Harleysville Financial Corporation Announces Regular Cash Dividend and Third Quarter Earnings for Fiscal Year 2020

Harleysville Financial Corporation (OTCQX:HARL) reported today that the Company’s board of directors declared a regular quarterly cash dividend of $.27 per share on the Company’s common stock. The cash dividend will be payable on August 12, 2020 to stockholders of record on July 29, 2020.

Net income for the third quarter was $1,611,000 or $.43 per diluted share compared to $1,964,000 or $.51 per diluted share for the same quarter last year.

Net income for the nine months ended June 30, 2020 amounted to $5,317,000 or $1.40 per diluted share compared to $6,230,000 or $1.63 per diluted share for the same nine-month period a year ago. Net income for the nine months ended June 30, 2019 included non-recurring gains on sale of $611,000 or a combined $.16 per diluted share for the nine months ended.

Brendan J. McGill, President and Chief Executive Officer of the Company, stated, “Our third quarter and our nine months ended were impacted by a lower interest rate environment and the COVID-19 pandemic. In response to the COVID-19 pandemic, we took unprecedented steps to protect our team members, our customers and the communities we serve. Our Pandemic Plan was activated and upon the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the Company implemented the Paycheck Protection Program (PPP) through the Small Business Administration (SBA). Other actions were taken to assist customers including offering loan deferral programs, enhancing mobile banking and instituting mortgage forbearance.

These are difficult times, and I am proud of the leadership of our team members. As we continue to face challenges and changes due to the COVID-19 pandemic, we believe the Company’s strong balance sheet and our fundamental operating principles of maintaining prudent underwriting standards, investing in high credit quality assets, controlling our operating expenses, and practicing sound capital management will provide a strong foundation while we navigate through these difficult and unprecedented times.”

The Company’s assets totaled $851.8 million compared to $795.0 million a year ago. Stockholders’ tangible book value increased 3.9% to $20.76 per share from $19.98 a year ago.

Harleysville Financial Corporation is traded on the OTCQX market under the symbol HARL (http://www.otcmarkets.com) and is the holding company for Harleysville Bank. Established in 1915, Harleysville Bank is a Pennsylvania chartered and federally insured bank, headquartered in Harleysville, PA. The Bank operates from six full-service offices located in Montgomery County and one office located in Bucks County, Pennsylvania.

This presentation may contain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995). Actual results may differ materially from the results discussed in these forward-looking statements. Factors that might cause such a difference include, but are not limited to, general economic conditions, changes in interest rates, deposit flows, loan demand, real estate values and competition; changes in accounting principles, policies, or guidelines; changes in legislation or regulation; and other economic; competitive, governmental, regulatory, and technological factors affecting the Company's operations, pricing, products and services.

Harleysville Financial Corporation
Selected Consolidated Financial Data as of June 30, 2020
(Dollars in thousands except per share data)		Year-To-Date
( Unaudited)		Nine Months Ended:								Three Months Ended:
Selected Consolidated Earnings Data		Jun 30, 2020				Jun 30, 2019				Jun 30, 2020				Mar 31, 2020				Dec 31, 2019				Sept 30, 2019				Jun 30, 2019
Total interest income		$	22,464			$	23,710			$	7,216			$	7,536			$	7,712			$	7,914			$	7,982
Total interest expense			5,174				5,207				1,561				1,749				1,864				1,846				1,826
Net Interest Income			17,290				18,503				5,655				5,787				5,848				6,068				6,156
Provision for loan losses			657				767				353				114				190				215				215
Net Interest Income after Provision for Loan Losses			16,633				17,736				5,302				5,673				5,658				5,853				5,941
Gain on sale of investments			-				144				-				-				-				-				-
Gain on sale of real estate owned			-				467				-				-				-				-				-
Bank owned life insurance			298				296				98				99				101				102				97
Other income			1,567				1,558				455				534				578				516				533
Total other expenses			11,441				11,613				3,700				3,910				3,831				3,846				3,930
Income before income taxes			7,057				8,588				2,155				2,396				2,506				2,625				2,641
Income tax expense			1,740				2,358				544				596				600				706				677
Net Income		$	5,317			$	6,230			$	1,611			$	1,800			$	1,906			$	1,919			$	1,964
Per Common Share Data
Basic earnings		$	1.41			$	1.66			$	0.43			$	0.48			$	0.51			$	0.51			$	0.52
Diluted earnings		$	1.40			$	1.63			$	0.43			$	0.47			$	0.50			$	0.50			$	0.51
Dividends		$	0.79			$	0.73			$	0.27			$	0.27			$	0.25			$	0.25			$	0.25
Tangible book value		$	20.76			$	19.98			$	20.76			$	20.57			$	20.51			$	20.26			$	19.98
Shares outstanding			3,747,052				3,759,019				3,747,052				3,742,933				3,769,479				3,764,057				3,759,019
Average shares outstanding - basic			3,763,454				3,755,921				3,744,957				3,778,093				3,767,081				3,761,840				3,766,383
Average shares outstanding - diluted			3,808,106				3,823,846				3,775,593				3,827,541				3,822,069				3,815,843				3,824,885
		Year-To-Date
		Nine Months Ended:								Three Months Ended:
Other Selected Consolidated Data		Jun 30, 2020				Jun 30, 2019				Jun 30, 2020				Mar 31, 2020				Dec 31, 2019				Sept 30, 2019				Jun 30, 2019
Return on average assets			0.89	%			1.06	%			0.78	%			0.91	%			0.97	%			0.98	%			0.99	%
Return on average equity			9.21	%			11.33	%			8.35	%			9.33	%			9.96	%			10.18	%			10.55	%
Net interest rate spread			2.77	%			3.05	%			2.63	%			2.82	%			2.85	%			2.96	%			2.99	%
Net yield on interest earning assets			2.95	%			3.23	%			2.80	%			3.01	%			3.05	%			3.15	%			3.17	%
Operating expenses to average assets			1.91	%			1.98	%			1.79	%			1.98	%			1.95	%			1.96	%			1.98	%
Efficiency ratio			59.73	%			55.84	%			59.60	%			60.91	%			58.69	%			57.52	%			57.91	%
Ratio of non-performing loans to total assets at end of period			0.85	%			1.07	%			0.85	%			0.89	%			0.96	%			1.08	%			1.07	%
Loan loss reserve to total loans, net			0.83	%			0.73	%			0.83	%			0.81	%			0.79	%			0.78	%			0.73	%
Stockholders' equity to assets			9.13	%			9.45	%			9.13	%			9.74	%			9.86	%			9.78	%			9.45	%
Selected Consolidated Financial Data		Jun 30, 2020				Mar 31, 2020				Dec 31, 2019				Sept 30, 2019				Jun 30, 2019
Total assets		$	851,821			$	790,447			$	784,497			$	779,256			$	795,031
Cash & investment securities			104,934				56,088				41,590				42,337				53,891
Mortgage-backed securities			93,970				105,016				109,591				96,600				90,690
Total Investments			198,904				161,104				151,181				138,937				144,581
Consumer Loans receivable			379,205				391,542				396,270				401,950				407,271
Commercial Loans receivable			240,485				204,489				203,433				207,591				211,967
Loan loss reserve			(5,167	)			(4,820	)			(4,711	)			(4,757	)			(4,547	)
Total Loans receivable net			614,523				591,211				594,992				604,784				614,691
FHLB stock			4,692				4,699				4,840				5,058				5,074
Checking accounts			226,921				193,383				187,490				181,054				186,012
Savings accounts			242,820				220,734				212,986				208,633				216,687
Certificate of deposit accounts			181,489				183,674				188,636				196,655				192,456
Total Deposits			651,230				597,791				589,112				586,342				595,155
Advances			109,781				104,804				106,191				111,125				114,743
Total stockholders' equity			77,780				77,007				77,329				76,247				75,109

 

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