Note 5: Other Real Estate Owned

12 Months Ended

Dec. 31, 2018

Notes

Note 5: Other Real Estate Owned

Note 5:           Other Real Estate Owned and Repossessions

Major classifications of other real estate owned at December 31, 2018 and 2017, were as follows:

	2018	2017
	(In Thousands)
Foreclosed assets held for sale and repossessions
One- to four-family construction	$                      —	$                      —
Subdivision construction	1,092	5,413
Land development	3,191	7,229
Commercial construction	—	—
One- to four-family residential	269	112
Other residential	—	140
Commercial real estate	—	1,694
Commercial business	—	—
Consumer	928	1,987
	5,480	16,575
Acquired foreclosed assets no longer covered by
FDIC loss sharing agreements, net of discounts	167	2,133
Acquired foreclosed assets not covered by FDIC
loss sharing agreements, net of discounts (Valley Bank)	1,234	1,666
Foreclosed assets held for sale and repossessions, net	6,881	20,374
Other real estate owned not acquired through foreclosure	1,559	1,628
Other real estate owned and repossessions	$                8,440	$             22,002

At December 31, 2018, other real estate owned not acquired through foreclosure included nine properties, eight of which were branch locations that were closed and are held for sale, and one of which is land acquired for a potential branch location.  During the year ended December 31, 2018, one former branch location was sold at a loss of $24,000, which is included in the net gains on sales of other real estate owned and repossessions amount in the table below. 

At December 31, 2017, other real estate owned not acquired through foreclosure included 10 properties, nine of which were branch locations that were closed and are held for sale, and one of which is land acquired for a potential branch location.  During the year ended December 31, 2017, seven former branch locations were sold at an aggregate gain of $250,000, which is included in the net gains on sales of other real estate owned and repossessions amount in the table below. 

At December 31, 2018, residential mortgage loans totaling $1.3 million were in the process of foreclosure, $1.0 million of which were acquired loans.  Of the $1.0 million of acquired loans, $873,000 were previously covered by loss sharing agreements and $171,000 were acquired in the Valley Bank transaction.

At December 31, 2017, residential mortgage loans totaling $3.2 million were in the process of foreclosure, $3.0 million of which were acquired loans.  Of the $3.0 million of acquired loans, $2.8 millionwere previously covered by loss sharing agreements and $208,000 were acquired in the Valley Bank transaction.

Expenses applicable to other real estate owned and repossessions for the years ended December 31, 2018, 2017 and 2016, included the following:

	2018	2017	2016
	(In Thousands)
Net gains on sales of other real estate owned and repossessions	$                (2,522)	$                (2,212)	$                     (68)
Valuation write-downs	3,897	1,585	431
Operating expenses, net of rental income	3,544	4,556	3,748
	$                 4,919	$                 3,929	$                 4,111