OTHER REAL ESTATE OWNED

6 Months Ended

Jun. 30, 2016

OTHER REAL ESTATE OWNED

OTHER REAL ESTATE OWNED

NOTE 5 — OTHER REAL ESTATE OWNED

Other real estate owned is recorded in other assets on the balance sheet.  Activity in other real estate owned was as follows:

	Three months ended  June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning Balance	$	1,891	$	2,201	$	1,959	$	2,688
Transfer to other real estate owned		446		207		983		363
Sale — Out of other real estate owned		(814)		(305)		(1,400)		(948)
Acquisition		1,668		—		1,668		—
Write-down		(11)		(38)		(30)		(38)
Ending Balance	$	3,180	$	2,065	$	3,180	$	2,065

The value of the sale amount above is the carrying value of the property when it was sold.

Activity in the valuation account for other real estate was as follows:

	Three months ended  June 30,				Six months ended June 30,
	2016		2015		2016		2015
Beginning Balance —	$	(236)	$	(285)	$	(217)	$	(448)
Impairments during year		(11)		(38)		(30)		(38)
Recovery on impairments		13		—		13		—
Reductions		—		—		—		163
Ending Balance — June 30	$	(234)	$	(323)	$	(234)	$	(323)

Expenses related to foreclosed assets for the period ending June 30 include:

	Three months ended  June 30,				Six months ended June 30,
	2016		2015		2016		2015
Write-downs	$	11	$	38	$	30	$	38
Losses/(gains)on sales		(48)		(5)		(216)		6
Net loss/(gain)	$	(37)	$	33	$	(186)	$	44
Operating expenses	$	52	$	58	$	57	$	94

Foreclosed residential real estate properties included in other assets on the Consolidated Balance Sheets totaled $1,875 and $915 at June 30, 2016 and December 31, 2015, respectively. Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $2,462 and $2,407 at June 30, 2016 and December 31, 2015, respectively.