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Note 5 - Foreclosed Assets

12 Months Ended

Dec. 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’ debt are initially recorded at fair value of the asset less estimated costs to sell.

	*December 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		1,391		—		1,391		2,416		(44	)		2,372
	$	1,391	$	—	$	1,391	$	2,888	$	(111	)	$	2,777

The following represents the roll forward of foreclosed assets:

	*At and For the Years Ended December 31,*
	*2024*			*2023*
Beginning balance	$	2,777		$	476
New foreclosed assets		156			2,859
Valuation adjustments		—			(111	)
Valuation reductions from sales		111			—
Direct write-downs		(516	)		(70	)
Sales		(1,137	)		(377	)
Ending balance	$	1,391		$	2,777

Activity in the valuation allowance is as follows:

	*At and For the Years Ended December 31,*
	*2024*			*2023*
Beginning balance	$	111		$	—
Additions charged to expense		—			111
Reductions from sales		(111	)		—
Ending balance	$	—		$	111

At December 31, 2024, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process was $93,000; there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process at December 31, 2023. At December 31, 2024, other foreclosed assets consisted of machinery repossessed in connection with equipment finance leases.