Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  Nasdaq  >  First Niagara Financial Group Inc.    FNFG

No quotes available
-- USD   0.00%
08/26 KEYCORP : KeyBank preparing for Pittsburgh First Niagara unveiling
08/24 KEYCORP : KeyBank acquisition of First Niagara complete
08/04 KEYCORP : names new leadership team for Buffalo region
SummaryQuotesNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

First Niagara Makes CEO Change, Shifts Away From Deals

share with twitter share with LinkedIn share with facebook
share via e-mail
0
03/20/2013 | 07:19pm CEST

--First Niagara CEO Koelmel's departure leaves company seeking replacement who can increase

--Company has named Chief Administrative and Operations Officer Gary Crosby as interim CEO

--Analysts and investors applauded the executive change

(Adds details on December 2011 common-stock offering in the 11th paragraph.)

   By Matthias Rieker 
 

First Niagara Financial Group Inc. (>> First Niagara Financial Group Inc.) is searching for a new chief executive who will increase growth at the Buffalo, N.Y., bank with few acquisitions.

The move came after an ill-timed deal-driven strategy weighed on bank's share prices and, according to analysts, ultimately led to the departure of Chief Executive John Koelmel.

Analysts and investors applauded the executive change, with First Niagara's stock rising more than 4% Wednesday in early-afternoon trade, to $8.79.

The shares, however, are down 42% since Feb. 18, 2011, when they closed at $15.06, their highest closing price since the 2008 financial crisis. First Niagara also wasn't part of the recent rally in bank stocks: The benchmark KBW Bank index, of which First Niagara's stock is a component, has climbed almost 30% during that same period.

The bank said late Tuesday that its board and Mr. Koelmel, 60 years old and chief executive since 2006, "mutually agreed" that he would step down. Chief Administrative and Operations Officer Gary Crosby, 59, was appointed interim chief executive. A search for a permanent chief executive is under way, the bank said.

Citigroup Global Markets analyst Josh Levin noted, "The company under Koelmel pursued growth for the sake of growth and this was not always consistent with shareholder value creation."

On Tuesday, First Niagara Chairman Thomas Bowers said in a statement the board is focused "on enhancing shareholder value through continuing organic growth and the efficient operation of the business we have today."

First Niagara "has built a formidable Northeast franchise from what was a sleepy mutual thrift in Upstate New York, and Mr. Koelmel was a driving force behind that evolution," Sandler O'Neill + Partners LP analyst Joseph Fenech said. "But at the end of the day, senior management is ultimately judged on stock price performance, and from that standpoint, we can't say we're all that surprised by yesterday's announcement."

A spokesman for First Niagara declined to make Mr. Bowers available for an interview and wouldn't comment on the analysts' reports.

First Niagara has grown aggressively to become a regional banking presence in upstate New York, Connecticut and parts of Pennsylvania, but the expansion hit a snag when it agreed to buy the upstate New York retail branch network of HSBC Holdings PLC (HBC, HSBA.LN, 0005.HK). In May 2012, First Niagara closed the purchase of 195 upstate New York and Connecticut HSBC branches for $1 billion.

In December 2011, several months after it unveiled the HSBC deal, First Niagara raised $450 million through a common-stock offering, diluting existing shareholders, while slashing its quarterly dividend to eight cents per share from 16 cents.

To appease antitrust regulatory concerns, First Niagara last year sold 37 HSBC branches to KeyCorp (>> KeyCorp) for about $95 million. The bank also sold eight branches to Financial Institutions Inc. (>> Financial Institutions, Inc.) for $11.8 million, and 19 branches to Community Bank System Inc. (>> Community Bank System, Inc.) for $26.9 million. The latter two transactions included HSBC and First Niagara branches.

First Niagara reiterated in its annual earnings filing with the Securities and Exchange Commission last month that the HSBC acquisition was "a unique opportunity to acquire low cost deposits and valuable customer relationships," and that the deal "will result in earnings growth and strengthen our franchise."

Last year, First Niagara's profit fell 3.2%, to $168 million, from 2011 and the bank's net interest margin--the profit margin from lending and investing--fell 16 basis points, to 3.42%.

Loans rose 20% last year from 2011, but are virtually flat since the acquisition of the HSBC branch network, at $19.7 billion. The bank's Tier 1 common capital as a percentage of risk-weighted assets, a key measure of a bank's health, fell to 7.45% on Dec. 31, 2012, from 13.25% a year earlier.

Evercore Partners analyst John Pancari said he is concerned about the bank's weakening loan growth and rising delinquencies, among other issues, and said the HSBC deal was "poorly executed." He downgraded the stock in January to "underweight" from "equal-weight."

Those concerns "are all longer-term in nature, and accordingly will likely take time to remedy," Mr. Pancari said in a research note Wednesday. "The CEO change and implied new direction could drive positive restructuring and improved performance over time."

Write to Matthias Rieker at matthias.rieker@dowjones.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on FIRST NIAGARA FINANCIAL GR
08/26 KEYCORP : KeyBank preparing for Pittsburgh First Niagara unveiling
08/24 KEYCORP : KeyBank acquisition of First Niagara complete
08/04 KEYCORP : names new leadership team for Buffalo region
08/03 KEYCORP : reaching out to First Niagara employees
08/01 FIRST NIAGARA FINANCIAL GROUP INC : Completion of Acquisition or Disposition of ..
08/01 FIRST NIAGARA FINANCIAL : Keycorp, first niagara merger ok'd
08/01 KEYCORP : nears closing of First Niagara aquisition
08/01 FIRST NIAGARA FINANCIAL : Key Bank closes on First Niagara acquisition
07/30 KEYCORP : completes First Niagara acquisition
07/30 KEYCORP : First Niagara conversion into KeyBank expected for fourth quarter
More news
Sector news : Banks - NEC
03:22p Stada shareholder AOC pushes through board reshuffle
08/26DJTesla Raises Price of Autopilot Option by $500
08/26DJU.S. Corporate Profits Climbed as GDP Ticks Down to 1.1%
08/26DJAGRICULTURAL BANK OF CHINA : First-Half Net Profit Up 0.8% to CNY105.15 Billion
08/26DJFinance Watch -- WSJ
More sector news : Banks - NEC
News from SeekingAlpha
08/24 KEYCORP : Upside Outweighs The Risks
08/10 Tracking Kahn Brothers Portfolio - Q2 2016 Update
08/01 KeyCorp And First Niagara Are A Winning Combination
08/01 Tesla Deal As Good As It Gets For SolarCity?
07/29 First Niagara beats by $0.03, misses on revenue
Advertisement
Financials ($)
More Financials
Technical analysis trends FIRST NIAGARA FIN...
Short TermMid-TermLong Term
TrendsBearishBearishBearish
Technical analysis
Income Statement Evolution
More Financials
Consensus 
Mean consensus
Number of Analysts
Average target price -
Spread / Average Target
Consensus details
EPS Revisions
More Estimates Revisions
Sector and Competitors
1st jan.Capitalization (M$)
FIRST NIAGARA FINANCIA..0.00%0
WELLS FARGO & CO-10.76%244 759
JPMORGAN CHASE & CO.0.29%239 185
INDUSTRIAL AND COML BA..-1.31%237 113
CHINA CONSTRUCTION BAN..-7.79%186 119
BANK OF AMERICA CORP-6.18%161 134
More Results