REAL ESTATE OWNED, NET

3 Months Ended

Mar. 31, 2015

Real Estate [Abstract]

REAL ESTATE OWNED, NET

REAL ESTATE OWNED, NET

The following table presents the changes in REO for the three months ended March 31, 2015 and 2014 (in thousands):

	Three Months Ended March 31
	2015			2014
Balance, beginning of the period	$	3,352		$	4,044
Additions from loan foreclosures	668			707
Additions from acquisitions	2,525			—
Additions from capitalized costs	—			4
Proceeds from dispositions of REO	(1,738		)	(1,641		)
Gain on sale of REO	115			159
Valuation adjustments in the period	—			(37		)
Balance, end of the period	$	4,922		$	3,236

The following table shows REO by type and geographic location by state as of March 31, 2015 (in thousands):

	Washington		Oregon		Idaho		Total
One- to four-family construction	912		2,602		—		3,514
Land development—residential	$	144	$	1,231	$	33	$	1,408
Balance, end of period	$	1,056	$	3,833	$	33	$	4,922

REO properties are recorded at the lower of the estimated fair value of the property, less expected selling costs, or the carrying value of the defaulted loan, establishing a new cost basis.  Subsequently, REO properties are carried at the lower of the new cost basis or updated fair market values, based on updated appraisals of the underlying properties, as received.  Valuation allowances on the carrying value of REO may be recognized based on updated appraisals or on management’s authorization to reduce the selling price of a property.