Allowance for credit losses

3 Months Ended

Mar. 31, 2020

Allowance for Credit Loss

Allowance for loan losses

Note 9 – Allowance for credit losses – loans held-in-portfolio

The Corporation follows the current expected credit loss (“CECL”) model, to establish and evaluate the adequacy of the allowance for credit losses (“ACL”) to provide for inherent losses in the loan portfolio. This model establishes a forward-looking methodology that reflects the expected credit losses over the lives of financial assets, starting when such assets are first acquired. In addition, CECL provides that the initial allowance for credit losses on purchased credit deteriorated (“PCD”) financial assets will be recorded as an increase to the purchase price, with subsequent changes to the allowance recorded as a credit loss expense. The provision for credit losses charged to current operations is based on this methodology. Loan losses are charged and recoveries are credited to the ACL. Refer to Note 4 - Summary of significant accounting policies, for a description of the Corporation’s methodology to estimate the ACL.

The following tables present the changes in the allowance for credit losses, and loan ending balances for the quarters ended March 31, 2020 and 2019.

For the quarter ended March 31, 2020
Puerto Rico
(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	131,063	$	574	$	116,281	$	10,768	$	173,965	$	432,651
	Impact of adopting CECL		62,393		115		86,081		(713)		122,492		270,368
	Provision (reversal of provision)		14,974		(289)		5,547		5,841		86,931		113,004
	Initial allowance for credit losses - PCD Loans		-		-		429		-		-		429
	Charge-offs		(2,994)		-		(8,306)		(3,775)		(58,084)		(73,159)
	Recoveries		2,414		19		2,768		468		7,973		13,642
Ending balance		$	207,850	$	419	$	202,800	$	12,589	$	333,277	$	756,935

For the quarter ended March 31, 2020
Popular U.S.
(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Beginning balance		$	15,989	$	4,204	$	4,827	$	630	$	19,407	$	45,057
	Impact of adopting CECL		29,103		(2,986)		10,431		382		7,809		44,739
	Provision (reversal of provision)		52,206		799		9,028		913		13,045		75,991
	Charge-offs		(568)		-		(9)		(9)		(4,938)		(5,524)
	Recoveries		468		155		10		110		1,775		2,518
Ending balance		$	97,198	$	2,172	$	24,287	$	2,026	$	37,098	$	162,781

For the quarter ended March 31, 2020
Popular, Inc.
(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	147,052	$	4,778	$	121,108	$	630	$	10,768	$	193,372	$	477,708
	Impact of adopting CECL		91,496		(2,871)		96,512		382		(713)		130,301		315,107
	Provision (reversal of provision)		67,180		510		14,575		913		5,841		99,976		188,995
	Initial allowance for credit losses - PCD Loans		-		-		429		-		-		-		429
	Charge-offs		(3,562)		-		(8,315)		(9)		(3,775)		(63,022)		(78,683)
	Recoveries		2,882		174		2,778		110		468		9,748		16,160
Ending balance		$	305,048	$	2,591	$	227,087	$	2,026	$	12,589	$	370,375	$	919,716

For the quarter ended March 31, 2019
Puerto Rico
(In thousands)		Commercial		Construction		Mortgage		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	207,214	$	886	$	142,978	$	11,486	$	144,594	$	507,158
	Provision (reversal of provision)		(1,689)		(81)		6,061		(891)		28,054		31,454
	Charge-offs		(19,461)		(22)		(13,174)		(2,096)		(35,869)		(70,622)
	Recoveries		2,867		39		1,991		610		10,886		16,393
Ending balance		$	188,931	$	822	$	137,856	$	9,109	$	147,665	$	484,383
Specific ALLL		$	33,253	$	19	$	40,779	$	321	$	23,350	$	97,722
General ALLL		$	155,678	$	803	$	97,077	$	8,788	$	124,315	$	386,661
Loans held-in-portfolio:
Impaired loans		$	381,803	$	1,788	$	515,365	$	1,018	$	101,887	$	1,001,861
Loans held-in-portfolio excluding impaired loans			7,009,319		89,584		5,860,223		962,214		5,073,149		18,994,489
Total loans held-in-portfolio		$	7,391,122	$	91,372	$	6,375,588	$	963,232	$	5,175,036	$	19,996,350

For the quarter ended March 31, 2019
Popular U.S.
(In thousands)		Commercial		Construction		Mortgage		Legacy		Consumer		Total
Allowance for credit losses:
Beginning balance		$	31,901	$	6,538	$	4,434	$	969	$	18,348	$	62,190
	Provision (reversal of provision)		6,491		128		237		(855)		4,370		10,371
	Charge-offs		(3,481)		-		(251)		164		(5,651)		(9,219)
	Recoveries		647		8		22		551		1,675		2,903
Ending balance		$	35,558	$	6,674	$	4,442	$	829	$	18,742	$	66,245
Specific ALLL		$	223	$	-	$	2,360	$	-	$	1,653	$	4,236
General ALLL		$	35,335	$	6,674	$	2,082	$	829	$	17,089	$	62,009
Loans held-in-portfolio:
Impaired loans		$	1,691	$	12,060	$	9,438	$	-	$	8,987	$	32,176
Loans held-in-portfolio excluding impaired loans			4,665,497		687,888		822,154		24,404		419,239		6,619,182
Total loans held-in-portfolio		$	4,667,188	$	699,948	$	831,592	$	24,404	$	428,226	$	6,651,358

For the quarter ended March 31, 2019
Popular, Inc.
(In thousands)		Commercial		Construction		Mortgage		Legacy		Leasing		Consumer		Total
Allowance for credit losses:
Beginning balance		$	239,115	$	7,424	$	147,412	$	969	$	11,486	$	162,942	$	569,348
	Provision (reversal of provision)		4,802		47		6,298		(855)		(891)		32,424		41,825
	Charge-offs		(22,942)		(22)		(13,425)		164		(2,096)		(41,520)		(79,841)
	Recoveries		3,514		47		2,013		551		610		12,561		19,296
Ending balance		$	224,489	$	7,496	$	142,298	$	829	$	9,109	$	166,407	$	550,628
Specific ALLL		$	33,476	$	19	$	43,139	$	-	$	321	$	25,003	$	101,958
General ALLL		$	191,013	$	7,477	$	99,159	$	829	$	8,788	$	141,404	$	448,670
Loans held-in-portfolio:
Impaired loans		$	383,494	$	13,848	$	524,803	$	-	$	1,018	$	110,874	$	1,034,037
Loans held-in-portfolio excluding impaired loans			11,674,816		777,472		6,682,377		24,404		962,214		5,492,388		25,613,671
Total loans held-in-portfolio		$	12,058,310	$	791,320	$	7,207,180	$	24,404	$	963,232	$	5,603,262	$	26,647,708

The following table presents the changes in the allowance for credit losses on unfunded commitments, which is presented as part of Other Liabilities, for the quarters ended March 31, 2020 and 2019.

		For the quarters ended March 31,
(In thousands)		2020		2019
Allowance for credit losses on unfunded commitments:
Balance at beginning of period		$	8,717	$	8,216
	Impact of adopting CECL		(5,460)		-
	Provision		1,209		119
Ending balance		$	4,466	$	8,335

The following table provides the activity in the allowance for credit losses related to loans accounted for pursuant to ASC Subtopic 310-30.

	ASC 310-30
(In thousands)	For the quarter ended March 31, 2019
Balance at beginning of period	$	122,135
Provision		7,726
Net charge-offs		(5,714)
Balance at end of period	$	124,147

Modifications

A modification of a loan constitutes a troubled debt restructuring when a borrower is experiencing financial difficulty and the modification constitutes a concession. For a summary of the accounting policy related to troubled debt restructurings (“TDRs”), refer to the Summary of Significant Accounting Policies included in Note 2 to the 2019 Form 10-K.

The outstanding balance of loans classified as TDRs amounted to $ 1.6 billion at March 31, 2020 (December 31, 2019 - $ 1.6 billion). The amount of outstanding commitments to lend additional funds to debtors owing receivables whose terms have been modified in TDRs amounted to $12 million related to the commercial loan portfolio at March 31, 2020 (December 31, 2019 - $14 million).

At March 31, 2020, the mortgage loan TDRs include $639 million guaranteed by U.S. sponsored entities at BPPR, compared to $625 million at December 31, 2019.

In response to the COVID-19 pandemic, the Corporation has entered into loan modifications with eligible customers in mortgage, consumer loans, credit cards, auto loans and leases and certain commercial credit facilities, comprised mainly of payment deferrals of up to six months, subject to certain terms and conditions. The Puerto Rico Legislative Assembly has also enacted legislation requiring financial institutions to offer to clients impacted by the COVID-19 pandemic moratoriums on consumer financial products through June 2020. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed by the President of the United States as part of an economic stimulus package, provided relief related to U.S. GAAP requirements for loan modifications related to COVID-19 relief measures. In addition, the Federal Reserve, along with other U.S. banking regulators, also issued interagency guidance to financial institutions that offers some practical expedients for evaluating whether loan modifications that occur in response to the COVID-19 pandemic are TDRs. According to the interagency guidance, COVID-19 related short-term modifications (i.e., six months or less) granted to consumer or commercial loans that were current as of the date of the loan modification are not TDRs, since financial institutions may conclude that the borrower is not experiencing financial difficulties. In addition, a modification or deferral program that is mandated by the federal government or a state government (e.g., a state program that requires all institutions within that state to suspend mortgage payments for a specified period) does not represent a TDR.

In accordance with the guidance in the CARES Act and interagency regulatory guidance, the loan modifications completed by the Corporation as part of the COVID-19 relief measures have not been treated as TDRs. Furthermore, these loan modifications do not affect the asset quality measures as the deferred payments are not deemed to be delinquent and the Corporation continues to accrue interest on these loans.

At March 31, 2020, the Corporation had completed 6,304 modifications for residential mortgage loans with an unpaid principal balance of $832 million and 3,798 modifications for credit cards with an unpaid principal balance of $22 million in response to the COVID-19 pandemic.

The following table presents the outstanding balance of loans classified as TDRs according to their accruing status and the related allowance at March 31, 2020 and December 31, 2019.

	March 31, 2020								December 31, 2019
(In thousands)		Accruing		Non-Accruing		Total		Related Allowance		Accruing		Non-Accruing		Total		Related Allowance
Loans held-in-portfolio:
Commercial	$	241,294	$	107,442	$	348,736	$	20,089	$	237,861	$	111,587	$	349,448	$	16,443
Construction		-		-		-		-		-		119		119		6
Mortgage		1,028,415		132,414		1,160,829		72,215		1,013,561		126,036		1,139,597		42,012
Leases		313		53		366		23		264		243		507		61
Consumer		78,972		15,579		94,551		27,016		82,205		15,808		98,013		21,404
Loans held-in-portfolio	$	1,348,994	$	255,488	$	1,604,482	$	119,343	$	1,333,891	$	253,793	$	1,587,684	$	79,926

The following tables present the loan count by type of modification for those loans modified in a TDR during the quarters ended March 31, 2020 and 2019. Loans modified as TDRs for the U.S. operations are considered insignificant to the Corporation.

For the quarter ended March 31, 2020
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial real estate non-owner occupied	-	1	-	-
Commercial real estate owner occupied	-	6	-	-
Commercial and industrial	1	11	-	1
Mortgage	2	26	147	-
Leasing	-	-	3	-
Consumer:
Credit cards	148	-	-	13
HELOCs	-	-	1	-
Personal	100	1	-	1
Auto	-	1	2	-
Other	1	-	-	-
Total	252	46	153	15

For the quarter ended March 31, 2019
	Reduction in interest rate	Extension of maturity date	Combination of reduction in interest rate and extension of maturity date	Other
Commercial real estate non-owner occupied	-	1	-	-
Commercial real estate owner occupied	-	10	-	-
Commercial and industrial	-	16	-	-
Mortgage	6	27	157	-
Consumer:
Credit cards	122	-	1	66
HELOCs	-	6	4	-
Personal	152	2	-	-
Auto	-	2	-	-
Other	6	-	-	-
Total	286	64	162	66

The following tables present, by class, quantitative information related to loans modified as TDRs during the quarters ended March 31, 2020 and 2019.

For the quarter ended March 31, 2020
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial real estate non-owner occupied	1	$	104	$	104	$	(8)
Commercial real estate owner occupied	6		3,906		3,902		105
Commercial and industrial	13		4,070		4,068		(717)
Mortgage	175		20,315		17,940		2,012
Leasing	3		94		95		6
Consumer:
Credit cards	161		1,260		1,273		84
HELOCs	1		332		265		854
Personal	102		1,861		1,859		297
Auto	3		86		87		12
Other	1		20		20		5
Total	466	$	32,048	$	29,613	$	2,650

For the quarter ended March 31, 2019
(Dollars in thousands)	Loan count	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Increase (decrease) in the allowance for loan losses as a result of modification
Commercial real estate non-owner occupied	1	$	314	$	311	$	18
Commercial real estate owner occupied	10		2,019		1,973		19
Commercial and industrial	16		3,943		4,479		314
Mortgage	190		20,732		18,591		671
Consumer:
Credit cards	189		1,543		1,530		171
HELOCs	10		694		621		55
Personal	154		3,147		3,153		805
Auto	2		25		23		4
Other	6		13		13		2
Total	578	$	32,430	$	30,694	$	2,059

The following tables present, by class, TDRs that were subject to payment default and that had been modified as a TDR during the twelve months preceding the default date. Payment default is defined as a restructured loan becoming 90 days past due after being modified, foreclosed or charged-off, whichever occurs first. The recorded investment as of period end is inclusive of all partial paydowns and charge-offs since the modification date. Loans modified as a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

Defaulted during the quarter ended March 31, 2020
(Dollars in thousands)	Loan count	Recorded investment as of first default date
Commercial real estate owner occupied	2	$	243
Commercial and industrial	2		40
Mortgage	39		4,482
Consumer:
Credit cards	106		859
Personal	45		808
Other	1		-
Total	195	$	6,432

Defaulted during the quarter ended March 31, 2019
(Dollars in thousands)	Loan count	Recorded investment as of first default date
Commercial real estate non-owner occupied	1	$	47
Commercial real estate owner occupied	2		427
Commercial and industrial	1		50
Mortgage	8		745
Leasing	1		22
Consumer:
Credit cards	104		1,087
Personal	68		1,352
Total	185	$	3,730

Commercial, consumer and mortgage loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Corporation evaluates the loan for possible further impairment. The allowance for credit losses may be increased or partial charge-offs may be taken to further write-down the carrying value of the loan.

Credit Quality

The risk rating system provides for the assignment of ratings at the obligor level based on the financial condition of the borrower. The risk rating analysis process is performed at least once a year or more frequently if events or conditions change which may deteriorate the credit quality. In the case of consumer and mortgage loans, these loans are classified considering their delinquency status at the end of the reporting period.

The following table presents the amortized cost basis, net of unearned income, of loans held-in-portfolio based on the Corporation’s assignment of obligor risk ratings as defined at March 31, 2020 by vintage year. For the definitions of the obligor risk ratings, refer to

the Credit Quality section of Note 9 to the Consolidated Financial Statements included in the Corporation’s Form 10K for the year ended December 31, 2019.

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Puerto Rico
	Commercial:
		Commercial multi-family
			Watch	$	-	$	-	$	-	$	-	$	-	$	4,778	$	-	$	-	$	4,778
			Special mention		-		-		-		-		-		3,810		-		-		3,810
			Substandard		-		-		-		-		-		1,262		100		-		1,362
			Pass/Unrated		1,300		37,086		26,582		2,135		4,805		65,407		-		-		137,315
		Total commercial multi-family		$	1,300	$	37,086	$	26,582	$	2,135	$	4,805	$	75,257	$	100	$	-	$	147,265
		Commercial real estate non-owner occupied
			Watch	$	-	$	62,790	$	20,494	$	37,793	$	55,762	$	214,651	$	1,400	$	-	$	392,890
			Special Mention		-		16,085		-		116		18,734		200,490		150		-		235,575
			Substandard		-		58,948		27,138		4,186		19,956		138,773		95		-		249,096
			Doubtful		-		-		-		-		-		2,222		-		-		2,222
			Pass/Unrated		4,763		111,994		174,404		102,193		122,328		684,278		7,156		-		1,207,116
		Total commercial real estate non-owner occupied		$	4,763	$	249,817	$	222,036	$	144,288	$	216,780	$	1,240,414	$	8,801	$	-	$	2,086,899
		Commercial real estate owner occupied
			Watch	$	441	$	5,725	$	46,201	$	10,116	$	5,970	$	166,946	$	2,106	$	-	$	237,505
			Special Mention		47		1,216		389		2,903		12,533		156,966		-		-		174,054
			Substandard		-		1,703		6,187		1,609		29,015		81,381		-		-		119,895
			Doubtful		-		-		-		-		-		76,214		-		-		76,214
			Loss		-		-		-		-		-		1,788		-		-		1,788
			Pass/Unrated		10,695		90,459		72,705		74,373		140,878		553,055		26,790		-		968,955
		Total commercial real estate owner occupied		$	11,183	$	99,103	$	125,482	$	89,001	$	188,396	$	1,036,350	$	28,896	$	-	$	1,578,411

	Commercial and industrial
		Watch	$	1,224	$	100,274	$	6,443	$	70,195	$	21,603	$	383,873	$	43,378	$	-	$	626,990
		Special Mention		123		8,229		9,877		25,048		10,611		139,478		10,057		-		203,423
		Substandard		208		3,021		11,901		4,837		2,497		66,849		47,280		-		136,593
		Doubtful		-		-		-		17		-		184		2		-		203
		Loss		-		-		-		-		-		-		5		-		5
		Pass/Unrated		35,559		563,273		454,997		255,949		181,119		475,913		584,383		-		2,551,193
	Total commercial and industrial		$	37,114	$	674,797	$	483,218	$	356,046	$	215,830	$	1,066,297	$	685,105	$	-	$	3,518,407
Construction
		Watch	$	-	$	-	$	8,942	$	-	$	-	$	-	$	340	$	-	$	9,282
		Special Mention		-		-		675		-		-		-		-		-		675
		Substandard		-		-		-		20,975		-		-		-		-		20,975
		Pass/Unrated		147		33,769		16,874		56,768		1,378		-		24,522		-		133,458
Total construction			$	147	$	33,769	$	26,491	$	77,743	$	1,378	$	-	$	24,862	$	-	$	164,390
Mortgage
		Substandard	$	920	$	1,103	$	1,148	$	2,949	$	3,653	$	148,444	$	-	$	-	$	158,217
		Pass/Unrated		28,286		217,430		160,292		211,799		200,212		5,039,772		-		-		5,857,791
Total mortgage			$	29,206	$	218,533	$	161,440	$	214,748	$	203,865	$	5,188,216	$	-	$	-	$	6,016,008
Leasing
		Substandard	$	29	$	1,129	$	1,178	$	886	$	543	$	309	$	-	$	-	$	4,074
		Pass/Unrated		160,443		373,109		262,568		144,915		93,388		50,045		-		-		1,084,468
Total leasing			$	160,472	$	374,238	$	263,746	$	145,801	$	93,931	$	50,354	$	-	$	-	$	1,088,542

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Puerto Rico
	Consumer:
		Credit cards
			Substandard	$	-	$	-	$	-	$	-	$	-	$	-	$	20,588	$	-	$	20,588
			Pass/Unrated		-		-		-		-		-		-		1,044,099		-		1,044,099
	Total credit cards			$	-	$	-	$	-	$	-	$	-	$	-	$	1,064,687	$	-	$	1,064,687
		HELOCs
			Pass/Unrated	$	-	$	-	$	-	$	-	$	-	$	608	$	4,321	$	-	$	4,929
	Total HELOCs			$	-	$	-	$	-	$	-	$	-	$	608	$	4,321	$	-	$	4,929
		Personal
			Substandard	$	1,159	$	7,298	$	2,621	$	2,431	$	1,733	$	17,880	$	81	$	2,523	$	35,726
			Pass/Unrated		159,300		570,029		244,528		147,695		88,062		166,866		1,441		49,579		1,427,500
	Total Personal			$	160,459	$	577,327	$	247,149	$	150,126	$	89,795	$	184,746	$	1,522	$	52,102	$	1,463,226
		Auto
			Substandard	$	58	$	7,727	$	7,846	$	4,353	$	3,035	$	3,412	$	-	$	-	$	26,431
			Pass/Unrated		296,102		1,040,732		778,165		392,860		246,082		173,778		-		-		2,927,719
	Total Auto			$	296,160	$	1,048,459	$	786,011	$	397,213	$	249,117	$	177,190	$	-	$	-	$	2,954,150
		Other consumer
			Substandard	$	-	$	-	$	893	$	-	$	-	$	12,989	$	-	$	-	$	13,882
			Pass/Unrated		1,442		19,254		13,501		7,134		3,268		15,783		62,703		-		123,085
	Total Other consumer			$	1,442	$	19,254	$	14,394	$	7,134	$	3,268	$	28,772	$	62,703	$	-	$	136,967
Total Puerto Rico				$	702,246	$	3,332,383	$	2,356,549	$	1,584,235	$	1,267,165	$	9,048,204	$	1,880,997	$	52,102	$	20,223,881

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Popular U.S.
	Commercial:
		Commercial multi-family
			Watch	$	-	$	-	$	1,415	$	12,796	$	12,135	$	18,285	$	-	$	-	$	44,631
			Special mention		-		-		-		6,706		2,086		6,658		-		-		15,450
			Substandard		-		-		-		2,097		4,721		1,153		-		-		7,971
			Pass/Unrated		64,645		405,889		259,639		159,495		291,251		379,684		1,690		-		1,562,293
		Total commercial multi-family		$	64,645	$	405,889	$	261,054	$	181,094	$	310,193	$	405,780	$	1,690	$	-	$	1,630,345
		Commercial real estate non-owner occupied
			Watch	$	4,442	$	-	$	6,471	$	26,527	$	2,235	$	23,710	$	-	$	-	$	63,385
			Special Mention		-		-		18,709		1,618		-		5,382		350		-		26,059
			Substandard		-		-		-		34,308		29,118		41,036		-		-		104,462
			Pass/Unrated		137,463		290,320		409,302		307,475		300,251		321,858		16,249		-		1,782,918
		Total commercial real estate non-owner occupied		$	141,905	$	290,320	$	434,482	$	369,928	$	331,604	$	391,986	$	16,599	$	-	$	1,976,824
		Commercial real estate owner occupied
			Watch	$	-	$	-	$	3,294	$	1,462	$	8,206	$	8,333	$	-	$	-	$	21,295
			Special Mention		-		-		195		-		-		5,604		-		-		5,799
			Substandard		-		-		1,349		-		-		16,222		-		-		17,571
			Pass/Unrated		8,980		57,796		51,801		38,479		28,838		105,036		7,365		-		298,295
		Total commercial real estate owner occupied		$	8,980	$	57,796	$	56,639	$	39,941	$	37,044	$	135,195	$	7,365	$	-	$	342,960

	Commercial and industrial
		Watch	$	-	$	373	$	60	$	304	$	1,330	$	5,704	$	7,434	$	-	$	15,205
		Special Mention		-		150		250		187		486		37		420		-		1,530
		Substandard		-		119		-		-		377		7,786		939		-		9,221
		Pass/Unrated		42,137		200,107		199,983		153,229		145,918		350,024		100,504		-		1,191,902
	Total commercial and industrial		$	42,137	$	200,749	$	200,293	$	153,720	$	148,111	$	363,551	$	109,297	$	-	$	1,217,858
Construction
		Watch	$	-	$	-	$	4,581	$	11,093	$	-	$	22,625	$	-	$	-	$	38,299
		Special Mention		-		-		-		-		-		8,064		-		-		8,064
		Substandard		-		-		5,434		8,572		10,069		18,500		-		-		42,575
		Pass/Unrated		27,149		217,733		164,075		190,824		39,485		9,786		-		-		649,052
Total construction			$	27,149	$	217,733	$	174,090	$	210,489	$	49,554	$	58,975	$	-	$	-	$	737,990
Mortgage
		Substandard	$	-	$	481	$	433	$	-	$	-	$	11,262	$	-	$	-	$	12,176
		Pass/Unrated		106,888		332,525		147,870		12,634		14,498		452,158		-		-		1,066,573
Total mortgage			$	106,888	$	333,006	$	148,303	$	12,634	$	14,498	$	463,420	$	-	$	-	$	1,078,749
Legacy
		Watch	$	-	$	-	$	-	$	-	$	-	$	1,113	$	-	$	-	$	1,113
		Special Mention		-		-		-		-		-		197		-		-		197
		Substandard		-		-		-		-		-		4,697		-		-		4,697
		Pass/Unrated		1,835		2,559		-		-		-		10,034		-		-		14,428
Total legacy			$	1,835	$	2,559	$	-	$	-	$	-	$	16,041	$	-	$	-	$	20,435

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Popular U.S.
	Consumer:
		Credit cards
			Pass/Unrated	$	-	$	-	$	-	$	-	$	-	$	-	$	36	$	-	$	36
	Total credit cards			$	-	$	-	$	-	$	-	$	-	$	-	$	36	$	-	$	36
		HELOCs
			Substandard	$	-	$	-	$	-	$	-	$	-	$	26	$	-	$	1,889	$	1,915
			Loss		-		-		-		-		-		322		-		7,137		7,459
			Pass/Unrated		-		-		-		-		-		16,490		61,301		30,246		108,037
	Total HELOCs			$	-	$	-	$	-	$	-	$	-	$	16,838	$	61,301	$	39,272	$	117,411
		Personal
			Substandard	$	-	$	700	$	514	$	134	$	64	$	255	$	-	$	-	$	1,667
			Loss		-		48		28		-		26		339		2		-		443
			Pass/Unrated		42,784		169,193		58,305		22,369		7,247		12,732		248		-		312,878
	Total Personal			$	42,784	$	169,941	$	58,847	$	22,503	$	7,337	$	13,326	$	250	$	-	$	314,988
		Other consumer
			Pass/Unrated	$	-	$	-	$	-	$	-	$	-	$	-	$	795	$	-	$	795
	Total Other consumer			$	-	$	-	$	-	$	-	$	-	$	-	$	795	$	-	$	795
Total Popular U.S.				$	436,323	$	1,677,993	$	1,333,708	$	990,309	$	898,341	$	1,865,112	$	197,333	$	39,272	$	7,438,391

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Popular, Inc.
	Commercial:
		Commercial multi-family
			Watch	$	-	$	-	$	1,415	$	12,796	$	12,135	$	23,063	$	-	$	-	$	49,409
			Special mention		-		-		-		6,706		2,086		10,468		-		-		19,260
			Substandard		-		-		-		2,097		4,721		2,415		100		-		9,333
			Pass/Unrated		65,945		442,975		286,221		161,630		296,056		445,091		1,690		-		1,699,608
		Total commercial multi-family		$	65,945	$	442,975	$	287,636	$	183,229	$	314,998	$	481,037	$	1,790	$	-	$	1,777,610
		Commercial real estate non-owner occupied
			Watch	$	4,442	$	62,790	$	26,965	$	64,320	$	57,997	$	238,361	$	1,400	$	-	$	456,275
			Special Mention		-		16,085		18,709		1,734		18,734		205,872		500		-		261,634
			Substandard		-		58,948		27,138		38,494		49,074		179,809		95		-		353,558
			Doubtful		-		-		-		-		-		2,222		-		-		2,222
			Pass/Unrated		142,226		402,314		583,706		409,668		422,579		1,006,136		23,405		-		2,990,034
		Total commercial real estate non-owner occupied		$	146,668	$	540,137	$	656,518	$	514,216	$	548,384	$	1,632,400	$	25,400	$	-	$	4,063,723
		Commercial real estate owner occupied
			Watch	$	441	$	5,725	$	49,495	$	11,578	$	14,176	$	175,279	$	2,106	$	-	$	258,800
			Special Mention		47		1,216		584		2,903		12,533		162,570		-		-		179,853
			Substandard		-		1,703		7,536		1,609		29,015		97,603		-		-		137,466
			Doubtful		-		-		-		-		-		76,214		-		-		76,214
			Loss		-		-		-		-		-		1,788		-		-		1,788
			Pass/Unrated		19,675		148,255		124,506		112,852		169,716		658,091		34,155		-		1,267,250
		Total commercial real estate owner occupied		$	20,163	$	156,899	$	182,121	$	128,942	$	225,440	$	1,171,545	$	36,261	$	-	$	1,921,371
		Commercial and industrial
			Watch	$	1,224	$	100,647	$	6,503	$	70,499	$	22,933	$	389,577	$	50,812	$	-	$	642,195
			Special Mention		123		8,379		10,127		25,235		11,097		139,515		10,477		-		204,953
			Substandard		208		3,140		11,901		4,837		2,874		74,635		48,219		-		145,814
			Doubtful		-		-		-		17		-		184		2		-		203
			Loss		-		-		-		-		-		-		5		-		5
			Pass/Unrated		77,696		763,380		654,980		409,178		327,037		825,937		684,887		-		3,743,095
		Total commercial and industrial		$	79,251	$	875,546	$	683,511	$	509,766	$	363,941	$	1,429,848	$	794,402	$	-	$	4,736,265

March 31, 2020
			Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
			Amortized Cost Basis by Origination Year
(In thousands)				2020		2019		2018		2017		2016		Prior Years						Total
Popular, Inc.
	Construction
		Watch	$	-	$	-	$	13,523	$	11,093	$	-	$	22,625	$	340	$	-	$	47,581
		Special Mention		-		-		675		-		-		8,064		-		-		8,739
		Substandard		-		-		5,434		29,547		10,069		18,500		-		-		63,550
		Pass/Unrated		27,296		251,502		180,949		247,592		40,863		9,786		24,522		-		782,510
	Total construction		$	27,296	$	251,502	$	200,581	$	288,232	$	50,932	$	58,975	$	24,862	$	-	$	902,380
	Mortgage
		Substandard	$	920	$	1,584	$	1,581	$	2,949	$	3,653	$	159,706	$	-	$	-	$	170,393
		Pass/Unrated		135,174		549,955		308,162		224,433		214,710		5,491,930		-		-		6,924,364
	Total mortgage		$	136,094	$	551,539	$	309,743	$	227,382	$	218,363	$	5,651,636	$	-	$	-	$	7,094,757
	Legacy
		Watch	$	-	$	-	$	-	$	-	$	-	$	1,113	$	-	$	-	$	1,113
		Special Mention		-		-		-		-		-		197		-		-		197
		Substandard		-		-		-		-		-		4,697		-		-		4,697
		Pass/Unrated		1,835		2,559		-		-		-		10,034		-		-		14,428
	Total legacy		$	1,835	$	2,559	$	-	$	-	$	-	$	16,041	$	-	$	-	$	20,435
	Leasing
		Substandard	$	29	$	1,129	$	1,178	$	886	$	543	$	309	$	-	$	-	$	4,074
		Pass/Unrated		160,443		373,109		262,568		144,915		93,388		50,045		-		-		1,084,468
	Total leasing		$	160,472	$	374,238	$	263,746	$	145,801	$	93,931	$	50,354	$	-	$	-	$	1,088,542

March 31, 2020
				Term Loans													Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis
				Amortized Cost Basis by Origination Year
(In thousands)					2020		2019		2018		2017		2016		Prior Years						Total
Popular, Inc.
	Consumer:
		Credit cards
			Substandard	$	-	$	-	$	-	$	-	$	-	$	-	$	20,588	$	-	$	20,588
			Pass/Unrated		-		-		-		-		-		-		1,044,135		-		1,044,135
	Total credit cards			$	-	$	-	$	-	$	-	$	-	$	-	$	1,064,723	$	-	$	1,064,723
		HELOCs
			Substandard	$	-	$	-	$	-	$	-	$	-	$	26	$	-	$	1,889	$	1,915
			Loss		-		-		-		-		-		322		-		7,137		7,459
			Pass/Unrated		-		-		-		-		-		17,098		65,622		30,246		112,966
	Total HELOCs			$	-	$	-	$	-	$	-	$	-	$	17,446	$	65,622	$	39,272	$	122,340
		Personal
			Substandard	$	1,159	$	7,998	$	3,135	$	2,565	$	1,797	$	18,135	$	81	$	2,523	$	37,393
			Loss		-		48		28		-		26		339		2		-		443
			Pass/Unrated		202,084		739,222		302,833		170,064		95,309		179,598		1,689		49,579		1,740,378
	Total Personal			$	203,243	$	747,268	$	305,996	$	172,629	$	97,132	$	198,072	$	1,772	$	52,102	$	1,778,214
		Auto
			Substandard	$	58	$	7,727	$	7,846	$	4,353	$	3,035	$	3,412	$	-	$	-	$	26,431
			Pass/Unrated		296,102		1,040,732		778,165		392,860		246,082		173,778		-		-		2,927,719
	Total Auto			$	296,160	$	1,048,459	$	786,011	$	397,213	$	249,117	$	177,190	$	-	$	-	$	2,954,150
		Other consumer
			Substandard	$	-	$	-	$	893	$	-	$	-	$	12,989	$	-	$	-	$	13,882
			Pass/Unrated		1,442		19,254		13,501		7,134		3,268		15,783		63,498		-		123,880
	Total Other consumer			$	1,442	$	19,254	$	14,394	$	7,134	$	3,268	$	28,772	$	63,498	$	-	$	137,762
Total Popular Inc.				$	1,138,569	$	5,010,376	$	3,690,257	$	2,574,544	$	2,165,506	$	10,913,316	$	2,078,330	$	91,374	$	27,662,272

The following table presents the outstanding balance, net of unearned income, of loans held-in-portfolio based on the Corporation’s assignment of obligor risk ratings as defined at December 31, 2019.

December 31, 2019
				Special										Pass/
(In thousands)		Watch		Mention		Substandard		Doubtful		Loss		Sub-total		Unrated		Total
Puerto Rico
Commercial multi-family		$	1,341	$	3,870	$	1,793	$	-	$	-	$	7,004	$	140,845	$	147,849
Commercial real estate non-owner occupied			492,357		166,810		239,448		3,290		-		901,905		1,206,313		2,108,218
Commercial real estate owner occupied			192,895		184,678		183,377		1,629		-		562,579		1,023,750		1,586,329
Commercial and industrial			592,861		170,183		130,872		148		16		894,080		2,524,654		3,418,734
	Total Commercial		1,279,454		525,541		555,490		5,067		16		2,365,568		4,895,562		7,261,130
Construction			340		649		20,771		-		-		21,760		115,710		137,470
Mortgage			2,187		2,218		127,621		-		-		132,026		6,034,722		6,166,748
Leasing			-		-		3,590		-		68		3,658		1,055,849		1,059,507
Consumer:
	Credit cards		-		-		19,461		-		-		19,461		1,104,339		1,123,800
	HELOCs		-		-		-		-		-		-		5,038		5,038
	Personal		77		-		19,558		-		-		19,635		1,348,515		1,368,150
	Auto		-		-		30,775		-		372		31,147		2,886,375		2,917,522
	Other		459		11		15,020		-		53		15,543		125,324		140,867
	Total Consumer		536		11		84,814		-		425		85,786		5,469,591		5,555,377
Total Puerto Rico		$	1,282,517	$	528,419	$	792,286	$	5,067	$	509	$	2,608,798	$	17,571,434	$	20,180,232
Popular U.S.
Commercial multi-family		$	48,359	$	13,827	$	8,433	$	-	$	-	$	70,619	$	1,576,691	$	1,647,310
Commercial real estate non-owner occupied			80,608		24,383		100,658		-		-		205,649		1,664,647		1,870,296
Commercial real estate owner occupied			27,298		5,709		13,826		-		-		46,833		292,302		339,135
Commercial and industrial			25,679		1,460		20,386		-		-		47,525		1,147,355		1,194,880
	Total Commercial		181,944		45,379		143,303		-		-		370,626		4,680,995		5,051,621
Construction			46,644		17,291		44,798		-		-		108,733		584,889		693,622
Mortgage			-		-		11,091		-		-		11,091		1,005,693		1,016,784
Legacy			388		202		1,528		-		-		2,118		19,987		22,105
Consumer:
	Credit cards		-		-		-		-		-		-		36		36
	HELOCs		-		-		2,024		-		7,930		9,954		107,389		117,343
	Personal		-		-		1,664		-		403		2,067		322,373		324,440
	Other		-		-		-		-		-		-		690		690
	Total Consumer		-		-		3,688		-		8,333		12,021		430,488		442,509
Total Popular U.S.		$	228,976	$	62,872	$	204,408	$	-	$	8,333	$	504,589	$	6,722,052	$	7,226,641
Popular, Inc.
Commercial multi-family		$	49,700	$	17,697	$	10,226	$	-	$	-	$	77,623	$	1,717,536	$	1,795,159
Commercial real estate non-owner occupied			572,965		191,193		340,106		3,290		-		1,107,554		2,870,960		3,978,514
Commercial real estate owner occupied			220,193		190,387		197,203		1,629		-		609,412		1,316,052		1,925,464
Commercial and industrial			618,540		171,643		151,258		148		16		941,605		3,672,009		4,613,614
	Total Commercial		1,461,398		570,920		698,793		5,067		16		2,736,194		9,576,557		12,312,751
Construction			46,984		17,940		65,569		-		-		130,493		700,599		831,092
Mortgage			2,187		2,218		138,712		-		-		143,117		7,040,415		7,183,532
Legacy			388		202		1,528		-		-		2,118		19,987		22,105
Leasing			-		-		3,590		-		68		3,658		1,055,849		1,059,507
Consumer:
	Credit cards		-		-		19,461		-		-		19,461		1,104,375		1,123,836
	HELOCs		-		-		2,024		-		7,930		9,954		112,427		122,381
	Personal		77		-		21,222		-		403		21,702		1,670,888		1,692,590
	Auto		-		-		30,775		-		372		31,147		2,886,375		2,917,522
	Other		459		11		15,020		-		53		15,543		126,014		141,557
	Total Consumer		536		11		88,502		-		8,758		97,807		5,900,079		5,997,886
Total Popular, Inc.		$	1,511,493	$	591,291	$	996,694	$	5,067	$	8,842	$	3,113,387	$	24,293,486	$	27,406,873
The following table presents the weighted average obligor risk rating at December 31, 2019 for those classifications that consider a range of rating scales.

Weighted average obligor risk rating		(Scales 11 and 12)			(Scales 1 through 8)
Puerto Rico:			Substandard			Pass
Commercial multi-family				11.82		6.02
Commercial real estate non-owner occupied				11.17		6.77
Commercial real estate owner occupied				11.36		7.30
Commercial and industrial				11.26		7.20
	Total Commercial			11.25		7.10
Construction				11.01		7.85
Popular U.S.:			Substandard			Pass
Commercial multi-family				11.25		7.37
Commercial real estate non-owner occupied				11.00		6.94
Commercial real estate owner occupied				11.02		7.48
Commercial and industrial				11.01		6.63
	Total Commercial			11.02		7.04
Construction				11.00		7.74
Legacy				11.25		7.95

For changes in the allowance for credit losses, loan ending balances and whether such loans and the allowance pertained to loans individually or collectively evaluated for impairment for the quarter ended March 31, 2019, refer to the allowance activity section of this note..

Impaired loans

The following tables present loans individually evaluated for impairment at December 31, 2019.

December 31, 2019
Puerto Rico
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal			Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance			allowance
Commercial multi-family	$	1,196	$	1,229	$	4	$	1,017	$	1,247	$	2,213	$	2,476	$	4
Commercial real estate non-owner occupied		44,975		45,803		12,281		149,587		173,124		194,562		218,927		12,281
Commercial real estate owner occupied		105,841		122,814		5,077		26,365		58,540		132,206		181,354		5,077
Commercial and industrial		43,640		47,611		3,171		24,831		44,255		68,471		91,866		3,171
Construction		119		119		6		-		-		119		119		6
Mortgage		420,949		479,936		40,596		101,520		134,331		522,469		614,267		40,596
Leasing		507		507		61		-		-		507		507		61
Consumer:
Credit cards		24,475		24,475		2,957		-		-		24,475		24,475		2,957
Personal		65,521		65,521		17,142		-		-		65,521		65,521		17,142
Auto		310		310		51		-		-		310		310		51
Other		851		851		109		-		-		851		851		109
Total Puerto Rico	$	708,384	$	789,176	$	81,455	$	303,320	$	411,497	$	1,011,704	$	1,200,673	$	81,455

December 31, 2019
Popular U.S.
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	-	$	-	$	-	$	2,097	$	2,539	$	2,097	$	2,539	$	-
Mortgage		6,906		7,257		2,208		2,480		2,844		9,386		10,101		2,208
Consumer:
HELOCs		6,691		6,691		1,560		2,829		3,087		9,520		9,778		1,560
Personal		26		26		3		88		88		114		114		3
Total Popular U.S.	$	13,623	$	13,974	$	3,771	$	7,494	$	8,558	$	21,117	$	22,532	$	3,771

December 31, 2019
Popular, Inc.
	Impaired Loans – With an						Impaired Loans
	Allowance						With No Allowance				Impaired Loans - Total
			Unpaid						Unpaid				Unpaid
	Recorded		principal		Related		Recorded		principal		Recorded		principal		Related
(In thousands)	investment		balance		allowance		investment		balance		investment		balance		allowance
Commercial multi-family	$	1,196	$	1,229	$	4	$	3,114	$	3,786	$	4,310	$	5,015	$	4
Commercial real estate non-owner occupied		44,975		45,803		12,281		149,587		173,124		194,562		218,927		12,281
Commercial real estate owner occupied		105,841		122,814		5,077		26,365		58,540		132,206		181,354		5,077
Commercial and industrial		43,640		47,611		3,171		24,831		44,255		68,471		91,866		3,171
Construction		119		119		6		-		-		119		119		6
Mortgage		427,855		487,193		42,804		104,000		137,175		531,855		624,368		42,804
Leasing		507		507		61		-		-		507		507		61
Consumer:
Credit cards		24,475		24,475		2,957		-		-		24,475		24,475		2,957
HELOCs		6,691		6,691		1,560		2,829		3,087		9,520		9,778		1,560
Personal		65,547		65,547		17,145		88		88		65,635		65,635		17,145
Auto		310		310		51		-		-		310		310		51
Other		851		851		109		-		-		851		851		109
Total Popular, Inc.	$	722,007	$	803,150	$	85,226	$	310,814	$	420,055	$	1,032,821	$	1,223,205	$	85,226

The following table presents the average recorded investment and interest income recognized on impaired loans for the quarter ended March 31, 2019.

For the quarter ended March 31, 2019
	Puerto Rico				Popular U.S.				Popular, Inc.
	Average		Interest		Average		Interest		Average		Interest
	recorded		income		recorded		income		recorded		income
(In thousands)	investment		recognized		investment		recognized		investment		recognized
Commercial multi-family	$	928	$	12	$	-	$	-	$	928	$	12
Commercial real estate non-owner occupied		178,725		1,712		-		-		178,725		1,712
Commercial real estate owner occupied		139,846		1,458		846		-		140,692		1,458
Commercial and industrial		70,662		745		-		-		70,662		745
Construction		1,788		-		12,060		-		13,848		-
Mortgage		512,417		4,026		9,429		40		521,846		4,066
Leasing		1,059		-		-		-		1,059		-
Consumer:
Credit cards		28,354		-		-		-		28,354		-
HELOCs		-		-		7,962		-		7,962		-
Personal		72,298		69		786		-		73,084		69
Auto		1,162		-		-		-		1,162		-
Other		1,247		-		-		-		1,247		-
Total Popular, Inc.	$	1,008,486	$	8,022	$	31,083	$	40	$	1,039,569	$	8,062