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LOANS HELD FOR INVESTMENT

9 Months Ended

Sep. 30, 2020

NOTE 7 – LOANS HELD FOR INVESTMENT

The following provides information about the loan portfolio held for investment as of the indicated dates:

	As of September 30,		As of December 31,
	2020		2019
(In thousands)
Residential mortgage loans, mainly secured by first mortgages	$	3,636,713	$	2,933,773
Construction loans		191,356		111,317
Commercial mortgage loans		2,220,277		1,444,586
Commercial and Industrial loans (1) (2)		3,226,843		2,230,876
Consumer loans		2,572,086		2,281,653
Loans held for investment (3)(4)		11,847,275		9,002,205
Allowance for credit losses on loans and finance leases		(384,718)		(155,139)
Loans held for investment, net	$	11,462,557	$	8,847,066

As of September 30, 2020, includes $453.4 million of SBA PPP loans.As of September 30, 2020 and December 31, 2019, includes $1.0 billion and $719.0 million, respectively, of commercial loans that were secured by real estate but are not dependent upon the real estate for repayment.Refer to Note 2 – Business Combination, above, for details about the loans acquired in the BSPR acquisition.Includes accretable fair value net purchase discounts of $51.8 million and $15.1 million as of September 30, 2020 and December 31, 2019, respectively.

The following tables present by portfolio classes the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more and still accruing as of September 30, 2020 and December 31, 2019 and the interest income recognized on nonaccrual loans for the quarter and nine-month period ended September 30, 2020:

		As of September 30, 2020								Quarter Ended September 30, 2020		Nine-Month Period Ended September 30, 2020		As of December 31, 2019
Puerto Rico and Virgin Islands region		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans (2)		Loans Past Due 90 days or more and Still Accruing (3)		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing (3)
(In thousands)		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans (2)		Loans Past Due 90 days or more and Still Accruing (3)		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing (3)

Residential mortgage loans, mainly secured
by first mortgages:
	FHA\VA government-guaranteed	$	-	$	-	$	-	$	110,882	$	-	$	-	$	-	$	81,011
	Conventional residential mortgage loans		9,697		98,600		108,297		40,595		269		835		108,117		40,208
Construction loans			956		12,134		13,090		-		19		61		9,782		-
Commercial mortgage loans			11,437		18,214		29,651		3,328		35		142		40,076		2,222
Commercial and Industrial loans			6,445		13,444		19,889		1,014		24		67		18,458		7,061
Consumer Loans:
Auto loans			-		9,071		9,071		-		17		138		12,057		-
Finance leases			-		879		879		-		2		23		1,354		-
Personal loans			-		1,445		1,445		-		8		36		1,523		-
Credit cards			-		-		-		1,340		-		-		-		4,411
Other consumer loans			-		3,003		3,003		-		-		5		5,016		-
Total loans held for investment ⁽¹⁾		$	28,535	$	156,790	$	185,325	$	157,159	$	374	$	1,307	$	196,383	$	134,913

Nonaccrual loans exclude $390.1 million and $388.4 million of TDR loans that were in compliance with modified terms and in accrual status as of September 30, 2020 and December 31, 2019, respectively.Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC Subtopic 310-30 as “units of account” both at the time of adoption of ASC 326 and on an ongoing basis for credit loss measurement. These loans accrete interest income based on the effective interest rate of the loan pools determined at the time of adoption of ASC 326 and will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The amortized cost of such loans as of September 30, 2020 and December 31, 2019 was $133.2 million and $136.7 million, respectively.These include loans rebooked, which were previously pooled into GNMA securities amounting to $17.7 million and $35.3 million as of September 30, 2020 and December 31, 2019, respectively. Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA’s specified delinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. During the third quarter and first nine months of 2020, the Corporation repurchased, pursuant to the aforementioned repurchase option $52.0 million and $55.0 million, respectively, of loans previously sold to GNMA.

		As of September 30, 2020								Quarter Ended September 30, 2020		Nine-Month Period Ended September 30, 2020		As of December 31, 2019
Florida region		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing
(In thousands)		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing

Residential mortgage loans, mainly secured
by first mortgages:
	FHA\VA government-guaranteed	$	-	$	-	$	-	$	250	$	-	$	-	$	-	$	129
	Conventional residential mortgage loans		190		14,310		14,500		-		19		134		13,291		-
Construction loans			-		-		-		-		-		-		-		-
Commercial mortgage loans			-		-		-		-		-		-		-		-
Commercial and Industrial loans			247		746		993		-		19		52		315		-
Consumer Loans:
Auto loans			-		-		-		-		-		-		163		-
Finance leases			-		-		-		-		-		-		-		-
Personal loans			-		-		-		-		-		-		5		-
Credit cards			-		-		-		-		-		-		-		-
Other consumer loans			-		472		472		1		-		4		511		-
Total loans held for investment ⁽¹⁾		$	437	$	15,528	$	15,965	$	251	$	38	$	190	$	14,285	$	129

Nonaccrual loans exclude $9.5 million and $9.9 million of TDR loans that were in compliance with modified terms and in accrual status as of September 30, 2020 and December 31, 2019, respectively.

		As of September 30, 2020								Quarter Ended September 30, 2020		Nine-Month Period Ended September 30, 2020		As of December 31, 2019
Total		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans (2)		Loans Past Due 90 days or more and Still Accruing (3)		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing (3)
(In thousands)		Nonaccrual Loans with No ACL		Nonaccrual Loans with ACL		Total Nonaccrual Loans (2)		Loans Past Due 90 days or more and Still Accruing (3)		Interest Income Recognized on Nonaccrual Loans		Interest Income Recognized on Nonaccrual Loans		Total Nonaccrual Loans		Loans Past Due 90 days or more and Still Accruing (3)


Residential mortgage loans, mainly secured
by first mortgages:
	FHA\VA government-guaranteed	$	-	$	-	$	-	$	111,132	$	-	$	-	$	-	$	81,140
	Conventional residential mortgage loans		9,887		112,910		122,797		40,595		288		969		121,408		40,208
Construction loans			956		12,134		13,090		-		19		61		9,782		-
Commercial mortgage loans			11,437		18,214		29,651		3,328		35		142		40,076		2,222
Commercial and Industrial loans			6,692		14,190		20,882		1,014		43		119		18,773		7,061
Consumer Loans:
Auto loans			-		9,071		9,071		-		17		138		12,220		-
Finance leases			-		879		879		-		2		23		1,354		-
Personal loans			-		1,445		1,445		-		8		36		1,528		-
Credit cards			-		-		-		1,340		-		-		-		4,411
Other consumer loans			-		3,475		3,475		1		-		9		5,527		-
Total loans held for investment ⁽¹⁾		$	28,972	$	172,318	$	201,290	$	157,410	$	412	$	1,497	$	210,668	$	135,042

Nonaccrual loans exclude $399.7 million and $398.3 million of TDR loans that were in compliance with modified terms and in accrual status as of September 30, 2020 and December 31, 2019, respectively.Excludes PCD loans previously accounted for under ASC Subtopic 310-30 for which the Corporation made the accounting policy election of maintaining pools of loans accounted for under ASC Subtopic 310-30 as “units of account” both at the time of adoption of ASC 326 and on an ongoing basis for credit loss measurement. These loans accrete interest income based on the effective interest rate of the loan pools determined at the time of adoption of ASC 326 and will continue to be excluded from nonaccrual loan statistics as long as the Corporation can reasonably estimate the timing and amount of cash flows expected to be collected on the loan pools. The amortized cost of such loans as of September 30, 2020 and December 31, 2019 was $133.2 million and $136.7 million, respectively.These include loans rebooked, which were previously pooled into GNMA securities amounting to $17.7 million and $35.3 million as of September 30, 2020 and December 31, 2019, respectively. Under the GNMA program, the Corporation has the option but not the obligation to repurchase loans that meet GNMA’s specified delinquency criteria. For accounting purposes, these loans subject to the repurchase option are required to be reflected on the financial statements with an offsetting liability. During the third quarter and first nine months of 2020, the Corporation repurchased, pursuant to the aforementioned repurchase option $52.0 million and $55.0 million, respectively, of loans previously sold to GNMA. As of September 30, 2020, the recorded investment on residential mortgage loans collateralized by residential real estate property that were in the process of foreclosure amounted to $177.8 million, including $60.4 million of loans insured by the FHA or guaranteed by the VA, and $18.9 million of PCD loans acquired prior to the adoption, on January 1, 2020, of ASC 326 and for which the Corporation made the accounting policy election of maintaining pools of loans previously accounted for under ASC 310-30 as “units of account.” The Corporation commences the foreclosure process on residential real estate loans when a borrower becomes 120 days delinquent in accordance with the requirements of the Consumer Financial Protection Bureau (“CFPB”). Foreclosure procedures and timelines vary depending on whether the property is located in a judicial or non-judicial state. Judicial states (i.e., Puerto Rico, Florida and the USVI) require the foreclosure to be processed through the state’s court while foreclosure in non-judicial states (i.e., the BVI) is processed without court intervention. Foreclosure timelines vary according to local jurisdiction law and investor guidelines. Occasionally, foreclosures may be delayed due to, among other reasons, mandatory mediations, bankruptcy, court delays and title issues.

The Corporation’s aging of the loan portfolio held for investment by portfolio classes as of September 30, 2020 is as follows:

As of September 30, 2020
Puerto Rico and Virgin Islands region	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due⁽¹⁾⁽²⁾		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans ^{(2) (3) (4)}	$	-	$	3,448	$	110,882	$	114,330	$	47,296	$	161,626
Conventional residential mortgage loans ^{(2) (4)}		-		40,833		148,892		189,725		2,749,008		2,938,733
Commercial loans:
Construction loans⁽⁴⁾		592		1,797		13,090		15,479		54,527		70,006
Commercial mortgage loans ⁽⁴⁾		973		6,426		32,979		40,378		1,793,903		1,834,281
Commercial and Industrial loans		11,445		844		20,903		33,192		2,254,403		2,287,595
Consumer loans:
Auto loans		14,224		2,784		9,071		26,079		1,198,284		1,224,363
Finance leases		5,528		1,608		879		8,015		450,366		458,381
Personal loans		3,556		2,426		1,445		7,427		380,133		387,560
Credit cards		1,085		810		1,340		3,235		324,414		327,649
Other consumer loans		1,183		1,134		3,003		5,320		138,687		144,007
Total loans held for investment	$	38,586	$	62,110	$	342,484	$	443,180	$	9,391,021	$	9,834,201

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. These balances include $54.1 million of residential mortgage loans insured by the FHA that were over 15 months delinquent.As of September 30, 2020, includes $17.7 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, conventional residential mortgage loans, commercial mortgage loans, and construction loans past due 30-59 days as of September 30, 2020 amounted to $6.1 million, $96.6 million, $6.7 million, and $0.5 million, respectively.

As of September 30, 2020
Florida region	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due ^{(1) (2)}		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans ⁽²⁾	$	-	$	-	$	250	$	250	$	926	$	1,176
Conventional residential mortgage loans ⁽³⁾		-		262		14,500		14,762		520,416		535,178
Commercial loans:
Construction loans		4,320		-		-		4,320		117,030		121,350
Commercial mortgage loans		1,195		354		-		1,549		384,447		385,996
Commercial and Industrial loans		1,535		644		993		3,172		936,076		939,248
Consumer loans:
Auto loans		600		576		-		1,176		20,341		21,517
Finance leases		-		-		-		-		-		-
Personal loans		-		-		-		-		133		133
Credit cards		-		-		-		-		-		-
Other consumer loans		196		-		473		669		7,807		8,476
Total loans held for investment	$	7,846	$	1,836	$	16,216	$	25,898	$	1,987,176	$	2,013,074

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans).It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. No residential mortgage loans insured by the FHA in the Florida region were over 15 months delinquent as of September 30, 2020.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, conventional residential mortgage loans, and commercial mortgage loans past due 30-59 days as of September 30, 2020 amounted to $0.2 million, $14.4 million, and $1.6 million, respectively.

As of September 30, 2020
Total	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due^{(1) (2)}		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans ^{(2) (3) (4)}	$	-	$	3,448	$	111,132	$	114,580	$	48,222	$	162,802
Conventional residential mortgage loans ^{(2) (4)}		-		41,095		163,392		204,487		3,269,424		3,473,911
Commercial loans:
Construction loans ⁽⁴⁾		4,912		1,797		13,090		19,799		171,557		191,356
Commercial mortgage loans ⁽⁴⁾		2,168		6,780		32,979		41,927		2,178,350		2,220,277
Commercial and Industrial loans		12,980		1,488		21,896		36,364		3,190,479		3,226,843
Consumer loans:
Auto loans		14,824		3,360		9,071		27,255		1,218,625		1,245,880
Finance leases		5,528		1,608		879		8,015		450,366		458,381
Personal loans		3,556		2,426		1,445		7,427		380,266		387,693
Credit cards		1,085		810		1,340		3,235		324,414		327,649
Other consumer loans		1,379		1,134		3,476		5,989		146,494		152,483
Total loans held for investment	$	46,432	$	63,946	$	358,700	$	469,078	$	11,378,197	$	11,847,275

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. These balances include $54.1 million of residential mortgage loans insured by the FHA that were over 15 months delinquent.As of September 30, 2020, includes $17.7 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, conventional residential mortgage loans, commercial mortgage loans, and construction loans past due 30-59 days as of September 30, 2020 amounted to $6.3 million, $111.0 million, $8.3 million, and $0.5 million, respectively.

The Corporation’s aging of the loan portfolio held for investment by portfolio classes as of December 31, 2019 is as follows:

As of December 31, 2019
Puerto Rico and Virgin Islands region	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due^{(1) (2)}		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans ^{(2) (3) (4)}	$	-	$	2,068	$	81,011	$	83,079	$	39,350	$	122,429
Conventional residential mortgage loans^{(2) (4)}		-		83,308		148,325		231,633		2,013,525		2,245,158
Commercial loans:
Construction loans ⁽⁴⁾		-		105		9,782		9,887		38,359		48,246
Commercial mortgage loans ⁽⁴⁾		-		2,681		42,298		44,979		1,034,921		1,079,900
Commercial and Industrial loans		1,454		105		25,519		27,078		1,364,335		1,391,413
Consumer loans:
Auto loans		35,163		8,267		12,057		55,487		1,048,873		1,104,360
Finance leases		6,501		1,402		1,354		9,257		405,275		414,532
Personal loans		4,008		2,084		1,523		7,615		266,478		274,093
Credit cards		2,896		2,096		4,411		9,403		282,887		292,290
Other consumer loans		3,870		1,575		5,016		10,461		145,395		155,856
Total loans held for investment	$	53,892	$	103,691	$	331,296	$	488,879	$	6,639,398	$	7,128,277

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. These balances include $37.9 million of residential mortgage loans insured by the FHA that were over 15 months delinquent.As of December 31, 2019, includes $35.6 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, conventional residential mortgage loans, commercial mortgage loans, and construction loans past due 30-59 days as of December 31, 2019 amounted to $6.7 million, $110.5 million, $6.0 million, and $0.1 million respectively.

As of December 31, 2019
Florida region	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due ^{(1) (2)}		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans ^{(2) (3)}	$	-	$	-	$	129	$	129	$	1,351	$	1,480
Conventional residential mortgage loans ^{(2) (3)}		-		2,193		13,291		15,484		549,222		564,706
Commercial loans:
Construction loans		-		-		-		-		63,071		63,071
Commercial mortgage loans⁽³⁾		-		870		-		870		363,816		364,686
Commercial and Industrial loans		331		-		315		646		838,817		839,463
Consumer loans:
Auto loans		1,270		272		163		1,705		28,790		30,495
Finance leases		-		-		-		-		-		-
Personal loans		-		-		5		5		777		782
Credit cards		-		-		-		-		-		-
Other consumer loans		147		2		511		660		8,585		9,245
Total loans held for investment	$	1,748	$	3,337	$	14,414	$	19,499	$	1,854,429	$	1,873,928

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards).It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. No residential mortgage loans insured by the FHA in the Florida region were over 15 months delinquent.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, conventional residential mortgage loans, and commercial mortgage loans past due 30-59 days as of December 31, 2019 amounted to $0.4 million, $5.8 million, and $0.6 million respectively.

As of December 31, 2019
Total	30-59 Days Past Due		60-89 Days Past Due		90 days or more Past Due ^{(1) (2)}		Total Past Due		Current		Total loans held for investment
(In thousands)
Residential mortgage loans, mainly secured by first mortgages:
FHA/VA government-guaranteed loans^{(2) (3) (4)}	$	-	$	2,068	$	81,140	$	83,208	$	40,701	$	123,909
Conventional residential mortgage loans^{(2) (4)}		-		85,501		161,616		247,117		2,562,747		2,809,864
Commercial loans:
Construction loans ⁽⁴⁾		-		105		9,782		9,887		101,430		111,317
Commercial mortgage loans ⁽⁴⁾		-		3,551		42,298		45,849		1,398,737		1,444,586
Commercial and Industrial loans		1,785		105		25,834		27,724		2,203,152		2,230,876
Consumer loans:
Auto loans		36,433		8,539		12,220		57,192		1,077,663		1,134,855
Finance leases		6,501		1,402		1,354		9,257		405,275		414,532
Personal loans		4,008		2,084		1,528		7,620		267,255		274,875
Credit cards		2,896		2,096		4,411		9,403		282,887		292,290
Other consumer loans		4,017		1,577		5,527		11,121		153,980		165,101
Total loans held for investment	$	55,640	$	107,028	$	345,710	$	508,378	$	8,493,827	$	9,002,205

Includes nonaccrual loans and accruing loans that were contractually delinquent 90 days or more (i.e., FHA/VA guaranteed loans and credit cards). Credit card loans continue to accrue finance charges and fees until charged-off at 180 days.It is the Corporation's policy to report delinquent residential mortgage loans insured by the FHA, guaranteed by the VA, and other government-insured loans as past-due loans 90 days and still accruing as opposed to nonaccrual loans since the principal repayment is insured. The Corporation continues accruing interest on these loans until they have passed the 15 months delinquency mark, taking into consideration the FHA interest curtailment process. These balances include $37.9 million of residential mortgage loans insured by the FHA that were over 15 months delinquent.As of December 31, 2019, includes $35.6 million of defaulted loans collateralizing GNMA securities for which the Corporation has an unconditional option (but not an obligation) to repurchase the defaulted loans.According to the Corporation's delinquency policy and consistent with the instructions for the preparation of the Consolidated Financial Statements for Bank Holding Companies (FR Y-9C) required by the Federal Reserve Board, residential mortgage, commercial mortgage, and construction loans are considered past due when the borrower is in arrears on two or more monthly payments. FHA/VA government-guaranteed loans, other residential mortgage loans, commercial mortgage loans, and construction loans past due 30-59 days as of December 31, 2019 amounted to $7.1 million, $116.2 million, $6.6 million, and $0.1 million respectively.

Credit Quality Indicators:

The Corporation categorizes loans into risk categories based on relevant information about the ability of the borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes non-homogeneous loans, such as commercial mortgage, commercial and industrial, and construction loans individually to classify the loans’ credit risk. As mentioned above, the Corporation periodically reviews its commercial and construction loan classifications to evaluate if they are properly classified. The frequency of these reviews will depend on the amount of the aggregate outstanding debt, and the risk rating classification of the obligor. In addition, during the renewal and annual review process of applicable credit facilities, the Corporation evaluates the corresponding loan grades. The Corporation uses the same definition for risk ratings as those described for Puerto Rico municipal bonds accounted for as held-to-maturity securities, as discussed in Note 5 – Investment Securities, above.

For residential mortgage and consumer loans, the Corporation also evaluates credit quality based on credit scores and loan-to-value ratios, if applicable.

Based on the most recent analysis performed, the amortized cost of commercial and construction loans by portfolio classes and by origination year based on the internal credit-risk category as of September 30, 2020 and the amortized cost of commercial and construction loans by portfolio classes based on the internal credit-risk category as of December 31, 2019 was as follows:

	As of September 30, 2020
Puerto Rico and Virgin Islands region	Term Loans																As of December 31, 2019
Puerto Rico and Virgin Islands region	Amortized Cost Basis by Origination Year																As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total

CONSTRUCTION
Risk Ratings:
Pass	$	11,715	$	19,571	$	1,814	$	15,326	$	1,923	$	3,304	$	-	$	53,653	$	35,680
Criticized:
Special Mention		-		780		-		-		-		-		-		780		-
Substandard		-		886		4,976		-		5,269		4,442		-		15,573		12,566
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total construction loans	$	11,715	$	21,237	$	6,790	$	15,326	$	7,192	$	7,746	$	-	$	70,006	$	48,246

COMMERCIAL MORTGAGE
Risk Ratings:
Pass	$	116,046	$	286,759	$	251,885	$	213,998	$	172,380	$	468,307	$	13	$	1,509,388	$	891,298
Criticized:
Special Mention		-		82,450		53,613		119,255		8,764		11,362		-		275,444		13,080
Substandard		192		97		-		-		673		48,487		-		49,449		175,522
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total commercial mortgage loans	$	116,238	$	369,306	$	305,498	$	333,253	$	181,817	$	528,156	$	13	$	1,834,281	$	1,079,900

COMMERCIAL AND INDUSTRIAL
Risk Ratings:
Pass	$	583,697	$	421,939	$	237,053	$	223,065	$	110,127	$	264,373	$	336,286	$	2,176,540	$	1,321,804
Criticized:
Special Mention		-		-		622		1,753		83		29,537		28,288		60,283		39,327
Substandard		780		1,291		2,722		18,474		1,603		20,363		5,539		50,772		27,265
Doubtful		-		-		-		-		-		-		-		-		2,768
Loss		-		-		-		-		-		-		-		-		249
Total commercial and industrial loans	$	584,477	$	423,230	$	240,397	$	243,292	$	111,813	$	314,273	$	370,113	$	2,287,595	$	1,391,413

					As of September 30, 2020
					Term Loans												As of December 31, 2019
Florida region					Amortized Cost Basis by Origination Year												As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total

CONSTRUCTION
Risk Ratings:
Pass	$	58,285	$	16,052	$	46,581	$	-	$	-	$	-	$	432	$	121,350	$	63,071
Criticized:
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total construction loans	$	58,285	$	16,052	$	46,581	$	-	$	-	$	-	$	432	$	121,350	$	63,071

COMMERCIAL MORTGAGE
Risk Ratings:
Pass	$	32,808	$	81,578	$	42,980	$	63,317	$	29,515	$	29,028	$	24,503	$	303,729	$	364,370
Criticized:
Special Mention		-		30,780		6,782		15,181		10,764		17,234		1,200		81,941		-
Substandard		-		-		-		-		-		326		-		326		316
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total commercial mortgage loans	$	32,808	$	112,358	$	49,762	$	78,498	$	40,279	$	46,588	$	25,703	$	385,996	$	364,686

COMMERCIAL AND INDUSTRIAL
Risk Ratings:
Pass	$	174,368	$	265,819	$	97,987	$	90,122	$	11,481	$	54,088	$	118,274	$	812,139	$	837,697
Criticized:
Special Mention		5,736		61,703		12,083		6,353		-		-		-		85,875		-
Substandard		38,759		-		-		-		-		1,729		746		41,234		1,766
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total commercial and industrial loans	$	218,863	$	327,522	$	110,070	$	96,475	$	11,481	$	55,817	$	119,020	$	939,248	$	839,463

	As of September 30, 2020
Total	Term Loans																As of December 31, 2019
	Amortized Cost Basis by Origination Year																As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total

CONSTRUCTION
Risk Ratings:
Pass	$	70,000	$	35,623	$	48,395	$	15,326	$	1,923	$	3,304	$	432	$	175,003	$	98,751
Criticized:
Special Mention		-		780		-		-		-		-		-		780		-
Substandard		-		886		4,976		-		5,269		4,442		-		15,573		12,566
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total construction loans	$	70,000	$	37,289	$	53,371	$	15,326	$	7,192	$	7,746	$	432	$	191,356	$	111,317

COMMERCIAL MORTGAGE
Risk Ratings:
Pass	$	148,854	$	368,337	$	294,865	$	277,315	$	201,895	$	497,335	$	24,516	$	1,813,117	$	1,255,668
Criticized:
Special Mention		-		113,230		60,395		134,436		19,528		28,596		1,200		357,385		13,080
Substandard		192		97		-		-		673		48,813		-		49,775		175,838
Doubtful		-		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-		-
Total commercial mortgage loans	$	149,046	$	481,664	$	355,260	$	411,751	$	222,096	$	574,744	$	25,716	$	2,220,277	$	1,444,586

COMMERCIAL AND INDUSTRIAL
Risk Ratings:
Pass	$	758,065	$	687,758	$	335,040	$	313,187	$	121,608	$	318,461	$	454,560	$	2,988,679	$	2,159,501
Criticized:
Special Mention		5,736		61,703		12,705		8,106		83		29,537		28,288		146,158		39,327
Substandard		39,539		1,291		2,722		18,474		1,603		22,092		6,285		92,006		29,031
Doubtful		-		-		-		-		-		-		-		-		2,768
Loss		-		-		-		-		-		-		-		-		249
Total commercial and industrial loans	$	803,340	$	750,752	$	350,467	$	339,767	$	123,294	$	370,090	$	489,133	$	3,226,843	$	2,230,876

The following table presents the amortized cost of residential mortgage loans by origination year based on the original loan-to-value-ratio (LTV) and original credit scores as of September 30, 2020 and the amortized cost of residential mortgage loans by original LTV and original credit scores as of December 31, 2019:

	As of September 30, 2020																As of December 31, 2019
	Term Loans
RESIDENTIAL MORTGAGES	Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total


Puerto Rico and Virgin Islands region:
FHA/VA government-guaranteed loans	$	235	$	2,124	$	2,900	$	4,987	$	10,406	$	140,974	$	-	$	161,626	$	122,429
Conventional residential mortgage loans:
Original LTV
Less than or equal to 90 percent		26,931		64,816		104,823		70,490		97,267		1,992,451		-		2,356,778		1,684,340
Greater than 90 percent but less than
or equal to 100 percent		3,514		7,107		8,068		3,956		14,838		439,463		-		476,946		460,879
Greater than 100 percent		-		943		5,480		3,116		7,416		88,054		-		105,009		99,939
Total residential mortgages in
Puerto Rico and Virgin Islands region	$	30,680	$	74,990	$	121,271	$	82,549	$	129,927	$	2,660,942	$	-	$	3,100,359	$	2,367,587

Florida region:
FHA/VA government-guaranteed loans	$	-	$	-	$	-	$	287	$	-	$	889	$	-	$	1,176	$	1,480
Conventional residential mortgage loans:
Original LTV
Less than or equal to 90 percent		22,317		53,217		63,939		92,677		85,259		198,874		-		516,283		549,850
Greater than 90 percent but less than
or equal to 100 percent		6,108		2,041		2,956		4,416		2,336		1,038		-		18,895		14,796
Greater than 100 percent		-		-		-		-		-		-		-		-		60
Total residential mortgages in Florida region	$	28,425	$	55,258	$	66,895	$	97,380	$	87,595	$	200,801	$	-	$	536,354	$	566,186

Total:
FHA/VA government-guaranteed loans	$	235	$	2,124	$	2,900	$	5,274	$	10,406	$	141,863	$	-	$	162,802	$	123,909
Conventional residential mortgage loans:
Original LTV
Less than or equal to 90 percent		49,248		118,033		168,762		163,167		182,526		2,191,325		-		2,873,061		2,234,190
Greater than 90 percent but less than
or equal to 100 percent		9,622		9,148		11,024		8,372		17,174		440,501		-		495,841		475,675
Greater than 100 percent		-		943		5,480		3,116		7,416		88,054		-		105,009		99,999
Total residential mortgages	$	59,105	$	130,248	$	188,166	$	179,929	$	217,522	$	2,861,743	$	-	$	3,636,713	$	2,933,773

	As of September 30, 2020																As of December 31, 2019
	Term Loans
RESIDENTIAL MORTGAGES	Amortized Cost Basis by Origination Year
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total


Puerto Rico and Virgin Islands region:
FHA/VA government-guaranteed loans	$	235	$	2,124	$	2,900	$	4,987	$	10,406	$	140,974	$	-	$	161,626	$	122,429
Conventional residential mortgage loans:
Original FICO Score
Less than 620		-		154		466		55		75		321,212		-		321,962		286,754
Greater than or equal to 620
and less than 680		1,873		3,093		8,052		7,703		8,526		494,428		-		523,675		416,766
Greater than or equal to 680
and less than 740		11,013		25,947		42,268		24,329		39,764		708,342		-		851,663		626,291
Greater than or equal to 740		17,559		43,672		67,585		45,475		71,156		995,986		-		1,241,433		915,347
Total residential mortgages in
Puerto Rico and Virgin Islands region	$	30,680	$	74,990	$	121,271	$	82,549	$	129,927	$	2,660,942	$	-	$	3,100,359	$	2,367,587

Florida region:
FHA/VA government-guaranteed loans	$	-	$	-	$	-	$	287	$	-	$	889	$	-	$	1,176	$	1,480
Conventional residential mortgage loans:
Original FICO Score
Less than 620		-		-		2,518		-		-		827		-		3,345		3,485
Greater than or equal to 620
and less than 680		2,789		5,087		3,643		9,519		11,497		17,311		-		49,846		51,164
Greater than or equal to 680
and less than 740		7,460		16,417		14,600		30,645		28,015		43,834		-		140,971		151,544
Greater than or equal to 740		18,176		33,754		46,134		56,929		48,083		137,940		-		341,016		358,513
Total residential mortgages in Florida region	$	28,425	$	55,258	$	66,895	$	97,380	$	87,595	$	200,801	$	-	$	536,354	$	566,186

Total:
FHA/VA government-guaranteed loans	$	235	$	2,124	$	2,900	$	5,274	$	10,406	$	141,863	$	-	$	162,802	$	123,909
Conventional residential mortgage loans:
Original FICO Score
Less than 620		-		154		2,984		55		75		322,039		-		325,307		290,239
Greater than or equal to 620
and less than 680		4,662		8,180		11,695		17,222		20,023		511,739		-		573,521		467,930
Greater than or equal to 680
and less than 740		18,473		42,364		56,868		54,974		67,779		752,176		-		992,634		777,835
Greater than or equal to 740		35,735		77,426		113,719		102,404		119,239		1,133,926		-		1,582,449		1,273,860
Total residential mortgages	$	59,105	$	130,248	$	188,166	$	179,929	$	217,522	$	2,861,743	$	-	$	3,636,713	$	2,933,773

The following tables present the amortized cost of consumer loans by origination year based on original credit scores as of September 30, 2020 and consumer loans based on original credit scores as of December 31, 2019:

CONSUMER	As of September 30, 2020
	Term Loans																As of December 31, 2019
Puerto Rico and Virgin Islands region	Amortized Cost Basis by Origination Year																As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total


Auto loans
Original FICO score
Less than 620	$	31,391	$	50,401	$	25,674	$	11,707	$	8,184	$	5,751	$	-	$	133,108	$	126,540
Greater than or equal to 620
and less than 680		98,020		150,569		95,019		41,543		20,461		14,333		-		419,945		388,890
Greater than or equal to 680
and less than 740		97,642		131,719		79,695		36,045		19,964		9,589		-		374,654		333,734
Greater than or equal to 740		88,812		101,343		52,210		28,757		18,061		7,473		-		296,656		255,196
Total auto loans	$	315,865	$	434,032	$	252,598	$	118,052	$	66,670	$	37,146	$	-	$	1,224,363	$	1,104,360

Finance leases
Original FICO score
Less than 620	$	2,254	$	5,685	$	4,471	$	1,964	$	574	$	370	$	-	$	15,318	$	15,852
Greater than or equal to 620
and less than 680		21,109		37,767		29,544		13,099		5,311		3,072		-		109,902		100,438
Greater than or equal to 680
and less than 740		38,443		61,025		49,789		19,918		11,924		5,531		-		186,630		170,034
Greater than or equal to 740		34,226		51,664		34,962		10,009		11,071		4,599		-		146,531		128,208
Total finance leases	$	96,032	$	156,141	$	118,766	$	44,990	$	28,880	$	13,572	$	-	$	458,381	$	414,532

Personal loans
Original FICO score
Less than 620	$	6,726	$	2,969	$	2,325	$	1,506	$	1,138	$	2,241	$	-	$	16,905	$	8,197
Greater than or equal to 620
and less than 680		6,829		26,279		10,797		4,296		1,614		1,252		-		51,067		52,712
Greater than or equal to 680
and less than 740		23,047		70,853		33,440		17,803		10,158		6,359		-		161,660		114,147
Greater than or equal to 740		19,862		60,901		34,180		18,082		10,166		5,638		-		148,829		98,668
Unscorable		1,254		2,932		1,971		1,064		721		1,157		-		9,099		369
Total personal loans	$	57,718	$	163,934	$	82,713	$	42,751	$	23,797	$	16,647	$	-	$	387,560	$	274,093

Credit cards
Original FICO score
Less than 620	$	-	$	-	$	-	$	-	$	-	$	-	$	13,350	$	13,350	$	11,247
Greater than or equal to 620
and less than 680		-		-		-		-		-		-		61,980		61,980		57,643
Greater than or equal to 680
and less than 740		-		-		-		-		-		-		142,009		142,009		126,977
Greater than or equal to 740		-		-		-		-		-		-		107,539		107,539		96,423
Unscorable		-		-		-		-		-		-		2,771		2,771		-
Total credit cards	$	-	$	-	$	-	$	-	$	-	$	-	$	327,649	$	327,649	$	292,290

Other consumer loans
Original FICO score
Less than 620	$	5,252	$	11,803	$	3,162	$	1,943	$	755	$	426	$	3,239	$	26,580	$	28,251
Greater than or equal to 620
and less than 680		13,756		27,697		8,034		4,193		1,767		6,343		1,598		63,388		68,727
Greater than or equal to 680
and less than 740		9,571		15,438		5,295		2,468		944		2,326		2,754		38,796		41,914
Greater than or equal to 740		2,270		4,139		1,331		691		281		440		1,422		10,574		13,359
Unscorable		-		-		-		-		-		1,785		2,884		4,669		3,605
Total other consumer loans	$	30,849	$	59,077	$	17,822	$	9,295	$	3,747	$	11,320	$	11,897	$	144,007	$	155,856

Total consumer loans in Puerto Rico and Virgin Islands region	$	500,464	$	813,184	$	471,899	$	215,088	$	123,094	$	78,685	$	339,546	$	2,541,960	$	2,241,131

CONSUMER	As of September 30, 2020
	Term Loans																As of December 31, 2019
Florida region	Amortized Cost Basis by Origination Year																As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total


Auto loans
Original FICO score
Less than 620	$	-	$	37	$	985	$	835	$	708	$	155	$	-	$	2,720	$	3,857
Greater than or equal to 620
and less than 680		-		573		4,480		3,491		1,624		421		-		10,589		15,052
Greater than or equal to 680
and less than 740		-		440		3,237		1,585		601		150		-		6,013		8,590
Greater than or equal to 740		-		280		1,509		287		101		18		-		2,195		2,996
Total auto loans	$	-	$	1,330	$	10,211	$	6,198	$	3,034	$	744	$	-	$	21,517	$	30,495

Finance leases
Original FICO score
Less than 620	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Greater than or equal to 620
and less than 680		-		-		-		-		-		-		-		-		-
Greater than or equal to 680
and less than 740		-		-		-		-		-		-		-		-		-
Greater than or equal to 740		-		-		-		-		-		-		-		-		-
Total finance leases	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Personal loans
Original FICO score
Less than 620	$	-	$	7	$	-	$	-	$	-	$	-	$	-	$	7	$	593
Greater than or equal to 620
and less than 680		8		-		-		-		-		-		-		8		-
Greater than or equal to 680
and less than 740		-		44		-		-		-		-		-		44		85
Greater than or equal to 740		4		-		-		70		-		-		-		74		71
Unscorable		-		-		-		-		-		-		-		-		33
Total personal loans	$	12	$	51	$	-	$	70	$	-	$	-	$	-	$	133	$	782

Credit cards
Original FICO score
Less than 620	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Greater than or equal to 620
and less than 680		-		-		-		-		-		-		-		-		-
Greater than or equal to 680
and less than 740		-		-		-		-		-		-		-		-		-
Greater than or equal to 740		-		-		-		-		-		-		-		-		-
Total credit cards	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other consumer loans
Original FICO score
Less than 620	$	132	$	-	$	-	$	-	$	-	$	-	$	61	$	193	$	83
Greater than or equal to 620
and less than 680		190		-		-		109		28		617		92		1,036		874
Greater than or equal to 680
and less than 740		179		-		42		50		325		1,189		507		2,292		2,559
Greater than or equal to 740		-		-		-		25		221		2,674		2,035		4,955		5,573
Unscorable		-		-		-		-		-		-		-		-		156
Total other consumer loans	$	501	$	-	$	42	$	184	$	574	$	4,480	$	2,695	$	8,476	$	9,245

Total consumer loans in Florida region	$	513	$	1,381	$	10,253	$	6,452	$	3,608	$	5,224	$	2,695	$	30,126	$	40,522

CONSUMER	As of September 30, 2020
	Term Loans																As of December 31, 2019
Total	Amortized Cost Basis by Origination Year																As of December 31, 2019
(In thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total		Total


Auto loans
Original FICO score
Less than 620	$	31,391	$	50,438	$	26,659	$	12,542	$	8,892	$	5,906	$	-	$	135,828	$	130,397
Greater than or equal to 620
and less than 680		98,020		151,142		99,499		45,034		22,085		14,754		-		430,534		403,942
Greater than or equal to 680
and less than 740		97,642		132,159		82,932		37,630		20,565		9,739		-		380,667		342,324
Greater than or equal to 740		88,812		101,623		53,719		29,044		18,162		7,491		-		298,851		258,192
Total auto loans	$	315,865	$	435,362	$	262,809	$	124,250	$	69,704	$	37,890	$	-	$	1,245,880	$	1,134,855

Finance leases
Original FICO score
Less than 620	$	2,254	$	5,685	$	4,471	$	1,964	$	574	$	370	$	-	$	15,318	$	15,852
Greater than or equal to 620
and less than 680		21,109		37,767		29,544		13,099		5,311		3,072		-		109,902		100,438
Greater than or equal to 680
and less than 740		38,443		61,025		49,789		19,918		11,924		5,531		-		186,630		170,034
Greater than or equal to 740		34,226		51,664		34,962		10,009		11,071		4,599		-		146,531		128,208
Total finance leases	$	96,032	$	156,141	$	118,766	$	44,990	$	28,880	$	13,572	$	-	$	458,381	$	414,532

Personal loans
Original FICO score
Less than 620	$	6,726	$	2,976	$	2,325	$	1,506	$	1,138	$	2,241	$	-	$	16,912	$	8,790
Greater than or equal to 620
and less than 680		6,837		26,279		10,797		4,296		1,614		1,252		-		51,075		52,712
Greater than or equal to 680
and less than 740		23,047		70,897		33,440		17,803		10,158		6,359		-		161,704		114,232
Greater than or equal to 740		19,866		60,901		34,180		18,152		10,166		5,638		-		148,903		98,739
Unscorable		1,254		2,932		1,971		1,064		721		1,157		-		9,099		402
Total personal loans	$	57,730	$	163,985	$	82,713	$	42,821	$	23,797	$	16,647	$	-	$	387,693	$	274,875

Credit cards
Original FICO score
Less than 620	$	-	$	-	$	-	$	-	$	-	$	-	$	13,350	$	13,350	$	11,247
Greater than or equal to 620
and less than 680		-		-		-		-		-		-		61,980		61,980		57,643
Greater than or equal to 680
and less than 740		-		-		-		-		-		-		142,009		142,009		126,977
Greater than or equal to 740		-		-		-		-		-		-		107,539		107,539		96,423
Unscorable		-		-		-		-		-		-		2,771		2,771		-
Total credit cards	$	-	$	-	$	-	$	-	$	-	$	-	$	327,649	$	327,649	$	292,290

Other consumer loans
Original FICO score
Less than 620	$	5,384	$	11,803	$	3,162	$	1,943	$	755	$	426	$	3,300	$	26,773	$	28,334
Greater than or equal to 620
and less than 680		13,946		27,697		8,034		4,302		1,795		6,960		1,690		64,424		69,601
Greater than or equal to 680
and less than 740		9,750		15,438		5,337		2,518		1,269		3,515		3,261		41,088		44,473
Greater than or equal to 740		2,270		4,139		1,331		716		502		3,114		3,457		15,529		18,932
Unscorable		-		-		-		-		-		1,785		2,884		4,669		3,761
Total other consumer loans	$	31,350	$	59,077	$	17,864	$	9,479	$	4,321	$	15,800	$	14,592	$	152,483	$	165,101

Total consumer loans	$	500,977	$	814,565	$	482,152	$	221,540	$	126,702	$	83,909	$	342,241	$	2,572,086	$	2,281,653

The following tables present information about collateral dependent loans that were individually evaluated for purposes of determining the ACL as of September 30, 2020:



		Collateral Dependent Loans - With Specific Allowance			Collateral Dependent Loans - With No Related Specific Allowance		Collateral Dependent Loans - Total
Puerto Rico and Virgin Islands region	Amortized Cost ⁽¹⁾		Related Specific Allowance		Amortized Cost ⁽¹⁾		Amortized Cost ⁽¹⁾		Related Specific Allowance
(In thousands)
Residential mortgage loans:
FHA/VA government-guaranteed loans	$	-	$	-	$	-	$	-	$	-
Conventional residential mortgage loans		99,839		9,935		9,750		109,589		9,935
Commercial loans:
Construction loans		6,036		491		2,686		8,722		491
Commercial mortgage loans		17,978		2,572		39,005		56,983		2,572
Commercial and Industrial loans		30,405		6,475		16,600		47,005		6,475
Consumer loans:
Auto loans		-		-		-		-		-
Finance leases		-		-		-		-		-
Personal loans		146		5		-		146		5
Credit cards		-		-		-		-		-
Other consumer loans		983		85		-		983		85
	$	155,387	$	19,563	$	68,041	$	223,428	$	19,563

Excludes accrued interest receivable.

		Collateral Dependent Loans - With Specific Allowance			Collateral Dependent Loans - With No Related Specific Allowance		Collateral Dependent Loans - Total
Florida region	Amortized Cost ⁽¹⁾		Related Specific Allowance		Amortized Cost ⁽¹⁾		Amortized Cost ⁽¹⁾		Related Specific Allowance
(In thousands)
Residential mortgage loans:
FHA/VA government-guaranteed loans	$	-	$	-	$	-	$	-	$	-
Conventional residential mortgage loans		9,376		1,327		-		9,376		1,327
Commercial loans:
Construction loans		-		-		-		-		-
Commercial mortgage loans		-		-		5,211		5,211		-
Commercial and Industrial loans		746		316		247		993		316
Consumer loans:
Auto loans		-		-		-		-		-
Finance leases		-		-		-		-		-
Personal loans		-		-		-		-		-
Credit cards		-		-		-		-		-
Other consumer loans		248		34		-		248		34
	$	10,370	$	1,677	$	5,458	$	15,828	$	1,677

Excludes accrued interest receivable.

		Collateral Dependent Loans - With Specific Allowance			Collateral Dependent Loans - With No Related Specific Allowance		Collateral Dependent Loans - Total
Total	Amortized Cost ⁽¹⁾		Related Specific Allowance		Amortized Cost ⁽¹⁾		Amortized Cost ⁽¹⁾		Related Specific Allowance
(In thousands)
Residential mortgage loans:
FHA/VA government-guaranteed loans	$	-	$	-	$	-	$	-	$	-
Conventional residential mortgage loans		109,215		11,262		9,750		118,965		11,262
Commercial loans:
Construction loans		6,036		491		2,686		8,722		491
Commercial mortgage loans		17,978		2,572		44,216		62,194		2,572
Commercial and Industrial loans		31,151		6,791		16,847		47,998		6,791
Consumer loans:
Auto loans		-		-		-		-		-
Finance leases		-		-		-		-		-
Personal loans		146		5		-		146		5
Credit cards		-		-		-		-		-
Other consumer loans		1,231		119		-		1,231		119
	$	165,757	$	21,240	$	73,499	$	239,256	$	21,240

Excludes accrued interest receivable. The underlying collateral for residential mortgage and consumer collateral dependent loans consisted of single-family residential properties, and for commercial and construction loans consisted primarily of office buildings, multifamily residential properties, and retail establishments. The weighted-average loan-to-value coverage for collateral dependent loans as of September 30, 2020 was 84%. There were no significant changes in the extent to which collateral secures the Corporation’s collateral dependent financial assets during the third quarter and first nine months of 2020.

PCD and PCI Loans

Prior to the adoption of ASC 326, the Corporation accounted for PCI loans and income recognition thereunder in accordance with ASC Subtopic 310-30. PCI loans are loans that as of the date of their acquisition have experienced deterioration in credit quality between origination and acquisition and for which it was probable at acquisition that not all contractually required payments would be collected. Following the adoption of ASC 326 on January 1, 2020, the Corporation analyzes acquired loans for more-than-insignificant deterioration in credit quality since their origination. Such loans are classified as PCD loans. Please also see Note 1 – Basis of Presentation and Significant Accounting Policies, above, for more information concerning the Corporation’s accounting for PCD loans.

Prior to the adoption of ASC 326, the Corporation identified the amount by which the undiscounted expected future cash flows on PCI loans exceeded the estimated fair value of the loan on the date of acquisition as the “accretable yield,” representing the amount of estimated future interest income on the loan. The amount of accretable yield was re-measured at each financial reporting date, representing the difference between the remaining undiscounted expected cash flows and the current carrying value of the PCI loan. Following the adoption of ASC 326, the Corporation accounts for interest income on PCD loans using the interest method, whereby any purchase non-credit discounts or premiums are accreted or amortized into interest income as an adjustment of the loan’s yield.

Upon the adoption of ASC 326, acquired loans classified as PCD are recorded at an initial amortized cost, which is comprised of the purchase price of the loans (or initial fair value) and the initial ACL determined for the loans, which represents the fair value credit discount, and any resulting premium or discount related to factors other than credit.

The following table reconciles the difference between the purchase price of the PCD loans acquired in the BSPR acquisition and the par value:

(In thousands)
	Residential Mortgage		Construction		Commercial Mortgage		Commercial & Industrial		Consumer		Total
	Residential Mortgage		Construction		Commercial Mortgage		Commercial & Industrial		Consumer		Total
Purchase price of loans at acquisition (initial fair value)	$	322,561	$	-	$	180,950	$	194,572	$	54,959	$	753,042
Allowance for credit losses at acquisition		12,739		-		9,723		1,830		4,452		28,744
Non-credit discount (premium) at acquisition		2,859		-		2,783		(95)		(1,284)		4,263
Par value of acquired loans at acquisition	$	338,159	$	-	$	193,456	$	196,307	$	58,127	$	786,049

Refer to Note 1 - Basis of Presentation and Significant Accounting Policies, above, for additional information about the description of the elements considered by the Corporation to determine the value of PCD loans acquired as part of the BSPR acquisition and the methodologies used to determine the initial ACL of these PCD loans.

Purchases and Sales of Loans

During the first nine months of 2020, the Corporation purchased $0.8 million of residential mortgage loans as part of a strategic program to purchase residential mortgage loans from mortgage bankers in Puerto Rico, compared to purchases of $13.4 million for the first nine months of 2019. In general, the loans purchased from mortgage bankers were conforming residential mortgage loans. Purchases of conforming residential mortgage loans provide the Corporation the flexibility to retain or sell the loans, including through securitization transactions, depending upon the Corporation’s interest rate risk management strategies. When the Corporation sells such loans, it generally keeps the right to service the loans.

In the ordinary course of business, the Corporation sells residential mortgage loans (originated or purchased) to GNMA and GSEs, such as FNMA and FHLMC, which generally securitize the transferred loans into MBS for sale into the secondary market. During the first nine months of 2020, the Corporation sold $156.8 million of FHA/VA mortgage loans to GNMA, which packaged them into MBS, compared to sales of $173.4 million for the first nine months of 2019. Also, during the first nine months of 2020, the Corporation sold approximately $162.6 million of performing residential mortgage loans to FNMA and FHLMC, compared to sales of $93.8 million during the first nine months of 2019. The Corporation’s continuing involvement with the loans that it sells consists primarily of servicing the loans. In addition, the Corporation agrees to repurchase loans if it breaches any of the representations and warranties included in the sale agreement. These representations and warranties are consistent with the GSEs’ selling and servicing guidelines (i.e., ensuring that the mortgage was properly underwritten according to established guidelines).

For loans sold to GNMA, the Corporation holds an option to repurchase individual delinquent loans issued on or after January 1, 2003 when the borrower fails to make any payment for three consecutive months. This option gives the Corporation the ability, but not the obligation, to repurchase the delinquent loans at par without prior authorization from GNMA.

Under ASC Topic 860, “Transfer and Servicing,” once the Corporation has the unilateral ability to repurchase the delinquent loan, it is considered to have regained effective control over the loan and is required to recognize the loan and a corresponding repurchase liability on the balance sheet regardless of the Corporation’s intent to repurchase the loan. As of September 30, 2020 and December 31, 2019, rebooked GNMA delinquent loans that were included in the residential mortgage loan portfolio amounted to $17.7 million and $35.6 million, respectively.

During the first nine months of 2020 and 2019, the Corporation repurchased, pursuant to the aforementioned repurchase option, $55.0 million and $22.5 million, respectively, of loans previously sold to GNMA. The principal balance of these loans is fully guaranteed and the risk of loss related to the repurchased loans is generally limited to the difference between the delinquent interest payment advanced to GNMA, which is computed at the loan’s interest rate, and the interest payments reimbursed by FHA, which are computed at a pre-determined debenture rate. Repurchases of GNMA loans allow the Corporation, among other things, to maintain acceptable delinquency rates on outstanding GNMA pools and remain as a seller and servicer in good standing with GNMA. On May 14, 2020, in response to the national emergency declared by the U.S. President related to the COVID-19 pandemic, GNMA announced a temporary relief that excludes any new borrower delinquencies, occurring on or after April 2020, from the calculation of delinquency and default ratios established in the GNMA MBS guide. This exclusion will be extended automatically to issuers that were compliant with GNMA delinquency rate thresholds as reflected by their April 2020 investor accounting report, reflecting March 2020 servicing data. The exemptions and delinquent loan exclusions will automatically expire on December 31, 2020, unless earlier rescinded or extended by GNMA, or the end of the national emergency, whichever comes earlier. Historically, losses for violations of representations and warranties, and on optional repurchases of GNMA delinquent loans, have been immaterial and no provision has been made at the time of sale.

Loan sales to FNMA and FHLMC are without recourse in relation to the future performance of the loans. The Corporation repurchased at par loans that it previously sold to FNMA and FHLMC in the amount of $42 thousand and $64 thousand during the first nine months of 2020 and 2019, respectively. The Corporation’s risk of loss with respect to these loans is also minimal as these repurchased loans are generally performing loans with documentation deficiencies.

In addition, during the first nine months of 2019, the Corporation sold $4.8 million in nonaccrual commercial loans held for sale and three commercial and industrial loan participations in Puerto Rico totaling $48.2 million.

Loan Portfolio Concentration

The Corporation’s primary lending area is Puerto Rico. The Corporation’s banking subsidiary, FirstBank, also lends in the USVI and BVI markets and in the United States (principally in the state of Florida). Of the total gross loans held for investment of $11.8 billion as of September 30, 2020, credit risk concentration was approximately 79% in Puerto Rico, 17% in the U.S., and 4% in the USVI and BVI.

As of September 30, 2020, the Corporation had $203.3 million outstanding in loans extended to the Puerto Rico government, its municipalities and public corporations, compared to $57.7 million as of December 31, 2019. Approximately $107.7 million of the outstanding loans as of September 30, 2020 consisted of loans extended to municipalities in Puerto Rico that are supported by assigned property tax revenues, and $38.6 million of municipal special obligation bonds. The vast majority of revenues of the municipalities included in the Corporation’s loan portfolio are independent of the Puerto Rico central government. These municipalities are required by law to levy special property taxes in such amounts as are required for the payment of all of their respective general obligation bonds and notes. Late in 2015, the GDB and the Municipal Revenue Collection Center (“CRIM”) signed and perfected a deed of trust. Through this deed, the Puerto Rico Fiscal Agency and Financial Advisory Authority, as fiduciary, is bound to keep the CRIM funds separate from any other deposits and must distribute the funds pursuant to applicable law. The CRIM funds are deposited at another commercial depository financial institution in Puerto Rico. In addition to loans extended to municipalities, the Corporation’s exposure to the Puerto Rico government as of September 30, 2020 included $13.8 million in loans granted to an affiliate of PREPA and $43.2 million in loans to an agency of the Puerto Rico central government.

In addition, as of September 30, 2020, the Corporation had $100.8 million in exposure to residential mortgage loans that are guaranteed by the PRHFA, compared to $106.9 million as of December 31, 2019. Residential mortgage loans guaranteed by the PRHFA are secured by the underlying properties and the guarantees serve to cover shortfalls in collateral in the event of a borrower default. The Puerto Rico government guarantees up to $75 million of the principal for all loans under the mortgage loan insurance program. According to the most recently-released audited financial statements of the PRHFA, as of June 30, 2016, the PRHFA’s mortgage loans insurance program covered loans in an aggregate of approximately $576 million. The regulations adopted by the PRHFA require the establishment of adequate reserves to guarantee the solvency of the mortgage loan insurance fund. As of June 30, 2016, the most recent date as of which information is available, the PRHFA had a restricted net position for such purposes of approximately $77.4 million.

The Corporation also has credit exposure to USVI government entities. As of September 30, 2020, the Corporation had $64.0 million in loans to USVI government instrumentalities and public corporations, compared to $64.1 million as of December 31, 2019. Of the amount outstanding as of September 30, 2020, public corporations of the USVI owed approximately $40.8 million and an independent instrumentality of the USVI government owed approximately $23.2 million. As of September 30, 2020, all loans were currently performing and up to date on principal and interest payments.

The Corporation cannot predict at this time the ultimate effect on the Puerto Rico economy, the Corporation’s clients, and the Corporation’s financial condition and results of operations of the financial problems of the Commonwealth of Puerto Rico, which may be exacerbated as a result of the COVID-19 pandemic, the uncertainty about the ultimate outcomes of the debt restructuring process, and the various legislative and other measures adopted and to be adopted by the Puerto Rico government and the PROMESA oversight board in response to such fiscal situation.

Troubled Debt Restructurings

The Corporation provides homeownership preservation assistance to its customers through a loss mitigation program in Puerto Rico that is similar to the U.S. government’s Home Affordable Modification Program guidelines. Depending upon the nature of a borrower’s financial condition, restructurings or loan modifications through this program, as well as other restructurings of individual commercial, commercial mortgage, construction, and residential mortgage loans, fit the definition of a TDR. A restructuring of a debt constitutes a TDR if the creditor, for economic or legal reasons related to the debtor’s financial difficulties, grants a concession to the debtor that it would not otherwise consider. Modifications involve changes in one or more of the loan terms that bring a defaulted loan current and provide sustainable affordability. Changes may include, among others, the extension of the maturity of the loan and modifications of the loan rate. As of September 30, 2020, the Corporation’s total TDR loans held for investment of $488.6 million consisted of $312.2 million of residential mortgage loans, $83.5 million of commercial and industrial loans, $67.6 million of commercial mortgage loans, $3.5 million of construction loans, and $21.8 million of consumer loans. The Corporation has committed to lend additional amount on these loans totaling up to $5.0 million.

The Corporation’s loss mitigation programs for residential mortgage and consumer loans can provide for one or a combination of the following: movement of interest past due to the end of the loan, extension of the loan term, deferral of principal payments and reduction of interest rates either permanently or for a period of up to six years (increasing back in step-up rates). Additionally, in certain cases, the restructuring may provide for the forgiveness of contractually-due principal or interest. Uncollected interest is added to the principal at the end of the loan term at the time of the restructuring and not recognized as income until collected or when the loan is paid off. These programs are available only to those borrowers who have defaulted, or are likely to default, permanently on their loans and would lose their homes in a foreclosure action absent some lender concession. Nevertheless, if the Corporation is not reasonably assured that the borrower will comply with its contractual commitment, the property is foreclosed.

Prior to permanently modifying a loan, the Corporation may enter into trial modifications with certain borrowers. Trial modifications generally represent a six-month period during which the borrower makes monthly payments under the anticipated modified payment terms prior to a formal modification. Upon successful completion of a trial modification, the Corporation and the borrower enter into a permanent modification. TDR loans that are participating in or that have been offered a binding trial modification are classified as TDRs when the trial offer is made and continue to be classified as TDRs regardless of whether the borrower enters into a permanent modification. As of September 30, 2020, the Corporation included as TDRs $2.5 million of residential mortgage loans that were participating in or had been offered a trial modification.

For the commercial real estate, commercial and industrial, and construction loan portfolios, at the time of a restructuring, the Corporation determines, on a loan-by-loan basis, whether a concession was granted for economic or legal reasons related to the borrower’s financial difficulty. Concessions granted for loans in these portfolios could include: reductions in interest rates to rates that are considered below market; extension of repayment schedules and maturity dates beyond the original contractual terms; waivers of borrower covenants; forgiveness of principal or interest; or other contractual changes that are considered to be concessions. The Corporation mitigates loan defaults for these loan portfolios through its collection function. The function’s objective is to minimize both early stage delinquencies and losses upon default of loans in these portfolios. In the case of the commercial and industrial, commercial mortgage, and construction loan portfolios, the Corporation’s Special Asset Group (“SAG”) focuses on strategies for the accelerated reduction of non-performing assets through note sales, short sales, loss mitigation programs, and sales of OREO.

In addition, the Corporation extends, renews, and restructures loans with satisfactory credit profiles. Many commercial loan facilities are structured as lines of credit, which generally have one-year terms and, therefore, require annual renewals. Other facilities may be restructured or extended from time to time based upon changes in the borrower’s business needs, use of funds, and timing of completion of projects, and other factors. If the borrower is not deemed to have financial difficulties, extensions, renewals, and restructurings are done in the normal course of business and not considered to be concessions, and the loans continue to be recorded as performing.

In working with borrowers affected by the COVID-19 pandemic, the Corporation has agreed to let consumer borrowers (i.e., borrowers under residential mortgages, personal loans, auto loans, finance leases and small loans) that were current in their payments or no more than 2 payments in arrears (not having exceeded 89 days past due as of March 16, 2020) to defer payments on their loans in some cases for up to six months but not beyond September 30, 2020, with few exceptions. In the case of credit cards and individual lines of credit, the borrowers were required to be current or less than 29 days past due in their payments as of March 16, 2020 to qualify for the payment deferral program providing for payment deferrals in some cases for up to six months but not beyond August 31, 2020. For both consumer and residential mortgage loans subject to the deferral programs, each borrower was required to begin making their regularly scheduled loan payment at the end of the deferral period and the deferred amounts were moved to the end of the loan. The payment deferral programs were applied prospectively beginning, in some instances, with the scheduled contractual payment due in March. For commercial loans, any request for payment deferral, including extensions of the repayment moratorium, is analyzed on a case-by-case basis. As of September 30, 2020, the Corporation had under deferred repayment arrangements 25,173 loans, totaling $1.2 billion, or 10% of its total loan portfolio held for investment, consisting of 3,227 residential mortgage loans, totaling $511.9 million, 21,750 consumer loans, totaling $168.7 million, and 196 commercial and construction loans, totaling $540.8 million. Most of these deferred repayment arrangements have been done under the provisions of the Section 4013 of the CARES Act of 2020 or the Interagency Revised Statement. In addition, moratoriums on loan repayments for consumer and residential mortgage products in Puerto Rico were mandated by local law. A loan modification covered by the provisions of the CARES Act of 2020 and the Interagency Revised Statement is not required to be considered as a TDR loan.

Selected information on the Corporation’s TDR loans held for investment based on the amortized cost by loan class and modification type is summarized in the following tables as of the indicated dates:

	As of September 30, 2020
Puerto Rico and Virgin Islands region	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	17,837	$	11,288	$	213,327	$	-	$	222	$	66,181	$	308,855
Construction loans		22		1,759		1,523		-		-		190		3,494
Commercial mortgage loans		1,494		1,391		35,798		-		16,546		6,867		62,096
Commercial and Industrial loans		543		12,440		15,708		-		18,134		36,445		83,270
Consumer loans:
Auto loans		-		550		5,503		-		-		6,212		12,265
Finance leases		-		22		715		-		-		611		1,348
Personal loans		22		17		627		-		-		294		960
Credit cards		-		-		2,548		18		-		-		2,566
Other consumer loans		1,751		1,074		566		196		-		341		3,928
Total Troubled Debt Restructurings in Puerto Rico
and Virgin Islands region	$	21,669	$	28,541	$	276,315	$	214	$	34,902	$	117,141	$	478,782

Other concessions granted by the Corporation include deferral of principal and/or interest payments for a period longer than what would be considered insignificant, payment plans under judicial stipulation, or a combination of two or more of the concessions listed in the table. Amounts included in Other that represent a combination of concessions are excluded from the amounts reported in the column for such individual concessions.

	As of September 30, 2020
Florida region	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	995	$	405	$	1,959	$	-	$	-	$	24	$	3,383
Construction loans		-		-		-		-		-		-		-
Commercial mortgage loans		2,868		840		1,796		-		-		-		5,504
Commercial and Industrial loans		-		-		-		-		-		247		247
Consumer loans:
Auto loans		-		61		18		-		-		-		79
Finance leases		-		-		-		-		-		-		-
Personal loans		-		-		-		-		-		-		-
Credit cards		-		-		-		-		-		-		-
Other consumer loans		38		-		175		-		-		407		620
Total Troubled Debt Restructurings in Florida Region	$	3,901	$	1,306	$	3,948	$	-	$	-	$	678	$	9,833

	As of September 30, 2020
Total	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	18,832	$	11,693	$	215,286	$	-	$	222	$	66,205	$	312,238
Construction loans		22		1,759		1,523		-		-		190		3,494
Commercial mortgage loans		4,362		2,231		37,594		-		16,546		6,867		67,600
Commercial and Industrial loans		543		12,440		15,708		-		18,134		36,692		83,517
Consumer loans:
Auto loans		-		611		5,521		-		-		6,212		12,344
Finance leases		-		22		715		-		-		611		1,348
Personal loans		22		17		627		-		-		294		960
Credit cards		-		-		2,548		18		-		-		2,566
Other consumer loans		1,789		1,074		741		196		-		748		4,548
Total Troubled Debt Restructurings	$	25,570	$	29,847	$	280,263	$	214	$	34,902	$	117,819	$	488,615

	As of December 31, 2019
Puerto Rico and Virgin Islands region	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	18,561	$	11,188	$	219,618	$	-	$	142	$	63,638	$	313,147
Construction loans		24		2,469		1,639		-		-		189		4,321
Commercial mortgage loans		909		1,414		39,131		-		19,848		8,149		69,451
Commercial and Industrial loans		579		16,160		12,077		142		692		36,884		66,534
Consumer loans:
Auto loans		-		801		7,374		-		-		6,249		14,424
Finance leases		-		40		1,066		-		-		426		1,532
Personal loans		26		43		845		-		-		159		1,073
Credit cards		-		-		2,767		24		-		-		2,791
Other consumer loans		2,020		1,196		770		180		-		337		4,503
Total Troubled Debt Restructurings in Puerto Rico
and Virgin Island region	$	22,119	$	33,311	$	285,287	$	346	$	20,682	$	116,031	$	477,776

	As of December 31, 2019
Florida region	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	1,009	$	412	$	2,049	$	-	$	-	$	32	$	3,502
Construction loans		-		-		-		-		-		-		-
Commercial mortgage loans		2,901		862		1,765		-		-		-		5,528
Commercial and Industrial loans		-		-		-		-		-		315		315
Consumer loans:
Auto loans		-		97		19		-		-		-		116
Finance leases		-		-		-		-		-		-		-
Personal loans		-		-		-		-		-		-		-
Credit cards		-		-		-		-		-		-		-
Other consumer loans		39		-		183		-		-		538		760
Total Troubled Debt Restructurings in Florida region	$	3,949	$	1,371	$	4,016	$	-	$	-	$	885	$	10,221

	As of December 31, 2019
Total	Interest rate below market		Maturity or term extension		Combination of reduction in interest rate and extension of maturity		Forgiveness of principal and/or interest		Forbearance Agreement		Other (1)		Total
(In thousands)
TDRs:
Conventional residential mortgage loans	$	19,570	$	11,600	$	221,667	$	-	$	142	$	63,670	$	316,649
Construction loans		24		2,469		1,639		-		-		189		4,321
Commercial mortgage loans		3,810		2,276		40,896		-		19,848		8,149		74,979
Commercial and Industrial loans		579		16,160		12,077		142		692		37,199		66,849
Consumer loans:
Auto loans		-		898		7,393		-		-		6,249		14,540
Finance leases		-		40		1,066		-		-		426		1,532
Personal loans		26		43		845		-		-		159		1,073
Credit cards		-		-		2,767		24		-		-		2,791
Other consumer loans		2,059		1,196		953		180		-		875		5,263
Total Troubled Debt Restructurings	$	26,068	$	34,682	$	289,303	$	346	$	20,682	$	116,916	$	487,997

The following table presents the Corporation's TDR loans held for investment activity for the indicated periods:

	Quarter Ended				Nine-Month Period Ended
	September 30,				September 30,
	2020		2019		2020		2019
(In thousands)
Beginning balance of TDRs	$	496,207	$	582,389	$	487,997	$	582,647
New TDRs		3,187		22,111		31,733		54,531
Increases to existing TDRs		2,210		125		5,821		1,647
Charge-offs post modification		(4,548)		(2,505)		(8,063)		(7,418)
Foreclosures		(309)		(2,716)		(1,947)		(9,637)
Paid-off, partial payments and other (1)		(8,132)		(103,566)		(26,926)		(125,932)
Ending balance of TDRs	$	488,615	$	495,838	$	488,615	$	495,838

For the quarter and nine-month period ended September 30, 2019, includes the payoff of a $92.4 million commercial mortgage loan.TDR loans are classified as either accrual or nonaccrual loans. Loans in accrual status may remain in accrual status when their contractual terms have been modified in a TDR if the loans had demonstrated performance prior to the restructuring and payment in full under the restructured terms is expected. Otherwise, a loan on nonaccrual status and restructured as a TDR will remain on nonaccrual status until the borrower has proven the ability to perform under the modified structure, generally for a minimum of six months, and there is evidence that such payments can, and are likely to, continue as agreed. Performance prior to the restructuring, or significant events that coincide with the restructuring, are included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of the restructuring or after a shorter performance period. If the borrower’s ability to meet the revised payment schedule is uncertain, the loan remains classified as a nonaccrual loan. Loan modifications increase the Corporation’s interest income by returning a nonaccrual loan to performing status, if applicable, increase cash flows by providing for payments to be made by the borrower, and limit increases in foreclosure and OREO costs. A TDR loan that specifies an interest rate that at the time of the restructuring is greater than or equal to the rate the Corporation is willing to accept for a new loan with comparable risk may not be reported as a TDR in the calendar years subsequent to the restructuring, if it is in compliance with its modified terms. The Corporation did not remove any loans from the TDR classification during 2020 and 2019.

The following tables provide a breakdown of the TDR loans held for investment by those in accrual and nonaccrual status as of the indicated dates:

September 30, 2020	Puerto Rico and
	Virgin Islands region						Florida region						Total
	Accrual		Nonaccrual		Total TDRs		Accrual		Nonaccrual		Total TDRs		Accrual		Nonaccrual ⁽¹⁾		Total TDRs
(In thousands)
Conventional residential mortgage loans	$	254,199	$	54,656	$	308,855	$	3,383	$	-	$	3,383	$	257,582	$	54,656	$	312,238
Construction loans		2,542		952		3,494		-		-		-		2,542		952		3,494
Commercial mortgage loans		43,646		18,450		62,096		5,504		-		5,504		49,150		18,450		67,600
Commercial and Industrial loans		74,390		8,880		83,270		-		247		247		74,390		9,127		83,517
Consumer loans:
Auto loans		6,983		5,282		12,265		79		-		79		7,062		5,282		12,344
Finance leases		1,340		8		1,348		-		-		-		1,340		8		1,348
Personal loans		960		-		960		-		-		-		960		-		960
Credit Cards		2,566		-		2,566		-		-		-		2,566		-		2,566
Other consumer loans		3,497		431		3,928		583		37		620		4,080		468		4,548
Total Troubled Debt Restructurings	$	390,123	$	88,659	$	478,782	$	9,549	$	284	$	9,833	$	399,672	$	88,943	$	488,615

Included in nonaccrual loans are $9.1 million in loans that are performing under the terms of the restructuring agreement but are reported in nonaccrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and are deemed fully collectible.


December 31, 2019	Puerto Rico and
	Virgin Islands region						Florida region						Total
	Accrual		Nonaccrual		Total TDRs		Accrual		Nonaccrual		Total TDRs		Accrual		Nonaccrual ⁽¹⁾		Total TDRs
(In thousands)
Conventional residential mortgage loans	$	262,244	$	50,903	$	313,147	$	3,502	$	-	$	3,502	$	265,746	$	50,903	$	316,649
Construction loans		3,238		1,083		4,321		-		-		-		3,238		1,083		4,321
Commercial mortgage loans		45,534		23,917		69,451		5,528		-		5,528		51,062		23,917		74,979
Commercial and Industrial loans		59,689		6,845		66,534		-		315		315		59,689		7,160		66,849
Consumer loans:
Auto loans		8,440		5,984		14,424		116		-		116		8,556		5,984		14,540
Finance leases		1,502		30		1,532		-		-		-		1,502		30		1,532
Personal loans		1,052		21		1,073		-		-		-		1,052		21		1,073
Credit Cards		2,791		-		2,791		-		-		-		2,791		-		2,791
Other consumer loans		3,898		605		4,503		723		37		760		4,621		642		5,263
Total Troubled Debt Restructurings	$	388,388	$	89,388	$	477,776	$	9,869	$	352	$	10,221	$	398,257	$	89,740	$	487,997

Included in nonaccrual loans are $14.8 million in loans that are performing under the terms of the restructuring agreement but are reported in nonaccrual status until the restructured loans meet the criteria of sustained payment performance under the revised terms for reinstatement to accrual status and are deemed fully collectible.TDR loans exclude restructured residential mortgage loans that are government-guaranteed (e.g., FHA/VA loans) totaling $58.8 million as of September 30, 2020 (compared with $60.1 million as of December 31, 2019). The Corporation excludes FHA/VA guaranteed loans from TDR loan statistics given that, in the event that the borrower defaults on the loan, the principal and interest (at the specified debenture rate) are guaranteed by the U.S. government; therefore, the risk of loss on these types of loans is very low.

Loan modifications that are considered TDR loans completed during the quarters and nine-month periods ended September 30, 2020 and
2019 were as follows:

Quarter Ended September 30, 2020

	Puerto Rico and Virgin Island region					Florida region					Total
	Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost
(Dollars in thousands)
TDRs:
Conventional residential mortgage loans	20	$	2,070	$	1,938	-	$	-	$	-	20	$	2,070	$	1,938
Construction loans	-		-		-	-		-		-	-		-		-
Commercial mortgage loans	-		-		-	-		-		-	-		-		-
Commercial and Industrial loans	-		-		-	-		-		-	-		-		-
Consumer loans:
Auto loans	37		658		655	-		-		-	37		658		655
Finance leases	4		54		54	-		-		-	4		54		54
Personal loans	7		60		60	-		-		-	7		60		60
Credit Cards	46		224		224	-		-		-	46		224		224
Other consumer loans	54		312		233	1		23		23	55		335		256
Total Troubled Debt Restructurings	168	$	3,378	$	3,164	1	$	23	$	23	169	$	3,401	$	3,187


Nine-Month Period Ended September 30, 2020

	Puerto Rico and Virgin Island region					Florida region					Total
	Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost
(Dollars in thousands)
TDRs:
Conventional residential mortgage loans	72	$	6,427	$	5,722	-	$	-	$	-	72	$	6,427	$	5,722
Construction loans	-		-		-	-		-		-	-		-		-
Commercial mortgage loans	2		75		81	-		-		-	2		75		81
Commercial and Industrial loans	6		22,064		22,064	-		-		-	6		22,064		22,064
Consumer loans:
Auto loans	133		2,102		2,091	-		-		-	133		2,102		2,091
Finance leases	29		408		408	-		-		-	29		408		408
Personal loans	23		202		200	-		-		-	23		202		200
Credit Cards	143		709		709	-		-		-	143		709		709
Other consumer loans	139		507		435	1		23		23	140		530		458
Total Troubled Debt Restructurings	547	$	32,494	$	31,710	1	$	23	$	23	548	$	32,517	$	31,733

Quarter Ended September 30, 2019

	Puerto Rico and Virgin Island region					Florida region					Total
	Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost
(Dollars in thousands)
TDRs:
Conventional residential mortgage loans	21	$	2,233	$	2,115	-	$	-	$	-	21	$	2,233	$	2,115
Construction loans	-		-		-	-		-		-	-		-		-
Commercial mortgage loans	5		17,344		17,282	-		-		-	5		17,344		17,282
Commercial and Industrial loans	1		236		236	-		-		-	1		236		236
Consumer loans:
Auto loans	70		1,205		1,206	-		-		-	70		1,205		1,206
Finance leases	12		202		202	-		-		-	12		202		202
Personal loans	13		101		102	-		-		-	13		101		102
Credit Cards	37		207		207	-		-		-	37		207		207
Other consumer loans	213		740		761	-		-		-	213		740		761
Total Troubled Debt Restructurings	372	$	22,268	$	22,111	-	$	-	$	-	372	$	22,268	$	22,111


Nine-Month Period Ended September 30, 2019

	Puerto Rico and Virgin Island region					Florida region					Total
	Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost		Number of contracts	Pre-modification Amortized Cost		Post-modification Amortized Cost
(Dollars in thousands)
TDRs:
Conventional residential mortgage loans	87	$	9,585	$	9,280	-	$	-	$	-	87	$	9,585	$	9,280
Construction loans	4		118		117	-		-		-	4		118		117
Commercial mortgage loans	11		40,374		38,136	-		-		-	11		40,374		38,136
Commercial and Industrial loans	7		439		438	-		-		-	7		439		438
Consumer loans:	-		-		-	-		-		-
Auto loans	205		3,294		3,261	3		33		33	208		3,327		3,294
Finance leases	33		646		643	-		-		-	33		646		643
Personal loans	45		413		411	-		-		-	45		413		411
Credit Cards	104		568		568	-		-		-	104		568		568
Other consumer loans	436		1,600		1,644	-		-		-	436		1,600		1,644
Total Troubled Debt Restructurings	932	$	57,037	$	54,498	3	$	33	$	33	935	$	57,070	$	54,531

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a nonaccrual loan. Recidivism on a modified loan occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. The Corporation considers a loan to have defaulted if the borrower has failed to make payments of either principal, interest, or both for a period of 90 days or more.

Loan modifications considered TDR loans that defaulted during the quarters and nine-month periods ended September 30, 2020 and 2019, and had become TDR during the 12-months preceding the default date, were as follows:

	Quarter Ended September 30,
	2020			2019
Puerto Rico and Virgin Islands region	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	2	$	253	5	$	1,706
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	-		-	-		-
Consumer loans:
Auto loans	19		358	50		856
Finance leases	-		-	-		-
Personal loans	-		-	-		-
Credit cards	15		80	-		-
Other consumer loans	14		64	18		72
Total Puerto Rico and Virgin Islands region	50	$	755	73	$	2,634

	Quarter Ended September 30,
	2020			2019
Florida region	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	-	$	-	-	$	-
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	-		-	-		-
Consumer loans:
Auto loans	-		-	-		-
Finance leases	-		-	-		-
Personal loans	-		-	-		-
Credit cards	-		-	-		-
Other consumer loans	-		-	-		-
Total in Florida region	-	$	-	-	$	-

	Quarter Ended September 30,
	2020			2019
Total	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	2	$	253	5	$	1,706
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	-		-	-		-
Consumer loans:
Auto loans	19		358	50		856
Finance leases	-		-	-		-
Personal loans	-		-	-		-
Credit cards	15		80	-		-
Other consumer loans	14		64	18		72
Total	50	$	755	73	$	2,634

	Nine-Month Period Ended September 30,
	2020			2019
Puerto Rico and Virgin Islands region	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	8	$	2,142	8	$	1,890
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	1		35	-		-
Consumer loans:
Auto loans	40		681	99		1,624
Finance leases	1		5	-		-
Personal loans	1		7	1		9
Credit cards	41		192	-		-
Other consumer loans	50		191	51		167
Total Puerto Rico and Virgin Islands region	142	$	3,253	159	$	3,690

	Nine-Month Period Ended September 30,
	2020			2019
Florida region	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	-	$	-	-	$	-
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	-		-	-		-
Consumer loans:
Auto loans	-		-	-		-
Finance leases	-		-	-		-
Personal loans	-		-	-		-
Credit cards	-		-	-		-
Other consumer loans	-		-	-		-
Total in Florida region	-	$	-	-	$	-

	Nine-Month Period Ended September 30,
	2020			2019
Total	Number of contracts	Amortized Cost		Number of contracts	Amortized Cost
(Dollars in thousands)
Conventional residential mortgage loans	8	$	2,142	8	$	1,890
Construction loans	-		-	-		-
Commercial mortgage loans	-		-	-		-
Commercial and Industrial loans	1		35	-		-
Consumer loans:
Auto loans	40		681	99		1,624
Finance leases	1		5	-		-
Personal loans	1		7	1		9
Credit cards	41		192	-		-
Other consumer loans	50		191	51		167
Total	142	$	3,253	159	$	3,690

For certain TDR loans, the Corporation splits the loans into two new notes, A and B Notes. The A Note is restructured to comply with the Corporation’s lending standards at current market rates, and is tailored to suit the customer’s ability to make timely interest and principal payments. The B Note includes the granting of the concession to the borrower and varies by situation. The B Note is fully charged off but the borrower’s obligation is not forgiven, and payments that are collected are accounted for as recoveries of previously charged-off amounts. A partial charge-off may be recorded if the B Note is collateral dependent and the source of repayment is independent of the A Note. At the time of the restructuring, the A Note is identified and classified as a TDR loan. In general, if the loan performs for at least six months according to the modified terms, the A Note may be returned to accrual status. The borrower’s payment performance prior to the restructuring is included in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of the restructuring. In the periods following the calendar year in which a loan is restructured, the A Note may no longer be reported as a TDR loan if it is in accrual status, is in compliance with its modified terms, and yields a market rate (as determined and documented at the time of the restructuring).

The following tables provide additional information about the volume of this type of loan restructuring as of September 30, 2020 and 2019 and the effect on the ACL in the third quarter and first nine months of 2020 and 2019:

	Quarter Ended								Quarter Ended
	September 30, 2020								September 30, 2019
(In thousands)	Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total		Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total
Beginning balance of A/B Notes	$	22,599	$	26,767	$	1,892	$	51,258	$	22,940	$	27,987	$	2,289	$	53,216
Increase to existing TDRs		-		367		-		367		-		-		-		-
Paid-off and partial payments		(97)		-		(288)		(385)		(95)		(192)		(345)		(632)
Charge-offs		(3,087)		-		-		(3,087)		-		-		-		-
Ending balance of A/B Notes	$	19,415	$	27,134	$	1,604	$	48,153	$	22,845	$	27,795	$	1,944	$	52,584

	Nine-Month Period Ended								Nine-Month Period Ended
	September 30, 2020								September 30, 2019
(In thousands)	Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total		Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total
Beginning balance of A/B Notes	$	22,749	$	26,596	$	1,883	$	51,228	$	3,003	$	28,406	$	2,431	$	33,840
New TDR loan splits		-		-		-		-		20,059		-		-		20,059
Increase to existing TDRs		-		738		34		772		-		-		-		-
Paid-off and partial payments		(247)		(200)		(313)		(760)		(217)		(611)		(487)		(1,315)
Charge-offs		(3,087)		-		-		(3,087)		-		-		-		-
Ending balance of A/B Notes	$	19,415	$	27,134	$	1,604	$	48,153	$	22,845	$	27,795	$	1,944	$	52,584

	Quarter Ended								Quarter Ended
	September 30, 2020								September 30, 2019
(In thousands)	Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total		Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total
Allowance for credit losses at the
beginning of the period for A/B Notes	$	3,646	$	438	$	-	$	4,084	$	1,261	$	318	$	-	$	1,579
(Releases) Charges to the provision
for credit losses		(559)		(40)		-		(599)		2,254		(56)		-		2,198
Charge-offs		(3,087)		-		-		(3,087)		-		-		-		-
Allowance for credit losses at the
end of the period for A/B Notes	$	-	$	398	$	-	$	398	$	3,515	$	262	$	-	$	3,777


	Nine-Month Period Ended								Nine-Month Period Ended
	September 30, 2020								September 30, 2019
(In thousands)	Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total		Commercial Mortgage loans		Commercial and Industrial loans		Construction loans		Total
Allowance for credit losses at the
beginning of the period for A/B Notes	$	3,516	$	14	$	-	$	3,530	$	-	$	473	$	-	$	473
Impact of adopting ASC 326		(415)		89		-		(326)		-		-		-		-
(Releases) Charges to the provision
for credit losses		(14)		295		-		281		3,515		(211)		-		3,304
Charge-offs		(3,087)		-		-		(3,087)		-		-		-		-
Allowance for credit losses at the
end of the period for A/B Notes	$	-	$	398	$	-	$	398	$	3,515	$	262	$	-	$	3,777

Approximately $41.6 million of the September 30, 2020 balance of loans restructured using the A/B note restructure workout strategy were in accrual status as of September 30, 2020.