Pennsylvania bank says deal adds wealth capabilities, extends reach. Harrisburg, Pa.-based Harleysville National Bank plans to pay up to $22 million for Cornerstone Advisors in a bid to expand its wealth management business throughout Pennsylvania. The move comes about four months after Cumblerland Advisors, a high-net-worth shop that Harleysville acquired in 2004, split off in a management-led buyout.

“This is a significant strategic acquisition for us,” says Gregg Wagner, Harleysville’s president and CEO. “The acquisition will allow us to better meet the financial and investment needs of our clients, simply and conveniently at one touch point.”

Incentive

Harleysville will pay $15 million in cash up front for Cornerstone, and as much as $7 million more over the next five years, depending on how the boutique performs.

Cornerstone – a registered investment advisory (RIA) with $1.5 billion in assets under management and a staff of about 30 – is based in LeHigh Valley, Pa., about 60 miles from Harrisburg. It will become a part Harleysville’s Millennium wealth-management and private-banking business. Cornerstone, which caters to business owners, wealthy families and small institutions, will continue to be run by its principals Jack Yaissle, Malcolm Cowen and Tom Scalici.

Vineland, N.J.-based RIA Cumberland Advisors has about $760 million in assets under management. It came to Harleysville in its 2004 acquisition of Malvern, Pa.-based Milliennium Bank.

The deal will boost Millennium’s assets under management from around $850 million to $2.35 billion by the time the deal is done, probably in the first quarter of 2006, according to Harleysville. Harleysville executives add that Cornerstone will make Millennium more attractive as a wealth manager. Cornerstone has an open-architecture investment platform that will become part of Millennium’s overall investment offering. In addition to financial consulting, Cornerstone offers business-succession and estate planning, insurance, and advice on benefits and compensation.

Harleysville has about $3 billion in assets and 45 branches, all in Pennsylvania. –FWR

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