Simone Lagomarsino, the new president and CEO of Paso Robles-based Heritage Oaks Bank, takes the reins of the region’s third-largest banking firm as it transitions out of the financial crisis. Her task: Keep the bank on track and remain competitive with other area banks vying for market share in San Luis Obispo County.

Lagomarsino succeeds longtime Heritage Oaks CEO Larry Ward, who announced his retirement earlier this year after 18 years with the firm.

On her sixth day on the job, Lagomarsino sat down with the Business Times to talk about the opportunities and challenges ahead for Heritage Oaks, which has 13 branches and had $969.3 million in assets as of June.

“Our goal is to build a top-tier bank in the region,” she said.

Lagomarsino, who will also take a seat on Heritage Oaks’ board of directors, comes to the post following 20 years in executive positions including president and CEO for Kinecta Federal Credit Union; CEO for Hawthorne Financial Corp.; and chief financial officer at Warner Center Bank, Ventura County National Bank, First Plus Bank and Imperial Financial Group.

At Hawthorne in Manhattan Beach, Lagomarsino grew the firm from about $1 billion in assets — about what Heritage Oaks has now — to $3 billion before the bank was sold.

Her career in banking began before she even went to college. “I started in banking a lot of years ago now, thinking it would be a temporary job,” she said. Wells Fargo hired a young  Lagomarsino and was flexible enough about her schedule that she was able to work there through school.

She attended Claremont University for her graduate and undergraduate degrees, and then started a career in community banking.

Lagomarsino said that when she was offered a job as CFO of a successful after-market auto parts company straight out of college, she found herself reflecting on her reason for turning down a more prestigious job title and better pay. “I asked myself, ‘Why it is that I’m still so in love with banking?’ ” she said. “I thought about that and thought, “One of the things I really enjoyed was that as community bankers, we’re making a tangible difference in the community.’ ”

Heritage Oaks, the parent of Business First Bank in Santa Barbara, is the third-largest regionally based bank in the Tri-Counties, behind Santa Barbara Bank & Trust and First California Bank.

Like other community banks, Heritage Oaks has struggled with troubled housing loans. It lost $17.6 million last year. Last March it faced a memorandum of understanding order from regulators to raise capital, but within days had raised $60   million and shored up its balance sheet.

Since then, the bank has focused on continuing to work through problem loans — it had $26.9 million  in non-performing assets on its books as of mid-year — and on organic growth in the Tri-Counties.
It continues to officially operate under the regulatory order,  Lagomarsino confirmed.

“[Former CEO Ward] has done a really good job of working with customers and getting the bank through the worst of the crisis,” she said. Lagomarsino told the Business Times that she’ll continue to focus on cleaning up the balance sheet.

“Most of the work has been done, but a few more quarters remain for us to make a further reduction in problem assets,” she said.

The San Luis Obispo County banking scene has come into play recently as Westlake Village-based First California Financial Group acquired a failed bank and branch there, and as San Luis Obispo-based Mission Community Bank laid out plans to acquire Santa Lucia Bank and continue a consolidation spree up and down the Central Coast.

“The position of our bank today is that it’s poised to grow,” Lagomarsino said.