The $153 million merger will significantly boost Lockport-based First Niagara's market share in the region, First Niagara President and Chief Executive John Koelmel said.

"Consistent with our focus on our best and most profitable growth opportunities, we are expanding our presence in Buffalo and Erie County, a major strategic priority for us, in an effective and efficient way," Koelmel said.

Great Lakes stockholders may choose $14 in cash or .993 shares of First Niagara stock for each share they own. Stockholders also may choose a cash-stock combination, though in the aggregate, no more than 50 percent of Great Lakes shares may be exchanged for First Niagara stock.

"We are both maximizing shareholder value and making sure that our customers will continue to receive the same customer focused banking services they are used to," said Andrew Dorn Jr., president and chief executive of Great Lakes Bancorp., which has $892 million in assets.

First Niagara has assets of $8 billion.

The deal, which would make First Niagara upstate's fourth largest bank in terms of deposits, is expected to close in the first quarter of 2008.