Last fall, Hurricane Maria wreaked havoc on Puerto Rico, knocking out power and damaging roads. It also unexpectedly forced Popular, the island’s biggest bank, to accelerate plans to revamp its retail brand.
Popular needed to replace the signs on branches that were damaged in the storm. Its handful of offices on the U.S. Virgin islands were in particularly bad shape, with damaged rooftops and mold inside the buildings.
“None of our branches were blown away, let’s put it that way,” but offices on St. Croix and St. Thomas “did take a big hit,” CEO Ignacio Alvarez said in an interview.
Popular had already been planning a name change before the storm tore through the Caribbean in September. The company used two separate names on storefronts on the U.S. mainland, where it was known as Popular Community Bank, and the U.S. territories, where it was known as Banco Popular. But given that so many of its customers travel frequently between the two regions, it made more sense to have a single, unified brand.
On Monday, the company made it official, announcing that all of its branches will operate simply as Popular.
“We’re one company, and one brand,” Alvarez said. “I feel strongly about that.”
Signage will change immediately on Popular’s roughly 50 branches in New York and Florida, as well as its eight locations in the Virgin Islands. The company does not yet have a timeline for changing the signs on its nearly 200 branches in Puerto Rico.
At any other bank, such a subtle rebranding likely wouldn’t attract much attention. But at Popular, which has spent the past six months recovering from Hurricane Maria, the effort is a welcome symbol of how the company — a financial behemoth on the small U.S. territory — is moving forward after a tough few months.
The hurricane knocked out power for months and electricity in the most remote areas still has not been restored.
In the immediate aftermath of the storm, Popular’s primary focus was getting its branches and ATMs back up and running. All but three of its branches have reopened and all of its buildings now have power, according to Alvarez.
While there is still more work to do on the recovery, including helping borrowers who need to modify their loans, Alvarez said that the time has come to also focus on long-term priorities, such as unifying the brand.
This is the second time Popular has rebranded itself since the financial crisis.
In 2010 the $44.2 billion-asset company changed the name on its branches on the U.S. mainland to Popular Community Bank, from Banco Popular, in an effort to attract customers outside of the Hispanic community.
With its latest rebranding, Popular is hoping to convey to potential customers that it is a full-service regional bank with a sizable balance sheet.
“The word ‘Community’ in our name implied that we may have been a smaller, less comprehensive institution,” Alvarez said. He declined to disclose a total cost for the rebranding effort.
The change also underscores the company’s long-term ambitions to be a bigger player on the U.S. mainland. After exiting Los Angeles and Chicago in 2014, Popular has since bulked back up by expanding its commercial lending book. Lending to niche lines of business, such as assisted-living facilities and condominium associations, has been a big focus.
Last year, its commercial loan portfolio increased 9% from a year earlier, to $10.3 billion.
Popular also this fall launched a private banking division, with the goal of managing the personal wealth of its growing roster of business customers.
The name change comes as Popular continues to work on getting back to business as usual after a once-in-a-lifetime storm.
Looking back at the past six months, Alvarez said the he has learned some unexpected lessons about disaster recovery. For instance, the experience has shown him just how much the financial services industry depends on well-functioning telecommunications systems.
“We did not anticipate the level of telecommunications disruption that we suffered,” Alvarez said.
When networks on the island went down after the storm, Popular was forced to operate its branches the old-fashioned way, by pen and paper. It even used hard-copy printouts of daily accounting balances.
Alvarez said he personally delivered trial balances by helicopter to branches in Vieques and Culebra, small islands off of the eastern coast of Puerto Rico. Meanwhile, young employees at the corporate office — referred to internally as the company’s “jedis” — would leave San Juan at 5 a.m. to deliver balances by car to branches in rural parts of the island.
While Popular had contingency plans in place, its telecommunications providers all used the same tower, which went down during the storm, according to the company.
Alvarez said Popular is considering using satellite communications as a backup in the future — an option that’s “expensive,” but also more reliable after a disaster.
Still, big questions remain about the financial impact of the storm, particularly on the island’s housing market. Though mortgage delinquencies have increased in the months following Maria, Alvarez said he doesn’t expect a wave of foreclosures.
After the storm, Popular and other banks gave borrowers on the island a three-month grace period on their loan payments. More recently, the company has begun working with struggling borrowers to modify the terms of their mortgages.
Alvarez emphasized that those efforts will take time. Reaching people by phone after the storm has been difficult, and most people prefer to modify their loans in person in consultations that can take several hours.
It will likely take until this summer to get a handle on the total number of foreclosures caused by the hurricane. As of Dec. 31, Popular had taken a $67.5 million provision for loan losses related to the storm.
“Logistically, it’s a massive effort,” Alvarez said, discussing the company’s efforts to reach out to borrowers struggling with monthly payments. “It’s going to take a lot of hand-holding.”