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First Niagara Financial Group on Tuesday replaced its charismatic CEO John R. Koelmel, who was responsible for building the bank, in a sudden and surprising move by its board of directors.

The Buffalo-based banking company, which has grown four-fold under Koelmel’s leadership in the last few years, announced late Tuesday that Koelmel will leave his position as president and CEO effective immediately. He also stepped off the board in accordance with company by-laws. In a press release, the bank described the action as a “mutually agreed upon departure,” but did not elaborate.

The board appointed Gary M. Crosby to serve as its interim president and CEO, while a national search is conducted for a permanent replacement. Crosby, 59, is currently executive vice president and chief administrative and operations office of the bank.

The board’s independent directors formed a special search committee, chaired by board member Nathaniel Woodson. The bank said it will retain an executive search firm, and will “conduct a thorough and expeditious search, considering both internal and external candidates.”

“John Koelmel has guided the company’s transformation from a local thrift to a leading northeast banking franchise, and led First Niagara during a period of difficult economic conditions and financial industry turmoil,” said Board Chairman G. Thomas Bowers. “The Board and I are grateful to John for his leadership through this critical period in our history and for positioning us so that we can focus on enhancing shareholder value through continuing organic growth and the efficient operation of the business we have today.”

Koelmel, a Western New York native and career accountant who took the helm of the bank in 2005, steered the bank through the financial crisis unscathed, directed initiatives to raise significant amounts of capital and invest in the bank’s operations, and then led the bank through a rapid period of growth. Under his tenure, the bank acquired 57 branches in Western Pennsylvania and then two banks in Eastern Pennsylvania and New England before snapping up HSBC Bank USA’s entire upstate New York branch network.

As a result, the bank surged from $8 billion in assets to $38 billion today, with 430 branches in four states, making it a Northeast regional powerhouse, and propelling it into the ranks of the nation’s largest banks.

However, the bank has now stopped its acquisition binge to focus instead on efficiently and effectively running what it has, making sure it can grow internally and be more profitable with its existing customer base. That’s an effort to boost its financial performance and especially its stock price, which has languished in the basement for years, under-performed peers and disappointed shareholders. The bank has been under tremendous pressure to get its stock price up.

email: jepstein@buffnews.com