Finance Professional Services September/October 2022

Lumbee Guaranty Bank – North Carolina

October 10, 2022

Lumbee Guaranty Bank

Committed to the community

Business View Magazine interviews Lumbee Guaranty Bank CEO, Kyle R. Chavis, for our focus on North Carolina Community Banks

As one of only 19 Native American owned banks in the United States, Lumbee Guaranty Bank is proudly celebrating 51 years as a community bank in North Carolina.

The idea for the bank originated with a group of Native American business owners, who were frustrated by the limited access to banking services in their rural community of Pembroke. In 1971, after meeting with the North Carolina Banking Commission, they received approval to charter Lumbee Bank, under the condition that 75% of the initial stockholders were Native American people from the region. This requirement was exceeded.

CEO, Kyle R. Chavis

Chief Executive Officer Kyle R. Chavis shares, “That initial group, the founding folks, essentially went door to door and sold stock for $10 a share. There were some subscribers that bought one share, they bought what they could afford, but they wanted to be part of the bank. They raised $667,000 in capital and 98% of the subscribers were Native Americans. Interestingly, some of those initial shareholders that bought that one share are still shareholders today.”

Since first opening its doors in December of 1971, Lumbee Guaranty Bank has grown to include 1,700 stockholders, with assets of $490 million. Headquartered in Pembroke, the bank has 14 branches, spanning three counties throughout rural southeastern North Carolina. Lumbee Guaranty Bank is proud to offer a complete range of deposit, loan and investment products. “We are a community bank, but we like to say we have everything that the big boys are able to offer, from mobile banking to online banking, all the bells and whistles, so to speak,” says Chavis, adding that this is accomplished while remaining locally focused and committed to the communities they serve.

With close to 100 employees, the bank made the decision at the onset of COVID to allow staff who were able to do so, to work from home. “What I refer to as our backroom people, or operations folks who kind of run the back room of the bank, were able to work from home during COVID-19 in 2020, and the first part of 2021. We were able to acquire some technology that allowed us to do that, and we were able to continue to accomplish everything that we needed to do, with about 30% of our workforce working from home,” Chavis explains.

At that time, customer facing personnel remained in the branch, serving clients with additional safety measures in place. With lobbies closed for close to a year, and visits to the bank by appointment only, Chavis notes that there was a change in customer behavior during this time, with many clients shifting to mobile and online banking. As this trend continues, Chavis reports that it has brought forward the question of how much of a brick-and-mortar presence Lumbee Guaranty Bank will need moving forward.

He asserts, “The customer’s behavior has changed, their expectations have changed as far as wanting to have those different delivery methods available. I don’t foresee us going out and closing a bunch of branches, but those are the kinds of things that you have to consider when you are thinking about potentially expanding. Do we really need brick and mortar, or can we expand in another way? Can we expand in a virtual environment?”

As for why clients continue to bank with Lumbee Guaranty Bank, Chavis believes the answer is simple. “People bank with people. You have to have the products and the financial services that customers need. You do have to have the pricing of your products right, but ultimately, banking is about relationships.”

As a long-time community bank, Lumbee Guaranty prides itself on excellent customer service, and relationship-focused banking. According to Chavis, “We do think that differentiates us from our larger competitors, simply because we are small enough to be able to know your name, to know that your kids are playing little league ball. We go to church with you, we go to school with you, we serve on committees with you, we are embedded in this community.”

As some of the larger competitors are beginning to cut back on their offerings, closing branches and laying off staff, Chavis recounts, “We are in rural southeastern North Carolina. From an economic standpoint, it is not the ideal place for a lot of folks to do business. We are not in Raleigh, or Charlotte, or in Atlanta. So being in these small rural communities, a lot of our large competitors have begun to distance themselves. But we are here, and I think the community sees that we are committed, and they see our importance to this area. We are a small business, like a lot of our customers, and so they want to do business with a small business. Those reasons are very important to people, as to why they want to bank with us.”

Lumbee Guaranty Bank - North Carolina

Aside from the investment in technology required for remote work, Lumbee Guaranty Bank has also invested in efficiencies like Zelle, a digital, person-to-person payment service which was rolled out in 2021. Clients also have the ability to add their Lumbee Guaranty debit and credit cards using a digital wallet app. “We have upgraded our mobile and our online banking services to be able to transfer funds, acquire balances, get balance alerts and those sorts of things more easily,” reports Chavis. “So we are constantly trying to reinvest in technology, because we know that we are not going to be on the cutting edge of the latest technological developments in banking, but we certainly don’t want to get behind.”

He maintains that this investment in technology allows the bank to stay relevant and competitive, while it is still the personal touch and excellent service that keep clients engaged. “That is really the only way that we are able to differentiate ourselves. That is what we hang our hat on. If you come here, and do business with us, you are not going to be a number, you are going to be an important customer. That is just simply where we focus our energy, through providing the best possible service that we can. We feel like that is what separates us from the competition.”

Looking to the future, Lumbee Guaranty Bank is committed to remaining independent, carrying on the original mission to serve southeastern North Carolina. “That is goal number one,” says Chavis. “Number two is to continue to grow. We have to continue to grow the size of our institution, and that means acquiring additional customers within our footprint and expanding our footprint. So, we will continue to look at opportunities to grow within the markets that we are in, and also potentially in any outlying markets that we’re not currently in, if the opportunity makes sense.”

Emphasizing a focus on growth, customer relationships, and competitive pricing, Chavis offers, “We are one of only 19 Native American owned banks in the country. We know that our story is unique, and we think it is compelling. So, we just want an opportunity to share that story with folks who don’t bank with us, and hopefully encourage them to do that.”