6. IMPAIRED AND NONPERFORMING LOANS AND LEASES AND OTHER REAL ESTATE OWNED

At March 31, 2013 and December 31, 2012, the recorded investment in nonperforming loans and leases was approximately $4,811,000 and $5,474,000, respectively. Nonperforming loans and leases include all such loans and leases that are either placed on nonaccrual status or are 90 days past due as to principal or interest but still accrue interest because such loans are well-secured and in the process of collection. The Company considers a loan to be impaired when, based on current information and events, it is probable that it will be unable to collect all amounts due (principal and interest) according to the contractual terms of the original loan agreement. At March 31, 2013, the recorded investment in loans and leases that were considered to be impaired totaled $24,477,000, which includes $4,811,000 in nonaccrual loans and leases and $19,666,000 in accruing loans and leases. Of the total impaired loans of $24,477,000, loans totaling $11,854,000 were deemed to require no specific reserve and loans totaling $12,623,000 were deemed to require a related valuation allowance of $1,733,000. At December 31, 2012, the recorded investment in loans and leases that were considered to be impaired totaled $26,553,000 and had a related valuation allowance of $1,595,000. If interest had been accruing on the nonperforming loans, such income would have approximated $59,000 and $272,000 for the three months ended March 31, 2013 and 2012.

At March 31, 2013 and December 31, 2012, the recorded investment in other real estate owned (“OREO”) was $8,946,000 and $12,237,000, respectively. During the first quarter of 2013, the Company sold six properties with balances of $3,743,000 for a loss of $93,000 and added a single property to OREO with a net book value totaling $432,000. The single property is improved land with a long-term lease for a self-storage facility in Sonoma County.

The Company periodically obtains property valuations to determine whether the recorded book value is considered fair value. During the first quarter of 2013, this valuation process did not result in the Company adjusting the book value of the OREO properties.

The March 31, 2013 OREO balance of $8,946,000 consists of 15 properties including five commercial real estate properties in the total amount of $4,010,000, six residential land properties in the total amount of $3,990,000, two commercial land properties in the total amount of $689,000 and two residential real estate properties in the total amount of $257,000.

Nonperforming loans and leases and OREO at March 31, 2013 and December 31, 2012 are summarized as follows (in thousands):

	March 31, 2013			December 31, 2012
Nonaccrual loans and leases that are current to terms (less than 30 days past due)	$	1,770		$	1,514
Nonaccrual loans and leases that are past due		3,041			3,960
Loans and leases past due 90 days and accruing interest		—			—
Other real estate owned		8,946			12,237
Total nonperforming assets	$	13,757		$	17,111

Nonperforming loans and leases to total loans and leases		1.91	%		2.12	%
Total nonperforming assets to total assets		2.34	%		2.79	%

Impaired loans and leases as of and for the periods ended March 31, 2013 and December 31, 2012 are summarized as follows:

(in thousands)	As of March 31, 2013						As of December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:

Commercial	$	775	$	794	$	—	$	1,248	$	1,407	$	—
Real estate-commercial		10,783		11,505		—		10,882		11,603		—
Real estate-multi-family		—		—		—		—		—		—
Real estate-construction		259		259		—		263		263		—
Real estate-residential		—		92		—		—		—		—
Leases		—		—		—		—		—		—
Consumer		37		109		—		37		109		—
Subtotal	$	11,854	$	12,759	$	—	$	12,430	$	13,382	$	—

With an allowance recorded:

Commercial	$	1,615	$	1,615	$	542	$	1,580	$	1,580	$	480
Real estate-commercial		6,748		6,812		871		8,223		8,287		786
Real estate-multi-family		1,673		1,766		124		1,681		1,774		122
Real estate-construction		—		—		—		—		—		—
Real estate-residential		2,382		2,382		166		2,429		2,483		179
Agriculture		—		—		—		—		—		—
Consumer		205		205		30		210		210		28
Subtotal	$	12,623	$	12,780	$	1,733	$	14,123	$	14,334	$	1,595

Total:

Commercial	$	2,390	$	2,409	$	542	$	2,828	$	2,987	$	480
Real estate-commercial		17,531		18,317		871		19,105		19,890		786
Real estate-multi-family		1,673		1,766		124		1,681		1,774		122
Real estate-construction		259		259		—		263		263		—
Real estate-residential		2,382		2,474		166		2,429		2,483		179
Leases		—		—		—		—		—		—
Agriculture		—		—		—		—		—		—
Consumer		242		314		30		247		319		28
	$	24,477	$	25,539	$	1,733	$	26,553	$	27,716	$	1,595

The following table presents the average balance related to impaired loans and leases for the periods indicated (in thousands):

	Average Recorded Investments for the three months ended
	March 31, 2013		March 31, 2012

Commercial	$	2,436	$	6,757
Real estate-commercial		17,608		15,337
Real estate-multi-family		1,677		1,216
Real estate-construction		261		2,223
Real estate-residential		2,405		2,869
Leases		—		9
Agriculture		—		497
Consumer		245		738
Total	$	24,632	$	29,646

The following table presents the interest income recognized on impaired loans and leases for the periods indicated (in thousands):

	Interest Income Recognized for the three months ended
	March 31, 2013		March 31, 2012

Commercial	$	16	$	240
Real estate-commercial		208		698
Real estate-multi-family		19		44
Real estate-construction		3		19
Real estate-residential		23		154
Leases		—		1
Agriculture		—		3
Consumer		1		43
Total	$	270	$	1,202