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Harleysville Closes $38M ARC Sale-Leaseback

HARLEYSVILLE, PA-The bank sells 15 branches to American Realty Capital and leases each back for a minimum 15-year term.

By Marita Thomas | Updated on December 28, 2007

HARLEYSVILLE, PA-Harleysville National Bank has closed on its sale-leaseback agreement with New York City-based American Realty Capital LLC. Under the final agreement, the locally based subsidiary of Harleysville National Corp. has sold 15 branches in six Pennsylvania counties for $38.2 million.

The bank retains control of the properties and, simultaneous with the sale, entered into long-term operating leases for all of them with ARC. Each lease has a minimum term of 15 years, with options to renew under certain conditions.

Of the $38.2-million net proceeds, Harleysville recorded a gain of approximately $2.3 million or $0.05 per share, which represents a portion of the total gain of $18.9 million. The remaining gain will be deferred and recognized over the 15-year term of the leases. The properties are in Berks, Bucks, Lehigh, Montgomery, Northampton and Carbon counties.

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