E-mail a friendAlden McDonald
airdate August 8, 2008
In '72, at age 29, Alden McDonald became CEO of New Orleans' Liberty Bank & Trust, a start-up headquartered in a trailer lot. In '05, Liberty was one of the largest African American-owned financial institutions in the U.S. He worked his way through school and began his career as a part-timer at a local bank. A commissioner of the Bring New Orleans Back Fund, McDonald has helped lead the post-Katrina rebuilding effort by example and, in '06, was named to Fortune magazine's "Portraits of Power" list.
New Orleans bank CEO discusses his disappointment that their call to host one of the upcoming presidential debates went unanswered. (2:42)
Full Interview. (11:37)
Alden McDonald
Tavis: Alden McDonald is the president and CEO of Liberty Bank which is not only the largest African American-owned bank in New Orleans, but one of the largest in the entire country. He is also the longest-tenured African American financial executive in the U.S. and the former Chairman of the New Orleans Chamber of Commerce. He joins us tonight from, where else, the Big Easy. Alden McDonald, nice to have you on the program, sir.
Alden McDonald: Fine. Thank you for inviting us again.
Tavis: Glad to have you. Let me start by asking, first of all, how you and your family are doing. That seems to be a bit more important than the bank business.
McDonald: First of all, before I even answer that question, I'd like to thank you, Tavis, for keeping the whole world apprised as to how we're recovering here in New Orleans. It is a hard piece of overcome, but we're getting there. To answer your question about my family and I, we're not in our home yet. We're about maybe three weeks away, so we'll make it for the third anniversary.
Tavis: All right. Just in time.
McDonald: Just in time.
Tavis: Did you completely rebuild? Did you have to renovate? What happened specifically to your home?
McDonald: No. My home is still locked up. We are renovating another home in another part of the city that did not get as much water and we should be in in a couple of weeks. It's been a challenge.
Tavis: I suspect so, if you're just now getting back in that home three years later. And it really goes to show and to underscore - and I say this with all due love, of course - it goes to underscore how difficult it is for everyday people who don't have the means that a bank president has.
Here we're talking to a bank president who, three years later, is just getting back into his home and that tells you why the city now is about, according to the most recent survey, about 72% of residents are back in the city. We're told, though, by this recent study that the city now has kind of plateaued at that 72% return mark.
But it really, again, just drives home the point that if you, three years later, are just getting back into your home and not the home that you were living in. It really does speak to the travail that people are having getting back to that city, yes?
McDonald: Yes. There are a number of people who are probably not coming back because of the difficulty in finding good contractors to rebuild. There's still some housing issues. The "jack o' lantern" approach still exists in the city and, until new housing policies are put in place, it's gonna become more difficult.
It's gonna be very, very important for the national government, HUD, FHA, to maybe change some of the rules because you're trying to build a community back with housing with rules that did not take into account the type of catastrophe we had here. So it makes it difficult for all of the people who even want to rebuild to find a way to rebuild. Things are changing, but they're changing on the slow side and it's gonna take some time for the city to come back.
For example, in the area where we have our corporate headquarters and where I did live, that area is only about thirty percent back. The first floor of our old building is still gutted. There are still very, very, very few commercial entities. The medical services in the area in which we were located are not back. They have not returned and there's nothing in the immediate future for them to return. So it's a very difficult process of getting different communities to rebuild.
However, you know, we have at the bank put a lot of attention in helping people to rebuild and maybe that's one of the reasons why it's taken me three years to get into my home because we felt it was very important to help rebuild the city first. Because in rebuilding the city first and getting people back, maybe we can increase the commercial aspect of neighborhoods and rebuild neighborhoods and get housing for people to come back.
Tavis: I want to talk specifically about the bank and the remarkable recovery. I'm gonna ask a two-part question in just a moment to have you first tell me what your situation was before the storm hit, how these eight branches were devastated, and then we'll talk about how you've rebounded.
I'm doing it in that order because "The New York Times," as you certainly well know, has been a series of stories following you and the bank and how this bank has gotten back on its feet. It's a remarkable story that "The Times" and others have been following.
Before I do that, though, since you were talking about the rebuilding of the city, I was thinking as you were talking, Alden, that earlier this week, the U.S. Commission on Presidential Debates finalized where these debates were going to be held, the various universities, the various cities, what time they're going to air, who the moderators are going to be.
You know as I do that they passed on New Orleans. There was a big push to get New Orleans as the site of one of the presidential debates, to put the focus back on this city three years later, to get these two candidates, Mr. McCain and Mr. Obama presumptively as we speak to address these issues. The Commission passed on New Orleans as a city. It's not going to be the site of one of these debates.
That said, I was personally disappointed in that. But that said, tell me what you're hearing, if anything, on the campaign trail from these candidates that gives you hope that the city might be getting the kind of support it needs as we go forward with a new administration.
McDonald: Well, I think it's gonna take even more than a new administration. I think it's going to be an awareness factor for all of Congress to understand the devastation. Some of the leadership from New Orleans have, on numerous occasions, had Congressional people to come into the city because you have to feel it. You have to see it because it needs changing in a lot of the procedures and policies that this country is pushing. I think it's very hard for one to understand why these changes are necessary without viewing it themselves.
The invitation to have the presidential debate in New Orleans was to do a couple of things. One, to let the world know that we're still up and running because we need all of the tax dollars we can get, all of the sales tax. We need people to come to the city in order to create jobs. That's one flaw that did not get repaired yet. We have no mechanism for creating new jobs or jobs that we lost. We lost about 100,000 jobs in this community and there was no real coordinated effort by government in any kind of way, shape or form or corporate America to recreate jobs.
So as a result of that, people are not coming back because the jobs they had are no longer here. We lost a lot of jobs in the medical field as well as the educational field. So we were hoping that once people came for the presidential debate, once the media came, we could begin talking about some of these issues and some of these changes that will be absolutely necessary for the next disaster in our country.
Tavis: Well, the media may not come for a presidential debate, but at least one media show - this one at the moment - has the pleasure of having you on to tell us about the bank. So quickly, tell me how the bank was doing before the storm, how devastated you were after and how you guys have rebounded.
McDonald: Well, pre-Katrina, we were about $330 million dollars. When Katrina hit, it hit our corporate office, our computer center. We did have backup services by one of the largest disaster sites in the country, but they failed us. They were not ready for such a disaster as well. Nor was the Federal Reserve. Nor was the banking industry. For example, the Federal Reserve in New Orleans even shut down. That gives you an idea of what type of disaster we really experienced.
Tavis: Um-hum.
McDonald: In saying all of that, we lost all of our records, all of our files, all of the communication. We had no computer system up to talk to the ATM machines, to talk to the Check Cards. We lost all of our credit files, all of our collateral files.
We literally had to start from zero two days after the storm in one of our branches that was located in Baton Rouge, Louisiana. So we had eight facilities. We had eight branches and two other facilities, a total of ten facilities, that we did not get back for almost a year in the New Orleans area. So we had to literally rebuild the bank from day one and try to get back on our feet.
A friend of mine in the banking business said, "Tell me what it was like." I thought for a while and I said, "It's like starting a bank today and you have a thousand people waiting to take money out yesterday." So we had to literally put the whole system back in place. We lost $50 million dollars of deposits, so it brought us down below $300 million in size. Today, we're close to $400 million in size, so we've increased our assets post-Katrina almost $100 million to begin with.
We since then opened in Houston, Texas and Kansas City, Missouri and Kansas City, Kansas. We are one of the chief lenders of helping people to rebuild their homes. We've been doing a lot of housing loans and, as you know, in this marketplace today, that's taboo. But we feel very comfortable with our customer base and that's what we're here for. We're here to help people. We're here to help the people who's been very loyal to us.
One other thing, Tavis, that we're very, very proud of. This storm hit in August of 2005. We lost money for the bank which was only the fifth time in the history of our institution that we lost money and, in 2006, we had the most profitable year in our company's history. We were the 25th best performing bank on return on equity in the country. Not just minority banks, but financial institutions.
We were the 25th best performing bank on return on equity. So our staff, the dedication of the people who worked very hard after the storm, did a tremendous job for rebuilding our institution, which was very important to rebuilding our community.
Tavis: It says a lot about the bank. It says a lot about your leadership. It says a lot about Black folk in particular and what can be done when we put our minds to it when the resources are there and when we can help people get back into the city. It's quite a remarkable story. What a turnaround Liberty Bank has endured over the last few years under the leadership of its president and CEO, Alden McDonald.
Alden, all the best to you. Nice to have you on the program. Thanks for coming on to give us the update as to how you are doing and we will keep hoping and praying that others in the city get a chance to turn their lives around as you and the bank have. Congratulations on getting into your new house.
McDonald: Well, thank you very much, Tavis, for not only inviting us back, but keeping the city of New Orleans in the forefront. We need all of the help we can get. Thank you.
Tavis: It is our pleasure.
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