Popular, Inc. BPOP

The business

Popular is the largest bank in Puerto Rico and the financial backbone of the island, with about $75.3B in assets and roughly a third of local deposits, plus smaller mainland-US and Virgin Islands operations. The slice carrying the franchise is the Puerto Rico deposit base: a large, sticky, low-cost funding pool, drawn partly from local consumers and partly from government and reconstruction-related balances, that funds a mix of commercial, mortgage, auto, and consumer lending at a wide spread. That cheap funding is why net interest income reached $2.54B in FY2025 and is running near $670M a quarter now, the engine of the whole income statement.

The qualitative fact the financials understate is the Puerto Rico macro tailwind and its concentration. Federal reconstruction and disaster-recovery inflows after Hurricane Maria and the pandemic have kept the island's deposit base flush and the economy more stable than its troubled fiscal history suggests, which has lifted return on equity from roughly 10% to the mid-teens. The flip side is concentration: the bank's fortunes track a single small island economy with a long record of fiscal stress, so a reversal in federal inflows or local activity would pressure funding costs and credit at once. What changed in the last few quarters is the steady climb in quarterly earnings, from $2.46 diluted in mid-2024 to $3.78 in Q1 2026, on expanding margin and a falling share count.