We see more bankers and meet more bank management teams than almost anyone else in the industry. We constantly speak on what constitutes a top-performing bank and how banks can achieve that status. However, it caught us off-guard recently when a banker asked us what makes a top-performing BANKER. We gave an incomplete answer at the time and so wanted to present a more thought-out list. We fully admit that this is just one group’s opinion so take this for what it’s worth.

Traits of a Top Performing Banker

If we can boil down the difference in one word between an average banker and a top-performing banker, it would be – mindset. The difference between a top-performing banker (TPB) and an average banker is that a top-performing banker has an execution-minded attitude plus a method for dealing with an array of banking challenges.

Here are some specific traits that we noticed that comprise a top-performing banker:

Process: Average bankers are focused on outcomes such as achieving a certain return on equity (ROE) for the quarter or asset growth number. TPBs focus on getting the process right and know that a successful outcome will be the byproduct if their approach is correct.

Auditors and Regulators: An average banker looks at auditors and regulators as “in their way.” TPBs understand that while auditors and regulators are not perfect, they can make their processes better. The best case is that these third parties uncover a weak spot or provide thoughtful criticism to make the bank better. TPBs also realize that just the act of explaining the process to a third party has value.

Concepts & Math: Top-performing bankers strive to understand concepts and the math behind those concepts. It is not enough to know that you need to raise deposits as a TPB will understand how deposit performance translates into value. For that matter, they also know how duration is calculated, what quantitatively makes up an efficiency ratio, and what goes into calculating a loan’s return on equity.

Focus: A TPB can quickly rattle off their top three priorities for the period. An average banker is never sure.

Team: A TPB knows that a large part of their resources should be devoted to human capital development and team integrity. These bankers are always recruiting and always looking to make their team better. They look to build team members up, make sure each is challenged according to their desires and abilities and make sure each is reaching their potential. TPBs know that if they develop expertise in attracting, growing, and promoting talent, they will never be short on talent.

Decisions: TPBs seek input from many but can make decisions easily when required. They understand what information is desired to make a better decision and weigh that against the effort of getting that information. They can decide with imperfect information and are always accountable for their decisions. Conversely, they also allow others to make decisions in order to spread the experience around.

Second-Order Thinking: TPBs track their decisions and review them on an ongoing basis to improve their thinking process. They understand that it is not enough to make decisions based on basic facts but to understand how and why those facts are essential. For example, an average banker will assume rates are going up because the forward curve says so or the economist they just heard said so. That is first-order thinking. TPB bankers will then ask themselves – what would need to happen to validate that rates are going up or what would have to happen to change my view? By understanding and tracking why decisions are made and the influences behind those decisions, TPBs will be better prepared when the underlying assumptions change.

Operational Leverage: TPBs are always asking the question – what can I do to improve our processes that will give us the next biggest bang for our effort? Size is less important than operating leverage. These bankers are often worried about the “quality” of growth or of earnings. They know that not all growth is good and that growing an inefficient bank makes for a larger inefficient bank. These bankers know that the key to quality earnings starts with growth that is from intent while controlling fixed cost so that margins get improved. In a similar vein, a TPB is always looking at what will improve the odds of achieving consistent positive outcomes.

Milestones and Long-Range Planning: TPBs have a vision, a long-range plan, and a set of near-term milestones that they need to achieve in order to accomplish that plan. They are not concerned about what they can do today, only that they make steps every day in acquiring the needed resources to attain their vision.

Accountability: TPBs take accountability and expects others to be held accountable. You will never see a TPB looking to place blame.

Competence Envelope: TPBs have a realistic understanding of their and their team’s strengths and weaknesses. They know that their bank isn’t good at everything and constantly look for future employees, other banks, vendors, or consultants that can help them learn and support their competency gaps. Conversely, they also look for ways to expand their competency envelope and know that sometimes you need to experiment or partner to learn.

Failure & Success: TPBs understand that failure and success can both move a bank forward. A TPB sees failure as critical to the path of mastery and seeks to learn from every mistake. A TPB also knows that it is harder to pull good lessons from success and takes extra time learning from victories.

Skill Development: Average bankers like to do things they are good at. TPBs do things they’re not good at so they can improve.

Experimentation: TPBs know that the economy, customer intent, and technology are constantly changing and what worked in the past may not work in the future. TPBs are always experimenting so that they can either find better ways to improve the process or to validate their existing process.

Luck: An average banker will be quick to think that their successes are a result of their good decisions. A TPB knows when good outcomes are the result of luck. A TPB recognizes that the current banking environment is the worst time to be a good bank and the best time to be a bad bank. This is why you will find many TPBs preparing their bank for better times ahead as they have already improved credit quality, shortened their interest rate position, reduced both their cost of funds and deposit sensitivity, all the while executing their plan to redesign their operation with new processes and technology.

Other Differences

Those are just some of the more obvious differences between an average banker and a top-performing banker. The mindset of a top-performing banker fuels the quest to improve and the desire to understand situations, not how they are perceived but how they are. Top-performing bankers have a need to see the truth, in whatever form it comes in, as they know they are capable of handling whatever may come their way. Meanwhile, average bankers are still trying to view the world the way they think it should be.

While there are no perfect bankers, we have met many that exhibit a majority of the above traits. They may not be at top-performing banks, but TPBs work hard on getting their bank to a higher level. If a top-performing banker reads this article, they will make notes on the one or two things that they can try to improve upon before sending it on in an effort to strengthen their team.  An average banker won’t care.

Published: 10/25/21 Author: Chris Nichols