OREO

9 Months Ended

Sep. 30, 2015

OREO

OREO

Note 6: OREO

OREO represents properties acquired through foreclosure or other proceedings in settlement of loans.  OREO is held for sale and is recorded at the date of foreclosure at the fair value of the properties less estimated costs of disposal, which establishes a new cost basis.  Any adjustment to fair value at the time of transfer to OREO is charged to the allowance for loan losses.  Property is evaluated regularly to ensure the recorded amount is supported by its current fair value, and valuation allowances to reduce the carrying amount to fair value less estimated costs to dispose are recorded as necessary.  Revenue, expense, gains and losses from the operations of foreclosed assets are included in operations.   At September 30, 2015, the Company held $0.1 million in residential OREO and an insignificant amount of other repossessed assets.  At December 31, 2014, the Company held $0.2 million of other repossessed assets.  At September 30, 2015 the Company had $1.2 million of residential real estate in the process of foreclosure.  The following table summarizes activity related to OREO:

	Nine Months Ended September 30, 2015			Year Ended December 31, 2014
	(dollars in thousands)
OREO:
Beginning balance	$	216		$	2,133
Additions, transfers from loans	399			660
Additions, fair value from Herget Financial acquisition	284			—
Proceeds from sales of OREO	(927		)	(2,739		)
Gain on sales of OREO	112			162
Valuation allowance for OREO	—			—
Ending balance	$	84		$	216