Robert M. Freeman, the chairman and chief executive of Signet Banking Corp., who is credited with transforming the company into a diversified financial services concern, said yesterday he will retire in December 1996, his 25th anniversary with the company.
The move shocked analysts and employees, who saw Mr. Freeman, 54, staying for several years to come.
"I have been in the trenches now for quite a while with a rapidly changing institution," said Mr. Freeman. "The company is on a roll. The strategies are in place, let the other folks take it into the future."
Signet's stock closed yesterday down 75 cents to $24.375.
The decision set into motion several high-level changes at the Richmond, Va.-based banking company, which has $11 billion in assets and banks in Maryland, Virginia and the District of Columbia.
Malcolm S. McDonald, who is president and chief operating officer, will become chief executive after the company's annual meeting in April; T. Gaylon Layfield III, who heads Signet's consumer banking business, will become vice chairman and chief operating officer; and Wallace B. Millner III, Signet's chief financial officer, will retain his current title, but also become vice chairman.
Mr. Freeman will continue as chairman until he retires, and then Mr. McDonald will become chairman and Mr. Layfield will become president.
Mr. Freeman joined the bank in 1971 as vice president in charge of correspondent and regional accounts. From there he worked his way through a number of other jobs until he became president and chief executive in 1989. A year later, he became chairman.
Mr. Freeman is credited not only with holding Signet together when it lost nearly $26 million in 1991, but with reshaping the company into a bank that offers an array of consumer products nationwide by telephone, computer and through the mail.
He also is known for spinning off the hugely profitable credit card unit, now called Capital One Financial Corp. -- a move some analysts criticized. Since then, he has used the strategy that made the credit card subsidiary so successful, and applied it to other products.
"I'd rate him pretty highly," said Merrill H. Ross, an analyst with Wheat First Butcher Singer Inc. "Look at the appreciation of shareholder value."
Signet's common stock -- adjusted for the spin-off of Capital One in February -- has appreciated 215 percent.
Ms. Ross said she was "absolutely astounded" when she found out Mr. Freeman was retiring.
She gives Mr. Freeman high marks for solving loan problems in the early 1990s and for spinning off Capital One, a move that will allow Signet to grow faster.
"Either one of those things would have been enough for one banker's lifetime," Ms. Ross said. "He may be 55, but he had 100 years worth of experience."
Mr. McDonald, 57, said he plans no major changes in strategy once he takes charge.Mr. Freeman said he set a goal years ago to retire by age 55, but it wasn't until this year that he gave it more serious thought. In mid-summer, he broke the news to Mr. McDonald and the directors.