Fitch Affirms First Niagara Financial Group at 'BBB/F2'; Outlook Stable

NEW YORK--(Business Wire)--
Fitch Ratings has affirmed the long- and short-term Issuer Default
Ratings (IDRs) and outstanding debt ratings of First Niagara Financial
Group, Inc. (FNFG) and its subsidiaries. The Rating Outlook is Stable.

First Niagara Financial Group, Inc:

--Long-term IDR at 'BBB';

--Short-term IDR at 'F2';

--Individual at 'B/C';

--Support at '5';

--Support Floor at 'NF'.

A detailed list of the affirmed ratings of the related entities is
included at the end of this release.

The rating affirmation is supported by FNFG's consistent operating
performance, historically sound asset quality and solid capital
levels. Despite the challenging operating environment, profitability
measures for first-half 2008 (1H'08) were up compared to the same
period the previous year. Factors attributing to the positive trends
were solid growth in commercial loans, significant NIM expansion and
continued low credit costs.

Given FNFG's franchise concentration in slower growth markets, it
has help to limit any contagion from the real estate sector downturn.
For 1H'08, the loan portfolio continues to exhibit sound asset
quality, evidenced by manageable level of NPAs and delinquency trends
remaining in line with expectations. Further, the company continues to
experience low levels of NCOs. Positively, reserve coverage is
considered ample at 2.2 times non-performing loans, particularly when
compared to its historically low loss rates. FNFG also maintains a
sizeable capital base, which provides additional support. Of note,
FNFG is exposed to some large commercial real estate credits that are
concentrated by borrower and geography. While these large loans are
performing well, it exposes FNFG to event risk. Although Fitch
believes the bleak economic picture may impact future credit
performance, losses are expected to remain at manageable levels.

Fitch has affirmed the following FNFG subsidiary ratings with a
Stable Outlook:

First Niagara Bank

--Long-term deposits 'BBB+';

--Long-term IDR 'BBB';

--Short-term deposits 'F2';

--Short-term IDR 'F2';

--Individual 'B/C';

--Support '5';

--Support Floor 'NF'.

First Niagara Commercial Bank

--Long-term deposits 'BBB+';

--Long-term IDR 'BBB';

--Short-term deposits 'F2';

--Short-term IDR 'F2';

--Individual 'B/C';

--Support '5';

--Support Floor 'NF'.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Doriana Gamboa, +1-212-908-0865
Meghan Crowe, +1-212-908-9121
Sandro Scenga, +1-212-908-0278 (Media Relations)

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