Barnes Negotiating With Other Banks : Executive Who Came to Rescue of Mission Viejo National to Resign

Jack M. Barnes, whose cost-cutting ways and abrasive manner angered many employees but helped turn around a failing Mission Viejo National Bank, will quit his posts as the bank’s president and chief executive officer, effective Oct. 1.

His post as chief executive will be filled by William T. Brady, the bank’s chairman. The president’s position will remain vacant temporarily.

Barnes, who controls 13% of the bank’s stock, was reportedly engaged in a power struggle with Brady, who controls 33% of the stock, over the bank’s operations and future. Barnes would not comment on any friction with Brady, and Brady could not be reached.

“You’ve got two strong-willed guys, and there was some difference of thoughts and ideas,” said Gerry Findley, a Brea financial institutions consultant who has advised the bank. “They just figured that the bank was in good shape, so they would part company.”

The two are parting company amicably. Barnes will have a four-month contract as a consultant, mainly on mortgage banking matters, his specialty.

Barnes said he is negotiating with several area banks and may try to put together a deal to buy a majority interest in one of them. He would not identify the banks.

Three years ago, Mission Viejo National was wracked by mounting losses and a divisive board of directors. In September, Barnes and Brady formed an alliance that brought Barnes into the daily operations as president. The bank lost $1.9 million that year.

Barnes reduced fringe benefits and cut salaries 40%, though he instituted employee bonus and stock-option plans. His theme, he said, was: “We want to make money and have fun, and we can’t have fun if we’re not making money.”

In 1986, the bank earned $1.4 million, mainly on mortgage banking. It is now one of the better-performing banks in the county. Though mortgage banking has faltered, the bank has been profitable so far this year, Barnes said.