Bank of America Corp. named Paul Donofrio to replace Bruce Thompson as chief financial officer in a broad shakeup that elevates a new generation of managers as the firm confronts regulatory hurdles after years of costly litigation.
Andrea Smith, the head of human resources, will assume a new role as chief administrative officer and eventually take the lead on Federal Reserve stress tests that have tripped up the bank. Terry Laughlin will lead wealth and investment management and become vice chairman as David Darnell retires later this year, according to the memo.
The changes come a week after second-quarter earnings sent the stock up, as analysts cited evidence the company -- the U.S. bank most beset by the financial crisis -- has turned a corner, managing to boost revenue while shaving expenses and avoiding major costs from legal claims and probes. Chief Executive Officer Brian T. Moynihan credited Thompson, 50, in an internal memo with putting the company on “a strong, stable financial foundation, with record levels of capital and liquidity.”
Still, the firm stumbled in the Fed’s stress tests in March. Examiners let it repurchase $4 billion in stock and maintain its dividend on the condition executives resubmit revenue and loss models and improve internal controls by the end of September. Donofrio, 55, becomes finance chief Aug. 1.
“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,” Moynihan wrote in the memo. More broadly, he said, “there have been some challenging bends in the road on which we have traveled.”
The changes elevate Laughlin, who’s overseeing the bank’s revised submission due in September, and Smith, who will work with him on next year’s stress test. She’ll eventually assume responsibility for the test and the bank’s so-called living will, which explains to regulators how the bank can be broken up in an emergency.
Bank of America was little changed in extended trading in New York, after the changes were announced. The shares climbed 3.1 percent this year through the close of regular trading Wednesday, trailing the 8.3 percent advance for the 24-company KBW Bank Index.