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

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Currently, the bank’s capital levels are less than those requirex under the Office of the Comptroller ofthe Currency’w newly required minimum individual capital The OCC has advised the company that it must achiev these ratios by June 30. Harleysville National said while it believes these ratiosare achievable, it does not thinjk it can do so by that date. It said it does not know what if any, the OCC will take if it does not compluy by that date. Harleysville National said the OCC may deem noncomplianced to be an unsafe and unsounds banking practice which would subject the bank to administrativd actionsor sanctions. Harleysville shareas closed 10 percent loweer Tuesdayat $5.47.
In order to increasd the bank’s capital levels to meet the requirements, the bank will have to increaswits capital, reduce its assets or both. Harleysvill e said its ability to increase its capital levels to meetthe OCC’zs requirements will largely depend on its financial performance and conditionss in the capital markets, which are outside its It added that raisingy capital through the issuance of commom stock or other securities would likelhy dilute the value of its common Harleysville National said its capital ratiosx have been negatively affected by the economic downturn and its effecy on the businesses and homeowners with whom it does President and CEO Paul D.
Geraghty said in a statemenft that “legacy credit issue s continue to be a challenge duringt this time ofeconomic uncertainty. This was a produc of our historical focus on real estate specifically residential real estate development and home equity He said the company has been working to strengthejcredit administration, add to its loan workout and actively manage the troubled loans that are weighing down its portfolio. At its most recent annual meeting this past Geraghty told shareholders he intends to meet regulatoryg requirements fora well-capitalized bank by the end of the Now that plan will have to be accelerated.
In an interviesw Tuesday afternoon, Geraghty said Harleysville National hopes toraised $65 million to $120 milliojn in equity. Harleysville Nationak Corp. (NASDAQ:HNBC) of Harleysville, Pa., has $5.6 billiohn in assets and is thelargest locally-based bank in the eight-county Philadelphiw region with last year’sx addition of Willow Financial It has the seventh-most deposits in the region with just more than $3 billion.