UPDATE 1-First Niagara to offer $400 mln of common shares

* Proceeds partly to improve capital levels, fund growth

* Sees $31.3 mln charge related to branch acquisition

Sept 23 (Reuters) - First Niagara Financial Group Inc (FNFG.O) said it would offer about $400 million of common shares to improve capital levels and fund growth, including acquisitions.

The New-York based bank also said in a filing with regulators that its third-quarter results would include about $31.3 million in one-time expenses related to the acquisition of certain National City Bank branches.

In April, First Niagara bought some deposits and branches in western Pennsylvania from National City Bank, a unit of PNC Financial Services Group (PNC.N). [ID:nBNG441458]

First Niagara said it plans to grant the underwriters an option to purchase up to an additional 15 percent of the shares sold to cover over-allotments.

Keefe Bruyette & Woods and Sandler O'Neill + Partners LP are joint book-running managers for the offering.

First Niagara shares closed at $13.09 Tuesday on Nasdaq. (Reporting by Abhinav Sharma in Bangalore; Editing by Anne Pallivathuckal)