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Note 5 - Foreclosed Assets

3 Months Ended

Mar. 31, 2024

NOTE 5 - FORECLOSED ASSETS

Real estate that is acquired through foreclosure or a deed in lieu of foreclosure is classified as other real estate owned ("OREO") until it is sold. When real estate is acquired through foreclosure or by deed in lieu of foreclosure, it is recorded at its fair value, less the estimated costs of disposal. If the fair value of the property is less than the loan balance, the difference is charged against the allowance for credit losses.

Assets are classified as foreclosed when physical possession of the collateral is taken regardless of whether foreclosure proceedings have taken place. Other foreclosed assets received in satisfaction of borrowers’ debts are initially recorded at fair value of the asset less estimated costs to sell.

	*March 31, 2024*							*December 31, 2023*
	*Balance*		*Valuation Allowance*			*Net Balance*		*Balance*		*Valuation Allowance*			*Net Balance*

Other real estate owned	$	—	$	—		$	—	$	472	$	(67	)	$	405
Other foreclosed assets		2,376		(44	)		2,332		2,416		(44	)		2,372
	$	2,376	$	(44	)	$	2,332	$	2,888	$	(111	)	$	2,777

The following represents the roll forward of foreclosed assets:

	*For the Three Months Ended*
	*March 31,*
	*2024*			*2023*
Beginning balance	$	2,777		$	476
New foreclosed assets		49			921
Valuation reductions from sales		67			—
Sales		(561	)		(4	)
Ending balance	$	2,332		$	1,393

Activity in the valuation allowance is as follows:

	*For the Three Months Ended*
	*March 31,*
	*2024*			*2023*
Beginning balance	$	111		$	—
Reductions from sales		(67	)		—
Ending balance	$	44		$	—

The were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process at March 31, 2024 and December 31, 2023. At March 31, 2024, other foreclosed assets consisted of vehicles and machinery repossessed in connection with equipment finance leases.