Harleysville National ordered to improve capital ratios - Philadelphia Business Journal:

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Currently, the bank’s capital levels are less than those requirefd under the Office of the Comptroller ofthe Currency’z newly required minimum individual capital ratios. The OCC has advisedc the company that it must achieve thesee ratios byJune 30. Harleysville National said whilre it believes these ratiosare achievable, it does not thinkj it can do so by that date. It said it does not know what if any, the OCC will take if it does not compl by that date. Harleysville National said the OCC may deem noncomplianced to be an unsafe and unsoune banking practice which would subjectt the bank to administrative actionsor sanctions.
Harleysville shares closedx 10 percent lower Tuesday at In order to increasethe bank’s capitaol levels to meet the requirements, the bank will have to increasw its capital, reduce its assets or Harleysville said its ability to increasr its capital levels to meet the OCC’sz requirements will largely depend on its financial performance and conditionw in the capital markets, which are outsidwe its control. It added that raising capitaol through the issuance of commo n stock or other securities would likely dilute the value of itscommojn stock.
Harleysville National said its capitalk ratios have been negatively affected by the economic downturn and its effect on the businessexs and homeowners with whom it does President and CEOPaul D. Geraghty said in a statemengt that “legacy credit issues continue to be a challenger during this time ofeconomic uncertainty. This was a producft of our historical focus on realestated lending, specifically residential real estate developmeny and home equity loans.” He said the company has been workingv to strengthen credit administration, add to its loan workour staff, and actively manage the troubled loans that are weighing down its portfolio.
At its most recent annua meeting thispast spring, Geraghty told shareholders he intends to meet regulatory requirements for a well-capitalized bank by the end of the Now that plan will have to be In an interview Tuesday Geraghty said Harleysville National hopes to raisd $65 million to $120 milliohn in equity. Harleysville National Corp. (NASDAQ:HNBC) of Harleysville, Pa., has $5.6 billionm in assets and is thelargest locally-based bank in the eight-countyt Philadelphia region with last year’s addition of Willow Financiakl Bancorp.
It has the seventh-most deposits in the regionb with just morethan $3