Gary M. Crosby has formally taken the helm of First Niagara Financial Group, becoming the leader of a bank that has blossomed into a major local employer and a prominent industry player in the Northeast.
After a nationwide search, the bank’s board of directors on Thursday announced Crosby was its choice for president and chief executive officer, the roles he has held on an interim basis since March, when John R. Koelmel was ousted.
First Niagara grew rapidly through numerous acquisitions during Koelmel’s tenure, becoming a significant local corporate presence and raising Buffalo Niagara’s profile as a regional banking center. Crosby has had time to show skill steadying and running the bank.
“I’m really thrilled to have the opportunity, really thrilled to have the trust and confidence of the board, and really thrilled to be able to lead this wonderful First Niagara team,” Crosby said in an interview.
First Niagara’s stock price closed down more than 5 percent on Thursday. Analysts attributed the drop to investor disappointment that an outsider was not chosen for the job, especially after a nine-month search. But Crosby, 60, also represents a familiar face – he joined the bank in 2009 – who brings continuity as First Niagara aims to increase the profitability of the various operations the bank has acquired. His mission from the board is to maximize those operations, rather than acquire more.
First Niagara has grown into one of the nation’s top 25 banks as measured by assets and market capitalization. It has 6,000 employees – including about 2,200 in Western New York, $37 billion in assets, and 420 branches in four states. Its market share in Buffalo Niagara is nearly 28 percent – second only to M&T Bank Corp. – based on deposits as of June 30, according to Federal Deposit Insurance Corp. data.
After Koelmel was removed and Crosby – then the bank’s chief operating officer – was named interim CEO, Crosby said it was not his intention to “throw my hat in the ring” for the job on a permanent basis. “That [comment] had morphed into, ‘I wasn’t interested,’ and I never said that,” he said Thursday.
“I did not want to be distracted by running for office, so to speak,” Crosby said. “I needed to be completely focused on my interim responsibilities and the expectations of my board. And also, I didn’t want to be compromised by the feeling that I was auditioning for the role.”
“The board did approach me, and when we did have a serious discussion about it, I was very excited because having been in the role now for almost a year, I found myself, and find myself, very comfortable making CEO decisions, driving change and delivering results.”
G. Thomas Bowers, First Niagara’s chairman, said Thursday it “wouldn’t be appropriate to comment” on other candidates who were considered. But Bowers said the board determined Crosby was an ideal fit for the job, based on his career background and his interim performance.
“He understands business, he understands banking,” Bowers said. And his skills mesh well with the bank’s current strategy, he said.
Crosby joined First Niagara as its chief administrative officer in 2009; early the following year, he was named chief operating officer. His resume also includes roles as chief financial officer and COO at ClientLogic, a partner with the venture capital firm Seed Capital Partners, and CFO and COO for Buffalo Public Schools.
“What’s common to all my experience is senior leadership roles and deep and broad experience, both operationally and financially,” Crosby said.
As for First Niagara’s stock declining Thursday, “I think the general expectation was the bank would go outside the firm and bring in a fresh face to run the operations,” said Damon DelMonte, a bank analyst at Keefe Bruyette & Woods.
Despite Wall Street’s initial reaction, DelMonte said Crosby has an attribute that an outsider could not bring to the job: having served in the role for several months, Crosby can more quickly deliver changes the board is looking for, rather than taking a few months just to get up to speed. “Mr. Crosby should have a very good handle on the opportunities and challenges facing the bank,” he said.
Joseph Fenech, a bank analyst at Sandler O’Neill & Partners LP, said he was surprised, in that after a nine-month search and the perception that Crosby “did not seem aggressively inclined to pursue the job,” he was selected for it. But Fenech said that at the outset of the search, he thought Crosby might be the choice because the board had shown a preference for continuity with its past CEO hires, and Crosby’s skills were a fit for the focus on operating, instead of acquiring.
Crosby will be paid a base salary of $975,000 a year, with the opportunity to earn nearly $3.5 million in bonuses and long-term incentives if the company meets certain performance targets, according to a filing First Niagara made with the Securities and Exchange Commission. He was also named to the bank’s board of directors. Asked to describe his leadership style, Crosby said: “I’m hands-on but not a micromanager ... I believe very strongly in teamwork, but I also believe strongly in personal accountability.
Crosby was asked whether he intended to keep First Niagara’s leadership team intact. “As CEO a very important part of your job is to constantly be assessing your talent, and making sure that you have the right people in the right places at the right time for what you’re trying to get done. So that’s a never ending assessment.”