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Note 8: Other Real Estate Owned

3 Months Ended

Sep. 30, 2019

Note 8: Other Real Estate Owned

NOTE 8: OTHER REAL ESTATE OWNED AND REPOSSESSIONS

Major classifications of other real estate owned were as follows:

	September 30,		December 31,
	2019		2018
	(In Thousands)

Foreclosed assets held for sale and repossessions
One- to four-family construction	$ —		$ —
Subdivision construction	755		1,092
Land development	2,594		3,191
Commercial construction	—		—
One- to four-family residential	310		269
Other residential	—		—
Commercial real estate	—		—
Commercial business	—		—
Consumer	665		928
	4,324		5,480
Foreclosed assets acquired through FDIC-assisted
transactions, net of discounts	1,108		1,401

Foreclosed assets held for sale and repossessions, net	5,432		6,881

Other real estate owned not acquired through foreclosure	2,012		1,559

Other real estate owned and repossessions	$ 7,444		$ 8,440

At September 30, 2019, other real estate owned not acquired through foreclosure included seven properties, all of which were branch locations that were closed and are held for sale. One of these properties, with a carrying value of $1.1 million, was added during the three months ended September 30, 2019. This property is under contract but the sale has not yet been completed. Three properties totaling $682,000, two of which were branch locations that were closed and held for sale and one of which was land acquired for a potential branch location, were sold during the nine months ended September, 30, 2019.

At December 31, 2018, other real estate owned not acquired through foreclosure included nine properties, eight of which were branch locations that were closed and are held for sale, and one of which is land acquired for a potential branch location.

At September 30, 2019, residential mortgage loans totaling $431,000 were in the process of foreclosure, $421,000 of which were acquired loans. Of the $421,000 of acquired loans, $162,000 were previously covered by loss sharing agreements and $259,000 were acquired in the Valley Bank transaction.

At December 31, 2018, residential mortgage loans totaling $1.3 million were in the process of foreclosure, $1.0 million of which were acquired loans. Of the $1.0 million of acquired loans, $873,000 were previously covered by loss sharing agreements and $171,000 were acquired in the Valley Bank transaction.

Expenses applicable to other real estate owned and repossessions included the following:

	Three Months Ended
	September 30,
	2019		2018
	(In Thousands)

Net gains on sales of other real estate owned and repossessions	$ (250)		$ (549)
Valuation write-downs	280		178
Operating expenses, net of rental income	573		869

	$ 603		$ 498

	Nine Months Ended
	September 30,
	2019		2018
	(In Thousands)

Net gains on sales of other real estate owned and repossessions	$ (659)		$ (1,998)
Valuation write-downs	724		3,551
Operating expenses, net of rental income	1,577		2,823

	$ 1,642		$ 4,376