Chickasaw Community Bank leverages HUD expertise as it diversifies

T.W. Shannon

In 2017, when former Oklahoma state legislator T.W. Shannon took a leadership role at Bank2, one of just a few Native American-owned banks in the United States, his industry experience was limited, the bank had a small footprint, and it had an uninspiring name.

So much has changed since then.

Bank2 is now Chickasaw Community Bank, a change made in January of 2020 in a nod to its origins and ownership by the Chickasaw Nation. Shannon, now CEO, is driving a notable transformation.

The Oklahoma City-based bank has nearly $300 million in assets, up from $200 million at the beginning of 2020. Its net income in 2020 was $10.1 million, up more than 282 percent since 2019. Total commercial loans and mortgage loans have grown as well since 2019, though by the smaller margins of 12.52 percent and 60 percent, respectively.

“I thought it was a real opportunity for me to give back to my tribe,” said Shannon about how he felt when he got the call to join the bank, which came from Chickasaw Nation Governor Bill Anoatubby. “Frankly, the tribe had helped support me through law school, and I thought it was a real opportunity to finally do something that I thought could maybe add to the bottom line for the tribe; we’ve had great success since then.” 

Though the work of the Chickasaw Community Bank is diverse, its focus has always included Native American communities. CCB processes a high volume of the home mortgage product designed specifically for American Indian and Alaska Native families, tribes and housing entities — U.S. Department of Housing and Urban Development’s Section 184 Indian Home Loan Guarantee Program, also known as HUD 184. 

“Our claim to fame as a bank really is the HUD 184 mortgage product,” Shannon said.

An upward trajectory

The Chickasaw Nation founded Chickasaw Community Bank’s predecessor in 2002 to diversify the tribe’s assets as well as provide a service to Native Americans and the larger community.

It began with a capital investment of $7.5 million. By the time Shannon joined the bank in 2017, its asset size was $130 million, and the foundation for acceleration was in place.

CCB began, and remains, a conservative bank, Shannon said. Though the HUD 184 loan is a mainstay for the bank, it has expanded its lending to include Federal Housing Administration and Small Business Administration loans, among others.

“We’re the No. 1 provider of [HUD 184 loans] in the state of Oklahoma. We believe we’re the No. 1 bank provider of them in the country,” Shannon said. “I don’t want to do less of those; I just want to do more of everything else as well.” 

The bank has turned some of its focus to commercial lending, opening a loan production office in early 2018 in Tulsa and growing the lending team in Oklahoma City. “That really fueled a lot of growth over the last few years,” said Josh Pape, executive vice president and Oklahoma City market president. 

Another key to their growth is having a bank that people trust, Pape said. “We’ve just made a commitment to hire the right people that have relationships in the community and are out serving and involved in the community.” 

The approach has brought quality business and growth through their doors, Pape said.

Working through the pandemic

As the Covid-19 pandemic brought economic and market volatility to the world, but also financial assistance programs to sustain small businesses, CCB funded millions in Paycheck Protection Program loans. 

The PPP is an example of how relationships are important to CCB, Shannon said, sliding easily into storyteller mode. “When the program first came out there was a lot of anxiety because, frankly, there wasn’t much guidance about how the program was to be administered, what kind of expectations they had for the bank, and what kind of underwriting requirements the bank should be focused on,” Shannon recalled. “The unknowns went on and on. You’ll remember the ‘too-large-to-fail’ banks were very quick to only offer it to their current customers.” 

CCB called each of its business customers, Shannon said, to make a connection and see how they could help. CCB offered loans not just to their own customers but to others within the community.

Ensuring continuity of banking services meant keeping employees healthy, which meant a major investment in laptops and security so employees could work from home. During the height of the pandemic, about 75 percent of CCB employees worked remotely. That paid off, giving the bank its biggest year on record, Shannon said.

Some of its employees were already remote, having stayed at the bank after moving to other locations, Pape said.

“I think that’s the innovative mind of T.W. and Gene Watson, our president, saying we can take on more because of the type of institution we are and we can put people to use,” said Hunter Paul, director of marketing and community involvement. Last June, the bank had 94 employees, and by June 2021 it employed 128. Those employees helped the bank manage record growth in its mortgage division, fueled by historically low interest rates and a refinance boom. 

CCB also added a correspondent lending line, Shannon said. The bank not only originates loans, but also buys them on the secondary market, hedges against loans, sells loans on the open market, and buys correspondent loans, too. Its reach as a HUD 184 lender means that they have customers in nearly every state. “We’re unique because there are very few banks our size that do as much in mortgage as we do,” Shannon said.

Innovating to build more 

CCB is a mission-oriented bank, Shannon said. That doesn’t mean they’re a nonprofit; their shareholders expect them to focus on the bottom line. Yet, they also work to improve housing opportunities, for example, and have other community service projects that enhance both the tribe and the larger community.

For the employees, it feels good to be part of something bigger than “just making money,” Shannon said. And that service-oriented outlook also extends to taking care of their employees, he said. 

“We recognize we’re serving a much higher call at the bank,” Shannon said. “Our motto is ‘Building Better Lives for Everyone.’” 

Perhaps with that mission in mind, CCB found a way to further increase its HUD 184 work while collaborating on a project with the Cherokee Nation, another Native American tribe in the region.

While HUD 184 loans are primarily accessed by individuals to purchase houses that are on tribal land, in this partnership it was the Cherokee tribe that took on the loan and then provided the housing to its members in a rent-to-own model. It benefits the tribal member who is in the home, but because the ownership is the tribe’s housing authority, it also benefits schools in that area, said Jerri Killer, interim executive director of the housing authority of the Cherokee Nation.

“We have over 800 mortgages right now with the bank for our program, which is phenomenal. That’s the lives of a lot of families that have benefited from the relationship that we’ve been able to create with them,” Killer said. HUD 184 loans are a unique loan product, so having someone who has the relationship and knowledge about tribal communities and the differences in types of land categories is important, she added. 

“We’re very grateful for CCB bank for their innovative and creative thinking and figuring out a way to do this,” Killer said. “This program has been a game changer for so many Cherokee families. When you get people who are in safe, stable housing, it can just change their life for the better.”

It’s a relationship that’s beneficial in both directions. The success of these programs has led the Cherokee Nation to refer other home buyers to the bank. And the bank has acquired grants that have helped bring down the cost of the mortgages, too, Killer said.

Relationships drive success 

A member of the Chickasaw tribe, Shannon previously served as its chief administrative officer after law school. As CAO, he was one of five C-level officers, and was responsible for all support functions.

He also has worked in the private and public sectors, including serving in Oklahoma’s House of Representatives for eight years, the last two as Speaker of the House. 

“In order to be successful, you have to understand relationships and putting together teams and setting goals and holding people accountable to those goals,” Shannon said. “That’s something I’ve always done.” 

One of those relationships is with Stolz Telecom, with offices in Oklahoma and Texas. The company equips emergency service vehicles and departments, including 911 centers, with communications equipment. The family-owned company has worked with CCB for several years, coming from a larger national bank, said co-owner Rachel Stolz.

“With a community bank, we get reached out to, they ask if we need anything,” Stolz said. “And so that personal relationship is what makes all the difference.” 

The business was able to get PPP loans for both its Texas and Oklahoma offices, finding the process seamless. “Without them, we couldn’t do what we do on a daily basis. And just knowing that they’re there to support us in any way has just meant the world to us,” Stolz said. 

For the bank, last year was an anomaly in terms of growth, Shannon said, with all that was happening. The bank has a deliberate strategy for growing the bank and its assets at 15 percent to 18 percent per year, Shannon said.

It will do that from a new location, relocating its headquarters in 2022, as well as opening new branch locations. Shannon described the new home office as one that will better reflect what the bank represents. 

Chickasaw roots

The Chickasaw people were originally from what is now Mississippi, before being uprooted and moved to Oklahoma in the 1800s. Having the Chickasaw identity in Oklahoma is itself a huge asset, both in business and in values, Paul said. “It’s been a great benefit for us to be wholly owned (by the tribe),” Paul said. “I think the only thing that we’re very much aware of is, ‘hey, we’re a bank for everybody. We have this name and we have this history, but it doesn’t mean we’re exclusive.’” 

CCB is one of only about 18 community banks in the United States owned by Native Americans. 

“The reality in banking is, the actual product itself, we all offer very similar products,” Shannon said. The difference is the uniqueness of who CCB is as a tribally-owned bank, as well as its focus on relationships, he added. 

“Banking is a relationship business, particularly community banking,” Shannon said. “The thing that’s great about community banking that’s so rewarding is that we really are on the ground level of helping people’s dreams come true. It’s very, very rewarding.”