Moynihan Grows Into Role as BofA Chief

By Rachel Louise Ensign 

A decade after the financial crisis, The Wall Street Journal has checked in on dozens of the bankers, government officials, chief executives, hedge-fund managers and others who left a mark on that period to find out what they are doing now. Today, we spotlight Bank of America CEO Brian Moynihan.

When Brian Moynihan took on the job of chief executive of Bank of America Corp. in 2010, the bank's very existence seemed uncertain. After almost nine years in the role, he has lifted its stock price and earned the praise of Warren Buffett.

The process took years. Mr. Moynihan, 58 years old, got the top role after CEO Kenneth Lewis unexpectedly announced his retirement in fall 2009. During that period, Bank of America faced major financial problems following acquisitions of Countrywide Financial Corp. and Merrill Lynch & Co. To stay afloat, the bank had to take $45 billion from the government.

With the bailout funds paid back, Mr. Moynihan oversaw a plan to stabilize the lender and try to shield it from similar damage in a future crisis. That strategy involved shedding riskier businesses and expanding through conservative lending.

For a long time, though, that turnaround plan was overshadowed by multibillion-dollar fines and other missteps, like when the bank in 2014 had to shelve a plan to buy back shares and boost its dividend for the first time in years after finding a $4 billion error in its capital calculations.

Eventually, the bank was able to cut costs and boost profits through strategies like closing around 1,600 branches while strategically expanding in big cities. Around 2015, the bank turned a corner "numerically" and "emotionally," Mr. Moynihan said this year.

An Ohio native, the low-key Mr. Moynihan joined Bank of America through its 2004 acquisition of Boston-based FleetBoston Financial Corp. He previously held a number of roles at the bank, including running consumer and small-business banking.

After Donald Trump's surprise 2016 election, bank stocks broadly jumped. Bank of America shares surged 74% between then and the end of 2017.

For the full year of 2017, the bank posted a $21.1 billion profit, excluding an adjustment from the tax cut, roughly matching the bank's all-time profit record from 2006. The bank issued millions of new shares during the crisis, however, so its per-share earnings remain far below where they were precrisis. Likewise its shares, unlike those of competitors such as JPMorgan Chase & Co. and Wells Fargo & Co., remain below precrisis levels.

The bank has also gotten approval to continue boosting buybacks and its dividend. Mr. Buffett, whose Berkshire Hathaway Inc. threw the bank a lifeline with a 2011 investment and now is its largest shareholder, has publicly praised Mr. Moynihan.

"Bank of America has done a sensational job under Brian Moynihan," Mr. Buffett said in a television interview last year. "Brian had all kinds of problems when he came in, they were not of his own doing...He just set out step-by-step to bring the bank back."

Mr. Moynihan has shown no indication he plans to leave the role anytime soon. "I've got some room to run, I hope," he said earlier this year.

Write to Rachel Louise Ensign at [e-mail]

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August 18, 2018 08:14 ET (12:14 GMT)

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