Note 8 - Other Real Estate Owned (OREO)

12 Months Ended

Dec. 31, 2018

Notes to Financial Statements

Real Estate Owned [Text Block]

NOTE

8.

OTHER REAL ESTATE OWNED (OREO)

OREO represents real estate to which we have taken legal title in partial or full satisfaction of loans and properties originally acquired for branch expansion but

no

longer intended to be used for that purpose. OREO is recorded at fair value less costs to sell. Additional expenditures for improvements that increase the fair value of the property as it is prepared for sale are added to the property’s cost basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ALLL. Thereafter, management periodically performs valuations and the property is carried at the lower of the cost or fair value less expected selling costs. Subsequent valuation adjustments and net expenses incurred from OREO property are recorded in

noninterest expense

, in the

Consolidated Statements of Income

.

The following table presents the changes in OREO for the years ended

December 31, 2018,

2017,

and

2016.

(Amounts in thousands)	Years Ended December 31,
OREO	2018			2017			2016
Balance at beginning of year	$	35		$	759		$	1,423
Additions		140			1,071			189
Dispositions		(144	)		(1,743	)		(745	)
Valuation adjustments		—			(52	)		(108	)
Total	$	31		$	35		$	759

For the year ended

December 31, 2018,

we transferred

five

foreclosed properties in the amount of

$140

thousand to OREO. During this period, we sold

five

properties with balances of

$144

thousand for a net gain of

$73

thousand. The

December 31, 2018

OREO balance consists of

one

1

-

4

family residential real estate property in the amount of

$31

thousand.