CHICAGO - More than a dozen professionals were cut from the ranks of Bank of America Corp. and Merrill Lynch & Co.'s municipal groups in recent days as the two firms continue to merge their businesses amid ongoing economic turmoil and pressure to return to profitability.
The majority of bankers let go were from the Banc of America Securities LLC broker-dealer team and included at least three managing directors - Erin Gore, the New York City-based co-head of the education and nonprofit group; Todd Bleakney, who ran the short-term desk in its Charlotte headquarters; and Scott Verch who managed the derivatives products in Charlotte. Sources said Ken Schneider, a vice president, also was cut.
Tripp Davenport, a vice president in Banc of America's Dallas office, was among the recent layoffs. Mark Nitcholas, a managing director and team leader in the Houston office, also has been cut, but it was unclear if he was included in the latest round or a previous round of layoffs.
"Rich Meister in New York is calling the shots," said one Texas source, referring to Richard Meister, a New York-based managing director at Merrill who has Texas relationships. Frank Farley, who covers Southwestern issuers for Banc of America, was cut earlier this year.
The groups at both firms had been bracing for the latest round of firings, following previous purges due to the economic turmoil and efforts to merge the two groups.
A spokeswoman for the firm declined to comment.
Many bankers at both firms have been talking to other broker-dealers, concerned over the stability of their positions. Sources said several bankers had landed at other firms recently.
It was not clear immediately if John Coan, a principal and transportation banker in Banc of America's Washington, D.C., office, and Daniel Schroeder, a vice president, were part of the latest round of cuts or had resigned, but both have taken new jobs. Merrill's Michael Solomon, a director, resigned last Friday to take a position with another firm.
The latest round of cuts was completed ahead of the closing of the first quarter and come as the merged firm moved into the top spot among senior managers, boosted by its role as a senior manager on California's $6.5 billion deal last month. It has so far underwritten 111 issues with a par value of $15.4 billion, compared to 140 issues with a par value of $10.6 billion through the first quarter of 2008. That figure reflects the business of both firms.
Separately, Merrill ranked second last year among senior managers on all bond issues, managing $40.8 billion in 340 issues, while Banc of America ranked seventh, with 353 issues totaling $19.9 billion, according to Thomson Reuters.
The last round of layoffs in early March hit bankers, sales, trading and underwriting professionals, while the more recent cuts focused on the banking staff. The ultimate goal of the reductions is to trim roughly 40% off the tax-exempt group's head count, according to public finance sources citing internal speculation.
Bank of America in late January undertook its first wave of layoffs, with the most prominent member of the public finance group cut in that round being Peter Hill, who had managed the public finance investment banking group. The move followed the December announcement that Merrill's chairman of municipal markets, John Lawlor, had been selected to lead the merged muni unit. Lawlor is overseeing all municipal activities, including origination, sales, and trading.
Bank of America announced its agreement to purchase Merrill Lynch in September. The Charlotte-based bank is scheduled to release its first-quarter earnings on April 20.
