National Penn Bancshares, a $1.6 billion community bank, is getting into the brokerage business.

The Boyertown, Pa.-based bank is preparing to file with the National Association of Securities Dealers for a broker-dealer license, said James V. Elliott, president of National Penn's trust unit.

Tentatively called Penn Securities, the brokerage, which could open as early as September, would bring National Penn closer to becoming a full- service financial institution, Mr. Elliott said.

Penn Securities would offer annuities, bonds, stocks, and mutual funds to the "individual that wants to be in control," said Mr. Elliott. It would initially hire about 10 brokers to serve high-net-worth and institutional accounts out of an office under construction in Bucks County.

Another five or six brokers would serve the bank's 53 retail branch offices in Pennsylvania, Mr. Elliott said.

The hires would include five brokers now employed by Compulife, a Virginia third-party marketing firm that runs National Penn's brokerage program. The bank plans to end its relationship with Compulife after receiving the broker-dealer license, Mr. Elliott said.

Penn Securities would be headed by Gene C. Levengood, a former manager with CoreStates Financial Corp.'s brokerage. Mr. Levengood joined National Penn after CoreStates merged with First Union Corp. He would report to Mr. Elliott.

Another former CoreStates banker will spearhead National Penn's insurance efforts. Jack Mikus, who joined the bank two weeks ago as a senior vice president, will explore affiliations with insurance providers, said Mr. Elliott.

"We refer to the acquisition of large banks by out-state-banks as an opportunity for smaller organizations like us to expand in a lot of areas," Mr. Elliott added.

Analysts said it makes sense for small banks to diversify their services.

"Bankers that are more visionary recognized that it's the direction they have to go in," said Cassandra Toroian, an equity analyst with Ryan Beck & Co. in Livingston, N.J. "There's tons of small investors out there, many of whom bank at community banks."

National Penn has a small trust subsidiary, Investors Trust Co., that manages $400 million of assets. But Mr. Elliott said that there are no immediate plans to convert that unit's collective funds-which account for $20 million of assets-to mutual funds.

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