First Niagara Financial Group Inc said it agreed to buy Harleysville National Corp for $5.50 per share, or $237 million, in stock to create a strong foothold in Pennsylvania.

The offer represents a premium of 37.5 percent to Harleysville National shares' closing price Friday.

The deal is expected to close in the first quarter of 2010 and will add to First Niagara's earnings per share by about 14 percent in 2011, the financial services company said.

Harleysville shareholders will get 0.474 First Niagara common stock for each share held, Lockport, New York-based First Niagara said in a statement.

The deal will provide First Niagara with $5.6 billion in assets including, $3.6 billion in loans and $4.1 billion in deposits and an additional workforce of 1,100, it said.

Shares of Harleysville, Pennsylvania-based Harleysville National jumped 33 percent to $5.32, while those of First Niagara were up 1 percent at $11.91 in morning trade Monday on Nasdaq.

(Reporting by Archana Shankar in Bangalore; Editing by Gopakumar Warrier)