Magazine article Black Enterprise

After the Storm: New Orleans-Based Bank Emerging Strong Post-Hurricane Katrina

Magazine article Black Enterprise

After the Storm: New Orleans-Based Bank Emerging Strong Post-Hurricane Katrina

Article excerpt

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THREE YEARS AGO, LIBERTY BANK AND TRUST CO. (NO. 8 on the BE BANKS list with $299.3 million in assets) was nearly wiped out by Hurricane Katrina. Offices were flooded, ATMs vandalized, and customers had scattered to the four winds. Now, its never-say-die President and CEO Alden J. McDonald Jr. and his bank are as strong as ever.

Evidence of McDonald's resilience abounds: Liberty Bank recently won a bid to take over the assets of Douglass National Bank in Kansas City, Kansas, and Missouri, formerly listed on the BE BANKS list. Liberty bought an estimated $55 million of Douglass' assets at book value, less a discount of $6.1 million. Liberty also picked up approximately 6,500 accounts, three branches, and the ATM network from Douglass, previously the Kansas City areas only black-owned bank. Federal regulators closed Douglass because of escalating bad loans and insufficient capital.

How much did Liberty lose as a result of Katrina?

The bank lost about $2 million in net profits in 2005 because of Katrina, one of the few times it lost money in its 35-year history. We lost a revenue stream of $2 million largely because of fewer transaction base customers. We have since recovered that revenue stream and more by implementing a new business model with new and exciting products. We had profits of $3.6 million in 2007, up from $3.5 million in 2006.

How does the Douglass deal fit into your strategy of growing and rebuilding Liberty Bank?

The Douglass National Bank acquisition is part of our continued strategy to grow Liberty through acquisition. …

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