Peyton Patterson, the chief executive of NewAlliance Bancshares Inc. of New Haven, Conn., announced she will leave the company after it is acquired by First Niagara Financial Group of Buffalo, N.Y., early next year.
The late-Monday announcement was not surprising to those familiar with the deal, which stipulated that Patterson would relinquish her title to First Niagara CEO John Koelmel after the acquisition is completed. The $1.5 billion deal was announced Aug. 19.
"Given that there was no clear role for her at the time of the announcement, it led people to believe that ultimately she would not remain with the combined institution," said Damon DelMonte, an analyst with KBW Inc.'s Keefe, Bruyette & Woods Inc.
Patterson did not indicate what she will do after leaving NewAlliance, though she will have plenty of money to tide her over. She is expected to receive up to $16.3 million in compensation, according to a filing with the Securities and Exchange Commission.
The package includes $5.8 million in cash severance, $7.9 million in additional pension benefits and $1.6 million in unvested restricted stock and accrued dividends. She is expected to owe the Internal Revenue Service $4.3 million on "excess parachute payments," for which NewAlliance will reimburse her under the agreement.
The pact includes a one-year noncompete clause prohibiting Patterson from working in the counties in which First Niagara will have a physical presence.
Patterson, who joined the $8.7 billion-asset NewAlliance in 2002 and led its $1 billion public offering in 2004, said she would continue to oversee the integration and transition process until the transaction is completed. She said the reasons for her departure were personal; a spokesman said she would not comment further.
When the deal was announced in August, Koelmel said he would be CEO of the combined company, which would have assets of more than $29 billion. Patterson did not say then if she planned to stay on after the merger.
Yet few thought she would accept a regional president job, for instance.
"For her, that's kind of like a step down," DelMonte said.