CommunityOne Bancorp chief executive Brian Simpson is stepping down, in a move designed to reduce management costs at the Charlotte-based lender he helped turn around.
Simpson will be replaced by CommunityOne’s current president, Bob Reid. Simpson will leave at the end of the month but serve as a consultant for the bank for up to two years.
According to securities filings, Simpson will receive $2 million in severance pay and be paid $125,000 annually for the consulting work.
Simpson, 51, and Reid, 58, are former First Union executives. They helped raise money to rescue CommunityOne and another struggling community lender, Bank of Granite, which together now operate as CommunityOne.
In a statement Friday, CommunityOne Chairman Chan Martin said the bank was looking to reduce costs as part of its 2015 planning. The bank’s management presented various options, including consolidating executive positions.
“The board supported the recommendation and it asked Bob to lead the consolidation,” Martin, a former Bank of America executive, said. “Brian has provided leadership and vision to the company, and his service is greatly appreciated by the board.”
In an interview Friday, Simpson said he supports the board’s decision to consolidate the roles but that he has mixed emotions.
“It’s not an outcome that I would want,” he said. “It’s one that I understand, and it’s frankly one that will improve in the near term the company’s operating performance as the company’s able to shed my expenses.”
Simpson made $760,542 in total compensation last year, while Reid made $686,778, according to a securities filing.
Simpson left First Union in 2001, the year it completed its merger with Wachovia. After the financial crisis hit, Simpson came out of retirement and formed a team of people with banking industry experience, including Reid, to look at struggling banks they could acquire.
The team eventually raised $310 million to recapitalize Asheboro-based CommunityOne Bank and buy Granite Falls-based Bank of Granite. The two banks were merged last year under the CommunityOne name.
The original plan for the lender was to grow to as much as $10 billion in assets, but it will be difficult to do that with the smaller bank deals available now, said a CommunityOne investor who spoke on condition of anonymity.
As it focuses on profitability, CommunityOne doesn’t need “two heavy hitters” at the top, the investor said.
Simpson on Friday called Reid an “incredibly capable” banker and said CommunityOne “will be well-served” under Reid’s leadership. As for his own plans after he leaves the bank, Simpson said he doesn’t have any at this time.
His departure comes nearly a year after the lender returned to profitability. In October, CommunityOne reported its first operating profit since the second quarter of 2008. It recently posted its fourth profitable quarter in a row.
CommunityOne was the last lender based in the Charlotte area to exit the federal bailout of the financial system. Through the Troubled Asset Relief Program, known as TARP, U.S. taxpayers pumped $51.5 million into the lender, which exited TARP earlier this year.
CommunityOne has $2 billion in assets and operates 50 branches throughout North Carolina.
Its shares fell 1.03 percent Friday to $9.63.