Banking boomtown loses one of its biggest players. Charlotte, N.C. is the country's second largest banking center, but the recent failure of Wachovia has the entire city bracing for fallout from thousands of executive-level layoffs. NBC's Kerry Sanders reports.
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BofA CEO to step down. Bank of America CEO Ken Lewis has notified his board of directors that he will step down by the end of the year. CNBC's Charlie Gasparino reports.
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When BofA's HQ goes, it's nothing personal
Bank of America has got to go.
Not a popular position, I realize. But a foregone conclusion, nonetheless.
Our fragile civic psyche has been harpooned by talk that the bank's new leadership team wouldn't want to live here. They've touched our "Hooterville" button, and it stings. Bank of America's roots are sunk deep into the clay and granite of the Piedmont, the thinking goes, and here it belongs.
Fact is, here it belongs is only because here it is. It started here as a parochial lender and, thanks to the genius of its leaders, it succeeded big in the pioneer era of interstate banking.
It snarfed away like a financial Pac-Man, gobbling up banks all over the country. Into its choppers fell giants from Boston, Dallas, Atlanta, St. Louis, Chicago and San Francisco.
And it stayed based here, mostly because of its homegrown leadership.
Our status as the nation's second-largest banking center gave us something to crow about. Most places don't take much pride in being No. 2 at anything, but when No. 1 is New York City and the category is finance, it brought affirmation that we were something special.
Charlotte's fortunes grew with the bank. It was instrumental in building our Emerald City business district, generous to our charities and arts, a magnet for importing brain power. Its executives were our local celebrities, fiduciary rock stars, uptown royalty.
That was a grand era.
Past-tense.
Now, most of the bank's directors are inconvenienced to have to fly to Charlotte to take a meeting. Now, the bank's new president will likely come from beyond our borders. Now, the bank very possibly could change the address of its headquarters.
It has erected a handsome tower in Midtown Manhattan that is taller than the Chrysler building, if you throw in the antenna spike on top. It has absorbed the giant Merrill Lynch brokerage, which will require some sorting out. It is a huge player in a complicated and troubled industry.
And it belongs smack-dab in the heart of the nation's financial center.
Bank of America succeeded so well because it was nimble. It reacted to trends. It took advantage of opportunities.
It would be a blow to our pride to lose the headquarters. But just a glancing blow.
Bank of America would maintain a huge force here. You may move your headquarters to Manhattan, but you'll keep the factory in a cost-efficient place.
Charlotte is full of financial expertise with lots of top-notch talent. We may lose the brain, but we'll keep the shoulders. And they're wide ones.
When we lost Wachovia, Wells Fargo kept a big part of its assembly line here. Little-known fact: Even after shedding about 500 local jobs post-takeover, Wells Fargo still has more workers here than BofA, about 19,000 to 15,000.
Our fortunes will still depend upon Bank of America, and it's in our best interest that the bank do well. It needs to have leadership that can oversee the Merrill transition close-up, leadership that can draw on the best talent available. It needs to be where the action is. It belongs in New York.
We're a business town, we understand business decisions. It's nothing personal.
Fact is, Bank of America has got to go. Regrettably.
Bank of America’s Next Chief May Be Based in New York
Bank of America Corp. broadened its search for a chief executive officer to include candidates who want to live in New York, acknowledging the bank’s biggest units are no longer based in its home of Charlotte, North Carolina, people familiar with the matter said.
The board, led by Chairman Walter Massey, is also concerned there may not be a deep enough pool of qualified candidates willing to move to Charlotte, 330 miles south of Washington, the people said, speaking anonymously because the search is private. CEO Kenneth Lewis, who is stepping down at year’s end, has said Charlotte will remain headquarters as long as he’s in charge.
“It does reflect well on the board that they’re not going to let the headquarters location limit their selection in terms of CEOs,” said Thomas Brown, CEO of New York-based hedge fund Second Curve Capital. “There aren’t too many people around the world who think that Charlotte is a major financial center.”
Five board members with ties to Charlotte have stepped down during the past two years, and none of their replacements lives in the city, the state’s largest. New directors live in Alabama, Delaware, New York, Ohio, Texas and Virginia. Lewis, 62, is the only North Carolina resident.
Curl, Moynihan
The leading internal CEO candidates are Chief Risk Officer Gregory Curl, 61, who lives in Charlotte, and consumer-banking chief Brian Moynihan, who almost left the bank last year after he declined to take a new post in Wilmington, Delaware, according to a person familiar with the situation. Moynihan, 50, lives in Boston, where he worked for FleetBoston Financial Corp. until Lewis bought the lender in 2004.
“We aren’t going to comment on speculation on the process,” bank spokesman Jerry Dubrowski said.
Former Bank of America CEO Hugh McColl Jr. told a Charlotte group on Oct. 22 that it’s unclear whether the next CEO will be based in the city, according to four people who heard his comments at the meeting, which was sponsored by Queens University of Charlotte. McColl engineered the 1998 acquisition of San Francisco-based BankAmerica Corp., stipulating Charlotte’s role as headquarters. He emphasized that he no longer influences the board’s decision-making, according to the people who heard his comments.
McColl didn’t return telephone calls seeking comment.
The Finger family in Houston, owners of more than 1 million Bank of America shares, said in a regulatory filing today that Moynihan and Curl aren’t suitable candidates and provided a list of 18 alternative choices. Their suggestions include former Bank of America executives Alvaro de Molina, now the CEO of GMAC Inc., and James Hance, chairman of Sprint Nextel Co. The Fingers sponsored a campaign earlier this year to oust Lewis.
Calabasas, Wilmington
Bank of America’s investment banking and wealth-management businesses, which are run from New York, made up half of revenue through Sept. 30, up from 34 percent in the same period last year, before the acquisition of Merrill Lynch & Co.
“With Merrill Lynch being such a big part of the ball game, the CEO probably ought to be in New York,” said Arnold Danielson, chairman of Danielson & Associates, an investment- banking firm in Bethesda, Maryland.
The home loans and insurance unit, which account for 14 percent of revenue, is based in the former Calabasas, California headquarters of Countrywide Financial Corp., which the bank acquired in 2008. The credit-card services unit makes up 23 percent of revenue and is based in Wilmington.
The consumer-banking business under Moynihan in Boston made up 11 percent of revenue. All told, that means about 98 percent of the bank’s revenue comes from units headed by executives based outside Charlotte.
Charlotte Jobs
Massey leads a search committee of six directors, three of whom joined the board upon the FleetBoston acquisition. They include retired FleetBoston CEO Charles “Chad” Gifford, who lives in Boston.
“Some of the Fleet members have no allegiance to Charlotte,” Brown said.
The North Carolina city was home to two of the four biggest U.S. banks until San Francisco-based Wells Fargo & Co. bought Charlotte-based Wachovia Corp. in an October 2008 sale brokered by government regulators.
Bank of America employs 15,000 people in its hometown, said Bob Morgan, president of the Charlotte Chamber, a group that promotes local business interests. That’s about 5 percent of the bank’s global workforce of 281,863. Wells Fargo has about 19,000 employees in the city after cutting about 2,000 jobs there during the past year, Morgan said.
New Yorkers contacted about the job include Charles Scharf, retail banking head at New York-based JPMorgan Chase & Co., a person familiar with the matter said. Robert Kelly, CEO of Bank of New York Mellon Corp. and a former Wachovia chief financial officer, “has said he has no interest in the job,” spokesman Kevin Heine said today.
A JPMorgan spokesman, Thomas Kelly, declined to comment on behalf of Scharf.
Report: Next CEO may run Bank of America from New York
This is the kind of news Charlotte boosters have dreaded.
Bloomberg reported Tuesday morning that the Bank of America board of directors has expanded its search for the bank's next CEO to include people who want to live and run the company from New York, not its current headquarters in Charlotte. The reason for expanding the search is attributed to the lack of qualified candidates who wish to move to Charlotte for the job, the report says.
The Bank of America tower uptown, the Charlotte skyline's signature spire, has always been home to the bank's executive offices. Is that status now at risk?
The report cites unnamed sources close to the situation. It also references private comments former BofA chairman Hugh McColl Jr. made recently, acknowledging he no longer influences the board's decisions.
A long commitment to Charlotte
When current bank CEO Ken Lewis announced in September his retirement effective in December, some observers immediately fretted about the bank's future in Charlotte.
The bank has gone through a metamorphosis since its early days in the Queen City. When McColl took over NCNB here three decades ago, he led the bank on a series of acquisitions and name changes, culminating in its merger with San Francisco-based BankAmerica and a name change to Bank of America. But at each step, McColl insisted the growing bank's headquarters remain in Charlotte.
When Lewis, a top McColl lieutenant, took the helm in 2001, he continued to build the empire, buying competing banks, and several other lines of businesses along the way, including the recent purchase of Merrill Lynch & Co.
Today, BofA is a national leader in retail banking, credit cards, mortgages and wealth management. But its diverse business is also geographically scattered. The bank's mortgage business is based in Calabassas, Calif., the former home of Countrywide Financial. Credit cards are based in Wilmington, Del., the former home of MBNA. And Merrill Lynch, the bank's powerful brokerage and investment banking operation, is based in New York.
Consumer banking has remain based in Charlotte, but Brian Moynihan, the former FleetBoston exec who now runs that business, chose to remain in Boston when he took over that line this summer.
Is anyone loyal to Charlotte?
Lewis always maintained his stance that the bank should remain headquartered in Charlotte. But since his retirement announcement, the bank has waged an uphill battle to find a replacement.
The only candidate based in Charlotte believed to still be in the running is chief risk officer Greg Curl, a top deal-maker who has worked and lived here for years.
But Moynihan, the other top internal candidate, has shown no desire to relocate. One external candidate many hoped would be considered is former BofA CFO and current GMAC CEO Al de Molina. But GMAC is in the middle of its own problems, and the chatter around his name has diminished in recent weeks. One report says his name is no longer in the hat.
But all indications suggest the board (which also lacks Charlotte loyalists after a makeover this summer) is still considering external candidates. And according to Tuesday morning's report, there aren't enough outsiders keen on Charlotte.
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Sources: McClatchy Newspapers, Charlotte Observer, Bloomberg.com, MSNBC, Triange Biz Journals, Wikipedia, AP, Youtube, Google Maps
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