Puerto Rican financial institution Popular (NASDAQ:BPOP) reported Q2 CY2025 results topping the market’s revenue expectations, with sales up 8.9% year on year to $800 million. Its GAAP profit of $3.09 per share was 21% above analysts’ consensus estimates.
Is now the time to buy Popular? Find out by accessing our full research report, it’s free.
Popular (BPOP) Q2 CY2025 Highlights:
- Net Interest Income: $631.5 million vs analyst estimates of $610.1 million (11.1% year-on-year growth, 3.5% beat)
- Net Interest Margin: 3.5% vs analyst estimates of 3.6% (flat year on year, 6.3 bps miss)
- Revenue: $800 million vs analyst estimates of $773.2 million (8.9% year-on-year growth, 3.5% beat)
- EPS (GAAP): $3.09 vs analyst estimates of $2.55 (21% beat)
- Market Capitalization: $7.89 billion
“We delivered strong performance in the second quarter, highlighted by higher net interest income, an expanding net interest margin, healthy loan and deposit growth, and improved credit quality,” said Javier D. Ferrer, President and Chief Executive Officer of Popular, Inc.
Company Overview
Founded in 1893 as the first bank in Puerto Rico to serve the working class, Popular (NASDAQ:BPOP) is a financial holding company that provides retail, mortgage, and commercial banking services primarily in Puerto Rico and the mainland United States.
Sales Growth
From lending activities to service fees, most banks build their revenue model around two income sources. Interest rate spreads between loans and deposits create the first stream, with the second coming from charges on everything from basic bank accounts to complex investment banking transactions.
Regrettably, Popular’s revenue grew at a mediocre 4.9% compounded annual growth rate over the last five years. This wasn’t a great result compared to the rest of the bank sector, but there are still things to like about Popular.
Long-term growth is the most important, but within financials, a half-decade historical view may miss recent interest rate changes and market returns. Popular’s recent performance shows its demand has slowed as its revenue was flat over the last two years. 
Note: Quarters not shown were determined to be outliers, impacted by outsized investment gains/losses that are not indicative of the recurring fundamentals of the business.
This quarter, Popular reported year-on-year revenue growth of 8.9%, and its $800 million of revenue exceeded Wall Street’s estimates by 3.5%.
Net interest income made up 76.1% of the company’s total revenue during the last five years, meaning lending operations are Popular’s largest source of revenue.
Markets consistently prioritize net interest income growth over fee-based revenue, recognizing its superior quality and recurring nature compared to the more unpredictable non-interest income streams.
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Tangible Book Value Per Share (TBVPS)
Banks are balance sheet-driven businesses because they generate earnings primarily through borrowing and lending. They’re also valued based on their balance sheet strength and ability to compound book value (another name for shareholders’ equity) over time.
This is why we consider tangible book value per share (TBVPS) the most important metric to track for banks. TBVPS represents the real, liquid net worth per share of a bank, excluding intangible assets that have debatable value upon liquidation. EPS can become murky due to acquisition impacts or accounting flexibility around loan provisions, and TBVPS resists financial engineering manipulation.
Popular’s TBVPS grew at a mediocre 4.6% annual clip over the last five years. However, TBVPS growth has accelerated recently, growing by 22.5% annually over the last two years from $50.28 to $75.41 per share.
Over the next 12 months, Consensus estimates call for Popular’s TBVPS to grow by 16.1% to $87.54, elite growth rate.
Key Takeaways from Popular’s Q2 Results
We were impressed by how significantly Popular blew past analysts’ EPS expectations this quarter. We were also glad its net interest income outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock remained flat at $115 immediately after reporting.
So do we think Popular is an attractive buy at the current price? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.