Dear Clients, Friends and Neighbors,

Larry Ward

With retirement on the horizon, I took the opportunity to reflect, in this Q & A series, on my initial vision for the Bank. I also shared a little bit about the significant projects I am most proud of, my most memorable moments with bank staff, and the most influential people during my career. For those curiously wondering what’s on my retirement to do-list, I list a few things I have in mind.

Question: On January 11, 1993 you joined Heritage Oaks Bank as President/CEO. What was the vision you had for the Bank the day you were hired?

Answer: The day I came on board my main goal was to meet and get to know the entire staff. Looking back, that was fairly simple as we only had a staff of 34 people and operated out of what is known as our main branch on 12th street in Paso Robles.

What interested me in taking the job was the opportunities I saw when looking at the balance sheet, income statement and annual reports of the Bank. The Bank was 10 years old and had grown to just over $50 million in assets. The capital account was minimal as the Bank did not have a record of generating earnings and      perhaps most importantly, the Bank had gone through 3 CEOs in its short 10 year history. It was clear that   stability in leadership was needed.

Being a person comfortable with dealing in numbers, I would say that my number one vision when I came on board was to generate a stable stream of earnings so that we could build the capital account and begin generating a return to our shareholders. My first day on the job, our market cap was just $2.7 million. Over the next 15 years, we were able to build that up to a high of $144 million, that is before the great recession hit us in 2008. Today our market cap is hovering around $91 million and our total assets are in the range of $975 million.

Question: As you reflect back, what are the 3 or 4 significant projects you are most proud of in your 18 years of leadership?

Answer: It is hard to pick out just three. I would say that the expansion of the company over the past 18 years has been very rewarding.  We were able to accomplish this growth through acquisitions of existing banks, and branch acquisitions as well as opening new branches.

Another achievement of which I am very proud  was our ability to increase earnings each year from 1993 up through 2008. The recession set us back considerably, but we are once again back into positive earnings and I am hopeful that we are starting another long term earnings trend.

I would say that the thing of which I am most proud is the team of professional bankers we have put together over the years and how we have all had such a profound impact on our Central Coast community. A company is only as strong as its people and based on that fact, I am convinced that our company is exceptionally strong.  I think this is clearly demonstrated by our ability to weather this past three year economic storm. I also am very proud to look at our community and see what a positive impact our staff has had in making this a better place to live through all we give back in financial contributions, and most importantly our staffs’ volunteer time.

Question: What moment(s) with staff will you take away as “most memorable”?

Answer: As I said, people are the heart and soul of any company. We have, for the past 12 years, been very focused on the culture within our company and have worked very hard to make this a place at which people want to work. From the quality of the people we have attracted into our company over the years, I would judge this as a success.

When I look at the economic environment we have been working in over these past three years and couple that with the stress it creates both at work and at home, I have nothing but high praise for the people I work with. This economy has tested all of us and my assessment of our team of bankers is that they have not only passed the test, but set the bar very high for all to follow.

Question: Who has been most influential to you during your years heading the Bank and why?

Answer: I can’t identify any single person as there were so many I have worked with and admired over the years. I can’t say enough about our Board of Directors. These past three years have been very trying for the Board and they have all stepped up when called upon.

In addition to our Board, I had the privilege of working with some exceptional people throughout my career. I have developed some very strong friendships throughout the industry, both bankers as well as advisors, who have all had a hand in the overall success of our company. I suspect that I am no different than many CEOs in that I have a trusted group of people I rely upon and can call on almost any time for counsel.

Question: You will remain with the Bank Board as a Director. Where do you see the success of the Bank in the next 3 to 5 years?

Answer: These past three years have tested the resolve of our bank and I believe put us in a position of strength. As we begin to emerge from this recession, our bank will be in a position of leadership among banks, not only on the Central Coast, but in the State of California. We have an exceptional capital position which will enable us to take advantage of opportunities as we explore options for growth. The recession has required that we take a look inside to assess how we are doing.  As a result, we have made some strategic changes that I think, in time, will be very beneficial.

Question: What is on your retirement to-do-list?

Answer: I do plan to stay very involved with the Bank as a member of the Board of Directors. I have also set up an office at home so that I can do some consulting as well. As anyone who knows me knows, I love to play golf so I would assume you will be able to find me on the golf course with a bit more regularity. There is also a great big world out there and I would like to see as much of it as I can before they put me away, and of course, I will continue to stay involved in many of the organizations with which I currently am active including Rotary.  I only hope I have time for everything.