54% at December 31, 2006, and .36% at June 30, 2006.  The increase in nonperforming assets at June 30, 2007, in relation to December 31, 2006, of $1.1 million was mainly due to a construction loan for one borrower and real estate loans for two borrowers placed on nonaccrual of interest, partially offset by the payoff of nonaccrual real estate loans for another borrower as well as a lower level of commercial mortgage loans 90 days past due.  The increase of nonperforming assets in relation to June 30, 2006, was largely due to a higher level of real estate loans on non-accrual of interest.  The loan loss provision increased $225,000 during the second quarter of 2007 over the comparable period in 2006.  The loan loss provision increased $1.5 million for the six-month period ending June 30, 2007, as compared to the same period in 2006, primarily as a
 
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result of inherent risk related to loan growth and the increases in nonperforming loans and charge-offs which occurred during the first quarter of 2007.
Total deposits increased $23.9 million or 1.0% to $2.50 billion at June 30, 2007, up from $2.48 billion at June 30, 2006.  This was principally attributable to growth in interest-bearing checking and money market accounts partially offset by declines in savings and time deposit accounts.  Core deposits (total deposits less time deposits) increased 7.6% or $123.2 million to $1.74 billion for the same periods.
Noninterest income of $10.3 million for the second quarter of 2007 reflects an increase of $332,000 from the second quarter of 2006.  Wealth management income rose $1.5 million during the second quarter of 2007 over the comparable quarter in 2006, primarily driven by a higher level of life insurance business at Cornerstone and the McPherson Enterprises acquisition on March 1, 2007.  The Bank experienced an increase in deposit service charges of $416,000 during the second quarter of 2007 as compared to the second quarter of 2006 mainly from return check and overdraft fees.  Partially offsetting these increases in noninterest income was the pre-tax gain of $1.4 million on the sale of the Bank’s $15.3 million credit card portfolio during the second quarter of 2006.  For the six-month period ended June 30, 2007, noninterest income was $19.4 million, an increase of $546,000 from the same period in 2006, primarily due to the previously aforementioned increases in wealth management income and service charges on deposits partially offset by the gain on the sale of the credit card portfolio during 2006.  In addition, gains on sales of investment securities for the six months ended June 30, 2007 were $533,000.  During the comparable period in 2006, there were no investment securities gains recognized.
Noninterest expense of $20.1 million for the second quarter of 2007 increased $2.5 million from the second quarter of 2006 and increased $4.1 million for the six months ended June 30, 2007, over the comparable period in 2006.  Salaries and benefits expense rose $1.6 million during the second quarter of 2007 and $2.7 million during the first six months of 2007 from the comparable periods in 2006, primarily due to higher staffing levels resulting from branch openings, increased commissions and incentives associated with higher wealth management revenue, higher cost of medical benefits and non-recurring compensation and severance charges related to a former executive which totaled approximately $300,000.  Occupancy expense increased $287,000 and furniture and equipment expense increased
 
-7-
 
$176,000 during the second quarter of 2007 over the same period in 2006 mostly due to several new office locations including the new operations center building in Harleysville and two branch openings as well as additional increases in rent.  Other expense increased $404,000 and $906,000 for the three and six months ended June 30, 2007, respectively over the comparable periods in 2006, mainly as a result of increased computer software costs and professional and consulting expenses.
Harleysville National Corporation, with assets of $3.3 billion, is the holding company for Harleysville National Bank (HNB).  Investment Management and Trust Services are provided through Millennium Wealth Management, a division of HNB, with assets under management of $3.2 billion.  Harleysville National Corporation stock is traded under the symbol "HNBC" and is commonly quoted under NASDAQ Global Market Issues. For more information, visit the Harleysville National Corporation website 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 Corporation’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 Corporation’s filings with the Securities and Exchange Commission.


 
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Harleysville National Corporation
                                    
Consolidated Selected Financial Data (1)
                                    
(Dollars in thousands, except per share data)
                                
June 30, 2007
                                    
(unaudited)
                                    
                                     
For the period:
        
Three Months Ended
                    
   
Jun. 30,
    
Mar. 31,
    
Dec. 31,
    
Sep. 30,
    
Jun. 30,
        
   
2007
    
2007
    
2006
    
2006
    
2006
        
Interest Income
   $
47,711
     $
46,695
     $
46,661
     $
45,961
     $
44,223
        
Interest Expense
    
27,556
      
26,858
      
26,849
      
25,347
      
22,947
        
Net Interest Income
    
20,155
      
19,837
      
19,812
      
20,614
      
21,276
        
Provision for Loan Losses
    
1,125
      
2,425
      
1,200
      
900
      
900
        
Net Interest Income after
                                              
        Provision for Loan Losses
    
19,030
      
17,412
      
18,612
      
19,714
      
20,376
        
                                               
Service Charges
    
2,442
      
1,918
      
1,994
      
2,092
      
2,026
        
Gains/(Losses) on Sales of Investment Securities, Net
    
2
      
531
       (674 )    
-
      
-
        
Gain on Sale of Credit Card Portfolio
    
-
      
-
      
-
      
-
      
1,444
        
Gain on Sale of Branch
    
-
      
-
      
10,650
      
-
      
-
        
Wealth Management Income
    
4,831
      
4,267
      
3,474
      
3,372
      
3,378
        
Bank-Owned Life Insurance Income
    
603
      
582
      
594
      
591
      
601
        
Other Income
    
2,377
      
1,849
      
2,168
      
2,231
      
2,474
        
          Total Noninterest Income
    
10,255
      
9,147
      
18,206
      
8,286
      
9,923
        
                                               
Salaries, Wages and Employee Benefits
    
12,450
      
11,597
      
11,787
      
11,487
      
10,854
        
Occupancy
    
1,688
      
1,546
      
1,392
      
1,379
      
1,401
        
Furniture and Equipment
    
1,076
      
917
      
956
      
917
      
900
        
Other Expenses
    
4,927
      
4,719
      
4,332
      
3,777
      
4,523
        
          Total Noninterest Expense
    
20,141
      
18,779
      
18,467
      
17,560
      
17,678
        
                                               
Income Before Income Taxes
    
9,144
      
7,780
      
18,351
      
10,440
      
12,621
        
Income Tax Expense
    
2,065
      
1,646
      
5,079
      
2,533
      
3,336
        
          Net Income
   $
7,079
     $
6,134
     $
13,272
     $
7,907
     $
9,285
        
                                               
Per Common Share Data:
                                              
Weighted Average Common Shares - Basic
    
28,944,643
      
28,965,500
      
28,966,810
      
29,011,903
      
28,933,741
        
Weighted Average Common Shares - Diluted
    
29,190,602
      
29,255,820
      
29,291,521
      
29,384,310
      
29,351,584
        
Net Income Per Share - Basic
   $
0.25
     $
0.21
     $
0.46
     $
0.27
     $
0.32
        
Net Income Per Share - Diluted
   $
0.24
     $
0.21
     $
0.45
     $
0.27
     $
0.32
        
Cash Dividend Per Share
   $
0.20
     $
0.20
     $
0.20
     $
0.19
     $
0.18
        
Book Value
   $
9.93
     $
10.23
     $
10.18
     $
9.89
     $
9.58
        
Market Value
   $
16.12
     $
17.82
     $
19.31
     $
20.10
     $
20.20
        
                                               
                                               
For the period:
  
Six Months Ended
                                
   
June 30,     
                              
   
2007
    
2006
                                
Interest Income
   $
94,406
     $
86,319
                                
Interest Expense
    
54,414
      
43,572
                                
Net Interest Income
    
39,992
      
42,747
                                
Provision for Loan Losses
    
3,550
      
2,100
                                
Net Interest Income after
                                              
        Provision for Loan Losses
    
36,442
      
40,647
                                
                                               
Service Charges
    
4,360
      
3,916
                                
Gains on Sales of Investment Securities, Net
    
533
      
-
                                
Gain on Sale of Credit Card Portfolio
    
-
      
1,444
                                
Wealth Management Income
    
9,098
      
7,942
                                
Bank-Owned Life Insurance Income
    
1,185
      
1,201
                                
Other Income
    
4,226
      
4,353
                                
          Total Noninterest Income
    
19,402
      
18,856
                                
                                               
Salaries, Wages and Employee Benefits
    
24,047
      
21,373
                                
Occupancy
    
3,234
      
2,899
                                
Furniture and Equipment
    
1,993
      
1,791
                                
Other Expenses
    
9,646
      
8,740
                                
          Total Noninterest Expense
    
38,920
      
34,803
                                
                                               
Income Before Income Taxes
    
16,924
      
24,700
                                
Income Tax Expense
    
3,711
      
6,464
                                
          Net Income
   $
13,213
     $
18,236
                                
                                               

-9-
                                               
   
Six Months Ended
                                
   
June 30,     
                              
Per Common Share Data:
  
2007
    
2006
                                
Weighted Average Common Shares - Basic
    
28,955,014
      
28,903,632
                                
Weighted Average Common Shares - Diluted
    
29,222,626
      
29,368,854
                                
Net Income Per Share - Basic
   $
0.46
     $
0.63
                                
Net Income Per Share - Diluted
   $
0.45
     $
0.62
                                
Cash Dividend Per Share
   $
0.40
     $
0.36
                                
                                               
                                               
   
2007
    
2007
    
2006
    
2006
    
2006
        
Asset Quality Data:
  
2Q
    
1Q
    
4Q
    
3Q
    
2Q
        
Nonaccrual Loans
   $
17,389
     $
17,519
     $
15,201
     $
10,806
     $
10,164
        
90 + Days Past Due Loans
    
1,283
      
2,001
      
2,444
      
2,262
      
1,279
        
Nonperforming Loans
    
18,672
      
19,520
      
17,645
      
13,068
      
11,443
        
Net Assets in Foreclosure
    
41
      
10
      
-
      
87
      
64
        
Nonperforming Assets
   $
18,713
     $
19,530
     $
17,645
     $
13,155
     $
11,507
        
Loan Loss Reserve
   $
21,646
     $
20,929
     $
21,154
     $
21,303
     $
20,617
        
Loan Loss Reserve / Loans
     1.04 %     1.01 %     1.03 %     1.05 %     1.02 %      
Loan Loss Reserve / Nonperforming Loans
     115.9 %     107.2 %     119.9 %     163.0 %     180.2 %      
Nonperforming Assets / Total Assets
     0.57 %     0.59 %     0.54 %     0.39 %     0.36 %      
Net Loan Charge-offs
   $
408
     $
2,650
     $
1,349
     $
214
     $
178
        
Net Loan Charge-offs (annualized)
                                              
       / Average Loans
     0.08 %     0.52 %     0.26 %     0.04 %     0.04 %      
                                               
                                               
   
2007
    
2007
    
2006
    
2006
    
2006
        
Selected Ratios (annualized):
  
2Q
    
1Q
    
4Q
    
3Q
    
2Q
        
Return on Average Assets
     0.86 %     0.76 %     1.61 %     0.96 %     1.16 %      
Return on Average Shareholders' Equity
     9.69 %     8.47 %     18.18 %     11.10 %     13.44 %      
Yield on Earning Assets (FTE)
     6.40 %     6.37 %     6.22 %     6.20 %     6.10 %      
Cost of Interest Bearing Funds
     4.17 %     4.14 %     4.05 %     3.88 %     3.60 %      
Net Interest Margin (FTE)
     2.82 %     2.82 %     2.75 %     2.89 %     3.04 %      
Leverage Ratio
     9.27 %     9.32 %     9.36 %     9.24 %     9.31 %      
                                               
   
2007
    
2006
                                
 Selected Ratios (annualized):    
Year-to-date 
      
Year-to-date  
                                
Return on Average Assets
     0.81 %     1.15 %                              
Return on Average Shareholders' Equity
     9.08 %     13.25 %                              
Yield on Earning Assets (FTE)
     6.39 %     6.04 %                              
Cost of Interest Bearing Funds
     4.15 %     3.47 %                              
Net Interest Margin (FTE)
     2.82 %     3.09 %                              
                                               
                                               
Balance Sheet (Period End):
  
2007
    
2007
    
2006
    
2006
    
2006
        
   
2Q
    
1Q
    
4Q
    
3Q
    
2Q
        
Assets
   $
3,303,244
     $
3,324,967
     $
3,249,828
     $
3,363,003
     $
3,217,018
        
Earning Assets
    
3,061,300
      
3,100,047
      
3,022,219
      
3,136,487
      
2,991,628
        
  Investment Securities
    
943,924
      
928,547
      
911,889
      
922,251
      
925,545
        
  Loans
    
2,081,991
      
2,065,777
      
2,047,355
      
2,034,273
      
2,032,625
        
  Other Earning Assets
    
35,385
      
105,723
      
62,975
      
179,963
      
33,458
        
Interest-Bearing Liabilities
    
2,637,615
      
2,654,182
      
2,578,377
      
2,707,217
      
2,541,713
        
Total Deposits
    
2,503,554
      
2,526,841
      
2,516,855
      
2,628,246
      
2,479,658
        
  Noninterest-Bearing Deposits
    
339,618
      
328,096
      
327,973
      
326,851
      
356,043
        
  Interest-Bearing Checking
    
516,600
      
524,429
      
539,974
      
571,444
      
419,312
        
  Money Market
    
759,905
      
711,969
      
662,966
      
675,904
      
664,392
        
  Savings
    
121,874
      
130,981
      
133,370
      
150,889
      
175,071
        
  Time Deposits
    
765,557
      
831,366
      
852,572
      
903,158
      
864,840
        
Total Borrowed Funds
    
473,679
      
455,437
      
389,495
      
405,822
      
418,098
        
  Federal Home Loan Bank
    
192,750
      
224,750
      
239,750
      
239,750
      
257,750
        
  Other Borrowings
    
280,929
      
230,687
      
149,745
      
166,072
      
160,348
        
Shareholders' Equity
    
286,906
      
296,246
      
294,751
      
286,605
      
277,737
        
                                               
Balance Sheet (Average):
  
2007
    
2007
    
2006
    
2006
    
2006
        
   
2Q
    
1Q
    
4Q
    
3Q
    
2Q
        
Assets
   $
3,303,020
     $
3,280,854
     $
3,279,260
     $
3,253,616
     $
3,218,481
        
Earning Assets
    
3,080,691
      
3,067,366
      
3,071,093
      
3,037,009
      
3,005,888
        
  Investment Securities
    
936,526
      
944,658
      
919,848
      
917,103
      
929,002
        
  Loans
    
2,062,144
      
2,059,871
      
2,034,515
      
2,027,028
      
2,006,723
        
  Other Earning Assets
    
82,021
      
62,837
      
116,730
      
92,878
      
70,163
        
Interest-Bearing Liabilities
    
2,653,605
      
2,629,978
      
2,629,023
      
2,593,694
      
2,555,544
        
Total Deposits
    
2,517,291
      
2,515,658
      
2,543,658
      
2,518,958
      
2,459,453
        
  Noninterest-Bearing Deposits
    
314,215
      
308,095
      
317,673
      
334,847
      
342,654
        
  Interest-Bearing Checking
    
552,666
      
528,874
      
541,676
      
466,447
      
415,426
        
  Money Market
    
737,463
      
716,266
      
672,458
      
676,035
      
661,444
        
  Savings
    
125,528
      
130,934
      
140,181
      
163,136
      
180,968
        
  Time Deposits
    
787,419
      
831,489
      
871,670
      
878,493
      
858,961
        
Total Borrowed Funds
    
450,529
      
422,415
      
403,038
      
409,583
      
438,745
        
  Federal Home Loan Bank
    
207,981
      
228,750
      
239,750
      
241,685
      
285,904
        
  Other Borrowings
    
242,548
      
193,665
      
163,288
      
167,898
      
152,841
        
Shareholders' Equity
    
293,032
      
293,795
      
289,618
      
282,678
      
277,064
        

-10-
                                               
Average Balance Sheets and Interest Rates - Fully-Taxable Equivalent Basis
                        
                                               
   
Three Months Ended June 30, 2007
    
Three Months Ended June 30, 2006
  
   
Average
            
Average
    
Average
            
Average
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Assets
                                              
Earning assets:
                                              
  Investment securities
                                              
    Taxable investments
   $
676,830
     $
8,488
       5.03 %   $
673,545
     $
7,552
       4.50 %
    Non-taxable investments (2)
    
259,696
      
3,908
       6.04 %    
255,457
      
3,904
       6.13 %
      Total investment securities
    
936,526
      
12,396
       5.31 %    
929,002
      
11,456
       4.95 %
  Federal funds sold and deposits in banks
    
82,021
      
1,086
       5.31 %    
70,163
      
855
       4.89 %
  Loans(2) (3)
    
2,062,144
      
35,709
       6.95 %    
2,006,723
      
33,426
       6.68 %
        Total earning assets
    
3,080,691
      
49,191
       6.40 %    
3,005,888
      
45,737
       6.10 %
  Noninterest-earning assets
    
222,329
                      
212,593
                  
          Total assets
   $
3,303,020
                     $
3,218,481
                  
                                                 
Liabilities and Shareholders' Equity
                                                
Interest-bearing liabilities:
                                                
  Interest-bearing deposits:
                                                
    Savings and money market
   $
1,415,657
      
12,830
       3.64 %   $
1,257,838
      
8,918
       2.84 %
    Time
    
787,419
      
9,302
       4.74 %    
858,961
      
8,965
       4.19 %
      Total interest-bearing deposits
    
2,203,076
      
22,132
       4.03 %    
2,116,799
      
17,883
       3.39 %
  Borrowed funds
    
450,529
      
5,424
       4.83 %    
438,745
      
5,064
       4.63 %
      Total interest-bearing liabilities
    
2,653,605
      
27,556
       4.17 %    
2,555,544
      
22,947
       3.60 %
  Noninterest-bearing liabilities:
                                                
    Demand deposits
    
314,215
                      
342,654
                  
    Other liabilities
    
42,168
                      
43,219
                  
      Total noninterest-bearing liabilities
    
356,383
                      
385,873
                  
        Total liabilities
    
3,009,988
                      
2,941,417
                  
  Shareholders' equity
    
293,032
                      
277,064
                  
          Total liabilities and shareholders' equity
   $
3,303,020
                     $
3,218,481
                  
                                                 
Net interest spread
                     2.23 %                     2.50 %
Effect of noninterest-bearing sources
                     0.59 %                     0.54 %
Net interest income/margin on earning assets
     $
21,635
       2.82 %           $
22,790
       3.04 %
Less tax equivalent adjustment
            
1,480
                      
1,514
          
Net interest income
           $
20,155
                     $
21,276
          
                                                 
   
Six Months Ended June 30, 2007
    
Six Months Ended June 30, 2006
  
   
Average
            
Average
    
Average
            
Average
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Assets
                                                
Earning assets:
                                                
  Investment securities
                                                
    Taxable investments
   $
680,719
     $
17,052
       5.05 %   $
681,829
     $
14,874
       4.40 %
    Non-taxable investments (2)
    
259,851
      
7,845
       6.09 %    
251,084
      
7,681
       6.17 %
      Total investment securities
    
940,570
      
24,897
       5.34 %    
932,913
      
22,555
       4.88 %
  Federal funds sold and deposits in banks
    
72,482
      
1,892
       5.26 %    
54,119
      
1,280
       4.77 %
  Loans(2) (3)
    
2,061,014
      
70,614
       6.91 %    
1,997,801
      
65,510
       6.61 %
        Total earning assets
    
3,074,066
      
97,403
       6.39 %    
2,984,833
      
89,345
       6.04 %
  Noninterest-earning assets
    
217,922
                      
206,561
                  
          Total assets
   $
3,291,988
                     $
3,191,394
                  
                                                 
Liabilities and Shareholders' Equity
                                                
Interest-bearing liabilities:
                                                
  Interest-bearing deposits:
                                                
    Savings and money market
   $
1,395,976
      
24,936
       3.60 %   $
1,243,715
      
16,431
       2.66 %
    Time
    
809,334
      
19,018
       4.74 %    
822,309
      
16,609
       4.07 %
      Total interest-bearing deposits
    
2,205,310
      
43,954
       4.02 %    
2,066,024
      
33,040
       3.22 %
  Borrowed funds
    
436,550
      
10,460
       4.83 %    
464,039
      
10,532
       4.58 %
      Total interest-bearing liabilities
    
2,641,860
      
54,414
       4.15 %    
2,530,063
      
43,572
       3.47 %
  Noninterest-bearing liabilities:
                                                
    Demand deposits
    
311,169
                      
340,672
                  
    Other liabilities
    
45,558
                      
43,183
                  
      Total noninterest-bearing liabilities
    
356,727
                      
383,855
                  
        Total liabilities
    
2,998,587
                      
2,913,918
                  
  Shareholders' equity
    
293,401
                      
277,476
                  
          Total liabilities and shareholders' equity
   $
3,291,988
                     $
3,191,394
                  
                                                 
Net interest spread
                     2.24 %                     2.57 %
Effect of noninterest-bearing sources
                     0.58 %                     0.52 %
Net interest income/margin on earning assets
     $
42,989
       2.82 %           $
45,773
       3.09 %
Less tax equivalent adjustment
            
2,997
                      
3,026
          
Net interest income
           $
39,992
                     $
42,747
          
                                                 
(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.
                                  

                                                         -11-