Todd McDonald, president of Liberty Bank and Trust in New Orleans, joins Forbes senior writer Jabari Young on The Enterprise Zone at the Nasdaq MarketSite. During their discussion, McDonald outlines the mission to eliminate loan denials, discusses the current state of the housing market, and shares insights about the overall state of the U.S. banking industry.
Read the full story on Forbes: https://www.forbes.com/sites/jabariyoung/2025/02/27/inside-the-largest-black-owned-bank-in-america-liberty-bank-new-orleans-alden-mcdonald/
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LifestyleTranscript
00:00You might as well call him another Michael Corleone, as he is the son of one of the godfathers of community banking, a CEO-in-waiting, right, the president of Liberty Bank & Trust in New Orleans, and he has his own ideas about the future.
00:14His name is Todd McDonald, and we'll discuss banking and all above coming up.
00:18You're in the Enterprise Zone at the NASDAQ.
00:21Hello, everyone. This is Jabari Young, senior writer at Forbes, and I am at the NASDAQ market site, and I am joined by Todd McDonald.
00:33He is the president of Liberty Bank & Trust in New Orleans.
00:36Now, this is the largest black-owned bank in America with $1.1 billion in assets, and Todd is also a Forbes BLK50 member.
00:46Todd, my brother, thank you so much for making the trip all the way from New Orleans here to New York, man.
00:50Thank you for having me. It's an honor.
00:51Hey, man, listen, it's a pleasure, man. Largest black bank in the world. I plan on asking you for a loan after this.
00:55Hey, done. Done.
00:56Oh, there we go. Y'all saw it. It's done, right?
00:58It's on camera.
00:59No dock loan.
01:00Well, I don't know about that. I don't know about that.
01:02Listen, man, we're here at the NASDAQ, and as we talk, it's red, right?
01:05But I'll say, if you had to give me a stock, something that maybe nobody talks enough about that's worked well for you and that maybe you're looking into, what would that be?
01:13Sure. So I'm not a registered investment agent, so I cannot give any particular stock picks.
01:20However, just sticking to what you know and what you're familiar with.
01:24Yeah.
01:25And so as we were talking, you said that you made an investment based on your daughter's interests.
01:30That's a pretty good way to make a decision because she's probably in the know on how that product or service or software is actually operating within her demographic.
01:40And so since she's 11, a long road ahead.
01:44And so if they're making the right decisions, that's the choices.
01:46And not to be secretive, Todd is talking about some Nintendo stock.
01:50Okay.
01:50Yeah.
01:51Over-the-counter markets, though, so it's a little bit tricky.
01:54But Nintendo, listen, it's been around since I was a kid, so I figure it's not going anywhere.
01:58They're ready to release a Nintendo Switch.
02:00So, you know, a good stock to invest in.
02:02She also has some Mattel as well.
02:04Okay.
02:04Yeah.
02:04I asked you the question, and here I am answering it for you.
02:06Well, hey, you know, but Warren Buffett, he always says, look, it's better on brands that you feel are just solid.
02:12Absolutely.
02:12So Coca-Cola, all of those brands.
02:15So Nintendo and Intel, I feel, fit right in that.
02:18It's not going anywhere.
02:18I figure it's going to be here.
02:19It's going to be here, man.
02:20Listen, it's 2025 and a lot's happened in the world.
02:24What's been the soundtrack that's been keeping Todd McDonald creative?
02:28Like, what's been that music, that sound that you've been relying on?
02:32Nothing is promised.
02:33Nothing is promised.
02:34Nothing is promised.
02:34Well, no, that's just how I'm navigating.
02:39Oh, I'm thinking that's a song.
02:41No, no, no, no.
02:42I don't have a specific song, but just being able to adapt to the changing times.
02:48Yeah.
02:49And so when you look at banks, especially like Liberty Bank, we have, you know, loans out to individuals and businesses across the country in various sectors.
02:57And so you look at the economic space right now that we're in, and they have a lot of adjustments from cost of goods,
03:04for food, for food, for medical supplies, and building materials.
03:08And so we do a lot of loans in affordable housing developments across the U.S.
03:14And so those loans, we're, you know, changing underwriting to kind of conform with where we see the markets are going.
03:21And so the end client is making those adjustments as well.
03:26And so we're resetting and adjusting.
03:29And, again, nothing is promised.
03:31So just a lot of inspiring music, I guess I should say.
03:34It sounds like a little bit of Shaw Day, nothing as good as the first time.
03:37That's what it sounds like.
03:38I don't know if you know, it's promised, but nothing as good as the first time, maybe a little Shaw Day is keeping me creative.
03:42I think all of that is applicable.
03:43Yeah, listen, Shaw Day is keeping me creative.
03:45Always has.
03:46I understand.
03:47Well, listen, Financial Literacy Month is in April, but we always talk about it on this show.
03:51It's an entrepreneurial business show.
03:51So tell me, what was your, be your best piece of money management advice that you've learned over the years
03:57and that you would give to your kids or some strangers?
04:00Understanding how to buy your first home.
04:03So financial literacy, you know, it starts with the A, B, and Cs of credit.
04:09You know, making sure your credit score is right, making sure you're saving money.
04:12But that very next step to make you apart from the rest is to buy your first home.
04:18And so financial literacy is a perfect gateway to start realizing the value of owning your property.
04:26You build wealth, you build equity in the home you purchase.
04:30You can deduct interest.
04:31You can deduct many things based on the different tax codes.
04:36And a lot of young professionals are renting.
04:39And renting is not bad, but as soon as you can get into your own home and have a mortgage or purchase a property,
04:49that's the best financial advice I can give right now.
04:52Yeah, absolutely.
04:52Well, listen, that's a perfect segue.
04:54Before we jump back into the mortgage conversation, describe the banking sector in one word, right?
05:00Because, again, a lot's going on.
05:01We have interest rates still high.
05:03You know, we don't know what's going to happen with tariffs, a lot of geopolitical uncertainty that's going on.
05:09And that's going to affect prices.
05:10And you being a banker, that's going to affect how you do business as well.
05:13But if you had to give me one word as we sit here in the middle of 2025, right, summer's approaching, what word would that be?
05:20Conservative.
05:21Conservative.
05:22Why conservative?
05:23Due to the uncertainty, no one really wants to go too far out in one particular lane.
05:28And so you saw a few banks that failed in 2023, they went long on certain options, and that came back to bite them.
05:37And so a lot of lessons were learned.
05:40You know, a lot of examiners now with FDIC and all of these different regulatory agencies,
05:45they're now applying those learnings to the environment that we're in right now.
05:50Right.
05:51And so I say conservative is because the way we stay in business is if we get the money back after we loan it out.
05:56Yes.
05:57And so any one of these triggers or tariffs or influx of costs of goods can really put pressure on that end client,
06:06which then turns to pressure on repayment.
06:09Yeah.
06:09And right now banks want to stay in a position with flexibility and being flexible so that we can pivot as soon as things change back.
06:18Hopefully they change back soon.
06:19Yeah, well, listen, I'm going to play the conservative consumer, right?
06:22Because we have some Forrest Be OK members in attendance, and I want them to help me play conservative consumer.
06:27So I'm going to work maybe two or three of their questions into this overall conversation that they've sent.
06:32But the overall, you know, state of the consumer is a little tricky, too, right?
06:36You have jobs, people getting laid off left and right.
06:38Me and you and your dad talked about this in your very office in New Orleans a few months ago.
06:42And he predicted there were going to be some trying times ahead.
06:44But as he says, O for obstacles, O for opportunity, right?
06:48That's exactly what your dad, Alderman McDonald, always says.
06:51But conservative consumer, you mentioned mortgages, right?
06:54Why, if I don't currently own a mortgage, would I want to go get one right now?
06:58Again, interest rates are high.
06:59And your very, you know, 2004 annual report, you guys have mentioned that, you know, insurance companies are pulling out of the southern Gulf states, right?
07:08And so now you've got a cost of insurance is going to go up.
07:10That messes with your price.
07:12Why, as a conservative consumer right now, right?
07:15I hope I got a job.
07:16I hope I have a job.
07:19But regardless, why do I want to jump in right now and purchase a house?
07:22And even if it's with Liberty Bank, you know, largest black owned bank in America, why now?
07:26Why can't I play conservative and wait this thing out?
07:28And this is just from what I'm seeing.
07:30They have a lot of deals out there right now.
07:33They have a lot of individuals and families that are feeling that pressure.
07:37And I'm not saying to be a shark when there's blood in the water, but there's opportunities.
07:42So the obstacle is there.
07:44It's here right now.
07:45So then there's an opportunity.
07:47So the opportunity is to purchase a home at a discounted price just because of the sensitivity.
07:53Are they truly discounted, though, because inflation is up?
07:55Well, you can look at it in a lot of different ways.
07:57However, if you look at the Zillows of the world or the Realtor.coms of the world, you'll see a lot of properties that have been on the market for 300 days, 400 days.
08:09And so you have an individual that is trying to move out of that house to maybe move across the country to move closer to their parents or because they can't afford the insurance or taxes anymore.
08:21We have a lot of older professionals now that are thinking about retirement.
08:26And so they want to reposition their investments.
08:28So you have all sorts of reasons why individuals are trying to sell their homes.
08:34But since it's so competitive, everyone, you look at it, I look at it pretty often, but you see reductions, continuous reductions.
08:41And if you look at the histories of a lot of these sale prices, they have multiple reductions.
08:47And so that's why I'm saying it could possibly be a benefit to buy now with the intent to refinance later if interest rates come down or when they come down.
08:58Because I believe that this administration is focused on getting the interest rates down.
09:02Well, listen, you said, you know, there could be some opportunities, but I did look at Zillow because I'm in the market.
09:07You know, I'm in the market for another house.
09:09And listen, I saw some prices go up and I saw some inventory come out, right?
09:13What are you guys seeing in your part of the world in New Orleans?
09:16But again, you guys are stationed all around the country.
09:18What are you guys seeing from the consumer where someone can say, OK, this opportunity is this?
09:23I was talking to Don Peebles about he give me five places where to look.
09:26And he was saying Washington, D.C.
09:27And I'm hearing a lot of real estate opening down there and in Texas and in the Fort Worth area.
09:31Where are the opportunities right now in the country?
09:33Texas is definitely a hot market.
09:35You have a lot of companies that are bringing their headquarters from the West Coast into the Texas market.
09:42Right. Regulation. Right. Correct.
09:44And I think they had just Houston specifically.
09:47I was just there this weekend and I think they had 200,000 new families move in just last year long.
09:53And so you do see an influx of individuals that are searching for property.
09:58Those situations are pretty unique because, as I mentioned, with the changing times, a lot of corporations are going to probably do layoffs.
10:08They're going to probably convert a lot of physical positions into A.I.
10:13A lot of companies are adopting A.I., as you know very well.
10:16I think D.C. is a very unique market because you have a lot of government employment.
10:21And so with those adjustments that this administration is making, you're going to see some turnover in property there.
10:29Definitely. Yeah.
10:30What about car loans? Right.
10:31The mortgage loans are there. Right.
10:32The other big consumer item is the car loans. Right.
10:35Why in the hell are I purchasing a car right now?
10:38Twenty five percent tariff on steel, twenty five percent tariff on aluminum.
10:41That's half the car weight right there. Right.
10:43And then you got all the other stuff that the parts and everything that goes into a why am I going to Liberty Bank and maybe getting out a loan so I can go purchase a brand new car,
10:51knowing that I'm going to pay astronomical prices.
10:53What's the incentive?
10:54I don't know if there is one.
10:55No.
10:56Just to be very candid and honest.
10:58A used car, maybe.
10:59A used car, maybe.
11:01But, yeah, certainly you want to be very conscious of what brand you purchase.
11:07Obviously, with tariffs, you're going to have uptick in costs just from being brand new.
11:12And then also if you have to repair it, the parts.
11:15The parts, yeah.
11:15And so I thought I read somewhere where one car company, they just said stop bringing in the cars to the United States.
11:22Yeah.
11:22That was Mercedes.
11:23Mm-hmm.
11:24Yeah.
11:24Uh, yes.
11:25So, uh, certain companies are making those judgments right now.
11:30And you just want to be, you want to be aware of them.
11:32Yeah.
11:32And because the worst thing you want to do is buy a particular brand and then can't find the parts.
11:38And so, you know, I know some car companies, you can't sell them without taking a 35%, 40% discount just because of certain, you know, things that they're dealing with as well.
11:49And so, and so just be very cautious and try to pick a vehicle that you can afford with it being, you know, in a repair position or brand new.
12:00It goes both ways.
12:02Are you guys seeing a lot of loans for cars or has that slowed down?
12:05No.
12:05No.
12:06We've actually seen a lot of default, um, not on our portfolio, but on, uh, portfolios of other banks that have a very deep niche into subprime auto lending.
12:17Yeah.
12:17Is that a carryover from the pandemic?
12:19I know a lot of people went and purchased cars and, you know, you read some of the horror stories about some of these cars, they just would put some paint on them, but people wasn't doing their due diligence and they were ending up with these bad cars and running into these problems.
12:30And then, you know, I was reading one sister, she had a $500 car payment and a big giant repair.
12:35She worked two hours or an hour and a half away.
12:36She couldn't get to work, lost a job because the car broke down and she couldn't have repaired.
12:40Is that the type of stuff you use?
12:41Oh yeah.
12:42Across the board, across the board.
12:43So losing, losing, uh, you know, income from layoffs, uh, or just the fact of, you know, fuel repairs, the insurance increase on your home, if you own your home, the taxes, all of these things make people feel it in their pocket.
13:01And, you know, what we try to do at Liberty Bank is to improve people's cash flow.
13:05So we try to refinance individuals out of predatory loans or loans that are overpriced due to perceived risk.
13:11And so a lot of, um, auto lenders in subprime markets, that's, that's their, their area, their niche.
13:18So you might have someone with a 20% interest rate on an auto loan.
13:22And if that, you know, auto gets into an accident or that person gets into an accident, the repair costs on top of a 20% monthly payment, it just provides a lot of heartburn.
13:34Yeah, it is.
13:35For us, and again, we wrote an article, uh, on you guys back in February.
13:38Uh, again, no, you're very welcome. Listen, thank you guys. You've been around since 1972.
13:43So, you know, but your dad, uh, Alden McDonald, co-founded the bank in 1972 alongside Dr. Norman C. Francis, the chairman.
13:51Um, what's been the feedback and the reaction so far? I mean, I never know what it's like when I go to write an article and I always tell us you guys life, right?
13:58And I check in sometimes, but what's been the reaction when you get such major publicity?
14:02Oh, very good reactions. I mean, we, we've had, so it does work.
14:06Oh, absolutely. Absolutely. So that's why I didn't need to keep you.
14:09Yeah.
14:10Very good work. Very good work. And, uh, just really appreciate the, the, the nuances that you, you, you know, pegged in the article.
14:18Uh, you talked about how just being who we are as a, as a, as a black owned institution is in the financial sector.
14:25Right.
14:25Um, you know, Liberty Bank, uh, in, in others in the, the minority depository sector typically had, had not had access to capital to grow.
14:35So we're a bank and we had trouble accessing capital ourselves historically.
14:40Yeah.
14:40And so now, uh, many of us are in position to grow and to expand our outreach and output.
14:48And so the article definitely provides a lot of fuel for us to have those conversations.
14:53And, uh, we're very grateful to you and your, your publication for highlighting us because a lot of our banks don't have the big marketing budgets like very large institutions.
15:03And so opportunities like this do not come, uh, very frequent.
15:06And so we, again, appreciate that, the, uh, the nod and the highlights and just the showcase of our institution.
15:13Well, I mean, listen, again, you guys did all the hard work and your dad, again, I was so impressed when I was sitting and listening to his story.
15:19And, you know, we're sitting, you know, down in New Orleans doing a Superbowl time.
15:23And, um, you know, for those, you know, who don't know, this bank started $18,000 your dad was making at one point in his life.
15:29And it started with that $18,000.
15:31And then here you go, it, you know, goes from $2 million and in business for 52 years, profitable for 47 of those 52 years.
15:39Um, but again, as I went around doing research about your dad, I would always hear, they would say, oh, McDonald.
15:44Oh, man, that's the godfather.
15:45That's the godfather.
15:47Like, if you had to describe your dad in one word, is that what you would call him?
15:50God, godfather?
15:50He's a lot nicer than the godfather.
15:52The godfather was nice, though.
15:53He spared a lot of lives.
15:54Well, you're right.
15:55You're right.
15:55You're right.
15:56Uh, no, but he, he's, uh, he's, he's very generous.
16:00And I think the position that he's held for so long is very fitting because in a community banking setting, you have to be very empathetic and passionate about the, the work that we do.
16:12And so, uh, it does not come very easy to do those things, to be profitable 47 out of 52 years.
16:18That is, is, is pretty unique, especially in our space.
16:22And then going through Hurricane Katrina in 2005, where we literally lost everything and had to restart the entire bank.
16:29And so, I don't think people understand the magnitude of that.
16:32Overcoming Hurricane Katrina, right?
16:34Yes.
16:34No power.
16:35Your bank's flooded.
16:36Your dad has to go down to Baton Rouge, was it, to take orders over the phone by hand?
16:41Correct.
16:41The, the dedication is like, man, if this bank was dedicated to do that, like, I wonder if they would run through all for me.
16:47And then overcoming Katrina and then the financial crisis.
16:49And, I mean, to get through all that and still be standing is just, like, extraordinary.
16:55It's phenomenal.
16:55As a black-led and black-owned bank.
16:58Yes.
16:59Yes.
17:00A lot of people call us God's bank and, and we're not, you know, uh, pushing back on that by any means because a, a, a lot of things happen that were, uh, not normal.
17:10And when you can combine expertise with the situation and with faith and passion, it all comes together and makes, you know, what we have today.
17:19Yeah.
17:20What's it like being a president of a bank and a seat you're waiting, right?
17:23We all assume that the CEO seat is yours.
17:25It's warm.
17:25Your dad still has it right now.
17:27He hasn't quite passed it to you.
17:28Correct.
17:28But I'm assuming, I'm going to go out on that risk and say you're next in line.
17:31I would think so.
17:31But what's it like being that president?
17:32And, and do you get anxious like that?
17:34You ready to retire yet?
17:35I want that CEO role.
17:36You know, it's, um, it's, it's, it's a very unique position.
17:40And, you know, it, very big shoes to fill.
17:43Yeah.
17:44And so I want to do it right.
17:46I want to make sure that the timing's right, not just for myself, but for him and for the
17:50organization.
17:51And we're taking into all, all of that into consideration.
17:55And, um, you know, it's, I've been in president for three years now.
18:00And so I definitely know where the bathrooms are.
18:03And I've been with the bank though, for 22 years.
18:06So this was my only professional job out of college.
18:09So when I graduated from Morehouse in 2003, I entered into Liberty's, um, headquarters.
18:15Yeah.
18:16And, and I've been there ever since.
18:17I always joke because I'm 44 years old.
18:19And so I always say, you know,
18:2144 years young, 44 years young.
18:22I'll take that.
18:23Yeah.
18:23Uh, I always joke to say that I've been around Liberty all my life, but I've only received
18:28a paycheck for 22 years.
18:29So I'm working on some back pay options.
18:32Um, and, you know, I'm trying to get my anguish just like you.
18:36I hear you.
18:37I was going to say, man, the role is always going to do some back pay.
18:39I was going to say the little Wayne thing.
18:41I'm not going to go.
18:41You know.
18:42I'm not going to go.
18:43Well, what's been the biggest positive surprise of the role, right?
18:46I mean, again, you've been in banking practically all your life, but here you are as a president.
18:50What's been the biggest positive surprise?
18:52Oh, many, many positive things.
18:54Um, I think in terms of the way banking is, is moving forward, it's exciting.
19:00Uh, we're adjusting our platform to, to make those adjustments so that we can survive another
19:0550 plus years.
19:07Um, and so I'm very honored to be in this position that Dr. Francis and my father and,
19:12and the executive team and the board chose me to take, you know,
19:16the, the, the next step to move the company forward.
19:19And so a lot of positive things in terms of, um, our sector, community banking space, uh,
19:26this new administration has, has doubled down on understanding that community banks like
19:31Liberty banks are very necessary for our country to move forward.
19:35And so it's very exciting.
19:37The, the secretary of treasury, uh, he's made some very bold statements and some really,
19:42he seems in support of community banking and shifting the power back.
19:46To community bank, if I'm reading that correctly.
19:48Yes.
19:48Yes.
19:48That's, that's how we read it.
19:49And, and look, big banks are not bad at all.
19:52No, no.
19:52Uh, and a lot of us have very strong partnerships with a lot of the larger institutions.
19:57And so if you go back to COVID and PPP, you saw why community banks were so important
20:02or reiterated our importance in the marketplace.
20:05Because you, if you have a lot of concentration and you have a pandemic such as COVID happening,
20:11you have to spread it out.
20:12Awesome.
20:13And so we have 4,600 banks, uh, in the United States right now, uh, about 150 of us focus
20:19on underserved communities and, and, uh, communities that are overlooked.
20:23And, uh, from what I'm hearing so far, it, it, it, we seem very aligned in terms of making
20:29sure that we're strong.
20:30We have strong balance sheets and that we're trying to expand our, uh, output and exposure.
20:35Yeah, absolutely.
20:35How about the biggest negative surprise, right?
20:37There's always negatives when it's positives.
20:40It's the negative one.
20:41Um, one that you just wish to go away today.
20:43You know, I, I don't wish that anything necessarily goes away.
20:46I think everything comes together for, for a reason.
20:48Not even the defaults, not even the right arm.
20:49Well, the defaults, yeah.
20:51But then, you know, we've done 12 acquisitions of banks in our history.
20:55And a lot of them, unfortunately, were failed institutions.
20:58And so there's a space, again, going back to, if there's a obstacle, there's an opportunity.
21:03And, um, just making sure that the banking sector is well positioned to withstand the defaults.
21:11And I think getting through this type of environment is going to be a feather in all of our hats
21:16when we get on the other side of it, because we'll know how to navigate a COVID.
21:20We'll know how to navigate high tariffs.
21:22We'll know how to navigate, uh, massive layoffs or, uh, government, uh, adjustments to, to the marketplace.
21:28And so, um, again, I, I think defaults is definitely, you know, you don't want too many of those.
21:35Uh, but it comes with lessons that are going to get us through challenges going forward.
21:39Yeah, most definitely.
21:40Uh, take this one to the, the Fores Be OK members that are in attendance.
21:44Uh, thank you guys for, again, for coming.
21:45But, uh, Shauna, right?
21:47I hope I'm saying that correctly.
21:48Shauna?
21:48Yeah, there you go.
21:49I said, Shauna.
21:50Uh, what lessons have shaped your leadership style as you continue your family's legacy
21:54and evolve Liberty Bank's mission for the next generation?
21:58Understanding the, the passion.
22:00Because in, in trying times, you have to get through it.
22:04And if you're waking up every day, you know, not being in a good place or feeling pressure
22:09or feeling pressure that you can't withstand, that's a red flag.
22:12And so I think when you, when you experience challenges, whether it's professional or in
22:18family, you need that extra juice to get you through it.
22:22And just a, a lesson that I've learned working with my father, working with, uh, members that,
22:27uh, have been in banking since the 60s and me coming in as a, as a younger banker, uh, navigating
22:34those challenges, you have to have patience and you have to have passion.
22:38Yeah.
22:38And that's, that's the way that I've navigated the space.
22:41And, uh, that's the way a lot of younger bankers are navigating the space now.
22:45Yeah.
22:45Well, listen, man, very fast, getting to your background again, you grew up in New Orleans.
22:49Yes.
22:49Um, you know, your dad was a banker, your mom, more stay at home mom and, and driving kids
22:54around the community and all of that stuff.
22:56But what was it like, like being the son of a banker?
22:59Like, did you come home and was it cash money sitting on the couch?
23:01No.
23:01Like, what was that like?
23:03Um, so my grandmother, uh, was, was, uh, was, uh, um,
23:08a driver for the school system.
23:10And my mom was a teacher, uh, until she retired.
23:13And, uh, it was, it wasn't like a television show.
23:18It wasn't like Scrooge McDuck with diving in coins, not by any means.
23:22Uh, but I, I, so with my father being in the position that, that he's been in, uh, it comes
23:27with a lot of time and dedication to other people other than our family.
23:32And so growing up as a banker's son, I knew, uh, one that his, his job was very demanding
23:38and that he most likely would travel a lot.
23:43Uh, and then, you know, we would all also kind of go to functions and people want to
23:48pull him aside or, you know, he'll find somebody that's in the corner and say, you know, that
23:52person's behind 60 days.
23:54And I'm like, what are you going to do?
23:55You know, so he's like, just, just a ton of stories.
23:57Did he turn into the godfather then if he was behind on money?
23:59Well, you know, he's not shy about getting that money back.
24:03That's, that's the core to our business.
24:05But, uh, just having, I mean, hundreds of stories like that, people coming over, a lot
24:10of successful business leaders, men and women from across the country coming to our home
24:15and enjoying family cooked meals, um, just exposing us to what is possible was pretty
24:22constant.
24:23Yeah.
24:23Um, and so, uh, as, as I navigate my family and bringing up my sons, my son and daughters,
24:30I try to provide that same type of environment.
24:32Yeah.
24:32Because I think if we're exposed to it, we're comfortable with it.
24:37And when we're comfortable with it, we can adjust no matter what happens.
24:40Yeah.
24:41But then here you are, right?
24:42You had, you're living in this big giant mansion because your dad's a banker and all
24:46of these nice cars are coming in.
24:47And I remember you telling me how you turned into a hustler at that point.
24:50You said, well, look, y'all going to be in here partying with my dad.
24:52Give me a couple of dollars to wash your car and you'd be fine, right?
24:55So you was making money while your dad was in there getting the loans back.
24:58Exactly.
24:59You're hitting it from both sides.
25:00Yeah, hitting it from both sides.
25:01Exactly.
25:01Where did you get this at?
25:02Where did you pick this up at?
25:04Because you very well could have been in the house monitoring your dad, seeing how he talked
25:07to people, how he works the room, but here you were outside washing car.
25:11So I think it's, it goes back to, you know, my grandmother just, you know, being a bus
25:15driver and her selling candy while she was driving and she would sell huckle bucks.
25:20I'll never forget this.
25:21And so she'll have spearmint and, and orange and all these different things.
25:25And she'll sell non-laters along while driving the bus.
25:28So she had the hustle mentality in her.
25:31And I'll probably pick up some of that from, from my dad's side.
25:33Your grandma was a big worm back in the day.
25:35She was running around trying to eat the kids.
25:37Now that I say it out loud, it comes close.
25:40But no, just, just understanding that, you know, nothing is, is, is given.
25:45Yeah.
25:45You have to earn everything you want.
25:47And, you know, as a kid, I'm the youngest of three.
25:50I saw a lot of toys that my, you know, siblings had that, you know, I didn't have or I wanted.
25:55And my parents always said, well, save up your money and, you know, you could buy it when you, when you have enough.
26:00Yeah.
26:00And so, you know, 20 bucks back then, you know, for a car wash, that was big money.
26:05Yeah, man.
26:06Listen, people are slowing back in the day.
26:07They don't do it nowadays, though.
26:09Right.
26:09They don't do it nowadays.
26:10But then, you know, you made the interesting decision to go to Morehouse College in Atlanta.
26:15And, you know, I was talking to another good friend of mine who also went to that college.
26:19And he called that the best decision of his life.
26:23And that was a strong statement, right?
26:25Because here he's married, got kids.
26:26But he says, that was the best decision of my life up until he got married and had kids.
26:29Got it.
26:30You follow suit.
26:31Best decision.
26:32Absolutely.
26:32A little more house why.
26:33Absolutely.
26:33Absolutely.
26:34I think the college itself is just a very, it's a breeding ground for, one, collaboration, two, thinking outside the box, being very creative, knowing how to survive.
26:46And I know a lot of HBCUs kind of get this, I guess, reputation of not being the most efficient institutions around.
26:57But, you know, with that comes teaching people how to navigate life.
27:03And, you know, I'd never forget going on the campus for the first time.
27:08My sister went to Spelman.
27:10So I kind of had a little exposure to it early on before I made my decision.
27:13But knowing that it's an environment where other leaders or other people that are like-minded come together and go through four years or some people graduate early.
27:24I did not.
27:25But getting into that environment and doing college together and then leaving out and also seeing a lot of the people come back to tell their stories, you kind of see the pathway.
27:38And, you know, I'm a big supporter or a big, you know, person that believes in shadowing.
27:45And so shadowing provides individuals with access to professions and access to businesses that you may not have access to.
27:56And so when you had a lot of alum come back to Morehouse, share their stories, you could connect the dots and say, hey, if I go down that lane, I can be him.
28:04If I go down this lane, I can be that person.
28:06And very, very successful individuals have come through Morehouse and the associated universities around Spelman, Clark, Morris Brown, Georgia Tech, Georgia State.
28:16So you saw all of that on Morehouse's campus.
28:19And uniquely, being an HBCU, you saw that with people that look like us.
28:23Yeah.
28:24Yeah.
28:24And, you know, again, one of the fascinating parts about your story, you know, your dad, who had mentored a white banker, told that same white banker, now you teach what I told you to my son.
28:33Correct.
28:34And then he helps you, and then here you are at Liberty Bank right now.
28:37Again, $1.1 billion in assets, right?
28:40And from what I'm reading from your annual report, the total income from loans, 10%, is what you guys reported, I believe it was, that you guys made off of that.
28:47Well, there's some, yeah, details on that.
28:50But another part was is that you guys secured 107 million new deposits in 2024, right?
28:56Correct.
28:56And you're using that money.
28:57It's a fuel, right?
28:58Fuel for your engine.
28:59And, again, you can then take those new deposits and use that money to loan out to people, right?
29:04Especially small businesses.
29:06Yeah.
29:06You know, accurate, right?
29:07Great.
29:07I'm going to stop there because take it back to the crowd.
29:10Lorencia has another question.
29:12It says, as a small black-owned business, I face challenges accessing capital, building trust, and staying resilient through uncertainty.
29:19And this is where we are right now, uncertainty.
29:22How can institutions like Liberty Bank actively support founders like myself and beyond financial literacy?
29:29What shifts do you believe are needed in banking to close the equity gap for entrepreneurs of color?
29:36I thought that was a very deep question, very multilayered.
29:39But I give you the floor.
29:40So what we see typically are small business owners, especially during unique times, they go out for capital, and they don't receive the most favorable terms.
29:49So whether it's a high interest rate or sometimes you have founders or owners of companies that give up equity, give up ownership of their businesses to get a loan, to get capital in.
30:01And that's very, very, very expensive.
30:02And so what Liberty and other banks like Liberty try to do is provide loans so that when that founder or owner pays it back, the company is still theirs.
30:13And so we kind of say—
30:15What type of loans are we talking about, though?
30:16What type of loans?
30:16Slances, credits.
30:18You know, a lot of small businesses get opportunities with big companies.
30:22And, you know, those big companies have a scope of work that need sort of capital to mobilize.
30:27And so the small business, let's just say, if they have a million-dollar contract and they need 100,000 in mobilization funds, that business comes to Liberty.
30:38You know, we assess the entire program, the contract, and assess their financials.
30:43And then we try to provide that line of credit so that they can execute.
30:46And typically businesses will make 20 to 30 percent net of what their gross is.
30:50So that million-dollar opportunity should translate into 200,000 to 300,000.
30:57So in order to get that opportunity to come to fruition, we provide the line of credit.
31:04Lines of credit are really good instruments.
31:06They charge interest only.
31:07It is a great instrument.
31:08I don't know people, I think, take advantage of it, though.
31:11Like, they think—they hear the word credit, and they get it mixed with credit card.
31:14Right, right.
31:15But I try to explain it.
31:17Some people are like, well, NBA teams run on lines of credit, right?
31:19They use their TV contracts as leverage, and they've got to take out credits because they have bills to pay.
31:25They've got athletes to pay every month.
31:27And believe me, those checks are not cheap.
31:29Not at all.
31:29They run on lines of credit.
31:31This country runs on lines of credit.
31:33Is that a message that still gets maybe conflicted with some entrepreneurs, small businesses,
31:37because you immediately think, oh, let me go get venture capital, right?
31:40Now, of course, that's equity.
31:41But lines of credit, is that an instrument maybe not used enough in black America?
31:45I would say that's correct.
31:46But I think because a lot of small businesses, especially small businesses in communities of color,
31:52are not exposed to credit facilities that are, again, favorable.
31:59Yeah.
31:59And so the more business that the liberties of the world take on, the bigger we become,
32:05the more we can provide those lines of credits.
32:08And so if there's only 150 of us kind of dedicated to this sort of certain space or this very niche market,
32:14how do we expand and make more banks adopt the business platform that we have
32:19into serving underserved and overlooked communities?
32:21And that goes back as just education, financial literacy.
32:25How do we educate that small business owner to understand that institutions like us are out there
32:30and are willing to give out capital and want to give out capital?
32:33And have the capital to give.
32:34And have the capital to give.
32:36And so, you know, we do a lot of partnerships with a lot of large companies
32:39so that they can market, when I say market us, we partner with them so they say,
32:45hey, we've identified an organization, a bank, that will provide you a line of credit
32:49for these contracts that we've given you as opportunities to build your business.
32:54Yeah.
32:54And so then just connecting, making the connections between the two have been tremendous.
33:00Yeah.
33:01In order to get that line of credit, or if you want to get a mortgage loan or a car loan,
33:05you do have to go through the credit process, right?
33:07There are no more no-doc loans like we experienced back then.
33:10Those are good instruments, too, but I'm not around to take advantage of it.
33:13I don't know. That's debatable.
33:13Imagine walking into it and you say, hey, let me get a hundred million dollars.
33:15Oh, here you go. They don't check anything or no job, no nothing.
33:19Yeah.
33:19We're gone from those days, but I know you're very passionate about trying to come up with
33:24the plan of getting rid of denials, right?
33:26You want to completely eliminate denials.
33:29So I want you to explain step by step how you plan on do that, right?
33:32Okay.
33:32Because getting rid of denial, that's a very, that's a huge thing.
33:35Somebody with maybe a 500 credit score, I know you say we're not going to deny you.
33:38We'll show you how to get it up so we can say yes.
33:41Correct.
33:41What is the overall plan if you had to give it to me in a step-by-step process?
33:44How does Liberty Bank going to eliminate denials?
33:47So, and just to be very specific, I'm not saying to approve every single loan with, you know,
33:56signing on a dotted line that day.
33:57I'm just saying that Liberty Bank and other institutions like Liberty, we provide a pathway
34:02to success.
34:04And so I want to incorporate approvals with conditions.
34:10So if Todd comes to the bank and wants an auto loan or wants a mortgage loan.
34:15Not an auto loan, definitely mortgage loan.
34:16But saying, hey Todd, right now we will approve you if you come up with X amount of cash or
34:26have a guarantor to, you know, come on the application with you because you've gone through a life
34:31event and your credit is, is in disray.
34:34A lot of people go through divorces or they lose family members or they have their parents
34:38move in.
34:38And so they experience credit challenges where they're taking on other responsibilities that
34:43they were not used to.
34:45And so when you see those applications come in and you can identify exactly what caused
34:51it, then you try to isolate that event and look at everything else.
34:57And so most of the time, you know, 80% of people want to repay a loan.
35:02Yeah.
35:02You know, 10, 20% out there that, that, you know, are looking for a easy way to come up
35:07with money and don't have to pay it.
35:08So, but that's the smaller amount, right?
35:10So 80% really wants to do well with the money that they obtained from the bank.
35:15And so what we're trying to do is say, hey, small business owner, you are approved with
35:21these conditions.
35:23And those conditions, you may be able to meet them right now or you may be able to meet
35:27them at a later date.
35:28But you know that Liberty Bank is here to provide a service and we want your business.
35:33We want to earn your business because this is, banking is about partnerships and collaboration
35:39and putting things together that, you know, banks, especially in our sector, don't have
35:45home run loans that typically show up.
35:48We have high net worth individuals that support us and we need that support.
35:51But for the most part, we're trying to work through the weeds of small businesses, businesses,
35:56again, that are overlooked, businesses that don't know about us, businesses that have the
36:00opportunity but don't have the capital.
36:02And so there's no, you know, slam don't deal that shows up on a daily basis in institutions
36:09like ours.
36:10So to provide encouragement, to provide confidence, that's where I want to take our lending.
36:17Yeah, most definitely.
36:18Love that, man.
36:19Listen, get out of here.
36:21Some long, fun stuff, right?
36:23Some outlook and some fun stuff.
36:24But I always start a million dollar question, right?
36:26First million.
36:27How'd you make it?
36:28As a bank or as?
36:29Well, as Todd McDonald.
36:30Well, I was in a lot of different things, especially after Hurricane Katrina.
36:37I was actually in the fast food space.
36:39Wow.
36:39Do you own fast food restaurants?
36:41Three of them.
36:41Wow.
36:42Which one?
36:42Steak Escape.
36:43Okay.
36:44It's a franchise based out of Ohio.
36:47And so the owner, before I purchased them, was a client of the bank.
36:52And when Katrina hit, him and his wife decided to not pursue the business going forward.
36:58And so as a commercial lender, I knew the financials.
37:00I knew the numbers.
37:02It's great to be a banker.
37:03You get all those inside deals.
37:05Well, yeah, we wouldn't call it inside, but, you know, being observant.
37:07Yeah, I'm observant, yeah.
37:09And so that was sort of my first, I guess, big business, if you will, outside of the bank.
37:16Because I'm still working at the bank.
37:16So, again, you know, just trying to have as many revenue streams as possible.
37:22Real estate has been very good to my wife and I and my family.
37:26We've made a lot of transactions that we walked in with, you know, equity day one.
37:32And so that's why I like real estate.
37:34I really feel like it's a very tangible asset that you can look at if you get in trouble.
37:40You could restructure.
37:41You could use it for different things to start a business.
37:44You could, you know, lend against it.
37:46And then, you know, my wife is in a number of businesses as well that she's done very, very well with.
37:52And it's just finding the right ones that you wake up and think about.
37:59And, again, I think I might have mentioned this to you when you're down in New Orleans.
38:02But, you know, now if you say, hey, Todd, we can make a lot of money making these caps.
38:06That's not my passion.
38:09Good luck, Jabara.
38:10You can go ahead and make these caps without me.
38:12But just understanding what motivates you is very important.
38:16Because if you're a professional and you're successful, you should have a lot of opportunities that come your way.
38:22So you always have to understand which one to say no to.
38:25Yeah, yeah.
38:26So you had your first million, again, real estate and the restaurant franchise.
38:29Correct.
38:30How did you spend your first million?
38:32Well.
38:32Two new Porsches and things?
38:33No, no, no, definitely not.
38:35Not at that time.
38:36No, so just growing, trying to grow it.
38:40And so I'm a big person that likes to see things, you know, 40 years out, 50 years out.
38:47So, like, you know, literally my wife and I, we have a spreadsheet that goes to where, you know, past retirement age.
38:53And different categories that we want to have assets in and what those numbers are.
38:58And so really being intentional about diversifying assets and then understanding what risk tolerance you have.
39:08And so making sure that you have your riskiest stuff, kind of, you know, things that can go away tomorrow, that's not our biggest bucket.
39:16You know, our biggest bucket are things that should withstand our entire professional career.
39:20Yeah, most definitely.
39:22Outlook stuff.
39:23Well, I'll take it back to the Forrest B.L.K. community.
39:26Owen, financial inclusion is a pillar of Liberty Bank's mission.
39:30How can AI systems be designed to eliminate bias in lending while staying ahead of regulations like HIPAA and General Data Protection Regulation, otherwise known as GDPR?
39:42Can ethical by design, AI, close the trust gap in underserved communities?
39:48To be determined.
39:49Not sure.
39:49That's scary, Todd, to be determined.
39:51I thought you was going to say no.
39:52No.
39:52It's, you see it.
39:55You see a lot of mistakes that AI and technology are coming back with.
39:58I mean, if you look up certain things just within the banking space, some stuff comes back not correct.
40:04And, you know, if someone is basing a loan decision on incorrect information, that's not going to play out well for the client.
40:15And so, you know, we're typically looking at adopting technology to help us service more on the service side, not on the decisioning side.
40:23And because, again, a lot of our client base, they have a W-2 income, they have a small business income, so they have all of these different parts to making up their total cash flow and revenue.
40:36And mistakes could be made easily if you apply an AI, you know, component to something that has a lot of more nuanced kind of history.
40:47And human judgment.
40:48Correct.
40:48Yeah.
40:49Correct.
40:49Correct.
40:49So not saying that AI is bad, but we're being very careful.
40:52We are not the early adopters in banking.
40:56We have to be very, very thoughtful, make decisions conservatively, and make sure that we don't, you know, misstep.
41:04And so we've, you know, adopted stuff on the customer service side, on the servicing side.
41:10And AI, I think it's, again, to be determined.
41:14Yeah.
41:14Yeah.
41:15Again, I don't like that to be determined thing.
41:16I don't like real answers.
41:18Black Outlook, Black America.
41:20Look, Nielsen says Black America spending power will reach 2.1 trillion by 2026.
41:262.1 trillion by 2026.
41:28When you hear that figure, what instantly comes to mind?
41:31We're leaving a lot on the table.
41:32Leaving a lot on the table.
41:33Yes.
41:33Our community is leaving a lot on the table because, again, we don't own a lot of the businesses that we purchase from.
41:41You have, you know, a number of banks.
41:46You have a number of financial institutions that are there to help, you know, figure out that wealth gap.
41:52But when we're consuming more from companies or individuals or products that don't originate from our community, we're losing.
42:02So our wallet, you know, spend and share is very small.
42:08And so how do we make very intentional adjustments to supporting certain businesses that support our communities, urban, rural, wherever?
42:16It, I think just holistically, everyone that is consuming a lot of these goods needs to be very intentional about supporting businesses that support their communities that they're in.
42:30Yeah.
42:30And when you do that, the multiplier effect comes in.
42:34Yeah.
42:34So more jobs.
42:35With more jobs, you have more people buying homes.
42:37With more homes purchased, you have larger tax rolls.
42:41So it's a domino effect that can take place in communities.
42:44And so, you know, you look at America and you have all these different neighborhoods.
42:48And so, you know, I was looking at something online where they're saying, you know, overseas, they're just going to start building buildings where they have everything in the building.
42:57But it's not a bad concept because at that point, all of the money that's being made from groceries to doctor's offices to, you know, hair salons to barbers, all of that's staying in that one structure.
43:08And then it's going to replace the windows.
43:11You know, you have climate change that will happen.
43:13You have hurricanes.
43:14So now you have money that changed out the windows to be hurricane proof.
43:17So self-sustainability is something that our community has not been able to take advantage of.
43:23But that's where we need to go.
43:24Yeah.
43:24I think we're headed in the right direction now.
43:26I really do.
43:26There's a momentum there.
43:27And I haven't been to Target in I don't know how long yet.
43:29I'm just, that's just me.
43:30I haven't been there.
43:31That's me.
43:32Target or Walmart, right?
43:33I'm not going.
43:34Not now.
43:35Not at least I need some tissue.
43:36No, I'm playing.
43:38Listen, look around the world, right?
43:39Where would Todd McDonald put his money right now?
43:42Which country would you invest in right now outside of the U.S.?
43:46Continent of Africa.
43:48Continent of Africa.
43:48Love it.
43:49Three books.
43:50Forrest B.L.K.
43:50This is a book club.
43:51Summertime's coming up.
43:52Three books that inspire you to perform your best or motivate you.
43:55I'm actually reading the five types of wealth right now.
44:02And from the title, it could come across as, oh, this is money focused, but it's actually
44:06not.
44:07Like, the fifth component is the money side.
44:09So, three books.
44:11So, that's one.
44:12The second one I really enjoyed reading was The Snowball Effect.
44:17And then a third.
44:20Man, you put me on the spot.
44:21I asked for these questions in advance.
44:22Yeah, I know.
44:23I didn't answer your purpose.
44:24I never give questions in advance.
44:26It's no fun if I did that.
44:27I would say Don Peoples has a really good book.
44:31And then, so, yeah, that's the three.
44:33That's the three.
44:34That's not bad.
44:34That's not bad at all.
44:35I'll get you out of here on this, man.
44:36Good to great.
44:37What's the difference between a good bank and a great one?
44:40I think a bank that positions itself for the future beyond that, you know, cohort of bankers
44:47positioning the bank's balance sheet to withstand down times, good times in the future is going
44:54to be the separator.
44:56A lot of times, decisions are made to survive a certain period of time that may only be three
45:03years, four years, five years.
45:04You saw that with some of the banks on the West Coast, that field.
45:07You know, a lot of decisions were made for 30 years out, 20 years out, but they made it in that
45:13one decision, did not think about anything that was going to change from that point.
45:18So, I really feel like leadership in banking has to be mindful of the people that are going to come
45:24behind them, as well as understand that challenges are going to take place.
45:30That's how we grow.
45:32Typically, you know, you work out, you go to the gym, you're breaking muscle to build.
45:36And that's the same with banking.
45:39So, we always have to prepare for the worst while we plan for the future.
45:43Yeah.
45:43Oh, for obstacles, oh, for opportunities, right?
45:45Yes.
45:46That's all that McDonald always says.
45:47Hey, Todd, man, thank you so much for the time, man.
45:49We'll see you have to be okay somewhere, right?
45:50Absolutely.
45:50You're somewhere down there, right, Atlanta?
45:51God willing.
45:52Of course.
45:52You've got to be there, man.
45:53If you don't come, I'm never talking to you again in life.
45:56I'm never calling again.
45:57I'm not going to tell you.
45:58I'm trashing Liberty Bank.
45:59I'm there.
46:00I'm there.
46:00I'm there.
46:01I appreciate it, man.
46:01Thank you so much for the time.
46:03And you've got to come back.
46:03Talk economy, man, you know, a lot is still going on within the black America, man.
46:07Again, so much to discuss, and we can't all do it in one show.
46:11I look forward to it.
46:11Absolutely.
46:12Todd McDonald, Liberty Bank, Michael Corleone, I should call him.
46:17You're in the NASDAQ, Enterprise Zone.
46:19Thanks for watching.
46:19Thanks for listening.
46:33Thanks for listening.