KNBT Bancorp, Inc. Declares Quarterly Cash Dividend

LEHIGH VALLEY, Pa., Jan. 22, 2008 (PRIME NEWSWIRE) -- KNBT Bancorp, Inc.
(Nasdaq:KNBT) ("KNBT"), the holding company for Keystone Nazareth Bank & Trust
Company (the "Bank"), today announced that the board of directors declared what
it expects to be its final quarterly cash dividend of $0.12 per share. As
previously announced, subject to receipt of all required regulatory approvals
and satisfaction of other closing conditions set forth in the merger agreement,
the pending merger of KNBT with and into National Penn Bancshares, Inc. is
scheduled to be completed on February 1, 2008.

The quarterly cash dividend is payable February 15, 2008 to shareholders of
record on January 30, 2008.

About KNBT Bancorp, Inc.

KNBT Bancorp, Inc. is the parent bank holding company for Keystone Nazareth Bank
& Trust Company. Keystone Nazareth Bank & Trust Company is a
Pennsylvania-chartered savings bank headquartered in Bethlehem, Pennsylvania
with 56 branch offices in Lehigh, Northampton, Carbon, Monroe, Luzerne and
Schuylkill Counties, Pennsylvania. Website: www.knbt.com

The information contained in this press release may contain forward-looking
statements (as defined in the Securities Exchange Act of 1934 and the
regulations thereunder) which are not historical facts or as to KNBT's
management's intentions, plans, beliefs, expectations or opinions or with
respect to the operation of KNBT or its subsidiaries. These statements include,
but are not limited to, financial projections and estimates and their underlying
assumptions; statements regarding plans, objectives and expectations with
respect to future operations, products and services; and statements regarding
future performance. Such statements are subject to certain risks and
uncertainties, many of which are difficult to predict and generally beyond the
control of KNBT and its management, that could cause actual results to differ
materially from those expressed in, or implied or projected by, the
forward-looking information and statements. The following factors, among others,
could cause actual results to differ materially from the anticipated results or
other expectations expressed in the forward-looking statements: (1) economic and
competitive conditions which could affect the volume of loan originations,
deposit flows and real estate values; (2) the levels of non-interest income and
expense and the amount of loan losses; (3) competitive pressure among depository
institutions increases significantly; (4) changes in the interest rate
environment may reduce interest margins; (5) general economic conditions, either
nationally or in the markets in which KNBT is doing business, are less favorable
than expected; (6) mergers may result in significant charges to income, may not
produce revenue enhancements or cost savings at levels or within time frames
originally anticipated and may result in unforeseen integration difficulties;
(7) descriptions may occur from the announced merger with National Penn
Bancshares, Inc. ("National Penn") and may create difficulties in maintaining
relationships with customers and employees; (8) the failure to obtain
shareholders or regulatory approval of the pending merger with National Penn;
(9) legislation or changes in regulatory requirements adversely affect the
business in which KNBT is engaged; and other factors discussed in the documents
filed by KNBT with the Securities and Exchange Commission ("SEC") from time to
time. Copies of these documents may be obtained from KNBT upon request and
without charge (except for the exhibits thereto) or can be accessed at the
website maintained by the SEC at http://www.sec.gov. KNBT undertakes no
obligation to update these forward-looking statements to reflect events or
circumstances that occur after the date on which such statements were made.

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CONTACT: KNBT Bancorp, Inc. and
Keystone Nazareth Bank & Trust Company
Scott V. Fainor, President and Chief Executive Officer
610-861-5000
Eugene T. Sobol, Senior Executive Vice President,
Chief Financial Officer and Treasurer
610-861-5000