Building a talent pipeline

Building a talent pipeline

A Texas banking education renaissance is ensuring the future of the industry

By Olivia Carmichael Solis

The future of the state’s banking industry is bright thanks in large part to a renewed focus by Texas universities on banking degrees, banking minors, commercial banking certificates and even an executive MBA, ensuring that a pipeline of talent flows back to the banks that desperately need it.

By the time these students graduate from these programs, they are armed with the knowledge and experience needed to hit the ground running in their banking careers. Many, thanks to internships, are employed by the time they get their degrees.

Texas banks have been instrumental in getting these programs off the ground – not only through financial contributions and internship programs, but by having a hands-on approach that includes input on curriculum, serving on advisory councils and boards, teaching in the classrooms and collaborating at all levels of the program.

“I believe these schools are necessary to the survival of community banking,” said Mike Mauldin, associate professor of practice/director of the Excellence in Banking Program at Texas Tech University. Mauldin is a former banker and past TBA chairman.

The Texas Bankers Association, recognizing the importance of ensuring these programs succeed, recently hired Brent Cox as vice president of university educational content. In this capacity, Cox works directly with the universities to help attract talent, deliver content and curriculum to support the development of the students and provide a talent pipeline into the state’s community banks.

“TBA is working hard to build the next generation of bank leaders by enhancing the strong links between these programs and our community banks,” explained TBA President & CEO Chris Furlow. “In the past, we’ve given contributions with the hope that good things would materialize. We will continue to make these significant investments, but they must be accompanied by a full-time effort to more directly connect bank talent generated by our university partners with our Texas community banks.”

 

Why a banking career?

Students, aware of the industry’s need for talent, are embracing the banking programs. Although many will be first generation bankers, they are aware of the integral part a bank plays in their community.

“I grew up in a small town and wanted to make a difference in my community,” said Texas Tech student Jake Johnson of Lubbock. “I want to start out in a small-town community bank as either a loan officer or in loan management, where I can have a relationship with my customers and help them manage their money the best way possible.”

Yessenia Duran, a Texas Tech senior finance and marketing major from Midland, is looking for a career at a bigger bank and has a summer internship lined up with Bank of America in San Francisco, where she will focus on credit and wholesale banking.

A native of Mexico, she is the first person in her family to attend college. She is very aware that the banking industry wants talent and believes the program at Texas Tech will prepare her to take on the roles banks are looking to fill.

Mason King, a Texas Tech senior finance major from Kingsland, said banking gives him the opportunity to make an impact by giving back, changing lives, making loans and making people’s days. His personal selling class has taught him that at the heart of a good bank is the need to forge relationships.

 

Leading programs

For many years, the Smith-Hutson Endowed Chair of Banking at Sam Houston State University had the distinction of having the only undergraduate banking major in the nation. Established in 1997 by the late Dr. Jim Bexley, who held the Smith-Hutson Endowed Chair of Banking until his death in 2019, the program has grown to include an executive MBA in banking.

Since its inception, approximately 432 students have graduated with a bachelor’s degree in banking and financial institutions. A total of 1,280 students have interned at Texas banks. Just as impressive is the fact that the demographics of these students mirror those of the state: approximately 25% of Sam Houston students are Hispanic and 18-19% are African American.

The impetus for starting the program came from an anonymous donor with a vision: to develop relationships with community banks, create a curriculum that would support graduates entering the banking industry and to have communications and interaction between the academic world and the banking industry.

Initially, the university offered a banking minor, which was followed by a banking major and then an executive MBA. An advisory board comprised of bankers and regulators was formed to provide advice and ensure the curriculum is current and relevant.

“The executive MBA was part of the dream of Dr. Bexley and the donor to educate people in the banking profession,” explained Dr. Mitchell Muehsam, dean of the College of Business Administration. “In today’s world, where technology is changing so dramatically and the pressures on financial markets change dramatically with regulations, you have to recognize that to be successful you have to be a lifelong learner; one way to get there is through a postgraduate degree.”

Dr. Muehsam attributes his program’s success to the recognition that the business world can’t interact successfully with the academic world, which has a reputation of being too elitist and theoretical and not practice-oriented. That’s where the “wonderful” relationships with bankers and trade associations come in: A comfort level is achieved wherein bankers see value in the program because they have input on the curriculum and see value in the graduates.

 

All in for excellence

The success of other banking programs prompted Texas Tech University to offer the Excellence in Banking Program through the Jerry S. Rawls College of Business. Bankers in the Panhandle, South Plains and Eastern New Mexico were experiencing difficulty attracting talent to their banks. Students graduating from other universities weren’t coming back to this area.

“It’s difficult getting these students back to rural America,” explained Mauldin. “The demand for this program must have been there since we raised over $12 million in just nine months. Those that contributed have a vision and goals, which are centered around keeping their banks viable.”

Mauldin is referring the extremely successful fundraising campaign that led to the program’s launch in the fall of 2019. Former TBA Chairman Scott Dueser, together with banking leaders from across Texas, was instrumental in turning the vision into reality.

The program initially launched with two students. Currently, it has 27 students, who Mauldin said are “excited, pumped and share my vision.”

Mauldin, who recruits students from finance classes, is excited about his new role in academia.

“I didn’t come here to find a place to relax. This was a big decision for me,” Mauldin said. “I came here to pass on what I’ve learned over the years and hopefully help shape students.”

The curriculum includes marketing courses that teach marketing principles, relationship building and etiquette for bankers. The credit lending component, which includes many elements from the Risk Management Association courses, prepares students to become credit analysists. Management of financial institutions is another required component.

The classroom experience is enhanced by bringing in seasoned bankers who can relate their real-life experiences.

A 10-week (paid) internship is required in order to obtain practical experience. Mauldin views the internship as a job audition. “When the students complete their internship, I want our partners to consider offering them a job,” Mauldin explained.

In addition, students have formed a Banking Club and compete in the nationwide Community Bank Case Study Competition facilitated by the Conference of State Bank Supervisors.

Mauldin believes his program is attracting “the very best” and is especially proud of the fact that the students reflect the community in terms of race, ethnicity and sex.

 

Chadwick Family Banking Program

Recognizing that Sam Houston State University was the pioneer of banking programs, Stephen F. Austin State University in Nacogdoches followed in their footsteps by launching the Chadwick Family Banking Program in January 2018.

“There was a group of bankers in East Texas who recognized that they needed the very best students from the college of business to apply for banking jobs in East Texas,” explained David R. Kaiser, lecturer/director of the program and a former community banker. “They came to the Rusche College of Business and asked what they needed to do to attract the best and brightest students from the business school to work at their banks in East Texas.”

The university responded by launching an undergraduate degree program that offers a Bachelor of Business Administration in banking that prepares students for careers as community bankers. In addition, the Chadwick Banker Scholarship was established to provide financial assistance for students seeking to become community bankers.

The program is supported by an advisory board comprised of community bankers and is instrumental to the program; the bankers serve as expert guest lecturers, make career guidance presentations to students, assist in grading student projects and provide internships to help students launch their careers.

Approximately one-third of the students in the program are from East Texas, one-third are from Dallas, and one-third come from the Houston area.

“Studying banking gives these students an opportunity to have a great career in their hometown,” Kaiser said, adding that many banks in the area have a need for talented and ambitious young bankers interested in remaining in East Texas after graduation.

Banking also gives students an opportunity to start their careers in a major city if that is what they are interested in. They can also work with one of the national or state regulators.

Recruitment starts in the college of business, targeting those students who are unsure about their career focus. “We get them when they first start at the business school,” Kaiser explained. “I tell students that a community banker utilizes their training in finance, accounting, marketing, business law, management and leadership every day. It’s a great job for someone who wants to really use what they learn in college.”

The school graduated its first two banking graduates in December and is looking forward to the future, including looking at offering a remote program for banking professionals who want to earn an undergraduate degree in banking but don’t live near the university.

 

Minor in banking

In 2016, officials at Texas A&M Kingsville saw that there was an unmet need for a banking program in the Coastal Bend region. Local banks, especially Kleberg Bank and IBC, were very supportive, and the program officially launched in fall 2019, although the first bank management class with a real-world project was offered in fall 2017.

Most of the students come from the Coastal Bend region, but significant numbers hail from Houston, Corpus Christi and the Rio Grande Valley. Some come from San Antonio and Kingsville and a few from Austin and Dallas.

The banking program at Texas A&M University-Kingsville has two dimensions, according to Dr. Thomas Krueger, the endowed chair and chair of the Accounting and Finance department. One is the banking minor, which consists of six courses, including advanced classes in finance with electives in accounting and marketing.

The bank management class, for example, includes a project dealing with strategic bank issues, such as the creation of a student-focused checking account, commercial loan approval and understanding bank customers using data analytics.

The other program is digital banking, which is a certificate consisting of finance and information systems courses. The information systems classes include data security, fraud and data analytics.

Internships are a valuable component, and the university is always seeking banks to provide them.

Like the other universities, Texas A&M Kingsville depends on bankers for the success of the program. A Bank Advisory Board, which is comprised of bankers from Bank of South Texas, IBC, Kleberg Bank, Lone Star Bank and Prosperity Bank, provides advice and counsel to the faculty, assists in the classrooms and helps in funding and resource development.

“We are a small and growing program interested in helping the banking sector thrive,” said Dr. Krueger. “Any and all banks are invited to contact us with their suggestions to be a leader in the provision of a banking education in South Texas.”

 

Banking certificates

Although the University of Houston does not offer a banking major, it does provide the Commercial Banking Certificate & Track in Finance, which is in its sixth year.

“I see our role here as a bridge to the industry,” said Professor Alexander J. Lara, CTP, MBA and Faculty Director Commercial Banking at the C.T. Bauer College of Business.

Approximately 60% percent of the Bauer College of Business students have transferred from other schools, largely junior colleges; 30% hold jobs of 20 hours or more a week.

Lara is very proud of the quality of the students. “What rises to the top is formidable,” he said. “Our department chair, who is a Princeton and Stanford graduate, states that he would put our students up against any Ivy League students.”

The Advisory Board is comprised of 20 active members who represent major money center banks in Houston, although there is a fair amount of community bank representation.

“What I found in my three-year tenure with this program is that generally with the community banks there is a strong appetite for the technical skills we are providing these students,” said Lara.

UH offers a class in credit analysis that focuses heavily on technical skills beginning with preparing a statement of cash flow and construction, case studies and a mock loan committee of senior bankers that sit in on student presentations.

For now, Lara said he is satisfied that the program has good traction and the focus is on quality. Going forward, the goal is to develop more experiential opportunities for students. “I think us being here in Houston is a significant advantage,” Lara said. “I can tap into my network.”

Lara said he is also hoping to leverage the experiential research Bauer students are conducting. For example, the school is conducting a research project for Amegy Bank on the client experience and one for Capital Bank in San Jacinto regarding lack of clarity in legislation and regulations around CBD.

 

Gig ’Em!

Texas A&M University also offers a Certificate in Commercial Banking as well as a Master of Financial Management, explained Dwight Garey, executive director of the Commercial Banking Program and a former banker.

The program was launched in 2011 thanks to a handful of bankers, including Garey, who got together to address the banking talent shortage.

Undergraduates applying to the program are BBA finance majors within the Mays Business School. The graduate student track of the Commercial Banking Program, however, includes not only students who have received a BBA in finance, but many come from outside the business school and have majored in subjects such as agriculture economics, agriculture business, economics and political science. The program is so popular, that 65% of the Commercial Banking Program students are graduate students.

Instrumental to the success of the program is the Advisory Board, which consists of representatives of 50 banks of all sizes. A smaller number of Affiliate Members also serve on the board, including consultants to the industry, regulators and executives of bankers associations. An Executive Council, managing program governance, is comprised of 16 members from the Advisory Board.

The bankers on the board not only support the program financially, but they also teach some courses.

The Risk Management Association has also been very important to the program’s success and piloted the first commercial credit analysis course at A&M.

Throughout the program, students are in contact with bankers in a variety of settings, from the classroom to social, fine dining and casual events, with the endgame being employment for the student.

All undergraduate students in the program are required to have a 10-week paid summer internship, which Garey calls “trial employment.” Open enrollment is during the fall semester of students’ junior year. Regarding internships, students are matched geographically with internship banks.

On Internship Interview Day, banks have scheduled interviews with students during an all-day interview process. At the end of the day, each bank ranks the students and each student ranks the banks. The goal is to match both the students and the banks with one of their top choices.

While some of the state’s banking programs focus heavily on community banks, Garey said A&M University prepares students for careers at banks of varying sizes including money center banks, regional and community banks.

 

Baylor University Commercial Banking Program

Baylor University established the Commercial Banking Program in 2012 to help students prepare for a career in commercial and corporate banking and attract major commercial bank recruiters to Baylor University.

The program is sponsored by the Banking Advisory Council, which includes representatives of regional and community banks. The counsel endows commercial bank scholarships and also provides strategic counsel to the Finance Department.

Ernest Fletcher, associate clinical professor and coordinator of the Commercial Banking Program, deems the program an excellent path for those who wish to begin networking with potential employers while fortifying and deepening their own proficiency in subjects such as finance, accounting and banking.

“By offering this program, we want to provide our students with a competitive advantage over those who attend universities that do not have a commercial banking program,” Fletcher said.

 

A lifetime of education through the graduate school of banking

The talent pipeline doesn’t end with the undergraduate banking programs. Once students embark on their banking careers, they have the opportunity to continue their university banking education at the graduate schools of banking offered at several U.S. universities. Texas is fortunate to have two options, the SW Graduate School of Banking at Southern Methodist University and the Texas Tech School of Banking.

SWGSB has been a national leader in educating thousands of financial services professionals since its founding in 1957.

Students attend three sessions taught over a two-week period in the summer. SWGSB prepares future banking leaders for greater responsibilities with peer networking, teambuilding experiences, case studies and a tailored curriculum.

The Texas Tech School of Banking has been in operation since 1973 and is in session for a week every August.

It blends traditional academic coursework and interactive lecture sessions hosted by dozens of industry experts and Texas Tech faculty members. After participants attend in year one, they return in a subsequent summer for another week of learning to complete the curriculum.