Business Monday

TotalBank’s CEO, Luis de la Aguilera, on life and banking in Miami

Luis de la Aguilera, CEO of Total Bank.
Luis de la Aguilera, CEO of Total Bank. THE MIAMI HERALD

Luis de la Aguilera has spent his entire career banking in — and on — Miami.

The Cuban-born de la Aguilera, who came to this country when he was 2 years old, became chief executive officer of TotalBank in 2013 after spending 13 years at the community financial institution. The bank, which has about $2.65 billion in assets and 20 branches in Miami-Dade County, celebrated its 40th anniversary earlier this year and has seen major changes over the past decade.

In 2007, Spain’s Banco Popular Español bought TotalBank for $300 million. Then, the financial crisis hit.

Like many financial institutions, TotalBank suffered losses during the recession. But once the bank had licked its wounds, executives decided that the downturn was an opportunity for expansion, de la Aguilera said.

“I would say we had a contrarian approach,” de la Aguilera said. “We launched a residential mortgage division in 2009 at the heart of the crisis. We launched a wealth management division during that time, too. This is a bank that has an ambitious long-term plan for its place in the community.”

As the economy began to turn the corner, the bank brought on about 100 new employees over the last five years, he said. Last summer, TotalBank moved into new digs at the iconic Miami Tower downtown.

Today, the bank is continuing its focus on residential lending, wealth management and commercial real estate.

A glut of new federal disclosure regulations has made it more expesnive to do business, especially with foreign investors, de la Aguilera said.

But de la Aguilera believes that Miami’s growing downtown and global reputation for luxury have made it a true “destination city” for people from around the world.

“I can’t think of a more exciting time to be in Miami,” de la Aguilera said.

Q: You've spent your entire banking career in Miami. What makes Miami a good home for banks?

A: Miami has always been proclaimed the “Gateway City to the Americas” and never more has this been true than today. In the last 40 years, the population of Miami-Dade County has doubled, capital has flowed and our city on the bay has flourished; truly become world-class and a global point of destination. If you have lived in Miami as long as I have (over 50 years) and have witnessed its growth and maturity, you would have no doubt why people, businesses and the banks who serve both, are attracted to Miami.

Q: How have the federal disclosure and compliance laws passed over the last 15 years affected TotalBank’s ability to do business with Latin American customers?

A: The BSA/AML compliance regulations have made it more expensive for banks like TotalBank to do business with Latin American customers due to the level of due diligence and monitoring that is required to bank these customers. However, I do not believe it has impeded our ability to do business with strong, qualifying Latin American customers.

Q: What advice would you give to Congress and federal regulators about the needs of community banks?

I believe that community banks play an important, but yet simple role in our local economies. Basically, we take deposits from members of our community and lend those funds to businesses and entrepreneurs in these same communities in order to spur economic development and growth. The increased regulation that community banks are facing as a result of Dodd-Frank [a 2010 act of Congress that imposes new rules and regulations on banks] and other regulations detracts from these efforts and is putting into question the viability of community banking as we have known it in the past. The number of community banks continues to decline and the ability for us to compete against the larger entities for which these rules were intended is harder every day.

Q: How has the 2007 purchase of TotalBank by Grupo Banco Popular Español affected the bank? Was it a difficult transition?

A: TotalBank has been fortunate to have the unconditional support of Grupo Banco Popular since 2007. The Group’s commitment to the U.S. market, and specifically Miami, has been continuously demonstrated, and we are excited to serve as the Group’s platform for its U.S. growth strategy. The Group’s acquisition of the Bank has had a profoundingly favorable effect on TotalBank. As a result of the acquisition, we are able to leverage the vast resources of one of the largest banks not only in Europe, but in the world. We maintain all of the advantages of a community bank such as local decision making and first class customer service, but combine that with resources and infrastructure of a much larger bank. Banco Popular’s commitment to the market and their collaborative approach to building a better bank made the transition after the acquisition as smooth as possible.

Q: How did the financial crisis affect the bank and how did you weather the storm?

A: The financial crisis presented many challenges to the banking industry and TotalBank was no exception. With the South Florida economy hit especially hard, many of our borrowers encountered challenges in meeting their loan obligations. We moved fast, made good decisions and worked with our borrowers and arrived at repayment solutions that made sense for all parties. We were also fortunate to have the unconditional commitment of our parent company, Grupo Banco Popular Español during these challenging times. With hard work and the appropriate combination of proactiveness and patience, we were able to work through these challenges with our borrowers to the point now that our asset quality has never been stronger.

Additionally, in the midst of the crisis during 2009 we launched our Residential Lending division. This was truly a contrarian move because as many banks in town were closing their mortgage operations, we were launching ours. We saw an opportunity to make a bold move precisely when many competitors were exiting the market and we took it. In 2009, our first year in the residential business, we funded $25 million in loans. This year, we will surpass over a billion dollars in closings since we launched this strategy — clearly this has been a success story and one of the many ways in which TotalBank has been committed to build a strong Miami.

Q: What changes have you made to the bank since taking over as CEO in 2013?

A: I am not the kind of man who takes singular credit for what TotalBank has accomplished, as truly our success has been one of incredible teamwork. Since being named president in 2009, the bank has undergone a truly remarkable transformation while successfully navigating the global financial crisis. These last six years have been a time of growth and innovation in which we have opened nine new banking centers, launched new major product lines like residential lending and wealth management, hired over 100 new staffers and relocated our headquarters to the Miami Tower. At TotalBank, we never stop challenging ourselves to think bigger, do better and work smarter.

Q: Why did the bank move into the Miami Tower and how have the new digs been?

A: Moving our headquarters to the Miami Tower and having our name clearly visible atop the most iconic, best-known building along the Miami skyline certainly makes a statement as we celebrate our 40th year of service to the community. We paid great attention in designing a workspace that promotes collaboration, communication and efficiency and we nailed it — our staff and clients are very happy.

Q: Do you think Miami is becoming a more global, international city and what changes in your daily life illustrate that evolution to you?

A: There is no question that Miami has become a global capital for trade, technology, entertainment, tourism, finance and the arts. [In addition to] the statistics that confirm this reality are the people who make this city great — Miami truly is a global melting pot and an American success story. You would be hard pressed to drive around the city and not witness the confluence and collaboration of cultures and that give Miami its unique flavor and style.

Q: In terms of real estate, how close are we to the end of the current cycle? And what will happens when it ends?

A: Where we are within the cycle is difficult to determine. However, I do believe that the growth we are seeing in property values in this cycle is sounder than the growth we saw through 2007. New condo construction is less reliant on bank financing and more reliant on deposits and equity. Additionally, residential mortgage lending is comprised of more traditional products without the sub-prime activity that we saw in the previous cycle.

That said, the Housing Affordability Index for the Miami area published by the National Association of Realtors has declined by 27 percent between 2011 and 2014. The index is based upon the relationship between the median home price, median family income, and the average mortgage interest rate. If this trend continues, it would not be unexpected for market prices to correct.

Luis de la Aguilera

Current position: President and CEO of TotalBank since 2013.

Past jobs: De la Aguilera has worked at TotalBank since 2000, serving in various capacities, including head of corporate lending and chief marketing officer. He started his banking career in 1982 at City National Bank of Miami and seven years later moved to Republic National, where he became a vice president. He also worked at Ocean Bank, directing the bank’s branch network.

Education: University of Miami, BA, 1981.

Personal: Married with two daughters, Victoria, 21, and Daniela, 13. De La Aguilera is also a top fundraiser for Castaways for Cancer, a group of kayakers who travel 160 miles from Miami to Key West to raise money for the American Cancer Society.