First Niagara Financial Group (NASDAQ: FNFG) said Tuesday that President and CEO John Koelmel has left the Buffalo–based banking company.
First Niagara’s board appointed Executive Vice President and Chief Administrative Officer Gary Crosby as interim president and CEO. Crosby joined bank in 2009.
A news release from First Niagara described Koelmel’s departure as “mutually agreed upon” and the bank’s representatives said no one would be available for immediate further comment on the move.
A filing from First Niagara with the Securities and Exchange Commission (SEC) said Koelmel is being terminated for reasons other than for cause. First Niagara’s stock reacted positively to the news. It rose more than 4 percent in trading Wednesday morning to $8.80 per share.
The stock declined sharply in July 2011 after First Niagara announced plans to acquire HSBC Bank’s upstate New York branch network. Shares were trading around $13.50 in late June and early July that year before the deal became public.
The stock declined 40 percent following the announcement of the deal and fell even further in 2012 to a low of around $7.08 per share.
“I highly value the opportunity to have driven First Niagara’s rapid growth over the last six years and to position it as one of the top regional banking franchises in the Northeast,” Koelmel said in the news release. “And I thank all 6,000 of my teammates for their tremendous support. I agree with the board that it’s in the best interests of the organization under present circumstances to move forward with new leadership.”
Koelmel’s seat on First Niagara’s board of directors expires with his departure. His total compensation in 2012 was more than $3.7 million, up from $3.2 million in 2011, according to a filing with SEC.
A special committee of the First Niagara board’s independent directors will conduct a search for a permanent president and CEO. The group will consider internal and external candidates, according to First Niagara.
The bank grew under Koelmel’s leadership with multiple acquisitions in Pennsylvania, New England, and upstate New York. The HSBC deal, which closed last year, made First Niagara a leading player in the Syracuse, Utica, and Binghamton markets.
Koelmel stressed in recent earnings conference calls that the bank was now focused on running its current operations and had no immediate plans for new acquisitions.
“John Koelmel has guided the company’s transformation from a local thrift to a leading northeast banking franchise and led First Niagara during a period of difficult economic conditions and financial industry turmoil,” First Niagara Chairman G. Thomas Bowers said in the release. “The board and I are grateful to John for his leadership through this critical period in our history and for positioning us so that we can focus on enhancing shareholder value through continuing organic growth and the efficient operation of the business we have today.
“We are committed to maintaining our position as a leading independent banking organization with a deep-seated focus on service to our customers and communities and to building value for our shareholders.”
First Niagara has 430 branches, $37 billion in assets, and 6,000 employees in upstate New York, Pennsylvania, Connecticut, and Massachusetts.
First Niagara is number four in the Syracuse metro area deposit market with 21 branches, more than $808 million in deposits, and a deposit market share of more than 7.5 percent, according to the latest statistics from the Federal Deposit Insurance Corp. The bank is also number four in the Utica–Rome market with nine branches, $405.9 million in deposits, and a market share of about 11 percent.
The bank is number two in the Binghamton market with 10 branches, $342.5 million in deposits, and a market share of 12.8 percent.
Contact Tampone at ktampone@cnybj.com