This follows locally based National Penn's June 27 agreement to acquire Greenville, DE-based Christiana Bank & Trust Co. for about $56.5 million in a transaction that is expected to close in early 2008. Under the agreement with KNBT, that company's locations will retain their names and National Penn's branches in Lehigh and Northampton counties will be rebranded under the KNBT name. There are now three such National Penn locations in Northampton and six in Lehigh County.

National Penn has slightly more than $5.6 billion in assets, and KNBT has $2.9 billion. The merger will make National Penn the fifth largest Pennsylvania-based bank holding company. It now operates under five divisions and identities: National Penn Bank, FirstService Bank, HomeTowne Heritage Bank, Nittany Bank and Peoples Bank of Oxford. As with previous National Penn acquisitions, the two Christiana locations, one each in Greenville and Wilmington, DE, will retain the Christiana flag.

The boards of National Penn and KNBT have approved the merger, which is subject to approval by the Federal Reserve Board, the Office of the Comptroller of the Currency and shareholders of both companies. Under the terms, current National Penn shareholders will own approximately 65% of the combined companies, and current KNBT shareholders will own 35%.