Laura "Laurie" Lee Stewart, president and CEO of Sound Community Bank, believes that the recent turbulence in the financial sector presents an opportunity for women leaders to show the industry how they can manage uncertainty and lead with authority.
Women who have held lower level positions and had to "bump hard against the glass ceiling" possess a certain amount of experience, humility and grit to deal with uncertainty in the market, she said.
"I had years of real self-doubt and imposter guilt when I was named CEO," said Stewart, who has led the Seattle-based bank for more than 30 years. "I 100% believe in being the servant leader. And I think that makes a real difference in stressful times, because people see that you're open to them. They see that you care as much about getting to the other side: success or crisis aversion."
Stewart started off as a teller at Washington Federal Savings in 1968 and worked her way up the chain of command at Credit Union of the Pacific. She became the CEO and president in 1989, and in 2003, converted the $38 million-asset credit union into a full-service community bank that now has $1.5 billion in assets.
After a period of market turmoil and rising mortgage rates this year, Stewart had to restructure the bank's balance sheet. Stewart said that this year's new "business cycle," characterized by rate hikes, liquidity risk and the fallout from the regional bank failures this spring, calls for a new playbook. "The things we thought we knew about asset liability management and liquidity interest rate risk, really, in many cases don't apply to this cycle," she said.
The first half of 2022, the bank was exceptionally liquid, but by the end of the second quarter, the loan-to-deposit ratio was 86%. Over the course of the year, the bank's rapid loan growth exceeded deposit growth as the market for deposits became competitive and the bank took on several Federal Home Loan bank advances to help fund this growth. By the end of the year, the loan-to-deposit ratio was 107%.
But Stewart noted that these measures may "camouflage" performance and has kept her eye on "right-sizing" its core mortgage businesses. "Even if the coupon was good, we would hesitate to expand the number of long-term assets we've got on our balance sheet," she said, due to liquidity risk and duration concerns.
The bank has also had to turn away commercial loan deals that would have been attractive in the lower rate environment, and Stewart has had to educate her loan officers who are used to "sub-4%" mortgages as the norm.
Stewart's efforts to populate the C-suite with women have been successful: Three out of Sound's five-person C-suite are women, and a large portion of its retail management staff are women.
"I really think female CEOs are far more authentic and genuine in that regard about saying 'Hey, we're gonna get there together,'" she said. "They're good at listening to customers while not talking down to them or being so sternly logical."
Outside of work, Stewart serves as the only non-Native board member on the Jamestown S'klallam community development financial institution in Sequim, Washington, the town she grew up in. She was re-elected this year and is now serving her second year.
"Some of these tribal members I've known since I was in grade school," she said. "To have them say, 'Hey, we want that Teitzel girl,' that's my maiden name, 'to come and help us with the CDFI' — it just did my heart good."
The CDFI aims to help tribal members beef up their finances so they can qualify for loans. In one case, Stewart said that the organization helped a single mother in the tribe buy a car to get to work because the area lacked public transportation. It was hard for her to get a loan elsewhere because she had an inconsistent source of income.
Stewart recently launched a
