[LOGO OF FIRST NIAGARA FINANCIAL GROUP, INC.]

                     FIRST NIAGARA FINANCIAL GROUP ANNOUNCES
                  ACCELERATION OF CERTAIN STOCK OPTION VESTING

Lockport, N.Y. - December 29, 2005 - First Niagara Financial Group, Inc.
(NASDAQ: FNFG) (the "Company"), today announced that effective December 28,
2005, the Compensation Committee of its Board of Directors approved the
acceleration of the vesting of all unvested stock options held by directors and
employees of the Company that were otherwise scheduled to vest by December 31,
2006.

As a result of this acceleration, options to purchase 779,897 shares of the
Company's common stock, or 35% of all unvested options outstanding, became
exercisable immediately. All but 60,016 of the accelerated options had an
exercise price below the Company's current stock price. All other terms of the
affected options, as well as the terms of all other options scheduled to vest
after December 31, 2006, remain unchanged. The Company estimates that this
action will reduce the impact of the adoption of Statement of Financial
Accounting Standards No. 123R "Share Based Payments" on 2006 compensation
expense related to outstanding options from approximately $2.5 million to $1.3
million. The Company will disclose the pro forma affect of the acceleration in
its consolidated financial statements for the year ending December 31, 2005.

The Company believes that this action will result in a more appropriate
recognition of the benefit attributable to currently outstanding options in its
2006 financial statements. While many other companies have eliminated the
recognition of stock option expense pursuant to FAS 123R by accelerating the
vesting of all outstanding options, the Company believes a compensation charge
in its financial statements attributable to stock options is appropriate to
reflect the economic benefit to be earned by plan participants. Accordingly,
only the options vesting next year, the majority of which would have otherwise
vested within the first five months of the year, are being accelerated. In
addition, although the Compensation Committee will continue to evaluate the
means to best compensate employees, the Company anticipates continuing to use
stock based compensation permitted by the Company's stock based benefit plans,
in order to attract, develop and retain those employees that will maximize the
Company's performance and shareholder value.

First Niagara Financial Group, Inc., through its wholly owned subsidiary First
Niagara Bank, has assets of $8.0 billion and deposits of $5.3 billion. First
Niagara Bank is a full-service, community-oriented bank that provides financial
services to individuals, families and businesses through 118 branches and
several financial services subsidiaries across New York State.

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.

Officer Contacts
- ----------------
Paul J. Kolkmeyer.......   President and CEO
John R. Koelmel.........   Chief Financial Officer
Christopher J. Thome....   Reporting and Investor Relations Manager
                           (716) 625-7645
                           chris.thome@fnfg.com
Leslie G. Garrity.......   Public Relations and Corporate Communications Manager
                           (716) 625-7528
                           leslie.garrity@fnfg.com