EXHIBIT 99.1

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. 

"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.  

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