LOANS RECEIVABLE | NOTE 5 - LOANS Oriental’s loan portfolio is composed of two segments, loans initially accounted for under the amortized cost method (referred to as "originated and other" loans) and loans acquired (referred to as "acquired" loans). Acquired loans are further segregated between acquired BBVAPR loans and acquired Eurobank loans . The composition of Oriental’s loan portfolio at June 30 , 2018 and December 31 , 2017 was as follows : June 30, December 31, 2018 2017 (In thousands) Originated and other loans and leases held for investment: Mortgage $ 678,259 $ 683,607 Commercial 1,507,368 1,307,261 Consumer 339,341 330,039 Auto and leasing 1,014,664 883,985 3,539,632 3,204,892 Allowance for loan and lease losses on originated and other loans and leases (94,218) (92,718) 3,445,414 3,112,174 Deferred loan costs, net 7,028 6,695 Total originated and other loans loans held for investment, net 3,452,442 3,118,869 Acquired loans: Acquired BBVAPR loans: Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium) Commercial 2,909 4,380 Consumer 25,736 28,915 Auto 11,283 21,969 39,928 55,264 Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-20 (2,726) (3,862) 37,202 51,402 Accounted for under ASC 310-30 (Loans acquired with deteriorated credit quality, including those by analogy) Mortgage 516,934 532,053 Commercial 223,853 243,092 Consumer 495 1,431 Auto 26,937 43,696 768,219 820,272 Allowance for loan and lease losses on acquired BBVAPR loans accounted for under ASC 310-30 (44,176) (45,755) 724,043 774,517 Total acquired BBVAPR loans, net 761,245 825,919 Acquired Eurobank loans: Loans secured by 1-4 family residential properties 65,637 69,538 Commercial 49,706 53,793 Consumer 935 1,112 Total acquired Eurobank loans 116,278 124,443 Allowance for loan and lease losses on Eurobank loans (24,314) (25,174) Total acquired Eurobank loans, net 91,964 99,269 Total acquired loans, net 853,209 925,188 Total held for investment, net 4,305,651 4,044,057 Mortgage loans held-for-sale 10,215 12,272 Total loans, net $ 4,315,866 $ 4,056,329 As a result of the devastation caused by hurricanes Irma and Maria, Oriental offered an automatic three-month moratorium for the payment due on certain loans. The level of delinquencies for mortgage and auto loans as of December 31 , 2017 was impacted by the loan moratorium. Aging of current and early delinquent loans in moratorium were frozen at September 30, 2017, throughout the moratorium period. In addition, a lthough the repayment schedule was modified as part of the moratorium, certai n borrowers continued to make payments shortly after the moratorium , having an impact on the respective delinquency status at December 31 , 2017 . At June 30 , 2018 , most of the loan moratoriums ha ve expired, and total delinquency levels are returning to pre-hurricane levels . Originated and Other Loans and Leases Held for Investment Oriental’s originated and other loans held for investment are encompassed within four portfolio segments: mortgage, commercial, consumer, and auto and leasing. The t ables below present the aging of the recorded investment in gross originated and other loans held for investment a t June 30 , 2018 and December 31 , 2017 , by class of loans. Mortgage loans past due include delinquent loans in the GNMA buy-back opti on program. Servicers of loans underlying GNMA mortgage-backed securities must report as their own assets the defaulted loans that they have the option (but not the obligation) to repurchase, even when they elect not to exercise that option. June 30, 2018 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Mortgage Traditional (by origination year): Up to the year 2002 $ 165 $ 1,397 $ 3,539 $ 5,101 $ 38,932 $ 44,033 $ 242 Years 2003 and 2004 83 1,624 5,907 7,614 71,750 79,364 - Year 2005 - 831 4,125 4,956 37,488 42,444 68 Year 2006 350 1,603 4,783 6,736 52,292 59,028 - Years 2007, 2008 and 2009 112 1,360 7,443 8,915 56,154 65,069 57 Years 2010, 2011, 2012, 2013 350 719 8,638 9,707 111,791 121,498 366 Years 2014, 2015, 2016, 2017 and 2018 - 132 1,593 1,725 128,731 130,456 - 1,060 7,666 36,028 44,754 497,138 541,892 733 Non-traditional - - 3,131 3,131 12,363 15,494 - Loss mitigation program 12,147 5,135 18,539 35,821 70,274 106,095 2,726 13,207 12,801 57,698 83,706 579,775 663,481 3,459 Home equity secured personal loans - - - - 257 257 - GNMA's buy-back option program - - 14,521 14,521 - 14,521 - 13,207 12,801 72,219 98,227 580,032 678,259 3,459 Commercial Commercial secured by real estate: Corporate - - - - 274,435 274,435 - Institutional - - - - 81,019 81,019 - Middle market - - 5,602 5,602 188,671 194,273 - Retail 1,240 473 9,327 11,040 205,450 216,490 - Floor plan - - - - 4,017 4,017 - Real estate - - - - 15,157 15,157 - 1,240 473 14,929 16,642 768,749 785,391 - Other commercial and industrial: Corporate - - - - 190,414 190,414 - Institutional - - - - 113,810 113,810 - Middle market 7,233 174 881 8,288 86,691 94,979 - Retail 341 212 709 1,262 283,334 284,596 - Floor plan 26 - 51 77 38,101 38,178 - 7,600 386 1,641 9,627 712,350 721,977 - 8,840 859 16,570 26,269 1,481,099 1,507,368 - June 30, 2018 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Consumer Credit cards $ 701 $ 274 $ 875 $ 1,850 $ 26,009 $ 27,859 $ - Overdrafts 12 1 - 13 145 158 - Personal lines of credit 72 30 40 142 1,789 1,931 - Personal loans 4,045 1,704 1,100 6,849 287,099 293,948 - Cash collateral personal loans 137 87 17 241 15,204 15,445 - 4,967 2,096 2,032 9,095 330,246 339,341 - Auto and leasing 45,953 19,870 11,101 76,924 937,740 1,014,664 - Total $ 72,967 $ 35,626 $ 101,922 $ 210,515 $ 3,329,117 $ 3,539,632 $ 3,459 December 31, 2017 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Mortgage Traditional (by origination year): Up to the year 2002 $ 86 $ 938 $ 3,537 $ 4,561 $ 41,579 $ 46,140 $ 467 Years 2003 and 2004 92 1,077 6,304 7,473 75,758 83,231 - Year 2005 101 383 3,348 3,832 40,669 44,501 68 Year 2006 242 604 5,971 6,817 55,966 62,783 66 Years 2007, 2008 and 2009 358 1,258 8,561 10,177 58,505 68,682 577 Years 2010, 2011, 2012, 2013 233 978 7,393 8,604 116,674 125,278 1,202 Years 2014, 2015, 2016 and 2017 - 75 1,649 1,724 121,194 122,918 - 1,112 5,313 36,763 43,188 510,345 553,533 2,380 Non-traditional - 326 3,543 3,869 14,401 18,270 - Loss mitigation program 7,233 3,331 18,923 29,487 73,793 103,280 4,981 8,345 8,970 59,229 76,544 598,539 675,083 7,361 Home equity secured personal loans - - - - 256 256 - GNMA's buy-back option program - - 8,268 8,268 - 8,268 - 8,345 8,970 67,497 84,812 598,795 683,607 7,361 Commercial Commercial secured by real estate: Corporate - - - - 235,426 235,426 - Institutional - - 118 118 44,648 44,766 - Middle market 765 - 3,527 4,292 225,649 229,941 - Retail 352 936 9,695 10,983 235,084 246,067 - Floor plan - - - - 3,998 3,998 - Real estate - - - - 17,556 17,556 - 1,117 936 13,340 15,393 762,361 777,754 - Other commercial and industrial: Corporate - - - - 170,015 170,015 - Institutional - - - - 125,591 125,591 - Middle market - - 881 881 84,482 85,363 - Retail 455 103 1,616 2,174 111,078 113,252 - Floor plan 9 - 51 60 35,226 35,286 - 464 103 2,548 3,115 526,392 529,507 - 1,581 1,039 15,888 18,508 1,288,753 1,307,261 - December 31, 2017 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Consumer Credit cards $ 246 $ 130 $ 1,227 $ 1,603 $ 26,827 $ 28,430 $ - Overdrafts 20 6 31 57 157 214 - Personal lines of credit 259 54 87 400 1,820 2,220 - Personal loans 3,778 1,494 223 5,495 278,982 284,477 - Cash collateral personal loans 103 59 312 474 14,224 14,698 - 4,406 1,743 1,880 8,029 322,010 330,039 - Auto and leasing 21,760 10,399 4,232 36,391 847,594 883,985 - Total $ 36,092 $ 22,151 $ 89,497 $ 147,740 $ 3,057,152 $ 3,204,892 $ 7,361 At both June 30 , 2018 and December 31 , 2017 , Oriental had a carrying balance of $ 94.9 million in originated and other loans held for investment granted to the Puerto Rico government, including its instrumentalities, public corporations and municipalities as part of the institutional commercial loan segment. All originated and other loans granted to the Puerto Rico government are general obligations of municipalities secured by ad valorem taxation, without limitation as to r ate or amount, on all taxable property within the issuing municipalities. The good faith, credit and unlimited taxing power of each issuing municipality are pledged for the payment of its general obligations. Acquired Loans Acquired loans were initially measured at fair value and subsequently accounted for under either ASC 310-30 or ASC 310-20 (Non-refundable fees and Other Costs). We have acquired loans in t he acquisitions of BBVAPR and Eurobank. Acquired BBVAPR Loans Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium) Credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium are accounted for under the guidance of ASC 3 10-20, which requires that any contractually required loan payment receivable in excess of Oriental’s initial investment in the loans be accreted into interest income on a level-yield basis over the life of the loan. Loans accounted for under ASC 310-20 ar e placed on non-accrual status when past due in accordance with Oriental’s non-accrual policy, and any accretion of discount or amortization of premium is discontinued. Acquired BBVAPR loans that were accounted for under the provisions of ASC 310-20 are re moved from the acquired loan category at the end of the reporting period upon refinancing, renewal or normal re-underwriting. The following tables present the aging of the recorded investment in gross acquired BBVAPR loans accounted for under ASC 310-20 as of June 30 , 2018 and December 31 , 2017 , by class of loans: June 30, 2018 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Commercial Commercial secured by real estate Retail $ - $ - $ 54 $ 54 $ - $ 54 $ - Floor plan - - 917 917 332 1,249 - - - 971 971 332 1,303 - Other commercial and industrial Retail 22 13 42 77 1,527 1,604 - Floor plan - - 2 2 - 2 - 22 13 44 79 1,527 1,606 - 22 13 1,015 1,050 1,859 2,909 - Consumer Credit cards 516 196 584 1,296 22,185 23,481 - Personal loans 73 8 14 95 2,160 2,255 - 589 204 598 1,391 24,345 25,736 - Auto 726 475 139 1,340 9,943 11,283 - Total $ 1,337 $ 692 $ 1,752 $ 3,781 $ 36,147 $ 39,928 $ - December 31, 2017 Loans 90+ Days Past Due and 30-59 Days 60-89 Days 90+ Days Total Past Still Past Due Past Due Past Due Due Current Total Loans Accruing (In thousands) Commercial Commercial secured by real estate Retail $ - $ - $ 119 $ 119 $ - $ 119 $ - Floor plan - - 928 928 393 1,321 - - - 1,047 1,047 393 1,440 - Other commercial and industrial Retail 36 - 221 257 2,681 2,938 - Floor plan - - 2 2 - 2 - 36 - 223 259 2,681 2,940 - 36 - 1,270 1,306 3,074 4,380 - Consumer Credit cards 208 127 1,310 1,645 24,822 26,467 - Personal loans 139 61 45 245 2,203 2,448 - 347 188 1,355 1,890 27,025 28,915 - Auto 602 248 179 1,029 20,940 21,969 - Total $ 985 $ 436 $ 2,804 $ 4,225 $ 51,039 $ 55,264 $ - Acquired BBVAPR Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy) Acquired BBVAPR loans, except for credit cards, retail and commercial revolving lines of credits, floor plans and performing auto loans with FICO scores over 660 acquired at a premium, are accounted for by Oriental in accordance with ASC 310-30. The carrying amount corresponding to acquired BBVAPR loans with deteriorated credit quality, including those accounted under ASC 310-30 by analogy, in the statements of financial condition at June 30 , 2018 and December 31 , 2017 is as follows: June 30, December 31, 2018 2017 (In thousands) Contractual required payments receivable: $ 1,406,468 $ 1,481,616 Less: Non-accretable discount 350,257 352,431 Cash expected to be collected 1,056,211 1,129,185 Less: Accretable yield 287,992 308,913 Carrying amount, gross 768,219 820,272 Less: allowance for loan and lease losses 44,176 45,755 Carrying amount, net $ 724,043 $ 774,517 At June 30 , 2018 and December 31 , 2017 , Oriental had $ 50. 8 million an d $ 50.3 million, respectively, in loans granted to Puerto Rico municipalities as part of its acquired BBVAPR loans accounted for under ASC 310-30. These loans are primarily secure d municipal general obligations. T he following tables describe the accretable yield and non-accretable discount activity of acquired BBVAPR loans accounted for under ASC 310-30 for the quarters and six-month periods ended June 30 , 2018 and 2017 Quarter Ended June 30, 2018 Mortgage Commercial Auto Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 248,379 $ 45,711 $ 1,726 $ 649 $ 296,465 Accretion (6,915) (3,597) (656) (194) (11,362) Change in expected cash flows - 2,775 400 73 3,248 Transfer from (to) non-accretable discount 2,439 (2,368) (399) (31) (359) Balance at end of period $ 243,903 $ 42,521 $ 1,071 $ 497 $ 287,992 Non-Accretable Discount Activity: Balance at beginning of period $ 301,107 $ 10,731 $ 23,443 $ 19,309 $ 354,590 Change in actual and expected losses (2,531) (1,956) (197) (8) (4,692) Transfer from accretable yield (2,439) 2,368 399 31 359 Balance at end of period $ 296,137 $ 11,143 $ 23,645 $ 19,332 $ 350,257 Six-Month Period Ended June 30, 2018 Mortgage Commercial Auto Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 258,498 $ 46,764 $ 2,766 $ 885 $ 308,913 Accretion (13,988) (7,282) (1,525) (450) (23,245) Change in expected cash flows - 5,931 826 131 6,888 Transfer (to) non-accretable discount (607) (2,892) (996) (69) (4,564) Balance at end of period $ 243,903 $ 42,521 $ 1,071 $ 497 $ 287,992 Non-Accretable Discount Activity: Balance at beginning of period $ 299,501 $ 10,596 $ 23,050 $ 19,284 $ 352,431 Change in actual and expected losses (3,971) (2,345) (401) (21) (6,738) Transfer from accretable yield 607 2,892 996 69 4,564 Balance at end of period $ 296,137 $ 11,143 $ 23,645 $ 19,332 $ 350,257 Quarter Ended June 30, 2017 Mortgage Commercial Auto Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 276,817 $ 46,902 $ 6,583 $ 3,058 $ 333,360 Accretion (7,694) (4,513) (1,776) (556) (14,539) Change in actual and expected losses 1 15,993 98 50 16,142 Transfer (to) from non-accretable discount 1,024 (2,344) (52) (1,066) (2,438) Balance at end of period $ 270,148 $ 56,038 $ 4,853 $ 1,486 $ 332,525 Non-Accretable Discount Activity: Balance at beginning of period $ 309,993 $ 14,803 $ 22,564 $ 18,159 $ 365,519 Change in actual and expected losses (2,465) (280) 1,344 206 (1,195) Transfer from (to) accretable yield (1,024) 2,344 52 1,066 2,438 Balance at end of period $ 306,504 $ 16,867 $ 23,960 $ 19,431 $ 366,762 Six-Month Period Ended June 30, 2017 Mortgage Commercial Auto Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 292,115 $ 50,366 $ 8,538 $ 3,682 $ 354,701 Accretion (15,584) (9,494) (3,923) (1,158) (30,159) Change in actual and expected losses 2 16,191 150 86 16,429 Transfer (to) from non-accretable discount (6,385) (1,025) 88 (1,124) (8,446) Balance at end of period $ 270,148 $ 56,038 $ 4,853 $ 1,486 $ 332,525 Non-Accretable Discount Activity: Balance at beginning of period $ 305,615 $ 16,965 $ 22,407 $ 18,120 $ 363,107 Change in actual and expected losses (5,496) (1,123) 1,641 187 (4,791) Transfer from (to) accretable yield 6,385 1,025 (88) 1,124 8,446 Balance at end of period $ 306,504 $ 16,867 $ 23,960 $ 19,431 $ 366,762 Acquired Eurobank Loans The carrying amount of acquired Eurobank loans at June 30 , 2018 and December 31 , 2017 is as follows: March 31 December 31 2018 2017 (In thousands) Contractual required payments receivable: $ 174,859 $ 179,960 Less: Non-accretable discount 5,547 5,845 Cash expected to be collected 169,312 174,115 Less: Accretable yield 46,594 49,672 Carrying amount, gross 122,718 124,443 Less: Allowance for loan and lease losses 25,410 25,174 Carrying amount, net $ 97,308 $ 99,269 The following tables describe the accretable yield and non-accretable discount activity of acquired Eurobank loans for the quarters and six-month periods en ded June 30 , 2018 and 2017 : Quarter Ended June 30, 2018 Loans Secured by 1-4 Family Residential Properties Commercial Construction & Development Secured by 1-4 Family Residential Properties Leasing Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 39,622 5,616 1,356 - - 46,594 Accretion (1,538) (1,706) - (4) (118) (3,366) Change in expected cash flows (836) 1,832 - (111) 236 1,121 Transfer (to) from non-accretable discount 2,021 (1,157) (132) 115 (118) 729 Balance at end of period $ 39,269 $ 4,585 $ 1,224 $ - $ - $ 45,078 Non-Accretable Discount Activity: Balance at beginning of period $ 4,479 - 849 - 219 5,547 Change in actual and expected losses 180 (1,157) - 115 (137) (999) Transfer from (to) accretable yield (2,021) 1,157 132 (115) 118 (729) Balance at end of period $ 2,638 $ - $ 981 $ - $ 200 $ 3,819 Six-Month Period Ended June 30, 2018 Loans Secured by 1-4 Family Residential Properties Commercial Construction & Development Secured by 1-4 Family Residential Properties Leasing Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of year $ 41,474 $ 6,751 $ 1,447 $ - $ - $ 49,672 Accretion (3,143) (3,312) - (38) (214) (6,707) Change in expected cash flows (980) 2,730 - (174) 414 1,990 Transfer from (to) non-accretable discount 1,918 (1,584) (223) 212 (200) 123 Balance at end of period $ 39,269 $ 4,585 $ 1,224 $ - $ - $ 45,078 Non-Accretable Discount Activity: Balance at beginning of year $ 4,576 $ 276 $ 758 $ - $ 235 $ 5,845 Change in actual and expected losses (20) (1,860) - 212 (235) (1,903) Transfer from (to) accretable yield (1,918) 1,584 223 (212) 200 (123) Balance at end of period $ 2,638 $ - $ 981 $ - $ 200 $ 3,819 Quarter Ended June 30, 2017 Loans Secured by 1-4 Family Residential Properties Commercial Construction & Development Secured by 1-4 Family Residential Properties Leasing Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 44,697 $ 12,743 $ 1,871 - $ - $ 59,311 Accretion (1,923) (4,061) (5) (11) (37) (6,037) Change in actual and expected losses 19 543 6 (22) 74 620 Transfer from (to) non-accretable discount 219 (68) 34 33 (37) 181 Balance at end of period $ 43,012 $ 9,157 $ 1,906 $ - $ - $ 54,075 Non-Accretable Discount Activity: Balance at beginning of period $ 7,426 $ 2,471 $ 333 $ - $ 6 $ 10,236 Change in actual and expected losses (520) (529) - 33 (29) (1,045) Transfer (to) from accretable yield (219) 68 (34) (33) 37 (181) Balance at end of period $ 6,687 $ 2,010 $ 299 $ - $ 14 $ 9,010 Six-Month Period Ended June 30, 2017 Loans Secured by 1-4 Family Residential Properties Commercial Construction & Development Secured by 1-4 Family Residential Properties Leasing Consumer Total (In thousands) Accretable Yield Activity: Balance at beginning of period $ 45,839 $ 16,475 $ 2,194 $ - $ - $ 64,508 Accretion (3,827) (8,571) (43) (11) (195) (12,647) Change in expected cash flows 100 1,321 43 (165) 384 1,683 Transfer from (to) non-accretable discount 900 (68) (288) 176 (189) 531 Balance at end of period $ 43,012 $ 9,157 $ 1,906 $ - $ - $ 54,075 Non-Accretable Discount Activity: Balance at beginning of period $ 8,441 $ 3,880 $ 11 $ - $ 8 $ 12,340 Change in actual and expected cash flows (854) (1,938) - 176 (183) (2,799) Transfer (to) from accretable yield (900) 68 288 (176) 189 (531) Balance at end of period $ 6,687 $ 2,010 $ 299 $ - $ 14 $ 9,010 Non-accrual Loans The following table presents the recorded investment in loans in non-accrual status by class of loans as of June 30 , 2018 and December 31 , 2017 : June 30, December 31, 2018 2017 (In thousands) Originated and other loans and leases held for investment Mortgage Traditional (by origination year): Up to the year 2002 $ 3,616 $ 3,070 Years 2003 and 2004 6,082 6,380 Year 2005 4,108 3,280 Year 2006 5,004 5,905 Years 2007, 2008 and 2009 7,454 7,984 Years 2010, 2011, 2012, 2013 8,272 6,259 Years 2014, 2015, 2016 and 2017 1,593 1,649 36,129 34,527 Non-traditional 3,131 3,543 Loss mitigation program 19,675 16,783 58,935 54,853 Commercial Commercial secured by real estate Institutional 10,352 118 Middle market 8,533 11,394 Retail 15,906 14,438 34,791 25,950 Other commercial and industrial Middle market 9,781 6,323 Retail 2,828 2,929 Floor plan 51 51 12,660 9,303 47,451 35,253 Consumer Credit cards 875 1,227 Overdrafts - 31 Personal lines of credit 50 102 Personal loans 1,884 900 Cash collateral personal loans 17 312 2,826 2,572 Auto and leasing 11,141 4,232 Total non-accrual originated loans $ 120,353 $ 96,910 June 30, December 31, 2018 2017 (In thousands) Acquired BBVAPR loans accounted for under ASC 310-20 Commercial Commercial secured by real estate Retail $ 54 $ 119 Floor plan 917 928 971 1,047 Other commercial and industrial Retail 42 221 Floor plan 2 2 44 223 1,015 1,270 Consumer Credit cards 584 1,310 Personal loans 14 45 598 1,355 Auto 139 179 Total non-accrual acquired BBVAPR loans accounted for under ASC 310-20 1,752 2,804 Total non-accrual loans $ 122,105 $ 99,714 Loans accounted for under ASC 310-30 are excluded from the above table as they are considered to be performing due to the application of the accretion method, in which these loans will accrete interest income over the remaining life of the loans using estimated cash flow analyses or are accounted under the cost recovery method. Delinquent residential mortgage loans insured or guaranteed under applicable FHA and VA programs are classified as non-performing loans when they become 90 days or more past due , but are not placed in non-accrual status until they become 1 2 months or more past due, since they are insured loans. Therefore, these loans are included as non-performing loans but excluded from non-accrual loans. In addition, these loans are excluded fr om the impairment analysis. At June 30 , 2018 and December 31 , 2017 , loans whose terms have been extended and which are classified as troubled-debt restructurings that are not included in non- accrual loans amounted to $ 100.5 million and $ 109.2 million , respectively, as they are performing under their new term s. At June 30 , 2018 and December 31 , 2017 , loans that are current in their monthly payments, but placed in non-accrual due to credit deterioration amounted to $ 21. 8 million and $ 20.1 million, respectively . Impaired Loans Oriental evaluates all loans, some individually and others as homogeneous groups, for purposes of determining impairment. The total investment in impaired commercial loans that were individually evaluated for impairment was $ 69.8 million and $ 72 .3 million at June 30 , 2018 and December 31 , 2017 , respectively. The impairments on these commercial loans were measured based on the fair value of collateral or the present value of cash flows, including those identified as troubled- debt restr ucturings . The allowance for loan and lease losses for these impaired commercial loans amounted to $ 10.0 million and $ 1 0 . 6 million at June 30 , 2018 and December 31 , 2017 , respectively. The total investment in impaired mortgage loans that were individu ally evaluated for impairment was $ 84.5 million and $ 85.4 million at June 30 , 2018 and December 31 , 2017 , respectively. Impairment on mortgage loans assessed as troubled-debt restructurings was measured using the present value of cash flows. The allow ance for loan losses for these impaired mortgage loans amounted to $ 9.9 million and $ 9.1 million at June 30 , 2018 and December 31 , 2017 , respectively. Originated and Other Loans and Leases Held for Investment Oriental ’s recorded investment in commercial and mortgage loans categorized as originated and other loans and leases held for investment that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30 , 2018 and 2017 are as follows: June 30, 2018 Unpaid Recorded Related Principal Investment Allowance Coverage (In thousands) Impaired loans with specific allowance: Commercial $ 47,346 $ 43,363 $ 9,906 23% Residential impaired and troubled-debt restructuring 95,121 84,520 9,862 12% Impaired loans with no specific allowance: Commercial 30,916 25,689 N/A 0% Total investment in impaired loans $ 173,383 $ 153,572 $ 19,768 13% December 31, 2017 Unpaid Recorded Related Principal Investment Allowance Coverage (In thousands) Impaired loans with specific allowance: Commercial $ 57,922 $ 52,585 $ 10,573 20% Residential impaired and troubled-debt restructuring 94,971 85,403 9,121 11% Impaired loans with no specific allowance Commercial 22,022 18,953 N/A 0% Total investment in impaired loans $ 174,915 $ 156,941 $ 19,694 13% Acquired BBVAPR Loans Accounted for under ASC 310-20 (Loans with revolving feature and/or acquired at a premium) Oriental ’s recorded investment in acquired BBVAPR commercial loans accounted for under ASC 310-20 that were individually evaluated for impairment and the related allowance for loan and lease losses at June 30 , 2018 and December 31 , 2017 are as follows: June 30, 2018 Unpaid Recorded Related Principal Investment Allowance Coverage (In thousands) Impaired loans with specific allowance Commercial $ 926 $ 747 $ 68 9% Impaired loans with no specific allowance Commercial $ - $ - N/A 0% Total investment in impaired loans $ 926 $ 747 $ 68 9% December 31, 2017 Unpaid Recorded Specific Principal Investment Allowance Coverage (In thousands) Impaired loans with specific allowance Commercial $ 926 $ 747 $ 20 3% Impaired loans with no specific allowance Commercial $ - $ - N/A 0% Total investment in impaired loans $ 926 $ 747 $ 20 3% Acquired BBVAPR Loans Accounted for under ASC 310-30 (including those accounted for under ASC 310-30 by analogy) Oriental ’s recorded investment in acquired BBVAPR loan pools accounted for under ASC 310-30 that have recorded impairments and their related allowance for loan and lease losses at June 30 , 2018 and December 31 , 2017 are as follows: June 30, 2018 Coverage Unpaid Recorded to Recorded Principal Investment Allowance Investment (In thousands) Impaired loan pools with specific allowance: Mortgage $ 525,230 $ 516,934 $ 14,567 3% Commercial 230,905 222,202 23,019 10% Consumer 1,400 495 18 4% Auto 28,086 26,937 6,572 24% Total investment in impaired loan pools $ 785,621 $ 766,568 $ 44,176 6% December 31 , 2017 Coverage Unpaid Recorded to Recorded Principal Investment Allowance Investment (In thousands) Impaired loan pools with specific allowance: Mortgage $ 547,064 $ 532,052 $ 14,085 3% Commercial 250,451 241,124 23,691 10% Consumer 2,468 1,431 18 1% Auto 43,440 43,696 7,961 18% Total investment in impaired loan pools $ 843,423 $ 818,303 $ 45,755 6% The tables above only present information with respect to acquired BBVAPR loan pools accounted for under ASC 310-30 if there is a recorded impairment to such loan pools and a specific allowance for loan losses. Acquired Eurobank Loans Oriental ’s recorded investment in acquired Eurobank loan pools that have recorded impairments and their related allowance for loan and lease losses as of June 30 , 2018 and December 31 , 2017 are as follows : June 30, 2018 Coverage Unpaid Recorded to Recorded Principal Investment Allowance Investment (In thousands) Impaired loan pools with specific allowance: Loans secured by 1-4 family residential properties $ 74,185 $ 65,584 $ 15,170 23% Commercial 51,865 49,758 9,140 18% Consumer 14 4 4 100% Total investment in impaired loan pools $ 126,064 $ 115,346 $ 24,314 21% December 31, 2017 Coverage Unpaid Recorded Specific to Recorded Principal Investment Allowance Investment (In thousands) Impaired loan pools with specific allowance Loans secured by 1-4 family residential properties $ 81,132 $ 69,538 $ 15,187 22% Commercial 58,099 53,793 9,982 19% Consumer 15 4 5 125% Total investment in impaired loan pools $ 139,246 $ 123,335 $ 25,174 20% The tables above only present information with respect to acquired Eurobank loan pools accounted for under ASC 310-30 if there is a recorded impairment to such loan pools and a specific allowance for loan losses. The following table presents the interest recognized in commercial and mortgage loans that were individually evaluated for impairment, which excludes loans accounted for under ASC 310-30, for the quarters and six-month periods ended June 30 , 2018 and 2017 : Quarter Ended June 30, 2018 2017 Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment (In thousands) Originated and other loans held for investment: Impaired loans with specific allowance Commercial $ 129 $ 46,976 $ 193 $ 14,908 Residential troubled-debt restructuring 705 84,473 723 87,615 Impaired loans with no specific allowance Commercial 131 22,129 383 44,528 965 153,578 1,299 147,051 Acquired loans accounted for under ASC 310-20: Impaired loans with specific allowance Commercial - 747 - - Impaired loans with no specific allowance Commercial - - - 763 Total interest income from impaired loans $ 965 $ 154,325 $ 1,299 $ 147,814 Six-Month Period Ended June 30, 2018 2017 Interest Income Recognized Average Recorded Investment Interest Income Recognized Average Recorded Investment (In thousands) Originated and other loans held for investment: Impaired loans with specific allowance Commercial $ 250 $ 49,154 $ 385 $ 13,859 Residential troubled-debt restructuring 1,384 84,613 1,427 88,579 Impaired loans with no specific allowance Commercial 262 19,946 766 44,211 Total interest income from impaired loans $ 1,896 $ 153,713 $ 2,578 $ 146,649 Acquired loans accounted for under ASC 310-20: Impaired loans with specific allowance Commercial $ - $ 747 $ - $ - Impaired loans with no specific allowance Commercial - - - 840 Total interest income from impaired loans $ 1,896 $ 154,460 $ 2,578 $ 147,489 Modifications The following tables present the troubled-debt restructurings in all loan portfolios during the quarters and six-month periods ended June 30 , 2018 and 2017 . Quarter Ended June 30, 2018 Number of contracts Pre-Modification Outstanding Recorded Investment Pre-Modification Weighted Average Rate Pre-Modification Weighted Average Term (in Months) Post-Modification Outstanding Recorded Investment Post-Modification Weighted Average Rate Post-Modification Weighted Average Term (in Months) (Dollars in thousands) Mortgage 45 $ 5,718 5.63% 371 $ 5,679 4.85% 325 Commercial 5 5,775 5.55% 39 5,775 6.34% 45 Consumer 21 357 16.49% 56 357 10.26% 72 Six-Month Period Ended June 30, 2018 Number of contracts Pre-Modification Outstanding Recorded Investment Pre-Modification Weighted Average Rate Pre-Modification Weighted Average Term (in Months) Post-Modification Outstanding Recorded Investment Post-Modification Weighted Average Rate Post-Modification Weighted Average Term (in Months) (Dollars in thousands) Mortgage 83 $ 11,466 5.66% 384 $ 11,019 4.96% 344 Commercial 8 7,334 5.38% 46 7,330 6.00% 50 Consumer 49 711 16.12% 51 712 10.93% 70 Quarter Ended June 30, 2017 Number of contracts Pre-Modification Outstanding Recorded Investment Pre-Modification Weighted Average Rate Pre-Modification Weighted Average Term (in Months) Post-Modification Outstanding Recorded Investment Post-Modification Weighted Average Rate Post-Modification Weighted Average Term (in Months) (Dollars in thousands) Mortgage 27 $ 3,349 6.00% 382 $ 3,313 4.21% 367 Commercial 9 2,155 5.96% 55 2,155 5.12% 68 Consumer 37 477 12.83% 65 477 10.87% 68 Auto 4 66 6.39% 61 66 12.91% 37 Six-Month Period Ended June 30, 2017 Number of contracts Pre-Modification Outstanding Recorded Investment Pre-Modification Weighted Average Rate Pre-Modification Weighted Average Term (in Months) Post-Modification Outstanding Recorded Investment Post-Modification Weighted Average Rate Post-Modification Weighted Average Term (in Months) (Dollars in thousands) Mortgage 59 $ 7,353 6.29% 387 $ 7,328 4.26% 378 Commercial 18 3,373 6.44% 55 3,374 5.41% 67 Consumer 62 869 11.98% 65 907 10.62% 70 Auto 7 111 7.41% 67 113 |