Study: Commercial banker shortage worries banks
James Dornbrook Reporter | Kansas City Business Journal | May 12, 2016
A new nationwide study by Bank Director magazine showed banks are having a hard time finding enough experienced commercial lenders to hire, making it difficult for them to grow their loan portfolios as fast as they'd like.
The survey showed 40 percent of bankers said recruiting commercial lenders is a top challenge for 2016. Asked to describe their bank's efforts to attract and retain commercial lenders, 43 percent said there weren't enough talented commercial lenders in the market to fill their needs. The same percentage said they are willing to pay highly to fill those roles.
In Kansas City, which has 138 different bank brands all competing against each other, competition for experienced talent is fierce. With virtually all of the banks healthy and looking to make loans to grow their interest income, recruiting can be tough.
"The ones who are really good are usually taken care of very well, so being able to recruit them away is a real challenge," said Paul Holewinski, CEO of Kansas City-based Dickinson Financial Corp. II.
Dickinson Financial owns Academy Bank and Armed Forces Bank. The company survived a strong test during the Great Recession, but cleaned up its books and is now out looking to grow. So the company is on the front lines of trying to attract solid commercial lending talent. They're approach is to not only offer good pay, but more latitude to negotiate terms.
"Our philosophy is to hire seasoned, experienced bankers who want to be in the banking business," Holewinski said. "What I mean by that is they are true professionals. They've been through the good times and bad and know the difference between a good loan and a bad loan. We've been successful bringing them to Academy Bank because we give them the latitude to sit across the desk from a customer and talk about loan terms we would offer and then they go get those terms approved with our loan committee and the terms are rarely changed. For an officer who has been in the business a long time, it gives him or her the confidence to know when he's talking to a customer we'll do the deal without a lot of modifications or changes through the committee process."
But a bank can't just focus on hiring experienced talent, especially with lots of Baby Boomers getting set to retire. They need to attract younger generations to the profession as well. However, the Bank Director study showed 34 percent are having trouble. Of that group, 60 percent said the main reason was millennials aren't interested in working for a bank. Coming out of a major financial crisis, banks need to improve their reputation as a good place to work for millennials.
"Certainly there has been a drop off in interest coming out of the financial crisis as an industry, but we're looking at recruiting people through a formal credit training program, having them cut their teeth on financial analysis and then having them work their way through as a junior lender or portfolio lenders," Holewinski said. "We've had some success there."
James reports about banking, financial services and law.
Published on May 12, 2016