exhibit991.htm

From Berks to Bucks
County, Chester County
to Carbon County, we
invest in our communities
and businesses every
day.

Celebrating 100 years
of tradition

-1-

2009 Annual Meeting of
Shareholders

April 28, 2009

Presidential Caterers

Norristown, PA

-2-

2009 Annual Meeting of
Shareholders

Paul D. Geraghty

President and Chief Executive
Officer

-3-

We Are Here

o Great franchise

o Strong team

o Many accomplishments

-4-

How Did We Get Here?

o Economic environment

o Philosophy and focus

-5-

Where We Are Going

o Dedicated to getting to a great
place

o Just need time

-6-

Forward-Looking Information

During the course of this presentation, management may make projections and forward-looking
statements regarding events or the future financial performance of Harleysville National Corporation. We
wish to caution you that these forward-looking statements involve certain risks and uncertainties, including
a variety of factors that may cause Harleysville National Corporation’s actual results to differ materially
from the anticipated results expressed in these forward-looking statements. Such factors include the
possibility that anticipated cost savings may not be realized, estimated synergies may not occur,
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.
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 the Corporation’s business
strategy due to changes in current or future market conditions; the effects of competition, and of changes
in laws and regulations on competition, including industry consolidation and development of competing
financial products and services; inability to achieve desired increases in capital and improvement in asset
quality; merger-related synergies; interest rate movements; 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. When we use words such as “believes”, “expects”, “anticipates”, or similar expressions, we
are making forward-looking statements. Investors are cautioned not to place undue reliance on these
forward-looking statements and are also advised to review the risk factors that may affect Harleysville
National Corporation’s operating results in documents filed by Harleysville National Corporation with the
Securities and Exchange Commission, including the Quarterly Report on Form 10-Q, the Annual Report
on Form 10-K, and other required filings. Harleysville National Corporation assumes no duty to update
the forward-looking statements made in this presentation.

-7-

We Are Here

o Great franchise

o Strong team

o Many accomplishments

-8-

Harleysville Today

o Exceptional demographics and footprint

o Over 80 branches in attractive markets

o Strong fee-based businesses

o Capable, highly experienced management
team

-9-

2008: A Year of Significant
Accomplishments

o Completed Willow acquisition

n Seamless integration

n Disciplined in-market expansion

n Leverages combined strengths

n Positions Harleysville for long term

-10-

2008: A Year of Significant
Accomplishments

o Formed new executive team, management
reorganized

o Strengthened credit administration

o Increased net interest margin by 22 basis points

o Boosted noninterest income by 7%

o Experienced 5% organic loan growth

o Profitable results

-11-

	2006	2007	2008
Core Performance*	$1.11	$1.03	$1.11
Credit Cost **	(.02)	(0.17)	(0.28)
Non Core Gain (Loss/Exp.)	.25	.04	(.05)
Reported Net Income	$1.34	$0.90	$0.78

* Represents a non-GAAP disclosure

**Represents interest foregone on avg. nonperforming assets @ 7% and provision in
excess of 20 bps on average loan outstandings

Financial Performance
(earnings per share)

-12-

How Did We Get Here?

o Economic environment

o Philosophy and focus

-13-

2008: A Year of Unprecedented
Challenges

o Harleysville not immune

o Economy

n Recession

n Unemployment

n Plummeting real estate valuations

o Political changes affect regulatory environment

-14-

Loan Portfolio Segmentation

-15-

Credit Portfolio

o Harleysville increased loan loss reserves
to $50 million at year end

n Nonperforming assets increased to $78.5
million at year end

n Nonperforming assets: 1.43% of total assets
(0.56% at end of ’07)

-16-

Capital Measure	HNC Ratio at 12/31/08	Adequately Capitalized*	Well- Capitalized*
Total Capital to Risk- Weighted Assets	8.88%	8%	10%
Tier I Capital (to risk- weighted assets)	7.73%	4%	6%
Tier 1 Capital (to average assets)	8.19%	4%	5%

*Reflects current regulatory standard as of 3/31/09

Harleysville National Corporation
Capital Measures

-17-

Dividend Reduction

o Strong precautionary measure

o Protect and strengthen balance sheet

o Safeguard your long-term investment in
Harleysville

n Build capital

n Enhance shareholder value

-18-

Expense Reductions

o Reduced compensation and staffing expenses

o Curtailed capital expenditures

o Consolidated branches

o Decreased discretionary expense

-19-

Expense Reductions

 We cannot control the economy. We can
control expenses

 Harleysville is taking the hard action
necessary to improve financial results,
enhance efficiency, and reduce our operating
costs

-20-

Where We Are Going

o Restoring franchise to historical
performance

o Challenges not structural

o Foundation is strong

-21-

-22-

Progress Made

o Strengthened core earnings

o Strategically focused business model

o Talented players across the line

o Underwriting standards and credit
management

-23-

2009 Annual Meeting of
Shareholders

George S. Rapp, CPA

Executive Vice President,

Chief Financial Officer

-24-

* Adjusted for stock dividend

Diluted Earnings Per Share*

-25-

Assets: Year End Balances
(in millions)

-26-

Loans: Year End Balances
(in millions)

-27-

Deposits: Year End Balances
(in millions)

-28-

Source: SNL Financial

Net Interest Margin

-29-

* excluding gains/loss on sales of investment securities and non-recurring revenue

Other Income* (in millions)

-30-

Source: SNL Financial

Return on Average Equity

-31-

Source: SNL Financial

Efficiency Ratio

-32-

		3/31/08	3/31/09
Diluted EPS	$.23		$.11
Net Interest Margin	2.91%		3.02%
Provision for Loan Losses	$1,960		$7,121
Total Assets	$3,894		$5,646
Total Loans	$2,482		$3,616
Total Deposits	$2,988		$4,147

Key Results

(dollars in millions)

Q1 2009 Performance

-33-

	12/31/08		3/31/09
Loan Loss Reserve		$49,955	$53,062
Nonperforming Assets		$78,535	$89,474
Loan Loss Reserve / Loans		1.36%	1.47%
NPAs / Assets		1.43%	1.58%
Charge-offs / Avg. Loans		0.36%	0.44%