Lumbee Guaranty Bank is going strong 50 years after it was founded, but the company had humble beginnings.

 "The origination of the bank was essentially due to a group of businessmen in Pembroke, North Carolina, who perceived a need for banking services basically for an underserved population, and at that particular time, that [would’ve] been the Lumbee Indian tribe which the majority of the members of our tribe are locally concentrated here in Robeson County, specifically around Pembroke,” Kyle Chavis, the CEO of Lumbee Guaranty Bank, explained. 

When people needed banking services, they had to travel roughly 20 minutes east to Lumberton or approximately 20 minutes west to Laurinburg. 

Leaders in the business community saw a need for a local bank, so they approached Southern National Bank, headquartered in Lumberton at the time. Several years later, Southern National Bank merged with BB&T. 
 

The bank leadership declined the request to put a branch in Pembroke as they did not believe it was the proper strategy for them at the time. But the need was still there. 

The challenge created an opportunity for innovation; the businesspeople decided they would explore the option of chartering a bank themselves. 

Ultimately, they appeared before the North Carolina Commissioner of Banks in Raleigh to ask for a state charter. There were guidelines for them to follow; they had to raise capital, having at least 75 percent of the capital raised from Native Americans in the area, with no more than $20,000 invested by an individual stockholder. 

“There were about 750 initial subscribers to the stock who contributed capital,” Chavis explained. “They raised about $670,000 dollars … Today, you’d probably have to raise between ten and 15 million dollars. 

“So, anyway, they raised that money, and stock was sold literally going door to door,” he continued. “People bought as little as a share for ten dollars. There were a lot of small shareholders initially. That’s really held true throughout the history of the bank.” 

The bank opened in December 1971. 

Since then, Lumbee Guaranty Bank has seen tremendous growth, spanning across three counties, opening numerous locations and having a significantly larger customer base. 

“We are grateful for the support we’ve had for 50 years from our community. If it were not for our customers, we would not be here,” Chavis said. 

"We now have fourteen locations across a three county area [Robeson, Cumberland and Hoke Counties],” he reported. “We’re approaching $500 million dollars in assets and we are a full-service commercial bank. We provide a wide variety of banking services that you can get at any other larger institution. We provide everything from loans to deposits to investment services, insurance services … We serve a very broad and diverse customer base now.” 

Since Lumbee Guaranty Bank initially served the underserved Lumbee Tribe, Chavis said there’s a misconception about who can bank there. 

"One of the challenges that I’ve seen in my time at the bank is that as we’ve expanded into markets outside of what I call our ‘legacy markets’ here in Robeson County, there’s been a perception that you have to be a member of the Lumbee Tribe to bank at Lumbee Guaranty Bank,” he said. 

“We have all kinds of customers. We have a lot of small business customers. Mostly small business and retail because we are a small community bank, but we serve everyone,” Chavis clarified. “We’ve evolved from the original mission of the bank to be able to provide services to an underserved population to, while we still embrace that as our history … we are a bank for everyone now.” 

Although the mission has changed, Chavis said they have a new mission now. “Our number one mission is to serve our customers, and that will continue to be our mission,” he said. 

Lumbee Guaranty Bank proudly refers to itself as “your community bank,” and goes to great lengths to invest in the communities it serves. 

“From a business standpoint, our deposits that we gather are from the local community, so we invest those deposits back into the community primarily through lending activities,” Chavis said. 

“We typically do not loan money outside of our primary market area … so those dollars that we have on deposit from our depositors are immediately reinvested to borrowers here in the communities that we serve by means of small business loans, mortgages, auto loans, home equity loans, credit, that sort of thing.”

Additionally, for over thirty years, the bank has had a college scholarship program where it has granted $1000 per year, renewable four-year scholarships to a high school senior at each of the high schools in the communities they serve. 

Lumbee Guaranty also endowed a $25,000 scholarship at Fayetteville State University for their school of business recently; at UNC-Pembroke, the bank supports their athletics program, and at Robeson Community College, LGB provides a number of scholarships. 

In general, other than contributing dollars, the bank encourages the bankers to be involved in the community. Many of them are involved in civic and community organizations like Kiwanis, Rotary, boards of trustees and hospital boards. 

“That’s a big way that we feel like it’s important to reinvest,” Chavis said. “It’s just being involved.” 

Another means of investing in the community is through Lumbee Guaranty’s financial literacy program that goes into the public schools in the three counties to educate students on finances from elementary school through high school. 

“We like to take that opportunity to go in and talk about budgeting, and for older students, talk about the importance of credit and establishing a banking relationship,” Chavis said. 

The business is publicly traded on the OTCQX exchange. “We’re traded under the symbol ‘LUMB’... We have about 1,100 shareholders now of our common stock,” Chavis said. 

They have a regular common stock and a class-A stock. They chose to split their shareholders into two classes a few years back so they could get under the SEC requirement of 1200 shareholders or less. In total, they have about 1,700 shareholders now. The stock is trading at about $12.50 a share. 

“It’s pretty much locally concentrated,” he said. “We’re still about 75 percent-owned, best we can tell, by Native American shareholders.” 

Chavis hopes that LGB’s love of the communities they serve and their involvement as a small business will encourage businesspeople to consider banking there. 

“We are a small business as well,” Chavis said. “We have less than 100 employees here at the bank. Our decision-making process is all a local process … We are open and ready to do business.” 

“As a community bank, a lot of times we can offer a little more flexibility than our larger competitors,” he continued. “Most of all, we really focus on the service aspect. That’s why we call ourselves your ‘hometown community bank.’ We grew up here, we go to church with you, our kids play ball with you, we serve on the same committees and the same boards and are involved in the same organizations with you. We are a part of the small business community so we feel like we are uniquely qualified to serve the small business community.”