First Niagara Financial Group, in a surprise move, shuffled its top finance executive, appointing a new chief financial officer while moving Michael W. Harrington to a top treasury and investment role.
The Buffalo-based parent of First Niagara Bank named Gregory W. Norwood as CFO and a member of the management committee. Harrington, who has been CFO for the last four years, was appointed treasurer and chief investment officer, reporting to Norwood. Both moves take effect April 4.
The changes appear to reflect the bank's rapid growth from a New York State-centered bank with operations from Buffalo to Albany into a multistate operation, including branches in Pittsburgh, Philadelphia and now southern New England.
In the last two years, the bank has acquired 57 branches in western Pennsylvania and Harleysville National Corp. in suburban Philadelphia, with 83 branches. It is in the process of buying New Haven, Conn.-based NewAlliance Bancshares, adding 88 branches in Connecticut and Massachusetts.
And its needs are expected to change even more, as executives try to look ahead at least two years, said President and CEO John R. Koelmel.
"Our expectations are that we will be something more than we are today, and we're consistently evaluating what we have and ensuring we've got the right people in the right seats on the bus," Koelmel said.
"Being able to tag-team Greg with Mike is a much more effective outcome than we would have had going a different path. Greg brings additional credentials that will clearly benefit us as we move forward over the next two to three years."
Harrington, meanwhile, takes over a role that has become more significant for a bank that has grown from $8 billion to $30 billion in less than three years. That role includes placing a greater priority on capital management, balance sheet management and investor relations.
Koelmel noted that about 40 percent of the bank's balance sheet "sits on the treasury side of the house," involving capital and investments.
"Michael's function and focus is mission-critical for us," he said. "Continuing to actively manage capital is a significant initiative and responsibility for us. We're always investing in the future."
And while it appears to push Harrington aside, Koelmel said that he is "in a very good place" with it, since it uses his expertise in risk and capital management.
Analysts approved. "While we commend a job well done by the outgoing CFO, Mike Harrington, we think this change reflects First Niagara's desire and commitment to become a very meaningful/sizable banking institution in the ever-volatile banking world," analyst Collyn Bement Gilbert, of Stifel Nicolaus & Co., wrote in a research report.
"While this management change comes as a bit of a surprise, [we] do not view this personnel shift as a poor reflection on [Harrington's] work," Keefe Bruyette & Woods analyst Damon DelMonte wrote. "Rather, we believe the company is trying to best position its senior management team for the bank's increased size of today and for whatever will come tomorrow."
Meanwhile, First Niagara has abandoned plans to separate the president and CEO roles, with Koelmel to stay as CEO and a national search conducted for a new president. The bank abandoned the search last year, with Koelmel no longer seeing as much of a need for the new position, spokeswoman Leslie G. Garrity said.
According to a filing with the Securities and Exchange Commission, Norwood will be paid $500,000 in salary, plus the potential for a bonus equal to 70 percent of his salary. He will also be eligible for annual long-term incentive pay in an amount of stock equal to 90 percent of base salary, plus an initial stock award. And he gets benefits and relocation pay.
He will also sign a "change in control" agreement identical to those of most other top executives, providing for severance pay equal to double his base salary and a targeted annual bonus if the company is ever acquired and he loses his job.
Harrington earned a total of $913,972 in 2010, including a salary of $376,538. Total compensation was down by 4.3 percent, from $954,742, in 2009, but his salary was up from $344,231.
Before joining First Niagara, Norwood, 54, was president and chief risk officer of Utah-based Ally Bank, the $70 billion-asset banking subsidiary of Detroit's Ally Financial, formerly GMAC Financial, the finance arm of the old General Motors Corp. He was also executive risk officer for Ally Financial, advising Ally's CEO and board of directors and overseeing its treasury, risk and other support functions.
Previously, until 2009, he was treasurer of banking giant Wachovia Corp., which was acquired in late 2008 by Wells Fargo & Co. amid concern that Charlotte, N.C.-based Wachovia was on the verge of failure. He also served in other roles at Wachovia since joining that company in 2005. Before that, he was corporate controller for Bank of America Corp. from 2001 to 2005.
He began his career in 1980 as a certified public accountant with KPMG LLP, where he became a partner and served financial services clients, including some of the nation's largest banks, while working out of New York City and then Charlotte. He also served for two years as a professional accounting fellow for the SEC in Washington, D.C. He graduated from Northern Arizona University.