Back when he was a lowly but cocky bank loan officer in the early 1960s, Hugh McColl would gab away the late nights with his friend Reitzel Snider, sipping whiskey in the kitchen and sharing their career dreams.
Like most young men on the make, Snider would talk about money and how he wanted lots of it. McColl, though he worked for a bank, seemed strangely indifferent to the almighty dollar. He was after something else.
"In those days, the word 'power' was the word that was always in Hugh's vocabulary," recalls Snider, a Charlotte real-estate investor. "I thought it was curious for him to use the word 'power' as a way to describe his aspirations.
"But now I understand."
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Today, Hugh Leon McColl Jr. may be the most powerful person in North Carolina. As chief executive of NationsBank Corp., the third-biggest bank in the country, he has accumulated the muscle to build cities, to move markets, indeed, to transform the American financial landscape.
McColl and NationsBank are leading the way in an era of wrenching change in the banking industry. The dismantling of federal and state banking laws has encouraged the rapid growth of a handful of megabanks, which have gobbled up hundreds of competitors.
Each new deal seems bigger than the last.
In two fell swoops in the past 16 months, McColl and NationsBank bought the biggest bank in Florida and the biggest bank in the Midwest.
Amazingly, in less than a decade, NationsBank and rival First Union Corp. have concentrated more financial power in Charlotte - Charlotte! - than any other place in the country, save New York City.
McColl's is a kind of power not seen in the state in generations, if ever. Historians are starting to compare McColl to such North Carolina business legends as James Buchanan Duke, the robber baron who built tobacco and electric power monopolies, and the Reynolds family, whose tobacco company built Winston-Salem and is now a global conglomerate.
McColl's power is visible in many ways, from his company's 60-story granite tower in downtown Charlotte to its 100,000 employees and $285 billion in assets.
Such financial strength has sent ripples across the state by making unprecedented resources available to businesses from Asheville to Wilmington. The bank's success has also made many Tar Heels rich. More than 24,000 North Carolinians own a chunk of the company's soaring stock.
McColl's personal power manifests itself in other forms as well. In 1993, for example, he jawboned the National Football League into giving Charlotte a team, and he persuaded Alan Greenspan, the reclusive chairman of the Federal Reserve, to visit Chapel Hill last fall for the dedication of the new McColl Building at the business school at McColl's alma mater.
As a young man, when he was not musing about power with Snider, McColl was often in the kitchen of another friend and colleague, Luther H. Hodges Jr. They talked about the day they would buy a New York bank and how they would create the first truly national bank, one with branches from coast to coast. Pretty audacious for two upstarts whose company, then called North Carolina National Bank, or NCNB, wasn't even the biggest in the state.
"He and I talked about those things regularly," says Hodges, who left the bank in 1977 to run for the U.S. Senate and now lives in New Mexico. "His philosophy has worked. Part of it is his own doing. Part of it is North Carolina. Part of it is luck. Part of it is timing."
Since becoming chief executive in 1983, McColl has transformed his company from a third-tier state bank into a national behemoth that competes with giants created by the Rockefellers, the Mellons and the Morgans.
Today, NationsBank has 3,000 branches, more than any other bank, in a broad crescent from Baltimore to Key West, Fla., to Santa Fe, N.M. Its stated goal is to become the Wal-Mart or McDonald's of finance, the most recognizable name in the industry.
It is possible, perhaps even likely, that NationsBank will become the largest bank in the United States by the time the 62-year-old McColl retires.
"I think NationsBank is the most significant banking story of the late 20th century," says Tony Plath, director of banking studies at the University of North Carolina at Charlotte. "Financial power does not shift easily, and it doesn't happen quickly. But it did. It shifted fast. And that is because of McColl."
A matter of Southern honor: For most of its history, the United States' financial might was concentrated in a few Northeastern cities: New York, Philadelphia and Boston. As the country expanded westward, Chicago and San Francisco joined the list.
In contrast, when it came to money, the South went begging. The region's lack of capital contributed heavily to its defeat in the Civil War and stunted its growth from Reconstruction through the Depression.
If Southern businessmen needed large infusions of money they had to trudge to New York, hat in hand. If the bankers agreed to provide credit or financing, they often attached unfavorable terms.
The South had its own banks, of course, but they were not in the same league as Chase Manhattan, Manufacturers Hanover and J.P. Morgan - the old-line firms that controlled the financial markets and the flow of money for many industries.
When McColl began his career, Northern banks didn't take their Southern counterparts very seriously, providing a bountiful source of motivation for a ferociously competitive man.
A native of a South Carolina town that was trampled by Gen. Sherman's troops, McColl recalls reading a book by James M. McPherson, the noted Civil War historian. McPherson describes how the North and South prepared their people for war by portraying the other side as evil; it was the only way they could justify the killing to come.
Such feelings have not faded completely, McColl notes.
"There's an intellectual basis for why these prejudices exist," he says. "Do I think Northerners are evil? Absolutely not. Do they think less well of us because we're Southern? Yes, I think so. Do I take pleasure in demonstrably being successful against all comers? Absolutely."
McColl is known to exaggerate his aristocratic Southern accent when he travels north of the Mason-Dixon line.
On one trip to New York for a bankers' convention, he gave a lecture on Southern history. It was his way of reminding people that his company - and the South - can now dictate the rules of the game.
"Believe me, he relishes this," says David Goldfield, a professor of Southern history at UNCC who knows McColl. "He loves beating the Yankees at their own game."
And the flow of capital is shifting rapidly. Nowadays, more business people from the North are flying into Charlotte in search of money than vice versa.
"We have the ability to change the face of the industry, and we have done that," McColl says. "As a Southerner, I am proud of that. My career has paralleled the explosive growth of the South. We'd like to think that we had something to do with it, or at least we understood it."
The Napoleon of banking: McColl might be a giant in finance, but not in stature. He is exactly 5 feet 6 and three-quarters of an inch tall, with oversized ears and a toothy grin.
For an interview in his office on the 58th floor of the NationsBank Corporate Center, he wears a checkered dress shirt, a gold-and-blue cactus tie and cowboy boots. He might be the only banker in downtown Charlotte on this day who is not buttoned down in a dark suit and a starched, white shirt.
On a chair next to his desk rests a pillow with an embroidered message: "If Dad Says No, Ask Granddad."
The relaxed, grandfatherly image does not square with his reputation. McColl is better known as a hard-charging ex-Marine who ruthlessly pushes his troops forward and rolls over his enemies.
He's been likened to tough guys from Napoleon to Gen. George Patton to Ming the Merciless. When NCNB bought a Florida bank in 1982, an editorial cartoon showed him invading the state in a tank.
McColl and his friends complain that such depictions are inaccurate, but the clich?s have stuck. Part of it is his own fault: He loves to talk about his two years in the Marines and fondly tosses around military phrases.
"It's a little whimsy of his, and I think he likes it," says Thomas I. Storrs, chairman emeritus of NationsBank and McColl's former boss. "I think there were times that the bravado worked to his disadvantage. But at the same time, it stirred up folks in his charge."
McColl's reputation as an aggressive renegade helped when NCNB was struggling for attention. On other occasions, however, it has worked against him.
In 1985, when NCNB was shopping for a bank in Georgia, McColl pushed hard to acquire First Atlanta Corp. But First Atlanta Chairman Thomas R. Williams backed away, afraid that McColl would fire him after the takeover. First Atlanta escaped by merging with NCNB's rival Wachovia Bank of Winston-Salem, which had a reputation as a courtly, well-mannered company. (Ironically, Wachovia later forced Williams out.)
Soon after, McColl sought a merger with Citizens & Southern, a blue blood Atlanta bank. In a widely quoted episode, the overeager McColl called up C&S Chairman Bennett Brown and threatened to "launch my missiles" if C&S did not submit. Brown responded by publicly telling McColl to "go the hell back to North Carolina." (C&S instead joined forces with Sovran Bank in Virginia, but ultimately merged with NCNB in 1991, creating NationsBank).
When McColl has succeeded in such ventures, employees of the takeover target often have quit in droves, leaving the impression he was a boss to avoid.
McColl appears especially bothered by suggestions that he is an uncaring boss and cringes at a magazine article that once ranked him as one of corporate America's 10 toughest people for whom to work. Few traits are more important than loyalty, he says, and that means sticking by his employees.
"It's a media thing," he adds. "I'm inured to it. I'm guilty of having fanned a lot of it in the early years, having used a lot of military metaphors, I guess. But I don't think my public image is even close to what I'm really like."
'I'm very candid': He is known for being blunt and direct, however, a description with which even McColl agrees.
"I'm very candid, is what I am," he says. "I'm very straightforward. I leave no doubt as to where I stand on an issue. I consider that honesty and candor, and some people are put off by that."
Luther Hodges has known McColl since they were at UNC-Chapel Hill and attended Naval ROTC classes together. He says McColl's personality has not changed.
"There's no guile about him," says Hodges, who was deputy commerce secretary under Jimmy Carter and is the son of a former governor. "There are no surprises about him. The only controversy about him was his management style. But he's totally consistent today with what he was at age 18."
Sometimes his honesty can come across as arrogance.
When he interviewed for a job with American Commercial Bank - the forerunner to NCNB - in 1959, he was initially rejected. "They probably thought I was flippant," McColl says. "And I was." It took a phone call from his father, a longtime bank customer, to give him a second chance.
Today, McColl often describes NationsBank as a company that hires only smart, talented and energetic people. He calls that the bank's formula for success, but competitors grumble that the resulting aura of superiority leads NationsBank to approach deals with a chip on its shoulder.
"I can see how some people might be intimidated by him," says William Grigg, retired chairman and chief executive of Duke Energy Corp. "He might give the impression that he might run over you. But I don't see him as a bully. He is just impatient with mediocrity."
He is also intensely competitive. Anyone who knows him, it seems, has a story about McColl's will to win.
Grigg says McColl has a hard time relaxing on the tennis court. During one social match, he grasped his racket so tightly that the leather grip unraveled.
During neighborhood football games as a young man in Charlotte, McColl could play only at full speed. "He was feisty," says C.D. Spangler Jr., the former UNC system president and a former neighbor. "He played touch football like it was tackle football. The games were pretty rough."
When his son, Hugh L. McColl III, was growing up, they'd often play one-on-one basketball. Many fathers use such games to build their kids' confidence. Not McColl.
"He didn't let me win," Hugh III says. "He'd overplay on my right hand, so I used to practice in the basement, dribbling with my left hand. He was instilling a desire to improve yourself, as well as to win."
McColl also has a longtime passion for playing cards - poker, gin rummy, bridge - anything, as long as it's for money.
As a Marine at Camp Lejeune, McColl played poker every night. When he was laid up in the base hospital with a knee injury, he persuaded friends to carry him back to the officers club so he wouldn't miss a game.
He'd hold his cards so tightly that his hands would shake, says John Cain, a Marine buddy who lives in New Orleans. Opponents would interpret that as a sign of nervousness or weakness. But it really meant he had a killer hand and was worried that others would drop out before he could take their money.
"These old officers came in and saw these young lieutenants, and I'm sure they said, 'Let's see if we can't skin them,' " Cain recalls. "I can assure you that they didn't. Hugh was far and away the best card player I had ever seen."
Cain says McColl won so many hands while on board a Navy ship off North Africa that he cleaned out the officer corps and had to stuff the cash in a locked trunk.
When asked how much he won playing cards, McColl smiles.
"Well, it was a lot," he says.
Was it thousands of dollars? "Well, yeah," he says, his shrug suggesting it was more.
Tens of thousands? "Yeah," he says immodestly.
At any rate, he adds, his winnings paid for a 77-day post-Marine vacation in Europe, with enough left over that he was in no hurry to get a job afterward.
Banking family: McColl was born in Bennettsville, S.C., population 9,300, an agrarian community in Marlboro County, about 100 miles south of Raleigh.
The McColls have influenced life in Bennettsville for more than a century. Hugh's great-grandfather, Duncan Donald McColl, a Civil War veteran, founded the Bank of Marlboro and brought the first railroad and textile mill to town.
The McColls were also cotton merchants and still run a large gin on the outskirts of town. The village of McColl is a few miles to the north, near the state line.
Hugh McColl's grandfather and father were also bankers. They closed the Bank of Marlboro during the Depression but later bought a controlling interest in Marlboro Trust Co., which is where young Hugh worked as a teenager, balancing ledgers and settling accounts.
Oddly enough, Marlboro County does not have a NationsBank branch. And though he no longer has any close relatives there, McColl returns regularly to support civic causes.
He has donated $200,000 to help renovate Bennettsville's civic center and has given money to preserve the McColl family homestead, circa 1830, now the home of the chamber of commerce.
The gestures are appreciated in a hard-knock town where cotton is still king and the unemployment rate was 14 percent in October, the highest in the state.
"He hasn't forgotten where his roots come from," says William L. Kinney Jr., publisher of the Marlboro Herald-Advocate and a longtime friend.
Residents express no surprise at McColl's rise to power. They point out he was student council president and voted Best All-Round Boy in his senior class. His yearbook quotation reads: He who is talented in leadership Holds the world's dream in his grip.
A risk taker: McColl left Bennettsville to attend UNC-CH, where he majored in business administration. After two years in the Marines, he returned home briefly, assuming he would take over the family business. But his father had other ideas. He told Hugh Jr. that he should seek his fortune elsewhere and suggested he go to Charlotte.
On Sept. 1, 1959, McColl started as a management trainee at American Commercial, a small bank that merged with another a year later and was renamed North Carolina National Bank.
Early in his career, McColl traveled across the South in his Volkswagen Beetle, looking to do business with small country banks. For an ambitious fellow, it was unglamorous work. But he steadily moved up the ladder at NCNB, becoming vice president in 1965 and senior vice president three years later.
Along the way, he cultivated contacts that would serve him well, often taking risks on customers other bankers ignored.
In 1973, a young financier named Erskine Bowles moved from New York to Charlotte in hopes of starting an investment banking company, a firm that would finance deals to buy and sell companies in the region. It was a novel idea, if not outlandish. Charlotte had no investment banks; that kind of business was done in New York.
Friends advised Bowles to pitch his idea to two rising executives at NCNB: McColl and Hodges. It took Bowles a year to secure a meeting with Hodges, who then told him his idea was "crazy," Bowles recalls.
But when Bowles called McColl to arrange a meeting, McColl promptly asked if he could have lunch the next day.
"I said, 'No, I can't,' " recalls Bowles, now chief of staff to President Clinton. "So he said, 'How about the next day?' He listened to my idea, said that was great, and, 'How can I help you?' " McColl's advice helped Bowles land many of his clients. The firm prospered and operates today as Bowles Hollowell Connor & Co.
"It was remarkable the difference in the approach of the two," Bowles says of McColl and Hodges. " [McColl] went out of his way to help someone he had no relationship with."
In 1974, at age 38, McColl was named president of NCNB, becoming a strong candidate to someday be named chief executive.
But it almost didn't happen. During the 1974-75 recession, NCNB nearly became insolvent. The bank that had built a reputation for risk-taking had bet the wrong way on interest rates and was caught with too many bad loans on its books.
Executives scurried to secure lines of credit from other banks and tried to reassure lenders that they would not go under. It was a dark time for NCNB, but McColl stood out as someone who held up under extreme stress.
"A lot of lessons get learned under pressure," says Thomas Storrs, then NCNB's chief executive. "And the lesson we learned was that Hugh was pretty good."
Trial by fire: McColl looks back at that time as a test.
"That period separated the lions from the lambs," he says. "It sobered us on many fronts. Those of us who made it through that survived and were made better people for it."
In 1983, when Storrs retired, McColl was named NCNB's chief executive.
His ascension coincided with a period of relaxed banking regulations. For generations, state and federal laws had prohibited banks from owning branches outside their states to prevent monopolies of finance. But in the early 1980s, the restrictions began to disappear.
As the barriers have vanished, banks have rushed across state lines, leading to a wave of mergers and acquisitions.
Since McColl took charge, his bank has acquired more than 50 banks in 15 states, increasing its assets from $13 billion to $285 billion.
While the growth has been impressive, size has its drawbacks. NationsBank has endured increasing criticism for eliminating several thousand jobs through mergers and for sharply increasing the fees it charges consumers. The bank has also been attacked for its minority lending practices.
Its first foray outside North Carolina came in 1982, when it bought a small bank in Florida. But its most crucial deal occurred in 1988, when NCNB acquired First Republic Bank of Dallas.
First Republic was the biggest bank in Texas but was in peril, having been taken over by federal regulators. NCNB put together an innovative but risky proposal to take over First Republic, taking advantage of an obscure tax loophole to save $1 billion.
The deal doubled NCNB's size and made it a major regional bank.
"Texas changed forever the shape of this company," McColl says. "We were a company that had to take a lot of chances, and we were regarded by many as too risky. We proved we could do a very difficult task. We showed we had brains, because nobody else was able to do it."
Meanwhile, NCNB was expanding into Baltimore, Atlanta, Washington and Miami. In 1991, it merged with C&S/Sovran Corp. and was renamed NationsBank.
Now, with more muscle, NationsBank has changed its strategy from acquiring distressed banks at bargain prices to buying trophy franchises.
In 1996, it announced the purchase of Boatmen's Bancshares of St. Louis, a bank with $41 billion in assets and a dominant market share in the Midwest. NationsBank followed that last August with a deal to buy Barnett Banks, the biggest bank in Florida with $44 billion in assets.
That deal made NationsBank the third largest in the country in assets, behind Citicorp and Chase Manhattan Corp.
"They have emerged from rather inauspicious beginnings and have now emerged as ... truly a global power," says Darren Short, a banking analyst with Robinson-Humphrey Co. in Atlanta. "McColl's impact is going to be indelibly etched upon the banking industry for years to come."
Corporate responsibility: As might be expected, McColl is a wealthy man. In 1996, he earned $4.2 million, on top of $3.6 million the year before, according to the bank's annual proxy statements.
But friends say he's also generous. He and his family donate regularly to Habitat for Humanity and arts groups. NationsBank gives away $50 million a year to charity, among the highest of any company in the state.
A Democrat, McColl describes himself as a fiscal conservative. But at times he sounds downright liberal.
He speaks at length about corporate responsibility and how companies are obliged to tackle social and economic problems such as improving schools and reviving poor neighborhoods.
In a speech to the Baltimore Corporate Citizenship Forum last month, McColl said he agreed with two former hippies - ice cream merchants Ben Cohen and Jerry Greenfield- that business must lead the push for social change, a role historically held by governments and churches.
"The bottom line is, we should make a difference because we can make a difference," he said. "We need to think about it a lot ... and make sure we're doing the right things in the right ways. To do nothing, however, is unacceptable."
McColl has made it his civic duty to develop and promote downtown Charlotte. Over the past decade, NationsBank has invested $1 billion in downtown projects and, more than any other organization, is responsible for changing the face of the center city.
Besides building its 60-story headquarters, it helped finance construction of Ericsson Stadium, a performing arts center and several other projects. This month the bank announced plans to turn four decrepit blocks into a $250 million complex of offices, shops and apartments - without a penny of public money.
McColl has propelled each of those deals and, as much as anyone, has fed Charlotte's ambition to be a big-league city, mentioned in the same breath as Atlanta, Washington or Miami.
"Clearly he is a practical man," former Mayor Harvey Gantt says. "Their company made a decision that this is going to be the headquarters for one of the largest banks in the country. He wants the city to look good. He wants it to be world class. They are concerned about image."
In his office, McColl keeps huge aerial photos of downtown and several plat maps that outline the city, block by block. Colleagues say he often gazes out his window, hatching grandiose plans for the streets below.
"Uptown Charlotte is his baby," says Goldfield, the UNCC history professor. "It's sort of his Monopoly board.
"He's very loyal to Charlotte because this is the town that made him. He wants to leave a legacy for Charlotte."
So much so, in fact, that he bridles with impatience when others disagree with him. When Goldfield wrote a column in The Charlotte Observer last year criticizing the city's approach to downtown development, a gruff McColl called to complain.
McColl summoned the professor to his office for lunch and tried to convince him of the merits of his vision for downtown. Goldfield, while not agreeing entirely, says he was impressed.
McColl and his bank are so eager to revitalize Charlotte's downtown that they can be relentless in prodding others to keep up.
Richard Vinroot, another former mayor, recalls a cocktail party at which he and McColl chatted about the city's lack of bus shelters and how riders often had to wait in the rain and sleet.
Vinroot said Charlotte needed a downtown transit center, where people could board buses in comfort and security. But he concluded the City Council lacked the will or interest to make it happen.
"What if I helped you build it?" McColl asked. Just like that, the bank agreed to pay for the bulk of the project, spending $10 million to build one of the fanciest bus shelters in the country, with restaurants, stores and a glittering design.
"He challenges others," Vinroot says. "He is a tough act to follow. I am sure a lot of folks here will be glad when he is gone because he is so robust in what he tries to do. He is very decisive. Most people would say, 'I'll get back to you.' Hugh just says, 'Why don't we do it?' "
What's next?: Although bank policy dictates he must retire by June 2000, when he turns 65, McColl says NationsBank will stay hungry. He foresees branches from coast to coast.
McColl puts on his poker face when asked which states he'd like to enter next. He says the Upper Midwest is a possibility, but downplays the perception that he wants California.
"I think it's very unlikely," he says of a move into the Golden State, which is dominated by two titans, Wells Fargo & Co. and BankAmerica Corp. "There are two large banks out there. But it's not clear that we could work out a merger that would be advanta-geous to our shareholders."
But analysts say McColl would like nothing more than to extend NationsBank's reach to the West Coast. They add that there is a strong chance NationsBank could become the largest bank in the country under McColl's watch.
Don't think McColl hasn't dreamed about it.
Hanging in the office of Hugh McColl III is a wall-size painting on loan from his father. Titled "The Deal," it shows a mass of intense bankers huddled around a large conference table, straining to make something big happen.
"He loves doing deals, and that's certainly what he's done," Hugh III says of his father. "And now he's within sniffing distance of No. 1."