Other Real Estate Owned and Repossessed Assets

12 Months Ended

Dec. 31, 2022

Other Real Estate Owned and Repossessed Assets

OTHER REAL ESTATE OWNED AND REPOSSESSED ASSETS

Other Real Estate Owned

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 table summarizes foreclosed property activity during the years ended December 31, 2022 and 2021:


	December 31, 2022			December 31, 2021
	(Dollars in Thousands)
Beginning balance	$	2,149		$	949
Additions (1)		411			1,981
Sales proceeds		(2,232	)		(1,205	)
Gross gains		386			491
Gross losses		(27	)		—
Net gains		359			491
Impairment		(1	)		(67	)
Ending balance	$	686		$	2,149

(1)

Additions to other real estate owned (“OREO”) include transfers from loans, transfers from closed Bank and ALC branches, and capitalized improvements to existing OREO properties.

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 $20 thousand and $151 thousand as of December 31, 2022 and 2021, respectively. In addition, the Company did not hold any consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of both December 31, 2022 and 2021.

Repossessed Assets

In addition to the other real estate and other assets acquired in foreclosure, the Company also acquires assets through the repossession of the underlying collateral of loans in default. The following table summarizes repossessed asset activity during the years ended December 31, 2022 and 2021:


	December 31, 2022			December 31, 2021
	(Dollars in Thousands)
Beginning balance	$	154		$	245
Transfers from loans		887			803
Sales proceeds		(506	)		(798	)
Gross gains		—			—
Gross losses		(452	)		(96	)
Net losses		(452	)		(96	)
Impairment		—			—
Ending balance	$	83		$	154

Repossessed assets are included in Other Assets in the Company’s consolidated balance sheet.