8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 9, 2008

HARLEYSVILLE NATIONAL CORPORATION

(Exact name of registrant as specified in its charter)

Pennsylvania	0-15237	23-2210237
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

483 Main Street, Harleysville, PA	19438
(Address of principal executive offices)	(Zip Code)

215-256-8851

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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CURRENT REPORT ON FORM 8-K

Item 5.02.  Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements with Certain Officers.

On September 9, 2008, the Registrant announced to its employees the restructuring of its management following the completion of its acquisition of Willow Financial Bancorp, Inc.

Demetra “Deb” M. Takes, the President and Chief Executive Officer of Harleysville National Bank and Trust Company (the “Bank”), the Registrant’s wholly-owned subsidiary, and director of the Registrant will continue in those roles but with an emphasis on marketing and customer relations.  Michael B. High, the Registrant’s Chief Operating Officer will retire as of the end of November 2008.  Brent Peters will continue as President of East Penn Bank, a division of the Bank, and will also be appointed Chief Administrative Officer of the Registrant.

The reorganization announcement is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 7.01.  Regulation FD

On September 9, 2008, at a special meeting of shareholders held at 2:00 PM at the Best Western The Inn at Towamencin-Kulpsville, 1750 Sumneytown Pike, Kulpsville, PA 19443, the shareholders of Harleysville National Corporation approved and adopted the Agreement and Plan of Merger dated as of May 20, 2008 by and between Harleysville National Corporation and Willow Financial Bancorp, Inc. The vote was as follows:

Votes for 19,137,707

Votes against 1,343,256

Votes abstaining 82,909

The Agreement and Plan of Merger was approved and adopted by at least a majority of the Registrant’s outstanding shares of common stock.

At the special meeting, Paul D. Geraghty, President and Chief Executive Officer of the Registrant, made a presentation.  The slides and script of his presentation are attached hereto as Exhibit 99.2 and incorporated herein by reference.

The information furnished under this Item 7.01 of this Current Report on Form 8-K shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934.

Item 8.01.  Other Events.

Pursuant to the special meeting and the information related thereto reported under Item 7.01 to this Current Report on Form 8-K that is incorporated herein by reference, the

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 Registrant and Willow Financial Bancorp, Inc. issued a joint press release on September 9, 2008 announcing the results of the meetings.  The joint press release is attached hereto as Exhibit 99.3 and incorporated herein by reference.

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Item 9.01.  Financial Statements and Exhibits

(a) Financial Statements and Exhibits

None.

(b) Pro Forma Financial Information

None.

(c) Shell Company Transactions.

Not applicable.

(d) Exhibits.

Exhibit Number	Description
99.1	Reorganization announcement.
99.2	Special Meeting Presentation.
99.3	Press release.

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 SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized.

	HARLEYSVILLE NATIONAL CORPORATION
	(Registrant)
Dated: September 10, 2008	/s/ George S. Rapp
	George S. Rapp
	Executive Vice President, and
	Chief Financial Officer

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Exhibit Index

Exhibit Number	Description
99.1	Reorganization announcement.
99.2	Special Meeting Presentation.
99.3	Press release.

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EX-99.1

Exhibit 99.1

Over the past several months you have heard me discuss the many great opportunities that our acquisition of Willow Financial brings to our organization.  Not only does it grow our bank, it provides the ability to adopt new practices and offer enhanced opportunities for our employees.  Through the integration process, we have identified areas for growth and change, beginning with our corporate structure.

I am excited to present to you the new structure and leadership of HNBC.  You will see it was organized with the “3 Es” that we featured in this year’s annual report as the keystones for HNBC’s future success: Expansion, Empowerment and Effectiveness in mind.  The structure and leaders, I believe, will foster partnership across business lines, and get our customer-facing staff out of the trenches and back on the front line, where they belong.  I believe it will help us work together as a collaborative team, rather than independent areas.  It will also bring much potential for employee growth and development post-integration.

Below is an overview of our new team and structure.

Deb Takes will continue as President and CEO of Harleysville National Bank.  Deb’s long relationship with the bank, our customers and communities is important to our success.  She remains invaluable in representing our organization throughout our footprint, and even more so as we grow.  As a leader on our executive management team and HNBC board member, I will look to Deb to offer insights and actively participate in decision-making in all areas of the bank.  

Donna Coughey, currently President and CEO of Willow Financial, will join HNBC in December to continue to provide leadership to and manage relationships with Willow’s employees, customers and communities.  Donna will provide valuable assistance as we work to strengthen our rapport with Willow’s constituents, especially in the rapidly growing Chester County market.

Mike High, our Chief Operating Officer (COO), will retire from HNBC the end of November.  Mike has been with us for nearly five years of his 30 -plus year career and has made tremendous contributions, first, as Chief Financial Officer, and now as COO.  Mike served as a driving force in our growth, most recently as a leading architect of the Willow Financial and East Penn acquisitions.  I am grateful for all his contributions.

Brent L. Peters will continue as President of East Penn Bank and will also serve as Chief Administrative Officer of HNBC.  In this expanded role, he will oversee the following functions:

§ Credit Administration (Jim McGowan)-As Chief Credit Officer, Jim will be responsible for retail and commercial credit approval and credit policy recommendations for all areas of the bank.

§   Human Capital (Liz Graham) – Liz and her team will focus on finding, developing and retaining valuable team members for our organization while building our culture and maintaining training, compensation and internal relations as top priorities.

§   Marketing (Noel Devine) – Noel will join us from the Willow Financial team.  She will lead brand management, advertising, market intelligence, web development, public relations and event management.

§   Risk Management (Patrick Killeen) – Patrick will join us from Willow Financial and will focus on portfolio modeling and analysis, policy recommendations, compliance, legal, security and corporate insurance functions.

Tracie Young, currently HNBC’s Director of Risk Management, will lead the development of a new Internal Audit and Credit Review function.  As she grows this new area, she will report directly to the Audit Committee, and indirectly to Brent.

Diane Brown, currently HNBC’s Director of Sales and Marketing, will be leaving the bank in mid-October to pursue other opportunities.  Diane has been with us for over a decade, leading many functions throughout her tenure including electronic banking, retail product development and the implementation of our robust employee Intranet.  I appreciate her service, contributions and dedication to the bank.

George Rapp will continue as Chief Financial Officer and Steve Murray will remain our Treasurer.  Both will have expanded roles commensurate with the additional responsibilities that come with a larger bank.  George will manage accounting, financial planning, budgeting, management information, investor relations, treasury and board reporting. Steve will actively manage ALCO, in addition to his treasury function.  Together, Steve and George will build a more robust investor relations program.

Ammon Baus, currently Chief Credit Officer for Willow Financial, will join HNBC in December as head of a new Client Services group.  This group will partner closely with commercial and retail delivery channels to provide integrated, customer-focused support.  Responsibilities will include underwriting, SBU, product management, mortgage banking, loan operations, collections, loan workout and a new channel management function.  Centralizing these areas will eliminate overlap and provide a dedicated focus on process which will help us become more effective throughout the bank.  For example, it will help free up our relationship managers from process issues giving them more time to focus on growing their customer base.

Lewis Cyr will continue as Chief Lending Officer/Head of Commercial Banking with responsibility for originations, portfolio management and developing full relationships with all of our commercial customers and prospects.

Lou Spinelli will continue to lead Retail Delivery with a very strong focus on expanding our retail customer base.   Additionally, he will recommend ways to optimize our branch-based retail delivery system, which will total 84 offices post-conversion.   

Randy McGarry, who joined the bank in June as Chief Information Technology Officer, and Sheila Gray, who came in February to manage Deposit Operations, will partner to lead a new group that comprises IT, Deposit Operations, Cash Management support, Branch Administration and the Call Center.  They will transform these areas into a team dedicated to solving operational issues such as payment processing, application support and process design so our systems and processes better provide what our branches and relationship managers need to effectively serve customers and grow relationships.  I expect Randy and Sheila’s combined talents to result in improved technology, streamlined processes, cross-departmental synergies and an improved customer experience.  

Wealth Management: We are very fortunate to have two very strong wealth management businesses, both focused on distinct segments of the market.  Millennium Wealth Management, which includes our trust, investment management and private banking areas, as well as retail investments via Millennium Wealth Management Advisors, will continue to be led by Joe Blair.  BeneServ, a benefits consulting company presently owned by Willow Financial, will report to Joe. Cornerstone’s strong partnership of Jack Yaissle, Skip Cowen and Tom Scalici will remain as the leadership team for the Cornerstone and McPherson companies, with its concentration on estate and business succession planning, qualified and non-qualified retirement planning, and investing for higher net worth individuals and institutions.

With our increased size comes additional board and governance requirements.  Executive Assistant and Corporate Secretary, Jo Ann Bynon, will work closely with our counsel and me to coordinate board functions including reporting, education recommendations and agenda items.  She will also serve as the point person for putting items on committee agendas and scheduling and documenting required approvals.

As we integrate Willow, these people, together with me, comprise the new executive leadership team of HNBC.  Over the coming weeks, each will take the next step in the formation of our new organization as they develop and define their teams.  We will continue to keep you apprised as our group continues to take shape.

Though I know that the upcoming transition period will be very challenging, I am exceedingly energized by what we can accomplish together in the future.  I am confident that through the synergies and pairings this group creates, we can continue to drive expansion, enhance performance, empower all employees and build a leading brand for our organization.

In the coming week, these individuals will begin the work of becoming a true team as they collaborate to draft our strategic plan for 2009 and beyond.  I look forward to sharing it with you soon and hope you are as excited as I am about the many opportunities for our company.

Thank you for your efforts, cooperation and continued flexibility as we move through this process.

EX-99.2

Exhibit 99.2

2008 Special Meeting of
HNBC Shareholders

September 9, 2008

Best Western The Inn at Towamencin

Kulpsville, PA

2

Forward-Looking Information

During the course of this presentation, management may make projections and

forward-looking statements regarding events or the future financial performance of

Harleysville National Corporation.We wish to caution you that these forward-looking

statements involve certain risks and uncertainties, including a variety of factors that may

cause Harleysville National Corporation’s actual results to differ materially from the

anticipated results expressed in these forward-looking statements.Investors are cautioned

not to place undue reliance on these forward-looking statements and are advised to

review the risk factors that may affect Harleysville National Corporation’s operating

results in documents filed by Harleysville National Corporation with the Securities and

Exchange Commission, including the Quarterly Report on Form 10-Q, the Annual
report on Form 10-K, and other required filings.Harleysville National Corporation

assumes no duty to update the forward-looking statements made in this presentation.

3

The following disclosure is made in accordance with Rule 165 of the Securities and Exchange Commission.
Harleysville National Corporation and Willow Financial Bancorp, Inc. have or will be filing documents concerning
the merger with the Securities and Exchange Commission, including a registration statement on Form S-4
(Registration No. 333-152007) containing a joint proxy statement/prospectus, which has been distributed to
shareholders of Harleysville National Corporation and Willow Financial Bancorp, Inc. Investors are urged to read
the registration statement and the joint proxy statement/prospectus regarding the proposed transaction and any
other relevant documents filed with the SEC, as well as any amendments or supplements to those documents,
because they will contain important information. Investors can obtain a free copy of the joint proxy
statement/prospectus, as well as other filings containing information about Harleysville National Corporation and
Willow Financial Bancorp, Inc., free of charge on the SEC’s Internet site (www.sec.gov), by contacting
Harleysville National Corporation, 483 Main Street, Harleysville, PA 19438, (Telephone No. 215-256-8851), or by
contacting Willow Financial Bancorp, Inc. at 170 South Warner Road, Wayne, PA 19087, (Telephone No. 610-995
-1700). Directors and executive officers of Harleysville National Corporation and Willow Financial Bancorp, Inc.
may be deemed to be participants in the solicitation of proxies from the shareholders of Harleysville National
Corporation and Willow Financial Bancorp, Inc, respectively, in connection with the merger. Information about the
directors and executive officers of Willow Financial Bancorp, Inc. and their ownership of Willow Financial
Bancorp, Inc. common stock is set forth in Willow Financial Bancorp, Inc.’s proxy statement for its 2007 annual
meeting of shareholders and can be obtained from Willow Financial Bancorp, Inc. Information about the directors
and executive officers of Harleysville National Corporation and their ownership of Harleysville National
Corporation common stock is set forth in Harleysville National Corporation’s proxy statement for its 2008 annual
meeting of shareholders and can be obtained from Harleysville National Corporation. Additional information
regarding the interests of those participants may be obtained by reading the prospectus/proxy statement regarding
the proposed merger transaction. INVESTORS SHOULD READ THE JOINT PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS TO BE FILED WITH THE SEC CAREFULLY
BEFORE MAKING A DECISION CONCERNING THE MERGER.

4

Best Community Bank
Anywhere

5

•Disciplined in-market acquisition

•Defends and extends market

•Solidifies presence in Southeast PA

•Expands employee talent pool

•Favorable economics

•Accretive in 2009

Strategic Rationale

6

Exchange ratio:	0.73 shares HNBC for each WFBC share
Implied price per share1:	$10.72
Aggregate purchase price1: Board representation:	$169.2 million 11 Harleysville National 2 Willow Financial
Anticipated close: % shares needed for transaction approval:	Fourth calendar quarter 2008 51%

1Price per share for WFBC based on the average HNBC closing stock price for ten days prior to
3/31/08.

Summary of Significant Terms

7

The acquisition of Willow Financial Bank is in line
with our strategic initiatives:

•EXPANSION

•EMPOWERMENT

•EFFECTIVENESS

8

	HNBC (as of 3/31/08)	WFBC (as of 3/31/08)	Pro forma Combined
Assets ($)	$3.9 billion	$1.6 billion	$5.5 billion
Total Net Loans ($)	$2.5 billion	$1.1 billion	$3.6 billion
Deposits ($)	$3.0 billion	$1.0 billion	$4.0 billion
Branches	55	29	84

The Merger at a Glance

9

EXPANSION

•Disciplined in-market expansion

•HNBC will be third-largest bank holding company
headquartered in the region

•84 branches

•$5.5 billion assets

•Extensive value-added products and services

10

EMPOWERMENT

•Sharing of best practices

•Local decision-making, $62 million legal
lending limit

•Expected synergies of $15 - $20 million to be
realized in 2009

11

EFFECTIVENESS

•Leverage $8.5 million investment in Harleysville
operations center

•Scale to invest in new technology that will improve
customer experience or efficiency

•Accretive to 2009 earnings

12

Retail - - Benefits

•Expanded branch network

•Cross-selling opportunities

•Extensive ATM Network

•Improved customer experience

•Compelling mortgage banking
business

13

Households	180,176
Household Growth Rate	9.7%
Median Income	$85,956
Average HH Income	$116,607
Household Income Growth rate 2007-2012	22.1%

Source: SNL

Demographics - - Chester County

•One of PA’s fastest
growing counties

•Compares favorably to
PA median income of
$43,900 and average

    HH income of $57,100

14

Commercial - - Benefits

•Retain local decision making

•Experienced, talented commercial lenders

•Sophisticated products/services

•Commercial cash management

•Wealth management (Cornerstone)

•BeneServ employee benefits insurance brokerage

•Higher legal lending limit

15

Wealth Management - Benefits

•Combined total of $3.6 billion Assets Under
Management

•Cross-selling activities

•Larger retail brokerage business

16

Enhances Foundation for Future Growth

üWillow Financial acquisition provides potent
growth platform for 2009 and beyond

Harleysville National Corporation

2008 Special Meeting of Shareholders

September 9, 2008

Paul Geraghty talking points

Slide 1 – 2008 Special Meeting of Shareholders

Good afternoon.  Thanks for joining us today for this special meeting of shareholders.  We are excited to discuss with you the matter at hand – your vote on our pending acquisition of Willow Financial Bancorp, which was first announced on May 21, 2008.

Slide 2 – Forward-looking information/Disclosure

Before we begin, let me remind you that during our presentation we will make forward-looking statements about our expected financial performance.  These forward-looking statements are subject to risks and uncertainties, and we caution you not to place undue reliance on these statements.  We urge you to review the risk factors that may affect our operating results as presented in our filings with the Securities and Exchange Commission.

Slide 3 – Rule 165 Disclosure

And here are the required disclosures in accordance with Rule 165of the Securities and Exchange Commission.

Slide 4 – Best Community Bank Anywhere

As I stated at our annual meeting of shareholders, we have a very simple goal here at Harleysville National Corporation…to be the Best Community Bank Anywhere.  This has been our consistent message to you ever since I became president and CEO of Harleysville 14 months ago.

While there is no single silver bullet that will accomplish this goal overnight, we firmly believe that the acquisition of Willow Financial Bancorp is a major next step for Harleysville National Corporation and will add significant shareholder value in the years to come.

Slide 5 – Strategic Rationale

The acquisition of Willow Financial is very compelling for the shareholders of Harleysville National.  First, this acquisition is consistent with the strategic rationale we have discussed for the past year or more – to grow through disciplined in-market expansion.

With Willow as part of the Harleysville family, we become a larger, stronger player in Southeast Pennsylvania, the Lehigh Valley and adjacent northern counties.  This delivers many benefits to your company, which I will discuss in a moment.  Most importantly, we believe that this acquisition makes Harleysville National Corporation a more valuable franchise.

With Willow, we gain many talented employees in all aspects of bank operations including retail banking, wealth management, commercial banking, information technology, and operations.

Willow’s recent challenges, in particular the out of balance condition that was announced in November 2007, enabled us to buy this bank at a good price.  Many shareholders have asked how we got comfortable with Willow’s balance sheet considering this issue, and the answer is that we examined every line item during due diligence in detail.  In addition, Willow’s outside consultants, Jefferson Wells and Price Waterhouse Coopers, had already scrutinized every balance sheet account.  We reviewed the work papers from those audits and this gave us a level of comfort that the issue had been identified, contained, and dealt with appropriately.

We also conducted an extensive file review of Willow’s loan portfolio and believe that Willow Financial’s credit quality is sound, as reflected in its strong credit quality metrics.

Finally, we believe that the acquisition of Willow will augment our annual earnings beginning in 2009 – a very quick timeframe.

Slide 6 – Summary of Significant Terms

This slide shows some of the key terms of the acquisition.

We are exchanging 0.73 shares of Harleysville for each share of Willow Financial.  This is an implied purchase price for Willow of $10.72 per share or $169.2 million total consideration.

Two Willow Financial directors – James E. McErlane and John J. Cunningham – will join the Harleysville National board of directors.  Jim McErlane is senior partner at Lamb McErlane a 28-lawyer firm based in West Chester PA.  His practice areas include banking and finance, real estate, municipal law, and governmental regulations.

John Cunningham is vice chairman and former managing partner of Cozen O’Connor, one of the largest law firms in Philadelphia, and he concentrates his practice in general corporate and commercial matters for companies, institutions and individuals.

These two new directors bring extensive business experience and will add significant value to our existing board of directors.

We expect the transaction to close within the fourth quarter.

Slide 7 – Strategic Initiatives

To date, we’ve marched toward our goal of becoming the Best Community Bank Anywhere through a three-pronged strategy to:

§   grow through expansion;

§   empower employees to make decisions, and suggest needed changes;

§   and improve our effectiveness by redesigning workflow, deploying advanced technology, and eliminating redundant or unproductive steps in our internal processes and procedures.

With greater scale, additional bright minds and increased purchasing power we can execute these with greater impact. Let’s look at this in detail.

Slide 8 – The merger at a glance

The combined bank will be the third-largest bank holding company headquartered in Southeast Pennsylvania.  This slide shows some of the key metrics:

-   combined, we will have $5.5 billion of assets

-   Total net loans grow to $3.6 billion

-   Total deposits grow to $4.0 billion

-   Nonperforming loans will represent .99% of total net loans, indicating good credit quality for the combined bank.

-   And we will have 84 branches throughout the region, better able to serve our retail customers where they work and where they live.

Slide 9 – Expansion

We’ve told you that we are going to grow our franchise and improve our results through disciplined in-market expansion.  This element of our growth strategy started last year with the acquisition of East Penn Financial.  Willow is a larger, more assertive step forward for us, but one that is entirely

consistent with the message we have delivered to shareholders for the past 18 months.

For those of you who are concerned with the possibility of Harleysville becoming a serial acquirer, I want to put your mind at ease.  Our current focus is to close the Willow Financial acquisition and successfully integrate the two banks, which will include a systems conversion, uniform identity and look and feel at the branches, cross-training of personnel and more.  In addition we are committed to achieving the financial benefits we’ve outlined and will be 100% focused on delivering on the benefits of this transaction.

In addition to our branch network and our increased scale, we will together have one of the most potent portfolios of value-added products and services in the community banking markets of Southeast Pennsylvania, the Lehigh Valley and the adjacent northern counties.  In essence, we will be a community bank with the resources to compete with the largest banks in the country.  Our objective is to have the scale benefits of larger banks while thinking and acting local.  That is, to us, what it will take to be The Best Community Bank Anywhere.

Slide 10 – Empowerment

The combined bank will have an extensive pool of talented employees to draw from, which will allow us to fill open positions with the best person suited for the job, regardless of company.

At the end of the day, our team will be able to share ideas, work together to attack problems, brainstorm to reduce unnecessary work or activity, and share best practices that will make us even better at what we do.

From a lending standpoint, our combined legal lending limit will be $62 million – one of the highest in the region for a bank with local decision-making authority.  This will be attractive to commercial customers with whom we do business, and elevate our visibility with prospective commercial customers.

We anticipate cost savings of $15- $20 million in 2009.

Slide 11 – Effectiveness

As a bank with greater assets and resources, we can drive economies of scale.  We can process more transactions through the operations center we

constructed in 2007.  We can purchase everything more effectively – from office supplies to computers.  And as a larger bank we can evaluate more sophisticated technological solutions to improve workflow and customer satisfaction.

In addition, one premise on which we moved forward was that the acquisition of Willow Financial would be accretive to 2009 earnings per share.

Slide 12 – Retail Benefits

As you can see from this branch map, the Harleysville and Willow networks fit together like a jigsaw puzzle, providing customers with extensive branch presence all throughout Southeast Pennsylvania, the Lehigh Valley and adjacent northern counties.In addition, Willow customers will have the opportunity to access 32,000 surcharge-free ATMs through the Allpoint network.  This is especially attractive to customers who live and work throughout our service area.  It brings greater flexibility and accessibility, allowing them to meet their financial services needs at home or at work…or anywhere in between!

The deployment of best practices such as branch remote capture, which enables elimination of deposit cutoff times, will improve customer satisfaction and make us the place to bank in our market.

In addition, with Willow we gain a mortgage banking business that is well run, conservative, and profitable.  This will be a value-added source of fee income for Harleysville’s shareholders, providing a broader and more competitive array of mortgage products for our retail customers.

As you can see from this branch map, the Willow acquisition gives us a solid presence in Chester County on day one.  This is a huge positive.  Let’s look at the Chester County market in detail.

Slide 13 – Demographics – Chester County

As you can see, the demographics for the Chester County markets we enter with this acquisition are highly favorable.

Median income of over $80,000 compares favorably to the Pennsylvania median of $43,900 and average household income of over $100,000

compares to the average household income for all of Pennsylvania of $57,100.

The bottom line – it’s a wealthy, fast growing county in a terrific banking market.

Couple this with our combined presence in the attractive markets of Bucks and Montgomery Counties and we are poised to capitalize on some very positive growth opportunities.

Slide 14 – Commercial Benefits

The benefits to commercial customers are extensive:  local decision making, a powerful team of smart, savvy relationship managers who know how to get the job done and an ability to provide greater support for our customers’ lending needs.

In addition, we gain several new products with the Willow acquisition, the most noteworthy of which is BeneServ, a high profile, successful, employee benefits insurance brokerage.  This new service is truly unique among

community banks and we’re excited to introduce it to Harleysville customers.

Likewise, Willow’s commercial customer base, which consists of many privately held growing businesses, offers solid opportunities to introduce the services our Cornerstone unit provides.  We can add value, and generate fee-income, by presenting Cornerstone’s estate and succession planning, investment management, and compensation consulting specialties to these customers.

Slide 15 – Wealth Management Benefits

The transaction builds on our success in the very important wealth management area through The Cornerstone Companies and Millennium Wealth Management.  In total, we will have $3.6 billion of assets under management, an amount that we expect to grow as we introduce Cornerstone and Millennium to Willow customers.  In addition, Willow’s retail brokerage operation will enhance our own and provide greater scale.

Slide 16 – Enhanced Foundation

In conclusion, we believe that the acquisition enhances our future growth opportunities.  It moves us closer to achieving many of our financial and customer service goals.  It’s accretive to earnings per share in 2009.  And it makes us a major player in the Pennsylvania banking market, without sacrificing our community focus.  For all these reasons, we are extremely excited about this transaction and we hope you are too.

With that we will take any questions you may have.

EX-99.3

  
    ex993-release.htm