Other Real Estate Owned

6 Months Ended

Jun. 30, 2011

Other Real Estate Owned

Other Real Estate Owned

Note 7. Other Real Estate Owned

The following table provides a summary of OREO activity for the three months ended June 30, 2011 and 2010:

	For the three months ended June 30, 2011									For the three months ended June 30, 2010
(in thousands)	Non-Covered  OREO			Covered  OREO			Total			Non-Covered  OREO			Covered  OREO			Total
Balance, beginning of period	$	56,342		$	121,822		$	178,164		$	58,025		$	77,526		$	135,551
Additions	3,967			33,549			37,516			6,048			33,151			39,199
Sales	(11,083		)	(24,836		)	(35,919		)	(2,185		)	(6,891		)	(9,076		)
Valuation adjustments	(1,592		)	(15,628		)	(17,220		)	(7,437		)	(4,945		)	(12,382		)
Balance, end of period	$	47,634		$	114,907		$	162,541		$	54,451		$	98,841		$	153,292

The following table provides a summary of OREO activity for the six months ended June 30, 2011 and 2010:

	For the six months ended June 30, 2011									For the six months ended June 30, 2010
(in thousands)	Non-Covered  OREO			Covered  OREO			Total			Non-Covered  OREO			Covered  OREO			Total
Balance, beginning of period	$	57,317		$	120,866		$	178,183		$	53,308		$	60,558		$	113,866
Additions	10,528			61,126			71,654			27,145			58,045			85,190
Sales	(17,147		)	(43,153		)	(60,300		)	(7,588		)	(10,793		)	(18,381		)
Valuation adjustments	(3,064		)	(23,932		)	(26,996		)	(18,414		)	(8,969		)	(27,383		)
Balance, end of period	$	47,634		$	114,907		$	162,541		$	54,451		$	98,841		$	153,292

At June 30, 2011, OREO was $162.5 million and included $114.9 million of covered OREO. At December 31, 2010, OREO was $178.2 million and included $120.9 million of covered OREO. At June 30, 2010, OREO was $153.3 million and included covered OREO of $98.8 million.  The balance of OREO at June 30, 2011 and December 31, 2010 is net of valuation allowances of $32.8 million and $5.5 million, respectively.  There was no OREO valuation allowance at June 30, 2010.

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 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, net in the noninterest income section of the consolidated statements of income.