Other Real Estate Owned and Repossessed Assets

3 Months Ended

Mar. 31, 2024

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 as of the three months ended March 31, 2024 and 2023:


	March 31, 2024			March 31, 2023
	(Dollars in Thousands)
Beginning balance	$	602		$	686
Additions (1)		—			—
Sales proceeds		—			—
Gross gains		—			—
Gross losses		—			—
Net gains		—			—
Impairment		(30	)		(69	)
Ending balance	$	572		$	617

(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 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 zero and $20 thousand as of March 31, 2024 and March 31, 2023, respectively. In addition, the Company held $20 thousand and zero in consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of March 31, 2024 and 2023, respectively.

Repossessed Assets

The Company also acquires assets through the repossession of the underlying collateral of loans in default. The following table summarizes repossessed asset activity as of the three months ended March 31, 2024 and 2023:


	March 31, 2024			March 31, 2023
	(Dollars in Thousands)
Beginning balance	$	435		$	83
Transfers from loans		364			490
Sales proceeds		(294	)		(128	)
Gross gains		—			—
Gross losses		(344	)		(180	)
Net losses		(344	)		(180	)
Impairment		—			—
Ending balance	$	161		$	265

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