Other Real Estate Owned and Property Acquired in Settlement of Loans

6 Months Ended

Jun. 30, 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 OREO below carrying value are recognized by a charge to income.

Total OREO and property acquired in settlement of loans decreased $0.5 million during the first six months of 2015 from $20.4 million at December 31, 2014, to $20.0 million at June 30, 2015. At June 30, 2015 and December 31, 2014, OREO and property acquired in settlement of loans represented 50% 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)	June 30, 2015		December 31, 2014
Real estate acquired in settlement of loans	$	19,717	$	20,122
Property acquired in settlement of loans	238		289
Total property acquired in settlement of loans	$	19,955	$	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)	June 30, 2015			June 30, 2014
Real estate acquired in settlement of loans, beginning of period	$	20,833		$	24,573
Plus: New real estate acquired in settlement of loans	938			983
Less: Sales of real estate acquired in settlement of loans	(1,663		)	(3,154		)
Less: Write-downs and net loss on sales charged to expense	(391		)	(660		)
Real estate acquired in settlement of loans, end of period	$	19,717		$	21,742

	For Six Months Ended
(dollars in thousands)	June 30, 2015			June 30, 2014
Real estate acquired in settlement of loans, beginning of period	$	20,122		$	28,353
Plus: New real estate acquired in settlement of loans	3,433			1,251
Less: Sales of real estate acquired in settlement of loans	(3,153		)	(6,928		)
Less: Write-downs and net loss on sales charged to expense	(685		)	(934		)
Real estate acquired in settlement of loans, end of period	$	19,717		$	21,742

At June 30, 2015, 6 assets with a net carrying amount of $1.1 million were under contract for sale. Estimated losses on these sales, if any, have been recognized in the Consolidated Statements of Operations in the first six months of 2015.

At June 30, 2015, the Company’s recorded investment in mortgage loans collateralized by residential real estate properties that are in the process of foreclosure was $0.6 million and the Company’s OREO balance included $3.5 million of residential real estate.