A California banker fired in 1996 from the bank he founded is looking to open a competing thrift in San Luis Obispo.

Lynn W. Lyon, former president of FirstBank of San Luis Obispo, has applied with the Office of Thrift Supervision to launch San Luis Trust Bank.

If the Dec. 29 application is approved, San Luis Trust would be the first federally chartered thrift organized in California in at least a decade, according to the OTS. "I've lived here 32 years and run two banks in this market," said Mr. Lyon, 57. "I don't want to live anywhere else."

Mr. Lyon headed San Luis National Bank until Wells Fargo & Co. bought it in 1979. In 1980, he organized FirstBank of San Luis Obispo, which he ran until he was dismissed in November 1996. He still sits on the bank's board of directors.

Mr. Lyon has filed a wrongful termination lawsuit against FirstBank and would not discuss his dismissal from the $140 million-asset institution. But in documents filed in Superior Court of San Luis Obispo, Mr. Lyon argued that the bank's directors falsely accused him of unspecified "improper conduct" and, after firing him, failed to fulfill his employment agreement.

David R. Booker, former vice chairman of the bank's board of directors, succeeded Mr. Lyon as president. The bank has denied all charges and filed a counterclaim to try to oust Mr. Lyon from its board.

In an interview this week, Mr. Lyon said he is not afraid of going head- to-head with his former employer. "If we pound the street and hustle for customers, business will take care of itself," Mr. Lyon said.

Mr. Booker said he is too busy running FirstBank to worry about a potential rivalry with Mr. Lyon. But with two new banks-Coastal National Bank and Mission Community Bank-opening in San Luis Obispo in the last six months, Mr. Booker questioned whether the 42,000-resident community could support another one.

"There are only so many pieces of the pie," Mr. Booker said.

Since 1990, the OTS has approved 38 new thrift charters nationwide, but none in California. Mr. Lyon said he looked at all regulatory options- including a national bank charter and a California state charter-but chose a federal thrift charter because he felt the OTS was the most flexible agency and seemed the most eager to work with him.

Pending approval by the OTS, San Luis Trust could open as early as the third quarter of this year, Mr. Lyon said. He is looking to raise $3 million to $5 million in start-up capital and plans to invest up to $1 million of his own money.

Given Mr. Lyon's stature in the community, one local observer predicts San Luis Trust Bank would prosper. When Mr. Lyon ran FirstBank, it routinely ranked among the state's top-performing community banks in both return on assets and return on equity, said James Avery of James H. Avery Consulting Inc.

And because San Luis Obispo residents tend to use locally owned banks, Mr. Avery said, he expects San Luis Trust to compete for years to come.

"This group is in it for the long haul," Mr. Avery said. "They're in a very good situation primarily because of" Mr. Lyon.

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