Specialization as a raison d’être

Chip Mahan and Trae White

Adhering to a “relationships first” philosophy, a partnership between Live Oak Bank and an insurance provider produced a customized, complementary fit that raised the bar on both organizations’ business operations and customer relations.

By Colleen Morrison


Wilmington, N.C.-based Live Oak Bank has always had a unique take on relationship banking. The $8.2 billion-asset branchless institution with digital footprints in all 50 states, focuses on vertical market specific enablement for small business customers. In fact, it is the top Small Business Administration (SBA) lender in the nation.

“If I think about the bank of the future, I ask myself, ‘Can you create a bespoke bank for your raison d’être?’” says James S. (Chip) Mahan III, the community bank’s founder, chairman and CEO. “We do business in 35 industries, so we’re in the process of attempting to create a bespoke bank for each one of those industries.”

The bank’s insurance industry expertise and national footprint made it a standout for Trae White, an insurance advisor and owner of Harders & Bradford Insurance Agency in Silver Spring, Md., who was looking for a bank partner to support an agency acquisition.

Specialization has helped the bank serve as a resource for customers.

Chip Mahan: We asked, “What does it take for an insurance agent to run their business? What does an acquisition in such a unique industry require?” If we can, in a tech-forward way, bring all that alive for an entire industry in a bespoke fashion and embed our bank inside, that is the community bank of the future.

Trae White: I looked at Live Oak because I knew that they have a really good level of expertise with insurance agency acquisitions. A lot of banks don’t have that, the asset is different, and an insurance agency is unique, with more intangible assets. I wanted to work with an institution that knows about those numbers and understands that asset, and Live Oak does. They finance more insurance agency transactions than anyone else in the business, and they came with a lot of experience on how to get the deal done. That was important to me in choosing a bank partner.

“You build a relationship early and you stick with it, and then you gain an expertise that helps your customers in a more collaborative, consultative way.”
—Chip Mahan III, Live Oak Bank

Frequent customer interactions translate to a stronger relationship, deepening the connection.

White: I brought Live Oak in early, before we even had a deal structured or a letter of intent. They helped me think through it all, gave me guidance, and walked me through the level of underwriting I needed, as well as the documentation I needed to purchase the business. They guided me through the whole loan process and provided good advice that extended beyond the specific transaction.

Because they dealt with so many insurance agency owners before, they could speak to the experience, as well, and share things to consider. I leaned on their expertise, and it made my job easier. In addition, they did a lot of really good financial underwriting that helped me understand the cash flow of the business. Their expertise was critical because when you have experience, you can give a greater level of context to head into the transaction.

Mahan: From the very beginning, we started working with insurance agencies. You build a relationship early and you stick with it, and then you gain an expertise that helps your customers in a more collaborative, consultative way.

Combining targeted market expertise with a personalized approach helps set it apart from its larger counterparts.

Mahan: Relationships matter. That’s why it’s total baloney that the big banks are going to dominate. If community banks know what’s out there and can be quick and make a decision in line with their customer base, we can beat the big banks to the punch.

White: I can easily speak to a person and have a relationship with that person. Throughout the acquisition process, I could talk to who I needed to talk to and get responses without delays. It’s a large community bank that just hasn’t lost its touch and connection.

The relationship continues to expand and evolve over time.

White: I speak with my loan account manager, and we do reviews of quarterly financials. I ask what he’s seeing in my reports, if there’s something that I may not be considering. He serves in a little bit of a consultative role there, and he’s always available to help me evaluate performance.

Mahan: Our philosophy is to treat every customer like the only customer. The relationship grows from there.


Colleen Morrison is a writer in Maryland.