Banking: High Interest

Heres a skill many bank executives never learned during their undergraduate finance studies or, in some cases, even in their MBA programs: bank leadership.

You cant major in banking, says Gretchen Claflin, COO of Pacific Coast Banking School (PCBS), a prestigious institution many Seattleites have never heard of. You cant say, I want to grow up and be a banker and this is how I want to educate myself for my career path. PCBS allows people to learn the business of banking in a way that is specific to the industry.

Bellevue-based PCBS has filled the gaps in banking education for 77 years, offering a rigorous program that propels the industrys stars to the top of their companies. Its a graduate-level institution that immerses promising bankers in the hows and whys of running a bank one of few such programs in the United States that actually trains commercial bankers.

KeyBank SVP Randy Riffle graduated from Pacific Coast Banking School in 2012.

It gathers the best bankers in the country together and teaches them how to lead a bank through the changes in the industry, says Randy Riffle, SVP of business banking for KeyBank in Seattle and Bellevue, and a 2012 PCBS alumnus.

The school was founded as the Pacific Northwest Banking School in 1938. The banking industry was recovering from the Great Depression and top-level banking professionals and Ivy League academics descended on the University of Washington, the schools home base, to teach the next generation of bankers the principles of responsible banking. Originally intended to benefit bankers in Washington, Oregon, Idaho and Montana, the school now attracts students from across the country and beyond, bringing in 240 new bankers each year from as far away as Guam and the Marshall Islands.
With a focus on leadership, PCBS arms students with the knowledge to rise through the ranks at their institutions, and perhaps even run them. Were working really hard to address the leadership gap, Claflin says.

The average age of PCBS students is 39 and about 70 percent of them already serve as vice presidents or higher. Twenty-five percent possess MBAs. At PCBS, they experience a curriculum balanced among risk management, financial performance and leadership, giving them a comprehensive look at banking and, ideally, how to manage an institution in a rapidly changing industry, be it in retail banking, community banking or business banking.

Tom Duryea, president and CEO of Summit State Bank in Santa Rosa, California, says PCBS provided him a holistic understanding of banking that helped him guide Summit through the recession that arrived soon after he graduated in 2007. Having that understanding of what bankings all about has allowed Summit to not only get through these times but to exceed the performance of most of our peers, Duryea asserts.

Students enrolling in the PCBS program accept a three-year commitment in addition to their daily jobs and personal responsibilities. They meet in resident sessions at the UW for two weeks in the summer during each year of the program. Between the first and second resident sessions, they must complete four written assignments, each of which requires 20 to 30 hours to complete. Between the second and third resident sessions, they complete another written assignment and a management report the equivalent of a masters summary project which requires about 100 hours.

Some students enter the program to help them advance their careers and better serve their banks. Some banks select their most promising talent to enroll. I really wanted the personal development, says April Sage, a business banker at KeyBank in Yelm and a first-year student at PCBS. I feel I can always be improving on my financial acumen.

Most students have their tuition fees $4,895 per annual session for next years entering class covered by their employers, according to the school. Its an investment the banks make in their employees and a potential perk that appeals to job seekers when banks are recruiting talent.

You know its going to help your career with the bank youre at and with your career in general, says Jennifer Warburton, a Heritage Bank SVP who was tapped for the program by her bosses in Seattle in 2011.

Life as a PCBS student takes a fair amount of juggling. Riffle, whose children were 2 and 4 when he began the program, would come in to an empty office at 4:30 in the morning to work on his school papers until 8 or 9 a.m., at which point he started his regular work day. Michelle Barrett, SVP of human resources at Peoples Bank in Bellingham and a 2014 graduate, was raising two teenagers while enrolled. She recalls that she and her kids often did homework together at night. They werent always thrilled when dinner wasnt ready, she notes.

And then theres the two-week immersion each August, for which students leave behind their regular jobs and their personal lives to take classes on the UW campus by day and cram into dorm rooms by night. Getting acclimated to sharing a bathroom was really comical, says Sage.

The two-week immersion brings a new urgency to the already rigorous coursework. It was helpful not to have responsibilities at home to juggle, Sage notes. It allowed for deeper understanding and a deeper focus.

The summer sessions also foster a closeness among the students. In fact, the networking opportunities are among the students most appreciated takeaways. Executives from larger banks mingle with community bankers and representatives of tiny credit unions. Long after they have finished the program, they often call on each other to ask advice and solicit opinions. Were very supportive of each other, Sage says of PCBS colleagues. Its a blessing to be able to have that type of camaraderie.

Patrick Yalung, Washington regional president at Wells Fargo Bank and a 1995 graduate of the program, agrees. Theres this informal benefit of networking and building relationships and sharing best practices around the entire student body, he says. If you can leverage … the academic part of the curriculum [with] this informal social networking, youll come away with an invaluable experience.

PCBS COO Gretchen Claflin expects the 2015 incoming class to be its largest.

Third-year students perform a full bank simulation at the UW, where PCBS brings in bank examiners and auditors. This simulation is where the students education all comes together, says Claflin. Alumni say their previously narrow perspective coming as they do from myriad specialties such as lending or commercial banking was expanded through lessons on how to manage all aspects of the industry. [The curriculum] filled in so many blind spots I had in understanding how a bank functions, says Duryea.

It gave me the background on the things I needed to be successful as a leader, adds Michelle Andrews, an area retail leader at KeyBank in Yakima who also graduated from PCBS this year. I really, really learned how to prioritize.

Andrews adds: The program gave me the additional skill set to make me think broader and bring that value to the table when it comes to our clients and coaching my team.

Sage says the benefits are immediate. What I found most interesting and reassuring was that I literally walked out on the first day [after class] and started using materials I learned as I answered emails that night, she notes.

PCBS is open to anyone working in the banking industry, but not everyone gets in. Not all applicants have the necessary background and experience they need to be successful in the program, Claflin explains. We have prerequisite requirements that students must meet and we review all applications to see if a student meets the necessary criteria.

Barrett had worked in human resources for 23 years before joining Peoples Bank. Though she doesnt work directly with bank clients, she wanted to learn more about the industry to help her do her job. I felt it would lend credibility when I make decisions for bankers, she says. Based on her PCBS experience, Barrett says the banks IT director was also selected to attend the program.

A handful of schools throughout the country offer similar programs, such as the Stonier School of Banking at the University of Pennsylvania and the Graduate School of Banking at Colorado. Graduate schools at The University of WisconsinMadison, Louisiana State University and Texas Tech also offer programs, as do some banks.

We all have the same mission, which is to educate bankers, says Claflin, who believes PCBSs program is the most rigorous and the largest in terms of enrollment.

PCBS President and CEO David Enger, a former banker himself, believes organizations that invest in their leaders are the ones best poised to succeed. In the spirit of that quest for the best training, he points out that PCBS has never altered its curriculum or changed entrance standards to meet enrollment targets, and he cites its affiliation with the UWs Foster School of Business as a critical asset that affirms PCBSs mission to teach beyond the bottom line. Says Enger: We want the students to go away thinking and believing that banking is a noble profession.

The Three Rs of Rising PCBS Enrollment

For 2015, PCBS projects an incoming class of 250, its biggest ever. COO Gretchen Claflin attributes the rising enrollment to three factors.

1. Retirement

Many bank executivess in the baby boom generation will be retiring in the next few years, so banks are preparing for a leadership gap. Claflin says, Not only do the leaders of tomorrow need to be challenged and educated in the business of banking (finance, credit risk, financial systems, etc.), but they also need to be trained to lead.

2. Retention

A PCBS education strengthens the employees ability to perform for the bank and also sends a message that the bank is committed to the employees success. This often results in increased rates of employee retention an ongoing challenge
for most banks.

3. Retooling

Banks are increasing investment in education to ensure that theyre well positioned to meet the challenges of the rapidly changing financial services industry.

New Contributor | Lynsi Burton writes about breaking news, crime and lifestyle trends for SeattlePI.com. She previously was a crime and courts reporter at the Skagit Valley Herald and covered the city of Bremerton for the Bremerton Patriot.