Popular Inc.

Overview Key strengths Key risks Largest market share in Puerto Rico Persistently high nonperforming loans High regulatory capital levels, though likely to decline somewhat as shareholder returns increase High geographic concentration in Puerto Rico which has underperformed the mainland U.S. Solid funding and liquidity profile Typically, higher credit losses than regional U.S. bank peers, though minimal net charge-offs in 2021 Popular has maintained about 50% of the deposit market share in Puerto Rico, and at $69.5 billion of total assets as of March 31, 2022, is multiple times larger than its direct competitors, First Bancorp. ($19.4 billion) and OFG Bancorp ($10.1 billion). In addition, Popular has solid geographic diversity with 31% of its loan portfolio based in mainland U.S. regions

...Popular Inc. continues to hold its dominant market position as the largest Puerto Rico-headquartered bank and has better geographic diversity than its Puerto Rican bank peers. Popular has maintained about 50% of the deposit market share in Puerto Rico, and at $69.5 billion of total assets as of March 31, 2022, is multiple times larger than its direct competitors, First Bancorp. ($19.4 billion) and OFG Bancorp ($10.1 billion). In addition, Popular has solid geographic diversity with 31% of its loan portfolio based in mainland U.S. regions which provides some diversification outside of the historically weaker Puerto Rican economy. Popular's regulatory capital levels remain among the highest for U.S. rated banks, though we expect them to decline somewhat as shareholder returns increase this year. Popular's Tier 1 Capital ratio was 16.33% as of March 31, 2022 and compares favorably to most U.S. regional bank peers. The company announced in January 2022 that it plans to repurchase $500 million...

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