Earnings season is here once again. We're only a few days in, but we have already seen some impressive numbers from banking behemoths JPMorgan Chase, Wells Fargo, and Citigroup, with Bank of America releasing earnings yesterday. While these results are important to those of us that follow the banking sector, my interest lies in some of the smaller banks beyond the behemoths.

With that in mind, I turn my attention to a regional bank that will be reporting earnings Friday. Here are some things I will be watching when it comes to Popular (NASDAQ:BPOP), the largest bank in Puerto Rico.

What analysts are expecting
Popular has been profitable the previous six quarters, and analysts are expecting more of the same from this quarter. Average estimates peg expected revenue just north of $458 million, with earnings coming in at a respectable $0.49 per share.

Improvement in quality of capital
Regardless of its size, it is important for any bank to be properly capitalized. Popular's tier 1 capital ratio was a healthy 16.3% at the end of the previous quarter, even with a nonperforming assets ratio of 6.7%. Continued improvement in both of these metrics would go a long way in preventing a miserable performance in 2011 repeating again this year.

What else to expect
Popular doesn't pay a dividend currently, and hasn't done so since March 2009. With performance hampered partially by its nonperforming assets, it could be a while before the bank is "popular" with income investors again. Nevertheless, I'll be looking for some indication that management is committed to return value to shareholders beyond share price appreciation, either through share repurchases or an announced dividend sometime in the next few quarters.