Harleysville National borrows $15 million more from First Niagara

By Lisa Kerner

Charlotte, N.C., Dec. 30 - Harleysville National Corp. borrowed an additional $15 million under its Dec. 7 loan agreement with First Niagara Financial Group, Inc., bringing its total borrowed under the agreement to $50 million, according to a form 8-K filed with the Securities and Exchange Commission.

The additional $15 million, in the form of a 5.25% promissory note, was contributed to Harleysville's banking subsidiary, Harleysville National Bank and Trust Co., as tier 1 capital, the filing said.

As previously reported, First Niagara agreed to lend up to $50 million to Harleysville as part of a recapitalization plan to ensure that Harleysville and its bank subsidiary meet the general regulatory capital ratios to be designated "well capitalized" under federal banking laws.

A prior form 8-K filing said that $35 million of the $50 million facility also took the form of a 5.25% promissory note, and the proceeds were also contributed to Harleysville National Bank and Trust as tier 1 capital.

Harleysville said that as of Dec. 23, Harleysville National Bank's regulatory capital ratios included total risk-based capital of 10.85%, tier 1 risk-based capital of 9.59% and tier 1 leverage capital of 6.79%.

In July, First Niagara announced it will acquire Harleysville in an all-stock transaction valued at about $237 million, or $5.50 per share.

Harleysville is the holding company for Harleysville National Bank and Trust, East Penn Bank, Millennium Wealth Management and Cornerstone Cos. The company is based in Harleysville, Pa.

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