Cameron Insider

A fledgling financial technology company with its nest in Wilmington is soaring with clients across the country. And it has deep connections to University of North Carolina Wilmington.  

Lumos Technologies, Inc. provides data insights and analytics as a service, with a focus on improving small business access to financing, says Brett Caines (MBA ’07), one of Lumos’ three founders. He, Stephen Hayes and Youri Nelson (BS ’10 and MS ’11 Applied Mathematics) formed their enterprise in October 2021. With an investment six months later, they brought on 10 additional staffers to handle everything from company management to mathematical modeling and data analysis. 

It’s a venture staffed 100% by former Live Oak Bank employees – and 70% by UNCW grads. In addition to Caines and Nelson, those Seahawks are Kirra Beitel (BS Computer Science ’16), Paul Cole (BS Environmental Science ’14 and MS Data Science ’18), AJ Franchino (BA Psychology ’16), Cory Jones (MS Accounting ’16), Misty Mangiacapre (BS Marine Biology ’13 and MS Chemistry ’16), (Jason Miller (BS Business with Finance and Economics concentrations, ’17) and Megan Pierce (BS Business with accounting concentration ’07). Separately, they contribute their own perspectives and experience gained at Live Oak to the new enterprise. Together, they’re taking on a problem they see in the world of small business financing: the lack of lending for very small businesses. 

Many institutions that say they make small business loans have gravitated to the high end of the spectrum, making multi-million-dollar loans to low-risk borrowers, Caines said. As a result, they have turned their attention – and their assets – away from companies that may need $500,000 or less. 

So, what is Lumos doing about this? 

The company recently launched its Prime+ scoring model for potential borrowers that “improves underwriting efficiency and provides a more accurate and fairer risk assessment for small business loans of less than $500,000,” according to the Lumos website. It predicts expected credit losses over an upcoming 12-month period.  

Currently, most lenders typically rely on a potential borrower’s credit score, Caines said.  

“Our Lumos Prime+ score relies more on factors that actually predict how that business will perform, such as the economic factors in the region and how similar businesses in the region have historically performed,” he said. “We’ve done a lot of work with our model to make sure it’s fair across many categories, that there is no intended unfavorability with various groups. We have tested it for bias and fairness.” 

Thus, Lumos’ data analysis model can help lenders assess the risk of making a small loan to a business with little or no borrowing track record. “Maybe they have bootstrapped for a couple of years and now need a $100,000 loan to grow,” Caines explained. 

Just as the young company is exploring alternative ways of thinking about problems, Caines says his experience in the Cameron School’s MBA program helped him to approach things differently.  

“Probably the biggest thing for me was being exposed to different perspectives than I had encountered in my undergraduate science and engineering studies, he said of his MBA experience. “I was coming out of a professional career as an engineer and looking for some kind of change. I would have been fine in the same industry but maybe in the business end. We thought through case studies: what other businesses had done, what should have been done differently, in hindsight. We gained views across all disciplines of what it takes to run a business. The faculty were stellar: always willing to help and talk after class.” 

UNCW provided a significant connection for Caines that led him into the financial industry. 

“Without UNCW I never would have met Chip [Mahan, Chairman and CEO of Live Oak Bancshares] and been at Live Oak Bank,” Caines said. “Leaving class one day, I stopped by [marketing professor] Vince Howe’s office. I asked, ‘I’m really interested in making a change from engineering, so if anything comes up, would you let me know?’ The next day, Chip happened to call up Dr. Howe. He said he was thinking about starting a ‘lending company,’ and wondered if Dr. Howe knew anybody who might be interested in doing some financial modeling for him.  

“The next time I saw Dr. Howe, he said he knew of something: not a job, but some financial modeling. My work on that project could be considered an elective of some sort. He connected me with Chip; I did that work. 

“That was the fall semester of 2006, and that work eventually led to me joining Live Oak Bank when it started,” he said. 

Caines rose to become Live Oak’s chief financial officer, before teaming up with Hayes and Nelson to found Lumos. He said Chip Mahan still stops by to see what and how the team is doing, and to offer them encouragement.

Mouhcine Guettabi joined the Cameron School’s Department of Finance and Economics in August 2021, coming from the University of Alaska Anchorage, where he was an assistant professor of economics. He earned his PhD in economics with an emphasis on Urban and Regional Economics from Oklahoma State University in 2012. 

Dr. Guettabi is an applied microeconomist with two main streams of research: the effect of natural resources on households and communities, and the socioeconomic effects of unconditional cash transfers.  

During his time at UAA, Dr. Guettabi regularly produced economic forecasts, analyzed the state’s finances, conducted analysis on key policy issues, and testified in front of the legislature.  

For the past year, he has served as UNCW’s regional economist, and recently he sat down to answer questions about this aspect of his job.  

When you accepted your current position at UNCW, did you expect to become its regional economist? 

I knew it was going to be part of my job. I’d had a lot of conversations about it. The field of regional economics is a fairly applied field, and you tend to interact with the community a good bit and be community oriented. There’s typically a lot of demand for these forecasts. At the University of Alaska, I was in the Institute for Social and Economic Research, which had a fairly high profile in the state. That involved informing residents about key policy initiatives and doing work to let people know what is going on – analyzing it objectively. People could potentially trust what was coming out of our shop.  

The job here is a bit smaller; it doesn’t carry as many responsibilities. I respond to requests as they come.  

How do you view your responsibilities in that regard? 

I think of my role as understanding, studying and communicating what is going on in the region and potentially being able to answer questions relevant to businesses, individuals and governmental agencies in the area. What makes the regional economy tick? I try to stay ahead of stuff, see where trends are heading, where there are opportunities or challenges in different sectors.   

Then there’s the communication part: getting out, speaking to different groups, listening, trying to stay ahead of a fast-changing environment. I do quite a bit of academic research, some applied research, sit with people who are doing projects. I think of myself as a resource to the community.  

How does being a regional economist influence your teaching? 

I teach a Principles of Economics class and a Regional Economics class. The Regional Economics class is me trying to teach students the tools of the trade; trying to answer questions that are prompted by the community. [Students] learn how to do an economic impact analysis, compare factors across regions. It’s very easy for me to go out and give an economic outlook [presentation] and come back and [share that with a class]. 

For example: data recently came out from the Census showing that migration patterns are changing significantly. I went to class and we talked about migration patterns for 10 minutes. It’s all part of this hat that I wear, and the service component of the job. Ideally, those components should not be separate: I try to marry all three, and allow each to inform the other.  

What has been surprising to you since coming to Wilmington?  

In the Wilmington-area economy there seem to be quite a few pockets that are not captured in the industrial structure. One example is retirees: there is a lot more spending from them than gets captured in wage and salary data. Another example is remote workers. 

It’s a bit challenging to understand the drivers of spending in this area if you were just to rely on data from agencies. Look at restaurant and hotel activity. It seems that level of spending does not match the [area’s] median income. How do you account for that? Squaring things up has taken me a while.  

It’s also a challenge to understand the share of the population that is working remotely. How many people have come to live here and work remotely? How many will stay? 

Long-time UNCW regional economist Woody Hall was known for his sometimes-humorous takes on the data he reported. His successor and your predecessor, Adam Jones, has a very dry wit. You have salted your public talks with colorful terms, such as “vibe-cession,” and you commented recently that “nobody’s acting their wage” as you pointed to the disconnect between wages and spending. So, do regional economists need a sense of humor?  

It’s not a prerequisite [he laughs]. I try not to take myself too seriously; hence, I try to joke around. Economics in general has a fairly negative reputation; I take pride in trying to communicate as clearly as possible when I speak to groups and take advantage of opportunities to inject humor. You don’t want people to be looking at their phones. 

You were fairly new to the university and to the region when you became the regional economist. How did you adjust so quickly? 

That’s the part of the job that’s not visible: trying to be a student and read up on the area. I went through a lot of material [from places like] the N.C. Department of Commerce and I looked at Adam’s work.  

While regions are more similar than dissimilar, I was trying to identify what makes this region tick and start to put materials together. Maybe it’s to my advantage that the area is changing so fast. You are trying to understand it like everybody else. There’s a bunch I still don’t know. I don’t think of myself as having all the answers; I can paint a picture that gets you to the answer, or help you find the answer.   

If anyone wants to reach out, contact me. If I can add value to someone’s project, I will, or point them in the right direction. Being a regional economist is a people-facing position.  

This past summer CSB alum, donor and RSM Partner Morris Marshburn ‘85 made a significant contribution to the Cameron School of Business.  This gift was then matched by the RSM foundation. The RSM scholarship recognizes the long-standing relationship between Morris, RSM, and the Cameron School of Business. This contribution allowed for the endowment of the RSM Scholarship in Accounting and the RSM Faculty Fellowship. 

The scholarship assists students pursuing a degree from our Accountancy and Business Law Department.    

The fellowship allows Seahawks to directly learn in the classroom from thought leaders across business disciplines.  Dr. Tom Downen was named the RSM Faculty Fellow. 

Morris Marshburn is the national leader of specialty finance within RSM’s financial services practice. He has more than 36 years of experience in public accounting, including over 31 years with RSM, providing assurance, tax and consulting services to public and private specialty finance companies across the United States. 

Give a man a fish and you feed him for a day; teach him how to fish and you feed him for a lifetime: so the old saying goes. Victoria Hansen and her team of Cameron School volunteers apply that adage to tax preparation. 

Hansen, an associate professor of accounting and the Elwood and Mary Walker Faculty Fellow, has headed up the university’s Volunteer Income Tax Assistance (VITA) program for several years. When she took over, she wanted to expand and improve the service. 

One step in that direction came after Hansen talked with an IRS staffer, who encouraged the university team to teach taxpayers how to master the software and complete their tax returns themselves, rather than do it for them.   

The result? The tax return is completed and filed, and the taxpayer is armed with the skills to do it again in the future.  

“This is a university; we’re all about teaching,” Hansen says. “The IRS thought it would be a good idea. It’s not as scary to do your own taxes as you may think it is, and there’s no reason to pay someone to do them, especially if you are filing a simple return.”  

When taxpayers come to the site for help, a university VITA volunteer introduces them to the Taxslayer software; if the taxpayer doesn’t have a laptop, they are lent one for the session.   

As long as the taxpayers have an adjusted gross income of $73,000 or less, they can use the free Taxslayer site. The software is similar to that of Turbotax, Hansen says. If they make more money or have more complex returns than the software enables, the university VITA team refers them to other VITA sites in the community where volunteers will complete their returns for them. 

“Surprisingly, most people try it,” she says of the Taxslayer software. “I’m always shocked at how many older people try it and they are pleasantly surprised. Most people who come for the service don’t have overly complicated returns; they’re just scared.  

“We do have one repeater who comes in and does her taxes at our site every year,” Hansen adds. “It makes her feel good to do it there. We also have a link on our website (https://csb.uncw.edu/acg/vita.html), so if you want to do your taxes in the comfort of your living room, you can – and email us if you have questions. There is a link on the website to the software and a bunch of information about filing. Some people who have been coming for years do that – a benefit of COVID.” 

Although COVID did open up online avenues of communication, it was disruptive. Hansen and her team suspended their services in March 2020 as the pandemic shut down person-to-person activities. But the VITA team adapted the following year.  

“In 2021 we had a virtual service in place via Zoom,” Hansen said. “People could share their screens so we could see what their tax return looked like. It was very difficult, compared to what we had done in the past; and when you are doing virtual [lessons], people had to schedule online sessions individually.” 

This year and last, things were back to normal.  

“This year we have three other faculty members who are assisting; they volunteer for a couple of shifts; they do what they have time for,” Hansen said in the midst of tax season in March. “I have 10 students this semester who are assisting, volunteering for three-hour shifts on Wednesday nights and Saturdays. Students are asked to do three three-hour shifts, but I have one who has done five so far. Most students will do more than I require, so they get the experience.”  

Another change the program has made in the past several years: providing easier access. In the program’s early days, the sessions took place on campus. But parking was a problem. 

“The first thing I did [when I took over] is ask ‘Can we do this somewhere more friendly?’” Hansen recalls. “For four years we held our sessions at the CIE (UNCW Center for Innovation and Entrepreneurship). This year it was at Truist Hall on South College Road right next to Taco Bell; it was easy for people to walk in and find us.” 

Not all the people the VITA program serves are older adults. Many students come to learn how to do their own taxes. And among the off-campus population, word of mouth has brought friends of former customers to sharpen their skills. 

“I assumed that because the process is technology-driven, people might be afraid to try it,” Hansen says. “But I’m surprised at how many people are willing to try.”