CHFC 2018 Annual Report

Note 7: Other Real Estate Owned and Repossessed Assets Changes in other real estate owned and repossessed assets, included in interest receivable and other assets on the Consolidated Statements of Financial Position, were as follows: (Dollars in thousands) Other real estate owned Repossessed assets Balance at January 1, 2016 $ 9,716 $ 219 Additions due to acquisitions 13,227 313 Other additions (1) 9,938 3,032 Net payments received (1,560) (763) Disposals (13,873) (2,426) Write-downs (636) — Balance at December 31, 2016 $ 16,812 $ 375 Other additions (1) 6,905 4,641 Net payments received (1,064) — Disposals (12,831) (4,391) Write-downs (1,640) — Balance at December 31, 2017 $ 8,182 $ 625 Transfers based on adoption of ASU 2014-09 (2) (189) — Other additions (1) 7,179 4,307 Net payments received (249) — Disposals (7,825) (4,508) Write-downs (1,266) — Balance at December 31, 2018 $ 5,832 $ 424 (1) Includes loans transferred to other real estate owned and other repossessed assets. (2) In accordance with the updates to Topic 606 adopted by the Corporation effective January 1, 2018, $1.1 million of other real estate owned sold with seller financing were reclassified on the Consolidated Statements of Financial Position to loans and the related $0.9 million of deferred gains were recognized in income as an adjustment to opening retained earnings. Refer to Note 1, Summary of SignificantAccounting Policies for further information. At December 31, 2018, the Corporation had $1.3 million of other real estate owned and repossessed assets as a result of obtaining physical possession in accordance with ASU No. 2014-04, Reclassification of Residential Real Estate Collateralized Consumer Mortgage Loans Upon Foreclosure. In addition, there were $4.5 million of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process, as of December 31, 2018. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 132