Updated from 1:40 p.m. EST
, the fourth-largest bank in the country, said Tuesday that John McCoy, its 56-year-old chairman and chief executive, is retiring after months of problems at the bank's credit card unit.
John Hall, the former chairman and chief executive of chemical company
, has been elected non-executive chairman of the board, and Verne Istock, Bank One's president, has been elected acting CEO.
Bank One shares closed up 3 13/32, or 11%, to 33 3/8.
The bank, which has twice this year told analysts to lower their earnings expectations because of problems at its
credit card unit, said it still plans to meet with analysts in New York in January. At the session, the company is supposed to provide an update on its problems.
In October, McCoy reorganized First USA, appointing a new executive to head that unit. But in November, the company told analysts for the second time this year to revise earnings estimates downward. Now it appears the persistent problems at First USA have claimed McCoy.
Bank One said its board has begun the search process for a permanent chairman and chief executive. Hall will head the search committee, which intends to complete the process in the next few months, Chicago-based Bank One said. Istock will be considered a possible successor to McCoy, the company said.
"With our strong executive management team, deep bench strength, dedicated employees, high-quality products and sound strategies, Bank One remains a formidable franchise," Istock said in a statement.
McCoy's departure frees the company to consider whether to sell First USA, said Anthony Polini, an analyst at
. "McCoy backed himself into a corner by saying we'll do whatever we need to do, but we won't sell First USA or Bank One," he said. "With McCoy gone, it gives them a little more flexibility."
Polini added that he thinks Bank One will seriously consider selling First USA. Advest does not have an investment banking relationship with Bank One, and Polini rates the stock a buy.
Not all on Wall Street see a sale as likely. "They seem to have made the commitment to cleaning things up on their own," said Nancy Yates, an analyst at
A.G. Edwards & Co.
"They got to the point where they could either change the leadership or outsource management by selling."
Bank One has not shown signs of looking to sell, she added. A.G. Edwards doesn't do any underwriting for the company, and Yates rates Bank One a maintain/speculative.
The timing of the announcement probably means that "we haven't seen the bottom on this yet," said Peyton Green, an analyst at
Sterne, Agee & Leach
, who said he now expects earnings weakness at Bank One to continue for at least another quarter. Sterne, Agee does not have an underwriting relationship with Bank One, and Green rates the stock an accumulate.
McCoy has served as chief executive since 1984. He oversaw Bank One's acquisition of
First Chicago NBD
in 1998, and earlier this year, engineered the introduction of
, an online bank.