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

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Currently, the bank’s capital levels are less than thosed required under the Office of the Comptroller ofthe Currency’sd newly required minimum individual capital ratios. The OCC has advised the company that it must achieve thesre ratios byJune 30. Harleysville Nationak said while it believes these ratios are it does not think it can do so bythat date. It said it does not know what if any, the OCC will take if it does not complt by that date. Harleysville National said the OCC may deem noncompliance to be an unsafe and unsound banking practice which would subject the bank to administrative actions or Harleysville shares closed 10 percent lowe r Tuesdayat $5.47.
In orderd to increase the bank’s capital levels to meet the requirements, the bank will have to increasseits capital, reduce its assets or both. Harleysville said its abilit y to increase its capital levels to meetthe OCC’zs requirements will largely depend on its financiall performance and conditions in the capitaol markets, which are outside its control. It added that raising capital through the issuance of commoj stock or other securities wouldc likely dilute the value of its common Harleysville National said its capital ratios have been negativelg affected by the economic downturhn and its effect on the businessex and homeowners with whom itdoes business.
Presidentg and CEO Paul D. Geraghty said in a statementt that “legacy credit issues continue to be a challeng e during this time ofeconomic uncertainty. This was a productr of our historical focus on realestate lending, specificallt residential real estate development and home equity He said the company has been workingg 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 meetingy this past spring, Geraghty told shareholderes 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 raise $65 million to $120 millionj in equity.
Harleysville National (NASDAQ:HNBC) of Harleysville, Pa., has $5.6 billion in assets and is thelargesyt locally-based bank in the eight-county Philadelphi region with last year’s addition of Willosw Financial Bancorp. It has the seventh-mos t deposits in the region with just morethan $3