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Loans
 12 Months Ended
Dec. 31, 2019
Loans [Abstract]  
Loans

NOTE 6 - LOANS

Oriental’s loan portfolio 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 among acquired Scotiabank PR & USVI loans, acquired BBVAPR loans and acquired Eurobank loans.

The composition of Oriental’s loan portfolio at December 31, 2019 and 2018 was as follows:

The composition of Oriental’s loan portfolio at December 31, 2019 and 2018 was as follows:

December 31,
20192018
(In thousands)
Originated and other loans and leases held for investment:
Mortgage $577,416$668,809
Commercial1,667,4941,597,588
Consumer361,638348,980
Auto and leasing1,277,7321,129,695
3,884,2803,745,072
Allowance for loan and lease losses on originated and other loans and leases(83,471)(95,188)
3,800,8093,649,884
Deferred loan costs, net8,9657,740
Total originated and other loans held for investment, net3,809,7743,657,624
Acquired loans:
Acquired Scotiabank PR & USVI loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Mortgage322,179-
Commercial193,192-
Consumer112,757-
Auto191,015-
819,143-
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage 1,130,964-
Commercial 212,866-
Consumer8,539-
Auto41,571-
1,393,940-
Total acquired Scotiabank PR & USVI loans, net2,213,083-
Acquired BBVAPR loans:
Accounted for under ASC 310-20 (Loans with revolving feature and/or
acquired at a premium)
Commercial2,1412,546
Consumer20,79423,988
Auto1354,435
23,07030,969
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20(1,573)(2,062)
21,49728,907
Accounted for under ASC 310-30 (Loans acquired with deteriorated
credit quality, including those by analogy)
Mortgage 411,531492,890
Commercial 117,694182,319
Auto1,79014,403
531,015689,612
Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30(17,036)(42,010)
513,979647,602
Total acquired BBVAPR loans, net535,476676,509
Acquired Eurobank loans:
Mortgage48,61763,392
Commercial29,04147,826
Consumer724846
Total acquired Eurobank loans78,382112,064
Allowance for loan and lease losses on Eurobank loans(14,459)(24,971)
Total acquired Eurobank loans, net63,92387,093
Total acquired loans, net2,812,482763,602
Total held for investment, net6,622,2564,421,226
Mortgage loans held-for-sale19,59110,368
Total loans, net$6,641,847$4,431,594

Originated and Other Loans and Leases Held for Investment

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

The tables below present the aging of the recorded investment in gross originated and other loans held for investment at December 31, 2019 and 2018, 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.

December 31, 2019
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002$71$669$1,362$2,102$32,194$34,296$248
Years 2003 and 2004812,7721,7844,63759,28063,917-
Year 2005771,1461,4862,70929,90532,614-
Year 20062779538982,12845,33947,467-
Years 2007, 2008 and 2009-6651,2791,94447,35849,302-
Years 2010, 2011, 2012, 20133435372,3363,21693,57896,79488
Years 2014 to present-2321,1701,402136,762138,164294
8496,97410,31518,138444,416462,554630
Non-traditional-1129721,0848,5539,637-
Loss mitigation program8,4365,4527,64121,52972,66894,1971,788
9,28512,53818,92840,751525,637566,3882,418
Mortgage secured personal loans----223223-
GNMA's buy-back option program--10,80510,805-10,805-
9,28512,53829,73351,556525,860577,4162,418
Commercial
Commercial secured by real estate:
Corporate--7,2647,264231,379238,643-
Institutional----137,610137,610-
Middle market305004,9285,458200,380205,838-
Retail8393672,8554,061224,468228,529-
Floor plan----3,3373,337-
Real estate----17,08317,083-
US Loan Program----25,45925,459-
86986715,04716,783839,716856,499-
Other commercial and industrial:
Corporate----137,350137,350-
Institutional----190,741190,741-
Middle market2,9342501,5504,73466,79971,533-
Retail4,370903454,805115,067119,872-
Floor plan209--20944,15444,363-
US Loan Program----247,136247,136-
7,5133401,8959,748801,247810,995-
8,3821,20716,94226,5311,640,9631,667,494-

December 31, 2019
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Consumer
Credit cards$800$243$546$1,589$26,025$27,614$-
Overdrafts51--51165216-
Personal lines of credit153-91621,6161,778-
Personal loans4,7962,0901,2628,148306,539314,687-
Cash collateral personal loans149529444816,89517,343-
5,9492,3382,11110,398351,240361,638-
Auto and leasing72,21131,35114,225117,7871,159,9451,277,732-
Total$95,827$47,434$63,011$206,272$3,678,008$3,884,280$2,418

December 31, 2018
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Mortgage
Traditional (by origination year):
Up to the year 2002$77$1,516$2,707$4,300$36,344$40,644$168
Years 2003 and 2004912,4125,6328,13567,70775,842-
Year 2005-5523,5314,08335,00439,087-
Year 20062551,6935,0747,02249,21356,235-
Years 2007, 2008 and 20092551,0596,6777,99152,78160,77256
Years 2010, 2011, 2012, 20132533288,6979,278104,429113,707270
Years 2014, 2015, 2016, 2017 and 2018-4831,4621,945139,500141,445-
9318,04333,78042,754484,978527,732494
Non-traditional-1163,0853,20111,07214,273-
Loss mitigation program10,7936,25819,38936,44070,393106,8332,223
11,72414,41756,25482,395566,443648,8382,717
Mortgage secured personal loans9--9241250-
GNMA's buy-back option program--19,72119,721-19,721-
11,73314,41775,975102,125566,684668,8092,717
Commercial
Commercial secured by real estate:
Corporate----289,052289,052-
Institutional--1,2001,20068,41369,613-
Middle market-1,4305,2026,632200,831207,463-
Retail1,6414638,57010,674210,251220,925-
Floor plan----4,1844,184-
Real estate----19,00919,009-
US Loan Program----3,1893,189-
1,6411,89314,97218,506794,929813,435-
Other commercial and industrial:
Corporate----179,885179,885-
Institutional----156,410156,410-
Middle market917-6,0206,93781,03087,967-
Retail5715468171,93488,00089,934-
Floor plan--464649,63349,679-
US Loan Program----220,278220,278-
1,4885466,8838,917775,236784,153-
3,1292,43921,85527,4231,570,1651,597,588-

December 31, 2018
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Consumer
Credit cards$725$363$411$1,499$26,535$28,034$-
Overdrafts10--10204214-
Personal lines of credit571122901,8271,917-
Personal loans3,9661,7401,2626,968296,151303,119-
Cash collateral personal loans74339341615,28015,696-
4,8322,4531,6988,983339,997348,980-
Auto and leasing58,09427,94513,49499,5331,030,1621,129,695-
Total$77,788$47,254$113,022$238,064$3,507,008$3,745,072$2,717

At December 31, 2019, and 2018, Oriental had a carrying balance of $92.6 million and $91.4 million, respectively, in current status, 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 originated and other loans granted to the Puerto Rico government 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.

Acquired Loans

Acquired loans were initially measured at fair value and subsequently accounted for under either ASC 310-30 or ASC 310-20. We have acquired loans in the acquisitions of Scotiabank, BBVAPR and Eurobank.

Acquired Scotiabank PR & USVI 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 loans acquired, except for those acquired with credit discount and showed specific credit risk indicators, are accounted for under the guidance of ASC 310-20, which requires that any contractually required loan payment receivable in excess of Oriental’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 Oriental’s non-accrual policy, and any accretion of discount or amortization of premium is discontinued. Acquired Scotiabank PR & USVI 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 Scotiabank PR & USVI loans accounted for under ASC 310-20 as of December 31, 2019, by class of loans:

December 31, 2019
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Mortgage
Traditional (by origination year)
Up to year 2002$-$-$-$-$383$383$-
Year 2003 and 2004----1,0551,055-
Year 2005----1,0181,018-
Year 2006----3,3313,331-
Year 2007, 2008, 2009-19-1921,45821,477-
Year 2010, 2011, 2012, 2013-478-478144,881145,359-
Year 2014 to present-70-7085,11085,180-
-567-567257,236257,803-
GNMA's buy-back option--64,37664,376-64,376-
-56764,37664,943257,236322,179-
Commercial
Commercial secured by real estate
Retail$125$79$1,684$1,888$32,993$34,881$-
125791,6841,88832,99334,881-
Other commercial and industrial
Retail2313795831153,078153,909-
Corporate----4,4024,402-
2313795831157,480158,311-
148922,4792,719190,473193,192-
Consumer
Credit cards16175-23628,53828,774-
Personal lines of credit3802021261250,22450,836-
Personal loans112814033,10733,147-
552123213888111,869112,757-
Auto1054015160190,855191,015-
Total $805$822$67,083$68,710$750,433$819,143$-

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 are accounted for under the guidance of ASC 310-20, which requires that any contractually required loan payment receivable in excess of Oriental’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 Oriental’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 December 31, 2019 and 2018, by class of loans:

December 31, 2019
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Commercial
Commercial secured by real estate
Floor plan$-$-$764$764$21$785$-
--76476421785-
Other commercial and industrial
Retail481826921,2641,356-
481826921,2641,356-
48187908561,2852,141-
Consumer
Credit cards4779935092617,88818,814-
Personal loans22-22441,9361,980-
4999937297019,82420,794-
Auto2021307164135-
Total $567$138$1,192$1,897$21,173$23,070$-

December 31, 2018
Loans 90+
Days Past
Due and
30-59 Days60-89 Days90+ DaysTotal PastStill
Past DuePast DuePast DueDueCurrentTotal LoansAccruing
(In thousands)
Commercial
Commercial secured by real estate
Retail$-$-$54$54$-$54$-
Floor plan--88888894982-
--942942941,036-
Other commercial and industrial
Retail30118491,4611,510-
30118491,4611,510-
30119509911,5552,546-
Consumer
Credit cards4991473801,02620,79621,822-
Personal loans6432181142,0522,166-
5631793981,14022,84823,988-
Auto4052412008463,5894,435-
Total $998$431$1,548$2,977$27,992$30,969$-

Acquired Scotiabank PR & USVI Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy)

Acquired Scotiabank loans, except for credit cards, retail and commercial revolving lines of credits, floor plans and performing loans that did not showed specific credit risk indicators are accounted for by Oriental in accordance with ASC 310-30.

The carrying amount corresponding to acquired Scotiabank PR & USVI loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at December 31, 2019 is as follows:

December 31,
20192018
(In thousands)
Contractual required payments receivable:$2,147,249 $ -
Less: Non-accretable discount294,424-
Cash expected to be collected1,852,825-
Less: Accretable yield458,885-
Carrying amount, gross1,393,940-
Less: allowance for loan and lease losses--
Carrying amount, net$1,393,940 $ -

At December 31, 2019 and 2018, Oriental had $41.4 million and $44.5 million, respectively, in loans granted to Puerto Rico municipalities as part of its acquired Scotiabank loans and BBVAPR loans accounted for under ASC 310-30. These loans are primarily secured municipal general obligations.

The following tables describe the accretable yield and non-accretable discount activity of acquired Scotiabank PR & USVI loans accounted for under ASC 310-30 for the year ended December 31, 2019:

Year Ended December 31, 2019
MortgageCommercialAutoConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$-$-$-$-$-
Additions325,731129,1823,715257458,885
Accretion-----
Change in expected cash flows-----
Transfer (to) non-accretable discount-----
Balance at end of year$325,731$129,182$3,715$257$458,885
Non-Accretable Discount Activity:
Balance at beginning of year$-$-$-$-$-
Additions217,11373,1983,720393294,424
Change in actual and expected losses-----
Transfer from accretable yield-----
Balance at end of year$217,113$73,198$3,720$393$294,424

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 Oriental 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 December 31, 2019 and 2018 is as follows:

December 31,
20192018
(In thousands)
Contractual required payments receivable:$1,086,367 $ 1,304,545
Less: Non-accretable discount340,466345,423
Cash expected to be collected745,901959,122
Less: Accretable yield214,886269,510
Carrying amount, gross531,015689,612
Less: allowance for loan and lease losses17,03642,010
Carrying amount, net$513,979 $ 647,602

The following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the years ended December 31, 2019, 2018 and 2017:

Year Ended December 31, 2019
MortgageCommercialAutoConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$232,199$36,508$243$560$269,510
Accretion(23,871)(10,312)(430)(739)(35,352)
Change in expected cash flows(212)23,080(19)73923,588
Transfer (to) from non-accretable discount(12,033)(30,653)253(427)(42,860)
Balance at end of year$196,083$18,623$47$133$214,886
Non-Accretable Discount Activity:
Balance at beginning of year$291,887$10,346$24,245$18,945$345,423
Change in actual and expected losses(27,741)(19,295)(169)(612)(47,817)
Transfer from (to) accretable yield12,03330,653(253)42742,860
Balance at end of year$276,179$21,704$23,823$18,760$340,466

Year Ended December 31, 2018
MortgageCommercialAutoConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$258,498$46,764$2,766$885$308,913
Accretion(27,248)(14,160)(2,360)(871)(44,639)
Change in expected cash flows-7,8958904849,269
Transfer from (to) non-accretable discount949(3,991)(1,053)62(4,033)
Balance at end of year$232,199$36,508$243$560$269,510
Non-Accretable Discount Activity:
Balance at beginning of year$299,501$10,596$23,050$19,284$352,431
Change in actual and expected losses(6,665)(4,241)142(277)(11,041)
Transfer (to) from accretable yield(949)3,9911,053(62)4,033
Balance at end of year$291,887$10,346$24,245$18,945$345,423

Year Ended December 31, 2017
MortgageCommercialAutoConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$292,115$50,366$8,538$3,682$354,701
Accretion(30,205)(20,572)(6,339)(1,841)(58,957)
Change in expected cash flows222,25017014322,565
Transfer from (to) non-accretable discount(3,414)(5,280)397(1,099)(9,396)
Balance at end of year$258,498$46,764$2,766$885$308,913
Non-Accretable Discount Activity:
Balance at beginning of year$305,615$16,965$22,407$18,120$363,107
Change in actual and expected losses(9,528)(11,649)1,04065(20,072)
Transfer (to) from accretable yield3,4145,280(397)1,0999,396
Balance at end of year$299,501$10,596$23,050$19,284$352,431

Acquired Eurobank Loans

The carrying amount of acquired Eurobank loans at December 31, 2019 and 2018 is as follows:

December 31,
20192018
(In thousands)
Contractual required payments receivable$117,107$156,722
Less: Non-accretable discount4,2852,959
Cash expected to be collected112,822153,763
Less: Accretable yield34,44141,699
Carrying amount, gross78,381112,064
Less: Allowance for loan and lease losses14,45824,971
Carrying amount, net$63,923$87,093

The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the years ended December 31, 2019, 2018 and 2017:

Year Ended December 31, 2019
MortgageCommercialLeasingConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$38,389$3,310$-$-$41,699
Accretion(4,999)(4,611)(14)(164)(9,788)
Change in expected cash flows2,5782,270(145)2734,976
Transfer (to) from non-accretable discount(1,947)(549)159(109)(2,446)
Balance at end of year$34,021$420$-$-$34,441
Non-Accretable Discount Activity:
Balance at beginning of year$2,826$-$-$133$2,959
Change in actual and expected losses(3,051)1,928159(156)(1,120)
Transfer from (to) accretable yield1,947549(159)1092,446
Balance at end of year$1,722$2,477$-$86$4,285

Year Ended December 31, 2018
MortgageCommercialLeasingConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$42,921$6,751-$-$49,672
Accretion(5,964)(6,430)(52)(389)(12,835)
Change in expected cash flows(1,129)5,023(329)7004,265
Transfer from (to) non-accretable discount2,561(2,034)381(311)597
Balance at end of year$38,389$3,310$-$-$41,699
Non-Accretable Discount Activity:
Balance at beginning of year$5,334$276$-$235$5,845
Change in actual and expected losses53(2,310)381(413)(2,289)
Transfer (to) from accretable yield(2,561)2,034(381)311(597)
Balance at end of year$2,826$-$-$133$2,959

Year Ended December 31, 2017
MortgageCommercialLeasingConsumerTotal
(In thousands)
Accretable Yield Activity:
Balance at beginning of year$48,033$16,475$-$-$64,508
Accretion(7,262)(12,985)(30)(283)(20,560)
Change in expected cash flows2421,881(217)7592,665
Transfer from (to) non-accretable discount1,9081,380247(476)3,059
Balance at end of year$42,921$6,751$-$-$49,672
Non-Accretable Discount Activity:
Balance at beginning of year$8,452$3,880$-$8$12,340
Change in actual and expected losses(1,210)(2,224)247(249)(3,436)
Transfer (to) from accretable yield(1,908)(1,380)(247)476(3,059)
Balance at end of year$5,334$276$-$235$5,845

Non-accrual Loans

The following table presents the recorded investment in loans in non-accrual status by class of loans as of December 31, 2019 and 2018:

December 31,
20192018
(In thousands)
Originated and other loans and leases held for investment
Mortgage
Traditional (by origination year):
Up to the year 2002$1,117$2,538
Years 2003 and 20041,7845,818
Year 20051,4863,600
Year 20068985,140
Years 2007, 2008 and 20091,4186,697
Years 2010, 2011, 2012, 20132,2448,427
Years 2014, 2015, 2016, 2017 and 20188761,462
9,82333,682
Non-traditional9723,085
Loss mitigation program7,94022,107
18,73558,874
Commercial
Commercial secured by real estate
Corporate7,264-
Institutional9,0929,911
Middle market5,6547,266
Retail8,02416,123
30,03433,300
Other commercial and industrial
Middle market4,4846,481
Retail4,3622,629
Floor plan20946
9,0559,156
39,08942,456
Consumer
Credit cards546411
Overdrafts--
Personal lines of credit1531
Personal loans3,8462,909
Cash collateral personal loans2943
4,7013,354
Auto and leasing14,23913,494
Total non-accrual originated loans$76,764$118,178

December 31,
20192018
(In thousands)
Acquired Scotiabank PR & USVI loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail$1,922$-
1,922-
Other commercial and industrial
Retail805-
2,727-
Consumer
Personal lines of credit212-
Personal loans2-
214-
Auto 26-
Total non-accrual acquired Scotiabank PR & USVI loans accounted for under ASC 310-202,967-
Acquired BBVAPR loans accounted for under ASC 310-20
Commercial
Commercial secured by real estate
Retail$- $ 54
Floor plan764888
764942
Other commercial and industrial
Retail268
790950
Consumer
Credit cards350380
Personal loans2218
372398
Auto 30200
Total non-accrual acquired BBVAPR loans accounted for under ASC 310-201,1921,548
Total non-accrual loans$80,923$119,726

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 under the cost recovery method.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and 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 12 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.

At December 31, 2019 and 2018, loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non-accrual loans amounted to $103.7 million and $112.9 million, respectively, as they are performing under their new terms.

At December 31, 2019 and 2018, loans that are current in their monthly payments, but placed in non-accrual due to credit deterioration amounted to $17.6 million and $21.2 million, respectively.

Impaired Loans

Oriental evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans that were individually evaluated for impairment was $61.1 million and $82.0 million at December 31, 2019 and 2018, respectively. The impairments on these 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 allowance for loan and lease losses for these impaired commercial loans amounted to $8.2 million and $8.4 million at December 31, 2019 and 2018, respectively. The total investment in impaired mortgage loans that were individually evaluated for impairment was $71.2 million and $84.2 million at December 31, 2019 and 2018, respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The allowance for loan losses for these impaired mortgage loans amounted to $6.9 million and $10.2 million at December 31, 2019 and 2018, respectively.

Originated and Other Loans and Leases Held for Investment

Oriental’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 December 31, 2019 and 2018 are as follows:

December 31, 2019
UnpaidRecordedRelated
PrincipalInvestment Allowance Coverage
(In thousands)
Impaired loans with specific allowance:
Commercial$33,454 $ 28,555 $ 8,21529%
Residential impaired and troubled-debt restructuring78,66671,1966,87410%
Impaired loans with no specific allowance:
Commercial39,10931,895N/A0%
Total investment in impaired loans$151,229$131,646$15,08911%

December 31, 2018
UnpaidRecordedRelated
PrincipalInvestment Allowance Coverage
(In thousands)
Impaired loans with specific allowance:
Commercial$54,636$49,092$8,43417%
Residential impaired and troubled-debt restructuring95,65984,17410,18612%
Impaired loans with no specific allowance
Commercial38,24132,137N/A0%
Total investment in impaired loans$188,536$165,403$18,62011%

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

Oriental’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 December 31, 2019 and 2018 are as follows:

December 31, 2019
UnpaidRecordedRelated
PrincipalInvestment Allowance Coverage
(In thousands)
Impaired loans with specific allowance
Commercial$926$678$20%
Impaired loans with no specific allowance
Commercial$-$-N/A0%
Total investment in impaired loans$926$678$20%
December 31, 2018
UnpaidRecordedSpecific
PrincipalInvestment Allowance Coverage
(In thousands)
Impaired loans with specific allowance
Commercial$926$747$142%
Impaired loans with no specific allowance
Commercial$-$-N/A0%
Total investment in impaired loans$926$747$142%

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

Oriental’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 December 31, 2019 and 2018 are as follows:

December 31, 2019
Coverage
UnpaidRecordedto Recorded
PrincipalInvestment Allowance Investment
(In thousands)
Impaired loan pools with specific allowance:
Mortgage$400,964$411,531$9,3762%
Commercial 87,10384,1176,7138%
Auto3,9471,79094753%
Total investment in impaired loan pools$492,014$497,438$17,0363%

December 31, 2018
Coverage
UnpaidRecordedto Recorded
PrincipalInvestment Allowance Investment
(In thousands)
Impaired loan pools with specific allowance:
Mortgage$498,537$492,890$15,2253%
Commercial 188,413180,79020,64111%
Auto14,55114,4036,14443%
Total investment in impaired loan pools$701,501$688,083$42,0106%

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

Acquired Eurobank Loans

Oriental’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as of December 31, 2019 and 2018 are as follows:

December 31, 2019
Coverage
UnpaidRecordedto Recorded
PrincipalInvestment Allowance Investment
(In thousands)
Impaired loan pools with specific allowance:
Mortgage$53,090$49,366$12,27825%
Commercial17,17617,1422,18013%
Total investment in impaired loan pools$70,266$66,508$14,45822%

December 31, 2018
Coverage
UnpaidRecordedSpecificto Recorded
PrincipalInvestment Allowance Investment
(In thousands)
Impaired loan pools with specific allowance
Mortgage$70,153$63,406$15,38224%
Commercial47,34247,8209,58520%
Consumer1544100%
Total investment in impaired loan pools$117,510$111,230$24,97122%

The tables above only present information with respect to acquired Eurobank loan pools accounted for under ASC 310-30 if there is a recorded impairment to such 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, which excludes loans accounted for under ASC 310-30, for the years ended December 31, 2019, 2018 and 2017:

Year Ended December 31,
201920182017
Interest Income RecognizedAverage Recorded InvestmentInterest Income RecognizedAverage Recorded InvestmentInterest Income RecognizedAverage Recorded Investment
(In thousands)
Originated and other loans held for investment:
Impaired loans with specific allowance
Commercial$503$41,868$1,624$44,727$1,538$25,797
Residential troubled-debt restructuring 2,66173,1732,55684,4943,30187,414
Impaired loans with no specific allowance
Commercial 1,08632,2691,09126,19987536,666
Total interest income from impaired loans$4,250$147,310$5,271$155,420$5,714$149,877
Acquired loans accounted for under ASC 310-20:
Impaired loans with specific allowance
Commercial$-$701$-$747$-$794
Total interest income from impaired loans$4,250$148,011$5,271$156,167$5,714$150,671

Modifications

The following tables present the troubled-debt restructurings in all loan portfolios during the years ended December 31, 2019, 2018 and 2017.

Year Ended December 31, 2019
Number of contractsPre-Modification Outstanding Recorded InvestmentPre-Modification Weighted Average RatePre-Modification Weighted Average Term (in Months)Post-Modification Outstanding Recorded InvestmentPost-Modification Weighted Average RatePost-Modification Weighted Average Term (in Months)
(Dollars in thousands)
Mortgage 148 $ 19,1305.85%376 $ 17,9915.09%345
Commercial 52,0707.23%562,0706.05%67
Consumer 3705,35715.69%665,39811.50%74
Auto223197.29%703268.97%44

Year Ended December 31, 2018
Number of contractsPre-Modification Outstanding Recorded InvestmentPre-Modification Weighted Average RatePre-Modification Weighted Average Term (in Months)Post-Modification Outstanding Recorded InvestmentPost-Modification Weighted Average RatePost-Modification Weighted Average Term (in Months)
(Dollars in thousands)
Mortgage 143 $ 19,0295.09%342 $ 18,2374.41%314
Commercial 2326,0195.75%11825,9735.64%136
Consumer 1742,31313.24%512,3329.86%61
Auto24010.42%374010.28%32
Year Ended December 31, 2017
Number of contractsPre-Modification Outstanding Recorded InvestmentPre-Modification Weighted Average RatePre-Modification Weighted Average Term (in Months)Post-Modification Outstanding Recorded InvestmentPost-Modification Weighted Average RatePost-Modification Weighted Average Term (in Months)
(Dollars in thousands)
Mortgage 85 $ 10,4416.23%390 $ 10,3434.40%384
Commercial 2413,8286.05%5713,8295.73%62
Consumer 1071,39111.68%621,43010.85%69
Auto91347.24%6613511.75%37

The following table presents troubled-debt restructurings for which there was a payment default during the years ended December 31, 2019, 2018,and 2017:

Year Ended December 31,
201920182017
Number of ContractsRecorded InvestmentNumber of ContractsRecorded InvestmentNumber of ContractsRecorded Investment
(Dollars in thousands)
Mortgage 29 $ 3,59723 $ 3,26234 $ 3,129
Commercial-$-4$2,1415$452
Consumer77 $ 1,11828 $ 34120 $ 249
Auto3$51-$--$-

Credit Quality Indicators

Oriental categorizes originated and other loans and acquired loans accounted for under ASC 310-20 into loan grades 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.

Oriental uses the following definitions for loan grades:

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 loans.

As of December 31, 2019 and 2018, and based on the most recent analysis performed, the loan grading of gross originated and other loans, Scotiabank PR & USVI and BBVAPR acquired loans accounted for under ASC 310-20 subject to loan grade by class of loans is as follows:

December 31, 2019
Loan Grades
BalanceSpecial
OutstandingPassMentionSubstandardDoubtfulLoss
(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate$238,643$214,474$16,905$7,264$-$-
Institutional137,610128,1693499,092--
Middle market205,838153,98432,62419,230--
Retail228,529212,0695,95710,503--
Floor plan3,3373,337----
Real estate17,08317,083----
US Loan Program25,45925,459----
856,499754,57555,83546,089--
Other commercial and industrial:
Corporate137,350134,9822,368---
Institutional190,741190,741----
Middle market71,53363,5402,5185,475--
Retail119,872115,551844,237--
Floor plan44,36342,4901,664209--
US Loan Program247,136237,2869,850---
810,995784,59016,4849,921--
Total1,667,4941,539,16572,31956,010--
Scotiabank PR & USVI Commercial - acquired loans (under ASC 310-20) (under ASC 310-20)
Commercial secured by real estate:
Retail34,88133,306351,50436-
34,88133,306351,50436-
Other commercial and industrial:
Retail153,909153,769-39101-
Corporate4,4024,402----
158,311158,171-39101-
Total Scotiabank PR & USVI commercial - acquired loans193,192191,477351,543137-
BBVAPR Commercial - acquired loans (under ASC 310-20) (under ASC 310-20)
Commercial secured by real estate:
Floor plan78521-764--
78521-764--
Other commercial and industrial:
Retail1,3561,356----
1,3561,356----
Total BBVAPR commercial - acquired loans2,1411,377-764--

December 31, 2019
Loan Grades
BalanceSpecial
OutstandingPassMentionSubstandardDoubtfulLoss
(In thousands)
Retail - originated and other loans held for investment
Mortgage:
Traditional462,554452,239-10,315--
Non-traditional9,6378,665-972--
Loss mitigation program94,19786,556-7,641--
Mortgage secured personal loans223223----
GNMA's buy-back option program10,805--10,805--
577,416547,683-29,733--
Consumer:
Credit cards27,61427,068-546--
Overdrafts216165-51--
Unsecured personal lines of credit1,7781,769-9--
Unsecured personal loans314,687313,425-1,262--
Cash collateral personal loans17,34317,049-294--
361,638359,476-2,162--
Auto and Leasing1,277,7321,263,506-14,226--
Total2,216,7862,170,665-46,121--
Retail - acquired loans (accounted for under ASC 310-20) - Scotiabank PR & USVI
Mortgage:
Traditional257,803257,803----
GNMA's buy-back option program64,376--64,376--
322,179257,803-64,376--
Consumer:
Credit cards28,77428,774----
Personal lines of credit50,83650,624-212--
Personal loans33,14733,147----
112,757112,545-212--
Auto191,015191,000-15--
303,772303,545-227--
Retail - acquired loans (accounted for under ASC 310-20) - BBVPR
Consumer:
Credit cards18,81418,464-350--
Personal loans1,9801,958-22--
20,79420,422-372--
Auto135106-29--
20,92920,528-401--
$4,726,493$4,484,559$72,354$169,443$137$-

December 31, 2018
Loan Grades
BalanceSpecial
OutstandingPassMentionSubstandardDoubtfulLoss
(In thousands)
Commercial - originated and other loans held for investment
Commercial secured by real estate:
Corporate$289,052$246,711$26,544$15,797$- $ -
Institutional69,61359,509-10,104--
Middle market207,463151,63832,63823,187--
Retail220,925195,2133,99621,716--
Floor plan4,1842,890-1,294--
Real estate19,00919,009----
US Loan Program3,1893,189----
813,435678,15963,17872,098--
Other commercial and industrial:
Corporate179,885154,62925,256---
Institutional156,410156,410----
Middle market87,96763,87613,73710,354--
Retail89,93486,8823182,734--
Floor plan49,67947,0922,54146--
US Loan Program220,278220,278----
784,153729,16741,85213,134--
Total1,597,5881,407,326105,03085,232--
Commercial - acquired loans (under ASC 310-20)
Commercial secured by real estate:
Retail54--54--
Floor plan98294-888--
1,03694-942--
Other commercial and industrial:
Retail1,5101,510----
1,5101,510----
Total2,5461,604-942--

December 31, 2018
Loan Grades
BalanceSpecial
OutstandingPassMentionSubstandardDoubtfulLoss
(In thousands)
Retail - originated and other loans held for investment
Mortgage:
Traditional527,732493,952-33,780--
Non-traditional14,27311,188-3,085--
Loss mitigation program106,83387,444-19,389--
Home equity secured personal loans250250----
GNMA's buy-back option program19,721--19,721--
668,809592,834-75,975--
Consumer:
Credit cards28,03427,623-411--
Overdrafts214204-10--
Unsecured personal lines of credit1,9171,895-22--
Unsecured personal loans303,119301,857-1,262--
Cash collateral personal loans15,69615,693-3--
348,980347,272-1,708--
Auto and Leasing1,129,6951,116,201-13,494--
Total2,147,4842,056,307-91,177--
Retail - acquired loans (under ASC 310-20)
Consumer:
Credit cards21,82221,442-380--
Personal loans2,1662,148-18--
23,98823,590-398--
Auto4,4354,235-200--
Total28,42327,825-598--
$3,776,041$3,493,062$105,030$177,949$-$-