The Rise and Fall of First Niagara's John Koelmel
March 20, 2013 12:38 PM
First Niagara (FNFG) Chief Executive John Koelmel, an aggressive bank buyer who described himself in basketball terms as a "shooter," fittingly lost his job on the eve of the March Madness tournament. Here's a look at his trajectory at the bank.Related Articles: Koelmel Out at First Niagara as Acquisition Strategy Falters In Seeking to Appease Everyone, First Niagara May Please No One (Image: Thinkstock)
Bean Counter Takes Charge
Koelmel was an accountant for more than two decades before switching to banking. He rose to chief executive of First Niagara after two years as its chief financial officer.(Image: Bloomberg News)
History Repeats
Paul Kolkmeyer, Koelmel's predecessor as chief executive, left in 2006 after clashing with the First Niagara board.
Beginning the Binge
First Niagara bought 57 branches from PNC and agreed to pay $237 million for the struggling Harleysville National in Pennsylvania in 2009.(Image: Thinkstock)
Winning Praise
Koelmel was initially praised for his daring deals during the financial crisis. "I enjoy playing offense," he told American Banker, which named him a Community Banker of the Year in 2009 . "I'm a shooter."(Image: Thinkstock)
The Zenith
First Niagara agreed in 2010 to pay $1.5 billion for New Alliance Bancshares in New Haven, Conn. The seller's chief executive, Peyton Patterson, predicted the deal would create a "super-regional powerhouse ."
One Shot Too Many
When First Niagara agreed to pay $1 billion to buy 195 branches in upstate New York and Connecticut from HSBC in 2011, questions immediately arose about whether Koelmel had overpaid.(Image: Bloomberg News)
Bad Timing
The financing for the HSBC deal, announced shortly before the European debt crisis caused U.S. stocks to tumble in August 2011, had to be reworked and created a drag on First Niagara's financials.(Image: Thinkstock)
Digging In
Koelmel vowed in early 2012 the deal would still work, as First Niagara sold unwanted HSBC branches to other banks. The "clouds of uncertainty are definitely clearing and dissipating ," he told American Banker.(Image: Bloomberg News)
Paying the Price
After profits fell in the fourth quarter of 2012 and its stock continued to swoon, First Niagara announced plans to cut $40 million in costs .(Image: Thinkstock)
Change of Command
First Niagara's board replaced Koelmel with interim chief Gary Crosby , who had been chief administrative and operations officer.(Image: Thinkstock)
Epitaph
"The company under Koelmel pursued growth for the sake of growth and this was not always consistent with shareholder value creation," Citigroup banking analyst Josh Levin wrote in a note to clients.(Image: Fotolia)
