Building the Brain Trust

Northern State University equips the next generation of bankers.Amid the ever-increasing welter of technological and regulatory changes, the need for qualified banking professionals has never been more acute. One South Dakota school is answering the call to provide the industry with thoroughly equipped candidates..Northern State University, Aberdeen, began a banking and financial services program in 2008. The program has expanded steadily in the last three years, adding a master's track, lecture series and an agribusiness minor collaboration with South Dakota State University, Brookings, S.D..NSU's program was created in response to the region's growing demand for skilled financial services professionals and fulfills a deeply felt need, said Robert Preston, assistant professor of banking and financial services. "Various bankers had expressed interest in a program to train successors," he said. "All of these executives from smaller banks in South Dakota and some of the surrounding states were asking, 'Who is going to succeed us?' A banker from Duluth told me that nobody seems to know how to be a banker anymore.".Preston became an NSU faculty member in 2012 and was joined a year later by Todd Muehler, also an assistant professor of banking and financial services, to help him run NSU's program..Preston has worked as a banker, as a lawyer helping with bank acquisitions, and as an examiner with the Federal Reserve Bank of Minneapolis. Muehler was a private practice attorney in North Dakota for a few years, and his primary experience in the financial services industry came from the noninterest income side, working as a financial advisor, trust officer and wealth management specialist for Wells Fargo and, more recently, managing the trust, insurance and brokerage departments for First National Bank South Dakota.."We worked on different sides of the bank, but we have enough knowledge between us to make a nice fit with the program," Muehler said..That background has proved very useful, with Preston and Muehler reviewing the university's program and retooling its curriculum to incorporate more practical knowledge. "With both Robert and I coming from the industry, we know there is a need for a graduate to come to the bank with a skill set that is readily deployable, instead of just a business or banking theory background," Muehler said. "Not that we want to do away with the theory, but we want to bring the practical aspect to the forefront."."Both of us have spent a great amount of time hiring people into the banking industry from a broad background of areas, so we know what banks need," Preston said. "We try to help make the student a more attractive candidate in the interview and a more valuable asset for employers.".From classroom to real life.Corey Bobzien had been interested in business since high school, but it wasn't until he started at NSU in 2010 that he zeroed in on banking.."All of the teachers had backgrounds in or related to community banking, and they all brought something to the classes that we could take and apply to banking right away," Bobzien said. "Obviously, you can't learn everything in the classroom, but Northern really helped prepare me for this work.".The program's internship requirement landed Bobzien at Roberts County National Bank, Sisseton, S.D., which hired him as a full-time loan assistant straight out of the internship last summer..John Rasmussen, CEO of the $59 million bank, was impressed by the degree of familiarity Bobzien already had with banking, even recent regulatory developments, and thinks the program is a good fit for community banks.."I think with the sophistication that's needed in today's market place, it's a good program for community banks to consider as a good educational source for intelligent employees," Rasmussen said. "We feel it's a valuable program, we're glad it's in South Dakota, and we're glad they're giving students this banking-specific education.".Following the success of NSU's undergraduate program, the banking and financial services department expanded two years ago to include a master's degree. The first class of eight students graduated last year, among them Josh Hogue, vice president of ag and commercial banking at the $271 million Reliabank Dakota, Estelline, S.D..Hogue graduated from Dakota State University, Madison, S.D., in 2005 with a degree in business management and marketing and started in insurance sales through a bank-owned agency before transitioning into banking. After working in the industry for a while, Hogue realized that he wanted to get a better grasp of the ins and outs of banking and the motivations behind management decisions. NSU's graduate program gave him just that, he said.."The program made me a more well-rounded banker," Hogue said. "I understand why you can't always get the deal at the price you want to, why the pricing needs to be where it's at and where the margins need to be. There were also courses that helped me understand how businesses in general are run, and that helps me deal with my customers.".Agriculture meets banking.NSU's undergraduate program has expanded beyond its original scope as well, with NSU's collaboration with SDSU announced last fall. The partnership allows banking and finance majors from NSU to take online classes from SDSU for an agriculture business minor and vice versa..The 18-credit minor will have two required classes, one on agricultural marketing and prices and one on agribusiness management, as well as at least one other agribusiness-anchored class, said Nicole Klein, professor of agricultural marketing and farm and ranch management at SDSU. Some shared requirements, such as accounting classes, can be fulfilled by coursework at NSU.."Bankers in a rural setting with those kinds of ag customers will need to know how pricing will affect the bottom line and how farms and ranches differ from other businesses. These classes will help the students understand the unique requirements of these ag-based fields," Klein said..The benefits of the dual background go both ways, benefitting the bank and its ag customers as well. "The banker, knowing more about the ag requirements, can have a better understanding of what ag borrowers need and experience and bring that knowledge to the bank," Preston said..A large part of getting the collaboration off the ground was the involvement of Aberdeen-based Dacotah Bank, which made a $240,000 commitment to help fund the collaboration between NSU and SDSU..Dacotah was also involved when NSU's program began seven years ago. Officers of Dacotah have served on the program's advisory board since the beginning, and the bank has provided personnel to assist with classroom instruction, said former Dacotah Chairman Rodney Fouberg, who retired at the beginning the year but continues to sit on the bank's board..Members of Dacotah's founding families, some of whom are on the bank's board, also have helped fund a lecture series at NSU as part of the program.."It makes sense to use resources available at NSU and SDSU to enhance the educational experience. We expect that students studying banking, ag economics and agribusiness will be even better prepared when they begin their careers. When students broaden their education, Dacotah Bank benefits," Fouberg said, adding that Dacotah had hired several graduates from NSU's banking program..Looking ahead, NSU's program will likely focus on the community banking niche given the school's location and areas of expertise, Preston said. "I think the future of the program is to develop more and more of that community bank or regional bank expertise to support that very important part of our economy. And not just in South Dakota – North Dakota, Minnesota, Iowa, any of the surrounding states, really, where community banks have a strong presence.".Education returns to the spotlight.Mentoring the next generation of banking leadership has led to a surge of interest in educational programs, both graduate and continuing education. As industry conditions continue to improve, schools are seeing a boost in attendance as bankers invest in their education.."It seems that education is now getting more attention as budget dollars are more available and banks are discovering they need to update the skill sets of their employees," said Jeff Judy, a Minneapolis-based banking industry consultant..Tim Koch, president of the Graduate School of Banking at Colorado–Boulder, said the issue goes beyond budgeting, although it does play a role. "The world is moving so much faster, especially in terms of technology. Bankers have to be educated differently. The days of the teller who accepted your deposit and gave you advice only about that deposit are long gone. Bankers are hiring different kinds of people, people who are able to keep pace with these changes," he said..Making sure bankers are equipped to deal with the spate of recent developments has meant a swell in students at graduate schools.."We're running at our highest levels in 10 years, which to me shows that the changing of the guard is taking place and that banks are deepening their bench strength, preparing those people to step up when leadership changes arise," said Kirby Davidson, president and CEO of the Graduate School of Banking in Madison, Wis..ICBA revamps its educational offerings.The Independent Community Bankers of America recently stepped up to meet the increased need for continuing education among bankers with the launch of Community Banker University on April 1..ICBA also recently announced an affiliation with the Barrett School of Banking, Memphis, Tenn., to provide a graduate degree in banking..Community Banker University essentially retools existing ICBA educational offerings and puts them in one platform across multiple delivery channels, including webinars and in-person classes, said Lindsay LaNore, ICBA executive vice president in charge of Community Banker University. Class offerings run the gamut from bank marketing and strategic planning to bank auditing and regulatory compliance..ICBA is also working on expanding and updating its educational offerings in light of recent changes in the banking industry. "The environment around community banking is changing rapidly, especially with regard to regulation and technology, and bankers need to be able to respond to these new exposures," LaNore said..Community Banker University will provide educational courses as well as accredited education for community bankers and other financial industry professionals. In particular, ICBA is working to develop initiatives to help community bankers identify and groom the next level of leaders, LaNore said.."Our goal is to make it a one-stop place for community bankers and people looking to get into the community banking industry to come and get the education they need," she said. "We want to help bankers communicate to the next generation of leaders that they have been identified as the next generation of leaders, that they are capable of becoming that next generation of leaders, and then give them all the tools they need to do that and do it well."