Alden McDonald, President and CEO of Liberty Bank, talks to NBCBLK about what it was like returning to New Orleans to rebuild the African American owned bank after Hurricane Katrina.
What is the significance of an African American owned bank?
It’s been very challenging for African-American owned banks, because primarily we served communities that other financial institutions wanted to be a part of, which simply means it costs more money to operate in these communities.
Our mission was to make certain that these communities had financial services, Because without these minority banks, a lot of these communities will go without financial services to support the economic base of these communities.
How did you get into banking?
When I got into the business of banking, they had no African-Americans really on the officer side. Banking became a passion once I found out how to buy a house with no money down. After that, I said, you know something? I want everybody to own a house.
So, it’s been a passion of mine to create homeownership, to create business ownership, and to really have people to have available to them financial services where they don’t have to pay high interest rates.
What happened to your banks during Hurricane Katrina?
Katrina came and wiped out everything. We literally had to start over again. Eighty percent of our customer base was wiped out. Eighty percent of our customer base was dispersed among the United States. So we had to rebuild the bank, rebuild the business model, and try to take care of people where they were located.
We attempted to help as many people to recover as we could. We began offering loans the day after Katrina, operating out of a remote operation in Baton Rouge, Louisiana.
How could you operate after such devastation? What did you do?
All of the infrastructure to run the computers were wiped out. Our backup system that we paid for as an alternative, they cannot supply us with what we needed. So we literally operated the bank for a week without records. But nobody knew that.
The people who were customers of ours, we made sure that they got what they needed, that they were able to get money. That if they needed to borrow money, we made loans to them.
We had to run the bank, rebuild the bank with limited staff, limited infrastructure. And it was an experience. We used to huddle every day at the office in Baton Rouge.
We worked about sixteen hours a day. Nobody had any place to go anyway, right? Everybody there lost everything. So we literally bunked up at the office, initially, until we were able to find housing for the people who were there.
Then we had to try to find housing for people who wanted to come back, our employee base to come back.
We enjoyed making it happen, because we enjoyed solving problems for thousands of people that relied on us.
Is there another side to the influx of people coming to New Orleans to help, but, not for cruel intentions, it didn’t happen?
I mean, whenever there's a catastrophe, you have people that come in in town to take advantage of others. That did happen. It happened a lot. Happened a lot in the African-American community, where contractors came in and took the little money that people had to rebuild, and as a result of that they couldn’t rebuild their homes.
And we tried helping in that arena as well. You have some people who are still struggling, trying to get their homes rebuilt. But for the vast majority there were different ways that they were able to get their homes rebuilt, they had to make some different decisions.
How did the community change post Katrina?
First of all, we had homes for almost a hundred thousand people. Probably eighty percent of those homes were lost. We had a huge shopping mall, right at a million square feet, which is a vacant land today. They had to tear it down because of the devastation.
We had three hospitals out here. We have one hospital that just came back less than a year ago. The physicians are not back yet. The medical services, medical offices that we had out here are not back yet. All of the schools are not back yet.
We just completed the police station and the fire station less than two years ago. And so the community is still rebuilding some of its basic structures. We are still without a supermarket in the area of New Orleans East.
10 year later, has progress been made? Is New Orleans back?
Ten years later, most of the city is back. Some of the neighborhoods are not back. And it all depends on how you describe back. For example, you have eighty percent of the homes that are back, but you don’t have the infrastructure that is back.
New Orleans coming back had to rebuild itself, and it rebuilt itself to sort of overcome some of the other issues. Homes got rebuilt to a modern nature, whereas perhaps a lot of those homes would not have been rebuilt.
A lot of the housing was rebuilt. So is New Orleans back? Yes, it's back. I mean, it's stronger now than what it was before, has better infrastructure than it had before.
The people have been through a lot. But the people persevered in a lot of different ways to make it better.
And what about Liberty Bank? How have you bounced back as a business?
From the business point of view, we’ve done well. The year after Katrina was our most profitable year in the history of our company. But that was because we closed some of the branches that we had that were not profitable anyway.
Because we service our community, it forced us to look at our business model again. Matter of fact, since Katrina, we changed our business model three times. So it forced you to survive. It forced you to rethink what you are, where you are, and where you're going to go.
It forced us to buy financial institutions and six other states for diversification purposes. And so what we’re thinking about today is that the continuation of surviving in a minority bank atmosphere, servicing these communities that we started off with a passion, still have the passion.
What are you most proud of in your 42 years of running Liberty Bank?
The thing that we're most proud of is that we've been able to survive as an African-American-owned financial institution, servicing a population of a financial entities elected not to serve because of the difficulty in servicing it. And we've done it and made a profit doing it, without gouging people.
So what I'm most proud of is that we're still here after forty-two years, servicing communities that lack financial services.
This interview has been edited and condensed for clarity.
