“Koelmel takes another winning shot” |
| Koelmel takes another winning shot Posted: 29 Aug 2010 06:21 AM PDT John Koelmel, CEO of fast-growing First Niagara Financial Group, wants to make sure he and his company are poised -- and not hesitant -- when opportunity knocks. Sitting on the corner of his desk, in a black glass frame, is a photo print of a basketball hoop, with a tagline that summarizes his outlook: "You'll always miss 100 percent of the shots you don't take." "I'm a shooter, and I'm comfortable taking the shots," Koelmel said. When opportunity came knocking again less than 10 days ago, the 6-foot, 4-inch Koelmel took his next shot. A few months after doubling in size from two acquisitions in Pennsylvania, First Niagara struck again, this time in New England. The Buffalo-based banking company agreed to pay $1.5 billion in cash and stock to buy NewAlliance Bankshares of New Haven, Conn., propelling First Niagara to No. 25 among the largest U.S.-based banks. It's the biggest bank merger nationwide in nearly two years -- and the first between two healthy banks. Industry experts say it shows bank consolidation is back. The rapid pace of deals also is garnering Koelmel -- a relative newcomer to banking -- and First Niagara increased attention and respect. More than 375 people -- including the mayor of New Haven who is among a group who opposed the deal -- listened in on the company's investor conference call following the deal's announcement. And Koelmel and the bank have been the subject of national television and newspaper coverage in the past week. "The pride that this organization has right now, that really puts a smile on my face, really gets me going," said Koelmel. "That's the juice for me. That's what gets my motor running." That's no surprise to those who know him. "John is a very unique individual. He's a very, very competent person, and he's a very people-oriented person," said Jerry Mazurkiewicz, a partner at accounting firm Dopkins & Co. who has known Koelmel for 35 years, since both worked at KPMG. The deals are also giving Koelmel enormous personal satisfaction as he pursues and achieves his goal of turning the former Lockport Savings Bank into a super-regional powerhouse stretching from Buffalo and Pittsburgh in the west to Boston in the east. "I'm having a hoot. I'm having the time of my life," Koelmel said during an interview in his office at the bank's headquarters in the Larkin at Exchange Building in Buffalo. "This is me. This is who I am at this stage of my life. I couldn't be more pleased." Shareholders might disagree. The bank's stock price has been stuck in neutral for several years, generally hovering between $12 and $14 per share, despite significantly more visibility to institutional investors and Wall Street analysts. However, Koelmel said "99 percent of the rest of the industry would love to be able to take credit for that," given the tumultuous market that has seen many bank stocks fall by 50 percent or more during the financial crisis and recession. "We've at least held our own. We've dramatically outperformed," he said. "But there's no question that the economy and the market is way too prickly." Even so, "if we can't get the stock price to $16, $18, $20, I won't be in this job much longer," he said. But "I'm confident we'll get to that point in the years ahead." Already, In the last few years, First Niagara has moved well beyond its sleepy roots in Niagara County, first expanding across upstate New York in a series of acquisitions that gave it a major presence in the Albany area and the largest insurance agency in the upstate region. At the same time, it has moved away from its history as a traditional thrift institution focused on savings accounts and mortgages, putting more emphasis instead on commercial lending and other fee-based business services that generate higher returns. But the biggest changes have come in the past three years, all under Koelmel. Since taking the bank's helm in December 2006 following the ouster of Paul Kolkmeyer, the 57-year-old Koelmel has overseen a rapid transformation of the company into a major player on a much larger scale. Last year, the bank startled Wall Street and other observers by reaching down into Pittsburgh to snap up 57 branches of National City Bank that PNC Financial Services Group had to divest under antitrust orders from the U.S. Justice Department. That deal made First Niagara a major player in Western Pennsylvania. The bank followed up just months later, acquiring the struggling Harleysville National Corp. in suburban Philadelphia, gaining 83 branches and $5.6 billion in assets in nine counties. With the closing of that deal in April, First Niagara had doubled to $19 billion in assets and 253 branches in two states. And it raised more than $1 billion in capital through three separate offerings, sometimes on the spur of the moment. Koelmel and other executives say integration of both Pennsylvania deals has gone exceptionally well, with almost all deposits retained, and both loan and deposit balances now up. And he has made no secret of his further aspirations. Even before announcing the Pittsburgh transaction, he unveiled the bank's general plans to "push its shopping cart" and expand into neighboring states from Pennsylvania to New England. The key, he says, is having confidence, conviction and courage -- confidence in the bank's management, employees and capabilities, conviction in his vision for the bank's future, and the courage to act as needed. "Our batting average these past few years is pretty high. I can't say that without a smile," he said, using one of the many sports metaphors he tosses out during a 90-minute interview. "The last few years, I feel like I and we have been in the zone." But no one expected him to make his next move so soon. Indeed, discussions with NewAlliance began months ago, even before ink was put to paper on the Harleysville closing. "Life's all about options, and enabling yourself, putting yourself in position to make choices," he said. "I'm a big seize-the-moment guy." This latest deal, announced Aug. 19, will add $8.7 billion in assets, $5.1 billion in deposits, $4.9 billion in loans to First Niagara's balance sheet, giving it a total of $29 billion in assets, $18 billion in deposits, and $14 billion in loans. That means it will have tripled in size in two years. First Niagara also gains 88 branches and 1,200 employees in six Connecticut counties and two counties in Massachusetts, for a total of 343 branches and about 5,000 workers. As a result, it will have the fifth-largest branch network in the Northeast, behind J.P. Morgan Chase & Co., Citigroup, PNC Financial Services Group and Buffalo-rival M&T Bank Corp. "I'm very impressed," said James Kaskie, CEO of Kaleida Health, where Koelmel is the board chairman. "It demonstrates his focus, his ability to execute, his ability to implement, his ability to find common ground so transactions will occur." "But I'm not surprised, because he's a very talented and very strategic executive, and he knows his business," he said. "He's doing what he's been born to do." Koelmel only became a banker a decade ago, after a 26-year career as a certified public accountant at KPMG LLP in Buffalo, including as managing partner overseeing all four upstate offices. Instead, he's learned the banking business along the way. The Orchard Park native started with KPMG in 1974, after graduating with an economics and accounting degree from College of the Holy Cross in Worcester, Mass. At KPMG, he served many bank and financial services clients, learning not only the trade but also the leadership skills that he now relies upon. He also developed connections that led to a job as senior vice president and chief administrative officer at Financial Institutions in Warsaw, parent of Wyoming County Bank, now Five Star Bank. His stint in Warsaw lasted two years, but ultimately wasn't the right fit for him or the bank, Koelmel says. So he moved to First Niagara, serving as chief financial officer for three years before assuming the top job. Koelmel moved the company's headquarters and several hundred employees from Pendleton in Niagara County to downtown Buffalo, and put the bank's name on top of the building. He's also said he expects to create additional jobs here as a result of the bank's more recent growth. Koelmal has been a vocal booster of Buffalo, and spearheaded fundraising efforts to keep the Empire State Games alive this year. And he said he hopes to bring that same role to the bank's newer geographies. "This is incredibly gratifying and rewarding for me. The opportunity to have an impact, not only for the organization but the community, is more than I could have hoped for when I started 36 years ago," he said. 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