Legg Mason's Cole climbs back to the top of his game

February 25, 2005|By Bill Atkinson

CHARLIE COLE lives by a motto that contrasts with his easygoing manner: "Never retreat."

"If you retreat, you give up," Cole said. "There is no use being alive."

It is a motto startling in its bluntness, but it has served Cole well, especially in darker moments.

Charles W. Cole Jr. could have given up in 1994, when he was forced out as chief executive of First Maryland Bancorp. He could have retired at age 58 and spent his time trekking up New Hampshire's Mount Washington or the Schilthorn in Switzerland.

Cole's bank had boasted a 20 percent annual compounded earnings growth rate for the 10 years he was chief executive officer. After his departure, First Maryland became Allfirst and was jolted by a currency scandal that led to an executive purge and the bank's sale to M&T Bank Corp.

"People trusted him; they knew him," said William Donald Schaefer, who knew Cole well when Schaefer was mayor of Baltimore and Maryland's governor. "He never tried to big-deal you, never tried to make himself a big man."

Cole, 69, is not only not off rappelling, he's running a Baltimore business again: the trust unit of Legg Mason. Since joining the company in 1999, Cole has taken it from 12 people and $400 million in assets to 75 people and $7.5 billion in assets.

Still, the trauma of his ouster and his old bank's demise are fresh in his mind.

First Maryland was Cole's baby, the place where he started as a trainee and worked for 34 years. He was named president in 1977 and CEO in 1984. He often arrived at 5:30 a.m. to get a jump on the day. "It was a passion," said Cole, who was heavily involved in civic activities and boards.

But Allied Irish Banks of Dublin snapped up 50 percent of the bank in 1983 and 100 percent in 1989. It installed its own chairman, Jeremiah Casey, an Allied Irish banker. Casey wanted to take the bank in one direction and Cole in another.

In 1994, amid a break in a board meeting, Casey dismissed Cole, telling him that he was taking early retirement. It was a devastating blow, one that Cole doesn't like to talk about.

Almost immediately, Cole was offered a job as vice chairman of Alex. Brown Advisory & Trust Co., which then was a subsidiary of investment banking company Alex. Brown Inc. But it wasn't the same. Cole wasn't running a bank with 7,000 employees, wasn't traveling on trade missions to China and was rarely interviewed in the press. But he saw an upside, a "new opportunity," he said.

Cole spent about five years at Brown and then received a call from Raymond A. "Chip" Mason, Legg Mason's chairman, who wanted to build a trust department. "It was like the White House calling," said Cole.

This year, Barrett Associates, a New York-based wealth manager owned by Legg, became a subsidiary of the trust company. And Legg Mason Investment Counsel, which manages money primarily for wealthy individuals and medium-sized institutions, also will become a subsidiary of the trust company. It has 55 employees and $5.7 billion in assets, and offices in New York, Philadelphia, Chicago and Cincinnati. "We are developing a national franchise," Cole said. "I don't want to sound arrogant, but we can take on Northern Trust and Bessemer and Morgan."

Not everyone is impressed with the strategy, though, and going up against Northern Trust, Bessemer and J.P. Morgan is easier said than done.

"Many, many brokerage firms have tried this," said James Hardesty, a money manager and former senior official of Mercantile Bankshares' trust division. "The golden fleece is, `I want to hold on to that money after my client has died.' Easily said, hard to do. Business is tough."

Maybe Cole is too optimistic, but he speaks with passion, the way he did when he ran First Maryland.

"It was a tragedy," he said. "It was a tragedy because a great company had been performing beautifully. Eleven hundred people lost their jobs."

Cole may have faded from his higher-profile days as a banker, but he is living his "never retreat" motto. It has given him a second chance. "It is unfolding beautifully," he said. "For me it would have been unthinkable just to stop at 58. We are only here a very short time."

Under Armour, the fast-growing Baltimore-based sports apparel company, has hired Joseph "Jody" Giles as chief information officer. Giles previously worked at Vans Inc., a California youth action sports apparel company known for its sneakers and boxy skateboarding shoes. The shoes became famous in the 1980s movie Fast Times at Ridgemont High. They were worn by Sean Penn's character, the drug-crazed Jeff Spicoli.

As chief technology officer, Giles ran Vans' information systems and helped launch a service that enables customers to design their shoes online.

Bill Atkinson's column runs Tuesdays and Fridays. Contact him at 410-332-6961 or by e-mail at bill.atkinson@balt sun.com.

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