A challenge too good to pass up put Simone Lagomarsino back in the C-suite

Simone Lagomarsino didn’t think she would work for a bank again.

Lagomarsino, who had led the Western Bankers Association for about 18 months, thought she would end her career at the trade group. But a call from a recruiter, and the right pitch, persuaded her to accept an offer to become president and CEO of Luther Burbank in Santa Rosa, Calif.

She will succeed John Biggs, the $4.9 billion-asset company’s longtime leader, when he retires on Jan. 2.

Lagomarsino, named one of American Banker’s Community Bankers of the Year in 2013 while CEO of Heritage Oaks Bancorp in Paso Robles, Calif., sold that bank to Pacific Premier Bancorp last year.

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After Heritage Oaks’ sale, Lagomarsino became CEO of the California Bankers Association, playing a role in its merger with the Western Independent Bankers. She continued to lead the combined group, which was rebranded as the Western Bankers Association.

The veteran banker recently discussed her new job and the opportunity she sees to expand Luther Burbank’s products and services. Here is an edited transcript of the conversation.

How does it feel to soon be working for a bank again?
SIMONE LAGOMARSINO: When I took the job at the [California Bankers Association] I didn’t expect that I would go back to working in banking. I really felt that I would stay with the association. It has truly been an honor and a privilege to represent our industry in that capacity. The association is very strong and our members are really doing a great job of serving our customers.

When I received the call from a recruiter, I just looked at the whole thing and thought of it as an opportunity. I can still be supportive of our industry and our association and do it as a bank CEO.

What did you learn at Heritage Oaks that will help you at Luther Burbank?
Many times employees have great ideas. I think new CEOs and managers sometimes come in and they think they have to have all the solutions. Sometimes you should take a breath as a new manager and not try and change things, but instead listen to others and what their thoughts are and what they feel is working well. Something I have learned over time is how important it is to listen, in particular before taking any action.

Luther Burbank has some talented [directors] and employees. I’m looking forward to spending time with them and listening and understanding the bank as much as I can. I’ve met with John Biggs and he has done a phenomenal job leading the organization. It’s an honor to come in after him. I just hope I can keep the momentum going.

Do you see this as another turnaround opportunity?
It is not a turnaround at all — that’s exciting to me. It’s an opportunity to join an organization that’s doing well. There’s an opportunity to look into things they’re already starting to pursue, such as business banking. It’s just continuing with the work they are doing and seeing if we can move in those directions and create value in the process.

What did you take away from leading WBA?
One of the things I’ve told our team is while I will be on the outside, as a member, I will be singing their praises. Our team works extraordinarily hard to serve our bankers and our industry. Having been on the inside, I think I’ll be a stronger member and supporter [urging other banks] to be members, be supportive and make sure we’re working together for the future of our industry.

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Where do you see the most opportunity for Luther Burbank?
The organization is a savings and loan. They’re working to grow a business banking division. It is an interesting time to join them because I had been able to do some of that at other organizations, including when I was at Hawthorne Savings from 1999 to 2004. It was a savings and loan and we were looking to move it more in the direction of a bank. I don’t want to make it sound like we’re moving Luther in the direction of a bank, but adding additional products and expanding the horizon a bit is very exciting and interesting.

The important thing will be to continue what has been successful for them and expanding on some new ventures. I have thought of myself as someone who likes to go in and identify areas where we can build franchise value for shareholders and continue to enhance and expand value for all constituents.

What industry trends are most top of mind for you?
Certainly consolidation has been huge. It’s an interesting time looking strategically at the future of our industry. I think the cost of compliance is a large part of what’s driving consolidation.

It’s an interesting time to step back and consider the role fintech plays. How do we, as community banks, think about that and focus on it, and in some respects partner with fintech and embrace it as opposed to ignoring it. I think it is part of the future.

How would you describe the state of California banking?
Our banks, from a credit standpoint, are quite strong overall. I think the tax cut was helpful. I know our banks in many cases compete with credit unions, so the tax cut helped from that standpoint. But the costs of deposits are rising and the competitive nature of deposit [gathering] is now a concern to many banks.

Generally speaking, our banks are in good shape. We did get some regulatory relief and now there are things that can be done by regulators, such as [Bank Secrecy Act and Community Reinvest Act] reform, without going back to Congress. There are opportunities there that will help reduce some of the regulatory burden and hopefully slow some of the consolidation we’ve been seeing.

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