Other Real Estate Owned

9 Months Ended

Sep. 30, 2022

Foreclosed and Repossessed Assets

Park typically transfers a loan to OREO at the time that Park takes deed/title to the real estate property asset. The carrying amounts of foreclosed real estate properties held at September 30, 2022 and December 31, 2021 are listed below, as well as the recorded investment of loans secured by residential real estate properties for which formal foreclosure proceedings were in process at those dates.


(in thousands)	September 30, 2022		December 31, 2021
OREO:
Commercial real estate	$	1,354	$	—
Residential real estate	—		775
Total OREO	$	1,354	$	775

Loans in process of foreclosure:
Residential real estate	$	1,567	$	1,148

Assets acquired through or in lieu of loan foreclosure are initially recorded at fair value less costs to sell when acquired. During the three months and the nine months ended September 30, 2022, Park recognized a $12.0 million OREO valuation markup related to the foreclosure and subsequent sale of a property collateralizing a former Vision Bank relationship. This income is included in "OREO valuation markup" on the Consolidated Condensed Statements of Income. There was no OREO valuation

markup related to former Vision Bank relationships during the three-month or the nine-month periods ended September 30, 2021.

During the three months and the nine months ended September 30, 2022, Park recognized a $5.6 million gain on the sale of OREO related to former Vision Bank relationships. This income is included in "Gain (loss) on sale of OREO, net" on the Consolidated Condensed Statements of Income. There was no gain or loss on sale of OREO related to former Vision Bank relationships during the three-month or the nine-month periods ended September 30, 2021.

In addition to real estate, Park may also repossess different types of collateral. At September 30, 2022 and December 31, 2021, Park had $352,000 and $3.3 million, respectively, in other repossessed assets which are included in "Other assets" on the Consolidated Condensed Balance Sheets. At December 31, 2021, the other repossessed assets largely consisted of an aircraft acquired as part of a loan workout.