UPDATE 3-First Niagara to buy Harleysville for $237 mln in stock

* Acquisition to help expand in eastern Pennsylvania

* Stock deal to add to First Niagara's EPS by 14 pct in 2011

* Sees deal to close in Q1 2010

* Harleysville surges 37 pct, First Niagara up 5 pct (Adds analyst comments, conference call details, updates stock movement)

By Archana Shankar and Sakthi Prasad

BANGALORE, July 27 (Reuters) - First Niagara Financial Group Inc (FNFG.O) said it agreed to buy Harleysville National Corp (HNBC.O) for $237 million in stock as it seeks to expand its eastern Pennsylvania footprint.

Lockport, New York-based First Niagara is offering $5.50 a share, a premium of 37.5 percent to Harleysville National's closing price Friday. Harleysville's shares rose more than 37 percent following the announcement, while those of First Niagara were up more than 5 percent.

Harleysville, based in Harleysville, Pennsylvania, has been struggling with credit troubles stemming from its historical focus on real-estate lending, especially residential development and home-equity loans.

Last month, the bank said it would sell assets, raise additional capital and restructure funding sources to boost its capital base.