Bank of America Financial Chief Exits as Part of Shakeup

By Christina Rexrode 
        Bank of America Corp. shook up its management team Wednesday, months 
after regulators chastised the firm's leadership after another flubbed "stress 
test" submission. 


        Bruce Thompson, the bank's chief financial officer and once 
considered a close ally of CEO Brian Moynihan, is leaving the Charlotte, N.C., 
firm, according to an internal memo sent to bank employees Wednesday evening. 



        The bank also announced that David Darnell, a vice chairman who 
oversaw the wealth-management division, is retiring. 


        Mr. Thompson's departure is a surprise. The 50-year-old executive 
spent the bulk of his career in the firm's investment bank and was among a 
handful of executives discussed as a potential successor to Mr. Moynihan. More 
recently, Mr. Thompson was one of the senior executives who oversaw the firm's 
stress-test submissions to the Federal Reserve. 


        Stress tests have become important flash points for big banks since 
the financial crisis because the Fed uses them as an opportunity to review a 
bank's planning and resilience in a potential recession. Banks generally must 
pass the Fed stress tests to increase dividends or buy back shares. 


        Bank of America stumbled on the test three times in the past five 
years, most recently in March when the bank only received conditional approval 
from the Fed. At the shareholder meeting last year, Mr. Moynihan asked Mr. 
Thompson to stand up and answer questions from investors about the stress-test 
difficulties. 


        The once-close relationship between Messrs. Moynihan and Thompson 
deteriorated in recent months, according to a person familiar with the matter. 



        The Wall Street Journal reported last month that the Fed warned the 
bank it wasn't doing enough to anticipate problems with its stress-test 
submissions. At the time, the bank said Mr. Moynihan was "keeping the heat on 
everyone to get this on track." 


        The Wednesday memo said Mr. Thompson had decided to step down. In a 
statement Wednesday, Mr. Moynihan said, "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." 


        Mr. Thompson is interested in pursuing jobs where he can work more 
closely with clients, according to a person close to him. 


        Wednesday's moves will likely tighten the focus on Mr. Moynihan, who 
after more than five years leading the nation's second-biggest bank by assets is 
under growing pressure to increase revenues and move the firm beyond its 
crisis-era problems. Bank of America last week posted a revenue gain after five 
consecutive quarters of declines. 


        The bank's shares have climbed steadily this month but still trail 
the performance of many peers. Bank of America gained about 32% over the last 
five years, compared with a 63% gain in the KBW bank index. 


        The shake-up will also intensify questions about who might succeed 
Mr. Moynihan, who is 55 years old. Some analysts and investors have complained 
that the bank hasn't been clear about who could replace him. Among the leading 
candidates still at the bank is Chief Operating Officer Tom Montag, who also 
runs investment banking. 


        In the Wednesday memo, he was the first executive mentioned, with Mr. 
Moynihan saying he and the rest of the management team "benefit each day from 
[Mr. Montag's] leadership and partnership." Mr. Montag is 58 years old. 


        Bank of America on Wednesday also announced a suite of other moves 
that will result in a mostly new team dealing with regulators on issues related 
to the stress test and related matters. 


        Paul Donofrio, a former Navy pilot and Bank of America veteran, will 
replace Mr. Thompson. The bank had moved him earlier this year from his longtime 
post in the corporate bank to the role of being CFO of the consumer bank and 
wealth management. 


        Terry Laughlin will succeed Mr. Darnell. Mr. Laughlin is a longtime 
ally of Mr. Moynihan, having worked with him in the early 1990s at Fleet 
Financial Group. Mr. Moynihan put him in charge of the bank's stress-test 
resubmission to the Fed, which is due at the end of September. He previously 
tapped Mr. Laughlin for problem-solving jobs like fixing the bank's mortgage 
woes. 


        Andrea Smith, the head of human resources, will be elevated to the 
newly created role of chief administrative officer, and will eventually take 
over control of the stress-test submissions as well as the "living wills" that 
the bank must report to regulators specifying how they would break themselves up 
in a worst-case scenario. 


        Mr. Darnell's retirement had been expected after he gave up a bigger 
job at the bank last year and moved to Florida. A Charlotte native, Mr. Darnell, 
62 years old, joined the bank in 1979 after being recruited by Hugh McColl Jr., 
who went on to become CEO of the firm that became Bank of America. Mr. Darnell's 
name was floated as a potential CEO candidate when Ken Lewis stepped down in 
2009, the job that Mr. Moynihan ultimately won. 


        Sheri Bronstein will replace Ms. Smith as head of human resources. 



        In the memo Wednesday, Mr. Moynihan noted "how far we have come in 
our journey over the past few years.... There have been some challenging bends 
in the road on which we have travelled. But we have progressed through your hard 
work and the talent of our leaders." 


        Write to Christina Rexrode at christina.rexrode@wsj.com 


        Access Investor Kit for Bank of America Corp.


        Visit 
http://www.companyspotlight.com/partner?cp_code=P479&isin=US0605051046


        (END) Dow Jones Newswires


        July 22, 2015 19:33 ET (23:33 GMT)

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