Under the agreement, shareholders of Penn Laurel will receive $31 in cash for each of their shares. Holders of options will receive in cash, the difference between $31 and the exercise price. The transaction, subject to the approval of Penn Laurel shareholders and state and federal regulatory authorities, is expected to reach completion in second quarter.

Northwest currently operates 160 community bank facilities in Pennsylvania, Maryland, New York, Ohio and Florida. Of those, eight are in Pennsylvania--one each in Clearfield and Weedville and two each in St. Marys, Johnsonburg and Ridgeway. The CSB facilities are in Clearfield, Curwensville, Coalport, DuBois and St. Marys.

"Penn Laurel has historically maintained strong levels of net interest income and fee income, which results from its emphasis on funding commercial loans and core deposits," says William Wagner, Northwest's president and CEO, in a statement. "When these components of income are combined with the significant synergies we expect to realize from this in-market merger, we anticipate the addition of Penn Laurel will be accretive to return-on-assets, return-on-equity and earnings per share. In addition, our combined network of offices in Clearfield and Elk counties will give us significant market share in North Central Pennsylvania."