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 nine months ended September 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	$	13


Balance, September 30, 2020	$	36

(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

Write-offs	—

Balance, September 30, 2019	$	20

As of both September 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 September 30, 2020 and 2019, the Company purchased $84 million and $39 million, respectively, of syndicated loans, and sold $2 million and $11 million, respectively, of syndicated loans. During the nine months ended September 30, 2020 and 2019, the Company purchased $134 million and $94 million, respectively, of syndicated loans and sold $9 million and $32 million, respectively, of syndicated loans.

Nonperforming loans were $8 million and $9 million as of September 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 $6 million and nil as of September 30, 2020 and December 31, 2019, respectively.

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 September 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 nine months. Total commercial mortgage loan modifications in 2020 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. As of September 30, 2020, there were 23 loans remaining with a total unpaid balance of $122 million. All other loans returned to their normal payment schedules.

The table below presents the amortized cost basis of commercial mortgage loans as of September 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		16		9		3		5		21		69
60% - 80%	78		161		27		29		55		153		503
40% - 60%	13		44		74		152		107		563		953
< 40%	7		22		69		86		59		875		1,118
Total	$	113	$	243	$	182	$	270	$	226	$	1,622	$	2,656

Loan-to-value ratio is based on income and expense data provided by borrowers at least annually and long-term capitalization 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
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	(in millions)
South Atlantic	$	689	$	705	26	%	26	%
Pacific	787		792		30		30
Mountain	232		237		9		9
West North Central	195		207		7		8
East North Central	254		232		10		9
Middle Atlantic	172		167		6		6
West South Central	164		169		6		6
New England	48		47		2		2
East South Central	115		116		4		4
	2,656		2,672		100	%	100	%
Less: allowance for credit losses	28		17
Total	$	2,628	$	2,655


	Loans				Percentage
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
	(in millions)
Retail	$	860	$	891	32	%	33	%
Office	378		404		14		15
Apartments	686		660		26		25
Industrial	407		404		15		15
Mixed use	77		66		3		3
Hotel	50		51		2		2
Other	198		196		8		7
	2,656		2,672		100	%	100	%
Less: allowance for credit losses	28		17
Total	$	2,628	$	2,655

The recorded investment in syndicated loans as of September 30, 2020 and December 31, 2019 was $471 million and $395 million, respectively. The Company’s syndicated loan portfolio is diversified across industries and issuers. Total syndicated loans past due were $4 million and $1 million as of September 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 September 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	—		4		3		7		1		7		22
Risk 3	—		3		7		22		10		19		61
Risk 2	15		40		48		53		16		36		208
Risk 1	16		30		44		44		17		30		181
Total	$	31	$	77	$	103	$	126	$	44	$	92	$	473

Policy loans do not exceed the cash surrender value at origination. As there is minimal risk of loss related to policy loans, there is no allowance for credit losses.

The deposit receivable was $1.4 billion and $1.5 billion as of September 30, 2020 and December 31, 2019, respectively. 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 September 30, 2020 and December 31, 2019.