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REAL ESTATE OWNED, NET
 6 Months Ended
Jun. 30, 2015
Real Estate [Abstract]  
REAL ESTATE OWNED, NET
REAL ESTATE OWNED, NET

The following table presents the changes in REO for the three and six months ended June 30, 2015 and 2014 (in thousands):
 
Three Months Ended
June 30
 
Six Months Ended
June 30
 
2015

 
2014

 
2015

 
2014

Balance, beginning of the period
$
4,922

 
$
3,236

 
$
3,352

 
$
4,044

Additions from loan foreclosures
1,473

 
1,996

 
2,141

 
2,703

Additions from acquisitions
—

 
—

 
2,525

 
—

Additions from capitalized costs
298

 
33

 
298

 
34

Proceeds from dispositions of REO
(511
)
 
(1,034
)
 
(2,249
)
 
(2,672
)
Gain on sale of REO
105

 
157

 
220

 
316

Valuation adjustments in the period
(182
)
 
—

 
(182
)
 
(37
)
Balance, end of the period
$
6,105

 
$
4,388

 
$
6,105

 
$
4,388



The following table shows REO by type and geographic location by state as of June 30, 2015 (in thousands):
 
Washington
 
Oregon
 
Idaho
 
Total
Commercial real estate
$
—

 
$
1,641

 
$
—

 
$
1,641

Land development—residential
144

 
1,225

 
33

 
1,402

One- to four-family real estate
1,494

 
1,568

 
—

 
3,062

Balance, end of period
$
1,638

 
$
4,434

 
$
33

 
$
6,105



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.