Bank of America Replaces Its CFO in Broad Management Shakeup

On Wednesday, Bank of America announced a broad series of changes to its management team, starting with its chief financial officer, Bruce Thompson.

The 50-year-old executive is rumored to be leaving the company, according to an internal memo distributed to bank employees. Thompson had served in the role since 2011 and was at one time the highest-paid CFO in the U.S. bank industry.

It's impossible to say precisely why Thompson is leaving and what that means for the nation's second biggest bank by assets. Executive departures are not generally when public companies shine in terms of transparency.

Last week, Bank of America announced its best quarterly performance since the financial crisis. Its expenses dropped to a reasonable level, the outlook for litigation costs improved substantially, and it generated a 0.99% return on assets, which is just under the 1% threshold most banks strive to achieve.

On top of that, CEO Brian Moyihan lauded Thompson's contribution in a memo to employees. "I am confident in saying that no finance executive in the world in the past decade has contended with greater challenges and discharged his responsibilities with as much skill and grit as Bruce Thompson," wrote the bank's chief.

These comments aside, The Wall Street Journal insinuated that the reasoning stemmed from Bank of America's struggles to pass the Federal Reserve's annual stress tests, which fell most recently under Thompson's purview. The $2.2 trillion bank has either failed or won only conditional approval to increase its dividend in three out of the past five tests.

The matter came to a head at Bank of America's 2015 shareholders' meeting, when Moynihan asked Thompson to address questions about its problems passing the 2015 stress test while other banks have seemed to sail right through it.

Replacing Thompson at CFO is Paul Donofrio, who has been with the bank since 1999. His most recent post was that of strategic finance executive, serving as CFO of consumer banking and global wealth and investment management.

In addition to Thompson, Bank of America's one-time head of consumer banking, David Darnell, will retire by the fourth quarter. Darnell was part of the executive class dating back to NationsBank, the North Carolina-based company that assumed the mantel following the 1998 merger with California's Bank of America.

Before Darnell's demotion in 2014 from co-chief operating officer to vice chairman, he was considered a potential successor to 55-year-old Moynihan. But even though Moynihan praised Darnell in Wednesday's press release, calling him both a friend and mentor, the move followed a pattern in which Moynihan is systematically ridding the executive suite of NationsBank partisans.

Finally, four other changes were announced as well:

  • Andrea Smith was promoted to chief administrative officer.
  • Anne Finucane was appointed vice chairman and continues as the company's global chief strategy and marketing officer.
  • Cathy Bessant remains head of the company's technology and operations areas, though the position was redesignated chief operations and technology officer.
  • Gary Lynch, the bank's global general counsel, was appointed vice chairman.

After climbing more than 2% in today's session, shares of Bank of America are marginally lower in after-hours trading.

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