CHICAGO -- Bank One Corp. Chairman and Chief Executive Officer John B. McCoy, who built the fifth-largest U.S. bank through acquisitions, resigned yesterday after his purchase of a credit-card company backfired, hurting profit and cutting the bank's stock by almost half in four months.
Bank One stock rose as much as 13 percent after the bank said it was seeking a replacement for McCoy, 56, ending the dynasty that ran the bank for three generations, starting with McCoy's grandfather.
McCoy's resignation comes after Bank One warned twice in less than three months this year that trouble in its credit-card unit would hurt earnings. Before the announcement, Bank One shares were down 47 percent since Aug. 22. They rose $3.3125 to $33.1875 in trading yesterday on the New York Stock Exchange.
"He takes the heat because he's the top guy," said Jerry Condon, chief investment officer at Chittenden Bank in Burlington, Vt., who sold his Bank One shares after the profit warnings. "They handled the [credit-card] business in a lousy fashion."
Verne G. Istock, 59, the bank's president and its former chairman, was elected acting chief executive, a position he will hold until a replacement is found for McCoy. The bank plans to find a permanent chairman and chief executive "in the next few months," it said in a statement.
The bank's board elected John R. Hall, 67, retired chairman and chief executive of Ashland Inc., the largest U.S. highway builder, as nonexecutive chairman in the interim.
The bank twice warned that 1999 earnings would be below analysts' forecasts because of slower-than-expected growth at its Wilmington, Del.-based credit-card unit, First USA Inc.
Chicago-based Bank One said First USA, purchased two years ago, is losing customers to competition, forcing it to cut prices and spend more on marketing and hiring.
Bank One was formed last year when Istock merged his First Chicago NBD Corp. with McCoy's Banc One Corp.