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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.

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