Liberty and profit for all: B.E. financial company of the year - Alden J. McDonald Jr., CEO of Liberty Bank and Trust Co - 25th Anniversary of the B.E. 100s - Cover Story - Company Profile

ALDEN J. MCDONALD JR HAS THE LOOK OF A MAN BEING sold a bill of goods. McDonald, president and CEO of New Orleans Liberty Bank & Trust Co., is visiting his General DeGaulle branch and has just been cornered in an elevator by a 30-ish, attractive African American woman. Representing a local HMO, she's come in to give the branch manager a presentation on why Liberty, which bids out its health insurance coverage at a cost of $250,000 annually, should give her company a rest run. Sensing an unexpected opportunity to make her pitch to the top man, she goes into hard sell mode.

But McDonald isn't having it.

"You're jumping the gun. If your firm wants to work with us, then they have a lot more to do before they send you down to give a presentation," he says firmly. "I need to see an EEOC report and know if you guys have any black people up near the top. I also want a commitment that they're going to be adding more black doctors to their HMO. There's more to do, a lot more." Then, in a kinder tone, he adds, "I'm doing this for the few of you over there, too, as well as us."

Privately, McDonald insists he's been burned by an HMO before. He made similar demands with an earlier health care carrier that agreed to include black physicians, per Liberty's request, for a short time, but soon reneged. This time, he wants it in writing. "When we spend our money, we want to make sure in some fashion it's staying in the community and it's not with a company that discriminates or doesn't include minorities in the process," he says.

Whether they'll bend to his demands is uncertain. But these days, the 53-year-old McDonald can afford to play hardball with an HN40 and just about anyone else within New Orleans proper. McDonald and Liberty Bank are on a serious roll, with the purchase of three new bank branches last year alone--two in New Orleans and one in Baton Rouge. Liberty's recent successes are all the more impressive because of the bank's grim outlook just a few years ago.

In the late '80s and very early '90s, the order of the day was streamline until it really hurts and then cut back a little bit more. When McDonald jokes now about the days of tracking paper dips to keep costs down, he sounds like a man who has walked through a dark tunnel to find a green valley on the other side.

While Lazarus-like insinuations may be pushing the analogy a bit far, to say that Liberty has come full circle since being named BLACK ENTERPRISE's Bank of the Year in 1984 would be a severe understatement. The oil bust of 1986-87 was the kiss of death for many independent banks in the New Orleans parish. Of the 10 independently owned commercial banks in New Orleans prior to 1985, only two survived the oil-bust debacle. And McDonald says Liberty came closer to joining the scrapheap than he'd care to remember. "We lost all of the profits we had made in the previous years plus some," he recalls. "It was a bad time."

Fast forward 10 years and Liberty is not only solvent again but in full-fledged expansion mode. The bank had assets last year of $ 134.8 million, a 5% increase from 1995. Liberty's total capital for the year was $10.1 million and deposits tallied up to $122.4 million. Its total loans saw a 10% increase to $81.3 million and the bank now has eight branches spread across New Orleans and Baton Rouge.

Just as significant, Liberty has been able to accomplish its remarkable turnaround while remaining an impact player to its 35,000 customers and the surrounding community. Whether it's sponsoring the local track meet, which offers college scholarships, or fund-raisers for the United Negro College Fund, Liberty has become a key player in the community. For over 25 years, it has had a reputation as one of the strongest financial institutions in its region. For its successful expansion efforts, for being a long-standing community player and being among the leading FHA and VA mortgage lenders, Liberty Bank of New Orleans is BLACK ENTERPRISE s 1997 Financial Company of the Year.

AND LIBERTY FOR ALL

New Orleans is a dangerous place, but in a good way. Bourbon Street sets the tone for much of the city's dark, yet dramatic flair. It starts with the throbbing beat of music pulsing from the many jazz dubs lining the narrow corridor of the "Street." The mood is amplified by the hawkish vendors selling overpriced T-shirts as well as the numerous bars and risque "cabarets" scattered throughout the strip. Bourbon Street is the seductive "must-see" attraction for the 10 million tourists who rush through the city annually. And although perceptions may vary, many come away thinking of New Orleans as a city where it's all right to be a little bad.

A child of New Orleans, McDonald says the city has changed in many ways since he was a youth. But, it's also stayed very much the same. "I've been here all of my life and there aren't too many other places that I'd care to live," he says.

The son of a waiter, McDonald worked his way through school tending lawns and serving as a steward at parties. At the time, he says, the very idea of banking was unthinkable. Instead, his early goal was to become a bricklayer, one of the few jobs available to blacks at the time. "Black folks in this area were either school teachers, worked in the post office or they were bricklayers or carpenters," he says. "Those were the professions available for us."