* Q1 oper EPS $0.18 vs $0.14 mkt view

* Net interest income rises 20 pct to $79.9 mln

* Shares rise 2 pct

July 17 (Reuters) - First Niagara Financial Group Inc (FNFG.O: Quote, Profile, Research) reported second-quarter profit above market expectations, helped by growth in low-cost core deposits that drove margins higher.

Net interest income rose about 20 percent to $79.9 million for the period.

For the second quarter, the company earned an operating net income of $25.5 million, or 18 cents a share, compared with $23.1 million, or 22 cents a share, a year ago.

On a GAAP basis, the company earned $20.8 million, or 8 cents a share.

Analysts on average had expected earnings of 14 cents a share, excluding items, according to Reuters Estimates.

Total core deposits comprised 72 percent of total deposits, compared with 65 percent a year earlier, resulting in a core deposit growth of $341 million.

Shares of the company were up 2 percent at $12.01 in morning trade on Nasdaq. (Reporting by Sakthi Prasad in Bangalore; Editing by Gopakumar Warrier)