By Lisa Kerner
Charlotte, N.C., Dec. 7 - First Niagara Financial Group, Inc. announced it will lend up to $50 million to Harleysville National Corp. 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.
According to a form 8-K filed with the Securities and Exchange Commission, $35 million of the $50 million facility took the form of a 5.25% promissory note, and the proceeds were contributed to Harleysville National Bank and Trust Co. as tier 1 capital.
The borrowing allowed the bank to meet the ratios of a "well capitalized" bank for the first time since September 2008, a Harleysville news release said.
As of Monday, Harleysville's regulatory capital ratios included total risk-based capital of 10.44%, tier 1 risk-based capital of 9.17% and a tier 1 leverage capital of 6.49%, all above the general regulatory minimums of 10%, 6% and 5%, respectively.
It was also announced that the Office of the Comptroller of the Currency extended the deadline for Harleysville's compliance with previously announced "individual minimum capital ratios" to March 31 from June 30.
In July, First Niagara announced it will acquire Harleysville in an all-stock transaction valued at about $237 million, or $5.50 per share.
First Niagara expects to complete its acquisition of Harleysville in the first quarter of 2010, prior to the compliance deadline.
The maturity of the promissory note will depend on when the acquisition closes.
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.
First Niagara is the holding company for First Niagara Bank based in Lockport, N.Y.
| Issuer: | Harleysville National Corp.
|
| Issue: | Promissory note
|
| Amount: | $35 million
|
| Coupon: | 5.25%
|
| Price: | Par
|
| Investor: | First Niagara Financial Group, Inc.
|
| Distribution: | Private placement
|
© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere.
For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.
