Foreclosed Assets (Tables)

12 Months Ended

Dec. 31, 2013

Analysis of the balance in foreclosed assets

The Company holds certain parcels of real estate due to completed foreclosure proceedings on defaulted loans or the closing of former branches. An analysis of the balance in OREO is as follows:

	Years Ended December 31,
	2013			2012
	(in thousands)
Balance at beginning of year	$	8,444		$	11,241
OREO due to foreclosure		1,771			850
Other additions to foreclosed properties		0			85
Closed branch locations transferred to OREO		885			0
Properties sold		(1,910	)		(3,732	)
Balance at end of year	$	9,190		$	8,444

Analysis of valuation allowance on foreclosed assets

OREOs are presented net of a valuation allowance for losses. As the market value of OREOs change, adjustments are made to the recorded investment in the properties through the valuation allowance to ensure that all properties are recorded at the lower of cost or market. Properties written down in previous periods can be written back up if a current property valuation warrants the change, though never above the original cost of the property. An analysis of the valuation allowance on OREOs is as follows:

	Years Ended December 31,
	2013				2012
	(in thousands)
Balance at beginning of year		$	1,870		$	1,851
Additions and write-downs			1,250			473
Reductions due to sales or increases in value			(345	)		(454	)
Balance at end of year		$	2,775		$	1,870

Expenses applicable to foreclosed assets

Expenses applicable to OREOs include the following:

	Years Ended December 31,
	2013		2012
	(in thousands)
Net loss (gain) on sales of real estate	$	100	$	304
Provision for losses (net write-downs)		1,245		473
Operating expenses, net of income*		217		345
Total Expenses	$	1,562	$	1,122

* included in other operating income and other operating expense