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Loans | 9 Months Ended
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Sep. 30, 2020
Loans [Abstract] |
Loans | NOTE 5 - LOANS Oriental’s loan portfolio is composed of four segments, commercial, mortgage, consumer, and auto. Loans are further segregated into classes which Oriental uses when assessing and monitoring the risk and performance of the portfolio. The composition of the amortized cost basis of Oriental’s loan portfolio at September 30, 2020 was as follows:
|  | September 30, 2020
|  | Non-PCD |  | PCD |  | Total
|  | (In thousands)
Commercial loans: |  |  |  |  |  |  |  |  |
Commercial secured by real estate |  | $ | 810,755 |  | $ | 248,653 |  | $ | 1,059,408
Other commercial and industrial |  |  | 636,610 |  |  | 103,902 |  |  | 740,512
Commercial Paycheck Protection Program (PPP Loans) |  |  | 289,218 |  |  | - |  |  | 289,218
US Loan Program |  |  | 337,657 |  |  | - |  |  | 337,657
|  |  | 2,074,240 |  |  | 352,555 |  |  | 2,426,795
Mortgage |  |  | 847,671 |  |  | 1,504,914 |  |  | 2,352,585
Consumer |  |  |  |  |  |  |  |  |
Personal loans |  |  | 327,923 |  |  | 1,934 |  |  | 329,857
Credit lines |  |  | 46,873 |  |  | 402 |  |  | 47,275
Credit cards |  |  | 59,618 |  |  | - |  |  | 59,618
Overdraft |  |  | 132 |  |  | - |  |  | 132
Auto |  |  | 1,511,829 |  |  | 31,836 |  |  | 1,543,665
|  |  | 1,946,375 |  |  | 34,172 |  |  | 1,980,547
|  |  | 4,868,286 |  |  | 1,891,641 |  |  | 6,759,927
Allowance for credit losses |  |  | (156,409) |  |  | (78,904) |  |  | (235,313)
Total loans held for investment |  |  | 4,711,877 |  |  | 1,812,737 |  |  | 6,524,614
Mortgage loans held for sale |  |  | 54,526 |  |  | - |  |  | 54,526
Total loans, net |  | $ | 4,766,403 |  | $ | 1,812,737 |  | $ | 6,579,140
At September 30, 2020, and December 31, 2019, Oriental had a carrying balance of $121.9 million and $134.0 million, respectively, in 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. Loans granted to the Puerto Rico government amounting to $97.8 million and $129.9 million at September 30, 2020, and December 31, 2019, respectively, 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 in current status and one loan amounting to $24.1 million and $4.1 million, respectively, to a public corporation acquired in the Scotiabank PR & USVI Acquisition in non-accrual status with an allowance for credit losses of $20.0 million at September 30, 2020. Loans acquired in the Scotiabank PR & USVI Acquisition accounted for under ASC 310-30 were recognized at fair value as of December 31, 2019, which included the impact of expected credit losses, and therefore, no allowance for credit losses was recorded at acquisition date. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations.The tables below present the aging of the amortized cost of loans held for investment at September 30, 2020 and December 31, 2019, by class of loans. Mortgage loans past due include $62.7 million and $75.2 million, respectively, of 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, 2020
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans 90+
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Days Past
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Due and
| 30-59 Days |  | 60-89 Days |  | 90+ Days |  | Total Past |  |  |  |  |  | Still
| Past Due |  | Past Due |  | Past Due |  | Due |  | Current |  | Total Loans |  | Accruing
| (In thousands)
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial secured by real estate | $ | 2,987 |  | $ | 749 |  | $ | 23,984 |  | $ | 27,720 |  | $ | 783,035 |  | $ | 810,755 |  | $ | -
Other commercial and industrial |  | 983 |  |  | 432 |  |  | 6,460 |  |  | 7,875 |  |  | 917,953 |  |  | 925,828 |  |  | -
US Loan Program |  | - |  |  | - |  |  | - |  |  | - |  |  | 337,657 |  |  | 337,657 |  |  | -
|  | 3,970 |  |  | 1,181 |  |  | 30,444 |  |  | 35,595 |  |  | 2,038,645 |  |  | 2,074,240 |  |  | -
Mortgage |  | 5,793 |  |  | 10,989 |  |  | 96,986 |  |  | 113,768 |  |  | 733,903 |  |  | 847,671 |  |  | 3,666
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personal loans |  | 4,984 |  |  | 4,209 |  |  | 2,237 |  |  | 11,430 |  |  | 316,493 |  |  | 327,923 |  |  | -
Credit lines |  | 999 |  |  | 196 |  |  | 1,249 |  |  | 2,444 |  |  | 44,429 |  |  | 46,873 |  |  | -
Credit cards |  | 1,104 |  |  | 509 |  |  | 1,561 |  |  | 3,174 |  |  | 56,444 |  |  | 59,618 |  |  | -
Overdraft |  | 31 |  |  | - |  |  | - |  |  | 31 |  |  | 101 |  |  | 132 |  |  | -
Auto |  | 53,782 |  |  | 34,130 |  |  | 21,823 |  |  | 109,735 |  |  | 1,402,094 |  |  | 1,511,829 |  |  | -
|  | 60,900 |  |  | 39,044 |  |  | 26,870 |  |  | 126,814 |  |  | 1,819,561 |  |  | 1,946,375 |  |  | -
Total loans | $ | 70,663 |  | $ | 51,214 |  | $ | 154,300 |  | $ | 276,177 |  | $ | 4,592,109 |  | $ | 4,868,286 |  | $ | 3,666
Upon adoption of CECL, Oriental elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. As such, PCD loans are not included in the table above.
| December 31, 2019
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans 90+
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Days Past
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Due and
| 30-59 Days |  | 60-89 Days |  | 90+ Days |  | Total Past |  |  |  |  |  | Still
| Past Due |  | Past Due |  | Past Due |  | Due |  | Current |  | Total Loans |  | Accruing
| (In thousands)
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial secured by real estate | $ | 994 |  | $ | 946 |  | $ | 17,495 |  | $ | 19,435 |  | $ | 847,271 |  | $ | 866,706 |  | $ | -
Other commercial and industrial |  | 7,584 |  |  | 371 |  |  | 2,716 |  |  | 10,671 |  |  | 712,855 |  |  | 723,526 |  |  | -
US Loan Program |  | - |  |  | - |  |  | - |  |  | - |  |  | 272,595 |  |  | 272,595 |  |  | -
|  | 8,578 |  |  | 1,317 |  |  | 20,211 |  |  | 30,106 |  |  | 1,832,721 |  |  | 1,862,827 |  |  | -
Mortgage |  | 9,285 |  |  | 13,105 |  |  | 94,109 |  |  | 116,499 |  |  | 783,096 |  |  | 899,595 |  |  | 2,418
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personal loans |  | 4,978 |  |  | 2,123 |  |  | 1,579 |  |  | 8,680 |  |  | 358,477 |  |  | 367,157 |  |  | -
Credit lines |  | 533 |  |  | 20 |  |  | 221 |  |  | 774 |  |  | 51,840 |  |  | 52,614 |  |  | -
Credit cards |  | 1,438 |  |  | 417 |  |  | 896 |  |  | 2,751 |  |  | 72,451 |  |  | 75,202 |  |  | -
Overdraft |  | 51 |  |  | - |  |  | - |  |  | 51 |  |  | 165 |  |  | 216 |  |  | -
Auto |  | 72,336 |  |  | 31,412 |  |  | 14,270 |  |  | 118,018 |  |  | 1,350,864 |  |  | 1,468,882 |  |  | -
|  | 79,336 |  |  | 33,972 |  |  | 16,966 |  |  | 130,274 |  |  | 1,833,797 |  |  | 1,964,071 |  |  | -
Total loans | $ | 97,199 |  | $ | 48,394 |  | $ | 131,286 |  | $ | 276,879 |  | $ | 4,449,614 |  | $ | 4,726,493 |  | $ | 2,418
Before the CECL implementation, certain acquired loans were accounted for by Oriental in accordance with ASC 310-30.The carrying amount corresponding to acquired loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at December 31, 2019 was as follows:
| December 31, 2019
|  | Scotiabank PR & USVI |  |  | BBVAPR |  |  | Eurobank
| (In thousands)
Contractual required payments receivable: | $ | 2,147,249 |  | $ | 1,086,367 |  | $ | 117,107
Less: Non-accretable discount |  | 294,424 |  |  | 340,466 |  |  | 4,285
Cash expected to be collected |  | 1,852,825 |  |  | 745,901 |  |  | 112,822
Less: Accretable yield |  | 458,885 |  |  | 214,886 |  |  | 34,441
Carrying amount, gross |  | 1,393,940 |  |  | 531,015 |  |  | 78,381
Less: allowance for loan and lease losses |  | - |  |  | 17,036 |  |  | 14,458
Carrying amount, net | $ | 1,393,940 |  | $ | 513,979 |  | $ | 63,923
The following table describes the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the quarter and nine-month period ended September 30, 2019:
| Quarter Ended September 30, 2019
| Mortgage |  | Commercial |  | Auto |  | Consumer |  | Total
| (In thousands)
Accretable Yield Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 217,549 |  | $ | 34,638 |  | $ | 43 |  | $ | 288 |  | $ | 252,518
Accretion |  | (5,876) |  |  | (2,379) |  |  | (77) |  |  | (151) |  |  | (8,483)
Change in expected cash flows |  | - |  |  | 3,995 |  |  | 5 |  |  | 151 |  |  | 4,151
Transfer from (to) non-accretable discount |  | (9,849) |  |  | (17,128) |  |  | 57 |  |  | (94) |  |  | (27,014)
Balance at end of period | $ | 201,824 |  | $ | 19,126 |  | $ | 28 |  | $ | 194 |  | $ | 221,172
Non-Accretable Discount Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 292,258 |  | $ | 10,904 |  | $ | 24,083 |  | $ | 18,810 |  | $ | 346,055
Change in actual and expected losses |  | (21,356) |  |  | (3,913) |  |  | 44 |  |  | (118) |  |  | (25,343)
Transfer (to) from accretable yield |  | 9,849 |  |  | 17,128 |  |  | (57) |  |  | 94 |  |  | 27,014
Balance at end of period | $ | 280,751 |  | $ | 24,119 |  | $ | 24,070 |  | $ | 18,786 |  | $ | 347,726
| Nine-Month Period Ended September 30, 2019
| Mortgage |  | Commercial |  | Auto |  | Consumer |  | Total
| (In thousands)
Accretable Yield Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 232,199 |  | $ | 36,508 |  | $ | 243 |  | $ | 560 |  | $ | 269,510
Accretion |  | (18,342) |  |  | (7,523) |  |  | (432) |  |  | (639) |  |  | (26,936)
Change in expected cash flows |  | - |  |  | 8,635 |  |  | 16 |  |  | 639 |  |  | 9,290
Transfer from (to) non-accretable discount |  | (12,033) |  |  | (18,494) |  |  | 201 |  |  | (366) |  |  | (30,692)
Balance at end of period | $ | 201,824 |  | $ | 19,126 |  | $ | 28 |  | $ | 194 |  | $ | 221,172
Non-Accretable Discount Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 291,887 |  | $ | 10,346 |  | $ | 24,245 |  | $ | 18,945 |  | $ | 345,423
Change in actual and expected losses |  | (23,169) |  |  | (4,721) |  |  | 26 |  |  | (525) |  |  | (28,389)
Transfer (to) from accretable yield |  | 12,033 |  |  | 18,494 |  |  | (201) |  |  | 366 |  |  | 30,692
Balance at end of period | $ | 280,751 |  | $ | 24,119 |  | $ | 24,070 |  | $ | 18,786 |  | $ | 347,726
The following table describes the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarter and nine-month period ended September 30, 2019:
| Quarter Ended September 30, 2019
| Mortgage |  | Commercial |  | Leasing |  | Consumer |  | Total
| (In thousands)
Accretable Yield Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 36,538 |  | $ | 1,856 |  |  | - |  | $ | - |  | $ | 38,394
Accretion |  | (1,218) |  |  | (1,075) |  |  | 3 |  |  | (89) |  |  | (2,379)
Change in expected cash flows |  | 1,917 |  |  | 550 |  |  | (93) |  |  | 132 |  |  | 2,506
Transfer from (to) non-accretable discount |  | (2,542) |  |  | (438) |  |  | 90 |  |  | (43) |  |  | (2,933)
Balance at end of period | $ | 34,695 |  | $ | 893 |  | $ | - |  | $ | - |  | $ | 35,588
Non-Accretable Discount Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 1,681 |  | $ | - |  | $ | - |  | $ | 118 |  | $ | 1,799
Change in actual and expected losses |  | (2,597) |  |  | (438) |  |  | 90 |  |  | (73) |  |  | (3,018)
Transfer (to) from accretable yield |  | 2,542 |  |  | 438 |  |  | (90) |  |  | 43 |  |  | 2,933
Balance at end of period | $ | 1,626 |  | $ | - |  | $ | - |  | $ | 88 |  | $ | 1,714
| Nine-Month Period Ended September 30, 2019
| Mortgage |  | Commercial |  | Leasing |  | Consumer |  | Total
| (In thousands)
Accretable Yield Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 38,389 |  | $ | 3,310 |  |  | - |  | $ | - |  | $ | 41,699
Accretion |  | (3,849) |  |  | (3,439) |  |  | (12) |  |  | (152) |  |  | (7,452)
Change in expected cash flows |  | 1,524 |  |  | 1,416 |  |  | (134) |  |  | 250 |  |  | 3,056
Transfer from (to) non-accretable discount |  | (1,369) |  |  | (394) |  |  | 146 |  |  | (98) |  |  | (1,715)
Balance at end of period | $ | 34,695 |  | $ | 893 |  | $ | - |  | $ | - |  | $ | 35,588
Non-Accretable Discount Activity: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at beginning of period | $ | 2,826 |  | $ | - |  | $ | - |  | $ | 133 |  | $ | 2,959
Change in actual and expected losses |  | (2,569) |  |  | (394) |  |  | 146 |  |  | (143) |  |  | (2,960)
Transfer (to) from accretable yield |  | 1,369 |  |  | 394 |  |  | (146) |  |  | 98 |  |  | 1,715
Balance at end of period | $ | 1,626 |  | $ | - |  | $ | - |  | $ | 88 |  | $ | 1,714
Non-accrual Loans The following table presents the amortized cost basis of loans on nonaccrual status as of September 30, 2020:
| September 30, 2020
| Nonaccrual with |  | Nonaccrual with no
| Allowance |  | Allowance
| for Credit Loss |  | for Credit Loss
| (In thousands)
Non-PCD: |  |  |  |  |
Commercial |  |  |  |  |
Commercial secured by real estate | $ | 9,902 |  | $ | 28,015
Other commercial and industrial |  | 3,806 |  |  | 3,219
|  | 13,708 |  |  | 31,234
Mortgage |  | 23,050 |  |  | 12,883
Consumer |  |  |  |  |
Personal loans |  | 1,826 |  |  | 565
Personal lines of credit |  | 1,253 |  |  | -
Credit cards |  | 1,562 |  |  | -
Auto and leasing |  | 22,583 |  |  | -
|  | 27,224 |  |  | 565
Total non-accrual loans | $ | 63,982 |  | $ | 44,682
PCD: |  |  |  |  |
Commercial |  |  |  |  |
Commercial secured by real estate | $ | 14,566 |  | $ | 3,068
Other commercial and industrial |  | 60,946 |  |  | 1,051
|  | 75,512 |  |  | 4,119
Mortgage |  | 1,003 |  |  | -
Consumer |  |  |  |  |
Personal loans |  | 4 |  |  | -
|  | 4 |  |  | -
Total non-accrual loans | $ | 76,519 |  | $ | 4,119
| $ | 140,501 |  | $ | 48,801
Upon adoption of CECL, Oriental elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. As such, for these loans the determination of nonaccrual or accrual status is made at the pool level, not the individual loan level. The following table presents the recorded investment in loans in non-accrual status by class of loans as of December 31, 2019:
| December 31,
| 2019
| (In thousands)
Commercial |  |
Commercial secured by real estate | $ | 32,720
Other commercial and industrial |  | 9,886
|  | 42,606
Mortgage |  | 18,735
Consumer |  |
Personal loans |  | 4,164
Personal lines of credit |  | 227
Credit cards |  | 896
Auto and leasing |  | 14,295
|  | 19,582
Total non-accrual loans | $ | 80,923
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, those loans are included as non-performing loans but excluded from non-accrual loans. At September 30, 2020 and December 31, 2019, loans whose terms have been extended and which were classified as troubled-debt restructurings that were not included in non-accrual loans amounted to $98.7 million and $103.7 million, respectively, as they were performing under their new terms. Modifications The following tables present the troubled-debt restructurings in all loan portfolios during the quarters and nine-month periods ended September 30, 2020 and 2019.
| Quarter Ended September 30, 2020
| 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 | 22 |  | $ | 2,438 |  | 4.98% |  | 286 |  | $ | 2,268 |  | 4.36% |  | 285
Commercial | 1 |  |  | 150 |  | 5.50% |  | 12 |  |  | 150 |  | 8.00% |  | 36
Consumer | 2 |  |  | 32 |  | 13.68% |  | 68 |  |  | 32 |  | 10.61% |  | 68
Auto | 29 |  |  | 187 |  | 10.63% |  | 76 |  |  | 187 |  | 10.87% |  | 73
| Nine-Month Period Ended September 30, 2020
| 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 | 51 |  | $ | 5,982 |  | 5.04% |  | 327 |  | $ | 5,736 |  | 4.34% |  | 329
Commercial | 3 |  |  | 581 |  | 6.71% |  | 57 |  |  | 581 |  | 7.03% |  | 135
Consumer | 20 |  |  | 284 |  | 13.11% |  | 67 |  |  | 289 |  | 10.63% |  | 78
Auto | 31 |  |  | 217 |  | 10.88% |  | 74 |  |  | 219 |  | 11.02% |  | 71
| Quarter Ended September 30, 2019
| 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 | 21 |  | $ | 2,446 |  | 5.97% |  | 358 |  | $ | 2,307 |  | 5.25% |  | 345
Commercial | 1 |  |  | 81 |  | 8.50% |  | 60 |  |  | 81 |  | 8.50% |  | 95
Consumer | 124 |  |  | 1,818 |  | 16.50% |  | 65 |  |  | 1,776 |  | 11.68% |  | 75
Auto | 8 |  |  | 112 |  | 6.96% |  | 71 |  |  | 112 |  | 8.60% |  | 43
| Nine-Month Period Ended September 30, 2019
| 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 | 109 |  | $ | 13,940 |  | 5.91% |  | 383 |  | $ | 12,893 |  | 5.14% |  | 346
Commercial | 3 |  |  | 1,245 |  | 7.12% |  | 55 |  |  | 1,245 |  | 5.96% |  | 86
Consumer | 265 |  |  | 3,833 |  | 15.92% |  | 66 |  |  | 3,825 |  | 11.69% |  | 75
Auto | 21 |  |  | 305 |  | 7.35% |  | 70 |  |  | 313 |  | 8.97% |  | 45
Upon adoption of CECL, Oriental elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. As such, PCD loans are not included in the table above. The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month periods ended September 30, 2020 and 2019:
| Twelve-month Period Ended September 30,
| 2020 |  |  | 2019
| Number of Contracts |  | Recorded Investment |  |  | Number of Contracts |  | Recorded Investment
| (Dollars in thousands)
Mortgage | 17 |  | $ | 2,394 |  |  | 32 |  | $ | 4,065
Commercial | 1 |  | $ | 84 |  |  | 2 |  | $ | 350
Consumer | 50 |  | $ | 627 |  |  | 61 |  | $ | 710
Auto | - |  | $ | - |  |  | 3 |  | $ | 51
Oriental offers various types of concessions when modifying a loan. Concessions made to the original contractual terms of the loan typically consists of the deferral of interest and/or principal payments due to deterioration in the borrowers' financial condition. In these cases, the principal balance on the TDR had matured and/or was in default at the time of restructure, and there were no commitments to lend additional funds to the borrower during the quarters and nine-month periods ended September 30, 2020 and 2019. TDRs disclosed above were not related to COVID-19 modifications. As discussed in Note 1 to these financial statements, Section 4013 of CARES Act and the "Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised)" provided banks an option to elect to not account for certain loan modifications related to COVID-19 as TDRs as long as the borrowers were not more than 30 days past due as of December 31, 2019 and at the time of modification program implementation, respectively, and meets other applicable criteria. Oriental’s loan deferrals outstanding balances at September 30, 2020 of approximately $135 million resulting from the COVID-19 pandemic were not classified as a TDR. Collateral-dependent Loans The table below present the amortized cost of collateral-dependent loans held for investment at September 30, 2020, by class of loans.
| September 30, 2020
| Real Estate
| (In thousands)
Commercial loans: |  |
Commercial secured by real estate | $ | 29,731
Other commercial and industrial |  | 3,069
Total loans | $ | 32,800
PCD loans, except for single pooled loans, are not included in the table above as their unit of account is the loan pool. Credit Quality Indicators Oriental categorizes its loans 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 September 30, 2020 and based on the most recent analysis performed, the risk category of loans subject to risk rating by class of loans is as follows.
| Term Loans |  | Revolving |  |  |
| Amortized Cost Basis by Origination Year |  | Loans |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Amortized |  |
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Cost Basis |  | Total
| (In thousands)
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial secured by real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 31,615 |  | $ | 125,253 |  | $ | 116,703 |  | $ | 87,845 |  | $ | 48,245 |  | $ | 227,034 |  | $ | 56,413 |  | $ | 693,108
Special Mention |  | 10,213 |  |  | 3,048 |  |  | 4,762 |  |  | 16,850 |  |  | 8,621 |  |  | 20,599 |  |  | 6,760 |  |  | 70,853
Substandard |  | 188 |  |  | 398 |  |  | 874 |  |  | 8,738 |  |  | 628 |  |  | 28,478 |  |  | 7,411 |  |  | 46,715
Doubtful |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 30 |  |  | 49 |  |  | 79
Loss |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Total commercial secured by real estate |  | 42,016 |  |  | 128,699 |  |  | 122,339 |  |  | 113,433 |  |  | 57,494 |  |  | 276,141 |  |  | 70,633 |  |  | 810,755
Other commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 345,220 |  |  | 87,578 |  |  | 97,500 |  |  | 15,175 |  |  | 8,903 |  |  | 15,342 |  |  | 306,602 |  |  | 876,320
Special Mention |  | 301 |  |  | 8,135 |  |  | - |  |  | - |  |  | 4 |  |  | 5,470 |  |  | 27,984 |  |  | 41,894
Substandard |  | - |  |  | 796 |  |  | 168 |  |  | 194 |  |  | 2,912 |  |  | 91 |  |  | 3,385 |  |  | 7,546
Doubtful |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 68 |  |  | 68
Loss |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Total other commercial and industrial: |  | 345,521 |  |  | 96,509 |  |  | 97,668 |  |  | 15,369 |  |  | 11,819 |  |  | 20,903 |  |  | 338,039 |  |  | 925,828
US Loan Program: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loan grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 57,673 |  |  | 64,563 |  |  | 79,209 |  |  | 7,131 |  |  | - |  |  | - |  |  | 75,345 |  |  | 283,921
Special Mention |  | 63 |  |  | 1,501 |  |  | 43,101 |  |  | - |  |  | - |  |  | - |  |  | 1,250 |  |  | 45,915
Substandard |  | - |  |  | - |  |  | 7,821 |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 7,821
Doubtful |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Loss |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Total US loan program: |  | 57,736 |  |  | 66,064 |  |  | 130,131 |  |  | 7,131 |  |  | - |  |  | - |  |  | 76,595 |  |  | 337,657
Total commercial loans | $ | 445,273 |  | $ | 291,272 |  | $ | 350,138 |  | $ | 135,933 |  | $ | 69,313 |  | $ | 297,044 |  | $ | 485,267 |  | $ | 2,074,240
At September 30, 2020, the balance of revolving loans converted to term loans was $25.2 million. Oriental considers the performance of the loan portfolio and its impact on the allowance for credit losses. For mortgage and consumer loan classes, Oriental also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the amortized cost in mortgage and consumer loans based on payment activity:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving Loans |  |  |
| Term Loans |  | Revolving |  | Converted to |  |  |
| Amortized Cost Basis by Origination Year |  | Loans |  | Term Loans |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Amortized |  | Amortized |  |
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Cost Basis |  | Cost Basis |  | Total
| (In thousands)
Mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 4,170 |  | $ | 21,330 |  | $ | 28,735 |  | $ | 34,413 |  | $ | 40,319 |  | $ | 678,226 |  | $ | - |  | $ | - |  | $ | 807,193
Nonperforming |  | - |  |  | 303 |  |  | 39 |  |  | 626 |  |  | 945 |  |  | 38,565 |  |  | - |  |  | - |  |  | 40,478
Total mortgage loans: |  | 4,170 |  |  | 21,633 |  |  | 28,774 |  |  | 35,039 |  |  | 41,264 |  |  | 716,791 |  |  | - |  |  | - |  |  | 847,671
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personal loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | 69,033 |  |  | 130,325 |  |  | 66,447 |  |  | 33,686 |  |  | 16,673 |  |  | 9,367 |  |  | - |  |  | - |  |  | 325,531
Nonperforming |  | 82 |  |  | 543 |  |  | 664 |  |  | 404 |  |  | 326 |  |  | 373 |  |  | - |  |  | - |  |  | 2,392
Total personal loans |  | 69,115 |  |  | 130,868 |  |  | 67,111 |  |  | 34,090 |  |  | 16,999 |  |  | 9,740 |  |  | - |  |  | - |  |  | 327,923
Credit lines: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 45,620 |  |  | - |  |  | 45,620
Nonperforming |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,253 |  |  | - |  |  | 1,253
Total credit lines |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 46,873 |  |  | - |  |  | 46,873
Credit cards: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 58,056 |  |  | - |  |  | 58,056
Nonperforming |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,562 |  |  | - |  |  | 1,562
Total credit cards |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 59,618 |  |  | - |  |  | 59,618
Overdrafts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment performance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 132 |  |  | - |  |  | 132
Nonperforming |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | -
Total overdrafts |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 132 |  |  | - |  |  | 132
Total consumer loans |  | 69,115 |  |  | 130,868 |  |  | 67,111 |  |  | 34,090 |  |  | 16,999 |  |  | 9,740 |  |  | 106,623 |  |  | - |  |  | 434,546
Total mortgage and consumer loans | $ | 73,285 |  | $ | 152,501 |  | $ | 95,885 |  | $ | 69,129 |  | $ | 58,263 |  | $ | 726,531 |  | $ | 106,623 |  | $ | - |  | $ | 1,282,217
Oriental evaluates credit quality for auto loans and leases based on FICO score. The following table presents the amortized cost in auto loans and leases based on their most recent FICO score:
| Term Loans |  |  |
| Amortized Cost Basis by Origination Year |  |  |
| 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Total
| (In thousands)
Auto: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO score: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-660 |  | 81,738 |  |  | 123,802 |  |  | 105,596 |  |  | 62,980 |  |  | 34,460 |  |  | 28,443 |  |  | 437,019
661-699 |  | 54,684 |  |  | 77,710 |  |  | 49,632 |  |  | 25,131 |  |  | 14,147 |  |  | 12,029 |  |  | 233,333
700+ |  | 126,267 |  |  | 222,082 |  |  | 176,364 |  |  | 93,445 |  |  | 52,035 |  |  | 40,791 |  |  | 710,984
No FICO |  | 13,656 |  |  | 43,322 |  |  | 34,291 |  |  | 18,861 |  |  | 10,907 |  |  | 9,456 |  |  | 130,493
Total auto: | $ | 276,345 |  | $ | 466,916 |  | $ | 365,883 |  | $ | 200,417 |  | $ | 111,549 |  | $ | 90,719 |  | $ | 1,511,829
Upon adoption of CECL, Oriental elected to maintain pools of loans that were previously accounted for under ASC 310-30 and will continue to account for these pools as a unit of account. As such, PCD loans are not included in the table above. As of December 31, 2019, and based on the most recent analysis performed, the loan grading of gross originated loans and acquired loans accounted for under ASC 310-20 subject to loan grade by class of loans was as follows:
| December 31, 2019
| Loan Grades
| Balance |  |  |  |  | Special |  |  |  |  |  |  |  |
| Outstanding |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Loss
| (In thousands)
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial secured by real estate | $ | 866,706 |  | $ | 762,443 |  | $ | 55,870 |  | $ | 48,357 |  | $ | 36 |  | $ | -
Other commercial and industrial |  | 723,526 |  |  | 706,831 |  |  | 6,634 |  |  | 9,960 |  |  | 101 |  |  | -
US Loan Program |  | 272,595 |  |  | 262,745 |  |  | 9,850 |  |  | - |  |  | - |  |  | -
Total Commercial | $ | 1,862,827 |  | $ | 1,732,019 |  | $ | 72,354 |  | $ | 58,317 |  | $ | 137 |  | $ | -
| December 31, 2019
| Loan Grades
| Balance |  |  |  |  | Special |  |  |  |  |  |  |  |
| Outstanding |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Loss
Retail |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Mortgage | $ | 899,595 |  | $ | 805,486 |  | $ | - |  | $ | 94,109 |  | $ | - |  | $ | -
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Personal loans |  | 367,157 |  |  | 365,579 |  |  | - |  |  | 1,578 |  |  | - |  |  | -
Personal lines of credit |  | 52,614 |  |  | 52,393 |  |  | - |  |  | 221 |  |  | - |  |  | -
Credit cards |  | 75,202 |  |  | 74,306 |  |  | - |  |  | 896 |  |  | - |  |  | -
Overdrafts |  | 216 |  |  | 165 |  |  | - |  |  | 51 |  |  | - |  |  | -
Auto |  | 1,468,882 |  |  | 1,454,612 |  |  | - |  |  | 14,270 |  |  | - |  |  | -
Total consumer loans |  | 1,964,071 |  |  | 1,947,055 |  |  | - |  |  | 17,016 |  |  | - |  |  | -
Total retail loans | $ | 2,863,666 |  | $ | 2,752,541 |  | $ | - |  | $ | 111,125 |  | $ | - |  | $ | -

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