Other Real Estate Owned

6 Months Ended

Jun. 30, 2014

Other Real Estate Owned [Abstract]

Real Estate Owned [Text Block]

Note 6.Other Real Estate Owned

OREO increased $194,000 from $9.6 million at December 31, 2013 to $9.8 million at June 30, 2014.  During the past twelve months there was a shift in OREO composition from real estate acquired through, or in lieu of foreclosure in settlement of loans to real estate acquired through foreclosure related to tax liens.  Set forth below are tables which detail the changes in OREO from December 31, 2013 to June 30, 2014 and December 31, 2012 to December 31, 2013.

	For the six months ended June 30, 2014
(In thousands)	Loans		Tax Liens		Total
Beginning balance	$	1,725	$	7,892	$	9,617
Net proceeds from sales		(143)		(1,770)		(1,913)
Net gains on sales		16		444		460
Transfers in		—		882		882
Cash additions		—		1,103		1,103
Impairment charge		(99)		(239)		(338)
Ending balance	$	1,499	$	8,312	$	9,811

	For the year ended December 31, 2013
(In thousands)	Loans		Tax Liens		Total
Beginning balance	$	11,365	$	2,070	$	13,435
Net proceeds from sales		(8,869)		(3,910)		(12,779)
Net gain on sales		228		1,199		1,427
Transfers in		100		8,951		9,051
Cash additions		—		—		—
Impairment charge		(1,099)		(418)		(1,517)
Ending balance	$	1,725	$	7,892	$	9,617

At June 30, 2014, OREO was comprised of $769,000 in land, $496,000 in commercial real estate, $8.3 million in tax liens, and residential real estate with a fair value of $234,000.  During the first half of 2014, the Company sold seven condominiums related to a construction project in Minneapolis, Minnesota in which the Company is a participant. The Company received its pro rata share of net proceeds in the amount of $143,000 and recorded a net gain of $16,000. During the first quarter of 2014, the Company recorded impairment charges of $74,000on the remaining, larger condominium units and $25,000 on the commercial real estate due to a recent agreement of sale. 

As shown in the table above the composition of the OREO assets has evolved to properties primarily acquired through the tax lien portfolio.  During the first half of 2014, the Company transferred $882,000 to OREO which represents 18 properties and added $1.1 million in lien redemptions on existing properties.  During the same period the Company sold 22 of the tax lien properties, received proceeds of $1.8 million, and recorded net gains of $444,000as a result of these sales. Additionally, the Company recorded impairment charges of $239,000in the first half of 2014 related to the tax lien properties.  At December 31, 2013, OREO assets acquired through the tax lien portfolio were $7.9million and were comprised of 59 properties.