Harleysville Natl Corp Pa (MM) (NASDAQ:HNBC)
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First Quarter Earnings Up 2.9% at Harleysville National
Corporation
HARLEYSVILLE, Pa., April 18 /PRNewswire-FirstCall/ -- Harleysville National
Corporation (HNC) (NASDAQ:HNBC), today announced first quarter 2005 earnings of
$9.2 million, a 2.9% increase over first quarter 2004 earnings of $8.9 million.
The corporation's consolidated total assets were $3.0 billion at March 31,
2005, an increase of 18.1% or $460.2 million above the March 31, 2004, level of
$2.54 billion. Of this increase, 11.0% or $279.8 was due to loan growth and
9.1%, or $231.3 million, was attributable to the acquisition of Millennium Bank
partially offset by a net decrease in cash and investments of 2.5% or $63.0
million.
For the quarter ending March 31, 2005, diluted earnings per share of $.34 and
basic earnings per share of $.35 remained level with the earnings during the
first quarter of 2004. The financial results for 2005 include the impact of
operations from the acquisition of Millennium Bank effective April 30, 2004,
and the related issuance of 946,000 (993,000 restated for stock dividend)
common shares, as well as the issuance of 1,295,000 common shares for a 5%
stock dividend paid on September 15, 2004. All share and per share information
has been restated to reflect this stock dividend.
Gregg J. Wagner, President and Chief Executive Officer, said, "We are pleased
to announce another successful quarter. I am proud of our employees' efforts
which are reflected in these first quarter results. Our entire team remains
committed to superior financial performance, enhancing shareholder value and
providing our customers with the best banking experience possible. We continue
our emphasis on building Millennium Wealth Management & Private Banking's full
line of trust, wealth management and private banking products and services and
hope to build upon the success they achieved this quarter, which is represented
in the increase in noninterest income generated."
Net interest income on a fully tax-equivalent basis in the first quarter of
2005 increased $1.2 million or 5.3% over the same period in 2004. This
increase was primarily the result of loan growth partially offset by a higher
level of borrowings and higher deposit rates. The net interest margin for the
first quarter of 2005 was 3.37%, compared to 3.73% for the first quarter of
2004, the decline being primarily due to higher funding costs, particularly
increased volumes in higher-rate money market accounts and lower loan yields.
The net interest margin increased 3 basis points over the fourth quarter of
2004 after declines during the previous four quarters. Average earning assets
increased $436.3 million or 18.4% during the first quarter of 2005 versus the
comparable period in 2004, while average loans increased $430.6 million or
30.4% during the same period. Loans totaling $157.1 million were acquired in
the acquisition of Millennium Bank which contributed to the increase in average
loans.
Nonperforming assets, including nonaccrual loans, net assets in foreclosure and
loans 90 days or more past due was .19% of total assets at March 31, 2005,
compared to .20% at December 31, 2004 and .21% at March 31, 2004. The ratio of
the allowance for loan losses to nonperforming loans (nonaccruing loans and
loans 90 days or more past due) was 362.1% at March 31, 2005, compared to
324.6% at December 31, 2004 and 341.3% at March 31, 2004. The increase in the
provision for the first quarter of 2005 compared to the first quarter of 2004
was primarily due to inherent risk related to loan growth and an increase in
nonperforming loans of $348,000.
Core deposits increased 19.1% or $254.3 million, to $1.59 billion at March 31,
2005, from $1.33 billion at March 31, 2004. Of this increase, 4.5% or $59.8
million was due to the acquisition of Millennium Bank. Total deposits
increased $269.0 million for the same period, which was primarily due to the
growth in core deposits. Average borrowings increased $202.6 million primarily
to support loan growth and the Millennium Bank acquisition.
Total noninterest income of $6.9 million for the first quarter of 2005 reflects
an increase of $1.2 million from the comparable period in 2004, primarily due
to increases of $808,000 in trust and investment advisory fees, $225,000 in
income from reinsurance activities and $226,000 in gains related to the auto
leasing portfolio, partially offset by $223,000 in losses related to the
equipment leasing portfolio.
Noninterest expense of $15.5 million for the first quarter of 2005 increased
$1.7 million or 12.2% from $13.8 million in the first quarter of 2004. The
increase in noninterest expense was mainly due to a $1.2 million increase in
salaries and benefits, primarily related to the acquisition of Millennium Bank
and higher healthcare costs. In addition, occupancy expense increased $307,000
during the first quarter of 2005 over the comparable period in 2004 mostly due
to the Millennium acquisition and a new branch opening, deferred compensation
expense for directors and employees increased $168,000 and advertising expense
increased $223,000. Partially offsetting these variances was higher loan
origination expense deferrals amounting to $457,000 related to higher loan
origination volume.
Harleysville National Corporation, with assets of $3 billion, is the holding
company for Harleysville National Bank (HNB). Investment Management and Trust
Services are provided through Millennium Wealth Management & Private Banking, a
division of HNB, with assets under management exceeding $1.6 billion.
Cumberland Advisors, Inc., a SEC registered investment advisor specializing in
fixed-income money management and equities, using exchange- traded funds, is
also a part of Millennium Wealth Management & Private Banking. Harleysville
National Corporation stock is traded under the symbol "HNBC" and is commonly
quoted under Nasdaq National Market Issues. For more information, visit the
HNC website at http://www.hncbank.com/.
This press release may contain forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Actual results and trends
could differ materially from those set forth in such statements due to various
factors. Such factors include the possibility that increased demand or prices
for the Corporation's financial services and products may not occur, changing
economic and competitive conditions, technological developments, and other
risks and uncertainties, including those detailed in the Corporation's filings
with the Securities and Exchange Commission.
Harleysville National Corporation
Consolidated Selected Financial Data
(Dollars in thousands, except per share data)
March 31, 2005
(unaudited)
For the period: Three Months Ended
Mar. 31, Dec. 31, Sept. 30, June 30, Mar. 31,
2005 2004 2004 2004 2004
Interest
Income $35,272 $34,196 $33,366 $30,994 $29,173
Interest
Expense 13,602 12,735 11,286 9,674 8,943
Net Interest
Income 21,670 21,461 22,080 21,320 20,230
Provision for
Loan Losses 750 1,070 499 497 489
Net Interest
Income after
Provision for
Loan Losses 20,920 20,391 21,581 20,823 19,741
Service
Charges 1,957 1,953 2,000 1,929 1,925
Gains on Sales
of Investment
Securities, Net 923 2,036 112 641 900
Trust, Investment
Services and
Advisory Income 1,929 1,999 1,878 1,588 1,121
Bank-Owned Life
Insurance Income 493 627 647 521 611
Income on Life
Insurance - 586 - - -
Other Income 1,641 2,194 2,056 1,608 1,226
Total Noninterest
Income 6,943 9,395 6,693 6,287 5,783
Salaries, Wages and
Employee Benefits 9,500 10,215 9,754 8,834 8,277
Occupancy 1,391 1,218 1,135 1,120 1,084
Furniture and
Equipment 1,373 1,454 1,414 1,510 1,258
Other Expenses 3,239 3,787 2,174 3,129 3,198
Total Noninterest
Expense 15,503 16,674 14,477 14,593 13,817
Income Before
Income Taxes 12,360 13,112 13,797 12,517 11,707
Income Tax Expense 3,195 2,999 3,632 3,135 2,800
Net Income $9,165 $10,113 $10,165 $9,382 $8,907
Per Common Share Data:
Weighted Average
Common Shares
- Basic 26,247,137 26,182,888 26,240,616 25,861,549 25,128,032
Weighted Average
Common Shares
- Diluted 26,967,759 27,057,756 27,055,603 26,722,932 26,033,205
Net Income
Per Share
- Basic $0.35 $0.38 $0.39 $0.37 $0.35
Net Income
Per Share
- Diluted $0.34 $0.37 $0.38 $0.35 $0.34
Cash Dividend
Per Share $0.18 $0.22 $0.18 $0.16 $0.16
Book Value $10.24 $10.30 $10.19 $9.58 $9.45
Market Value $21.25 $26.60 $24.51 $24.38 $26.50
2005 2004 2004 2004 2004
Asset Quality
Data: 1Q 4Q 3Q 2Q 1Q
Nonaccrual
Loans $4,572 $4,705 $3,350 $3,245 $3,645
90 + Days Past
Due Loans 599 981 948 919 1,178
Nonperforming
Loans 5,171 5,686 4,298 4,164 4,823
Net Assets in
Foreclosure 411 370 347 389 423
Nonperforming
Assets $5,582 $6,056 $4,645 $4,553 $5,246
Loan Loss
Reserve $18,724 $18,455 $17,795 $17,940 $16,464
Loan Loss
Reserve / Loans 1.00% 1.00% 1.00% 1.07% 1.15%
Loan Loss
Reserve /
Nonperforming
Loans 362.1% 324.6% 414.0% 430.8% 341.3%
Nonperforming
Assets / Total
Assets 0.19% 0.20% 0.16% 0.16% 0.21%
Net Loan
Charge-offs $481 $410 $644 $698 $778
Net Loan
Charge-offs
(annualized)
/ Average Loans 0.11% 0.09% 0.15% 0.18% 0.22%
2005 2004 2004 2004 2004
Selected Ratios
(annualized): 1Q 4Q 3Q 2Q 1Q
Return on Average
Assets 1.25% 1.36% 1.40% 1.37% 1.43%
Return on Average
Shareholders'
Equity 13.69% 15.00% 15.61% 15.06% 15.33%
Yield on Earning
Assets (FTE) 5.34% 5.16% 5.18% 5.12% 5.25%
Cost of Interest-
Bearing Funds 2.37% 2.19% 2.01% 1.82% 1.86%
Net Interest
Margin (FTE) 3.37% 3.34% 3.51% 3.62% 3.73%
Leverage Ratio 8.99% 8.91% 8.99% 9.28% 10.04%
Balance Sheet
(Period End): 2005 2004 2004 2004 2004
1Q 4Q 3Q 2Q 1Q
Assets $3,002,572 $3,024,515 $2,976,173 $2,865,949 $2,542,328
Earning
Assets 2,817,956 2,845,656 2,791,891 2,678,772 2,406,068
Investment
Securities 907,379 943,563 975,750 957,398 948,749
Loans, Net of
Unearned
Fees 1,865,641 1,845,802 1,774,189 1,683,528 1,428,145
Other
Earning Assets 44,936 56,291 41,952 37,846 29,174
Interest-Bearing
Liabilities 2,343,177 2,367,229 2,332,102 2,218,687 1,930,052
Total Deposits 2,237,567 2,212,563 2,209,753 2,093,101 1,968,521
Noninterest-
Bearing
Deposits 332,525 333,516 325,132 345,191 317,566
Interest-Bearing
Checking 352,132 305,584 320,276 258,739 268,110
Money Market 679,872 713,039 661,480 561,823 521,085
Savings 222,553 223,039 229,992 245,768 225,981
Time, under
$100,000 523,782 508,010 527,971 523,587 481,400
Time, $100,000
or greater 126,703 129,375 144,902 157,993 154,379
Total Borrowed
Funds 438,135 488,182 447,481 470,777 279,097
Federal Home
Loan Bank 272,750 317,750 257,750 241,750 172,750
Other
Borrowings 165,385 170,432 189,731 229,027 106,347
Shareholders'
Equity 268,624 270,532 266,966 251,877 237,964
Balance Sheet
(Average): 2005 2004 2004 2004 2004
1Q 4Q 3Q 2Q 1Q
Assets $2,976,361 $2,957,559 $2,878,769 $2,759,563 $2,497,085
Earning
Assets 2,801,817 2,776,599 2,695,579 2,593,105 2,365,497
Investment
Securities 910,981 941,704 932,330 983,420 910,314
Loans, Net of
Unearned
Fees 1,845,408 1,793,935 1,717,245 1,572,830 1,414,802
Other Earning
Assets 45,428 40,960 46,004 36,855 40,381
Interest-Bearing
Liabilities 2,328,569 2,308,446 2,237,681 2,136,010 1,931,950
Total
Deposits 2,196,584 2,213,829 2,154,443 2,048,279 1,961,481
Noninterest-
Bearing
Deposits 321,912 324,466 329,559 316,715 280,809
Interest-Bearing
Checking 325,081 317,328 285,735 274,978 280,142
Money Market 688,602 692,703 620,420 537,614 517,846
Savings 222,853 226,251 237,463 239,971 222,807
Time, under
$100,000 513,986 517,167 525,701 508,275 487,379
Time, $100,000
or greater 124,150 135,914 155,565 170,726 172,498
Total Borrowed
Funds 453,897 419,083 412,797 404,446 251,278
Federal Home
Loan Bank 292,917 263,566 255,837 187,608 172,750
Other
Borrowings 160,980 155,517 156,960 216,838 78,528
Shareholders'
Equity 271,531 268,211 259,035 250,504 232,386
DATASOURCE: Harleysville National Corporation
CONTACT: Gregg J. Wagner, President and CEO, Harleysville National
Corporation, +1-215-513-2391
Web site: http://www.hncbank.com/