Homebuilders' troubles burden Harleysville Bank

0 Comments | Philadelphia Inquirer, The, June, 2009 | by Harold Brubaker Inquirer Staff Writer

Harleysville National Bank & Trust Co. has for decades been a steady lender to homebuilders in suburban Philadelphia, but now the inability of those builders to sell houses is straining the Montgomery County bank, chief executive Paul Geraghty said yesterday.

"I think in some respects we're feeling the effects of being such a strong lender collateralized by housing in our market area," Geraghty said. 

Half of the bank's $3.6 billion in loans as of March 31 were backed by residential real estate through $1.5 billion in first mortgages and home-equity loans, in addition to $324 million in loans to residential builders, who accounted for a third of the bank's troubled loans.

Harleysville, the second-biggest bank based in the Philadelphia region, disclosed Monday...