WFG Capital Advisors Announces That KNBT Bancorp, Inc. has Completed The Acquisition of Caruso Benefits Group, Inc.

HARRISBURG, PA -- April 5, 2005 -- KNBT Bancorp, Inc. (NASDAQ/NMS: KNBT) the holding company for Keystone Nazareth Bank & Trust Company (the "Bank"), announced today the completion of the acquisition of Caruso Benefits Group, Inc. (the "Company"), a benefits management firm based in Bethlehem, Pennsylvania.   KNBT Bancorp previously announced entering into the agreement to purchase the Company on February 28, 2005.

Caruso Benefits Group, Inc. specializes in employee benefits management with an emphasis on group medical, life and disability and is the largest employee benefit retailer and wholesaler in the Lehigh Valley and surrounding regions.  Founded in 1971 by Michael J. Caruso, CLU, ChFC, the Company services clientele ranging from individual entrepreneurs to organizations with several thousand employees, primarily in the Eastern Pennsylvania region, through a seasoned management team and supporting staff as well as a wholesale network of over 250 licensed producers. The Company will operate as Caruso Benefits Group, Inc., a wholly owned subsidiary of the Bank, with Michael J. Caruso remaining as President of the firm.

WFG Capital Advisors LP acted as the financial advisor to Caruso Benefits Group, Inc.

Under the terms of the definitive agreement, KNBT Bancorp, Inc. acquired all of the capital stock of the Caruso Benefits Group, Inc. for a purchase price of $28 million in cash, $20 million of which was paid at closing and $8 million of which is payable over a three year period, subject to the Company maintaining certain levels of profitability. The transaction is expected to enhance fee income of the Bank by approximately $5.0 million (pre-tax) per year and to be accretive $0.03 per share to KNBT Bancorp during the first full year after acquisition.

A copy of the investor presentation for this transaction will be available on KNBT’s website at www.knbt.com.

About WFG Capital Advisors
WFG Capital Advisors, a PA-based investment banking firm specializing in the insurance industry, initiated the transaction and served as the exclusive financial advisor to Caruso Benefits Group, Inc.

Media Contacts:
Robert J. Lieblein, President & CEO
(717) 780-7801 / rlieblein@wfgca.com

Steven S. Wevodau, Managing Principal
(717) 780-7802 / swevodau@wfgca.com

www.wfgca.com