Other Real Estate Owned (OREO)

12 Months Ended

Dec. 31, 2017

Other Real Estate Owned (OREO) [Abstract]

Other Real Estate Owned (OREO)

NOTE 5, Other Real Estate Owned (OREO)

The Company holds certain parcels of real estate due to completed foreclosure proceedings on defaulted loans or the closing of former branches. An analysis of the balance in OREO is as follows:

	Years Ended December 31,
	2017			2016
	(in thousands)
Balance at beginning of year	$	2,093		$	5,290
Transfers to OREO due to foreclosure		-			-
Other additions to foreclosed properties		-			52
Closed branch locations transferred to OREO		-			127
Properties sold		(2,093	)		(3,376	)
Balance at end of year	$	-		$	2,093

Other additions to foreclosed properties in the table above are for capital improvements on existing properties.

OREOs are presented net of a valuation allowance for losses. As the fair values of OREOs change, adjustments are made to the recorded investment in the properties through the valuation allowance to ensure that all properties are recorded at the lower of cost or fair value.  Properties written down in previous periods can be written back up if a current property valuation warrants the change, though never above the original cost of the property. An analysis of the valuation allowance on OREOs is as follows:

	Years Ended December 31,
	2017			2016
	(in thousands)
Balance at beginning of year	$	1,026		$	2,549
Additions and write-downs		-			60
Reductions due to sales or increases in value		(1,026	)		(1,583	)
Balance at end of year	$	-		$	1,026

Expenses applicable to OREOs include the following:

	Years Ended December 31,
	2017			2016		2015
	(in thousands)
Net loss (gain) on sales of real estate	$	(18	)	$	94	$	-54
Provision for losses (net write-downs)		-			60		1,011
Operating expenses, net of income (1)		10			160		219
Total Expenses	$	(8	)	$	314	$	1,176

(1) Included in other operating income and other operating expense on the Consolidated Statements of Operations.