Israel Velasco, Florida Region President, Popular Bank

In an interview with Invest:, Israel Velasco, Florida Region President of Popular Bank, shared how they distinguish themselves through their customer-centric approach, why they are expanding in the commercial and industrial (C&I) lending sector, and why banks are removing ‘banks’ from their names as they continue to evolve.

What have been some major highlights over the past 12 months?

South Florida continues to be a very thriving market for us. We have navigated this economy quite well over the past year. One of our major highlights was opening our 12th branch in South Florida, specifically in Fort Lauderdale, in October 2023. This branch already has about $35 million in deposits, which is ahead of plan.

Additionally, we have placed a strong emphasis on the middle market and business banking sectors, specifically in commercial and industrial (C&I) banking and lending. Our success in these areas has led us to hire an additional middle market team earlier in 2024, and they have been performing exceptionally well. While commercial real estate has been slower due to the higher interest rate environment, the middle market has excelled, which motivated us to expand further in that space.

Another significant aspect of our business is Popular Association Banking (PAB). This division provides banking services to community associations across the country, and Florida has been a key market for us, especially in the wake of the Surfside condominium collapse. The government has introduced stricter regulations to prevent similar tragedies, focusing on complying with required maintenance for many buildings. As a result, we have seen a surge in financing requests from condominium associations that are now required to complete these necessary improvements.

PAB offers financing to fund such projects that can spread the cost over 5 to 30 years, making it more manageable for unit owners than passing a hefty special assessment all at once. We have seen growth in this sector throughout Florida and other parts of the country where condominiums are prevalent.

Lastly, in 2023, we opened our new headquarters in Miami Lakes. We had outgrown our previous space, which was just next door. Our new location, developed in collaboration with the Kislak Organization, is still in Miami Lakes as it offers convenient access to both Dade and Broward Counties. We felt it was important to stay here, as many of our employees live in both counties. In addition, we are one of only two banks based in Miami Lakes. 

What are you monitoring on the banking regulatory front either on a federal or state level?   

I do not believe the upcoming presidential election will have a significant impact on the future of our business. Because the economy in South Florida is so robust, we are not focused on who will be the next President. Our priorities remain the same as before. We aim to grow our Popular Association Banking business, expand our middle market and business banking presence, and take advantage of opportunities in commercial real estate, particularly construction.

That said, the recent Fed rate cut will likely influence the market more than any political changes. Lower interest rates will stimulate more borrowing, which will boost the economy. We expect to see additional rate cuts, which should lead to more activity in the real estate sector. Although real estate has remained strong, the number of transactions has been lower due to high interest rates. As rates drop, we anticipate a resurgence in activity.

Given your customer-centric approach, what would you say is the key to providing an optimal experience for your clients? 

Our purpose at the bank is to put people at the center of progress. This philosophy applies to everyone we interact with, including our colleagues, customers, communities, and shareholders. It is crucial that we always keep people at the center of everything we do.

Banking is in a challenging space right now. We have customers who still prefer to visit the bank and interact in person, while others prefer the convenience of technology and expect the best digital services. Our branches are modern and welcoming, designed to cater to those who prefer in-person interactions. At the same time, we leverage our 131-year history and scale to offer the latest technology in banking, providing our clients with advanced digital services.

We need to serve both types of customers, that is, those who are digitally inclined and those who value face-to-face interaction. For instance, my youngest daughter, who is 25 years old, has never visited a bank or used a checkbook as she does everything online. On the other hand, many clients still prefer to come into our branches to make deposits. So, we must offer both options, using our size and experience to deliver the best omnichannel services available.

What is your outlook for the South Florida banking sector overall for the next two to three years and what role do you see Popular Bank playing in the vision?  

I believe that banks in South Florida will continue to perform well due to the region’s strong economy and the continued influx of people and businesses. Companies are relocating their headquarters to South Florida, which benefits the local banking sector.

Cybersecurity is a critical focus area for us, and we are investing heavily in this space because cyber threats are a constant concern. There is also likely to be further consolidation in the banking industry. Regulatory costs are high, and this is challenging for smaller institutions. As a result, scale matters; larger banks can achieve economies of scale that smaller banks cannot, making it harder for smaller banks to compete.

We are well-positioned due to our size, and we plan to continue expanding our branch footprint, especially in Broward and Palm Beach Counties. Miami is our core market, but the broader South Florida area provides ample opportunities for growth. Cities like Fort Lauderdale are attracting more businesses and residents as Miami becomes more expensive, making Broward County an increasingly appealing market.

Where do you see the biggest opportunities for growth, and what are some challenges you might face while trying to expand the bank?

We need to continue adapting to the changing landscape. The bank has never performed better, and while our current performance is strong, we constantly evaluate how we can evolve to stay at the forefront of our space. We have significant competition, and not all of it is from traditional banks; non-bank entities are also entering the market.

Success in banking means continually evolving and not becoming complacent. A strong performance is not a reason to put on blinders. A good example is Blockbuster Video, which was once on top but failed to adapt and was eventually overtaken by streaming services. Kodak faced a similar fate by not evolving with digital photography.

Our holding company’s name, Popular Inc, does not include “Bank” because we offer much more than traditional banking services, such as investments, insurance, private banking, and trust services. Many banks have also moved away from including “Bank” in their names to reflect their broader offerings. Our goal is to remain adaptable and continuously seek out ways to improve and provide the best services to our clients.

Lastly, while Miami has many community banks, Broward County tends to have more of the larger national banks and fewer community banks. Fort Lauderdale’s economy is thriving, and it offers a great opportunity for growth. With Miami becoming very expensive, there has been a northward migration into Broward and Palm Beach Counties, making these areas prime locations for expansion.