Other Real Estate Owned and Repossessed Assets

12 Months Ended

Dec. 31, 2023

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, 2023 and 2022:


	December 31, 2023			December 31, 2022
	(Dollars in Thousands)
Beginning balance	$	686		$	2,149
Additions (1)		—			411
Sales proceeds		(15	)		(2,232	)
Gross gains		1			386
Gross losses		(6	)		(27	)
Net gains		(5	)		359
Impairment		(64	)		(1	)
Ending balance	$	602		$	686

(1)

Additions to other real estate owned (“OREO”) may include transfers from loans, transfers from closed 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 the 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 zero and $20.0 thousand as of December 31, 2023 and 2022, 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, 2023 and 2022.

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, 2023 and 2022:


	December 31, 2023			December 31, 2022
	(Dollars in Thousands)
Beginning balance	$	83		$	154
Transfers from loans		1,178			887
Sales proceeds		(453	)		(506	)
Gross gains		—			—
Gross losses		(535	)		(452	)
Net losses		(535	)		(452	)
Impairment		—			—
Ending balance	$	273		$	83

Repossessed assets are included in other assets in the Company’s consolidated balance sheets.