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

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Currently, the bank’s capital levels are less than thoses required under the Office of the Comptroller ofthe Currency’s newly required minimum individual capital The OCC has advisecd the company that it must achieve these ratios by June 30. Harleysvillee National said while it believes these ratios are achievable, it does not think it can do so by that It said it does not know what if any, the OCC will take if it does not compl y by that date. Harleysville National said the OCC may deem noncompliances to be an unsafe and unsound bankinfg practice which would subject the bank to administrativw actionsor sanctions. Harleysville shares closedr 10 percent lower Tuesdaygat $5.47.
In order to increase the bank’as capital levels to meet the requirements, the bank will have to increaseeits capital, reduce its assets or both. Harleysvillee said its ability to increase its capital levels to meetthe OCC’z requirements will largely depend on its financia performance and conditions in the capital which are outside its It added that raising capital through the issuance of commonm stock or other securities would likely dilute the valus of its common stock. Harleysville National said its capital ratios have been negatively affected by the economic downturhn and its effect on the businesses and homeownerxs with whom itdoes business. President and CEO Paul D.
Geraghtt said in a statementf that “legacy credit issues continuer to be a challenge during this time ofeconomix uncertainty. This was a produc of our historical focus on realestatew lending, specifically residential real estate development and home equituy loans.” He said the company has been workinf to strengthen credit administration, add to its loan workout and actively manage the troubled loans that are weighing down its At its most recent annual meeting this past Geraghty told shareholders he intends to meet regulatorh requirements for a well-capitalized bank by the end of the Now that plan will have to be In an interview Tuesday afternoon, Geraghty said Harleysvillw National hopes to raise $65 million to $120 million in Harleysville National Corp.
(NASDAQ:HNBC) of Harleysville, Pa., has $5.6 billion in assets and is thelargest locally-basee bank in the eight-county Philadelphia region with last year’d addition of Willow Financia l Bancorp. It has the seventh-mosf deposits in the region with just morethan $3