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Loans Receivable

9 Months Ended

Sep. 30, 2016

Loans Receivable [Abstract]

LOANS RECEIVABLE

NOTE 4 - LOANS

The Company’s loan portfolio held for investment is composed of two segments, loans initially accounted for under the amortized cost method (referred to as "originated and other" loans) and loans acquired (referred to as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans. Acquired Eurobank loans were purchased subject to loss-sharing agreements with the FDIC. The FDIC loss-share coverage related to commercial and other-non single family acquired Eurobank loans expired on June 30, 2015. Notwithstanding the expiration of loss share coverage of commercial loans, on July 2, 2015, the Company entered into an agreement with the FDIC pursuant to which the FDIC concurred with a potential sale of a pool of loss-share assets covered under the commercial loss-sharing agreement. Pursuant to such agreement, and as further discussed below, the FDIC agreed to and paid $20 million in loss share coverage with respect to the aggregate loss resulting from any portfolio sale within 120 days of the agreement. This sale was completed on September 28, 2015. Covered loans are no longer a material amount. Therefore, the Company changed its loan disclosures during 2015. Loans held for sale are presented separately.

The coverage for the single family residential loans will expire on June 30, 2020. At September 30, 2016, the remaining covered loans, amounting to $62.8 million, net carrying amount ($75.0 million gross amount), are included as part of acquired Eurobank loans under the name "loans secured by 1-4 family residential properties." At December 31, 2015, covered loans amounted to $67.2 million, net carrying amount ($92.3 million gross amount). Interest income recognized for covered loans during the nine-month periods ended September 30, 2016 and 2015 was $6.4 million and $31.4 million, respectively. The decrease in interest income recognized for covered loans is mainly due to the expiration of the FDIC loss-share coverage related to commercial and other-non single family residential loans on June 30, 2015.

Effective June 30, 2016, pursuant to supervisory direction, the Company changed the purchase credit impaired policy for all loans accounted for under ASC 310-30 (Loans and Debt Securities Acquired with Deteriorated Credit Quality). Under the revised policy, the Company writes-off the loan’s recorded investment and derecognizes the associated allowance for loan and lease losses for loans that exit the acquired pools. The revised policy was implemented prospectively due to the immaterial impact of retrospective adoption. Prior to June 30, 2016, the pool’s carrying value and allowance was determined by discounting expected cash flows at the pool’s effective yield. The allowance for loan and lease losses was maintained until all of the loans in the pool were paid off or charged-off. The transition to this revised policy during the second quarter of 2016 resulted in the de-recognition of $8.9 million and $73.1 million in the recorded investment balance and associated allowance for loans that had exited the pools, for acquired BBVAPR loans and acquired Eurobank loans, respectively, with no impact to the provision for loan and lease losses. Refer to Note 5 Allowances for Loan and Lease Losses.

During the third quarter of 2016, the Company entered into an agreement to sell its outstanding $200.0 million participation in the Puerto Rico Electric Power Authority ("PREPA") line of credit for $123.5 million, slightly lower than the adjusted book balance, net of reserves. As a result of this transaction, the Company recognized a $56.2 million charge-off and $2.9 million provision for loan and lease losses during the quarter ended September 30, 2016. At September 30, 2016, this line of credit was reported as other loans held for sale, at fair value of $123.1 million. The sale transaction settled on October 7, 2016.

The composition of the Company’s loan portfolio at September 30, 2016 and December 31, 2015 was as follows

	September 30,			December 31,
	2016			2015
	(In thousands)
Originated and other loans and leases held for investment: (c)
Mortgage	$	735,367		$	757,828
Commercial		1,267,177			1,441,649
Consumer		278,666			242,950
Auto and leasing		730,589			669,163
		3,011,799			3,111,590
Allowance for loan and lease losses on originated and other loans and leases		(62,168)			(112,626)
		2,949,631			2,998,964
Deferred loan costs, net		5,421			4,203
Total originated and other loans loans held for investment, net		2,955,052			3,003,167
Acquired loans:
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial		5,755			7,457
Consumer		34,215			38,385
Auto		64,393			106,911
		104,363			152,753
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20 (b)		(4,213)			(5,542)
		100,150			147,211
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy) (a)
Mortgage		579,769			608,294
Commercial		230,163			287,311
Construction		71,436			88,180
Consumer		5,768			11,843
Auto		100,475			153,592
		987,611			1,149,220
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30		(29,819)			(25,785)
		957,792			1,123,435
Total acquired BBVAPR loans, net		1,057,942			1,270,646
Acquired Eurobank loans: (a)
Loans secured by 1-4 family residential properties		75,043			92,273
Commercial and construction		82,753			142,377
Consumer		1,488			2,314
Total Eurobank loans		159,284			236,964
Allowance for loan and lease losses on Eurobank loans (b)		(22,812)			(90,178)
Total Eurobank loans, net		136,472			146,786
Total acquired loans, net		1,194,414			1,417,432
Total held for investment, net		4,149,466			4,420,599
Mortgage loans held for sale		26,362			13,614
Other loans held for sale (c)		123,137			-
Total loans, net	$	4,298,965		$	4,434,213
(a) Current period amounts have been re-measured using the revised de-recognition policy for purchased credit impaired loans implemented in the second quarter of 2016.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was de-recognized due to the revision in the de-recognition policy for these loans implemented during the second quarter of 2016.
(c) During the third quarter of 2016, the Company entered into an agreement to sell its outstanding participation in the PREPA line of credit. At September 30, 2016 this line of credit was reported as other loans held for sale, at fair value of $123.1 million.

Originated and Other Loans and Leases Held for Investment

The Company’s originated and other loans held for investment are encompassed within four portfolio segments: mortgage, commercial, consumer, and auto and leasing.

The following tables present the aging of the recorded investment in gross originated and other loans held for investment as of September 30, 2016 and December 31, 2015 by class of loans. Mortgage loans past due include delinquent loans in the GNMA buy-back option program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option.

	September 30, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	190		$	1,607		$	3,388		$	5,185		$	92		$	47,169		$	52,446		$	114
Years 2003 and 2004		249			4,271			6,142			10,662			332			81,915			92,909			-
Year 2005		123			1,810			3,930			5,863			202			44,617			50,682			-
Year 2006		781			3,434			7,045			11,260			321			60,358			71,939			-
Years 2007, 2008 and 2009		929			2,182			11,283			14,394			46			66,407			80,847			569
Years 2010, 2011, 2012, 2013		452			2,777			10,497			13,726			-			129,710			143,436			571
Years 2014, 2015 and 2016		-			430			1,150			1,580			47			102,789			104,416			-
		2,724			16,511			43,435			62,670			1,040			532,965			596,675			1,254
Non-traditional		-			301			5,002			5,303			-			19,036			24,339			-
Loss mitigation program		10,908			6,571			18,315			35,794			2,704			65,918			104,416			2,120
		13,632			23,383			66,752			103,767			3,744			617,919			725,430			3,374
Home equity secured personal loans		-			-			-			-			-			339			339			-
GNMA's buy-back option program		-			-			9,598			9,598			-			-			9,598			-
Total mortgage		13,632			23,383			76,350			113,365			3,744			618,258			735,367			3,374
Commercial
Commercial secured by real estate:
Corporate		-			-			-			-			-			240,458			240,458			-
Institutional		-			-			-			-			1,495			27,265			28,760			-
Middle market		-			205			3,114			3,319			1,406			232,088			236,813			-
Retail		672			707			6,477			7,856			3,710			236,983			248,549			-
Floor plan		-			-			-			-			-			2,793			2,793			-
Real estate		-			-			-			-			-			15,783			15,783			-
		672			912			9,591			11,175			6,611			755,370			773,156			-
Other commercial and industrial:
Corporate		-			-			-			-			-			126,325			126,325			-
Institutional		500			-			-			500			1,345			172,988			174,833			-
Middle market		-			-			-			-			1,350			85,349			86,699			-
Retail		1,112			311			1,060			2,483			210			71,252			73,945			-
Floor plan		670			-			119			789			-			31,430			32,219			-
		2,282			311			1,179			3,772			2,905			487,344			494,021			-
Total commercial		2,954			1,223			10,770			14,947			9,516			1,242,714			1,267,177			-

	September 30, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Consumer
Credit cards		486			264			510			1,260			-			24,204			25,464			-
Overdrafts		12			3			3			18			-			178			196			-
Personal lines of credit		38			18			37			93			-			2,199			2,292			-
Personal loans		2,154			1,657			926			4,737			778			229,480			234,995			-
Cash collateral personal loans		162			2			30			194			-			15,525			15,719			-
Total consumer		2,852			1,944			1,506			6,302			778			271,586			278,666			-
Auto and leasing		46,564			18,738			8,407			73,709			115			656,765			730,589			-
Total	$	66,002		$	45,288		$	97,033		$	208,323		$	14,153		$	2,789,323		$	3,011,799		$	3,374

	December 31, 2015
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002	$	80		$	2,217		$	3,889		$	6,186		$	41		$	51,562		$	57,789		$	144
Years 2003 and 2004		251			5,036			5,536			10,823			-			88,623			99,446			-
Year 2005		79			2,553			3,549			6,181			-			48,040			54,221			-
Year 2006		551			2,878			7,934			11,363			176			66,864			78,403			-
Years 2007, 2008 and 2009		170			2,053			14,733			16,956			-			74,590			91,546			526
Years 2010, 2011, 2012, 2013		662			1,673			10,519			12,854			141			137,749			150,744			72
Years 2014 and 2015		-			65			663			728			-			85,128			85,856			-
		1,793			16,475			46,823			65,091			358			552,556			618,005			742
Non-traditional		-			977			5,079			6,056			13			23,483			29,552			-
Loss mitigation program		9,958			6,887			14,930			31,775			5,593			64,548			101,916			3,083
		11,751			24,339			66,832			102,922			5,964			640,587			749,473			3,825
Home equity secured personal loans		-			-			64			64			-			346			410			-
GNMA's buy-back option program		-			-			7,945			7,945			-			-			7,945			-
Total mortgage		11,751			24,339			74,841			110,931			5,964			640,933			757,828			3,825
Commercial
Commercial secured by real estate:
Corporate		-			-			-			-			-			227,557			227,557			-
Institutional		213			-			-			213			-			33,594			33,807			-
Middle market		1,174			712			9,113			10,999			1,730			194,219			206,948			-
Retail		686			466			6,921			8,073			1,177			231,840			241,090			-
Floor plan		-			-			-			-			-			2,892			2,892			-
Real estate		-			-			-			-			-			16,662			16,662			-
		2,073			1,178			16,034			19,285			2,907			706,764			728,956			-
Other commercial and industrial:
Corporate		-			-			-			-			-			108,582			108,582			-
Institutional		-			-			-			-			190,290			190,695			380,985			-
Middle market		-			-			-			-			1,565			105,748			107,313			-
Retail		282			639			604			1,525			783			75,489			77,797			-
Floor plan		238			51			39			328			-			37,688			38,016			-
		520			690			643			1,853			192,638			518,202			712,693			-
Total commercial		2,593			1,868			16,677			21,138			195,545			1,224,966			1,441,649			-

	December 31, 2015
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Consumer
Credit cards		449			182			369			1,000			-			21,766			22,766			-
Overdrafts		24			-			-			24			-			166			190			-
Personal lines of credit		74			-			45			119			19			2,106			2,244			-
Personal loans		2,078			1,179			627			3,884			414			196,858			201,156			-
Cash collateral personal loans		125			17			2			144			-			16,450			16,594			-
Total consumer		2,750			1,378			1,043			5,171			433			237,346			242,950			-
Auto and leasing		53,566			16,898			8,293			78,757			49			590,357			669,163			-
Total	$	70,660		$	44,483		$	100,854		$	215,997		$	201,991		$	2,693,602		$	3,111,590		$	3,825

During 2015, the Company changed its early delinquency reporting on mortgage loans from one scheduled payment due to two scheduled payments due to be comparable with local peers, except for troubled-debt restructured loans which continue using one scheduled payment due for delinquency reporting. During the quarter ended June 30, 2016, the Company changed its early delinquency reporting on consumer and auto loans from one scheduled payment due to two scheduled payments to report consistently its retail portfolio. The change resulted in a $19 thousand and $5.9 million reduction in early and total delinquency for consumer and auto loans, respectively.

At September 30, 2016 and December 31, 2015, the Company had carrying balances of $136.8 million and $334.6 million, respectively, in originated and other loans held for investment granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. All loans granted to the Puerto Rico government were current at September 30, 2016 and December 31, 2015.

Acquired Loans

Acquired loans were initially measured at fair value and subsequently accounted for under either ASC 310-30 or ASC 310-20 (Non-refundable fees and Other Costs). We have acquired loans in two bank acquisitions, BBVAPR and Eurobank.

Acquired BBVAPR Loans

Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium)

Credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, excluding the acquired Eurobank loan portfolio, are accounted for under the guidance of ASC 310-20, which requires that any contractually required loan payment receivable in excess of the Company’s initial investment in the loans be accreted into interest income on a level-yield basis over the life of the loan. Loans accounted for under ASC 310-20 are placed on non-accrual status when past due in accordance with the Company’s non-accrual policy, and any accretion of discount or amortization of premium is discontinued. Acquired BBVAPR loans that were accounted for under the provisions of ASC 310-20 are removed from the acquired loan category at the end of the reporting period upon refinancing, renewal or normal re-underwriting.

The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of September 30, 2016 and December 31, 2015, by class of loans:

	September 30, 2016
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-		$	-		$	150		$	150		$	-		$	-		$	150		$	-
Floor plan		969			-			227			1,196			-			1,286			2,482			-
		969			-			377			1,346			-			1,286			2,632			-
Other commercial and industrial
Retail		67			56			78			201			-			2,919			3,120			-
Floor plan		-			-			3			3			-			-			3			-
		67			56			81			204			-			2,919			3,123			-
		1,036			56			458			1,550			-			4,205			5,755			-
Consumer
Credit cards		827			443			641			1,911			-			29,452			31,363			-
Personal loans		95			15			62			172			-			2,680			2,852			-
		922			458			703			2,083			-			32,132			34,215			-
Auto		4,321			1,608			739			6,668			4			57,721			64,393			-
Total	$	6,279		$	2,122		$	1,900		$	10,301		$	4		$	94,058		$	104,363		$	-

	December 31, 2015
																						Loans 90+
																						Days Past
													Current									Due and
	30-59 Days			60-89 Days			90+ Days			Total Past			in Non-			Current						Still
	Past Due			Past Due			Past Due			Due			Accrual			Accruing			Total Loans			Accruing
	(In thousands)
Commercial
Commercial secured by real estate
Retail	$	-		$	-		$	228		$	228		$	-		$	-		$	228		$	-
Floor plan		-			-			467			467			-			2,422			2,889			-
		-			-			695			695			-			2,422			3,117			-
Other commercial and industrial
Retail		186			29			178			393			-			3,331			3,724			-
Floor plan		-			-			7			7			-			609			616			-
		186			29			185			400			-			3,940			4,340			-
		186			29			880			1,095			-			6,362			7,457			-
Consumer
Credit cards		930			384			489			1,803			-			33,414			35,217			-
Personal loans		14			29			46			89			-			3,079			3,168			-
		944			413			535			1,892			-			36,493			38,385			-
Auto		7,553			2,279			831			10,663			-			96,248			106,911			-
Total	$	8,683		$	2,721		$	2,246		$	13,650		$	-		$	139,103		$	152,753		$	-

Acquired BBVAPR Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

Acquired BBVAPR loans, except for credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, are accounted for by the Company in accordance with ASC 310-30.

The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at September 30, 2016 and December 31, 2015 is as follows:

		September 30,			December 31,
		2016			2015
			(In thousands)
Contractual required payments receivable (a)		$	1,716,721		$	1,945,098
Less: Non-accretable discount			367,754			434,190
Cash expected to be collected			1,348,967			1,510,908
Less: Accretable yield			361,356			361,688
Carrying amount, gross			987,611			1,149,220
Less: allowance for loan and lease losses (b)			29,819			25,785
Carrying amount, net		$	957,792		$	1,123,435
(a) Current period amounts have been re-measured using the revised de-recognition policy for purchased credit impaired loans implemented in the second quarter of 2016.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was de-recognized due to the revision in the de-recognition policy for these loans implemented during the second quarter of 2016.

At September 30, 2016 and December 31, 2015, the Company had $65.6 million and $80.9 million, respectively, in loans granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of its acquired BBVAPR loans accounted for under ASC 310-30.

The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the

	Quarter Ended September 30, 2016
	Mortgage			Commercial			Construction			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	283,823		$	37,059		$	15,248		$	14,103		$	4,885		$	355,118
Accretion		(8,197)			(5,201)			(1,485)			(3,107)			(662)			(18,652)
Change in expected cash flows		(1)			1,764			(1)			618			(241)			2,139
Transfer from (to) non-accretable discount		24,056			(1,296)			283			(525)			233			22,751
Balance at end of period	$	299,681		$	32,326		$	14,045		$	11,089		$	4,215		$	361,356
Non-Accretable Discount Activity:
Balance at beginning of period	$	336,153		$	10,582		$	7,419		$	22,121		$	18,225		$	394,500
Change in actual and expected losses		(2,591)			(1,215)			(1)			(309)			121			(3,995)
Transfer (to) from accretable yield		(24,056)			1,296			(283)			525			(233)			(22,751)
Balance at end of period	$	309,506		$	10,663		$	7,135		$	22,337		$	18,113		$	367,754

	Nine-Month Period Ended September 30, 2016
	Mortgage			Commercial			Construction			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	268,794		$	45,411		$	19,615		$	21,578		$	6,290		$	361,688
Accretion		(24,798)			(16,312)			(4,661)			(10,934)			(2,470)			(59,175)
Change in expected cash flows		(1)			4,954			(209)			1,249			(242)			5,751
Transfer from (to) non-accretable discount		55,686			(1,727)			(700)			(804)			637			53,092
Balance at end of period	$	299,681		$	32,326		$	14,045		$	11,089		$	4,215		$	361,356
Non-Accretable Discount Activity:
Balance at beginning of period	$	374,772		$	11,781		$	6,764		$	22,039		$	18,834		$	434,190
Change in actual and expected losses		(9,580)			(2,845)			(329)			(506)			(84)			(13,344)
Transfer (to) from accretable yield		(55,686)			1,727			700			804			(637)			(53,092)
Balance at end of period	$	309,506		$	10,663		$	7,135		$	22,337		$	18,113		$	367,754

	Quarter Ended September 30, 2015
	Mortgage			Commercial			Construction			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	275,880		$	71,563		$	24,613		$	31,531		$	8,461		$	412,048
Accretion		(8,614)			(12,693)			(2,719)			(5,463)			(1,207)			(30,696)
Change in actual and expected losses		-			6,134			1,396			(1)			(1)			7,528
Transfer from (to) non-accretable discount		75			(6,450)			(4,075)			148			35			(10,267)
Balance at end of period	$	267,341		$	58,554		$	19,215		$	26,215		$	7,288		$	378,613
Non-Accretable Discount Activity:
Balance at beginning of period	$	389,107		$	10,770		$	6,994		$	23,690		$	19,356		$	449,917
Change in actual and expected losses		(2,184)			(12,090)			(2,937)			(555)			(315)			(18,081)
Transfer (to) from accretable yield		(75)			6,450			4,075			(148)			(35)			10,267
Balance at end of period	$	386,848		$	5,130		$	8,132		$	22,987		$	19,006		$	442,103

	Nine-Month Period Ended September 30, 2015
	Mortgage			Commercial			Construction			Auto			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	298,364		$	61,196		$	25,829		$	53,998		$	6,559		$	445,946
Accretion		(26,414)			(33,049)			(8,672)			(18,614)			(3,420)			(90,169)
Change in actual and expected losses		-			6,134			1,396			(1)			(1)			7,528
Transfer (to) from non-accretable discount		(4,609)			24,273			662			(9,168)			4,150			15,308
Balance at end of period	$	267,341			58,554			19,215			26,215			7,288			378,613
Non-Accretable Discount Activity:
Balance at beginning of period	$	389,839		$	23,069		$	3,486		$	16,215		$	24,018		$	456,627
Change in actual and expected losses		(7,600)			6,334			5,308			(2,396)			(862)			784
Transfer from (to) accretable yield		4,609			(24,273)			(662)			9,168			(4,150)			(15,308)
Balance at end of period	$	386,848		$	5,130		$	8,132		$	22,987		$	19,006		$	442,103

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at September 30, 2016 and December 31, 2015 is as follows:

		September 30			December 31
	2016			2015
	(In thousands)
Contractual required payments receivable (a)	$	243,873		$	342,511
Less: Non-accretable discount		7,934			21,156
Cash expected to be collected		235,939			321,355
Less: Accretable yield		76,655			84,391
Carrying amount, gross		159,284			236,964
Less: Allowance for loan and lease losses (b)		22,812			90,178
Carrying amount, net	$	136,472		$	146,786
(a) Current period amounts have been re-measured using the revised de-recognition policy for purchased credit impaired loans implemented in the second quarter of 2016.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was de-recognized due to the revision in the de-recognition policy for these loans implemented during the second quarter of 2016.

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters and nine-month periods ended September 30, 2016 and 2015:

	Quarter Ended September 30, 2016
	Loans Secured by 1-4 Family Residential Properties			Commercial and Other Construction			Construction & Development Secured by 1-4 Family Residential Properties			Leasing			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	48,336		$	29,142		$	2,204		$	-		$	-		$	79,682
Accretion		(2,217)			(6,570)			-			(62)			(490)			(9,339)
Change in expected cash flows		646			1,719			(8)			62			490			2,909
Transfer from (to) non-accretable discount		3,737			(188)			(146)			-			-			3,403
Balance at end of year	$	50,502		$	24,103		$	2,050		$	-		$	-		$	76,655
Non-Accretable Discount Activity:
Balance at beginning of period	$	11,555		$	-		$	-		$	-		$	-		$	11,555
Change in actual and expected losses		(845)			617			10			-			-			(218)
Transfer from (to) accretable yield		(3,737)			188			146			-			-			(3,403)
Balance at end of period	$	6,973		$	805		$	156		$	-		$	-		$	7,934

	Nine-Month Period Ended September 30, 2016
	Loans Secured by 1-4 Family Residential Properties			Commercial and Other Construction			Construction & Development Secured by 1-4 Family Residential Properties			Leasing			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	51,954		$	26,970		$	2,255		$	-		$	3,212		$	84,391
Accretion		(6,746)			(15,193)			(47)			(60)			(1,751)			(23,797)
Change in expected cash flows		1,432			14,431			(31)			(15)			(1,456)			14,361
Transfer from (to) non-accretable discount		3,862			(2,105)			(127)			75			(5)			1,700
Balance at end of period	$	50,502		$	24,103		$	2,050		$	-		$	-		$	76,655
Non-Accretable Discount Activity:
Balance at beginning of period	$	12,869		$	-		$	-		$	-		$	8,287		$	21,156
Change in actual and expected losses		(2,034)			(1,300)			29			75			(8,292)			(11,522)
Transfer (to) from accretable yield		(3,862)			2,105			127			(75)			5			(1,700)
Balance at end of period	$	6,973		$	805		$	156		$	-		$	-		$	7,934

	Quarter Ended September 30, 2015
	Loans Secured by 1-4 Family Residential Properties			Commercial and Other Construction			Construction & Development Secured by 1-4 Family Residential Properties			Leasing			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	55,806		$	27,473		$	18,349		$	1,103		$	1,910		$	104,641
Accretion		(3,543)			(10,100)			(1,446)			(711)			(214)			(16,014)
Change in expected cash flows		4,320			43,775			(10,749)			270			118			37,734
Transfer from non-accretable discount		(2,188)			(30,400)			175			307			1,603			(30,503)
Balance at end of period	$	54,395		$	30,748		$	6,329		$	969		$	3,417		$	95,858
Non-Accretable Discount Activity:
Balance at beginning of period	$	11,402		$	-		$	-		$	-		$	9,730		$	21,132
Change in actual and expected losses		(8)			(30,400)			175			307			(34)			(29,960)
Transfer to accretable yield		2,188			30,400			(175)			(307)			(1,603)			30,503
Balance at end of period	$	13,582		$	-		$	-		$	-		$	8,093		$	21,675

	Nine-Month Period Ended September 30, 2015
	Loans Secured by 1-4 Family Residential Properties			Commercial and Other Construction			Construction & Development Secured by 1-4 Family Residential Properties			Leasing			Consumer			Total
	(In thousands)
Accretable Yield Activity:
Balance at beginning of period	$	47,636		$	37,919		$	20,753		$	2,479		$	1,072		$	109,859
Accretion		(10,337)			(28,002)			(2,470)			(3,040)			(427)			(44,276)
Change in Expected Cash Flows		4,320			43,775			(10,749)			270			118			37,734
Transfer from (to) non-accretable discount		12,776			(22,944)			(1,205)			1,260			2,654			(7,459)
Balance at end of period	$	54,395		$	30,748		$	6,329		$	969		$	3,417		$	95,858
Non-Accretable Discount Activity:
Balance at beginning of period	$	27,348		$	24,464		$	-		$	-		$	10,598		$	62,410
Change in actual and expected cash flows		(990)			(47,408)			(1,205)			1,260			149			(48,194)
Transfer (to) from accretable yield		(12,776)			22,944			1,205			(1,260)			(2,654)			7,459
Balance at end of period	$	13,582		$	-		$	-		$	-		$	8,093		$	21,675

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class of loans as of September 30, 2016 and December 31, 2015:

	September 30,			December 31,
	2016			2015
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002	$	3,436		$	3,786
Years 2003 and 2004		6,474			5,737
Year 2005		4,367			3,627
Year 2006		7,412			8,189
Years 2007, 2008 and 2009		10,931			14,625
Years 2010, 2011, 2012, 2013		10,059			10,588
Years 2014, 2015 and 2016		1,197			663
		43,876			47,215
Non-traditional		5,002			5,092
Loss mitigation program		21,485			20,172
		70,363			72,479
Home equity loans, secured personal loans		-			64
		70,363			72,543
Commercial
Commercial secured by real estate
Middle market		4,726			12,729
Retail		11,040			8,726
		15,766			21,455
Other commercial and industrial
Institutional		1,845			190,290
Middle market		1,350			1,565
Retail		2,101			1,932
Floor plan		790			39
		6,086			193,826
		21,852			215,281
Consumer
Credit cards		510			369
Personal lines of credit		37			100
Personal loans		1,890			1,146
Cash collateral personal loans		30			16
		2,467			1,631
Auto and leasing		9,477			8,418
Total non-accrual originated loans	$	104,159		$	297,873

	September 30,			December 31,
	2016			2015
	(In thousands)
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail	$	150		$	228
Floor plan		227			467
		377			695
Other commercial and industrial
Retail		78			178
Floor plan		3			7
		81			185
		458			880
Consumer
Credit cards		641			489
Personal loans		62			46
		703			535
Auto		777			831
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20		1,938			2,246
Total non-accrual loans	$	106,097		$	300,119

Loans accounted for under ASC 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses or are accounted for under the cost recovery method.

Delinquent residential mortgage loans insured or guaranteed under applicable Federal Housing Administration ("FHA") and U.S. Department of Veterans Affairs ("VA") programs are classified as non-performing loans when they become 90 days or more past due, but are not placed in non-accrual status until they become 18 months or more past due, since they are insured loans. Therefore, these loans are included as non-performing loans but excluded from non-accrual loans. In addition, these loans are excluded from the impairment analysis.

During the first quarter of 2015, the participation in the PREPA line of credit was classified as non-accrual. At December 31, 2015, this participation had an unpaid principal balance of $190.3 million. During the third quarter of 2016, the Company agreed to sell its participation with a settlement on October 7, 2016. Therefore, at September 30, 2016 this line of credit was reported as other loans held for sale, at fair value of $123.1 million.

At September 30, 2016 and December 31, 2015, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $100.3 million and $93.6 million, respectively, as they are performing under their new terms.

Impaired Loans

The Company evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans was $36.6 million and $235.8 million at September 30, 2016 and December 31, 2015, respectively. Impaired commercial loans at December 31, 2015 included the PREPA line of credit with an unpaid principal balance of $190.3 million. The impaired commercial loans were measured based on the fair value of collateral or the present value of cash flows, including those identified as troubled-debt restructurings. The valuation allowance for impaired commercial loans amounted to $5.6 million at September 30, 2016 and $55.9 million at December 31, 2015. The valuation allowance for impaired commercial loans at December 31, 2015 included $53.3 million of specific allowance for PREPA. The total investment in impaired mortgage loans was $92.3 million and $90.0 million at September 30, 2016 and December 31, 2015, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The valuation allowance for impaired mortgage loans amounted to $8.7 million at September 30, 2016 and $9.2 million at December 31, 2015.

Originated and Other Loans and Leases Held for Investment

The Company’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	16,915		$	14,949		$	5,572		38%
Residential impaired and troubled-debt restructuring		100,390			92,343			8,725		9%
Impaired loans with no specific allowance:
Commercial		27,908			21,420			-		0%
Total investment in impaired loans	$	145,213		$	128,712		$	14,297		11%

	December 31, 2015
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with specific allowance:
Commercial	$	210,718		$	199,366		$	55,947		28%
Residential impaired and troubled-debt restructuring		97,424			89,973			9,233		10%
Impaired loans with no specific allowance
Commercial		42,110			35,928			-		0%
Total investment in impaired loans	$	350,252		$	325,267		$	65,180		20%

Acquired BBVAPR Loans

Loans Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium)

The Company’s recorded investment in acquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016
	Unpaid			Recorded			Related
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	251		$	230		$	-		0%
Total investment in impaired loans	$	251		$	230		$	-		0%
	December 31, 2015
	Unpaid			Recorded			Specific
	Principal			Investment			Allowance			Coverage
	(In thousands)
Impaired loans with no specific allowance
Commercial	$	486		$	474		$	-		0%
Total investment in impaired loans	$	486		$	474		$	-		0%

Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

The Company’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Mortgage	$	608,751		$	579,770		$	2,664		0%
Commercial		168,980			164,061			17,878		11%
Construction		52,775			51,271			4,120		8%
Auto		107,358			100,475			5,157		5%
Total investment in impaired loan pools	$	937,864		$	895,577		$	29,819		3%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans implemented in the second quarter of 2016.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized due to the revision in the derecognition policy for these loans implemented during the second quarter of 2016.

	December 31 , 2015
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance:
Mortgage	$	608,294		$	608,294		$	1,761		0%
Commercial		287,311			168,107			15,455		9%
Construction		88,180			87,983			5,707		6%
Auto		153,592			153,592			2,862		2%
Total investment in impaired loan pools	$	1,137,377		$	1,017,976		$	25,785		3%

The tables above only present information with respect to acquired BBVAPR loans and pools accounted for under ASC 310-30 if there is a recorded impairment to such loans or loan pools and a specific allowance for loan losses.

Acquired Eurobank Loans

The Company’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as of September 30, 2016 and December 31, 2015 are as follows:

	September 30, 2016
										Coverage
	Unpaid			Recorded						to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance: (a)(b)
Loans secured by 1-4 family residential properties	$	83,216		$	70,337		$	12,268		17%
Commercial and construction		57,889			53,445			10,544		20%
Consumer		-			1,488			-		0%
Total investment in impaired loan pools	$	141,105		$	125,270		$	22,812		18%
(a) Current period amounts have been re-measured using the revised derecognition policy for purchased credit impaired loans implemented in the second quarter of 2016.
(b) A portion of the allowance for loan and lease losses associated with purchased credit impaired loans was derecognized due to the revision in the derecognition policy for these loans implemented during the second quarter of 2016.

	December 31, 2015
										Coverage
	Unpaid			Recorded			Specific			to Recorded
	Principal			Investment			Allowance			Investment
	(In thousands)
Impaired loan pools with specific allowance
Loans secured by 1-4 family residential properties	$	101,444		$	92,273		$	22,570		24%
Commercial and construction		133,148			142,377			67,365		47%
Consumer		6,713			2,314			243		11%
Total investment in impaired loan pools	$	241,305		$	236,964		$	90,178		38%

The tables above only present information with respect to acquired Eurobank loans and loan pools accounted for under ASC 310-30 if there is a recorded impairment to such loans or loan pools and a specific allowance for loan losses.

The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, excluding loans accounted for under ASC 310-30 for the quarters and nine-month periods ended September 30, 2016 and 2015:

	Quarter Ended September 30,
	2016						2015
	Interest Income Recognized			Average Recorded Investment			Interest Income Recognized			Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	162		$	73,729		$	37		$	207,610
Residential troubled-debt restructuring		765			91,345			788			90,278
Impaired loans with no specific allowance
Commercial		259			62,946			365			31,159
		1,186			228,020			1,190			329,047
Acquired loans accounted for under ASC 310-20:
Impaired loans with specific allowance
Commercial	$	15		$	323		$	-		$	-
Impaired loans with no specific allowance
Commercial		-			952			-			1,077
Total interest income from impaired loans	$	1,201		$	229,295		$	1,190		$	330,124

	Nine-Month Period Ended September 30,
	2016							2015
	Interest Income Recognized			Average Recorded Investment				Interest Income Recognized			Average Recorded Investment
	(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial	$	202		$	155,094		$	73		$	166,633
Residential troubled-debt restructuring		2,321			90,881			2,381			90,903
Impaired loans with no specific allowance
Commercial		749			42,050			727			74,247
Total interest income from impaired loans	$	3,272		$	288,025		$	3,181		$	331,783
Aquired loans accounted for under SC 310-20:
Impaired loans with specific allowance
Commercial	$	45		$	108		$	-		$	-
Impaired loans with no specific allowance
Commercial		-			736			-			1,641
Total interest income from impaired loans	$	3,317		$	288,869		$	3,181		$	333,424

Modifications

The following tables present the troubled-debt restructurings during the

	Quarter Ended September 30, 2016
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	20		$	2,737		6.28%		297		$	2,768		4.72%		387
Commercial	5			7,352		5.31%		65			7,352		5.89%		130
Consumer	20			183		14.73%		72			210		12.72%		54
	Nine-Month Period Ended September 30, 2016
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	72		$	9,558		6.00%		347		$	9,284		4.69%		462
Commercial	13			8,675		5.53%		63			8,676		5.95%		120
Consumer	67			739		13.63%		74			813		11.12%		67

	Quarter Ended September 30, 2015
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	30		$	3,846		6.34%		338		$	3,992		4.45%		180
Commercial	3			1,001		6.50%		12			8,511		3.19%		12
Consumer	27			170		12.41%		70			400		12.32%		52
	Nine-Month Period Ended September 30, 2015
	Number of contracts		Pre-Modification Outstanding Recorded Investment			Pre-Modification Weighted Average Rate		Pre-Modification Weighted Average Term (in Months)		Post-Modification Outstanding Recorded Investment			Post-Modification Weighted Average Rate		Post-Modification Weighted Average Term (in Months)
	(Dollars in thousands)
Mortgage	127		$	15,455		5.07%		346		$	15,586		4.21%		306
Commercial	7			5,534		6.77%		67			13,045		4.52%		57
Consumer	59			567		13.87%		71			840		13.33%		60
Auto	1			64		12.95%		72			65		12.95%		72

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended September 30, 2016 and 2015:

	Twelve-Month Period Ended September 30,
	2016						2015
	Number of Contracts		Recorded Investment				Number of Contracts		Recorded Investment
	(Dollars in thousands)
Mortgage	23		$	3,437			49		$	5,396
Commercial	2		$	157			-		$	-
Consumer	7		$	68			8		$	177
Auto	-		$	-			1		$	64

Credit Quality Indicators

The Company categorizes originated and other loans and acquired loans accounted for under ASC 310-20 into risk categories based on relevant information about the ability of borrowers to service their debt, such as economic conditions, portfolio risk characteristics, prior loss experience, and the results of periodic credit reviews of individual loans.

The Company uses the following definitions for risk ratings:

Pass: Loans classified as “pass” have a well-defined primary source of repayment very likely to be sufficient, with no apparent risk, strong financial position, minimal operating risk, profitability, liquidity and capitalization better than industry standards.

Special Mention: Loans classified as “special mention” have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard: Loans classified as “substandard” are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as “doubtful” have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, questionable and improbable.

Loss: Loans classified as “loss” are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this worthless loan even though partial recovery may be effected in the future.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans.

As of September 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and BBVAPR acquired loans accounted for under ASC 310-20 subject to risk rating by class of loans is as follows:

	September 30, 2016
	Risk Ratings
																Individually
	Balance						Special									Measured for
	Outstanding			Pass			Mention			Substandard			Doubtful			Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	240,458		$	225,559		$	14,899		$	-		$	-		$	-
Institutional		28,760			25,745			-			-			-			3,015
Middle market		236,813			200,191			23,628			517			-			12,477
Retail		248,549			224,865			6,486			4,435			-			12,763
Floor plan		2,793			1,824			-			-			-			969
Real estate		15,783			15,783			-			-			-			-
		773,156			693,967			45,013			4,952			-			29,224
Other commercial and industrial:
Corporate		126,325			126,325			-			-			-			-
Institutional		174,833			172,749			239			-			-			1,845
Middle market		86,699			80,606			4,582			161			-			1,350
Retail		73,945			68,670			863			1,328			-			3,084
Floor plan		32,219			27,396			3,876			81			-			866
		494,021			475,746			9,560			1,570			-			7,145
Total		1,267,177			1,169,713			54,573			6,522			-			36,369
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		150			-			-			150			-			-
Floor plan		2,482			1,899			356			-			-			227
		2,632			1,899			356			150			-			227
Other commercial and industrial:
Retail		3,120			3,096			-			24			-			-
Floor plan		3			-			-			-			-			3
		3,123			3,096			-			24			-			3
Total		5,755			4,995			356			174			-			230
Total	$	1,272,932		$	1,174,708		$	54,929		$	6,696		$	-		$	36,599

	December 31, 2015
	Risk Ratings
																Individually
	Balance						Special									Measured for
	Outstanding			Pass			Mention			Substandard			Doubtful			Impairment
	(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate	$	227,557		$	212,410		$	15,147		$	-		$	-		$	-
Institutional		33,807			25,907			-			-			-			7,900
Middle market		206,948			181,916			9,697			-			-			15,335
Retail		241,090			217,836			7,936			5,097			-			10,221
Floor plan		2,892			2,892			-			-			-			-
Real estate		16,662			16,662			-			-			-			-
		728,956			657,623			32,780			5,097			-			33,456
Other commercial and industrial:
Corporate		108,582			100,826			-			-			-			7,756
Institutional		380,985			190,695			-			-			-			190,290
Middle market		107,313			97,288			8,052			-			-			1,973
Retail		77,797			73,757			1,076			1,184			-			1,780
Floor plan		38,016			35,862			2,115			-			-			39
		712,693			498,428			11,243			1,184			-			201,838
Total		1,441,649			1,156,051			44,023			6,281			-			235,294
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail		228			-			-			228			-			-
Floor plan		2,889			602			1,820			-			-			467
		3,117			602			1,820			228			-			467
Other commercial and industrial:
Retail		3,724			3,637			-			87			-			-
Floor plan		616			609			-			-			-			7
		4,340			4,246			-			87			-			7
Total		7,457			4,848			1,820			315			-			474
Total	$	1,449,106		$	1,160,899		$	45,843		$	6,596		$	-		$	235,768

At September 30, 2016 and December 31, 2015, the Company had outstanding credit facilities held for investment of approximately $202.4 million and $415.4 million, respectively, granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities, included within the portfolios of originated and other loans and acquired BBVAPR loans accounted for under ASC 310-30. A substantial portion of the Company’s credit exposure to Puerto Rico’s government consists of collateralized loans or obligations that have a specific source of income or revenues identified for their repayment. Approximately $191.2 million of these loans are general obligations of municipalities secured by ad valorem taxation, without limitation as to rate or amount, on all taxable property within the issuing municipalities. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations.

At September 30, 2016, we had approximately $11.2 million of credit facilities to central government and public corporations of the Commonwealth, consisting of a participation in a loan to the Puerto Rico Housing Finance Authority ("PRHFA") with an outstanding balance of $10.9 million to be repaid from abandoned or unclaimed funds at financial institutions that revert to the government under a Puerto Rico escheat law. The loan to PRHFA defaulted on an annual principal payment in the third quarter of 2016.

The outstanding balance of credit facilities to the central government and public corporations decreased by $200.8 million during 2016 mainly as a result of the sale of the PREPA fuel line of credit which had an outstanding balance of $190.3 million at December 31, 2015. At September 30, 2016, this fuel line of credit was reported as other loans held for sale, at fair value. The sale settled on October 7, 2016.

For residential and consumer loan classes, the Company evaluates credit quality based on the delinquency status of the loan. As of September 30, 2016 and December 31, 2015, and based on the most recent analysis performed, the risk category of gross originated and other loans and acquired BBVAPR loans accounted for under ASC 310-20 not subject to risk rating by class of loans is as follows:

	September 30, 2016
	Delinquency
																						Individually
	Balance																					Measured for
	Outstanding			0-29 days			30-59 days			60-89 days			90-119 days			120-364 days			365+ days			Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	52,446		$	46,884		$	-		$	1,607		$	304		$	1,296		$	1,646		$	709
Years 2003 and 2004		92,909			81,218			-			4,003			1,492			1,806			2,442			1,948
Year 2005		50,682			44,294			123			1,810			790			910			1,797			958
Year 2006		71,939			58,195			231			3,380			955			1,283			4,173			3,722
Years 2007, 2008 and 2009		80,847			64,798			171			1,779			863			2,212			7,068			3,956
Years 2010, 2011, 2012 2013		143,436			131,227			292			2,398			717			809			3,954			4,039
Years 2014, 2015 and 2016		104,416			102,788			-			430			244			447			460			47
		596,675			529,404			817			15,407			5,365			8,763			21,540			15,379
Non-traditional		24,339			19,036			-			301			-			1,904			3,098			-
Loss mitigation program		104,416			17,991			2,086			1,598			1,150			1,233			3,394			76,964
		725,430			566,431			2,903			17,306			6,515			11,900			28,032			92,343
Home equity secured personal loans		339			339			-			-			-			-			-			-
GNMA's buy-back option program		9,598			-			-			-			1,872			4,065			3,661			-
		735,367			566,770			2,903			17,306			8,387			15,965			31,693			92,343
Consumer
Credit cards		25,464			24,204			486			264			251			259			-			-
Overdrafts		196			178			12			3			2			1			-			-
Unsecured personal lines of credit		2,292			2,199			38			18			21			13			3			-
Unsecured personal loans		234,995			230,259			2,154			1,657			889			36			-			-
Cash collateral personal loans		15,719			15,525			162			2			30			-			-			-
		278,666			272,365			2,852			1,944			1,193			309			3			-
Auto and Leasing		730,589			656,880			46,564			18,738			6,015			2,392			-			-
		1,744,622			1,496,015			52,319			37,988			15,595			18,666			31,696			92,343
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		31,363			29,452			827			443			238			403			-			-
Personal loans		2,852			2,679			95			15			22			41			-			-
		34,215			32,131			922			458			260			444			-			-
Auto		64,393			57,725			4,321			1,608			588			151			-			-
		98,608			89,856			5,243			2,066			848			595			-			-
Total	$	1,843,230		$	1,585,871		$	57,562		$	40,054		$	16,443		$	19,261		$	31,696		$	92,343

	December 31, 2015
	Delinquency
																						Individually
	Balance																					Measured for
	Outstanding			0-29 days			30-59 days			60-89 days			90-119 days			120-364 days			365+ days			Impairment
	(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year)
Up to the year 2002	$	57,789		$	50,912		$	82		$	2,218		$	530		$	1,504		$	1,858		$	685
Years 2003 and 2004		99,446			87,060			251			4,867			1,261			1,353			2,921			1,733
Year 2005		54,221			47,197			79			2,553			292			1,068			2,189			843
Year 2006		78,403			63,659			318			2,878			1,168			1,895			4,871			3,614
Years 2007, 2008 and 2009		91,546			71,439			170			1,665			685			2,972			10,725			3,890
Years 2010, 2011, 2012 2013		150,744			134,945			569			1,611			434			1,982			6,737			4,466
Year 2014 and 2015		85,856			85,128			-			65			148			281			234			-
		618,005			540,340			1,469			15,857			4,518			11,055			29,535			15,231
Non-traditional		29,552			23,497			-			977			552			2,621			1,905			-
Loss mitigation program		101,916			16,031			4,173			1,977			727			1,728			2,538			74,742
		749,473			579,868			5,642			18,811			5,797			15,404			33,978			89,973
Home equity secured personal loans		410			346			-			-			-			64			-			-
GNMA's buy-back option program		7,945			-			-			-			1,593			3,578			2,774			-
		757,828			580,214			5,642			18,811			7,390			19,046			36,752			89,973
Consumer
Credit cards		22,766			21,766			449			182			179			190			-			-
Overdrafts		190			166			24			-			-			-			-			-
Unsecured personal lines of credit		2,244			2,125			74			-			17			28			-			-
Unsecured personal loans		201,156			197,339			2,083			1,107			621			6			-			-
Cash collateral personal loans		16,594			16,450			125			17			2			-			-			-
		242,950			237,846			2,755			1,306			819			224			-			-
Auto and Leasing		669,163			590,482			53,549			16,839			5,708			2,585			-			-
		1,669,941			1,408,542			61,946			36,956			13,917			21,855			36,752			89,973
Acquired loans (accounted for under ASC 310-20)
Consumer
Credit cards		35,217			33,414			930			384			186			303			-			-
Personal loans		3,168			3,079			14			29			1			45			-			-
		38,385			36,493			944			413			187			348			-			-
Auto		106,911			96,247			7,553			2,279			623			209			-			-
		145,296			132,740			8,497			2,692			810			557			-			-
Total	$	1,815,237		$	1,541,282		$	70,443		$	39,648		$	14,727		$	22,412		$	36,752		$	89,973

X

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

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Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Publisher SEC
-Name Regulation S-X (SX)
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