Called a seasoned pro with vision, Heritage Oaks’ Chief Executive Officer Simone Lagomarsino has been named one of three community bankers of the year by a prestigious national banking newspaper for her leadership in turning around the Paso Robles-based institution.
When she took over as CEO two years ago, the bank was under a regulatory order to improve overall credit quality, operations and financial profitability. During the recession, its percentage of problem real estate loans in construction and land development had swelled to 20 percent of its credit portfolio, compared with rivals that had limited their concentration to less than 6 percent, according to American Banker.
“Yet in a phenomenally short amount of time, Lagomarsino has righted the ship,” the trade newspaper reported.
“The way she approached the turnaround is pretty impressive,” said Paul Davis, American Banker’s community banking editor. She stood out among dozens of other contenders nationwide for the award partly due to her leadership abilities — including her ability to put the right people in place, he noted.
Lagomarsino, 52, was also praised for her ability to multitask, keep the core business momentum going and replace the problem loans with good earning assets, American Banker reported.
Equally impressive under her leadership was that the bank not only addressed regulators’ concerns — the final order was lifted this past spring — but also got on solid enough footing to pursue the acquisition of Mission Community Bancorp, Davis said. That acquisition is expected to close Feb. 28.
Lagomarsino, who has been president and CEO since September 2011, said the award reflects the work of an entire team — employees, board members, customers.
“It’s like at the Academy Awards,” she said. “If a movie wins Best Picture of the Year, one person goes up and receives the statue, but it’s really a reflection of the whole movie — and everyone in it.”
Although American Banker considers her a turnaround expert, Lagomarsino prefers to call it creating value — “looking at where an organization is, and determining where we want it to be and creating a plan to take it from Point A to Point B improving results in an organization that was performing OK but not a top performer.”
American Banker gave three community banker awards this year, from a pool of about 6,500 community banks nationwide.
When asked what she thinks are her greatest accomplishments at Heritage Oaks, Lagomarsino said the ability to grow the organization while at the same time dealing with — and working through — regulatory issues.
The next key challenges the bank faces, she said, are to integrate Heritage Oaks and Mission well, making sure “customers from both banks are pleased with how things are working,” and to continue growing the bank and potentially seek other acquisitions.
“I believe there is a need for a community bank of our size on the Central Coast, and there is a big vacuum right now,” Lagomarsino said.
Heritage Oaks, with $1.1 billion in assets, will grow to $1.5 billion once the Mission acquisition is completed. From a customer perspective, she said, there are regional customers too big for existing small banks due to loan limits and too small for the bigger banks to focus on. “That’s a niche we can fill.”
In addition to the usual bank services, Heritage Oaks is carving out a spot in agricultural lending overall, offering commercial and industrial loans ranging from $2 million to $4 million, providing good service and pricing, Lagomarsino said.
In an industry where smaller banks are being acquired nationwide, Lagomarsino said Heritage Oaks is positioning itself to be the acquirer, but if it were to receive an offer, it has a fiduciary responsibility to consider it. She hopes the bank can grow to $3 billion to $5 billion in assets within three to five years by acquiring banks farther south.
Lagomarsino, whose husband, Blair, is focused on their small winery business called Vino Al Lago in Ventura County, lives in Paso Robles. Her husband “comes up here or I will go down there at times.” She intends to stay here, she said, “as long as the board will have me stay.”