Financing receivables are comprised of commercial loans, policy loans, and the deposit receivable. See Note 2 for information regarding the Company’s accounting policies related to financing receivables and the allowance for credit losses.

The following tables present a rollforward of the allowance for credit losses for the six months ended June 30:


	Commercial Loans
			(in millions)
Balance, December 31, 2019 ⁽¹⁾	$	20
Cumulative effect of adoption of current expected credit losses guidance	3
Balance, January 1, 2020	23
Provisions	11


Balance, June 30, 2020	$	34

⁽¹⁾Prior to January 1, 2020, the allowance for credit losses was based on an incurred loss model that did not require estimating expected credit losses over the expected life of the asset.


	Commercial Loans
			(in millions)
Balance, January 1, 2019	$	20

Charge-offs	—

Balance, June 30, 2019	$	20

As of both June 30, 2020 and December 31, 2019, accrued interest on commercial loans was $11 million and is recorded in accrued investment income on the Consolidated Balance Sheets and excluded from the amortized cost basis of commercial loans.

During the three months ended June 30, 2020 and 2019, the Company purchased $9 million and $30 million, respectively, of syndicated loans, and sold nil and $12 million, respectively, of syndicated loans. During the six months ended June 30, 2020 and 2019, the Company purchased $50 million and $55 million, respectively, of syndicated loans and sold $7 million and $21 million, respectively, of syndicated loans.

The Company has not acquired any loans with deteriorated credit quality as of the acquisition date.

Nonperforming loans were $11 million and $9 million as of June 30, 2020 and December 31, 2019, respectively. All other loans were considered to be performing.

The Company reviews the credit worthiness of the borrower and the performance of the underlying properties in order to determine the risk of loss on commercial mortgage loans. Loan-to-value ratio is the primary credit quality indicator included in this review. Total commercial mortgage loans past due were nil as of both June 30, 2020 and December 31, 2019.

Based on this review, the commercial mortgage loans are assigned an internal risk rating, which management updates as necessary. Commercial mortgage loans which management has assigned its highest risk rating were less than 1% of total commercial mortgage loans as of both June 30, 2020 and December 31, 2019. Loans with the highest risk rating represent distressed loans which the

Company has identified as impaired or expects to become delinquent or enter into foreclosure within the next six months. As of June 30, 2020, commercial mortgage loan modifications due to the COVID-19 pandemic consisted of 88 loans with a total unpaid balance of $360 million. Modifications primarily consisted of short-term forbearance and interest only payments.

The table below presents the amortized cost basis of commercial mortgage loans as of June 30, 2020 by year of origination and loan-to-value ratio:


Loan-to-Value Ratio	2020			2019		2018		2017		2016		Prior		Total
			(in millions)
> 100%	$	—		$	—	$	3	$	—	$	—	$	10	$	13
80% - 100%	15			5		9		3		5		21		58
60% - 80%	66			172		27		29		56		155		505
40% - 60%	13			44		75		154		108		587		981
< 40%	6			22		70		87		59		891		1,135
Total	$	100		$	243	$	184	$	273	$	228	$	1,664	$	2,692

Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capital rate assumptions based on property type.

In addition, the Company reviews the concentrations of credit risk by region and property type. Concentrations of credit risk of commercial mortgage loans by U.S. region were as follows:


	Loans									Percentage
			June 30, 2020			December 31, 2019			June 30, 2020			December 31, 2019
			(in millions)
South Atlantic	$	711		$	705		26	%		26	%
Pacific	797			792			30			30
Mountain	235			237			9			9
West North Central	203			207			8			8
East North Central	242			232			9			9
Middle Atlantic	175			167			6			6
West South Central	165			169			6			6
New England	48			47			2			2
East South Central	116			116			4			4
	2,692			2,672			100	%		100	%
Less: allowance for credit losses	27			17
Total	$	2,665		$	2,655


	Loans									Percentage
			June 30, 2020			December 31, 2019			June 30, 2020			December 31, 2019
			(in millions)
Retail	$	874		$	891		32	%		33	%
Office	387			404			14			15
Apartments	688			660			26			25
Industrial	412			404			15			15
Mixed use	77			66			3			3
Hotel	50			51			2			2
Other	204			196			8			7
	2,692			2,672			100	%		100	%
Less: allowance for credit losses	27			17
Total	$	2,665		$	2,655

The recorded investment in syndicated loans as of June 30, 2020 and December 31, 2019 was $401 million and $395 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were nil and $1 million as of June 30, 2020 and December 31, 2019, respectively. The Company assigns an internal risk rating to each syndicated loan in its portfolio ranging from 1 through 5, with 5 reflecting the lowest quality.

The table below presents the amortized cost basis of syndicated loans as of June 30, 2020 by origination year and internal risk rating:


Internal Risk Rating	2020			2019		2018		2017		2016		Prior		Total
			(in millions)
Risk 5	$	—		$	—	$	1	$	—	$	—	$	—	$	1
Risk 4	—			6		3		7		1		5		22
Risk 3	3			6		8		19		8		14		58
Risk 2	8			31		40		38		15		42		174
Risk 1	7			19		36		43		13		28		146
Total	$	18		$	62	$	88	$	107	$	37	$	89	$	401

Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, the Company does not record an allowance for credit losses.

The deposit receivable was $1.5 billion as of both June 30, 2020 and December 31, 2019. The deposit receivable is fully collateralized by the fair value of the assets held in a trust. Based on management’s evaluation of the nature of the underlying assets and the potential for changes in the collateral value, the Company did not have an allowance for credit losses for the deposit receivable as of both June 30, 2020 and December 31, 2019.