Other Real Estate Owned

12 Months Ended

Dec. 31, 2012

Other Real Estate Owned

Other Real Estate Owned

Note 8. Other Real Estate Owned

        The following table provides a summary of OREO activity for 2012 and 2011:

	2012									2011
(in thousands)	Non-Covered			Covered OREO			Total			Non-Covered			Covered OREO			Total
Balance, beginning of year	$	30,790		$	98,550		$	129,340		$	57,317		$	120,866		$	178,183
Additions		14,177			50,377			64,554			18,486			102,541			121,027
Sales		(17,147	)		(70,211	)		(87,358	)		(40,413	)		(83,414	)		(123,827	)
Valuation adjustments		(6,793	)		(20,440	)		(27,233	)		(4,600	)		(41,443	)		(46,043	)
Balance, end of year	$	21,027		$	58,276		$	79,303		$	30,790		$	98,550		$	129,340

        At December 31, 2012, OREO was $79.3 million and included $58.3 million of covered OREO. At December 31, 2011, OREO was $129.3 million and included $98.6 million of covered OREO. The balance of OREO at December 31, 2012 and 2011 is net of valuation allowances of $33.6 million and $37.4 million, respectively.

        Covered OREO expenses and valuation write-downs are recorded in the noninterest expense section of the consolidated statements of income. Under the loss-sharing agreements, 80 percent of eligible covered OREO expenses and valuation write-downs are reimbursable to the Company from the FDIC. The portion of these expenses that is reimbursable is recorded in FDIC loss sharing income (expense), net in the noninterest income section of the consolidated statements of income.