Other Real Estate Owned and Property Acquired in Settlement of Loans

3 Months Ended

Mar. 31, 2015

Repossessed Assets [Abstract]

Other Real Estate Owned and Property Acquired in Settlement of Loans

Other Real Estate Owned and Property Acquired in Settlement of Loans

OREO consists of real estate acquired through foreclosure or deed in lieu thereof, and is classified as held for sale. The property is initially carried at fair value based on recent appraisals, less estimated costs to sell. Declines in the fair value of properties included in other real estate below carrying value are recognized by a charge to income.

Total OREO and property acquired in settlement of loans increased $0.6 million during the first three months of 2015 from $20.4 million at December 31, 2014, to $21.0 million at March 31, 2015. At March 31, 2015 and December 31, 2014, OREO and property acquired in settlement of loans represented 51% and 45% of total nonperforming assets, respectively.

The following table summarizes OREO and property acquired in settlement of loans at the periods indicated:

(dollars in thousands)	March 31, 2015		December 31, 2014
Real estate acquired in settlement of loans	$	20,833	$	20,122
Property acquired in settlement of loans	207		289
Total property acquired in settlement of loans	$	21,040	$	20,411

The following tables summarize the changes in real estate acquired in settlement of loans at the periods indicated:

	For Three Months Ended
(dollars in thousands)	March 31, 2015			March 31, 2014
Real estate acquired in settlement of loans, beginning of period	$	20,122		$	28,353
Plus: New real estate acquired in settlement of loans	2,495			268
Less: Sales of real estate acquired in settlement of loans	(1,490		)	(3,774		)
Less: Write-downs and net gain (loss) on sales charged to expense	(294		)	(274		)
Real estate acquired in settlement of loans, end of period	$	20,833		$	24,573

At March 31, 2015, 16 assets with a net carrying amount of $3.4 million were under contract for sale. Estimated losses on these sales have been recognized in the Consolidated Statements of Operations in the first three months of 2015.

At March 31, 2015, the Company’s recorded investment in mortgage loans collateralized by residential real estate properties that are in the process of foreclosure was $1.1 million and the Company’s OREO balance included $3.4 million of residential real estate.