Banking is an accidental profession.
Some bankers start as tellers trying to pay for college. Others are accountants and lawyers hired by bank clients. Still others are entrepreneurs who get frustrated with banks and start their own.
This is one reason banks face such a challenge in recruiting high-quality candidates.
Well, God helps those who help themselves. That’s Scott Dueser’s philosophy.
Dueser is the chairman and CEO of First Financial Bankshares, a $10.3 billion bank based in Abilene, Texas. It trades for the highest valuation on the KBW Regional Banking Index. Over the past two decades, it’s produced a total shareholder return of more than 2,000%.
Five years ago, Dueser started lobbying his alma mater, Texas Tech University, to launch an Excellence in Banking program that would offer classes in banking to undergraduate and graduate students studying finance.
For years, First Financial hired students from Sam Houston State University’s banking and financial institutions program in Huntsville. It did the same with Texas A&M University’s commercial banking program in College Station.
Why not construct a similar recruiting pipeline, Dueser thought, in First Financial’s West Texas stomping grounds? Other banks agreed. Much of the program’s endowment came from upwards of three dozen banks.
The inaugural group of students started earlier this year, three of whom interned at Dueser’s bank over the summer.
The program’s director is Mike Mauldin, who spent 17 years leading First Financial’s Hereford region.
“Mike is the perfect guy for the job,” Dueser says. “He’s not an academic; he’s a banker. A really good one. He’s also great with kids.”
Mauldin has structured the program around four pillars.
The first is a bank management class, covering the gamut of issues that lower and mid-level managers face in banks. The second is a marketing course, delving not only into traditional marketing strategies, but also into etiquette, teaching students how to navigate a professional environment.
The third pillar is a credit and lending course. This is where the rubber meets the road insofar as banking is concerned. According to the syllabus, students learn how to work with customers, read financial statements and assess credit risk.
Finally, students must intern at a bank. They’re required to write weekly papers as a part of it, Mauldin says, making them reflect on what they’ve learned.
“I don’t think of it as an internship,” Mauldin says. “I think of it as a long job interview. What we want at the end of the process is for the students to get jobs.”
Now, as a publication read by practitioners, we can be honest: No one learns much in college. At least I didn’t. But you do learn how to learn —a critical skill in an industry as dynamic as banking.
The program also acclimates students to banking. It’s a profession that everybody knows about, but few people understand.
Banking is to business what ballet is to dance, requiring a combination of both strength and grace. It’s an art and a science to balance the fragility associated with leverage and the stabilizing influence of capital and prudent credit policies.
“When assets are twenty times equity — a common ratio in this industry — mistakes that involve only a small portion of assets can destroy a major portion of equity,” Warren Buffett wrote in his 1990 shareholder letter. “And mistakes have been the rule rather than the exception at many major banks.”
Programs like the one at Texas Tech are designed to combat this.
A second rationale for the program, Dueser explains, is the need to diversify the industry’s workforce, which has proved to be a perennial issue in banking.
And so far, the program has lived up to expectations. Half the inaugural class consists of minority and women candidates.
Done right, banking is a lucrative and fulfilling profession. No community can thrive without a bank. The more students that appreciate this, the easier it’ll be to recruit them.