UPDATE 2-Banco Popular to shed over 20 pct of US branches

* Popular to shed 28 of 132 U.S. branches

* Investors Bancorp to buy six New Jersey branches (Adds New Jersey transaction terms, recasts paragraphs 2-4)

CHICAGO, May 21 (Reuters) - Popular Inc (BPOP.O), the parent of Banco Popular, on Thursday said it plans to shed more than 20 percent of its U.S. branch network, in an effort to focus on more profitable operations, including New York.

The San Juan, Puerto Rico-based company said it will close its California in-store branch network, which includes 22 of its 46 branches in that state.

Popular will also sell six New Jersey branches with about $250 million of deposits to Investors Bancorp Inc (ISBC.O), a Short Hills, New Jersey lender with roughly $7.4 billion of assets and 53 branches.

Investors Bancorp said it will pay a 1 percent deposit premium, and is not buying the loans. It expects a closing in the third quarter.

Following these actions, Popular will operate 104 U.S. branches, including 41 in New York and New Jersey, 24 in southern California, 23 in Florida and 16 in Illinois. All of these areas have large Spanish-speaking populations.

Chief Executive Richard Carrion said Thursday's move "allows us to better allocate our resources at the New York region," where Popular has operated since 1961.

Popular also operates 177 branches in Puerto Rico, where it has the largest share of deposits. It has lost money in the last two calendar quarters.

Shares of Popular closed Thursday down 11 cents at $2.79 on the Nasdaq. The company announced the transactions after U.S. markets closed. (Reporting by Jonathan Stempel; Editing Bernard Orr)