Note 8: Other Real Estate Owned

9 Months Ended

Sep. 30, 2016

Notes

Note 8: Other Real Estate Owned

NOTE 8: OTHER REAL ESTATE OWNED

Major classifications of other real estate owned were as follows:

	September 30,	December 31,
	2016	2015
	(In Thousands)
Foreclosed assets held for sale
One- to four-family construction	$                     —		$                     —
Subdivision construction	6,685		7,016
Land development	10,886		12,133
Commercial construction	—		—
One- to four-family residential	1,465		1,375
Other residential	1,094		2,150
Commercial real estate	1,184		3,608
Commercial business	—		—
Consumer	2,067		1,109
	23,381		27,391
FDIC-supported foreclosed assets, net of discounts	795		1,834
Acquired foreclosed assets no longer covered by FDIC loss sharing agreements, net of discounts	432		460
Acquired foreclosed assets not covered by FDIC loss sharing agreements, net of discounts	1,891		995
Foreclosed assets held for sale, net	26,499		30,680
Other real estate owned not acquired through foreclosure	4,750		1,213
Other real estate owned	$             31,249		$             31,893

Other real estate owned not acquired through foreclosure includes 17 properties, 16 of which were branch locations that have been closed and are held for sale, and one of which is land which was acquired for a potential branch location.  During the three months ended September 30, 2016, one branch location which was closed and is held for sale was added to other real estate owned totaling $981,000.  During the nine months ended September 30, 2016, 12 former branch locations were added to other real estate owned not acquired through foreclosure due to the closing of those branches in January of 2016.  Five former branch locations have been sold during the nine month period at a net gain of $400,000, which is included in the gain of sales of other real estate owned amount in the table below.

At September 30, 2016, residential mortgage loans totaling $3.0 million were in the process of foreclosure, $2.9 million of which were acquired loans.  Of the $2.9 million of acquired loans, $2.0 million was covered by loss sharing agreements as of September 30, 2016 and $693,000 was acquired in the Valley Bank transaction. 

Expenses applicable to other real estate owned included the following:

	Three Months Ended
	September 30,
	2016	2015
	(In Thousands)
Net (gain) loss on sales of other real estate owned	$                       43	$                     (99)
Valuation write-downs	338	194
Operating expenses, net of rental income	917	521
	$                 1,298	$                     616

	Nine Months Ended
	September 30,
	2016	2015
	(In Thousands)
Net gain on sales of other real estate owned	$                  (168)	$            (709)
Valuation write-downs	430	385
Operating expenses, net of rental income	2,821	1,643
	$                 3,083	$            1,319