This report provides a comprehensive evaluation of Popular, Inc. (BPOP), analyzing its business moat, financials, historical performance, and future growth to ascertain its fair value. Updated on October 27, 2025, our findings are contextualized by benchmarking BPOP against competitors like Zions Bancorporation (ZION) and Comerica Incorporated (CMA) through the lens of Warren Buffett and Charlie Munger's investment philosophies.
Mixed: Popular, Inc. offers high profitability but is tied to significant geographic risk. The company dominates the Puerto Rican market, giving it a strong competitive moat and superior returns. However, this complete dependence on one economy leads to volatile earnings and an unpredictable growth path. The bank consistently rewards shareholders with growing dividends and significant share buybacks. Key risks include rising provisions for loan losses and large unrealized losses on its investments. Currently, the stock appears to be fairly valued compared to its peers and historical profitability. This makes BPOP a holding for investors comfortable with the risks of a concentrated regional economy.
US: NASDAQ
Popular, Inc., operating primarily through its main subsidiary Banco Popular de Puerto Rico and its mainland U.S. arm Popular Bank, functions as a traditional community-focused financial institution. The company's core business model revolves around gathering deposits from individuals and businesses and then using those funds to issue a variety of loans, including commercial, mortgage, and consumer loans. Its main markets are Puerto Rico, where it holds a dominant number one market share, and key metropolitan areas in the mainland U.S., specifically New York, New Jersey, and Florida. The bank earns revenue primarily through the spread between the interest it earns on loans and the interest it pays on deposits, known as Net Interest Income (NII). A secondary but important revenue stream comes from non-interest income, which includes service charges on deposit accounts, credit card fees, wealth management services, and insurance fees. The business strategy is deeply rooted in building long-term customer relationships, leveraging its extensive branch network and brand recognition, particularly within its fortress market of Puerto Rico.
One of the company's primary services is commercial lending, which forms the backbone of its loan portfolio and contributes significantly to its Net Interest Income. This segment caters to a wide range of business clients, from small local enterprises to large corporations in Puerto Rico and select U.S. markets, offering products like commercial real estate (CRE) loans, construction loans, and commercial and industrial (C&I) loans for operational funding. The market for commercial lending in Puerto Rico is mature and highly concentrated, with slow but steady growth tied to the island's economic cycles. Popular's dominant position gives it significant pricing power and economies of scale that smaller competitors like Oriental Bank and FirstBank find difficult to match. Its main competitors on the island are these two local banks, while in the U.S., it competes with a wide array of larger national and smaller regional banks. The typical commercial customer is a local business deeply embedded in the Puerto Rican economy. These relationships are very sticky; businesses are reluctant to switch their primary banking partner due to the high costs and operational disruption involved in moving credit lines, treasury management services, and deposit accounts. Popular's competitive moat in this segment is its unparalleled market knowledge, deep-seated relationships built over generations, and the sheer scale of its operations in Puerto Rico, which creates a significant barrier to entry.
A second cornerstone of Popular's business is its retail banking and mortgage lending division, which serves individual consumers and households. This segment contributes substantially to both net interest income through loans and non-interest income through service fees. Products offered include residential mortgages, auto loans, personal loans, and credit cards. The retail banking market in Puerto Rico is vast but similarly concentrated, with Popular's brand being nearly synonymous with banking on the island. While growth mirrors consumer confidence and economic conditions, the recurring nature of loan payments and banking fees provides a stable revenue base. Competition comes from other local banks and 'cooperativas' (credit unions), which often compete on price but cannot match Popular's extensive network of branches and ATMs or its range of digital services. The retail customer base is broad, encompassing a large percentage of the Puerto Rican population. The stickiness of these retail relationships is high, as the inconvenience of changing a primary bank account, automatic payments, and direct deposits creates a powerful deterrent for customers. The moat here is built on brand loyalty, convenience, and a network effect; the more customers and businesses use Popular, the more essential its services become for everyday transactions across the island, reinforcing its dominant position.
Finally, the bank's deposit services and fee-generating businesses are critical for funding its lending operations and diversifying its revenue. This includes offering checking and savings accounts for both retail and commercial clients, which generates low-cost funding, and a suite of services that produce non-interest income. These fee-based services, which account for roughly 23% of total revenue, include service charges on deposit accounts, debit and credit card interchange fees, wealth management, and trust services. The market for these services is directly tied to the bank's customer base and transaction volume. Given its massive footprint in Puerto Rico, Popular benefits from immense economies of scale, processing a significant portion of the island's daily financial transactions. Competitors offer similar products, but none have the reach of Popular. The customer for these services is essentially every loan or deposit holder. The switching costs are extremely high; moving a primary operating account is a complex task for both individuals and businesses. This sticky, low-cost deposit base is the most crucial element of Popular's moat, allowing it to fund lending activities more cheaply than its rivals and remain profitable even when interest rate margins are tight.
In conclusion, Popular, Inc.'s business model is that of a fortress-like regional bank, but its region is the unique and isolated economy of Puerto Rico. Its competitive moat is exceptionally deep within this territory, built on decades of brand dominance, an unrivaled physical and digital network, and the high switching costs inherent in banking. This creates a virtuous cycle: its scale attracts more customers, which provides more low-cost deposits, which in turn allows for profitable lending and further investment in its network, solidifying its leadership position. This structure has proven incredibly resilient through numerous economic challenges faced by the island.
However, the durability of this moat is intrinsically linked to the health of the Puerto Rican economy. This high degree of geographic concentration is the company's most significant vulnerability. Economic downturns, natural disasters, or adverse policy changes impacting Puerto Rico directly and disproportionately affect Popular's performance. While the bank's expansion into the U.S. mainland provides a degree of diversification, its operations there are much smaller and lack the commanding competitive advantages it enjoys on the island. Therefore, while the business model is strong and the moat is formidable, its resilience is ultimately constrained by its dependence on a single, albeit captive, market.
Popular, Inc.'s recent financial statements paint a picture of a profitable but risk-aware institution. On the income statement, the bank demonstrates healthy growth, with Net Interest Income increasing to $646.51 million in the most recent quarter, up 12.93% year-over-year. This has translated into strong profitability, evidenced by a Return on Equity (ROE) of 14.01%, which is a robust figure for a regional bank. This performance is supported by a stable and growing deposit base, which reached $66.5 billion, providing a low-cost source of funding for its lending activities. This combination of income growth and profitability suggests a solid core earning capacity.
The balance sheet reveals both strength and areas for caution. A major strength is the bank's liquidity. The loan-to-deposit ratio is a very conservative 57.0%, indicating that the bank has ample liquid assets and is not overly reliant on loans for its earnings, providing a cushion in case of economic downturns. However, a significant red flag is the large negative balance of -$1.28 billion in 'comprehensiveIncomeAndOther,' which typically includes unrealized losses on investment securities. This suggests the bank's bond portfolio has lost value due to rising interest rates, which could constrain its flexibility if it needed to sell those assets. While the bank's leverage remains manageable with a debt-to-equity ratio of 0.2, this portfolio risk cannot be ignored.
From a credit risk perspective, Popular, Inc. is taking proactive steps but also signaling concern. The allowance for loan losses as a percentage of gross loans stands at a healthy 2.01%. At the same time, the provision for these losses has been increasing, rising from $48.94 million to $75.13 million over the last two quarters. This trend indicates that management anticipates potential weakening in the credit environment, a common theme for banks in the current economic climate. In summary, Popular Inc.'s financial foundation appears stable due to its strong earnings and liquidity, but investors should be mindful of the significant interest rate risk in its securities portfolio and the emerging signs of credit caution.
This analysis covers Popular Inc.'s past performance over the last five fiscal years, from the beginning of FY2020 to the end of FY2024. During this period, the bank's performance has been characterized by high profitability and strong shareholder returns, but also significant volatility in its earnings trajectory. The period captures the economic shock of the pandemic, a strong recovery fueled by stimulus and rising interest rates, and a subsequent normalization of earnings. This track record highlights both the bank's operational strengths within its core market and the inherent risks tied to its geographic concentration.
From a growth perspective, BPOP's record is a tale of peaks and valleys. Over the analysis window (FY2020-FY2024), revenue grew at a compound annual growth rate (CAGR) of approximately 6.6%, while earnings per share (EPS) had a CAGR of around 9.8%. However, this growth was not linear. EPS more than doubled from $5.88in 2020 to a peak of$14.65 in 2022, before falling back to $7.53` in 2023. This choppiness contrasts with the slower but often steadier growth profiles of mainland U.S. competitors like Zions Bancorporation or Synovus Financial. The underlying drivers were a significant release of loan loss reserves in 2021 and a favorable interest rate environment, which later moderated.
Despite earnings volatility, BPOP's core profitability has been a standout feature. Its Return on Equity (ROE), a key measure of how effectively it uses shareholder money to generate profit, has consistently been strong, averaging well over 12% and reaching over 21% in 2022. This performance is superior to nearly all its cited peers, which typically report ROEs in the 10-13% range. A key driver for this is the bank's strong Net Interest Margin (NIM), which competitor analysis places around a healthy 3.5%. This indicates the bank earns a strong spread between its loan income and deposit costs, reflecting its dominant market position in Puerto Rico.
In terms of shareholder returns, BPOP has an excellent track record. The company has aggressively returned capital through both dividends and share buybacks. The dividend per share grew impressively from $1.60in 2020 to$2.56 in 2024, a CAGR of 12.5%, all while maintaining a conservative payout ratio (typically 25-30%). Simultaneously, the bank reduced its diluted shares outstanding from 86 million to 72 million, a reduction of over 16%, which boosts EPS. This consistent and meaningful return of capital to shareholders is a significant historical strength, demonstrating management's confidence and financial discipline. While the stock's performance can be volatile, the underlying capital allocation has been reliably shareholder-friendly.
The regional banking industry is navigating a period of significant change, driven by a volatile interest rate environment, heightened regulatory scrutiny, and the accelerating shift towards digital banking. Over the next 3-5 years, success will depend on a bank's ability to manage funding costs, invest efficiently in technology, and capture loan growth in resilient economic pockets. For Popular, Inc., these industry shifts are filtered through the unique lens of its primary market, Puerto Rico. The island's economy is expected to grow at a modest 1-2% CAGR, but this is subject to catalysts like the deployment of over $60 billion in federal reconstruction funds, which could spur significant commercial and construction lending. Another potential catalyst is the nearshoring trend, where U.S. companies may relocate manufacturing to Puerto Rico, boosting long-term business investment. Competitive intensity in regional banking is increasing due to fintech encroachment and the scale advantages of larger banks. However, in Puerto Rico, the market is a near-oligopoly, with high barriers to entry due to deep-seated relationships and regulatory familiarity, making it harder for new players to gain traction.
This unique market structure insulates Popular, Inc. from the intense competitive pressures seen on the U.S. mainland. The primary drivers of change within its core market are not new entrants, but macroeconomic and demographic shifts. The key demographic trend is Puerto Rico's population decline, which could shrink the consumer banking pool over the long term. Technologically, while digital adoption is growing, there remains a strong preference for in-person banking, reinforcing the value of Popular's extensive branch network. The regulatory environment, particularly after recent U.S. banking turmoil, has become more stringent, increasing compliance costs but also solidifying the position of well-capitalized incumbents like Popular. The key question for Popular's future growth is whether positive catalysts like federal spending can outweigh the structural headwinds of a slow-growing, isolated economy.
Popular's primary growth engine is its commercial lending segment in Puerto Rico. Currently, consumption is steady, driven by the financing needs of local businesses for operations, expansion, and real estate. Consumption is primarily constrained by the overall health of the Puerto Rican economy; business investment is cautious due to historical volatility and hurricane risk. Over the next 3-5 years, the consumption of commercial and, particularly, construction loans is expected to increase. This growth will be fueled by government-backed infrastructure projects and private sector investments related to the rebuilding efforts post-Hurricane Maria. The commercial real estate market in Puerto Rico is estimated to be around $15-20 billion, with growth heavily tied to these reconstruction funds. Catalysts include the acceleration of federal fund disbursement and new tax incentives to attract businesses. Competition is limited to local rivals like FirstBank and Oriental Bank. Popular consistently outperforms due to its larger balance sheet, enabling it to fund larger projects, and its deep, multi-generational relationships with the island's key commercial players. The number of banks in Puerto Rico has decreased significantly over the past two decades through consolidation, and this trend is unlikely to reverse due to the high regulatory burden and mature nature of the market. A key risk is a significant delay or reduction in federal funding (medium probability), which would immediately slow loan origination and hurt business confidence. Another risk is a severe natural disaster (medium probability), which could cause widespread loan defaults and halt economic activity.
In retail and mortgage lending, current consumption is driven by basic consumer needs, auto financing, and a tentative housing market. This segment is constrained by Puerto Rico's low median income and population decline, which caps the overall size of the addressable market. Over the next 3-5 years, mortgage originations are expected to see a slight increase, driven by a shortage of housing inventory and rising demand from those benefiting from the economic recovery. However, growth in personal and auto loans will likely remain muted, tracking the slow wage growth. The Puerto Rican mortgage market sees about $5-7 billion in annual originations. A key catalyst for growth would be a government program to encourage first-time homebuyers or a reversal in population trends. Competition comes from other local banks and credit unions ('cooperativas'), which often compete aggressively on interest rates. Popular wins share through its brand recognition, extensive branch and ATM network, and superior digital banking platform, which offers convenience that smaller players struggle to match. The primary risk for this segment is an acceleration of emigration from the island (medium probability), which would directly shrink the pool of potential borrowers and depositors. A sharp economic downturn in the U.S. could also reduce remittances, a key source of income for many Puerto Rican households, thereby lowering their borrowing capacity (high probability).
Popular's fee-generating businesses, primarily from service charges and card fees, are a stable but slow-growing revenue source. Current consumption is directly tied to the volume of transactions processed through its network and the number of active deposit accounts. Growth is constrained by the finite size of the Puerto Rican economy and the low-growth nature of these mature services. Over the next 3-5 years, a key shift will be the transition from cash to digital payments, which could increase interchange fee volume. Growth is expected to come from cross-selling wealth management and insurance products, though this is a small base. The market for payment services in Puerto Rico is dominated by Popular, which processes a significant portion of the island's transactions. Growth in digital payments could see a 5-7% annual increase in transaction volume. Competition is minimal from traditional players, but the long-term risk comes from fintech payment solutions like PayPal or Square gaining traction, though their adoption in Puerto Rico has been slower than in the U.S. The number of providers is unlikely to change significantly. A key risk is regulatory pressure on service fees, such as overdraft charges (medium probability), which could directly impact a major source of noninterest income. Another risk is a slow but steady erosion of transaction share to global fintech players (low probability in the next 3-5 years) as consumer habits evolve.
The U.S. mainland operation represents Popular's most significant opportunity for geographic diversification and higher growth. Current consumption is focused on serving individuals and small-to-medium-sized businesses, often within Hispanic communities in New York, New Jersey, and Florida. The operation is severely constrained by its small scale, limited brand recognition, and the hyper-competitive nature of these banking markets. Over the next 3-5 years, growth will almost certainly have to come from targeted acquisitions. Organic growth will likely be minimal. The bank may shift its focus to specific niches, such as lending to healthcare practices or community associations, where it can build expertise. The size of the community banking market in these states is vast, running into the hundreds of billions, but Popular's share is minuscule. A catalyst would be a well-priced, strategic acquisition of a smaller community bank that deepens its presence in a key metro area. Competition is fierce, from money-center giants like JPMorgan Chase to established regional players and hundreds of smaller community banks. Popular is unlikely to win on price or product breadth. Its best chance to outperform is by leveraging its cultural connection to Hispanic communities, a demographic that is growing in wealth and influence. The biggest risk is execution risk on M&A (medium probability), such as overpaying for a target or failing to integrate it effectively, which could destroy shareholder value. Another risk is simply being unable to compete effectively due to a lack of scale, leading to stagnant growth and poor returns on capital (high probability for organic strategy).
Looking ahead, Popular's overarching challenge is to translate its dominant but geographically-bound moat into meaningful shareholder growth. The bank's future performance hinges less on competitive execution and more on the macroeconomic fate of Puerto Rico. Management's key task will be disciplined capital allocation. With organic growth opportunities being modest, returning capital to shareholders through consistent dividends and share buybacks will be a crucial driver of total returns. Furthermore, the bank's digital transformation journey is critical. While the branch network remains a core asset in Puerto Rico, enhancing digital capabilities will be essential for improving efficiency and retaining the next generation of customers. Success in the U.S. will require a clear and disciplined M&A strategy, as organic efforts are unlikely to move the needle. Ultimately, investors are betting on a stable-to-improving Puerto Rican economy, managed by a prudent leadership team that can navigate the inherent risks of its concentrated market position.
As of October 27, 2025, an in-depth valuation analysis of Popular, Inc. (BPOP) at a price of $114.00 suggests the stock is fairly valued. A triangulated approach, combining multiples, cash-flow yields, and asset-based metrics, points to a company trading near its intrinsic worth. With a fair value estimate of $108–$122, the current price offers limited immediate upside, making the stock suitable for a watchlist or for investors with a long-term horizon.
From a multiples perspective, BPOP's trailing P/E ratio of 10.09 is attractive compared to the regional bank industry's average of around 11.74. Its forward P/E of 8.91 further suggests that the market anticipates earnings growth, placing BPOP at the lower, more attractive end of the peer range. Applying a peer average P/E of 11x to BPOP's trailing EPS of $11.28 would imply a value of approximately $124, indicating potential upside from this viewpoint.
From a cash-flow and yield standpoint, the dividend yield of 2.64% is a key part of the total return, though it is slightly below the regional bank average. However, the dividend is very safe, with a conservative payout ratio of 25.27%, indicating ample room for future growth. Crucially, the company enhances shareholder returns through a significant share repurchase program, reflected in a 4.35% buyback yield in the most recent quarter. For banks, the price-to-tangible book value (P/TBV) is a primary valuation tool. BPOP's P/TBV of approximately 1.44x is well within the typical range for regional banks and appears justified given its solid return on equity of 14.01%.
In conclusion, a triangulation of these methods suggests a fair value range of approximately $108 - $122. The multiples approach points to a higher valuation, while the dividend yield comparison suggests a more modest one. The P/TBV, a key metric for this sector, indicates that the current price is reasonable. Therefore, the stock appears to be fairly valued.
In 2025, Bill Ackman would view Popular, Inc. as a high-quality, simple, and predictable franchise trading at a compellingly low price. His thesis for banks is to find dominant players with strong pricing power that generate high returns on capital, and BPOP fits this perfectly with its fortress-like ~40% deposit market share in Puerto Rico and a robust Return on Equity (ROE) of ~15%. The primary appeal is the significant discount to intrinsic value, indicated by a low Price-to-Earnings (P/E) ratio of ~7.5x, which he would see as the market mispricing the ongoing, federally-funded economic recovery of Puerto Rico. The main risk is the geographic concentration in a single, historically volatile economy, but Ackman would likely see this as a calculated risk given the clear catalyst for growth. Forced to choose the best regional banks, Ackman would favor Popular Inc. (BPOP) for its combination of a deep moat and value, and East West Bancorp (EWBC) for its best-in-class profitability (~17% ROE) and unique niche, viewing both as superior long-term compounders. A significant deterioration in Puerto Rico's economic outlook or a sharp rise in loan defaults would likely cause him to reconsider his position.
Warren Buffett would view Popular, Inc. as a fascinating but challenging case study in 2025. He would be immediately drawn to the bank's powerful and durable competitive moat, evidenced by its commanding ~40% deposit market share in Puerto Rico, which allows for a low cost of funds and strong pricing power. This moat translates into excellent profitability, with a Return on Equity (ROE) around ~15%, a figure Buffett seeks in high-quality banks. Furthermore, the stock's low valuation, trading at approximately ~7.5x earnings and ~1.1x tangible book value, would offer a significant margin of safety. However, Buffett's core philosophy emphasizes predictable earnings, and BPOP's complete dependence on the historically volatile Puerto Rican economy presents a major concentration risk that he typically avoids. For retail investors, the takeaway is that BPOP is a statistically cheap, high-quality local franchise, but the investment's success is inextricably linked to the fortunes of a single, unpredictable economy. While Buffett would admire the business, he would likely avoid investing due to the lack of geographic diversification, unless the price fell to a level that overwhelmingly compensated for this specific risk.
Charlie Munger would approach a bank like Popular, Inc. by first applying his mental model for the industry: find simple, conservatively run institutions with durable, low-cost deposit franchises that avoid making stupid lending decisions. BPOP would immediately stand out for its incredible moat—a fortress-like ~40% deposit market share in Puerto Rico—which allows it to generate a stellar ~15% return on equity. However, Munger would be acutely aware of the primary risk: the bank's fate is entirely tethered to the often-volatile Puerto Rican economy, a significant concentration risk. In the context of 2025, with the island's recovery ongoing but fragile, he would weigh if the price compensates for this risk. Given the stock's low valuation at a ~7.5x price-to-earnings ratio, he would likely conclude the market is overly pessimistic, providing a sufficient margin of safety to invest. Management wisely uses its cash by reinvesting over 75% of its earnings back into the business at that high ~15% return, which is the correct way to compound long-term shareholder value. If forced to pick the three best regional banks, Munger would likely choose East West Bancorp (EWBC) for its best-in-class ~17% ROE and unique niche, Popular, Inc. (BPOP) itself for its combination of a monopolistic moat and deep value, and M&T Bank (MTB) for its legendary history of conservative underwriting and disciplined growth. A significant downturn in Puerto Rico's economic recovery or a loosening of credit standards would be the primary factors that could change Munger's positive view.
Popular, Inc. stands apart from its regional banking peers primarily due to its geographic concentration and historical dominance in Puerto Rico. Unlike competitors that operate across multiple states in the mainland U.S., Popular's brand and operations are deeply entrenched in the Puerto Rican economy. This creates a powerful moat; the company holds the #1 market share in deposits and loans on the island, making it the go-to financial institution for individuals and businesses. This deep integration means its performance is inextricably linked to Puerto Rico's economic cycles, fiscal policies, and recovery efforts, which can be a source of both significant opportunity and heightened risk compared to a bank operating in, for example, the more diversified economy of the U.S. Southeast.
This unique positioning influences every aspect of its comparison to other banks. While a competitor like Zions Bancorporation benefits from growth in several different western states, Popular's growth is largely dependent on a single, smaller economy. This concentration risk is often the main reason the stock may trade at a discount to its peers. Investors must weigh the bank's operational excellence and market leadership against the inherent volatility and political risks associated with Puerto Rico's economy. The bank's management team has proven adept at navigating this challenging environment, but the external factors remain a key differentiator from its competitors.
Furthermore, Popular also maintains a presence in the mainland U.S. through its Popular Bank subsidiary, primarily in New York and Florida. This segment provides some measure of diversification, but it remains a smaller part of the overall business. Consequently, when analyzing BPOP against its peers, it's less about comparing two similar U.S. regional banks and more about evaluating a dominant market leader in a contained, non-sovereign territory against more traditionally diversified banking franchises. The investment thesis for BPOP hinges on a belief in the continued economic stabilization and growth of Puerto Rico, a factor that is largely irrelevant for its state-side competitors.
Zions Bancorporation is a diversified regional bank operating across the Western United States, making it a good example of a traditional, geographically spread-out competitor to Popular, Inc. While both banks are of similar size in terms of market capitalization, their risk profiles and growth drivers are fundamentally different. Zions offers investors exposure to several growing state economies, reducing single-market risk. In contrast, BPOP's strength is its unparalleled dominance in a single, more volatile market—Puerto Rico. This comparison highlights a classic investment trade-off: Zions' stability and diversification versus BPOP's higher potential reward tied to a concentrated economic recovery.
Business & Moat
BPOP’s moat is its near-monopolistic position in Puerto Rico, boasting a ~40% deposit market share, a formidable brand advantage. Zions has strong regional brands (e.g., Amegy Bank in Texas, California Bank & Trust) but faces intense competition in each market, holding smaller shares like ~5% in Utah. Switching costs are high for both as customers rarely change primary banks, but BPOP's island-wide integration creates stickier relationships. In terms of scale, Zions has slightly larger assets at ~$87 billion versus BPOP's ~$70 billion. Network effects are localized for both; BPOP’s network blankets Puerto Rico, while Zions' is spread across 11 states. Regulatory barriers are high for all U.S. banks, creating a level playing field. Overall, BPOP’s concentrated market dominance gives it a stronger moat. Winner: Popular, Inc. for its fortress-like position in its core market.
Financial Statement Analysis
Zions has shown moderate revenue growth around 3-4% annually, while BPOP's growth can be more volatile but has been strong recently, sometimes exceeding 10% due to interest rate environments. BPOP consistently posts a higher Net Interest Margin (NIM)—the profit made on loans—at around 3.5% compared to Zions' ~3.2%, indicating better lending profitability. BPOP is also more profitable, with a Return on Equity (ROE) of ~15% versus Zions' ~11%, meaning BPOP generates more profit from shareholder investments. Both banks are well-capitalized, but BPOP’s higher profitability gives it an edge. Zions offers a higher dividend yield at ~4.0% versus BPOP’s ~3.0%, which may appeal to income investors. Overall, BPOP's superior profitability metrics make it the financial winner. Winner: Popular, Inc. due to superior margins and returns.
Past Performance
Over the past five years, BPOP has delivered stronger growth, with an earnings per share (EPS) CAGR of ~15% compared to Zions' ~8%. BPOP’s margin trend has also been more favorable, expanding more significantly in rising rate environments. This has translated into superior shareholder returns; BPOP's 5-year Total Shareholder Return (TSR) has significantly outpaced that of Zions. However, BPOP’s stock is more volatile, as measured by its beta, and has experienced deeper drawdowns during periods of economic uncertainty in Puerto Rico. Zions offers more stability and lower risk, having navigated past economic cycles with less drama. For pure returns, BPOP is the winner, but Zions wins on risk-adjusted performance. Overall Past Performance winner: Popular, Inc. for delivering higher absolute returns.
Future Growth
BPOP's future growth is almost entirely dependent on the economic trajectory of Puerto Rico, including federal stimulus funds and infrastructure projects. This presents a high-risk, high-reward scenario. Zions' growth is tied to the more diverse and generally stable economies of states like Utah, Arizona, and Texas, which offers a more predictable, albeit potentially slower, growth path. Consensus estimates project modest loan growth for Zions in the low-single-digits, while BPOP's can swing more widely based on local conditions. Zions has a slight edge in its ability to capitalize on diverse regional opportunities, while BPOP's growth is a single-market bet. The diversification of growth drivers favors Zions. Overall Growth outlook winner: Zions Bancorporation due to its lower-risk, multi-state growth prospects.
Fair Value
BPOP typically trades at a discount to peers due to its perceived geographic risk. Its Price-to-Tangible Book Value (P/TBV) is around 1.1x, while Zions trades at a slightly higher 1.2x. This metric is key for banks as it compares the stock price to the hard assets of the company. On a Price-to-Earnings (P/E) basis, BPOP is also cheaper, trading at ~7.5x forward earnings versus Zions' ~9.5x. Zions offers a higher dividend yield of ~4.0% compared to BPOP's ~3.0%. BPOP's discount seems to compensate for its higher risk, but its superior profitability (ROE of ~15% vs ~11%) suggests it might be undervalued. For investors willing to accept the Puerto Rico risk, BPOP offers better value. Winner: Popular, Inc. is the better value today based on its lower multiples despite stronger profitability.
Winner: Popular, Inc. over Zions Bancorporation. BPOP earns the win due to its superior profitability, stronger competitive moat in its core market, and more attractive valuation. Its ~15% ROE and 3.5% NIM are significantly better than Zions' figures, demonstrating more efficient and profitable operations. While Zions offers the safety of geographic diversification and a more stable performance history, its growth and returns have been more muted. The primary risk for BPOP is its heavy reliance on the Puerto Rican economy, which makes its stock more volatile. However, its discounted valuation (P/E of ~7.5x vs Zions' ~9.5x) provides a margin of safety for this risk, making it a more compelling investment for those with a higher risk tolerance. This verdict is supported by BPOP’s demonstrated ability to generate higher returns on its assets and equity.
Comerica Incorporated is a major regional bank with a strong focus on commercial lending, serving business clients in key markets like Texas, California, and Michigan. This business-centric model contrasts with Popular, Inc.'s blend of retail and commercial banking concentrated in Puerto Rico. While both are similarly valued, Comerica's performance is highly sensitive to the health of corporate America and interest rate fluctuations, whereas BPOP's is tied to the broader consumer and business economy of its island territory. Comparing the two reveals a choice between a specialized commercial lender exposed to national business cycles and a dominant regional player linked to a unique local economy.
Business & Moat
Comerica’s moat comes from its deep relationships in commercial banking, a specialized field with high switching costs for corporate clients who rely on its tailored treasury and credit services. However, it faces fierce competition from money-center banks and other regionals in its key markets, with a market share of ~3% in Texas deposits. BPOP’s moat is its retail and commercial dominance in Puerto Rico, with a ~40% deposit share and unmatched brand recognition. In terms of scale, Comerica has slightly larger assets at ~$79 billion compared to BPOP's ~$70 billion. Regulatory barriers are equally high for both. BPOP’s moat is deeper and less susceptible to competition within its primary market. Winner: Popular, Inc. due to its commanding and defensible market share.
Financial Statement Analysis
Comerica is highly sensitive to interest rates due to its asset structure, which can lead to rapid swings in its Net Interest Margin (NIM). Its NIM is currently around 3.3%, slightly below BPOP's steady 3.5%. In terms of profitability, Comerica has a strong Return on Equity (ROE) of ~14%, which is nearly on par with BPOP’s ~15%. Revenue growth for both has been decent, but Comerica's is more closely tied to national economic trends. Comerica offers a significantly higher dividend yield of ~5.5%, a major draw for income investors, compared to BPOP's ~3.0%. Both banks maintain strong capital ratios. While Comerica’s high dividend is attractive, BPOP’s slightly better profitability and more stable margin give it a narrow edge. Winner: Popular, Inc. for its consistent profitability.
Past Performance
Over the last five years, both banks have seen periods of strong performance, but BPOP has been a more consistent grower in terms of earnings per share, with a CAGR of ~15% versus Comerica's ~10%. Comerica's stock performance is more cyclical and has experienced significant volatility, particularly during periods of interest rate uncertainty. BPOP's stock, while also volatile, has been on a more consistent upward trend, leading to a higher 5-year Total Shareholder Return (TSR). In terms of risk, Comerica’s exposure to specific commercial sectors (like energy or technology) can create concentrated risks, while BPOP's risk is geographic. BPOP's superior and more consistent EPS growth and TSR make it the winner here. Winner: Popular, Inc. due to better long-term growth and shareholder returns.
Future Growth
Comerica's growth is linked to business investment and expansion in its core markets of Texas and California, which have strong long-term economic prospects. It stands to benefit from a rebound in commercial and industrial lending. BPOP's growth, in contrast, relies on the continuation of Puerto Rico's economic recovery and the effective deployment of federal aid on the island. While BPOP's growth could be explosive if the recovery accelerates, Comerica's path is arguably more predictable and tied to larger, more diversified economies. Analysts expect Comerica to achieve stable mid-single-digit loan growth. Given the stability of its underlying markets, Comerica has a slight edge in growth outlook. Winner: Comerica Incorporated because its growth is tied to larger and more dynamic U.S. mainland economies.
Fair Value
Both banks trade at similar, relatively low valuations. Comerica’s forward P/E ratio is around ~7.8x, nearly identical to BPOP's ~7.5x. However, Comerica trades at a higher Price-to-Tangible Book Value (P/TBV) of 1.3x compared to BPOP's 1.1x, suggesting investors pay a higher premium for its assets. The most significant difference is the dividend; Comerica's ~5.5% yield is substantially higher than BPOP's ~3.0%. For an investor prioritizing income, Comerica is the clear choice. For an investor looking for value based on assets, BPOP is cheaper. Given the similar P/E ratios, BPOP's lower P/TBV makes it slightly more attractive from a pure valuation standpoint. Winner: Popular, Inc. for being cheaper on a price-to-book basis.
Winner: Popular, Inc. over Comerica Incorporated. Despite Comerica’s very attractive dividend yield, BPOP is the winner due to its stronger competitive moat, superior historical performance, and more favorable valuation on an asset basis. BPOP’s market dominance in Puerto Rico provides a level of protection that Comerica, despite its strong commercial franchise, does not have in its highly competitive markets. This has translated to better long-term earnings growth (~15% vs ~10% CAGR) and shareholder returns. While Comerica's mainland focus offers a different risk profile, BPOP's ability to generate high returns (~15% ROE) while trading at a lower P/TBV ratio (1.1x) presents a more compelling risk/reward proposition. The verdict is based on BPOP's higher quality business model (moat) and more attractive valuation.
East West Bancorp (EWBC) is a unique regional bank that has carved out a niche serving the Chinese-American community and facilitating cross-border business between the U.S. and Greater China. This specialized focus provides a distinct growth engine compared to Popular, Inc.'s concentration in Puerto Rico. EWBC is known for its exceptional profitability and efficient operations, often outperforming mainstream regional banks. The comparison with BPOP is intriguing, as both are highly profitable banks that derive their strength from catering to specific, well-defined communities, albeit with vastly different geographic and geopolitical risks.
Business & Moat
EWBC's moat is built on its cultural expertise and deep network within the U.S.-China business corridor, creating high switching costs for clients who depend on its specialized services. Its brand is paramount in this niche, making it the largest independent bank in Southern California. BPOP's moat is its geographic dominance in Puerto Rico, with a ~40% deposit share. Both have powerful, focused moats. In terms of scale, EWBC is similar in size to BPOP, with total assets around ~$68 billion. Regulatory barriers are high for both, but EWBC also navigates international banking regulations, adding complexity. It's a close call, but EWBC's unique, hard-to-replicate cross-border expertise gives it a slight edge. Winner: East West Bancorp due to its unique and globally relevant niche.
Financial Statement Analysis
EWBC is a profitability powerhouse. Its Return on Equity (ROE) is exceptionally high for the industry, often exceeding 17%, which is superior to BPOP’s already strong ~15%. EWBC also runs a very efficient operation, reflected in its best-in-class efficiency ratio. Its Net Interest Margin (NIM) is strong at ~3.6%, slightly edging out BPOP's 3.5%. Revenue growth at EWBC has been consistently robust, driven by strong loan origination in both its commercial and consumer segments. BPOP's financials are excellent, but EWBC's are simply top-tier across the board. The only area where BPOP might have an edge is in certain capital ratios, but EWBC's ability to generate profit is outstanding. Winner: East West Bancorp for its industry-leading profitability metrics.
Past Performance
Over the past decade, EWBC has been one of the best-performing regional banks in the U.S. Its 5-year EPS CAGR of ~18% surpasses BPOP's ~15%. This consistent, high-level performance has resulted in a superior 5-year Total Shareholder Return (TSR) for EWBC. In terms of risk, EWBC's stock can be sensitive to U.S.-China trade tensions, representing a unique geopolitical risk. BPOP's stock performance is tied to Puerto Rico's economic health. While both face unique risks, EWBC's track record of navigating its environment while delivering higher growth and returns is impressive. Winner: East West Bancorp based on its superior historical growth and shareholder returns.
Future Growth EWBC's growth is tied to the continued prosperity of the Asian-American community in the U.S. and the flow of trade and investment between the U.S. and Asia. While geopolitical tensions pose a risk, the long-term demographic and economic trends are favorable. BPOP's growth is a concentrated bet on Puerto Rico's recovery. EWBC has more levers to pull for growth, including expansion into new U.S. markets with large Asian populations and deepening its wealth management services. Consensus estimates typically point to stronger long-term growth for EWBC than for an average regional bank. This gives it an edge over BPOP's single-market dependency. Winner: East West Bancorp for its multiple avenues for growth and favorable demographic tailwinds.
Fair Value
Reflecting its higher quality and growth prospects, EWBC typically trades at a premium to BPOP. Its P/TBV is around 1.4x, compared to BPOP's 1.1x. Its forward P/E ratio is also slightly higher at ~8.5x versus BPOP's ~7.5x. Both offer a similar dividend yield of around ~3.0%. From a quality perspective, EWBC's premium seems justified by its 17%+ ROE. However, BPOP is statistically cheaper on every multiple. For an investor seeking a bargain, BPOP is the clearer choice. For those willing to pay a fair price for a superior business, EWBC is attractive. In a direct value comparison, the cheaper stock wins. Winner: Popular, Inc. is the better value today based on its lower valuation multiples.
Winner: East West Bancorp over Popular, Inc. Although BPOP is a strong performer and trades at a cheaper valuation, EWBC is the winner due to its superior business model, world-class profitability, and stronger growth profile. EWBC's ROE of over 17% and its consistent high-teens EPS growth demonstrate a higher quality operation. Its unique moat serving the U.S.-China corridor provides a durable competitive advantage that is less volatile than BPOP's reliance on a single, economically sensitive territory. While an investment in EWBC carries geopolitical risk, its financial track record and future growth prospects are more compelling. The verdict is based on EWBC's consistent ability to generate superior returns, justifying its modest valuation premium over BPOP.
Webster Financial Corporation is a leading regional bank in the Northeast U.S., significantly expanding its footprint after its merger with Sterling Bancorp. Its business is a traditional mix of commercial and consumer banking, with a strong presence in affluent markets from New England to the New York metro area. This makes it a solid, mainstream competitor to Popular, Inc. The comparison highlights the differences between a bank growing via large-scale acquisition in a competitive, wealthy region versus BPOP's organic dominance in a more constrained, but less competitive, market.
Business & Moat
Webster's moat is derived from its dense branch network in the Northeast and strong relationships with commercial clients, particularly after the Sterling merger which deepened its commercial banking capabilities. Its brand is well-regarded in its core markets, where it holds a top-10 deposit share in several states. BPOP’s moat is its ~40% deposit share in Puerto Rico, a much more dominant position. In terms of scale, Webster is now significantly larger, with assets over ~$71 billion, comparable to BPOP's ~$70 billion. Switching costs and regulatory barriers are similar for both. BPOP's market leadership is more concentrated and powerful, giving it a stronger moat. Winner: Popular, Inc. due to its commanding market share and pricing power in its primary territory.
Financial Statement Analysis
Webster’s financials reflect its recent merger, with solid revenue growth but also associated integration costs. Its Net Interest Margin (NIM) is healthy at ~3.4%, just shy of BPOP’s 3.5%. Webster’s profitability is good, with a Return on Equity (ROE) of ~13%, but this is notably lower than BPOP’s ~15%. Webster has focused on improving its efficiency ratio post-merger, which is a key area to watch. BPOP operates more profitably on a standalone basis. Webster offers a higher dividend yield of ~3.8% versus BPOP's ~3.0%, which is attractive for income seekers. Overall, BPOP’s superior profitability metrics give it the win in this category. Winner: Popular, Inc. for its higher return on equity and stronger net interest margin.
Past Performance
Webster's historical performance includes the transformative merger, making direct five-year comparisons complex. Pre-merger, Webster was a steady, if unspectacular, performer. BPOP, by contrast, has delivered more robust and consistent growth in earnings per share over the past five years, with a CAGR of ~15%. BPOP’s Total Shareholder Return (TSR) over that period has also been significantly stronger than Webster’s. Webster's stock has performed well since the merger was announced, but its longer-term track record is less impressive than BPOP's. In terms of risk, Webster's operations in the stable Northeast are lower risk than BPOP's in Puerto Rico. Still, BPOP's results speak for themselves. Winner: Popular, Inc. based on its superior growth and shareholder returns over the past five years.
Future Growth
Webster's future growth hinges on successfully integrating Sterling and realizing the promised cost savings and revenue synergies. This includes expanding its commercial lending and Health Savings Account (HSA) businesses, which are key growth drivers. This path offers clear, execution-dependent upside. BPOP's growth is tied to the less predictable macroeconomic recovery of Puerto Rico. While BPOP's potential might be higher in a best-case scenario, Webster has a more controllable and defined growth strategy based on its merger integration and established U.S. mainland markets. Analysts project Webster can achieve mid-to-high single-digit EPS growth as synergies are realized. Winner: Webster Financial for its clearer, more executable growth plan.
Fair Value
Webster trades at a valuation that is quite similar to BPOP. Its forward P/E ratio is ~8.0x, compared to BPOP's ~7.5x. Its Price-to-Tangible Book Value (P/TBV) is ~1.2x, slightly above BPOP's 1.1x. Webster offers a more attractive dividend yield at ~3.8% compared to BPOP's ~3.0%. Given that BPOP is a more profitable bank (higher ROE), its slightly lower valuation multiples suggest it is the better value. An investor is paying less for a business that generates higher returns on its equity. The higher dividend from Webster is a consideration, but on a pure valuation basis, BPOP has the edge. Winner: Popular, Inc. for offering higher profitability at a lower valuation.
Winner: Popular, Inc. over Webster Financial Corporation. BPOP secures the victory based on its stronger competitive moat, superior profitability, and more attractive valuation. While Webster's merger with Sterling creates a formidable Northeast banking franchise with a clear path to growth, BPOP's existing business is simply more profitable, with an ROE of ~15% versus Webster's ~13%. Furthermore, BPOP's commanding ~40% market share in Puerto Rico is a more durable competitive advantage than Webster's position in the highly fragmented Northeast market. Although Webster is a solid, lower-risk bank, an investor in BPOP gets a more profitable company at a cheaper price (P/TBV of 1.1x vs 1.2x), which more than compensates for the added geographic risk. The verdict rests on BPOP's higher-quality financial metrics and stronger market position.
First Horizon Corporation is a prominent regional bank with a strong presence in the attractive U.S. Southeast. Its recent history was shaped by a terminated merger with TD Bank, which has left the company in a state of transition but also makes it a potential future acquisition target. Its core business is fundamentally sound, focusing on serving growing metropolitan areas. This creates a compelling comparison with Popular, Inc.: a bank navigating post-merger uncertainty in a high-growth region versus BPOP's stable dominance in a single, lower-growth but recovering market.
Business & Moat
First Horizon's moat is built on its established brand and market share in key Southern markets, particularly Tennessee, where it is a leading bank. It has strong client relationships, but faces intense competition from larger national banks and aggressive regional peers across the Southeast. Its market share in its main state of Tennessee is strong at ~15%, but this pales in comparison to BPOP's ~40% share in Puerto Rico. In terms of scale, First Horizon is larger, with assets of ~$81 billion compared to BPOP's ~$70 billion. While First Horizon is a strong regional player, BPOP’s moat is quantitatively stronger due to its market concentration. Winner: Popular, Inc. for its unparalleled market dominance.
Financial Statement Analysis
First Horizon’s financial performance has been solid, but it lags BPOP in key profitability areas. Its Net Interest Margin (NIM) is very strong, often around ~3.8%, which is higher than BPOP’s 3.5% and a key strength. However, its profitability is lower, with a Return on Equity (ROE) of ~11%, significantly below BPOP’s ~15%. This suggests BPOP is more efficient at turning shareholder capital into profit. Revenue growth for First Horizon is tied to the vibrant Southeast economy, which is a tailwind. First Horizon offers a higher dividend yield of ~4.0% versus BPOP's ~3.0%. Despite FHN's impressive NIM, BPOP's much higher ROE makes it the overall winner here. Winner: Popular, Inc. due to its superior return on equity.
Past Performance
Over the past five years, BPOP has delivered more impressive results. Its EPS CAGR of ~15% is substantially better than First Horizon's, which has been in the mid-single-digits. This has driven a significant outperformance in Total Shareholder Return (TSR) for BPOP's stock. First Horizon's stock performance has been volatile, especially around the news of its terminated merger. In terms of risk, First Horizon's operational environment in the U.S. Southeast is less risky than Puerto Rico. However, BPOP has managed its unique risks effectively to produce better results for shareholders. Winner: Popular, Inc. for its much stronger growth and shareholder returns over the last five years.
Future Growth First Horizon's greatest asset for future growth is its location in the fast-growing Southeast U.S. This region is attracting businesses and population, driving loan demand. The bank's challenge is to capitalize on this while operating independently after the failed merger. BPOP's growth is tied to the single, slower-growing economy of Puerto Rico. While Puerto Rico's recovery offers upside, the organic growth potential in First Horizon's markets is arguably stronger and more sustainable. Furthermore, First Horizon remains a plausible takeover candidate, which could provide a price catalyst for shareholders. Winner: First Horizon Corporation due to the superior economic fundamentals of its geographic footprint.
Fair Value
First Horizon trades at a higher valuation than BPOP, which seems at odds with its lower profitability. Its forward P/E ratio is ~10.5x, compared to BPOP's ~7.5x. Its Price-to-Tangible Book Value (P/TBV) is also higher at 1.3x versus BPOP's 1.1x. This valuation premium may reflect the attractiveness of its Southeast franchise and its potential as a takeover target. First Horizon offers a higher dividend yield of ~4.0%. From a fundamental value investor's perspective, BPOP is the clear winner. It is a more profitable company (~15% ROE vs ~11%) trading at a significant discount. Winner: Popular, Inc. is substantially better value, offering superior profitability for a lower price.
Winner: Popular, Inc. over First Horizon Corporation. BPOP is the decisive winner in this matchup. It is a more profitable and financially efficient company that trades at a much cheaper valuation. BPOP’s ROE of ~15% dwarfs First Horizon’s ~11%, and its past five years of growth and shareholder returns have been far superior. While First Horizon operates in a more attractive geographical region and offers a higher dividend, this does not justify its 30% valuation premium on a P/E basis over BPOP. The market may be pricing in an acquisition premium for First Horizon, but for a fundamental, long-term investor, BPOP offers a stronger business (in terms of moat and profitability) at a more compelling price. The verdict is based on BPOP's superior financial performance and significant valuation discount.
Synovus Financial Corp. is a regional bank deeply rooted in the U.S. Southeast, with a strong presence in Georgia, Alabama, South Carolina, Florida, and Tennessee. It is a classic community-focused regional bank that has grown to a significant size. Its performance is tied to the economic health and growth of this dynamic region, making it a direct competitor to other southern banks like First Horizon. For Popular, Inc., the comparison is one of geographic focus and risk: Synovus benefits from the diversified and booming Southeast, while BPOP relies on its dominant but concentrated position in Puerto Rico.
Business & Moat
Synovus builds its moat on long-standing community ties and strong customer relationships in its core Southern markets. Its brand is well-respected locally, and it holds a strong #3 deposit market share in Georgia. However, the Southeast is an extremely competitive banking market. BPOP's moat is its near-fortress position in Puerto Rico, with a ~40% market share that no competitor can realistically challenge. In terms of scale, Synovus is smaller, with assets around ~$60 billion compared to BPOP's ~$70 billion. While Synovus has a solid franchise, BPOP’s dominant, uncontested market leadership gives it a more powerful and durable moat. Winner: Popular, Inc. for its commanding competitive position.
Financial Statement Analysis
Synovus's financials are solid but do not match BPOP's level of profitability. Its Net Interest Margin (NIM) is typically around 3.3%, which is below BPOP’s 3.5%. More importantly, its Return on Equity (ROE) is around ~11%, which is significantly lower than BPOP’s ~15%. This indicates that BPOP is more effective at generating profits from its asset base and shareholder equity. Synovus offers a compelling dividend yield of ~4.0%, which is higher than BPOP's ~3.0% and will appeal to income-focused investors. However, BPOP’s clear advantage in core profitability metrics makes it the winner in this category. Winner: Popular, Inc. due to its superior ROE and net interest margin.
Past Performance
Over the past five years, BPOP has been the stronger performer. BPOP's EPS has grown at a ~15% annualized rate, while Synovus's has been closer to ~7%. This superior growth has led to BPOP's stock delivering a much higher Total Shareholder Return (TSR) during that period. Synovus's performance has been steady but has not matched the high-growth trajectory that BPOP has achieved, partly driven by the recovery in its core market. The risk profile for Synovus is lower due to its presence in the stable and growing Southeast, but the results favor BPOP. Winner: Popular, Inc. for its significantly better historical growth and shareholder returns.
Future Growth Synovus is well-positioned to benefit from the strong economic and demographic trends in the U.S. Southeast. The region continues to attract business investment and population growth, which should drive healthy loan demand for years to come. This provides a clear and stable runway for growth. BPOP's growth is less certain and is tied to the more volatile economic path of Puerto Rico. While the potential upside from a full-fledged recovery is high, the risks are also greater. Synovus's position in one of the best regions for banking in the U.S. gives it a more reliable growth outlook. Winner: Synovus Financial for its exposure to a superior macroeconomic environment.
Fair Value
Synovus trades at a higher valuation than BPOP, despite being less profitable. Its forward P/E ratio is approximately ~9.0x, compared to BPOP's ~7.5x. It also trades at a higher Price-to-Tangible Book Value (P/TBV) of 1.2x, versus BPOP's 1.1x. The market assigns this premium due to its lower-risk operations in the attractive Southeast market. Synovus also offers a higher dividend yield at ~4.0%. However, from a value standpoint, BPOP is the clear choice. An investor gets a company with a ~15% ROE for a 7.5x P/E, while with Synovus they pay a 9.0x P/E for a company with an ~11% ROE. Winner: Popular, Inc. offers far better value based on its superior profitability and lower multiples.
Winner: Popular, Inc. over Synovus Financial Corp. BPOP is the clear winner in this comparison. It has a stronger competitive moat, is significantly more profitable, has a better track record of growth, and trades at a cheaper valuation. While Synovus benefits from operating in the economically vibrant U.S. Southeast and offers a higher dividend, these advantages do not compensate for its weaker financial metrics compared to BPOP. An investor in BPOP is buying a market-leading franchise (~40% share) with a superior ROE (~15% vs. ~11%) at a lower P/E (~7.5x vs. ~9.0x). The investment case for BPOP is simply more compelling from both a quality and value perspective, provided the investor can tolerate the unique risks of its Puerto Rican focus.
Based on industry classification and performance score:
Popular, Inc. possesses a formidable competitive moat due to its dominant market leadership in Puerto Rico, which provides a stable, low-cost source of deposits and significant pricing power. This market concentration, however, is a double-edged sword, making the bank highly dependent on Puerto Rico's historically volatile and slow-growing economy. While its U.S. operations provide some diversification, they lack the same competitive strength. The investor takeaway is mixed, as the bank's undeniable local strength is counterbalanced by significant geographic concentration risk.
Popular maintains a solid, though not exceptional, balance of fee income that is in line with its peers, providing a decent cushion against interest rate fluctuations.
Popular's ability to generate noninterest income provides a valuable diversifier to its primary revenue stream from lending. In Q1 2024, noninterest income represented 23% of its total revenue, a figure that is IN LINE with the 20-25% average for the regional banking sub-industry. This indicates a healthy but not superior level of revenue diversification. The fee income is well-spread across different sources, with service charges on deposit accounts ($61.5 million in Q1 2024) being the largest contributor, followed by other service fees including credit card income ($47.3 million). This balance reduces the bank's vulnerability to swings in interest rates that can compress net interest margins. While the bank does not have a massive wealth management or mortgage banking operation on the scale of larger competitors, its fee income base is robust and recurring, providing stability to its overall earnings.
The bank has a well-diversified deposit base across retail, commercial, and public fund clients, reducing its reliance on any single funding source.
Popular demonstrates a healthy diversification across its depositor base, which mitigates concentration risk. The bank serves a broad spectrum of customers, including a large number of retail (individual) clients, a wide array of small to large businesses, and government entities in Puerto Rico (public funds). This mix ensures that the bank is not overly reliant on a few large depositors, making its funding more stable and less susceptible to market shocks or the flight of 'hot money'. Furthermore, the bank maintains a very low reliance on brokered deposits, which are less stable and more expensive wholesale funding sources. While specific percentages for each customer type are not always disclosed, the qualitative descriptions in its reporting and its position as the primary bank for Puerto Rico's economy strongly suggest a balanced and diverse customer mix, which is a hallmark of a sound community-focused banking model.
The bank's unparalleled expertise and market leadership in the Puerto Rican economy serves as its ultimate niche, affording it deep customer knowledge and pricing power.
While Popular does not focus on a narrow lending niche like agriculture or SBA loans, its entire franchise is built upon an unmatched specialization in a specific geography: Puerto Rico. This deep, concentrated expertise is a powerful competitive advantage. The bank possesses an intimate understanding of the local economy, its industries, and its credit risks that outside competitors cannot replicate. Its loan portfolio is well-diversified across categories within this market, with commercial and construction loans at ~40%, mortgage loans at ~32%, and consumer loans at ~23%. This isn't a niche in the traditional sense, but its function as the de facto primary lender for an entire island economy gives it pricing power and a durable information advantage. The risk, of course, is the high concentration in a single, volatile economy, but the expertise within that economy is the core of its lending moat.
The bank boasts a stable and low-cost core deposit base, a key strength, though its percentage of uninsured deposits is higher than peers, representing a potential risk.
Popular's greatest strength lies in its sticky, low-cost deposit franchise, which is a direct result of its market dominance in Puerto Rico. As of Q1 2024, noninterest-bearing deposits constituted about 27% of total deposits, providing a significant base of free funding. This is a strong figure compared to many regional peers. Consequently, its total cost of deposits was 2.15%, which is favorably below the sub-industry average that has trended closer to 2.5% or higher in the current rate environment. This low-cost funding is a durable competitive advantage that supports higher net interest margins. However, a point of weakness is the level of uninsured deposits, which stood at 45% at the end of 2023. This is above the regional bank median of around 30-35%, creating a higher risk profile should there be a crisis of confidence, as these larger depositors are typically the first to move funds.
Popular's dominant and dense branch network in Puerto Rico gives it an unmatched physical presence, creating a powerful moat for deposit gathering and customer relationships.
Popular, Inc. leverages its extensive branch network as a primary competitive advantage, particularly in its core market of Puerto Rico. With approximately 157 branches on the island, its physical footprint far surpasses that of its nearest competitors, making it the most accessible bank for a majority of the population. This density supports its relationship-based banking model and is a key driver of its strong deposit base. The bank's effectiveness is reflected in its high deposits per branch, which stands at approximately $354 million, a very strong figure for a regional bank that indicates excellent asset gathering efficiency at each location. While many banks are reducing their physical presence, Popular's strategic branch placement remains a powerful tool for customer acquisition and service in a market that still values in-person banking. This scale provides significant operating leverage and solidifies its market-leading position.
Popular, Inc. shows a solid financial position with strong recent profitability and growing income. Key metrics like a Return on Equity of 14.01% and Net Interest Income growth of 12.93% in the latest quarter highlight its operational strength. However, rising provisions for loan losses, which jumped to $75.13 million recently, suggest potential credit concerns on the horizon. The bank also carries significant unrealized losses on its investment portfolio, reflected in a large negative comprehensiveIncomeAndOther balance of -$1.28 billion. Overall, the takeaway is mixed; the bank is currently profitable but faces clear risks from credit quality and interest rate sensitivity.
The bank maintains an exceptionally strong liquidity position with a very low loan-to-deposit ratio, though its tangible capital appears average.
Popular, Inc. demonstrates a robust liquidity profile but its capital levels are less impressive. The bank's loan-to-deposit ratio in the latest quarter was 57.0% ($37.9 billion in net loans to $66.5 billion in deposits). This is significantly below the typical regional bank range of 80-95%, indicating a very high level of liquidity and a conservative stance, which is a major strength in an uncertain economy. However, its capital buffer appears adequate but not exceptional. The Tangible Common Equity to Total Assets ratio was 7.06% in the last quarter. While this provides a reasonable cushion to absorb losses, it's not a standout figure in the industry. Data on crucial metrics like the CET1 ratio and uninsured deposits were not provided, which limits a full assessment. The extremely strong liquidity offsets the average capital position.
The bank has a solid reserve for potential loan losses, but the recent and significant increase in provisions suggests management is preparing for a tougher credit environment.
The bank's readiness for credit losses presents a mixed picture. On the positive side, its allowance for credit losses stands at 2.01% of gross loans ($786 million in allowance vs. $39.1 billion in loans), which is a healthy reserve level compared to many peers. This indicates a conservative approach to provisioning for bad debt. However, the trend in provisioning is a point of concern for investors. The provision for credit losses increased from $48.94 million in Q2 2025 to $75.13 million in Q3 2025, a nearly 54% jump in just one quarter. This sharp increase signals that management anticipates higher loan defaults in the near future. While building reserves is prudent, the need to do so at an accelerated pace is a red flag about underlying credit quality trends.
The bank is exposed to significant interest rate risk, with over a billion dollars in unrealized losses on its securities portfolio that could pressure its tangible equity.
Popular, Inc.'s balance sheet shows considerable sensitivity to interest rate changes, which poses a risk to investors. The 'comprehensiveIncomeAndOther' line item, which is a proxy for accumulated other comprehensive income (AOCI), was a negative -$1.28 billion in the most recent quarter. This large negative figure primarily reflects unrealized losses on its investment securities portfolio caused by rising interest rates. While these are paper losses and only realized if the securities are sold, they reduce the bank's tangible book value and financial flexibility. The bank's funding profile appears solid, with non-interest-bearing deposits making up about 22.4% ($14.87 billion out of $66.51 billion) of total deposits. This provides a cheap funding source, but the significant unrealized losses on the asset side of the balance sheet are a material weakness.
The bank's core profitability driver, Net Interest Income, is growing at a strong double-digit pace, reflecting a healthy margin between its loan earnings and deposit costs.
The bank shows significant strength in its core lending operations. Net Interest Income (NII), the profit made from lending and borrowing, grew 12.93% year-over-year to $646.51 million in the most recent quarter. This robust growth indicates the bank is successfully managing its asset yields and funding costs in the current interest rate environment. Total interest income rose to $966.65 million while interest expense was $320.14 million, showing a healthy spread. Our calculation of its annualized Net Interest Margin (NIM) is approximately 3.61%, a strong result for a bank of its size. This sustained growth in NII is a fundamental strength, providing a reliable engine for the bank's overall earnings.
The bank has shown improving cost discipline, bringing its efficiency ratio down to a respectable `59.0%`, indicating effective management of its operating expenses.
Popular, Inc. demonstrates solid expense management. In its most recent quarter, the bank reported an efficiency ratio of 59.0% ($482.3 million in non-interest expense divided by $817.7 million in revenue). This figure is an improvement from 61.6% in the prior quarter and 63.7% in the last fiscal year. An efficiency ratio below 60% is generally considered good for a regional bank, as it means the bank is spending less to generate each dollar of revenue. The largest expense, salaries and employee benefits, constituted about 48% of non-interest expenses, which is a typical level. The consistent improvement in this key metric suggests that management has a good handle on its cost structure, which supports profitability.
Over the past five years, Popular, Inc. has demonstrated impressive but volatile performance. The bank consistently generated superior profitability, with a return on equity often near 15%, which is significantly higher than most regional bank competitors. It has also been a reliable source of capital returns, steadily growing its dividend and buying back a substantial number of shares. However, this strength is offset by inconsistent earnings, which saw a major spike in 2021-2022 followed by a sharp decline in 2023, reflecting its dependence on the Puerto Rican economy. For investors, the takeaway is mixed: BPOP's history shows a highly profitable bank that rewards shareholders, but it comes with a bumpy ride and higher risk than its mainland peers.
The bank has achieved steady growth in both loans and deposits over the past five years, all while maintaining a conservative and prudent balance sheet.
Popular, Inc. has shown consistent growth in its core banking activities. From FY2020 to FY2024, gross loans grew from $29.7 billionto$37.6 billion, a compound annual growth rate (CAGR) of 6.0%. Over the same period, total deposits grew from $56.9 billionto$64.9 billion, a CAGR of 3.3%. This demonstrates the bank's ability to steadily expand its lending operations while maintaining a strong deposit base, which is crucial for funding its activities cheaply.
The bank's management of its balance sheet appears prudent. The loan-to-deposit ratio, which measures how much of the bank's deposits are lent out, increased from a very low 50.3% in 2020 to a still-conservative 56.1% in 2024. This level is well below that of many peers and indicates that the bank is not taking excessive risks to chase growth. The steady expansion of its core balance sheet reflects its strong franchise in its primary market.
The bank has historically maintained a strong and stable Net Interest Margin, a key source of profitability that has consistently been superior to most of its peers.
A key historical strength for Popular, Inc. has been its ability to generate strong and consistent profitability from its core lending operations. This is best seen in its Net Interest Margin (NIM), which measures the difference between the interest it earns on loans and the interest it pays on deposits. Based on competitor analysis, BPOP has consistently maintained a NIM around 3.5%. This is a robust figure that is higher than most of its regional bank peers, including Zions (~3.2%), Comerica (~3.3%), and Webster Financial (~3.4%). This demonstrates a durable competitive advantage, likely stemming from its dominant market share in Puerto Rico, which gives it pricing power.
This strong NIM has translated into steady growth in Net Interest Income, which grew from $1.86 billionin 2020 to$2.28 billion in 2024. While specific efficiency ratio data is not provided, the bank's consistently high Return on Equity (~15%) suggests that it operates efficiently overall. The historical stability and strength of its NIM is a clear positive and a cornerstone of its past performance.
Despite a positive long-term growth rate, the bank's year-to-year earnings have been extremely volatile, failing to provide a consistent growth track for investors.
Popular, Inc.'s earnings per share (EPS) track record is a rollercoaster. While the overall trend from 2020 to 2024 shows growth, the path has been highly inconsistent. EPS started at $5.88in 2020, soared to a peak of$14.65 in 2022, and then dropped sharply by nearly 50% to $7.53` in 2023. This is not the record of a company with steady, predictable earnings growth.
The dramatic rise and fall were driven by external factors like the release of credit reserves post-pandemic and the impact of rapidly rising interest rates, which later moderated. While the company's average growth outpaced many peers like Zions (ZION) and Comerica (CMA), those peers often delivered a much smoother earnings progression. For an investor analyzing past performance, this level of volatility makes it difficult to have confidence in a predictable earnings trajectory, even if the business is fundamentally profitable. Because the track record is defined by sharp swings rather than steady growth, it does not pass this test for consistency.
The bank's credit-related expenses have been highly volatile, swinging from large provisions to large reserve releases, indicating a lack of stability in its credit performance.
While the bank has managed through economic cycles, its credit performance history lacks stability, which is the key criteria for this factor. The Provision for Loan Losses on the income statement shows significant swings, reflecting the volatile economic outlook for its primary market of Puerto Rico. For example, the bank set aside a large provision of $292.5 millionin 2020 amid pandemic uncertainty. This was followed by a large reserve release (a negative provision) of$193.5 million in 2021 as conditions improved, before provisions climbed back up to $256.9 million` by 2024.
These dramatic fluctuations, while reactive to economic conditions, do not paint a picture of a stable and predictable credit environment. For investors, this volatility means that earnings can be significantly impacted by large, hard-to-predict changes in credit cost assumptions. Compared to mainland U.S. peers operating in more stable economies, BPOP's credit cost history is much less consistent, introducing a higher degree of risk into its earnings stream. Therefore, based on the metric of stability, its performance fails this test.
The bank has an excellent track record of rewarding shareholders with consistently rising dividends and a significant reduction in share count through buybacks.
Popular, Inc. has demonstrated a strong and consistent commitment to returning capital to shareholders. Over the last five years, the dividend per share has grown at a compound annual rate of 12.5%, rising from $1.60in 2020 to$2.56 in 2024. This growth has been supported by a conservative payout ratio, which remained below 30% for most of the period, indicating that the dividend is well-covered by earnings and has room to grow further.
In addition to dividends, the company has actively repurchased its own stock. The number of diluted shares outstanding has fallen from 86 million in FY2020 to 72 million in FY2024. This 16% reduction in share count has provided a meaningful boost to earnings per share over time. This consistent, two-pronged approach of growing dividends and buying back stock is a clear sign of a shareholder-friendly management team and a strong signal of financial health.
Popular, Inc.'s future growth is overwhelmingly tied to the economic trajectory of Puerto Rico. The bank's dominant market position provides a stable foundation, with potential tailwinds from federal reconstruction funds and nearshoring trends boosting commercial loan demand. However, this geographic concentration is also its primary headwind, exposing it to the island's slow-growth profile, demographic challenges, and vulnerability to natural disasters. While its U.S. operations offer a path for diversification, they are too small to significantly alter the overall picture in the next 3-5 years. The investor takeaway is mixed, as BPOP's growth is likely to be slow and steady at best, heavily dependent on factors outside its direct control.
The bank's loan growth outlook is modest and heavily dependent on the pace of Puerto Rico's economic recovery, lacking the dynamism seen in faster-growing U.S. regional economies.
Management has guided to low-single-digit loan growth for the upcoming fiscal year, reflecting the mature and slow-growth nature of its primary market in Puerto Rico. While there is potential upside from construction lending tied to federal reconstruction funds, the pipeline is not robust enough to suggest a significant acceleration in overall growth. Loan demand in the U.S. is not large enough to offset the slow pace in Puerto Rico. Compared to mainland U.S. regional banks operating in more dynamic economies, BPOP's growth outlook is subdued. The bank's future is tied more to macroeconomic recovery on the island than to its own ability to competitively win new business, resulting in a fundamentally weak organic growth profile.
The company maintains a strong capital position and has a history of returning cash to shareholders, but its M&A strategy for growth in the U.S. remains opportunistic and lacks a clear, transformative target.
Popular maintains a robust capital base, with a CET1 ratio consistently above 16%, well in excess of regulatory requirements. This provides significant flexibility for capital deployment. The bank has a consistent track record of dividend payments and has an active share repurchase program, with $250 million remaining under its authorization as of early 2024, signaling a commitment to shareholder returns. However, its growth strategy via M&A on the U.S. mainland appears cautious and opportunistic rather than programmatic. While this discipline prevents overpaying, it also means that the bank's diversification away from Puerto Rico will likely be a very slow process. The lack of a clear, near-term M&A catalyst to meaningfully scale up the U.S. operations is a weakness in its long-term growth story.
The bank is prudently investing in digital channels while maintaining its dominant branch network in Puerto Rico, a necessary strategy for its unique market.
Popular, Inc. is executing a balanced strategy of optimizing its physical footprint while investing in digital capabilities. In Puerto Rico, its extensive network of 157 branches remains a powerful competitive advantage for deposit gathering and relationship building. Management has focused on modernization and select consolidations rather than widespread closures, which is appropriate for a market that still values in-person banking. Simultaneously, digital adoption has been a key focus, with the bank reporting strong growth in active users on its 'Mi Banco' platform. This hybrid approach allows BPOP to defend its market share against smaller rivals while improving long-term operating efficiency. The strategy appears well-suited to the company's specific market dynamics, balancing current customer preferences with future technological shifts.
Thanks to its strong, low-cost deposit base in Puerto Rico, the bank is better positioned than many peers to defend its net interest margin against rising funding costs.
Popular's key strength is its formidable deposit franchise in Puerto Rico, which provides a large base of low-cost core deposits. This has allowed the bank to manage its cost of deposits more effectively than many U.S. peers during the recent rate-hiking cycle. While its Net Interest Margin (NIM) is not immune to industry-wide pressures, management's guidance suggests relative stability, forecasting a NIM in the range of 3.15% to 3.25%. This outlook is supported by a significant portion of its loan book being variable-rate, allowing assets to reprice higher, partially offsetting the rise in deposit costs. This ability to protect its margin better than many competitors is a significant positive for its future earnings stability.
Fee income provides a stable, but slow-growing, source of revenue, with no clear strategic initiatives or ambitious targets to significantly accelerate its growth in the near future.
Popular's noninterest income hovers around 23% of total revenue, which is average for its peer group and provides a decent buffer against net interest margin volatility. The income is derived from stable sources like service charges and card fees, which are directly tied to its dominant market share in Puerto Rico. However, the company has not articulated a compelling strategy or set aggressive public targets for growing its fee-based businesses, such as wealth management or treasury services. Without a clear plan to expand these higher-growth services, future fee income growth will likely be limited to the low single digits, mirroring the slow economic growth of its core market. This dependency on mature fee categories represents a missed opportunity for earnings diversification and faster growth.
As of October 27, 2025, with a closing price of $114.00, Popular, Inc. (BPOP) appears to be reasonably valued with potential for modest upside. Key indicators supporting this view include a trailing P/E ratio of 10.09, which is below the regional bank industry average, and a price-to-tangible book value of 1.44x, which is in line with peers. Combined with a respectable dividend and buyback yield, the overall picture suggests a stock that is not significantly mispriced. The investor takeaway is neutral to slightly positive, indicating that while not deeply undervalued, the current price could still be a fair entry point for long-term investors.
The stock trades at a reasonable valuation relative to its tangible book value, especially when considering its profitability.
The price-to-tangible book value (P/TBV) is a critical valuation metric for banks. BPOP's P/TBV is approximately 1.44x, based on the latest tangible book value per share of $79.12. This is in line with the industry average for regional banks, which often trade between 1.0x and 1.5x of their tangible book value. When viewed alongside the company's return on equity of 14.01%, this valuation appears justified, as it indicates the bank is generating solid returns on its core capital base.
The company's strong profitability as measured by ROE supports its current price-to-book valuation.
A bank's price-to-book (P/B) multiple should ideally be aligned with its return on equity (ROE). BPOP's ROE is a healthy 14.01%, which is a strong level of profitability. The current P/B ratio is 1.25. Generally, a higher ROE justifies a higher P/B multiple. Given the solid ROE, the current P/B multiple appears reasonable and sustainable, suggesting a good alignment between the company's performance and its market valuation.
The stock's low P/E ratio relative to its earnings growth suggests that it is attractively priced.
With a trailing P/E ratio of 10.09 and a forward P/E of 8.91, BPOP trades at a discount to the industry average of around 11.74. This is particularly compelling given the company's recent earnings performance, with EPS growth of 45.5% in the latest quarter. The forward P/E suggests that the market expects continued earnings momentum. A low P/E in the context of strong growth can be a signal of undervaluation, making this a positive factor for the stock.
The company offers a sustainable dividend and complements it with significant share repurchases, providing a solid total return to shareholders.
Popular, Inc. provides a respectable dividend yield of 2.64%. While this is slightly below the regional bank average of 3.31%, the low payout ratio of 25.27% suggests the dividend is safe and has potential for future growth. More importantly, the company has been actively returning capital to shareholders through buybacks, as evidenced by a 4.35% buyback yield dilution in the most recent quarter. This combination of dividends and repurchases creates a strong total capital return profile for investors.
The stock appears attractively valued on key metrics when compared to its peers in the regional banking sector.
On a relative basis, BPOP screens well. Its trailing P/E ratio of 10.09 is below the industry average. The P/TBV of 1.44x is reasonable and in line with peers. While its dividend yield of 2.64% is slightly below the peer average of 3.31%, the overall valuation picture is favorable. The stock's beta of 0.69 also suggests lower volatility than the broader market, which can be an attractive feature for more conservative investors.
The most significant risk facing Popular, Inc. (BPOP) is its deep-rooted geographic concentration. The bank's fortunes are intrinsically tied to the economic and fiscal health of Puerto Rico, an economy that has historically faced volatility, high debt levels, and vulnerability to severe weather events like hurricanes. A future economic downturn on the island, whether caused by local policies or a broader U.S. recession, would directly impact BPOP's loan growth and credit quality, leading to higher loan defaults. Furthermore, the bank's profitability is highly sensitive to macroeconomic shifts, particularly interest rates. A prolonged period of high interest rates could increase BPOP's funding costs as it competes for deposits, while a sharp decline in rates could compress its net interest margin (the spread between what it earns on assets and pays on liabilities), directly impacting its core earnings.
From a competitive standpoint, BPOP faces threats on multiple fronts. In its core Puerto Rican market, it competes with other local banks and credit unions for both loans and deposits. More importantly, large mainland U.S. banks and nimble fintech companies are expanding their reach through digital platforms, offering competitive products without the cost of a physical branch network. This digital disruption could erode BPOP's market share and pressure its pricing power over the long term. Regulatory risk is also a constant factor. As a systemically important financial institution, BPOP is subject to stricter capital and liquidity requirements than smaller banks, which increases compliance costs. Future regulatory changes, whether related to consumer protection, capital requirements, or climate risk reporting, could introduce new operational hurdles and expenses.
Looking at the balance sheet, investors should monitor the bank's loan portfolio for signs of stress, particularly within its commercial and industrial loans, should the economy weaken. While the bank maintains provisions for credit losses, a deeper-than-expected recession could prove these reserves insufficient. The bank is also reliant on its deposit base for funding. In a volatile rate environment, there is always a risk of deposit outflows as customers seek higher yields elsewhere, which could force the bank to seek more expensive forms of funding. Managing this delicate balance between loan growth, credit quality, and funding costs will be BPOP's central challenge in the years ahead.
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