This the season for giving gifts, and banking veteran Tom Vance offers anecdote-laced advice to help young lenders find their way while striking chords with other bankers who also have been through the decades and cycles. Perhaps, too, this article can emphasize the critical role of mentoring in developing tomorrow's credit professionals.

When you've been around, and around, the block, you learn a few things. One is that others who have been around that block even more than you have experiences to share that can help you develop that all-important, but sometimes neglected, area of loan decisioning: sound judgment. In this article, I'm pleased to share a number of experiences that have helped me build sound judgment in my various roles. Banks want to use money to make money, not lose it. As exciting as it may be to employ all the latest quantitative tools, I've learned that these tools are an adjunct to a banker's judgment and not an end in themselves. So here are my thoughts on building the better banker.

Many problems can be avoided at the outset if the banker begins with the proper skills set. You might assume that an "experienced'" lender or support person the bank has hired is well versed in best practices in lending and documentation. This assumption max cost the bank tens of thousands of dollars in loan losses if the manager doesn't make sure the employee knows what the heck he or she is doing. Those few hundreds of dollars saved by not investing in a formal lending school max snowball into enough dollars in losses to afford a Harvard MBA. Make sure everyone knows their job well and never assume folks know how critically important their role might be in lending. Also, never assume young lenders know what to do or say in problem-loan situations. Leadership must get involved, show the way, set expectations, and direct how to get there. Employees do not like to admit they don't know, so don't wait for them to tell you. The worst documentation clerk I ever had was a legal secretary and the most pitiful credit analyst I ever saw was a CPA. Go figure.