First Niagara Financial Group Inc, the thrift-holding company for First Niagara Bank, said on Friday it applied to the Federal Reserve Board to become a bank-holding company.

Lockport, New York-based First Niagara is currently regulated by the Office of Thrift Supervision (OTS) but following its conversion to a bank-holding company, it will operate under the Federal Reserve Board.

Following its application to become a bank-holding company, the company has withdrawn its application for approval of the Harleysville National Corp transaction from the OTS and is instead seeking approval from the Federal Reserve Board to complete the transaction, it said.

First Niagara continued to expect to close the Harleysville transaction in the first quarter of 2010, the company said in a statement.

In July, First Niagara agreed to buy Harleysville National Corp, and its $5.2 billion in assets and 83 branches.

Shares of the company fell 2 percent to $13.02 in early morning trade Friday on Nasdaq. (Reporting by Brenton Cordeiro in Bangalore; Editing by Gopakumar Warrier)