-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VK3LoMJVhb4q6P6n2Xe1qW5uOdKUgDcxxzn417my9XsxuoVkiL45/MSBpXefTgLa Mzb6wWGGsuAisQCNinnxmA== 0000702902-09-000016.txt : 20090424 0000702902-09-000016.hdr.sgml : 20090424 20090423173620 ACCESSION NUMBER: 0000702902-09-000016 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20090423 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20090424 DATE AS OF CHANGE: 20090423 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARLEYSVILLE NATIONAL CORP CENTRAL INDEX KEY: 0000702902 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 232210237 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-15237 FILM NUMBER: 09767484 BUSINESS ADDRESS: STREET 1: 483 MAIN ST STREET 2: P O BOX 195 CITY: HARLEYSVILLE STATE: PA ZIP: 19438 BUSINESS PHONE: 2152568851 MAIL ADDRESS: STREET 1: 483 MAIN STREET CITY: HARLEYSVILLE STATE: PA ZIP: 19438 8-K 1 form8-k.htm HARLEYSVILLE NATIONAL CORPORATION form8-k.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
                
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d)
 
of the Securities Exchange Act of 1934
 
                    
Date of Report (Date of earliest event reported): April 23, 2009
 
HARLEYSVILLE NATIONAL CORPORATION
                
(Exact name of registrant as specified in its charter)
 
Pennsylvania
  
0-15237
  
23-2210237
(State or other jurisdiction of incorporation)
  
(Commission File Number)
  
(IRS Employer Identification No.)
 
 
483 Main Street, Harleysville, PA
  
19438
(Address of principal executive offices)
  
(Zip Code)
 
 
215-256-8851
                
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o
  
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
  
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
  
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
  
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

 
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Item 2.02                      Results of Operations and Financial Condition
 
 
Harleysville National Corporation reported net income for the first quarter March 31, 2009.  On April 23, 2009, Harleysville National Corporation issued a press release titled “Harleysville National Corporation Reports First Quarter Earnings of $4.6 Million,” a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
 
 
Item 9.01.  Financial Statements and Exhibits
 
 
(a)
Financial Statements and Exhibits
 
 
None.
 
 
(b)
Pro Forma Financial Information
 
 
None.
 
 
(c)
Shell Company Transactions.
 
 
Not applicable.
 
 
(d)
Exhibits.
 
Exhibit Number
  
Description
99.1
  
Press Release issued by Harleysville National Corporation dated April 23, 2009, titled, “Harleysville National Corporation Reports First Quarter Earnings of $4.6 Million.”
     
 
 

 
-2-
 

SIGNATURES
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
                                    HARLEYSVILLE NATIONAL CORPORATION
 
 
 
 
Dated:April, 23, 2009                                                   /s/ George S. Rapp                     
                                                                        George S. Rapp, EVP and Chief Financial Officer
 

 
-3-
 

EXHIBIT INDEX
 
 
 
 
 
Exhibit 99.1
Press Release, dated April, 23, 2009, of Harleysville
 
National Corporation (filed pursuant to Item 2.02 hereof).
 
 
 
 

 
-4-
 

 EX-99.1 2 exhibit991.htm EXHIBIT 99.1 PRESS RELEASE exhibit991.htm


 

FOR IMMEDIATE RELEASE
CONTACT:                 Paul D. Geraghty, President and CEO
PHONE:                      215-513-2391
 
HARLEYSVILLE NATIONAL CORPORATION REPORTS
FIRST QUARTER EARNINGS OF $4.6 MILLION
 
Declares dividend of 1 cent per share payable June 15, 2009
 
HARLEYSVILLE, PA (April 23, 2009) - Harleysville National Corporation (NASDAQ:HNBC) reported today net income of $4.6 million or $.11 per diluted share for the first quarter of 2009, compared to $7.3 million, or $.23 per diluted share, for the first quarter of 2008.  First quarter results include a non-cash other-than-temporary impairment charge of $1.3 million on collateralized debt obligation investments in pooled trust preferred securities, as well as other investments.  First quarter results also include $1.0 million in severance expenses.  These costs were offset by a $2.0 million gain on the sale of investment securities, as well as a $1.7 million gain from the sale of Harleysville National Bank’s merchant credit card business.
 
Paul D. Geraghty, President and CEO, Harleysville National Corporation, said, “Leading economists continue to forecast a deteriorating economy at least through the end of 2009 and possibly into 2010.  This means that prudent banks like Harleysville must take steps to conserve capital, cut costs, and carefully manage credit exposures now and into the future. We believe that the actions we took in the first quarter will position us for long-term strength and stability.  At the same time, our profitable results and continued organic loan and deposit growth indicate the strength of our underlying franchise as we manage through economic instability and legacy credit costs.”
 
Provision for Loan Losses
During the first quarter of 2009, provision for loan losses was $7.1 million, compared to $2.0 million in the first quarter of 2008.  The increase in provision for loan losses reflects an increase in nonperforming assets to $89.5 million at March 31, 2009, up from $78.5 million at the end of 2008 and $27.1 million from a year ago.
 
Geraghty continued, “We have taken a number of steps to protect the interest of shareholders and to proactively reduce exposure to troubled borrowers, while continuing to support our customers and communities.  We have enhanced our credit review process with additional staff and have also bolstered
 
-5-
resources in our loan workout group.  During the first quarter we also proactively reduced exposures to several troubled borrowers without the need to write down any of the underlying loans – a significant accomplishment in this economy.  We are carefully monitoring our positions in the loan portfolio to ensure that we are well-equipped to deal with any deteriorating credit situations.  We continue to actively lend to creditworthy commercial and retail customers.”
 
During the fourth quarter of 2008, the company reported that its Total Capital to Risk-Weighted Assets fell below the well-capitalized level to adequately capitalized.  As of March 31, 2009, this ratio increased to 9.39% from 8.88% at December 31, 2008.
 
Second Quarter Dividend
 
The Board of Directors of Harleysville National Corporation declared a regular cash dividend of $.01 per share on 42,715,408 shares of outstanding common stock as of April 22, 2009. The dividend is payable June 15, 2009, to shareholders of record on May 30, 2009.
 
Geraghty continued, “As we continue to manage through legacy credit issues and build loan loss reserves, conservation of capital is of the top priority of any prudent financial institution in the current economic environment. This necessitated this quarter’s dividend action which, while painful for our shareholders, enables us to conserve approximately $3.9 million of capital per quarter for reinvestment in balance sheet strength.  We understand the importance of dividends to our shareholders and, after careful consideration, feel this reduction is the right thing to do to safeguard their long-term investment in Harleysville National Corporation.”
 
In addition, the Board of Directors has determined that it will withdraw its previously-submitted application under the U.S. Treasury Department’s Capital Purchase Program, (“CPP”) as part of the Troubled Asset Relief Program (“TARP”).  Geraghty, on behalf of the Corporation, said, “Harleysville continues its efforts to return to ‘Well-Capitalized’ under regulatory guidelines, but at this time we believe that the TARP program is not the best course of action for us.  We are exploring alternative sources of capital.”
 
Key Financial Metrics
 
The following is an overview of the key financial metrics for the quarter:
·  
Total assets were $5.6 billion at March 31, 2009, an increase of 45.0% or $1.8 billion over $3.9 billion at March 31, 2008.  Willow Financial had assets of approximately $1.6 billion at the acquisition date of December 5, 2008.
   
 
 
-6-
 
·  
Loans increased $1.1 billion and deposits grew $1.2 billion from March 31, 2008.  Adjusted for the Willow Financial acquisition, organic loan growth was approximately $81.3 million or 3.3%, and deposits grew by $240.4 million or 8.1%.
·  
Net interest income on a tax equivalent basis in the first quarter of 2009 increased $11.6 million or 44.5% from the same period in 2008 mainly as a result of the Willow Financial acquisition.  The net interest margin for the first quarter of 2009 was 3.02% compared to 2.91% for the same period in 2008.
·  
Nonperforming assets were $89.5 million at March 31, 2009.  Nonperforming assets as a percentage of total assets increased to 1.58% from 1.43% at December 31, 2008, and 0.69% at March 31, 2008.  Net charge-offs were $4.0 million compared to $798,000 in the first quarter of 2008.
·  
Quarterly noninterest income was up $5.3 million from the first quarter of 2008.  Gains on sales of investment securities and loans increased by $3.3 million over last year’s quarter.  Service charges on deposits increased $1.1 million, or 34.7% mainly from Willow Financial deposit accounts.  In addition, first quarter noninterest income includes $1.7 million gain on the sale of the Bank’s merchant credit card business.  A non-cash other-than-temporary impairment charge of $1.3 million on collateralized debt obligation investments in pooled trust preferred securities as well as other investments was also recorded during the first quarter of 2009.
·  
Quarterly noninterest expenses were up $14.9 million over the same period in the prior year, driven by the acquisition of Willow Financial.  In addition, FDIC insurance assessments increased by $2.6 million and severance costs were $1.0 million.  Other expenses were $3.5 million higher during the first quarter of 2009 mostly due to Willow Financial including increased professional, consulting and data processing expenses.
 
Harleysville National Corporation, with assets of $5.6 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 $2.5 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
 
- # # # -
 
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
 
 
-7-
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.

 

 
-8-
 

Harleysville National Corporation
                              
Consolidated Selected Financial Data (1)
                              
(Dollars in thousands, except per share data)
                              
March 31, 2009
                              
(unaudited)
                              
                               
For the period:
        
Three Months Ended
              
   
Mar. 31,
    
Dec. 31,
    
Sep. 30,
    
Jun. 30,
    
Mar. 31,
  
   
2009
    
2008
    
2008
    
2008
    
2008
  
Interest Income
   $ 63,638     $ 54,583     $ 49,942     $ 49,353     $ 52,416  
Interest Expense
     28,334       25,136       24,645       24,164       28,209  
Net Interest Income
     35,304       29,447       25,297       25,189       24,207  
Provision for Loan Losses
     7,121       7,920       2,580       3,107       1,960  
Net Interest Income after
                                        
        Provision for Loan Losses
     28,183       21,527       22,717       22,082       22,247  
                                         
Service Charges
     4,194       3,666       3,424       3,312       3,113  
Gain on Sales of Investment Securities, Net
     1,952       2,417       -       97       128  
Other-than-temporary Impairment of  Available for Sale Securities
     (1,344 )     (1,923 )     -       -       -  
Gain (Loss) on Sales of Loans, Net
     1,698       136       (5 )     219       207  
Wealth Management Income
     4,322       5,888       3,862       4,615       4,279  
Bank-Owned Life Insurance Income
     778       730       706       657       684  
Other Income
     4,559       2,430       2,458       2,696       2,421  
          Total Noninterest Income
     16,159       13,344       10,445       11,596       10,832  
                                         
Salaries, Wages and Employee Benefits
     20,279       14,509       13,539       14,201       13,859  
Occupancy
     4,206       2,663       2,412       2,441       2,585  
Furniture and Equipment
     1,608       1,181       1,074       1,083       1,094  
Intangibles Expense
     948       2,211       678       631       688  
FDIC Deposit Insurance
     2,787       1,164       551       204       163  
Merger Charges
     -       2,456       974       -       -  
Other Expenses
     8,793       7,109       5,925       5,898       5,329  
          Total Noninterest Expense
     38,621       31,293       25,153       24,458       23,718  
                                         
Income Before Income Taxes
     5,721       3,578       8,009       9,220       9,361  
Income Tax (Benefit) Expense
     1,126       (245 )     1,370       1,893       2,057  
          Net Income
   $ 4,595     $ 3,823     $ 6,639     $ 7,327     $ 7,304  
                                         
Per Common Share Data:
                                        
Weighted Average Common Shares - Basic
     42,990,542       34,695,062       31,385,257       31,359,011       31,346,833  
Weighted Average Common Shares - Diluted
     43,018,233       34,843,058       31,551,026       31,521,608       31,522,736  
Net Income Per Share - Basic
   $ 0.11     $ 0.11     $ 0.21     $ 0.24     $ 0.23  
Net Income Per Share - Diluted
   $ 0.11     $ 0.11     $ 0.21     $ 0.23     $ 0.23  
Cash Dividend Per Share
   $ 0.10     $ 0.20     $ 0.20     $ 0.20     $ 0.20  
Book Value
   $ 11.00     $ 11.05     $ 9.90     $ 10.45     $ 10.95  
Market Value
   $ 6.06     $ 14.44     $ 16.98     $ 11.16     $ 14.42  
                                         
                                         
   
2009
    
2008
    
2008
    
2008
    
2008
  
Asset Quality Data:
     1Q       4Q       3Q       2Q       1Q  
Nonaccrual Loans
   $ 85,393     $ 75,060     $ 36,278     $ 36,284     $ 23,819  
90 + Days Past Due Loans
     2,073       1,849       1,275       1,676       1,702  
Nonperforming Loans
     87,466       76,909       37,553       37,960       25,521  
Net Assets in Foreclosure
     2,008       1,626       1,221       1,189       1,536  
Nonperforming Assets
   $ 89,474     $ 78,535     $ 38,774     $ 39,149     $ 27,057  
Loan Loss Reserve
   $ 53,062     $ 49,955     $ 31,668     $ 31,174     $ 28,490  
Loan Loss Reserve / Loans
     1.47 %     1.36 %     1.25 %     1.25 %     1.15 %
Loan Loss Reserve / Nonperforming Loans
     60.7 %     65.0 %     84.3 %     82.1 %     111.6 %
Nonperforming Assets / Total Assets
     1.58 %     1.43 %     0.98 %     1.01 %     0.69 %
Net Loan Charge-offs
   $ 4,014     $ 2,558     $ 2,086     $ 423     $ 798  
Net Loan Charge-offs (annualized)
                                        
       / Average Loans
     0.44 %     0.36 %     0.33 %     0.07 %     0.13 %
                                         
                                         
   
2009
    
2008
    
2008
    
2008
    
2008
  
Selected Ratios (annualized):
     1Q       4Q       3Q       2Q       1Q  
Return on Average Assets
     0.33 %     0.35 %     0.68 %     0.76 %     0.75 %
Return on Average Shareholders' Equity
     3.88 %     4.40 %     8.20 %     8.79 %     8.55 %
Yield on Earning Assets (FTE)
     5.29 %     5.69 %     5.76 %     5.80 %     6.07 %
Cost of Interest Bearing Funds
     2.53 %     2.82 %     3.10 %     3.12 %     3.60 %
Net Interest Margin (FTE)
     3.02 %     3.16 %     3.02 %     3.06 %     2.91 %
Leverage Ratio
     6.33 %     8.19 %     8.13 %     8.18 %     8.07 %


 
-9-
 

                                     
Balance Sheet (Period End):
  
2009
    
2008
    
2008
    
2008
    
2008
        
      1Q       4Q     3Q       2Q     1Q        
Assets
   $ 5,646,195     $ 5,490,509     $ 3,949,730     $ 3,882,232     $ 3,894,019        
Earning Assets
     5,109,083       4,944,126       3,626,352       3,544,587       3,569,040        
  Investment Securities
     1,179,213       1,231,661       983,349       1,014,134       1,048,915        
  Loans
     3,615,775       3,685,244       2,539,037       2,501,968       2,481,930        
  Other Earning Assets
     314,095       27,221       103,966       28,485       38,195        
Interest-Bearing Liabilities
     4,585,275       4,449,461       3,221,921       3,114,993       3,129,316        
Total Deposits
     4,147,418       3,938,432       3,018,276       2,865,148       2,987,907        
  Noninterest-Bearing Deposits
     497,921       479,469       343,308       362,750       355,027        
  Interest-Bearing Checking
     579,922       556,855       430,607       422,850       399,178        
  Money Market
     1,074,892       1,042,302       727,693       756,588       854,831        
  Savings
     309,767       270,885       182,342       183,226       171,337        
  Time Deposits
     1,684,916       1,588,921       1,334,326       1,139,734       1,207,534        
Total Borrowed Funds
     935,778       990,498       546,953       612,595       496,436        
  Federal Home Loan Bank
     515,993       522,671       213,755       223,764       208,774        
  Other Borrowings
     419,785       467,827       333,198       388,831       287,662        
Shareholders' Equity
     473,713       474,707       310,994       327,910       343,282        
                                               
Balance Sheet (Average):
  
2009
    
2008
    
2008
    
2008
    
2008
        
     
1Q
      
4Q
       3Q      
2Q
       1Q        
Assets
   $ 5,580,099     $ 4,341,741     $ 3,899,593     $ 3,856,900     $ 3,890,959        
Earning Assets
     5,047,766       3,956,963       3,580,454       3,552,208       3,590,965        
  Investment Securities
     1,209,012       1,072,468       1,002,901       1,029,502       1,043,566        
  Loans
     3,666,744       2,860,891       2,522,034       2,491,894       2,463,242        
  Other Earning Assets
     172,010       23,604       55,519       30,812       84,157        
Interest-Bearing Liabilities
     4,543,033       3,550,359       3,158,464       3,114,520       3,151,996        
Total Deposits
     4,062,577       3,289,483       2,923,815       2,900,523       2,977,052        
  Noninterest-Bearing Deposits
     472,687       445,495       348,183       340,802       324,120        
  Interest-Bearing Checking
     560,239       444,141       428,078       415,398       436,828        
  Money Market
     1,060,299       820,395       739,931       804,890       822,411        
  Savings
     286,317       212,081       182,403       176,917       156,211        
  Time Deposits
     1,683,035       1,367,371       1,225,220       1,162,516       1,237,482        
Total Borrowed Funds
     953,143       706,371       582,832       554,799       499,064        
  Federal Home Loan Bank
     520,592       289,245       217,717       213,860       211,607        
  Other Borrowings
     432,551       417,126       365,115       340,939       287,457        
Shareholders' Equity
     480,491       345,887       322,077       335,311       343,400        
                                               
                                               
Average Balance Sheets and Interest Rates - Fully-Taxable Equivalent Basis
                        
                                               
   
Three Months Ended March 31, 2009
    
Three Months Ended March 31, 2008
  
   
Average
            
Average
    
Average
            
Average
  
   
Balance
    
Interest
    
Rate
    
Balance
    
Interest
    
Rate
  
Assets
                                              
Earning assets:
                                              
  Investment securities
                                              
    Taxable investments
   $ 885,819     $ 11,786       5.40 %   $ 753,468     $ 9,754       5.21 %
    Non-taxable investments (2)
     323,193       5,325       6.68 %     290,098       4,356       6.04 %
      Total investment securities
     1,209,012       17,111       5.74 %     1,043,566       14,110       5.44 %
  Federal funds sold and deposits in banks
     172,010       127       0.30 %     84,157       694       3.32 %
  Loans(2) (3)
     3,666,744       48,658       5.38 %     2,463,242       39,405       6.43 %
        Total earning assets
     5,047,766       65,896       5.29 %     3,590,965       54,209       6.07 %
  Noninterest-earning assets
     532,333                       299,994                  
          Total assets
   $ 5,580,099                     $ 3,890,959                  
                                                 
Liabilities and Shareholders' Equity
                                                
Interest-bearing liabilities:
                                                
  Interest-bearing deposits:
                                                
    Savings and money market
   $ 1,906,855       6,171       1.31 %   $ 1,415,450       8,095       2.30 %
    Time
     1,683,035       14,693       3.54 %     1,237,482       14,501       4.71 %
      Total interest-bearing deposits
     3,589,890       20,864       2.36 %     2,652,932       22,596       3.43 %
  Borrowed funds
     953,143       7,470       3.18 %     499,064       5,613       4.52 %
      Total interest-bearing liabilities
     4,543,033       28,334       2.53 %     3,151,996       28,209       3.60 %
  Noninterest-bearing liabilities:
                                                
    Demand deposits
     472,687                       324,120                  
    Other liabilities
     83,888                       71,443                  
      Total noninterest-bearing liabilities
     556,575                       395,563                  
        Total liabilities
     5,099,608                       3,547,559                  
  Shareholders' equity
     480,491                       343,400                  
          Total liabilities and shareholders' equity
   $ 5,580,099                     $ 3,890,959                  
                                                 
Net interest spread
                     2.76 %                     2.47 %
Effect of noninterest-bearing sources
                     0.26 %                     0.44 %
Net interest income/margin on earning assets
           $ 37,562       3.02 %           $ 26,000       2.91 %
Less tax equivalent adjustment
             2,258                       1,793          
Net interest income
           $ 35,304                     $ 24,207          

 
-10-
 



             
Regulatory Capital
            
             
             
   
Actual
        
As of March 31, 2009
  
Amount
    
Ratio
  
             
Total Capital (to risk weighted assets):
            
Corporation
   $ 388,884       9.39 %
Harleysville National Bank
     375,036       9.07 %
Tier 1 Capital (to risk weighted assets):
                
Corporation
     337,084       8.14 %
Harleysville National Bank
     323,355       7.82 %
Tier 1 Capital (to average assets):
                
Corporation
     337,084       6.33 %
Harleysville National Bank
     323,355       6.09 %
                 
As of December 31, 2008
                
                 
Total Capital (to risk weighted assets):
                
Corporation
   $ 384,522       8.88 %
Harleysville National Bank
     370,552       8.58 %
Tier 1 Capital (to risk weighted assets):
                
Corporation
     334,467       7.73 %
Harleysville National Bank
     320,497       7.42 %
Tier 1 Capital (to average assets):
                
Corporation
     334,467       8.19 %
Harleysville National Bank
     320,497       7.88 %
                 
                 
(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-
 

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