The longtime president and CEO of Five Star Bank and its parent company suddenly announced his retirement Tuesday, effective immediately, catching the community by surprise and triggering a planned succession, even though officials said the move has been in the works for two years.
Peter G. Humphrey, the fourth-generation member of his family to lead the bank, "has chosen" to step down from the top roles at the bank, citing his desire to "spend more time with my family and pursue other interests," according to a news release.
He has worked for Five Star and Warsaw-based Financial Institutions for 35 years. The company's stock fell 1.4 percent, or 25 cents, to $17.48 on Tuesday.
Chairman John E. Benjamin, who has been in that role since 2010, has assumed the role of interim CEO while a search is conducted for a permanent successor, expected to take about six months. Benjamin is president of Three Rivers Development Corp., where he has led economic development efforts in Corning for more than 30 years.
As part of a planned management transition, Richard J. Harrison has been promoted to chief operating officer, while Martin K. Birmingham will become president and chief of community banking.
In an interview, Benjamin said the board began discussions with Humphrey more than two years ago about the timing of his retirement but put off any decision until about 90 days ago, after it was clear the bank was in strong shape. The board, in anticipation, started getting proposals from executive search firms about six months ago.
"Peter and the board decided the best time to do this is when you're on top," said Benjamin, a director of the bank for nine years, who previously served as vice chairman and headed the executive nominating and governance committee. "We all want to go out on top. Peter had a chance to do it, and he did it."
He acknowledged the suddenness of the decision but said it was not prompted by any financial or operational problems at the bank, nor did it stem from disagreements with the board or personality clashes, or any personal or health issues with Humphrey or his family.
"This is going out when the business is doing well and he can get the accolades that he so deserves," he said. "We're getting ready to go into a new year, and we want to get started with the right people in place. We have a very strong senior management team, to [his] credit."
Humphrey, 56, said he will stay active with the bank. "I intend to remain on the board of directors and be involved in the regional and state business community, helping drive a competitive, sustainable business climate across upstate New York," he said.
Harrison has been the bank's executive vice president and chief of retail banking since a reorganization in January. Previously, he was senior retail lending administrator, responsible for overseeing underwriting, administration and collections for the retail loan portfolio. He also headed up the indirect auto lending business.
He joined the company in 2003 as senior vice president of retail lending with predecessor bank National Bank of Geneva, after serving as executive vice president and chief credit officer at Savings Bank of the Finger Lakes and president of United Auto Finance.
Birmingham has been executive vice president of commercial banking and regional president for the Northeast region. Previously, he was president and CEO of National Bank of Geneva. Before joining the company in 2005, he was the Rochester regional market president for Bank of America Corp. Earlier he worked for Fleet Bank.
The sudden decision marks the end of the Humphrey family's role in the company's management after four generations and will represent the first time a non-Humphrey will lead the bank. Humphrey's son, Chris, works in the bank's loan department in Rochester but is not part of senior leadership.
"He's the only Humphrey that would be involved in running the bank going forward ... [but] he's not prepared to take on the CEO role," Benjamin said.
Humphrey's great-grandfather had purchased Wyoming National Bank in the mid-1800s and became president in 1867. The family later merged three banks into what became Wyoming County Bank in the 1920s, and also owned National Bank of Geneva and a third bank. The family formed the holding company in 1931 to own the three banks, and it remained family-owned until it went public in 1999. It bought Bath National Bank in 2001 and also owned First Tier Bank & Trust.
Humphrey has been CEO since 1994 and led the bank through a period of rapid growth in agricultural lending that nearly brought the bank down when commodity prices fell and the portfolio of loans soured. He led the bank through a turnaround and recovery over a few years, cleaning up or selling bad debts, focusing on customer retention, cutting costs, rebranding and ultimately consolidating the four subsidiary banks into First Tier, which was renamed Five Star Bank, to streamline operations and strengthen oversight.
Since then, he has returned the company to a path of profitability and growth, focused on nonfarm business lending, especially under U.S. Small Business Administration guarantee programs, and indirect auto lending through a growing network of car dealers across upstate New York. And the bank repaid the government's $37.5 million investment in it through the Troubled Assets Relief Program during the financial crisis.