Dan Geary helped Warner Center Bank earn a lot of money during his four years as its president, but he learned the hard way that that wasn't enough to keep board members happy.
Directors of the Woodland Hills bank, after disclosing last week that they had fired Geary, said they became disenchanted when the 47-year-old banker started acting too independently. The board also prevailed upon his chief lieutenant, Senior Vice President John M. Lyons, to quit. Businessmen familiar with Warner, citing Geary's solid reputation and the one-branch bank's strong profits for most of his tenure, said they were startled by the news.
Dismissal as Case Study
"Unless there's some problem I don't know about, I'm pretty sure Warner Center Bank came out on the short end" when it lost Geary, said Gerry Findley, a Brea bank consultant.
As a case study, the dismissal of Daniel J. Geary Jr. can be viewed at least a couple of ways. Board members portray it as the story of a banker who, possibly caught up in his own success, began both paying less attention to the nitty-gritty details of his job and trying to exert increased authority.
On the other hand, observers say that Warner's board may have shot itself in the foot--and cost the bank some momentum--by failing to resolve its differences with the popular banker. Some Geary supporters suggest the board was too strong-willed and made a foolish miscue in dismissing a talented chief executive at a time when good bank presidents are hard to find.
By all accounts, Geary leaves Warner in solid shape. Despite a loan loss of more than $500,000 in the fourth quarter of last year, the bank's profit for 1985 was down only 2.1%, to $538,558.
According to the Sheshunoff Banks of California 1986 guide, Warner's return on assets of 1.34% last year put it among the top 7% of banks in its size range in the state. Warner's return on equity, another key gauge of profitability, was 14.73%, in the top 10%.
Modest Growth in Assets
Recently, however, the bank's numbers haven't been looking as good. Never a fast-growing institution, Warner's assets were up less than 4% last year, and stood at a modest $48.3 million as of March 31. First-quarter earnings were off sharply, falling 45% from a strong quarter last year to $89,000.
All the same, bank officials say no major changes are planned. They promise that the bank will continue its policy of specializing in loans to small manufacturers, distributors, professionals and service firms while avoiding flashier lines of business such as real estate finance.
Warner's new president and chief executive, Terry H. Downard, and the new No. 2 executive, Gary Nudell, both have been with the bank several years and were hired by Geary.
Jerome S. Simon, Warner's vice chairman, said that, when Geary recruited Downard, he told directors, "This guy may not stay here very long because he'll be a candidate to be president at another bank, but, while he's here, he'll help us." Simon added, "So Dan found his own replacement."
Board members say they decided to oust Geary principally because of a "mosaic" of events in recent months that, they asserted, showed he had become "less attentive" to the board and his job.
"It was something that built up little by little," said Sam F. Iacobellis, Warner's chairman and the president of North American aircraft operations for Rockwell International.
Over the last six months, Simon said, Geary made directors feel "that we were working for him rather than the other way around, and it just doesn't work that way."
In retrospect, Iacobellis said, Geary may have begun alienating directors in a subtle way as early as 1982, when they first discussed the terms of his employment. Iacobellis said he was put off by Geary's desire for a written contract, an agreement including a provision that let the board fire him "at will" in exchange for guaranteed severance benefits.
Iacobellis, who said he works at Rockwell without a contract, equated the move to preparing for divorce before getting married. He wouldn't disclose how much severance Geary received.
Geary also may have angered directors over the years by his supposed lack of enthusiasm for outsiders' offers to buy the bank. Simon maintained it was "widely felt" by directors that Geary sometimes "wasn't 100% cooperative" with prospective buyers. Directors said they are not now negotiating or pursuing any sort of merger.
Problem at Recent Meeting
Among the immediate causes for Geary's firing, Iacobellis cited a recent board meeting at which, he maintains, Geary stumbled when asked basic questions about the bank's monthly financial performance.
Simon, an insurance man, faulted Geary's handling of the bank's frequently held, catered lunch meetings with prospective customers. When Warner started holding the informal gatherings several years ago, Simon said, they typically included a few bank officers and directors besides Geary.