More Community Banks Weigh Merits of In-House Training

Smaller institutions are slowly embracing in-house training programs, adopting a practice that many scrapped well before the financial crisis.

Training programs are commonplace at the nation's biggest banks, but community banks have largely gone without them due to questions over their cost-effectiveness and concerns that newly trained employees might jump ship.

A more rigorous regulatory environment, along with a heightened need for risk management and revenue growth, seems to be encouraging more management teams to revisit the practice.

"What we're trying to create is a proactive learning environment," said Lauren Henson, a senior vice president at Carolina Financial in Charleston, S.C., who runs the company's recently launched CresCom University. "We think the culture is so special here that [employees] will realize the grass isn't greener on the other side."

Carolina Financial, the $1.2 billion-asset holding company for CresCom Bank, launched its program in May to focus on themes such as leadership, compliance and continuing education. The in-house training effort is part of a plan to boost employee retention by investing in the development of new leaders.

The program's introductory course — Management 101 — focuses on helping branch-level worker step into management posts. Carolina Financial has yet to establish a progression of courses to graduate junior executives, but it continues to add to its curriculum. The company also plans to build a training center with a 35-seat classroom to house the initiative.

C1 Financial in Tampa, Fla., has also developed a training program. Working in partnership with the University of South Florida, the $1.5 billion-asset company designed a 22-week course that combines instruction by USF faculty with on-the-job training at the bank.

C1's efficiency ratio is higher than the industry average, due in large part to expenses associated with its training program, though Trevor Burgess, the company's president and chief executive, said the effort's benefits outweigh its costs. Burgess said the program, launched in 2013, has generated a steady stream of new managers, and he expects it to produce his successor one day.

Camden National in Camden, Maine, got a head start on many other institutions when it launched Horizons, its in-house training program, in 2009. Horizons offers three levels of progressively more complex instruction to employees who have been singled out for leadership potential. The $2.8 billion-asset company last fall promoted four Horizons graduates to become assistant vice presidents.

Training programs have value, said Ted Peters, recently retired chairman and chief executive at Bryn Mawr Bank and founder of Bluestone Financial Institutions Fund. Peters got his start in banking in the mid-1970s when he participated in a training program at Philadelphia National Bank. (The bank was sold in the 1990s to First Union Corp.)

"I was very fortunate to get in," Peters said. "It was almost like an MBA. We worked for half a day and went to school for half a day."

FirstBank Holding in Lakewood, Colo. has never questioned the wisdom of investing in its training program. It has offered management training courses since it was founded in 1963, and the program is now considered the bedrock to the $14 billion-asset company's business model.

"Everyone in management starts within the … training program, and it's promote-from-within after that," said Christinne Johnson, FirstBank's director of human resources.

FirstBank's program consists of classroom instruction, interspersed with hands-on work in the branches, spread over six months, Johnson said. As the company has expanded, the program has grown with it. Six individual classes start each year. Enrollment in each class is kept small, and every student is paired with a training officer who serves as a mentor. Mid- and senior-level executives provide classroom instruction.

Johnson, who went through the program in 1996, said it was a big reason she decided to commit to a career at FirstBank.

"I can recall being impressed that the company was spending so much money to make sure I understood the entire business," she said. "That was pretty cool. I bought into FirstBank."

The training program has provided a major boost to FirstBank's efforts to hold on to its best and brightest workers.

"There are so many long-term people in senior management positions, and the fact that we've got succession planning built-in has been a huge help," Johnson said.