Note 5 - Foreclosed Assets

6 Months Ended

Jun. 30, 2024

Notes to Financial Statements

Foreclosed Assets [Text Block]

NOTE 5 - FORECLOSED ASSETS

Real estate that is acquired through foreclosure or a deed in lieu of foreclosure is classified as other real estate owned ("OREO") until it is sold. When real estate is acquired through foreclosure or by deed in lieu of foreclosure, it is recorded at its fair value, less the estimated costs of disposal. If the fair value of the property is less than the loan balance, the difference is charged against the allowance for credit losses.

Assets are classified as foreclosed when physical possession of the collateral is taken regardless of whether foreclosure proceedings have taken place. Other foreclosed assets received in satisfaction of borrowers’ debts are initially recorded at fair value of the asset less estimated costs to sell.

	June 30, 2024						December 31, 2023
	Balance		Valuation Allowance		Net Balance		Balance		Valuation Allowance			Net Balance
Other real estate owned	$	—	$	—	$	—	$	472	$	(67	)	$	405
Other foreclosed assets		1,898		—		1,898		2,416		(44	)		2,372
	$	1,898	$	—	$	1,898	$	2,888	$	(111	)	$	2,777

The following represents the roll forward of foreclosed assets:

	For the Three Months Ended						For the Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
Beginning balance	$	2,332		$	1,393		$	2,777		$	476
New foreclosed assets		—			—			49			921
Valuation reductions from sales		44			—			111			—
Direct write-downs		—			(70	)		—			(70	)
Sales		(478	)		(373	)		(1,039	)		(377	)
Ending balance	$	1,898		$	950		$	1,898		$	950

Activity in the valuation allowance is as follows:

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2024			2023		2024			2023
Beginning balance	$	44		$	—	$	111		$	—
Reductions from sales		(44	)		—		(111	)		—
Ending balance	$	—		$	—	$	—		$	—

The were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process at June 30, 2024 and  December 31, 2023.  At June 30, 2024, other foreclosed assets consisted of machinery repossessed in connection with equipment finance leases.