Harleysville National Corp. of Pennsylvania announced Friday that its fourth-quarter net income fell 26% year over year, to $2.8 million.
First Niagara Financial Group Inc., which is acquiring the $5.2 billion-asset Harleysville, agreed to plug a $150 million capital hole at the bank as part of the deal.
Under the merger agreement, the amount paid to shareholders could shrink if delinquent loans exceeded $237.5 million for any month before closing.
As of Dec. 31, Harleysville had delinquent loans of $182.8 million, down $10.5 million from the end of the third quarter.
Harleysville reported $133.6 million of nonperforming assets, or 2.58% of total assets, down 40 basis points from the third quarter yet up 115 basis points from a year earlier.
Delinquent loans fell 73% year over year, to $26.2 million, and net chargeoffs rose nearly 83%, to $15.1 million.
The company's loan-loss provision fell 43%, to $4.5 million.
For the year Harleysville reported a net loss of $219.5 million, or $5.09 a share.
That included a $214.5 million goodwill impairment charge in the second quarter. For 2008 it posted net income of $25.1 million, or 78 cents a share.