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LOANS

9 Months Ended

Sep. 30, 2023

OFG’s loan portfolio is composed of four segments: commercial, mortgage, consumer, and auto. Loans are further segregated into classes which OFG uses when assessing and monitoring the risk and performance of the portfolio.

The composition of the amortized cost basis of OFG’s loan portfolio at September 30, 2023 and December 31, 2022 was as follows:


	September 30, 2023						December 31, 2022
	Non-PCD		PCD		Total		Non-PCD		PCD		Total
	(In thousands)
Commercial loans:
Commercial secured by real estate	$	1,001,062	$	125,635	$	1,126,697	$	974,202	$	138,678	$	1,112,880
Other commercial and industrial	984,473		14,222		998,695		854,442		20,474		874,916

US commercial loans	707,593		—		707,593		642,133		—		642,133
	2,693,128		139,857		2,832,985		2,470,777		159,152		2,629,929
Mortgage	648,414		955,596		1,604,010		675,793		1,028,428		1,704,221
Consumer:
Personal loans	561,185		284		561,469		480,620		338		480,958
Credit lines	11,169		288		11,457		12,826		300		13,126
Credit cards	40,030		—		40,030		42,872		—		42,872
Overdraft	239		—		239		301		—		301
	612,623		572		613,195		536,619		638		537,257
Auto	2,208,993		2,552		2,211,545		1,958,257		5,658		1,963,915
	6,163,158		1,098,577		7,261,735		5,641,446		1,193,876		6,835,322
Allowance for credit losses	(148,210)		(9,319)		(157,529)		(141,841)		(10,832)		(152,673)
Total loans held for investment, net	6,014,948		1,089,258		7,104,206		5,499,605		1,183,044		6,682,649
Mortgage loans held for sale	564		—		564		19,499		—		19,499
Other loans held for sale	25,282		—		25,282		21,088		—		21,088
Total loans held for sale	25,846		—		25,846		40,587		—		40,587
Total loans, net	$	6,040,794	$	1,089,258	$	7,130,052	$	5,540,192	$	1,183,044	$	6,723,236

During the quarter ended September 30, 2023, OFG transferred to held for sale a US commercial loan amounting to $2.0 million, net of $2.7 million charge-off, which was subsequently sold in October 2023. During the quarter ended September 30, 2023, OFG transferred to held for sale a small portfolio of non-performing small business commercial loans amounting to $4.4 million, net of a $906 thousand charge-off recognized during the quarter.

At September 30, 2023 and December 31, 2022, OFG had carrying balances of $68.3 million and $73.7 million, respectively, in loans held for investment granted to the Puerto Rico government or its instrumentalities as part of the commercial loan segment. The Bank’s loans 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 in current status. 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, 2023 and December 31, 2022, by class of loans. Mortgage loans past due include $18.2 million and $32.6 million of delinquent loans in the Government National Mortgage Association (“GNMA”) buy-back option program at September 30, 2023 and December 31, 2022, respectively. 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, 2023
	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		Loans 90+ Days Past Due and Still Accruing
	(In thousands)
Commercial loans:
Commercial secured by real estate	$	1,581	$	759	$	4,159	$	6,499	$	994,563	$	1,001,062	$	—
Other commercial and industrial	2,657		337		5,284		8,278		976,195		984,473		—
US commercial loans	332		—		—		332		707,261		707,593		—
	4,570		1,096		9,443		15,109		2,678,019		2,693,128		—
Mortgage	5,539		8,841		34,508		48,888		599,526		648,414		2,899
Consumer:
Personal loans	5,891		3,171		2,626		11,688		549,497		561,185		—
Credit lines	54		126		71		251		10,918		11,169		—
Credit cards	608		265		565		1,438		38,592		40,030		—
Overdraft	45		—		—		45		194		239		—
	6,598		3,562		3,262		13,422		599,201		612,623		—
Auto	97,901		41,377		16,301		155,579		2,053,414		2,208,993		—
Total loans	$	114,608	$	54,876	$	63,514	$	232,998	$	5,930,160	$	6,163,158	$	2,899

As of September 30, 2023, total past due loans exclude $8.1 million of past due commercial loans held for sale.


	December 31, 2022
	30-59 Day Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		Loans 90+ Days Past Due and Still Accruing
	(In thousands)
Commercial loans:
Commercial secured by real estate	$	923	$	164	$	6,147	$	7,234	$	966,968	$	974,202	$	—
Other commercial and industrial	943		720		3,225		4,888		849,554		854,442		—
US commercial loans	—		—		—		—		642,133		642,133		—
	1,866		884		9,372		12,122		2,458,655		2,470,777		—
Mortgage	9,267		5,848		56,714		71,829		603,964		675,793		3,856
Consumer:
Personal loans	4,263		2,669		2,314		9,246		471,374		480,620		—
Credit lines	500		154		117		771		12,055		12,826		—
Credit cards	730		486		682		1,898		40,974		42,872		—
Overdraft	91		2		—		93		208		301		—
	5,584		3,311		3,113		12,008		524,611		536,619		—
Auto	75,237		36,954		19,613		131,804		1,826,453		1,958,257		—
Total loans	$	91,954	$	46,997	$	88,812	$	227,763	$	5,413,683	$	5,641,446	$	3,856

As of December 31, 2022, total past due loans exclude $21.1 million of past due commercial loans held for sale.

Upon adoption of the CECL methodology, OFG 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, purchased credit deteriorated (“PCD”) loans are not included in the preceding two tables.

Non-accrual Loans

The following table presents the amortized cost basis of loans held for investment on nonaccrual status as of September 30, 2023 and December 31, 2022:


	September 30, 2023						December 31, 2022
	Non-accrual with Allowance for Credit Loss		Non-accrual with no Allowance for Credit Loss		Total		Non-accrual with Allowance for Credit Loss		Non-accrual with no Allowance for Credit Loss		Total
	(In thousands)						(In thousands)
Non-PCD:
Commercial loans:
Commercial secured by real estate	$	3,150	$	7,971	$	11,121	$	4,091	$	17,098	$	21,189
Other commercial and industrial	4,790		859		5,649		2,769		885		3,654
US commercial loans	19,879		—		19,879		9,589		—		9,589
	27,819		8,830		36,649		16,449		17,983		34,432
Mortgage	12,013		5,379		17,392		11,719		11,522		23,241
Consumer:
Personal loans	2,718		4		2,722		1,950		379		2,329
Personal lines of credit	71		—		71		116		—		116
Credit cards	566		—		566		683		—		683
	3,355		4		3,359		2,749		379		3,128
Auto	16,296		5		16,301		19,612		1		19,613
Total	$	59,483	$	14,218	$	73,701	$	50,529	$	29,885	$	80,414

PCD:
Commercial loans:
Commercial secured by real estate	$	3,089	$	2,533	$	5,622	$	2,807	$	6,084	$	8,891
Other commercial and industrial	—		1,066		1,066		—		36		36
	3,089		3,599		6,688		2,807		6,120		8,927
Mortgage	253		—		253		259		—		259
Consumer:
Personal loans	7		—		7		—		—		—
	7		—		7		—		—		—
Total	$	3,349	$	3,599	$	6,948	$	3,066	$	6,120	$	9,186
Total non-accrual loans	$	62,832	$	17,817	$	80,649	$	53,595	$	36,005	$	89,600

The determination of nonaccrual or accrual status of PCD loans is made at the pool level, not the individual loan level.

As of September 30, 2023 and December 31, 2022, total commercial non-accrual loans exclude $8.5 million and $27.8 million of non-accrual commercial loans held for sale, respectively.

Delinquent residential mortgage loans insured or guaranteed under applicable FHA and Veterans Administration (“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 December 31, 2022, loans whose terms have been extended and which were classified as troubled-debt restructurings that were not included in non-accrual loans amounted to $145.2 million as they were performing under their modified terms.

Modifications to Debtors Experiencing Financial Difficulty

OFG’s loss mitigation program was designed to ensure that borrowers experiencing financial difficulties have the opportunity to continue paying their obligations. The loss mitigation alternatives are divided depending on the borrower’s hardship and their ability to continue with regular payment or with a new modified payment plan. The loss mitigation program provides alternatives for home retention or disposition options avoiding foreclosure proceedings and collateral retention.

OFG offers various types of loan modifications to borrowers experiencing financial difficulty in the form of an interest rate reduction, an other-than-insignificant payment delay, a term extension, interest or principal forbearance or forgiveness, or any combination of these types of concessions.

On January 1, 2023, OFG adopted ASU 2022-02, which eliminated the recognition and measurement of TDRs and enhanced disclosures for loan restructurings for borrowers experiencing financial difficulty, using the prospective transition method.

At September 30, 2023, the amortized cost of modified loans excludes $110 thousand of accrued interest receivable. Accrued interest receivable on loans is included in the “accrued interest receivable” line in OFG’s consolidated statements of financial condition.

The following tables present the amortized cost basis as of September 30, 2023 of loans held for investment that were modified during the quarter and nine-month period ended September 30, 2023, disaggregated by class of financing receivable and type of concession granted.


	Interest Rate Reduction
	Quarter Ended September 30, 2023				Nine-Month Period Ended September 30, 2023

	Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable		Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable

Commercial loans:



US commercial loans	6,824		0.96	%	6,824		0.96	%


Consumer:
Personal loans	40		0.01	%	40		0.01	%




Auto	30		—	%	30		—	%
Total	$	6,894			$	6,894


	Term Extension
	Quarter Ended September 30, 2023				Nine-Month Period Ended September 30, 2023

	Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable		Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable

Commercial loans:
Commercial secured by real estate	$	629	0.06	%	$	6,328	0.56	%
Other commercial and industrial	36		0.00	%	80		0.01	%

	665		0.02	%	6,408		0.23	%
Mortgage	771		0.05	%	5,040		0.31	%







Total	$	1,436			$	11,448


	Principal Forbearance/Forgiveness
	Quarter Ended September 30, 2023				Nine-Month Period Ended September 30, 2023

	Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable		Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable







Mortgage	$	—	—	%	$	98	0.01	%


	Combination - Term Extension and Interest Rate Reduction
	Quarter Ended September 30, 2023				Nine-Month Period Ended September 30, 2023

	Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable		Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable







Mortgage	117		0.01	%	$	723	0.05	%
Consumer:
Personal loans	—		—	%	82		0.01	%





Total	$	117			$	805


	Combination - Term Extension and Principal Forgiveness/Forbearance
	Quarter Ended September 30, 2023				Nine-Month Period Ended September 30, 2023

	Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable		Amortized Cost Basis (In thousands)		% of Total Class of Financing Receivable

Commercial loans:



US commercial loans	$	—	—	%	$	4,286	0.61	%

Mortgage	—		—	%	447		0.03	%







Total	$	—			$	4,733

Our credit loss estimation methodology incorporates a lifetime approach, utilizing modeled loan performance based on the historical experience of loans with similar risk characteristics, adjusted for current conditions, and reasonable and supportable forecasts. The model considers extensive historical loss experience, including the impact of loss mitigation programs offered to borrowers facing financial difficulty and projected loss severity from loan defaults, and is applied consistently across all portfolio segments. Additionally, our allowance for credit losses is recorded on each asset upon origination or acquisition and is based on historical loss information, including modifications made to borrowers facing financial difficulty. Changes to the allowance for credit losses are generally not recorded upon modification, as the effects of most modifications are already considered in the estimation methodology. Refer to Note 5 – Allowance for Credit Losses for additional information.

The following table presents the financial effect of the modifications granted to borrowers experiencing financial difficulty during the quarter and nine-month period ended September 30, 2023. The financial effect of the combined modifications is presented separately by type of modification.


	Quarter Ended September 30, 2023
	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (In months)	Weighted-Average Forgiveness/Forbearance of Principal Amount (In thousands)
Commercial loans:
Commercial loans secured by real estate	—	%	14	$	—
US Commercial loans	1.95	%	0	—
	—	%	14	$	—
Mortgage	1.25	%	349	$	—
Consumer:
Personal loans	4.00	%	0	$	—



Auto	3.00	%	0	$	—


	Nine-Month Period Ended September 30, 2023
	Weighted-Average Interest Rate Reduction		Weighted-Average Term Extension (In months)	Weighted-Average Forgiveness/Forbearance of Principal Amount (In thousands)
Commercial loans:
Commercial loans secured by real estate	—	%	23	$	—
US Commercial loans	1.95	%	31	2,973
	—	%	54	$	2,973
Mortgage	1.94	%	227	$	24
Consumer:
Personal loans	2.98	%	81	$	—



Auto	3.00	%	0	$	—

During the nine-month period ended September 30, 2023, OFG agreed to modify the terms of a US commercial loan with unpaid principal balance of $8.9 million by extending its term and forgiving $4.6 million of its principal balance in exchange for the company’s private stock with a fair value of $1.6 million. In addition, OFG agreed to modify the terms of another US commercial loan with unpaid principal balance of $4.4 million by forgiving all its unpaid principal balance in exchange for the company’s private stock with a fair value of $279 thousand.

The following table presents the amortized cost basis as of September 30, 2023 of loans held for investment that had a payment default subsequent to being granted a modification to borrowers experiencing financial difficulty in the prior nine-months.


	Nine-Month Period Ended September 30, 2023
	Amortized Cost Basis of Modified Financing Receivables that Subsequently Defaulted
	Interest Rate Reduction		Term Extension		Principal Forgiveness/Forbearance		Combination - Term Extension and Interest Rate Reduction		Total
	(In thousands)






Mortgage	$	—	$	415	$	—	$	—	$	415

A payment default for a financial difficulty modification loan is defined as reaching 90 days past due with respect to principal and/or interest payments or when the borrower missed three consecutive monthly payments since modification. Payment defaults is one of the factors considered when projecting future cash flows in the calculation of the allowance for credit losses of loans.

OFG closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents an aging of the loans held for investment that have been modified during the nine-month period ended September 30, 2023.


	September 30, 2023
	30-59 Day Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total
	(In thousands)
Commercial loans:
Commercial loans secured by real estate	$	—	$	—	$	—	$	—	$	6,328	$	6,328
Other commercial and industrial	—		—		—		—		80		80
US commercial loans	—		—		—		—		11,110		11,110
	—		—		—		—		17,518		17,518
Mortgage	566		133		415		1,114		5,194		6,308
Consumer:
Personal loans	—		—		—		—		122		122



	—		—		—		—		122		122
Auto	—		—		—		—		30		30
Total	$	566	$	133	$	415	$	1,114	$	22,864	$	23,978

At September 30, 2023, the total amortized cost of modified loans to borrowers experiencing financial difficulty includes $4.5 million of government-guaranteed loans (e.g., FHA/VA). There were no outstanding commitments to lend additional funds to debtors experiencing financial difficulties at September 30, 2023.

Troubled Debt Restructurings (“TDRs”) Disclosures Prior to the Adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02, OFG offered various types of concessions when modifying a loan. Concessions made to the original contractual terms of the loan typically consisted 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 restructuring. Loans that were restructured in a TDR prior to the adoption of ASU 2022-02 will continue to be accounted for under the historical TDR accounting until the relevant loans are paid off, liquidated or subsequently modified. Refer to “Note 1 – Summary of Significant Accounting Policies” in our 2022 Form 10-K for more information on TDR accounting and disclosure requirements, and “Note 1 – Summary of Significant Accounting Policies” in this report for more information on our adoption of ASU 2022-02.

The amount of outstanding commitments to lend additional funds to commercial borrowers whose terms were modified in TDRs amounted to $3.2 million at December 31, 2022.

The following table presents the troubled-debt restructurings in all loan portfolios as of December 31, 2022:


	December 31, 2022
		Accruing		Non-accruing		Total		Related Allowance
	(In thousands)
Commercial loans:
Commercial secured by real estate		$	31,437	$	13,187	$	44,624	$	181
Other commercial and industrial		2,272		354		2,626		42

US commercial loans		7,132		—		7,132		89
		40,841		13,541		54,382		312
Mortgage		102,387		6,773		109,160		2,495
Consumer:
Personal loans		1,850		15		1,865		73




Auto		77		—		77		3
Total loans		$	145,155	$	20,329	$	165,484	$	2,883

The following tables present the troubled-debt restructurings by loan portfolios and modification type as of December 31, 2022:


	December 31, 2022
	Reduction in interest rate		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forbearance		Total
	(In thousands)
Commercial loans:
Commercial secured by real estate	$	7,746	$	29,454	$	7,424	$	—	$	44,624
Other commercial and industrial	785		1,367		474		—		2,626

US commercial loans	7,132		—		—		—		7,132
	15,663		30,821		7,898		—		54,382
Mortgage	31,709		8,020		35,194		34,237		109,160
Consumer:
Personal loans	825		176		793		71		1,865





Auto	39		—		20		18		77
Total loans	$	48,236	$	39,017	$	43,905	$	34,326	$	165,484

At December 31, 2022, TDR mortgage loans included $43.5 million of government-guaranteed loans (e.g., FHA/VA).

Upon adoption of CECL, OFG 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 were not included in the TDR tables.

Loan modifications that were considered TDR loans completed during the quarter and nine-month period ended September 30, 2022:


	Quarter Ended September 30, 2022
	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	10	1,344		4.45	%	214	1,447		3.67	%	292
Commercial	1	170		5.75	%	66	169		5.75	%	114
Consumer	1	40		10.70	%	72	40		10.95	%	60



	Nine-Months Ended September 30, 2022
	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	82	$	10,377	4.60	%	266	$	10,918	3.64	%	341
Commercial	5	38,873		3.57	%	131	38,729		3.64	%	184
Consumer	3	62		13.72	%	75	62		10.95	%	67

The following table presents troubled-debt restructurings for which there was a payment default during the twelve-month period ended September 30, 2022:

Twelve-month period ended September 30, 2022

Number of Contracts

Recorded Investment

(Dollars in thousands)

Mortgage

1,087

As of September 30, 2023 and December 31, 2022, the recorded investment on residential mortgage loans collateralized by residential real estate property that were in the process of foreclosure amounted to $24.1 million and $14.9 million, respectively. OFG commences the foreclosure process on residential real estate loans when a borrower becomes 120 days delinquent. Puerto Rico and the USVI require the foreclosure to be processed through the respective territory’s courts. Foreclosure timelines vary according to local law and investor guidelines. Occasionally, foreclosures may be delayed due to, among other reasons, mandatory mediation, bankruptcy, court delays and property title issues.

Collateral-dependent Loans

The table below presents the amortized cost of commercial collateral-dependent loans held for investment at September 30, 2023 and December 31, 2022, by class of loans.


	September 30,		December 31,
	2023		2022
	(In thousands)

Commercial loans secured by real estate	$	8,605	$	8,805

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

OFG categorizes its loans into loan grades based on relevant information about the ability of borrowers to service their debts, such as economic conditions, portfolio risk characteristics, prior loss experience, and the results of periodic credit reviews of individual loans.

OFG 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 process described above are considered to be pass loans.

On January 1, 2023, OFG adopted ASU 2022-02 which requires public companies to include current year-to-date period gross charge-offs by year of origination as described in the tables below.

As of September 30, 2023, and based on the most recent analysis performed, the risk category of loans held for investment subject to risk rating by class of loans is as follows.


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2023		2022		2021		2020		2019		Prior
	(In thousands)
Commercial:
Commercial secured by real estate:
Loan grade:
Pass	$	106,717	$	220,049	$	171,767	$	122,158	$	82,940	$	156,508	$	70,693	$	930,832
Special Mention	—		1,806		6,642		17,542		15,754		10,785		172		52,701
Substandard	—		407		1,279		752		2,655		11,894		527		17,514
Doubtful	—		—		—		—		—		15		—		15
Loss	—		—		—		—		—		—		—		—
Total commercial secured by real estate	106,717		222,262		179,688		140,452		101,349		179,202		71,392		1,001,062


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2023		2022		2021		2020		2019		Prior
	(In thousands)
Commercial secured by real estate:
Current nine month period gross charge-offs	—		—		265		—		94		821		—		1,180
Other commercial and industrial:
Loan grade:
Pass	194,795		105,699		126,074		38,982		8,260		15,818		483,884		973,512
Special Mention	21		1,805		13		5,706		36		126		14		7,721
Substandard	10		144		833		617		942		126		568		3,240
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total other commercial and industrial:	194,826		107,648		126,920		45,305		9,238		16,070		484,466		984,473
Other commercial and industrial:
Current nine month period gross charge-offs	—		41		878		11		9		1,180		—		2,119
US commercial loans:
Loan grade:
Pass	119,438		68,167		75,965		45,371		29,698		8,089		320,863		667,591
Special Mention	—		7,841		6,566		—		—		—		—		14,407
Substandard	11,111		—		—		—		—		5,716		8,768		25,595
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total US commercial loans:	130,549		76,008		82,531		45,371		29,698		13,805		329,631		707,593
US commercial loans:
Current nine month period gross charge-offs	33		1,156		—		—		—		8,637		—		9,826
Total commercial loans	$	432,092	$	405,918	$	389,139	$	231,128	$	140,285	$	209,077	$	885,489	$	2,693,128
Total current nine month period gross charge-offs	$	33	$	1,197	$	1,143	$	11	$	103	$	10,638	$	—	$	13,125

As of December 31, 2022, and based on the most recent analysis performed, the risk category of loans held for investment subject to risk rating by class of loans is as follows.


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2022		2021		2020		2019		2018		Prior
	(In thousands)
Commercial:
Commercial secured by real estate:
Loan grade:
Pass	$	220,035	$	177,775	$	110,809	$	118,518	$	50,454	$	159,721	$	69,523	$	906,835
Special Mention	1,899		—		6,007		17,004		2,095		13,934		439		41,378
Substandard	103		8,410		345		405		473		14,722		1,185		25,643
Doubtful	—		—		—		—		—		15		331		346
Loss	—		—		—		—		—		—		—		—
Total commercial secured by real estate	222,037		186,185		117,161		135,927		53,022		188,392		71,478		974,202
Other commercial and industrial:
Loan grade:
Pass	123,659		198,776		67,147		35,678		13,807		7,863		397,944		844,874
Special Mention	3		60		31		654		1,819		21		3,823		6,411
Substandard	112		—		260		472		280		74		1,920		3,118
Doubtful	—		—		—		—		—		—		39		39
Loss	—		—		—		—		—		—		—		—
Total other commercial and industrial:	123,774		198,836		67,438		36,804		15,906		7,958		403,726		854,442
US commercial loans:
Loan grade:
Pass	81,155		92,688		43,965		33,827		49,356		—		308,183		609,174
Special Mention	6,346		—		—		—		—		—		1,122		7,468
Substandard	3,363		—		8,090		—		4,449		—		9,589		25,491
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total US commercial loans:	90,864		92,688		52,055		33,827		53,805		—		318,894		642,133
Total commercial loans	$	436,675	$	477,709	$	236,654	$	206,558	$	122,733	$	196,350	$	794,098	$	2,470,777

At September 30, 2023 and December 31, 2022, the balance of revolving commercial loans converted to term loans was $121.1 million and $78.0 million, respectively.

OFG considers the performance of the loan portfolio and its impact on the allowance for credit losses. For mortgage and consumer loan classes, OFG 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 held for investment based on payment activity as of September 30, 2023:


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2023		2022		2021		2020		2019		Prior
	(In thousands)
Mortgage:
Payment performance:
Performing	$	27,314	$	19,752	$	23,745	$	16,065	$	14,722	$	521,462	$	—	$	623,060
Nonperforming	—		114		182		109		482		24,467		—		25,354
Total mortgage loans:	27,314		19,866		23,927		16,174		15,204		545,929		—		648,414
Mortgage:
Current nine month period gross charge-offs	—		—		—		—		—		610		—		610
Consumer:
Personal loans:
Payment performance:
Performing	224,566		208,788		77,158		21,839		18,006		8,106		—		558,463
Nonperforming	423		1,477		505		153		98		66		—		2,722
Total personal loans	224,989		210,265		77,663		21,992		18,104		8,172		—		561,185
Personal loans:
Current nine month period gross charge-offs	492		7,581		3,461		638		1,172		637		—		13,981
Credit lines:
Payment performance:
Performing	—		—		—		—		—		—		11,097		11,097
Nonperforming	—		—		—		—		—		—		72		72
Total credit lines	—		—		—		—		—		—		11,169		11,169
Credit lines:
Current nine month period gross charge-offs	—		—		—		—		—		—		313		313
Credit cards:
Payment performance:
Performing	—		—		—		—		—		—		39,464		39,464
Nonperforming	—		—		—		—		—		—		566		566
Total credit cards	—		—		—		—		—		—		40,030		40,030
Credit cards:
Current nine month period gross charge-offs	—		—		—		—		—		—		2,124		2,124
Overdrafts:
Payment performance:
Performing	—		—		—		—		—		—		239		239
Nonperforming	—		—		—		—		—		—		—		—
Total overdrafts	—		—		—		—		—		—		239		239
Overdrafts:
Current nine month period gross charge-offs	—		—		—		—		—		—		434		434


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2023		2022		2021		2020		2019		Prior
	(In thousands)
Total consumer loans	224,989		210,265		77,663		21,992		18,104		8,172		51,438		612,623
Total consumer current nine month period gross charge-offs	492		7,581		3,461		638		1,172		637		2,871		16,852
Total mortgage and consumer loans	$	252,303	$	230,131	$	101,590	$	38,166	$	33,308	$	554,101	$	51,438	$	1,261,037
Total mortgage and consumer current nine month period gross charge-offs	$	492	$	7,581	$	3,461	$	638	$	1,172	$	1,247	$	2,871	$	17,462

The following table presents the amortized cost in mortgage and consumer loans held for investment based on payment activity as of December 31, 2022:


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans Amortized Cost Basis		Total
	2022		2021		2020		2019		2018		Prior
	(In thousands)
Mortgage:
Payment performance:
Performing	$	18,700	$	25,274	$	16,175	$	15,457	$	16,790	$	549,885	$	—	$	642,281
Nonperforming	—		—		110		574		241		32,587		—		33,512
Total mortgage loans:	18,700		25,274		16,285		16,031		17,031		582,472		—		675,793
Consumer:
Personal loans:
Payment performance:
Performing	284,183		112,591		31,876		31,850		12,022		5,768		—		478,290
Nonperforming	831		661		111		300		81		346		—		2,330
Total personal loans	285,014		113,252		31,987		32,150		12,103		6,114		—		480,620
Credit lines:
Payment performance:
Performing	—		—		—		—		—		—		12,710		12,710
Nonperforming	—		—		—		—		—		—		116		116
Total credit lines	—		—		—		—		—		—		12,826		12,826
Credit cards:
Payment performance:
Performing	—		—		—		—		—		—		42,189		42,189
Nonperforming	—		—		—		—		—		—		683		683
Total credit cards	—		—		—		—		—		—		42,872		42,872
Overdrafts:
Payment performance:
Performing	—		—		—		—		—		—		301		301
Nonperforming	—		—		—		—		—		—		—		—
Total overdrafts	—		—		—		—		—		—		301		301
Total consumer loans	285,014		113,252		31,987		32,150		12,103		6,114		55,999		536,619
Total mortgage and consumer loans	$	303,714	$	138,526	$	48,272	$	48,181	$	29,134	$	588,586	$	55,999	$	1,212,412

At September 30, 2023 and December 31, 2022, there were no mortgage and consumer revolving loans that converted to term loans.

OFG evaluates credit quality for auto loans based on FICO score. The following table presents the amortized cost in auto loans held for investment based on their most recent FICO score as of September 30, 2023:


	Term Loans Amortized Cost Basis by Origination Year												Total
	2023		2022		2021		2020		2019		Prior
	(In thousands)
Auto:
FICO score:
1-660	121,234		195,732		124,437		60,882		44,959		47,229		594,473
661-699	130,962		128,534		65,830		30,251		21,784		19,694		397,055
700+	367,239		339,488		197,162		113,239		99,649		75,429		1,192,206
No FICO	4,564		6,792		4,882		2,502		4,441		2,078		25,259
Total auto loans	$	623,999	$	670,546	$	392,311	$	206,874	$	170,833	$	144,430	$	2,208,993
Auto:
Current nine month period gross charge-offs	$	1,120	$	12,271	$	7,848	$	2,945	$	2,402	$	2,520	$	29,106

The following table presents the amortized cost in auto loans held for investment based on their most recent FICO score as of December 31, 2022:


	Term Loans Amortized Cost Basis by Origination Year												Total
	2022		2021		2020		2019		2018		Prior
	(In thousands)
Auto:
FICO score:
1-660	178,426		143,926		72,148		58,069		44,156		31,980		528,705
661-699	171,723		93,359		42,388		31,033		21,283		13,518		373,304
700+	375,845		235,743		144,783		135,517		88,597		47,499		1,027,984
No FICO	7,766		6,553		3,741		5,873		3,008		1,323		28,264
Total auto loans	$	733,760	$	479,581	$	263,060	$	230,492	$	157,044	$	94,320	$	1,958,257

As of September 30, 2023 and December 31, 2022, accrued interest receivable on loans totaled $59.9 million and $58.1 million, respectively, and is included in the accrued interest receivable line in OFG’s consolidated statements of financial condition. Refer to “Note 10 – Accrued Interest Receivable and Other Assets” for more information on accrued interest receivable on loans.