Strong Business Fundamentals and Growth Continue to Drive First Niagara in the Third...

Strong Business Fundamentals and Growth Continue to Drive First Niagara in the
Third Quarter of 2011

Third Quarter 2011 Highlights:

-- Operating Non-GAAP EPS of $0.25, equal to the linked second quarter and
a 9% increase over the third quarter of 2010
-- Strong commercial loan growth continues at 14%, annualized, over
normalized linked quarter
-- Strong core deposit increase of 16%, annualized, over normalized linked
quarter
-- Superior credit quality continues to distinguish the bank in a weakened
economy
-- GAAP EPS of $0.19, includes branch closure and other nonrecurring
charges of $16.7 million

BUFFALO, N.Y., Oct. 20, 2011 (GLOBE NEWSWIRE) -- First Niagara Financial Group,
Inc. (Nasdaq:FNFG) continued to deliver solid results in the third quarter of
2011, driven by organic growth in both commercial loans and core deposits.
Credit quality also remains very strong, further positioning the Company for
consistent performance during a slow and extended economic recovery.

"Strong fundamentals drove positive results again this quarter, as we continue
to take market share, grow our customer base and diversify revenue sources,"
said President & Chief Executive Officer John R. Koelmel. "It is clear that the
economy in general and banking in particular will be challenged for an extended
period of time. However, our talented team, expanded franchise, customer-focused
business model and very solid balance sheet have us well positioned. While the
challenges are clear, our performance in the third quarter demonstrates our
continuing focus on strengthening our near-term position while driving long-term
shareholder value."

First Niagara posted third quarter 2011 operating non-GAAP earnings of $73.6
million, or $0.25 per diluted share. Operating earnings were $71.2 million, or
$0.25, in the second quarter of 2011. Total revenue of $304.1 million was
comparable to the second quarter of 2011, normalized for the full effect of the
NewAlliance acquisition completed on April 15, 2011. Solid operating earnings
reflect the benefits of continuing growth in average commercial loans of $327
million as well as growth in core deposits of $573 million over normalized
second quarter 2011 balances. However, the benefit of a growing customer base
was negated by net interest margin compression resulting in flat total revenues
over normalized second quarter 2011 levels.

Note: To facilitate comparisons to the linked quarter, relevant second quarter
2011 amounts were normalized to account for the acquisition of NewAlliance
completed on April 15, 2011 as if it had been included for the entire second
quarter and to reflect a one-time adjustment for FDIC deposit premium expense.

On a GAAP basis, third quarter 2011 net income was $57.0 million, or $0.19 per
diluted share, compared to $13.6 million, or $0.05 per diluted share, in the
second quarter of 2011 and $45.6 million or $0.22 per diluted share in the third
quarter of 2010. GAAP net income and EPS during the third quarter reflect branch
closure restructuring costs and to a lesser extent other merger integration
expenses.

Operating Results (Non-GAAP) Q3 2011 Q2 2011 Q3 2010
----------------------------------------------- ------- ------- -------
Net interest income $ 235.4 $ 230.4 $ 161.3
Provision for credit losses 14.5 17.3 11.0
Noninterest income 68.7 60.9 49.5
Noninterest expense 178.5 166.7 130.7
Net operating income before non-operating items 73.6 $ 71.2 46.9
Weighted average diluted shares outstanding 292.5 282.4 206.1

Operating earnings per diluted share $ 0.25 $ 0.25 $ 0.23
----------------------------------------------- ------- ------- -------

Reported Results (GAAP)
----------------------------------------------- ------- ------- -------
Net income before non-operating items $ 73.6 $ 71.2 $ 46.9
Non-operating items(a) 16.7 57.7 1.3
Net income $ 57.0 $ 13.6 $ 45.6
Weighted average diluted shares outstanding 292.5 282.4 206.1

Earnings per diluted share $ 0.19 $ 0.05 $ 0.22
----------------------------------------------- ------- ------- -------
All amounts in millions except earnings per diluted share. The
Non-GAAP/Operating Results table above summarizes the company's operating
results excluding certain non-operating items.
(a) Amounts are shown net of tax and represent non-recurring expenses
related to acquisition, integration and restructuring.

"In these challenging times we are all-the-more focused on running our
business," Chief Financial Officer Gregory W. Norwood said. "Accordingly, we are
serving our customers just like we did throughout the 2008 disruption. We also
continue to invest in the business, albeit at a more measured pace, as evidenced
by expenses that are essentially flat compared to a normalized second quarter of
2011. Until there is more sustainable economic recovery, it will be all-the-more
important to balance the impact of the current environment with our continuing
investment in our longer-term organic growth strategy. Further, while the
negative impact on industry margins from the unprecedented Federal Reserve
actions is significant, we have and will actively manage both loan and deposit
pricing through this historically low interest rate environment."

Strong Loan Growth Continues

Total loans and leases averaged $16.2 billion in the third quarter of 2011,
increasing by $311 million, or an annualized 8%, over normalized linked quarter
balances. First Niagara increased lending across all of its geographic regions
and in key portfolios including commercial and home equity loans. Third quarter
originations increased to $2.5 billion, a 10% annualized increase, compared to
the linked quarter.

Commercial loans averaged $9.6 billion in the third quarter of 2011, increasing
by $327 million, or an annualized 14%, over normalized linked quarter balances.
C&I loans averaged $3.4 billion in the third quarter of 2011, increasing by $233
million, or an annualized 29%, over normalized linked quarter balances. Even in
a relatively low demand environment for credit, First Niagara continues to drive
commercial loan growth by focusing on its customer-relationship value
proposition.

Home equity and mortgage balances in the third quarter of 2011 reflect
considerably higher customer refinance activity that began early in the quarter
driven by the significant decline in interest rates. While such refinance
activity reduced yields and interest income on that portfolio of loans, mortgage
banking fee income increased during the quarter driven by greater origination
volumes and higher gain on sale profit. Average home equity loans in the third
quarter were $2.2 billion, compared to $2.1 billion, normalized, in the second
quarter of 2011. Average residential mortgage balances in the third quarter were
$4.2 billion, compared to $4.3 billion, normalized, in the linked quarter.

Superior Credit Quality

Asset quality ratios continued to significantly outperform industry averages and
remained consistent with the company's recent performance, reflecting its
longstanding underwriting discipline and focus on historically stable and
resilient geographic markets. Third quarter 2011 net charge-offs were $8.1
million, representing 0.20% of average loans annualized, or 0.36% excluding
acquired loans. This compares to $7.5 million in the linked quarter, or 0.20% of
average loans annualized, or 0.31% excluding acquired loans.

The third quarter 2011 provision for credit losses was $14.5 million. As in
recent quarters, the provision exceeded net charge-offs as the Company increased
its level of allowance consistent with the growth and changing mix of its loan
portfolio At September 30, 2011, the allowance for loan losses totaled $112.7
million, or 0.69% of total loans, or 1.20% excluding acquired loans. At June 30,
2011, the allowance equaled $107.0 million, and equaled 0.66% of total loans and
1.21% excluding acquired loans. In addition to the allowance, purchase
accounting fair value credit marks recorded at the time of the acquisitions
further insulate the balance sheet. As of September 30, 2011, about 43% of total
loans represented credits that were marked to fair value at the time of their
acquisition.

At September 30, 2011, nonperforming loans were $81.9 million, representing
0.50% of total loans, or 0.87% excluding acquired loans. Nonperforming loans
represented 0.51% of total loans at June 30, 2011, or 0.93% excluding acquired
loans. Nonperforming assets were $91.3 million, representing 0.29% of total
assets at September 30, 2011, a slight decrease from 0.31% of assets at the end
of the prior quarter.

Strong Core Deposit Growth

Average core deposits of $14.7 billion for the third quarter of 2011, increased
$573 million, or 16%, over normalized linked quarter. Average interest bearing
and non-interest bearing deposits each grew by approximately $200 million on a
normalized linked quarter basis. Average core deposits as a percentage of total
deposits increased 137 basis points to 77% in the third quarter, compared to
second quarter normalized balances.

The most significant deposit growth in the third quarter was in money market
savings accounts. As part of First Niagara's household acquisition strategy that
the company began early in the second quarter, average money market savings grew
approximately $555 million on a normalized linked quarter basis. Approximately
two thirds of the $800 million in promotional deposits represented new customer
accounts. Rates paid on these three-month promotions averaged 1.25 percent,
which was a primary driver of the increase in deposit costs in the third quarter
of 2011.

Also during the third quarter, First Niagara launched a line of new checking
products supported by a comprehensive advertising and marketing program that is
driving early results. The bank's new "YouFirst Checking" products include
"Pinnacle Checking" and "PinnaclePlus Checking" accounts, which offer premium
features in response to consumer demand, such as unlimited non-First Niagara
transactions at all 425,000 U.S. ATMs with no fees. These more robust products
supplement low-minimum-balance "Choice Checking" and free, no-minimum-balance
"eChecking" accounts that continue to be attractive to a portion of First
Niagara's customer base.

Net Interest Income Essentially Flat Despite Interest Rate Environment

Average earning assets grew 4.6% from normalized linked quarter. Net interest
income, normalized, was down a modest 2.3% at $235.4 million. Net interest
margin in the third quarter of 2011 was 3.48%, compared to 3.65% in the linked
quarter. Normalizing second quarter 2011 for the full effect of the NewAlliance
acquisition lowers net interest margin by two basis points. Given the
historically low interest rate environment, margin pressure will continue for
the foreseeable future.

The business drivers of the decline accounted for eight basis points and
included the impact of higher mortgage asset premium amortization, cost of the
money market deposit acquisition strategy and modest commercial loan yield
compression. The remaining decline was attributable to normal third quarter "day
count" impact and various other adjustments.

Higher Noninterest Income

Third quarter noninterest income of $68.7 million was up $6 million compared to
normalized linked quarter, driven by growth in banking services, mortgage, as
well as lending and leasing fees. Greater refinance and purchase volumes and
higher margins drove the increase in mortgage banking fees.

Other income increased from normalized linked quarter driven by First Niagara's
capital markets business, which was particularly successful in increasing
derivative income in the third quarter through cross-selling to existing
healthcare, municipal, leasing and other commercial customers. Capital markets'
pipeline remains strong as customers look to lock in historically low interest
rates.

Noninterest Expense Relatively Stable

Third quarter operating (non-GAAP) noninterest expense was $177 million, up $3.3
million or 1.9% compared to second quarter of 2011, normalized. This increase
reflected continuing investments in marketing and advertising and technology and
communications to support the company's expected larger asset base and expanding
franchise. Technology expenses increased as the company expanded its data center
capacity. The incremental technology cost will be further absorbed as the
company continues to scale its business. These higher technology expenses were
partially offset by a reduction in salaries and benefits of 4%, or $3.7 million,
compared to the normalized linked quarter.

Reported (GAAP) noninterest expense for the current quarter totaled $203.9
million, reflecting $25.3 million in non-operating expenses, which are
substantially related to previously announced restructuring and repositioning
initiatives. The restructuring and repositioning charges stemmed from severance,
occupancy, and professional services expenses related primarily to closure of
fourteen branches in Eastern Pennsylvania during the quarter.

Capital

At September 30, 2011 the company's estimated consolidated Total Risk Based
capital and Tier 1 Common Risk Based capital ratios were 12.54% and 11.27%,
respectively. First Niagara remains well above current regulatory guidelines for
well capitalized institutions.

About First Niagara

First Niagara, through its wholly owned subsidiary, First Niagara Bank, N.A., is
a multi-state community-oriented bank that currently has approximately $31
billion in assets, $20 billion in deposits, 332 branches and 5,000 employees
providing financial services to individuals, families and businesses across
Upstate New York, Pennsylvania, Connecticut and Massachusetts. For more
information, visit www.fnfg.com.

Investor Call

A conference call will be held at 11 a.m. Eastern Time on Thursday, October 20,
2011 to discuss the company's financial results and business strategy. Those
wishing to participate in the call may dial toll-free 1-877-709-8150. A replay
of the call will be available until November 3, 2011 by dialing 1-877-660-6853,
Account # 240, Conference ID # 379653.

Non-GAAP Measures - This news release contains financial information determined
by methods other than in accordance with accounting principles generally
accepted in the United States of America (GAAP). The Company believes that
non-GAAP financial measures provide a meaningful comparison of the underlying
operational performance of the company, and facilitate investors' assessments of
business and performance trends in comparison to others in the financial
services industry. In addition, the company believes the exclusion of these
non-operating items enables management to perform a more effective evaluation
and comparison of the company's results and to assess performance in relation to
the company's ongoing operations. These disclosures should not be viewed as a
substitute for financial measures determined in accordance with GAAP, nor are
they necessarily comparable to non-GAAP performance measures that may be
presented by other companies. Where non-GAAP disclosures are used in this news
release, the comparable GAAP financial measure, as well as the reconciliation to
the comparable GAAP financial member, can be found in this document.

Forward-Looking Statements - This press release contains forward-looking
statements with respect to the financial condition and results of operations of
First Niagara Financial Group, Inc. including, without limitations, statements
relating to the earnings outlook of the company. These forward-looking
statements involve certain risks and uncertainties. Factors that may cause
actual results to differ materially from those contemplated by such
forward-looking statements include, among others, the following possibilities:
(1) changes in the interest rate environment; (2) competitive pressure among
financial services companies; (3) general economic conditions including an
increase in non-performing loans that could result from an economic downturn;
(4) changes in legislation or regulatory requirements; (5) difficulties in
continuing to improve operating efficiencies; (6) difficulties in the
integration of acquired businesses; and (7) increased risk associated with an
increase in commercial real estate and business loans and non-performing loans.

First Niagara Financial Group, Inc.

Income Statement Highlights -- Reported Basis

(in thousands, except per share amounts)

2011
2010 Nine months ended

--------------------------------------------------------------------------------
---

September September
Third Second First Fourth
Third 30, 30,
Quarter Quarter Quarter Quarter
Quarter 2011 2010

--------------------------------------------------------------------------------
---

Interest income:

Loans and leases $ 192,772 $ 184,341 $ 132,117 $
133,983 $ 131,862 $ 509,230 $ 362,006

Investment securities and other 94,375 93,029 76,767
71,337 68,774 264,171 178,262

--------------------------------------------------------------------------------
---
Total interest income 287,147 277,370 208,884
205,320 200,636 773,401 540,268

Interest expense:

Deposits 24,771 21,324 15,621
16,825 19,244 61,716 54,325

Borrowings 26,947 25,609 20,395
20,947 20,113 72,951 55,737

--------------------------------------------------------------------------------
---
Total interest expense 51,718 46,933 36,016
37,772 39,357 134,667 110,062

--
Net interest income 235,429 230,437 172,868
167,548 161,279 638,734 430,206

Provision for credit losses 14,500 17,307 12,900
13,500 11,000 44,707 35,131

--------------------------------------------------------------------------------
---
Net interest income after

provision 220,929 213,130 159,968
154,048 150,279 594,027 395,075

Noninterest income:

Banking services 26,384 24,613 19,006
22,230 21,007 70,003 58,543
Insurance commissions 16,886 17,044 15,755
13,130 13,573 49,685 38,504
Wealth management services 7,933 7,883 6,734
4,940 5,939 22,550 14,898
Mortgage banking 5,254 3,386 1,263
6,052 3,320 9,903 6,178
Lending and leasing 3,582 2,811 3,763
3,850 3,045 10,156 7,599
Bank owned life insurance 2,742 3,055 2,030
1,994 2,067 7,827 5,267

Other income 5,874 2,103 3,523
1,916 554 11,500 1,514

--------------------------------------------------------------------------------
---
Total noninterest income 68,655 60,895 52,074
54,112 49,505 181,624 132,503

Noninterest expense:

Salaries and benefits 89,131 90,192 73,776
65,698 68,603 253,099 180,921
Occupancy and equipment 20,434 18,952 16,197
16,053 15,582 55,583 38,911
Technology and communications 16,634 13,929 12,871
12,878 12,769 43,434 32,821
Marketing and advertising 7,554 3,880 2,692
3,383 5,782 14,126 15,005
Professional services 9,171 9,138 6,039
7,538 4,426 24,348 10,990
Amortization of intangibles 6,896 6,573 5,489
5,447 5,453 18,958 14,011
FDIC premiums 10,301 6,267 6,195
5,871 4,630 22,763 13,052
Merger and acquisition

integration expenses 9,008 76,828 6,176
5,904 1,916 92,012 43,985
Restructuring charges 16,326 11,656 1,056
-- -- 29,038 --

Other expense 18,416 17,726 14,659
16,562 13,448 50,801 34,298

--------------------------------------------------------------------------------
---
Total noninterest expense 203,871 255,141 145,150
139,334 132,609 604,162 383,994

Income before income taxes 85,713 18,884 66,892
68,826 67,175 171,489 143,584

Income taxes 28,732 5,334 21,974
22,971 21,579 56,040 49,086

--------------------------------------------------------------------------------
---

Net income $ 56,981 $ 13,550 $ 44,918 $
45,855 $ 45,596 $ 115,449 $ 94,498

================================================================================
===

Financial Ratios:

Earnings per basic share $ 0.19 $ 0.05 $ 0.22 $
0.22 $ 0.22 $ 0.44 $ 0.48
Earnings per diluted share 0.19 0.05 0.22
0.22 0.22 0.44 0.47
Weighted average shares

outstanding - basic(1) 292,211 281,496 206,124
205,901 205,821 260,259 198,378
Weighted average shares

outstanding - diluted(1) 292,503 282,420 206,644
206,229 206,058 260,689 198,686
Pre-tax, pre-provision income(2) 100,213 36,191 79,792
82,326 78,175 216,196 178,715
Pre-tax, pre-provision income

per diluted share(2) 0.34 0.13 0.39
0.40 0.38 0.83 0.90
Pre-tax, pre-provision return on

average assets(2) 1.28% 0.50% 1.53%
1.55% 1.52% 1.07% 1.32%
Net interest margin(3) 3.48% 3.65% 3.80%
3.65% 3.61% 3.63% 3.63%
Interest yield on average

loans(3) 4.73% 4.93% 5.12%
5.24% 5.26% 4.91% 5.36%
Rate paid on interest-bearing

liabilities(3) 0.87% 0.84% 0.90%
0.93% 1.00% 0.87% 1.08%
Efficiency ratio 67.04% 87.58% 64.53%
62.90% 62.91% 73.65% 68.24%
Noninterest income as a

percentage of net revenue(4) 22.58% 20.90% 23.15%
24.40% 23.49% 22.14% 23.55%
Effective tax rate 33.5% 28.2% 32.8%
33.4% 32.1% 32.7% 34.2%
Return on average assets 0.73% 0.19% 0.86%
0.87% 0.88% 0.57% 0.70%
Return on average common equity 5.61% 1.42% 6.56%
6.46% 6.44% 4.34% 4.79%
Return on average tangible

common equity(2) 10.28% 2.59% 10.94%
10.64% 10.59% 7.76% 7.95%

(1) Share count excludes unallocated ESOP shares and unvested restricted stock
shares.
(2) The tables in this earnings release present computation of earnings and
certain other ratios using non-GAAP
financial measures, which we believe provide investors with information that
is useful in understanding our
financial performance and position. See Appendix A for further detail.

(3) Yields and rates calculated on a tax equivalent basis.

(4) Net revenue is comprised of net interest income and noninterest income.

First Niagara Financial Group, Inc.

Period End Balance Sheet

(in thousands)

2011
2010
-------------------------------------------
----------------------------

September 30, June 30, March 31,
December 31, September 30,
------------- ------------- -------------
------------- -------------

Cash and cash equivalents $ 332,437 $ 318,820 $ 220,997
$ 213,820 $ 315,608
Investment securities:

Available for sale 8,349,237 8,219,695 5,424,731
7,289,455 7,341,505
Held to maturity 2,830,744 2,939,933 3,030,320
1,025,724 1,125,184
FHLB and FRB common stock 331,747 305,241 166,357
183,800 171,814
Loans held for sale 79,820 51,141 26,955
37,977 50,092
Loans and leases:

Commercial:

Real estate 6,148,988 6,130,301 4,541,739
4,370,857 4,281,222

Business 3,588,733 3,335,330 2,697,274
2,623,079 2,275,563
------------- ------------- -------------
------------- -------------
Total commercial loans 9,737,721 9,465,631 7,239,013
6,993,936 6,556,785
Residential real estate 4,171,374 4,270,811 1,701,544
1,692,198 1,757,457
Home equity 2,177,772 2,160,665 1,507,292
1,524,570 1,481,301

Other consumer 278,499 272,118 263,394
272,710 277,941
------------- ------------- -------------
------------- -------------
Total loans and leases 16,365,366 16,169,225 10,711,243
10,483,414 10,073,484

Allowance for loan losses 112,749 107,028 100,126
95,354 94,532
------------- ------------- -------------
------------- -------------
Loans and leases, net 16,252,617 16,062,197 10,611,117
10,388,060 9,978,952
Bank owned life insurance 416,449 378,241 232,748
230,718 228,723
Premises and equipment 303,634 292,778 227,136
217,555 209,508
Goodwill and other

intangibles 1,812,628 1,829,712 1,108,811
1,114,144 1,099,446

Other assets 500,194 491,888 390,673
382,600 350,708
------------- ------------- -------------
------------- -------------

Total assets $ 31,209,507 $ 30,889,646 $ 21,439,845 $
21,083,853 $ 20,871,540
============= ============= =============
============= =============

Deposits:

Savings accounts $ 2,641,723 $ 2,767,951 $ 1,271,494 $
1,235,004 $ 1,235,201
Interest-bearing checking 2,028,052 2,028,645 1,726,379
1,705,537 1,783,788
Money market deposits 7,507,189 6,878,214 5,177,242
4,919,014 4,941,989
Noninterest-bearing

deposits 3,095,283 2,738,917 2,050,034
1,989,505 1,815,201

Certificates of deposit 4,351,930 4,486,768 3,230,674
3,299,784 3,619,004
------------- ------------- -------------
------------- -------------
Total deposits 19,624,177 18,900,495 13,455,823
13,148,844 13,395,183

Short-term borrowings 1,156,711 1,466,745 970,262
1,788,566 1,634,481
Long-term borrowings 5,928,632 6,134,181 3,933,791
3,104,908 2,708,639

Other liabilities 499,312 395,390 304,937
276,465 326,676
------------- ------------- -------------
------------- -------------
Total liabilities 27,208,832 26,896,811 18,664,813
18,318,783 18,064,979

Stockholders' equity 4,000,675 3,992,835 2,775,032
2,765,070 2,806,561
------------- ------------- -------------
------------- -------------
Total liabilities and

stockholders' equity $ 31,209,507 $ 30,889,646 $ 21,439,845 $
21,083,853 $ 20,871,540
============= ============= =============
============= =============

Selected balance sheet

information:

Total interest-earning

assets $ 27,805,974 $ 27,560,036 $ 19,278,620 $
18,922,199 $ 18,604,341
Total interest-bearing

liabilities 23,614,238 23,762,504 16,309,842
16,052,813 15,923,102
------------- ------------- -------------
------------- -------------

Net interest-earning assets $ 4,191,736 $ 3,797,532 $ 2,968,778 $
2,869,386 $ 2,681,239
============= ============= =============
============= =============

Tangible common equity(1) $ 2,188,047 $ 2,163,123 $ 1,666,221 $
1,650,926 $ 1,707,115
Unrealized gain (loss) on

securities, net of tax 116,666 102,754 63,893
70,690 131,572
Total mortgage loans

serviced for others 1,922,592 1,834,004 1,572,925
1,554,083 1,397,674

Total core deposits $ 15,272,247 $ 14,413,727 $ 10,225,149 $
9,849,060 $ 9,776,179

Legacy loans(2) $ 9,425,194 $ 8,859,695 $ 8,210,106 $
7,833,695 $ 7,239,939
Acquired loans(3) 7,195,250 7,576,334 2,616,387
2,772,158 2,953,752
Credit related discount on

acquired loans(4) (255,078) (266,804) (115,250)
(122,439) (120,207)
------------- ------------- -------------
------------- -------------

Total Loans $ 16,365,366 $ 16,169,225 $ 10,711,243 $
10,483,414 $ 10,073,484
============= ============= =============
============= =============

(1) The tables in this earnings release present computation of earnings and
certain other ratios using
non-GAAP financial measures, which we believe provide investors with
information that is useful in
understanding our financial performance and position. See Appendix A for
further detail.
(2) Legacy loans represent total loans excluding loans acquired after January
1, 2009.
(3) Represents the carrying value of acquired loans plus the principal not
expected to be collected.
(4) Represent principal on acquired loans not expected to be collected.

First Niagara Financial Group, Inc.

Average Balance Sheet and Related Tax Equivalent Yields & Rates

(in millions)

For the three months ended
Nine months ended

--------------------------------------------------------------------------------
------------------------------------------------
September 30, 2011 June 30, 2011 September 30,
2010 September 30, 2011 September 30, 2010

Yields Yields
Yields Yields Yields
Average and Average and Average
and Average and Average and
Balances Interest Rates Balances Interest Rates Balances Interest
Rates Balances Interest Rates Balances Interest Rates

--------------------------------------------------------------------------------
------------------------------------------------

Interest

-earning

assets:

Loans

and

leases(

1)

Commerci

al:

Real

estate $ 6,143 $ 82 5.23% $ 5,807 $ 79 5.42% $ 4,246 $ 61
5.70% $ 5,467 $ 223 5.39% $ 3,846 $ 167 5.77%

Business 3,424 35 3.95 3,120 34 4.30 2,210 27
4.83 3,056 98 4.23 2,002 73 4.89

--------------------------------------------------------------------------------
------------------------------------------------
Total

commerc

ial

loans 9,567 117 4.78 8,927 113 5.03 6,456 88
5.40 8,523 321 4.97 5,848 240 5.47
Resident

ial real

estate 4,227 47 4.49 3,849 44 4.56 1,853 23
5.04 3,269 113 4.60 1,800 69 5.14
Home

equity 2,167 25 4.55 2,039 23 4.58 1,461 17
4.50 1,908 65 4.56 1,183 42 4.70
Other

consume

r 277 5 6.81 270 5 7.10 270 5
7.56 272 14 6.93 240 13 7.46

--------------------------------------------------------------------------------
------------------------------------------------
Total

loans

and

leases 16,238 194 4.73 15,085 185 4.93 10,040 133
5.26 13,972 513 4.91 9,071 364 5.36
Mortgage

-backed

securit

ies 9,346 79 3.41 9,041 81 3.58 7,120 62
3.49 8,522 229 3.58 6,038 159 3.51
Other

investm

ent

securit

ies 1,594 18 4.44 1,473 14 3.88 794 7
3.65 1,341 42 4.11 801 22 3.68

--------------------------------------------------------------------------------
------------------------------------------------
Total

securi

ties,

at

amorti

zed

cost 10,940 97 3.56 10,514 95 3.63 7,914 69
3.50 9,863 271 3.65 6,839 181 3.53
Money

market

and

other

investm

ents 411 3 2.34 354 3 2.58 192 1
3.10 333 7 2.81 171 3 2.29

--------------------------------------------------------------------------------
------------------------------------------------
Total

interes

t-earnin

g assets$ 27,589 $ 294 4.22% 25,953 $ 283 4.37% 18,146 $ 203
4.47% $ 24,168 $ 791 4.37% $ 16,081 $ 548 4.55%
Goodwill

and

other

intangi

bles 1,828 1,739 1,101
1,562 1,049
Other

noninte

rest-ear

ning

assets 1,566 1,405 1,212
1,373 1,009

-------- --------- ---------
--------- ---------
Total

assets $ 30,983 $ 29,097 $ 20,459
$ 27,103 $ 18,139
======== ========= =========
========= =========

Interest

-bearing

liabili

ties:

Deposits

Savings

account

s $ 2,699 $ 2 0.25% $ 2,555 $ 2 0.29% $ 1,261 $ --
0.12% $ 2,174 $ 4 0.24% $ 1,141 $ 1 0.15%
Interest

-bearing

checkin

g 2,025 1 0.13 2,027 1 0.13 1,734 1
0.20 1,910 2 0.12 1,484 2 0.20
Money

market

deposit

s 7,148 11 0.65 6,407 9 0.58 4,881 7
0.59 6,197 27 0.58 4,437 22 0.65
Certific

ates of

deposit 4,444 11 0.96 4,355 9 0.88 3,823 11
1.11 4,022 29 0.97 3,555 29 1.10

--------------------------------------------------------------------------------
------------------------------------------------
Total

interes

t

bearing

deposit

s 16,316 25 0.60% 15,344 21 0.56% 11,699 19
0.65% 14,303 62 0.58% 10,617 54 0.68%
Borrowin

gs

FHLB

advance

s 3,322 13 1.49% 3,287 12 1.41% 1,604 8
1.92% 2,713 31 1.52% 1,109 20 2.42%
Repurcha

se

agreeme

nts 3,603 8 0.86 3,272 8 0.93 1,840 5
1.20 3,315 23 0.91 1,571 16 1.34
Senior

notes 297 5 6.90 297 5 6.89 297 5
6.83 297 15 6.95 267 16 7.90
Other

borrowi

ngs 129 1 4.43 127 1 4.37 93 2
6.76 122 4 4.29 78 4 6.48

--------------------------------------------------------------------------------
------------------------------------------------
Total

borrowi

ngs 7,351 27 1.45 6,983 26 1.47 3,834 20
2.07 6,447 73 1.51 3,025 56 2.45

--------------------------------------------------------------------------------
------------------------------------------------
Total

interes

t-bearin

g

liabili

ties $ 23,667 $ 52 0.87% 22,327 $ 47 0.84% 15,533 $ 39
1.00% 20,750 $ 135 0.87% 13,642 $ 110 1.08%
Noninter

est-bear

ing

deposit

s 2,857 2,542 1,814
2,433 1,598
Other

noninte

rest-bea

ring

liabili

ties 431 389 303
367 261
-------- --------- ---------
--------- ---------
Total

liabili

ties 26,955 25,258 17,650
23,550 15,501
Stockhol

ders'

equity 4,028 3,839 2,809
3,553 2,638
-------- --------- ---------
--------- ---------
Total

liabil

ities

and

stockh

olders'

equity$ 30,983 $ 29,097 $ 20,459
$ 27,103 $ 18,139
======== ========= =========
========= =========

Net

interes

t income

(FTE) $ 242 $ 236 $ 164
$ 656 $ 438
Taxable

Equival

ent

Adjustm

ent 7 6 3
17 8

Total

core

deposit

s $ 14,729 $ 14 0.38% $ 13,531 $ 12 0.35% $ 9,690 $ 8
0.35% $ 12,714 $ 33 0.34% $ 8,660 $ 25 0.39%
Total

deposit

s 19,173 25 0.51% 17,886 21 0.48% 13,513 19
0.56% 16,736 62 0.49% 12,215 54 0.59%

Tax

equival

ent net

interes

t rate

spread 3.35% 3.53%
3.47% 3.50% 3.47%
Tax

equival

ent net

interes

t rate

margin 3.48% 3.65%
3.61% 3.63% 3.63%
(1) Includes nonaccrual loans.

First Niagara Financial Group, Inc.

Allowance for Loans and Lease Losses & Asset Quality

(in thousands)

2011
2010 Nine months ended

--------------------------------------------------------------------------------
--------

September 30,September 30,
Third Second First Fourth
Third
Quarter Quarter Quarter Quarter
Quarter 2011 2010

--------------------------------------------------------------------------------
--------
Beginning balance $ 107,028 $ 100,126 $ 95,354 $
94,532 $ 90,409 $ 95,354 $ 88,303
Net loan (charge-offs)

recoveries:

Commercial real estate $ (5,580) $ (2,787) $ (2,006) $
(4,765) $ (3,078) $ (10,373) $ (16,202)
Commercial business (2,123) (3,439) (4,391)
(6,082) (3,187) (9,953) (10,980)
Residential real estate 171 (177) (662)
(389) (55) (668) (275)
Home equity (223) (829) (781)
(809) (196) (1,833) (716)

Other consumer (370) (305) (288)
(634) (361) (963) (729)

--------------------------------------------------------------------------------
--------

Total net loan charge-offs $ (8,125) $ (7,537) $ (8,128) $
(12,679) $ (6,877) $ (23,790) $ (28,902)

================================================================================
========

Provision for loan losses 13,846 14,439 12,900
13,500 11,000 41,185 35,131

--------------------------------------------------------------------------------
--------

Ending balance $ 112,749 $ 107,028 $ 100,126 $
95,354 $ 94,532 $ 112,749 $ 94,532

================================================================================
========

Supplemental information

Allowance to loans 0.69% 0.66% 0.93%
0.91% 0.94% 0.69% 0.94%
Allowance to legacy loans(1) 1.20 1.21 1.22
1.22 1.31 1.20 1.31
Provision to average loans

(annualized) 0.34% 0.38% 0.49%
0.53% 0.43% 0.39% 0.52%

Net charge-offs to average loans

(annualized)

Commercial real estate 0.36% 0.19% 0.18%
0.44% 0.29% 0.25% 0.56%

Commercial business 0.25% 0.44% 0.67%
0.99% 0.58% 0.43% 0.73%

--------------------------------------------------------------------------------
--------
Total commercial loans 0.32% 0.28% 0.36%
0.64% 0.39% 0.32% 0.62%
Residential real estate -0.02% 0.02% 0.15%
0.09% 0.01% 0.03% 0.02%
Home equity 0.04% 0.16% 0.21%
0.22% 0.05% 0.13% 0.08%

Other consumer 0.53% 0.45% 0.42%
0.94% 0.53% 0.47% 0.41%

--------------------------------------------------------------------------------
--------

Total consumer loans 0.03% 0.09% 0.20%
0.21% 0.07% 0.08% 0.07%

--------------------------------------------------------------------------------
--------
Total loans 0.20% 0.20% 0.31%
0.49% 0.27% 0.23% 0.42%

Net charge-offs of legacy loans to average legacy loans

(annualized)(1)

Commercial real estate 0.61% 0.26% 0.24%
0.59% 0.39% 0.37% 0.70%

Commercial business 0.35% 0.55% 0.83%
1.32% 0.79% 0.56% 0.97%

--------------------------------------------------------------------------------
--------
Total commercial loans 0.50% 0.37% 0.46%
0.86% 0.53% 0.45% 0.79%
Residential real estate -0.04% 0.04% 0.18%
0.10% 0.01% 0.05% 0.02%
Home equity 0.09% 0.33% 0.33%
0.36% 0.09% 0.25% 0.12%

Other consumer 1.04% 0.87% 0.77%
1.83% 1.03% 0.90% 0.71%

--------------------------------------------------------------------------------
--------

Total consumer loans 0.06% 0.19% 0.27%
0.29% 0.10% 0.17% 0.09%

--------------------------------------------------------------------------------
--------
Total loans 0.36% 0.31% 0.40%
0.67% 0.38% 0.36% 0.54%

Nonperforming loans:

Commercial real estate $ 41,295 $ 42,881 $ 37,346 $
44,065 $ 49,271 $ 41,295 $ 49,271
Commercial business 18,839 20,021 24,823
25,819 25,924 18,839 25,924
Residential real estate 15,555 14,484 13,433
14,461 13,156 15,555 13,156
Home equity 5,428 4,748 4,467
4,605 4,809 5,428 4,809

Other consumer 769 379 299
373 1,020 769 1,020

--------------------------------------------------------------------------------
--------
Total nonperforming loans 81,886 82,513 80,368
89,323 94,180 81,886 94,180

Real estate owned 9,392 12,315 6,955
8,647 8,619 9,392 8,619

--------------------------------------------------------------------------------
--------

Total nonperforming assets $ 91,278 $ 94,828 $ 87,323 $
97,970 $ 102,799 $ 91,278 $ 102,799

================================================================================
========

Accruing troubled debt

restructurings (TDR) $ 45,282 $ 18,794 $ 27,027 $
21,607 $ 18,932 $ 45,282 $ 18,932
Acquired loans 90 days past

due still accruing(2) 143,270 134,869 62,942
58,097 56,716 143,270 56,716
Total classified loans(3) 692,961 700,813 564,037
481,074 462,902 692,961 462,902
Total criticized loans(4) 1,268,879 1,253,937 972,148
942,941 859,219 1,268,879 859,219

Total nonperforming loans to

loans 0.50% 0.51% 0.75%
0.85% 0.93% 0.50% 0.93%
Total nonperforming assets to

loans and real estate owned 0.56% 0.58% 0.81%
0.93% 1.01% 0.56% 1.01%
Total nonperforming assets to

assets 0.29% 0.31% 0.41%
0.46% 0.49% 0.29% 0.49%
Allowance to nonperforming

loans 137.7% 129.7% 124.6%
106.8% 100.4% 137.7% 100.4%
Texas ratio(5) 10.19% 10.12% 8.51%
8.94% 8.85% 10.19% 8.85%
(1) Legacy loans represent total loans excluding loans acquired after January
1, 2009.
(2) All such loans represent acquired loans that were originally recorded at
fair value upon acquisition. These loans
are considered to be accruing as we primarily recognize interest income
through the accretion of the difference
between the carrying value of these loans and their expected cash flows.

(3) Includes consumer loans, which are considered classified when they are 90
days or more past due. Classified loans
include substandard, doubtful, and loss, which are consistent with regulatory
definitions, and as described in Item 1,
"Business", under the heading "Classification of Assets" in our Annual Report
on 10-K for the year ended December 31,
2010.

(4) Beginning in the third quarter of 2011, criticized loans includes consumer
loans when they are 90 days or more past
due. Prior to the third quarter of 2011, criticized loans includes consumer
loans when they are 60 days or more past
due. The impact of the change at September 30, 2011 was a reduction of
criticized loans by $24 million. Criticized
loans include special mention, substandard, doubtful, and loss.

(5) Represents ratio computed using non-GAAP financial measures, which we
believe provide investors with information
that is useful in understanding our financial performance and position. See
Appendix A for further detail.

First Niagara Financial Group, Inc.

Key Statistics

(Share counts in thousands)

2011 2010

-----------------------------
-------------------

September March December
September
30, June 30, 31, 31,
30,
--------- -------- -------- --------
---------

First Niagara Financial Group,

Inc

Tier 1 risk based capital 11.88% 12.04% 13.32% 13.54%
14.25%
Tier 1 common capital(1) 11.27% 11.36% 12.56% 12.76%
13.42%
Total risk based capital 12.54% 12.65% 14.13% 14.35%
15.09%
Leverage ratio 7.42% 7.81% 8.21% 8.14%
8.37%
Equity to assets 12.82% 12.93% 12.94% 13.11%
13.45%
Tangible common equity to

tangible assets(1) 7.44% 7.44% 8.20% 8.27%
8.63%

First Niagara Bank, N.A.:

Tier 1 risk based capital 11.49% 11.62% 11.23% 11.06%
11.88%
Total risk based capital 12.15% 12.23% 12.04% 11.86%
12.72%
Leverage ratio 7.17% 7.51% 6.92% 6.64%
6.97%

Number of branches 332 346 257 257
255
Full time equivalent employees 4,712 4,751 3,825 3,791
3,725

Share information and per

share metrics:

Common shares outstanding 294,898 295,245 209,432 209,112
209,059
Treasury shares 14,192 13,845 5,674 5,994
6,047
Book value per share(2) $ 13.72 $ 13.68 $ 13.45 $ 13.42 $
13.63
Tangible book value per

share(1)(2) 7.50 7.41 8.08 8.01
8.29
Price/Book 66.69% 96.49% 100.97% 104.17%
85.47%
Price/Tangible book(1) 122.00% 178.14% 168.07% 174.53%
140.53%
Cash dividends $ 0.16 $ 0.16 $ 0.16 $ 0.15 $
0.14
Dividend payout ratio 84.21% 320.00% 72.73% 68.18%
63.64%
Dividend yield (annualized) 6.94% 4.86% 4.78% 4.26%
4.77%

(1) The tables in this earnings release present computation of earnings and

certain other ratios using non-GAAP financial measures, which we believe
provide
investors with information that is useful in understanding our financial

performance and position. See Appendix A for further detail.

(2) Share count excludes unallocated ESOP shares and unvested restricted stock

shares.

First Niagara Financial Group, Inc.

Appendix A - Non-GAAP Reconciliation

(in thousands, except per share amounts)

2011 2010
Nine months ended

--------------------------------------------------------------------------------
------------------------

Third Second First Fourth
Third September 30, September 30,
Quarter Quarter Quarter Quarter
Quarter 2011 2010

--------------------------------------------------------------------------------
------------------------
Reconciliation

of noninterest

expense on

operating

basis to

reported

noninterest

expense(1):

Total

noninterest

expense on

operating

basis

(Non-GAAP) $ 178,537 $ 166,657 $ 137,918 $ 133,430
$ 130,693 $ 483,112 $ 339,255
Salaries and

benefits -- -- -- --
-- -- 754
Merger and

acquisition

integration

expenses 9,008 76,828 6,176 5,904
1,916 92,012 43,985
Restructuring

charges 16,326 11,656 1,056 --
-- 29,038 --

--------------------------------------------------------------------------------
------------------------
Total reported

noninterest

expense

(GAAP) $ 203,871 $ 255,141 $ 145,150 $ 139,334
$ 132,609 $ 604,162 $ 383,994

================================================================================
========================

Reconciliation

of net

operating

income to net

income(1):

Net operating

income

(Non-GAAP) $ 73,645 $ 71,242 $ 49,774 $ 49,663
$ 46,897 $ 194,661 $ 124,454
Nonoperating

expenses, net

of tax:

Salaries and

benefits -- -- -- --
-- -- 513
Merger and

acquisition

integration

expenses 5,925 50,092 4,147 3,808
1,301 60,164 29,443
Restructuring

charges 10,739 7,600 709 --
-- 19,048 --

--------------------------------------------------------------------------------
------------------------

16,664 57,692 4,856 3,808
1,301 79,212 29,956

--------------------------------------------------------------------------------
------------------------
Net income

(GAAP) $ 56,981 $ 13,550 $ 44,918 $ 45,855
$ 45,596 $ 115,449 $ 94,498

================================================================================
========================

Computation of

pre-tax,pre-pr

ovision income:

Net interest

income $ 235,429 $ 230,437 $ 172,868 $ 167,548
$ 161,279 $ 638,734 $ 430,206
Noninterest

income 68,655 60,895 52,074 54,112
49,505 181,624 132,503
Noninterest

expense (203,871) (255,141) (145,150) (139,334)
(132,609) (604,162) (383,994)

--------------------------------------------------------------------------------
------------------------
Pre-tax,

pre-provision

income (GAAP) 100,213 36,191 79,792 82,326
78,175 216,196 178,715

--------------------------------------------------------------------------------
------------------------
Add back:

non-operating

noninterest

expenses (1) 25,334 88,484 7,232 5,904
1,916 121,050 44,739

--------------------------------------------------------------------------------
------------------------
Pre-tax,

pre-provision

income

(Non-GAAP) $ 125,547 $ 124,675 $ 87,024 $ 88,230
$ 80,091 $ 337,246 $ 223,454

================================================================================
========================

Financial

ratios

computed on an

operating

basis(1):

Earnings per

basic share $ 0.25 $ 0.25 $ 0.24 $ 0.24
$ 0.23 $ 0.75 $ 0.63
Earnings per

diluted share $ 0.25 $ 0.25 $ 0.24 $ 0.24
$ 0.23 $ 0.75 $ 0.62
Weighted

average shares

outstanding -

basic(2) 292,211 281,496 206,124 205,901
205,821 260,259 198,378
Weighted

average shares

outstanding -

diluted(2) 292,503 282,420 206,644 206,229
206,058 260,689 198,686
Pre-tax,

pre-provision

income 125,547 124,675 87,024 88,230
80,091 337,246 223,454
Pre-tax,

pre-provision

income per

diluted share 0.43 0.44 0.42 0.43
0.39 1.29 1.12
Pre-tax,

pre-provision

return on

average assets 1.61% 1.72% 1.67% 1.67%
1.55% 1.66% 1.65%
Net interest

margin(3) 3.48% 3.65% 3.80% 3.65%
3.61% 3.63% 3.63%
Interest yield

on average

loans(3) 4.73% 4.93% 5.12% 5.24%
5.26% 4.91% 5.36%
Rate paid on

interest-beari

ng

liabilities(3) 0.87% 0.84% 0.90% 0.93%
1.00% 0.87% 1.08%
Efficiency

ratio 58.71% 57.21% 61.30% 60.20%
62.00% 58.89% 60.29%
Effective tax

rate 33.7% 33.6% 32.9% 33.5%
32.1% 33.5% 33.9%
Noninterest

income as a

percentage of

net revenue(4) 22.58% 20.90% 23.15% 24.41%
23.49% 22.14% 23.55%
Return on

average assets 0.94% 0.98% 0.96% 0.94%
0.91% 0.96% 0.92%
Return on

average common

equity 7.25% 7.44% 7.27% 6.99%
6.62% 7.33% 6.31%
Return on

average

tangible

common equity 13.28% 13.61% 12.12% 11.52%
10.90% 13.08% 10.47%

Computation of

Ending

Tangible

Assets:

Total assets $ 31,209,507 $ 30,889,646 $ 21,439,845 $ 21,083,853 $
20,871,540 $ 31,209,507 $ 20,871,540
Less: Goodwill

and other

intangibles (1,812,628) (1,829,712) (1,108,811) (1,114,144)
(1,099,446) (1,812,628) (1,099,446)

--------------------------------------------------------------------------------
------------------------
Tangible

assets $ 29,396,879 $ 29,059,934 $ 20,331,034 $ 19,969,709 $
19,772,094 $ 29,396,879 $ 19,772,094

Computation of

Ending

Tangible

Common Equity:

Stockholders'

equity $ 4,000,675 $ 3,992,835 $ 2,775,032 $ 2,765,070
$ 2,806,561 $ 4,000,675 $ 2,806,561
Less: Goodwill

and other

intangibles (1,812,628) (1,829,712) (1,108,811) (1,114,144)
(1,099,446) (1,812,628) (1,099,446)

--------------------------------------------------------------------------------
------------------------
Tangible

common equity $ 2,188,047 $ 2,163,123 $ 1,666,221 $ 1,650,926
$ 1,707,115 $ 2,188,047 $ 1,707,115

Computation of

Average

Tangible

Common Equity:

Stockholders'

equity $ 4,027,572 $ 3,839,101 $ 2,777,266 $ 2,818,265
$ 2,808,497 $ 3,552,559 $ 2,637,923
Less: Goodwill

and other

intangibles (1,827,820) (1,738,948) (1,112,329) (1,107,958)
(1,101,044) (1,562,320) (1,048,910)

--------------------------------------------------------------------------------
------------------------
Tangible

common equity $ 2,199,752 $ 2,100,153 $ 1,664,937 $ 1,710,307
$ 1,707,453 $ 1,990,239 $ 1,589,013

Computation of

Texas Ratio:

Nonperforming

Assets $ 91,278 $ 94,828 $ 87,323 $ 97,970
$ 102,799 $ 91,278 $ 102,799
Acquired loans

90 days past

due still

accruing(5) 143,270 134,869 62,942 58,097
56,716 143,270 56,716

--------------------------------------------------------------------------------
------------------------
Sum of

nonperforming

assets and

acquired

loans 90 days

past due

still

accruing $ 234,548 $ 229,697 $ 150,265 $ 156,067
$ 159,515 $ 234,548 $ 159,515

Tangible

common equity $ 2,188,047 $ 2,163,123 $ 1,666,221 $ 1,650,926
$ 1,707,115 $ 2,188,047 $ 1,707,115
Allowance for

loan loss 112,749 107,028 100,126 95,354
94,532 112,749 94,532

--------------------------------------------------------------------------------
------------------------
Sum of

tangible

common equity

and allowance

for loan loss $ 2,300,796 $ 2,270,151 $ 1,766,347 $ 1,746,280
$ 1,801,647 $ 2,300,796 $ 1,801,647

Sum of

nonperforming

assets and

acquired

loans 90 days

past due

still

accruing/Sum

of tangible

common equity

and allowance

for loan loss 10.19% 10.12% 8.51% 8.94%
8.85% 10.19% 8.85%

Computation of

Tier 1 Common

Capital:

Tier 1 capital $ 2,151,953 $ 2,118,085 $ 1,632,307 $ 1,601,892
$ 1,602,150 $ 2,151,953 $ 1,602,150
Less:

Qualifying

restricted

core capital

elements (111,112) (110,920) (92,944) (92,899)
(92,920) (111,112) (92,920)

--------------------------------------------------------------------------------
------------------------
Tier 1 common

capital

(Non-GAAP) $ 2,040,841 $ 2,007,165 $ 1,539,363 $ 1,508,993
$ 1,509,230 $ 2,040,841 $ 1,509,230

(1) Noninterest expense on an operating basis and net operating income are
non-GAAP measures that we believe provide
meaningful comparisons of our underlying operational performance and
facilitates investors' assessments of business and
performance trends in comparison to others in the financial services industry.
In addition, we believe exclusion of
these nonoperating items enables management to perform a more effective
evaluation and comparison of our results and to
assess performance in relation to our ongoing operations.

(2) Share count excludes unallocated ESOP shares and unvested restricted stock
shares.
(3) Yields and rates calculated on a tax equivalent basis.

(4) Net revenue is comprised of net interest income and noninterest income.

(5) All such loans represent acquired loans that were originally recorded at
fair value upon acquisition. These loans
are considered to be accruing as we primarily recognize interest income
through the accretion of the difference between
the carrying value of these loans and their expected cash flows.

First

Niagara

Financi

al

Group,

Inc.

Appendix B - Quarterly Income Statement normalized for NewAlliance acquisition

(in

thousan

ds)

Third Quarter

2011 Second Quarter
2011

--------------------------------------------------------------------------------
------------------------------

Estimated New
Alliance Impact

-------------------------------------

Purchase

accounting

FDIC accretion
Normalized
Adjustment(1 Adjusted Estimated
(amortizatio Normalization FDIC Results
Actual ) (Non-GAAP) Actual results (2) n)(3)
Other (4) adjustment(5)Adjustment(1) (Non-GAAP)

--------------------------------------------------------------------------------
------------------------------ ------------

Total

interes

t income $ 287,147 $ 287,147 $ 277,370 $ 72,796 $
(7,153) $ (1,502) $ 12,659 $290,029

Total

interes

t

expense 51,718 51,718 46,933 21,563
(10,914) 2,102 49,035

--------------------------------------------------------------------------------
------------------------------ ------------

Net

interes

t income 235,429 235,429 230,437 51,233
3,761 (1,502) 10,557 240,994
Provisio

n for

credit

losses 14,500 14,500 17,307 1,900
375 17,682

--------------------------------------------------------------------------------
------------------------------ ------------
Net

interes

t income

after

provisi

on 220,929 220,929 213,130 49,333
3,761 (1,502) 10,182 223, 312

Total

noninte

rest

income 68,655 68,655 60,895 9,128
- - 1,802 62,697
Total

noninte

rest

expense 178,537 (1,574) 176,963 166,657 35,955
1,417 (9,619) 5,477 1,574 173,708
--

Income

before

income

taxes 111,047 1,574 112,621 107,368 22,506
2,344 8,117 6,507 (1,574) 112,301
Income

taxes 37,402 539 37,941 36,126 7,778
810 2,805 2,249 (539) 37,836

--------------------------------------------------------------------------------
------------------------------ ------------
Net

operati

ng

income

(Non-GA

AP) $ 73,645 $ 1,035 $ 74,680 $ 71,242 $ 14,728 $
1,534 $ 5,312 $ 4,258 $ (1,035) $74,465

--------------------------------------------------------------------------------
------------------------------ ------------
Total

nonoper

ating

expense

s, net

of tax 16,664 57,692

------------ ------------

Net

income

(GAAP) $ 56,981 $ 13,550

============ ============

(1) One time adjustment of FDIC premium recognized in the third quarter related
to the second quarter

(2) Estimated results based upon actual Q1 results prorated for number of days
of FNFG ownership of NewAlliance in Q2.

(3) Actual purchase accounting accretion or amortization related to NewAlliance
recognized in the second quarter.

(4) Other adjustments based upon cost of funding cash consideration and planned
cost synergies at time of merger.

(5) Normalization adjustment assumes 15 days of additional ownership of
NewAlliance calcuated as the Estimated NewAlliance

Impact divided by the 76 days of ownership in the second quarter and
multiplied by 15.

First Niagara Financial Group, Inc.

Appendix C - Quarterly Average Balance Sheet and Related Tax Equivalent Yields
& Rates normalized for NewAlliance

acquisition

(in

million

s)

For the three months
ended

--------------------------------------------------------------------------------
----------------------------------------------

September 30, 2011
June 30, 2011

--------------------------------------------------------------------------------
-----------------

Normalized
Reported Reported
Normalization Adjustment (Non-GAAP)
Average Interest Yields Average Interest Yields Average
Interest(2) Yields Average Interest Yields

Balances and Balances and
and Balances and
Rates Rates Balances (1)
Rates Rates

--------------------------------------------------------------------------------
----------------------------------------------

Interest

-earning

assets:

--------------------------------------------------------------------------------
----------------------------------------------
Loans

and

leases

(3)

Commer

cial:

Real

esta

te $ 6,143 $ 82 5.23% $ 5,807 $ 79 5.42% $
242 $ 4 (0.01)% $ 6,049 $ 83 5.41%
Busin

ess 3,424 35 3.95 3,120 34 4.30
71 1 0.05 3,191 35 4.35

--------------------------------------------------------------------------------
----------------------------------------------
Tota

l

com

merc

ial

loa

ns 9,567 117 4.78 8,927 113 5.03
313 5 0.01 9,240 118 5.04
Resid

entia

l

real

esta

te 4,227 47 4.49 3,849 44 4.56
423 4 (0.03) 4,272 48 4.53
Home

equi

ty 2,167 25 4.55 2,039 23 4.58
104 2 0.01 2,143 25 4.59
Other

cons

umer 277 5 6.81 270 5 7.10
2 -- 0.01 272 5 7.11

--------------------------------------------------------------------------------
----------------------------------------------
Tota

l

loa

ns

and

lea

ses 16,238 194 4.73 15,085 185 4.93
842 11 (0.01) 15,927 196 4.92
Total

securi

ties,

at

amorti

zed

cost 10,940 97 3.56 10,514 95 3.63
455 3 (0.05) 10,969 98 3.57
Money

market

and

other

invest

ments 411 3 2.34 354 3 2.58
21 (1) (0.11) 375 2 2.47

--------------------------------------------------------------------------------
----------------------------------------------
Total

inte

rest-

earni

ng

asse

ts $ 27,589 $ 294 4.22% $ 25,953 $ 283 4.37% $
1,318 $ 13 (0.02)% $ 27,271 $ 296 4.35%
Goodwill

and

other

intangi

bles 1,828 1,739
117 1,856
Other

noninte

rest-ear

ning

assets 1,566 1,405
50 1,455
----------- -----------
--------------- ------------
--

Total

asse

ts $ 30,983 $ 29,097 $
1,485 $ 30,582
=========== ===========
=============== ============

Interest

-bearing

liabili

ties:

Deposit

s

Saving

s

accou

nts $ 2,699 $ 2 0.25% $ 2,555 $ 2 0.29% $
254 $ 0 0.02 % $ 2,809 $ 2 0.31%
Intere

st-bea

ring

check

ing 2,025 1 0.13 2,027 1 0.13
70 0 0.00 2,097 1 0.13
Money

marke

t

depos

its 7,148 11 0.65 6,407 9 0.58
186 1 0.01 6,593 10 0.59
Certif

icates

of

depos

it 4,444 11 0.96 4,355 9 0.88
251 1 (0.03) 4,606 10 0.85

--------------------------------------------------------------------------------
----------------------------------------------
Tota

l

int

eres

t

bea

ring

dep

osit

s 16,316 25 0.60% 15,344 21 0.56%
761 2 (0.00)% 16,105 23 0.56%
Total

borrow

ings 7,351 27 1.45 6,983 26 1.47
379 1 (0.02) 7,362 27 1.45

--------------------------------------------------------------------------------
----------------------------------------------
Total

inter

est-be

aring

liabi

lities $ 23,667 $ 52 0.87% $ 22,327 $ 47 0.84%
1,140 3 (0.00)% $ 23,467 $ 50 0.84%
Noninter

est-bear

ing

deposit

s 2,857 2,542
115 2,657
Other

noninte

rest-bea

ring

liabili

ties 431 389
10 399
----------- -----------
--------------- ------------
Total

liabi

lities 26,955 25,258
1,265 26,523
Stockhol

ders'

equity 4,028 3,839
220 4,059
----------- -----------
--------------- ------------
Total

liabi

lities

and

stock

holder

s'

equit

y $ 30,983 $ 29,097 $
1,485 $ 30,582
=========== ===========
=============== ============

--
Net

interes

t income

(FTE) $ 242 $ 236
$ 247
Taxable

Equival

ent

Adjustm

ent 7 6
6

Total

core

deposit

s $ 14,729 $ 14 0.38% $ 13,531 $ 12 0.35% $
625 $ 1 0.01 % $ 14,156 $ 13 0.36%
Total

deposit

s 19,173 25 0.51% 17,886 21 0.48%
876 2 0.02% 18,762 23 0.50%

Tax

equival

ent net

interes

t rate

spread 3.35% 3.53%
(0.02)% 3.51%
Tax

equival

ent net

interes

t rate

margin 3.48% 3.65%
(0.02)% 3.63%
(1) Normalization adjustment assumes 15 days of additional ownership of
NewAlliance calculated based upon balances at

acquisition.

(2) Normalization adjustment assumes 15 days of additional ownership of
NewAlliance for interest income (expense)

based upon Q2 Estimated NewAlliance Impact per Appendix B.

(3) Includes nonaccrual loans.

CONTACT: Investors:
Ram Shankar
Senior Vice President, Investor Relations
(716) 270-8623
ram.shankar@fnfg.com

News Media:
David Lanzillo
Senior Vice President, Corporate Communications
(716) 819-5780
david.lanzillo@fnfg.com