exhibit991.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT: Paul D. Geraghty, President and CEO

PHONE: 215-513-2391

HARLEYSVILLE NATIONAL CORPORATION REPORTS

FOURTH QUARTER EARNINGS OF $3.8 MILLION AND

2008 EARNINGS OF $25.1 MILLION

Declares dividend of 10 cents per share payable March 13, 2009

HARLEYSVILLE, PA (February 2, 2009) - Harleysville National Corporation (NASDAQ:HNBC) 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

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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	Ratio	Regulatory Standard for Adequately Capitalized	Regulatory Standard for 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.

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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

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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.

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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®. For more information, visit the Harleysville National Corporation website at www.hncbank.com

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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.

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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. 31,			Sep. 30,			Jun. 30,		Mar. 31,		Dec. 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

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	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


	2008			2008			2008			2008			2007
Asset Quality 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	%


	2008			2008			2008			2008			2007
Selected Ratios (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

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Average Balance Sheets and Interest Rates - Fully-Taxable Equivalent Basis

	Three Months Ended December 31, 2008							Three Months Ended December 31, 2007
	Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Earning assets:
Investment securities
Taxable investments	$	758,807	$	10,301		5.40	%	$	696,628	$	8,982		5.12	%
Non-taxable investments (2)		313,661		4,820		6.11	%		266,290		4,000		5.96	%
Total investment securities		1,072,468		15,121		5.61	%		962,918		12,982		5.35	%
Federal funds sold and deposits in banks		23,604		52		0.88	%		85,557		1,023		4.74	%
Loans(2) (3)		2,860,891		41,434		5.76	%		2,278,188		38,692		6.74	%
Total earning assets		3,956,963		56,607		5.69	%		3,326,663		52,697		6.28	%
Noninterest-earning assets		384,778							262,476
Total assets	$	4,341,741						$	3,589,139

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and money market	$	1,476,617		5,604		1.51	%	$	1,371,041		10,768		3.12	%
Time		1,367,371		13,357		3.89	%		1,034,028		12,639		4.85	%
Total interest-bearing deposits		2,843,988		18,961		2.65	%		2,405,069		23,407		3.86	%
Borrowed funds		706,371		6,175		3.48	%		509,200		6,148		4.79	%
Total interest-bearing liabilities		3,550,359		25,136		2.82	%		2,914,269		29,555		4.02	%
Noninterest-bearing liabilities:
Demand deposits		369,480							313,556
Other liabilities		76,015							44,536
Total noninterest-bearing liabilities		445,495							358,092
Total liabilities		3,995,854							3,272,361
Shareholders' equity		345,887							316,778
Total liabilities and shareholders' equity	$	4,341,741						$	3,589,139

Net interest spread						2.87	%						2.26	%
Effect of noninterest-bearing sources						0.29	%						0.50	%
Net interest income/margin on earning assets			$	31,471		3.16	%			$	23,142		2.76	%
Less tax equivalent adjustment				2,024							1,564
Net interest income			$	29,447						$	21,578

	Twelve Months Ended December 31, 2008							Twelve Months Ended December 31, 2007
	Average				Average			Average				Average
	Balance		Interest		Rate			Balance		Interest		Rate
Assets
Earning assets:
Investment securities
Taxable investments	$	738,640	$	39,195		5.31	%	$	681,788	$	34,803		5.10	%
Non-taxable investments (2)		298,472		18,110		6.07	%		262,676		15,849		6.03	%
Total investment securities		1,037,112		57,305		5.53	%		944,464		50,652		5.36	%
Federal funds sold and deposits in banks		48,474		1,097		2.26	%		72,087		3,576		4.96	%
Loans(2) (3)		2,585,101		155,447		6.01	%		2,123,170		146,400		6.90	%
Total earning assets		3,670,687		213,849		5.83	%		3,139,721		200,628		6.39	%
Noninterest-earning assets		327,285							231,583
Total assets	$	3,997,972						$	3,371,304

Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing deposits:
Savings and money market	$	1,409,941		25,140		1.78	%	$	1,381,582		47,980		3.47	%
Time		1,248,412		53,771		4.31	%		863,953		41,309		4.78	%
Total interest-bearing deposits		2,658,353		78,911		2.97	%		2,245,535		89,289		3.98	%
Borrowed funds		586,088		23,243		3.97	%		471,296		22,838		4.85	%
Total interest-bearing liabilities		3,244,441		102,154		3.15	%		2,716,831		112,127		4.13	%
Noninterest-bearing liabilities:
Demand deposits		345,717							312,011
Other liabilities		71,160							44,069
Total noninterest-bearing liabilities		416,877							356,080
Total liabilities		3,661,318							3,072,911
Shareholders' equity		336,654							298,393
Total liabilities and shareholders' equity	$	3,997,972						$	3,371,304

Net interest spread						2.68	%						2.26	%
Effect of noninterest-bearing sources						0.36	%						0.56	%
Net interest income/margin on earning assets			$	111,695		3.04	%			$	88,501		2.82	%
Less tax equivalent adjustment				7,555							6,067
Net interest income			$	104,140						$	82,434

-8-


Regulatory Capital
											To Be Well Capitalized
											Under Prompt Corrective
	Actual					For Capital Adequacy Purposes					Action 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.