NEW YORK (Reuters) - Bank of America Corp (BAC.N) is forcing out Chief Risk Officer Amy Woods Brinkley, after a surge in credit losses led to a government bailout and an order by regulators to raise $33.9 billion of capital.
The largest U.S. bank named Gregory Curl on Thursday to replace Brinkley, 52, who it said joined the company in 1978 and has been in her current job since 2001.
Curl, 60, has also worked for the bank for 31 years, most recently as global corporate strategic development and planning executive. He will succeed Brinkley on June 30, and Brinkley will retire from the bank this summer.
Chief Executive Kenneth Lewis has accepted $45 billion of funds from the Treasury Department’s Troubled Asset Relief Program, including $20 billion in a January bailout to help the Charlotte, North Carolina, bank absorb Merrill Lynch & Co.
In May, Lewis had said credit losses should take a “heavy toll” over the next few quarters, after nonperforming assets surged 41 percent in the first quarter to $25.74 billion.
“This is not a normal retirement,” said Anthony Plath, a finance professor at the University of North Carolina at Charlotte. “There’s something going on here that’s related to loan losses and the performance of the bank.”
Bank of America has said it has raised close to $33 billion of the $33.9 billion that federal regulators demanded after a “stress test” of the bank’s ability to withstand a potentially deep recession.
“Ken Lewis and Amy mutually decided we needed a different approach to risk management,” spokesman Robert Stickler said. “We’re going into a much different environment, and we need to adjust accordingly,” He said management decided on the change, without government involvement.
Separately, the bank said Robert Tillman, a former chief executive of home improvement retailer Lowe’s Cos (LOW.N), resigned as a director on May 29. He stepped down three days after the resignation of former lead director O. Temple Sloan, a strong supporter of Lewis. Three directors have left since April.
Walter Massey, who became chairman when shareholders voted in April to strip Lewis of that role, is leading a board committee to seek directors with financial expertise.
Jonathan Finger, whose family owns the bank’s shares and campaigned against Lewis’ and Sloan’s re-election, said replacing Brinkley appears to be a positive step.
“With the economy in the state it is in, Bank of America needs to manage credit issues aggressively,” he said. “It has been too aggressive in going after market share.”
Lewis said in a statement Brinkley has been “an essential cornerstone of our company,” while Curl “has the natural ability to look at things, see both the upside and the potential pitfalls, and then navigate the right course.”
Stickler said Curl’s focus will be on credit underwriting. None of the executives was available for immediate comment.
Bank of America has two other women among its top 11 executives, according to its website.
Shares of Bank of America rose 66 cents, or 5.9 percent, to close at $11.87 on the New York Stock Exchange on Thursday.
Editing by Matthew Lewis and Steve Orlofsky