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Harleysville Financial Corporation Announces an Increase of the Regular Cash Dividend and Earnings for the First Fiscal Quarter 2018

Company Release - 1/24/2018 11:57 AM ET

HARLEYSVILLE, Pa.--(BUSINESS WIRE)-- Harleysville Financial Corporation (OTCQX:HARL) reported today that the Company’s Board of Directors declared a regular quarterly cash dividend of $.23 per share on the Company’s common stock. This represents an increase of 4.55% from the previous dividend. The cash dividend will be payable on February 21, 2018 to stockholders of record on February 7, 2018.

Net income for the quarter ended December 31, 2017 was $1,453,000 or $.38 per diluted share compared to $1,374,000 or $.36 per diluted share for the same quarter last year. There was a onetime adjustment to our deferred tax assets of approximately $355,000 or $.09 per diluted share in the current quarter due to the tax reform bill that was signed into law. The law changed the corporate income tax rate from 35% to 21%. The $355,000 tax adjustment was recorded as additional income tax expense.

Chief Executive Officer Ron Geib stated, “While our results were impacted by the adjustment to our deferred tax asset through income tax expense we were still able to have solid financial results this quarter. We are well positioned for the future and the Company will benefit from the tax reform on a go forward basis. We are pleased that we are able to create additional value for our stockholders by increasing the cash dividend to $.23 per share. We continue to remain focused on increasing core deposit relationships and reducing the amount of advances as they mature. Reducing our funding costs, while maintaining a portfolio of quality loans and investments, should allow us to deliver consistent, ongoing returns for our shareholders.”

The Company’s assets totaled $773.6 million compared to $757.3 million a year ago, and stockholders’ tangible book value increased to $18.48 per share from $17.94 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 December 31, 2017
(Dollars in thousands except per share data)  
(Unaudited) Three Months Ended:
 
Selected Consolidated Earnings Data

Dec 31,
2017

Sept 30,
2017

Jun 30,
2017

Mar 31,
2017

Dec 31,
2016

Total interest income $ 7,418 $ 7,326 $ 7,157 $ 7,038 $ 7,039
Total interest expense   1,828     1,832     1,807     1,921     1,936  
 
Net Interest Income 5,590 5,494 5,350 5,117 5,103
Provision for loan losses   175     175     139     170     180  
Net Interest Income after Provision for Loan Losses   5,415     5,319     5,211     4,947     4,923  
 
Gain on sale of investments - - - 173 -
Gain on sale of real estate owned 304 - - - 55
Bank owned life insurance 99 99 97 97 98
Other income 500 494 511 496 481
Total other expenses   3,720     3,687     3,870     3,656     3,398  
 
Income before income taxes 2,598 2,225 1,949 2,057 2,159
Income tax expense   1,145     721     561     673     785  
 
Net Income $ 1,453   $ 1,504   $ 1,388   $ 1,384   $ 1,374  
 
 
Per Common Share Data
Basic earnings $ 0.39 $ 0.40 $ 0.37 $ 0.37 $ 0.37
Diluted earnings $ 0.38 $ 0.39 $ 0.36 $ 0.36 $ 0.36
Dividends $ 0.22 $ 0.22 $ 0.22 $ 0.22 $ 0.21
Tangible book value $ 18.48 $ 18.33 $ 18.14 $ 17.98 $ 17.94
Shares outstanding 3,769,277 3,759,637 3,756,177 3,749,078 3,701,372
Average shares outstanding - basic 3,763,863 3,757,691 3,750,666 3,718,269 3,693,427
Average shares outstanding - diluted 3,846,687 3,848,906 3,838,571 3,814,420 3,771,069
 
 
                 
Three Months Ended:
Other Selected Consolidated Data

Dec 31,
2017

Sept 30,
2017

Jun 30,
2017

Mar 31,
2017

Dec 31,
2016

Return on average assets 0.76 % 0.78 % 0.72 % 0.73 % 0.73 %
Return on average equity 8.42 % 8.81 % 8.22 % 8.30 % 8.35 %
Net interest rate spread 2.81 % 2.70 % 2.68 % 2.59 % 2.62 %
Net yield on interest earning assets 2.99 % 2.90 % 2.87 % 2.76 % 2.79 %
Operating expenses to average assets 1.94 % 1.90 % 2.01 % 1.92 % 1.80 %
Efficiency ratio 57.29 % 60.57 % 64.96 % 64.03 % 59.23 %

Ratio of non-performing loans to total assets at end of period

1.35 % 1.53 % 1.57 % 1.58 % 1.36 %
Loan loss reserve to total loans, net 0.67 % 0.69 % 0.73 % 0.75 % 0.74 %
Stockholders' equity to assets 9.00 % 9.03 % 8.71 % 8.85 % 8.77 %
 
                 
Selected Consolidated Financial Data

Dec 31,
2017

 

Sept 30,
2017

 

Jun 30,
2017

 

Mar 31,
2017

 

Dec 31,
2016

Total assets $ 773,555 $ 762,894 $ 781,807 $ 761,925 $ 757,271
Cash & investment securities 43,856 28,917 54,439 43,010 44,104
Mortgage-backed securities 106,258 112,699 119,461 126,291 135,028
Total Investments 150,114 141,616 173,900 169,301 179,132
Consumer Loans receivable 405,411 407,461 405,196 394,278 388,864
Commercial Loans receivable 186,189 181,045 170,300 166,672 157,750
Loan loss reserve (3,966 ) (4,063 ) (4,193 ) (4,226 ) (4,051 )
Total Loans receivable net 587,634 584,443 571,303 556,724 542,563
FHLB stock 4,954 5,384 5,624 5,229 5,533
Checking accounts 173,623 167,100 171,607 169,165 162,867
Savings accounts 225,830 235,147 239,856 241,183 238,367
Certificate of deposit accounts 164,670 146,508 144,030 139,444 132,802
Total Deposits 564,123 548,755 555,493 549,792 534,036
Advances 131,403 136,958 148,082 135,371 149,523
Total stockholders' equity 69,644 68,900 68,121 67,415 66,401
 

Harleysville Financial Corporation
Brendan J. McGill
President/COO
215-256-8828

Source: Harleysville Financial Corporation

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