Note 5 – Foreclosed Real Estate

Foreclosed real estate assets are presented net of the valuation allowance. The Company considers foreclosed real estate as classified assets for regulatory and financial reporting. Foreclosed real estate carrying amounts reflect management’s estimate of the realizable value of these properties incorporating current appraised values, local real estate market conditions and related selling costs. The Company had foreclosed real estate of $157,000 and $159,000 at June 30, 2025 and December 31, 2024, respectively.

During the three months ended June 30, 2025 and June 30, 2024, the Company incurred foreclosed real estate expenses of $0 and $11,000, respectively.

The Company had $305,000 and $84,000 in loans secured by residential real estate for which formal foreclosure proceedings were in process as of June 30, 2025 and December 31, 2024, respectively.

The table below shows the foreclosed real estate roll forward balance as of June 30, 2025.


(dollars in thousands)	June 30, 2025			December 31, 2024
Beginning of period balance	$	159		$	160
Principal payments		(2	)		(1	)
End of period balance	$	157		$	159