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Selling additional shares raises $108.8 million for First Niagara

First Niagara Financial Group raised nearly $109 million by selling additional shares of its stock to investors, the Pendleton-based bank said.

"I'm really proud of us, as an organization, to be able to raise capital in the worst of times," said John R. Koelmel, First Niagara's president and chief executive officer.

The stock offering will give First Niagara extra capital to meet potentially stricter capital requirements that could be imposed on banks in the wake of the ongoing financial crisis, Koelmel said.

It also will give First Niagara extra cash that it could use to expand its business, either through internal growth or by acquiring additional branches, or banks, that may come up for sale in the future, he said.

"Priority one for us is on our existing footprint and solidifying the franchise that we already have," through a network of branches that stretches from Buffalo to Albany.

First Niagara sold 8.5 million shares of its common stock through the offering, which had strong enough demand from investors that the company was able to sell an additional 1.1 million shares.

That boosted the total proceeds of the offering to $115 million, a 15 percent increase from the initial expectation that the stock sale would raise $100 million by pricing the shares at $13.50 per share.

After underwriting fees are deducted, the net proceeds to First Niagara are about $108.8 million.

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