Blue Economy Convergence Conversation: Chip Mahan of Live Oak Bank

Chip Mahan is a pioneer in banking who started his career in 1973 and has spent his career revolutionizing banking at the convergence of fintech and financial services. In 1995, Chip and his brother-in-law changed the way banking was done by putting the first bank on the internet. Today, Chip is Chairman and CEO of Live Oak Bank, the nation’s leading SBA and USDA lender, and the 2018 winner of the Bank Administration Institute Global Innovation Awards in the internal process innovation category for converting bank operations to the cloud. 

In this Blue Economy Convergence Conversation, Chip and I discussed the opportunities for Wilmington to become an economic hub of innovation and entrepreneurs.


Deb: What was it like in 1995 to be the first bank on the internet?

Chip: In 1993, my brother-in-law had a security software firm that was doing technical work in the Unix operating system and that had partnered with IBM and other big OEMs to build advanced operating systems. He was the one who said, “this internet’s going to be big.” I said, “what the hell is the internet?”

It didn’t take long for us to have a series of meetings that helped drive us to action, including a meeting with Marc Andreessen and Jim Barksdale who co-founded Netscape. I told them I wanted to put a bank on the internet. They offered to help but the deal didn’t make smart fiscal sense, so instead, we hired a bunch of engineers to design and build online bill payment, stock trades, and other transactions. We had arrows in our back because of the changes we were trying to make. We’ve taken some big swings over the years. It’s been a lot of fun.

Deb: What is your definition of the Blue Economy?

Chip: I think it’s about the data. I was recently appointed to the UNCW Board of Trustees and I’m learning. There’s always a push pull. We want our town to grow, and we are very fortunate to be unlike any other community in the United States. This is the second smallest county in North Carolina, but we have a $1.4B endowment to help us address community issues. That means that we have $40M annually year to invest in a town of approximately 125,000 people. As we figure out the Blue Economy, I want to get the data to make sure that we are doing the right thing on a long-term basis. It’s a marathon, not a sprint.

Deb: How will the community come together with a vision, strategy, and a decision framework for allocating the money?

Chip: I don’t know. But there is a special finance committee for the Foundation. I’m confident it has the right people serving on the committee. They are going through the process of hiring staff to look after the investments. Collectively, they will make the right decisions to deploy whatever the annual number of disbursements will be based on the interest rate environment. Many of the committee members have been here for generations and I am thoroughly convinced that they will do the right thing.

Deb: Would an overarching concept such as the Blue Economy help Wilmington balance decision-making across all the things that are going on in the community, such as growing the Port, trying to clean up the river, and addressing social inequalities? Is there a value for the community to come together and have debates and discussions around what your collective future is and what you want Wilmington to be when it grows up?

Chip: Yes. I don’t know yet what that could look like, but we ought to have a consolidated view of how to grow Southeastern North Carolina. There is an opportunity in our region to bolster the economic development force. I think Wilmington is doing a great job. Across the Cape Fear River, Brunswick County seems to do its own thing. There are 250,000 people in Southeastern North Carolina. There ought to be one consolidated vision on how we attract businesses and what type of business we want. 

I’m in the technology business, so I’m biased towards technology businesses. Massive changes are happening in technology. Most of the code that runs every bank in the country today is ancient. There are 280 billion lines of code sitting on servers that are not Amazon Web Services, Microsoft, or Google. And all of it is going to be swapped out in the near term. In my opinion, 100% will be swapped out in the next 10-plus years. The big tech companies have billions of dollars to put into advancements so software engineers can do things more elegantly, quickly, safely, and securely. If you look at what’s happening in banking, there are a lot of changes happening there because of technology. We could have tech companies here making things like this happen.

Deb: How do you bring in that talent? Coding is a competitive field.  Are you trying to attract from outside or inside Wilmington or both?

Chip: Both. I’m guessing we probably have 400 UNCW graduates in our ranks at Live Oak. That gets back to the business model. We started nCino in 2012 with people in Wilmington. Today the business is worth $2.5B, which is a whole lot of capital to take care of our families. If you have the right business model, you can continue to grow organically and build a great business.

Deb: What do you see are the three to five unique things for Wilmington to bring together for future success?

Chip: Ultimately, it gets back to education. How can we educate people to give them a chance? We will have this large amount of capital in this small town to invest in this kind of change that could reshape the future of our waterfront community. In many ways, we could become a prototype for any town in America. And to make the future better, we have a very unique situation to take advantage of because of where we are situated and the incredible investments we have to work with. We just need to come together as a community to make decisions and act.

Deb: When you think about the greater Wilmington area in the next 15 to 20 years, what does it look like? 

Chip: We are so blessed. We have the ocean on one side and the Cape Fear River on the other. If we just focus for the moment on Wilmington and New Hanover, there’s not much land left. What is left is controlled by several families. There are many questions we need to address such as, how do we control development in the right way? How do we attract and retain the type of talent we need for our businesses?

As I think about those questions in terms of my companies, the average age of an employee at Live Oak Bank is 29, and the average salary is over $100,000. There is a multiplier effect of this. It’s the same thing with nCino. We can continue to build businesses like these, primarily in the technology area, to attract diversity and expand the culture because people will actually come. Nobody has the advantage that we have because of the foundation. I’m not saying money fixes everything, but if we hire the right people with the right vision, it’s a good start. The Blue Economy could be that vision. Then if you have the data to make the best decisions you can, we can start to make progress.

Deb: What is your greatest hope for the future?

Chip: Because of the foundation and extra capital, we can make investments in the future. This is such a beautiful place for people to live. I hope we wake up one day and still have such beauty, but we also have 20-30 new companies supporting the breadth of families and people across the community.


Chip reminds us those responsible for a transformation jeopardize its ultimate success by ignoring the human aspect.  Wilmington leaders must therefore stay ahead of and manage the human aspect of the Blue Economy.  In effect, community leaders must be nurtured and developed through the transition to a robust educational system that addresses the potential of people, both those living in and those desiring to live in Wilmington.

Deborah Westphal is a leader in future-focused strategy. In her book Convergence, she leverages more than 30 years of experience helping the world’s most innovative business and government leaders to challenge biases, ignite ideas, and build connections. She delivers this rich insight with an empathetic and thought-provoking writing style to chart a path for readers. Throughout the book, personal stories and historical examples highlight convergences that span the globe, impacting everything from global supply chains to climate change, and reshaping the future of business, technology, and humanity everywhere.

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