Norwood Financial Corp. in Honesdale, Pa., has agreed to buy rival North Penn Bancorp Inc. of Scranton for $27.1 million.

The $534.5 million-asset Norwood said Wednesday that North Penn shareholders could choose between $19.12 in cash or 0.6829 shares of Norwood for each North Penn share.

The deal's price is 128.3% of North Penn's tangible book value. The deal is expected to close in the second quarter of 2011, Norwood said. The transaction's total value is based on Norwood's stock trading at $28 a share. The company's stock fell 4.8% Wednesday, to $27.35.

Buying the $164.5 million-asset North Penn would allow Norwood to expand in Monroe County and into Lackawana County.

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