Foreclosed Assets (Tables)

12 Months Ended

Dec. 31, 2015

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,
	2015				2014
	(in thousands)
Balance at beginning of year		$	8,014		$	9,190
Transfers to OREO due to foreclosure			553			1,815
Other additions to foreclosed properties			0			23
Properties sold			(3,277	)		(3,014	)
Balance at end of year		$	5,290		$	8,014

Analysis of valuation allowance on foreclosed assets

OREOs are presented net of a valuation allowance for losses. As the fair values 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 fair value. 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,
	2015				2014
	(in thousands)
Balance at beginning of year		$	2,908		$	2,775
Additions and write-downs			1,011			1,056
Reductions due to sales or increases in value			(1,370	)		(923	)
Balance at end of year		$	2,549		$	2,908

Expenses applicable to foreclosed assets

Expenses applicable to OREOs include the following:

	Years Ended December 31,
	2015			2014
	(in thousands)
Net loss (gain) on sales of real estate	$	(54	)	$	(184	)
Provision for losses (net write-downs)		1,011			1,056
Operating expenses, net of income (1)		219			285
Total Expenses	$	1,176		$	1,157

(1) Included in other operating income and other operating expense on the Consolidated Statements of Income.