Wholesale management changes at Riggs National Bank in recent weeks have spawned a widespread but erroneous assumption that former senior executives were fired by chairman and principal stockholder Joe L. Allbritton.
The term "ousted" has become shorthand for describing the departures of former Riggs executives in the fallout resulting from Allbritton's seizure of control after he bought more than 40 percent of the institution's stock two years ago.
To be sure, Allbritton's actions since taking over as chairman and chief executive officer of the District's largest bank and its parent corporation have resulted in perhaps the biggest management shakeup at a District bank in recent memory. The fallout could prove costly to Riggs while benefitting its stiffest competitor, No. 2 American Security Bank.
But there is no apparent evidence that Riggs' former management was ousted from the corporation. It is true that, stripped of the power that comes with titles they had held B.A. (before Allbritton), former chief executive officer Vincent C. Burke Jr. and former president Daniel J. Callahan III were put in untenable positions at the bank.
Rather than continuing in the mostly ceremonial job as chairman of the bank, Burke, at 60, took early retirement with a substantial income and fringe benefits. He will receive more than $100,000 annually under Riggs' pension plan plus directors' fees, as well as benefits and expenses related to his services as a consultant to the board. Burke will also be paid an additional $75,000 annually until he reaches age 65.
Callahan, who had been chief operating officer of the bank, was left only with the presidency of the holding company that owns Riggs. With Allbritton firmly in control as chief executive officer of the bank and the corporation, Callahan resigned.
Unhappy with Allbritton's management style and the course he has chartered for Riggs, others have resigned in protest or disgust. In only six months, at least a half dozen Riggs officers have left the bank.
In the midst of those departures, Oliver T. Carr Jr., prominent Washington developer and longtime member of Riggs' board, resigned. Carr has declined to discuss his reasons for quitting Riggs' board, but friends say he was disenchanted with the recent turn of events at Riggs.
American Security Corp. wasted little time in making Carr a director of the company and its subsidiary bank.
Of all the departures, Carr's and Callahan's could be the costliest for Riggs. With Callahan accepting an invitation this week to set up office next door as vice chairman of American Security Bank, the implication seems clear.
Besides having valuable knowledge about the competition's strengths and weaknesses, Callahan and Carr give American Security significant potential for attracting important commercial clients whose allegiance had been cultivated by Riggs' former management.
Several local bankers, having learned of Callahan's appointment before it was officially announced, described it as a coup for American Security. At a reception Monday night for the new president of D.C. National Bank, one banker asserted that American Security Chairman W. Jarvis Moody "made a wise decision and showed a lot of courage" in bringing the respected Callahan on board.
Just how much American Security will benefit from the addition of Callahan and Carr remains to be seen, however.
While Allbritton's management shakeup may be unique in Washington's traditionally quiet banking community, there are those who contend that he had little choice in protecting his investment.
Although Allbritton has replaced certain Riggs officers with experienced bankers, control rests with him and Thomas Wren, an associate who is president of University Bancshares, Inc., a Houston banking firm owned by Allbritton.
Allbritton's reputation as an astute businessman stems from his ability in the past to turn a profit from various investments. But his track record as head of a major regional bank is yet to be established.
His Houston bank isn't in the same league with Riggs and American Security. University's valuation two years ago was less than $16 million.
The only thing that can be said with any certainty is that new alignments within the management structure of both Riggs and American Security will affect the competitive considerations of both.