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Harleysville loss totaled $219.5 million in 2009

Published January 29. 2010 05:00PM

Harleysville National Corporation, the parent company of East Penn Bank and Harleysville National Bank, had a net loss of $219.5 million during 2009.

The losses came during the first three quarters. In the fourth quarter, Harleysville showed net income of $2.8 million.

Most of the loss was attributed to a non-cash goodwill impairment charge of $214.5 million in the second quarter, according to a financial report filed with the U.S. Securities and Exchange Commission.

Harleysville is in the process of merging with First Niagara Financial Group Inc. of Buffalo, N.Y. The merger is expected to be approved and completed by March 31.

When the merger occurs, all branches of East Penn Bank and Harleysville National Bank will be renamed First Niagara Bank branches.

Paul D. Geraghty, president and CEO of Harleysville National, said, "We continue to manage our loan portfolio to protect the bank's capital base and minimize increases in delinquencies and non-performing assets, while building a stronger balance sheet.

"To this end, during the fourth quarter, we increased our penetration of retail and business deposit accounts and grew non-municipal core deposits. We were also encouraged by the full payoffs of two nonperforming loans totaling $18 million during the fourth quarter contributing to a $20 million decline in nonperforming assets over the linked quarter."

During the fourth quarter, provision of loan losses was $4.5 million, compared to $14.8 million the previous quarter and $7.9 million in the fourth quarter of 2008.

For Harleysville National, total assets were $5.2 billion on Dec. 31, a decrease of 5.5 percent from December 31, 2008, primarily as a result of the aforementioned goodwill impairment charge.

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