Other Real Estate Owned and Repossessions

12 Months Ended

Dec. 31, 2019

Other Real Estate Owned and Repossessions

6.	OTHER REAL ESTATE OWNED AND REPOSSESSIONS

Other real estate and certain other assets acquired in foreclosure are reported at the net realizable value of the property, less estimated costs to sell. The following tables summarize foreclosed property activity as of December 31, 2019 and 2018:

	December 31, 2019
	Bank			ALC			Total
	(Dollars in Thousands)
Beginning balance	$	1,401		$	104		$	1,505
Additions ⁽¹⁾		224			89			313
Sales proceeds		(582	)		(82	)		(664	)

Gross gains		37			2			39
Gross losses		(51	)		(26	)		(77	)
Net gains (losses)		(14	)		(24	)		(38	)
Impairment		—			(38	)		(38	)
Ending balance	$	1,029		$	49		$	1,078

	December 31, 2018
	Bank			ALC			Total
	(Dollars in Thousands)
Beginning balance	$	3,527		$	265		$	3,792
Additions ⁽¹⁾		399			57			456
Sales proceeds		(2,567	)		(89	)		(2,656	)

Gross gains		267			15			282
Gross losses		(46	)		(81	)		(127	)
Net gains (losses)		221			(66	)		155
Impairment		(179	)		(63	)		(242	)
Ending balance	$	1,401		$	104		$	1,505

⁽¹⁾

Additions to OREO include transfers from loans, capitalized improvements to existing OREO properties and OREO acquired through acquisitions.

Valuation adjustments are recorded in other non-interest expense and are primarily post-foreclosure write-downs that are a result of continued declining property values based on updated appraisals or other indications of value, such as offers to purchase. Net realizable value less estimated costs to sell of foreclosed residential real estate held by the Company was $0.1 million and $0.2 million as of December 31, 2019 and 2018, respectively. In addition, the Company held $0.7 million of consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of December 31, 2019 and did not hold any of these loans as of December 31, 2018.

Repossessions

In addition to the other real estate and other assets acquired in foreclosure, the Bank and ALC also acquire assets through the repossession of the underlying collateral of loans in default. Total repossessed assets as of December 31, 2019 and 2018 were $0.3 million and $0.2 million, respectively.