Other Real Estate Owned

3 Months Ended

Mar. 31, 2012

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 March 31, 2012 and 2011:

	For the three months ended March 31, 2012									For the three months ended March 31, 2011
(in thousands)	Non-Covered OREO			Covered OREO			Total			Non-Covered OREO			Covered OREO			Total
Balance, beginning of period	$	30,790		$	98,550		$	129,340		$	57,317		$	120,866		$	178,183
Additions	2,217			6,075			8,292			6,562			27,577			34,139
Sales	(2,877		)	(18,362		)	(21,239		)	(6,064		)	(18,317		)	(24,381		)
Valuation adjustments	(1,056		)	(7,807		)	(8,863		)	(1,473		)	(8,304		)	(9,777		)
Balance, end of period	$	29,074		$	78,456		$	107,530		$	56,342		$	121,822		$	178,164

At March 31, 2012, OREO was $107.5 million and included $78.5 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 March 31, 2012 and December 31, 2011 is net of valuation allowances of $36.4 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.