A Tennessee Tech finance team takes home national honors after partnering with an Upper Cumberland company to analyze banking financials.
Finance major Bo Briggs said the team examined five years of financial data to tell the story of how the bank managed interest rate changes following the pandemic. Briggs said the project required the team to format their findings into a 25-page paper for a panel of judges.
“I’m not pursuing banking, but even for me just to kind of solidify what you hear in the classroom and get that experience of, just as far as education goes in general, this is how this really works, and to get to see that play out in a real-world scenario, what you hear in the classroom, was really awesome and rewarding,” Briggs said.
Briggs said the team worked directly with bank executives to understand how the institution utilizes different assets and tools to shield itself from financial risk. Briggs said the collaboration highlighted how the bank maintains profitability while adhering to specific risk tolerance levels.
“One of the cool things was no one’s really trying to like predict the future, you kind of just use what you know works, and I guess as a finance major, like you watch movies or hear and feel like people are there’s someone, you know, behind a computer that’s crunching numbers and trying to beat the market and predict what’s going to happen,” Briggs said. “They kind of just they do take that into account, but it’s mostly let’s see what works. You know, there’s no rocket science, it’s just let’s keep this simple and do what we know is going to help us be successful.”
Briggs said the team studied the use of lower-risk securities to protect depositor money and ensure the bank maintains adequate reserves. Briggs said these fundamental practices allow a bank to cover potential losses in a loan portfolio or handle a sudden increase in withdrawals.
“We had to be pretty effective in the way we communicated because there was a page limit on this paper, so we couldn’t just kind of blab on and on and on about a point, you had to say what you wanted to say concisely and get the information across,” Briggs said. “So that was extremely valuable for me. And then also just communication because we had to be in communication with the executives at the bank, with our other teammates, and just communicating professionally with another organization for sure.”
Briggs said the study contrasted the stable practices of Wilson Bank and Trust with the volatile practices that led to the failure of Silicon Valley Bank on the West Coast. Briggs said the project emphasized the importance of avoiding situations where a bank cannot provide funds when interest rates change and customers attempt to withdraw their money.
“Just thanks to the team, they were they were great,” Briggs said. “They carried me around through this competition.”