Real Estate Owned (REO)

9 Months Ended

Sep. 30, 2024

Real Estate Owned (REO)

Real Estate Owned (REO)

6.    Real Estate Owned (REO)

Property acquired through foreclosure are included on the Company’s consolidated balance sheets as real estate owned and further categorized as held for sale or held for rental, described in detail below.

As of September 30, 2024 and December 31, 2023, REO totaled $4.3 million and $3.5 million, respectively. For the three months ended September 30, 2024 and 2023, the Company recorded an impairment loss of $0.3 million and $0.2 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded an impairment loss of $0.4 million and $0.6 million, respectively.

The following table presents the Company’s REO as of September 30, 2024 and December 31, 2023:

	September 30, 2024		December 31, 2023
	(in thousands)
Real estate owned at the beginning of period	$	3,462	$	5,216
Principal basis transferred to real estate owned		2,991		1,756
Charges and building improvements		—		230
Proceeds from sale of real estate owned		(2,008)		(3,040)
Impairment loss		(397)		(794)
Gain on sale of real estate owned		284		94
Balance at end of period	$	4,332	$	3,462

As of September 30, 2024, REO included $0.8 million of real estate held for rental and $3.5 million of real estate held for sale. As of December 31, 2023, REO included $0.8 million of real estate held for rental and $2.7 million of real estate held for sale.

Properties Held for Sale

During the three months ended September 30, 2024, the Company sold two properties held for sale and recognized a net gain of $0.02 million. During the nine months ended September 30, 2024, the Company sold 13 properties held for sale and recognized a net gain of $0.3 million. During the three months ended September 30, 2023, the Company sold one property held for sale and recognized a net loss of $0.01 million. During the nine months ended September 30, 2023, the Company sold five properties held for sale and recognized a net gain of $0.1 million.

Properties Held for Rental

As of September 30, 2024, one property, a commercial building, was held for rental. The tenant signed a five-year lease that commenced on August 1, 2021.

As of September 30, 2024, future minimum rents under this lease were as follows:

Years Ending December 31,	Amount
	(in thousands)
2024 (3 months)	$	14
2025		53
2026		31
Total	$	98