First Niagara CEO Koelmel stepping down after failed merger
First Niagara Financial Group said CEO John R. Koelmel is stepping down and being replaced on an interim basis.
Koelmel's departure was “mutually agreed,” the Buffalo, N.Y.-based company said Tuesday in a statement, without elaborating on the reason for his exit. “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, 60, said in the statement.
The interim CEO, Gary M. Crosby, 59, was the bank's chief administrative and operations officer since July 2009. Before joining First Niagara, he served as CFO and COO for the Buffalo City School District, according to a regulatory filing.
Bank analyst Anthony Polini said that First Niagara embarked on “an overly aggressive acquisition campaign,” under Koelmel and that his biggest deal did not pay off.
Koelmel did “hit two home runs” with acquisitions in 2009, said Polini, an analyst at Raymond James & Associates, New York. They were the $54 million acquisition of 57 National City branches in the Pittsburgh region that were sold by PNC Bank, followed a few months later by the $237 million acquisition of Harleysville National Corp., a Philadelphia-area financial services company.
But Koelmel's $1 billion acquisiton of 195 HSBC branches mostly in upstate New York was “a big mistake” because First Niagara “ended up paying too much,” said the analyst.
Koelmel joined First Niagara in 2004 and served as chief financial officer. He was named CEO in December 2006 and succeeded Paul Kolkmeyer, who departed amid philosophical differences with the board, then-Chairman Robert Weber said in a statement at the time.
First Niagara shares have declined 41 percent since Koelmel took over, closing Tuesday at $8.44. The stock has dropped 18 percent in the past year, the worst performance in the index of 24 lenders, which has climbed 14 percent. M&T Bank Corp., the Buffalo lender that counts Warren Buffett's Berkshire Hathaway Inc. among its biggest shareholders, has advanced 19 percent.
Koelmel led the bank “during a period of difficult economic conditions and financial industry turmoil,” Chairman G. Thomas Bowers said in the statement. “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.”
Bloomberg News and Trib Total Media staff writer Thomas Olson contributed to this report.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Kennametal plans plant closings, job cuts in fallout from oil and gas decline
- Credit card privacy a myth, study shows
- BNY Mellon is putting iconic Citizens Bank Tower up for sale
- Almost half of households exhaust their income
- Wolf signs ban on new drilling beneath state land
- BNY Mellon expands role for treasury exec
- Fight to lift crude export ban grows
- Pipeline companies weather downturn in prices of natural gas, oil
- Earnings, home sales data break Wall Street’s 2-day losing streak
- Alibaba finally called out on counterfeits
- Traders in oil playing risky game