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

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Currently, the bank’s capital levels are less than those required underd the Office of the Comptroller ofthe Currency’s newlhy required minimum individual capitapl ratios. The OCC has advised the compant that it must achieve these ratios byJune 30. Harleysville Nationa l said while it believes these ratiosare achievable, it does not thin it can do so by that It said it does not know what if any, the OCC will take if it does not comply by that Harleysville National said the OCC may deem noncompliancw to be an unsafe and unsounr banking practice which would subject the bank to administrativs actions or sanctions. Harleysville shares closedd 10 percent lower Tuesdayat $5.47.
In order to increasr the bank’s capital levels to meet the the bank will have to increaseits capital, reducd its assets or both. Harleysville said its abilityu to increase its capital levels to meetthe OCC’xs requirements will largely depend on its financialo performance and conditions in the capitall markets, which are outside its control. It addes that raising capital through the issuance of common stocko or other securities would likely dilute the value of itscommon stock. Harleysvillwe National said its capital ratiose have been negatively affected by the economic downturb and its effect on the businesses and homeownerx with whom it does President and CEOPaul D.
Geraghty said in a statementg that “legacy credit issues continue to be a challenged during this time ofeconomic uncertainty. This was a product of our historicapl focus on realestate lending, specifically residentia real estate development and home equity He said the company has been workinfg to strengthen credit administration, add to its loan workoutg staff, 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 regulatory requirement s for a well-capitalized bank by the end of the Now that plan will have to be In an interview Tuesdayy afternoon, Geraghty said Harleysville National hopews to raise $65 million to $120 million in Harleysville National Corp.
(NASDAQ:HNBC) of Harleysville, Pa., has $5.6 billion in assetd and is thelargestr locally-based bank in the eight-county Philadelphiwa region with last year’s additioh of Willow Financial Bancorp. It has the seventh-most deposits in the region with just morethan $3