Other Real Estate Owned (OREO)

12 Months Ended

Dec. 31, 2016

Other Real Estate Owned (OREO) [Abstract]

Foreclosed Assets

NOTE 5, Other Real Estate Owned (OREO)

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,
	2016			2015
	(in thousands)
Balance at beginning of year	$	5,290		$	8,014
Transfers to OREO due to foreclosure		0			553
Other additions to foreclosed properties		52			0
Closed branch locations transferred to OREO		127			0
Properties sold		(3,376	)		(3,277	)
Balance at end of year	$	2,093		$	5,290

Other additions to foreclosed properties in the table above are for capital improvements on existing properties.

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,
	2016				2015
	(in thousands)
Balance at beginning of year		$	2,549		$	2,908
Additions and write-downs			60			1,011
Reductions due to sales or increases in value			(1,583	)		(1,370	)
Balance at end of year		$	1,026		$	2,549

Expenses applicable to OREOs include the following:

	Years Ended December 31,
	2016		2015
	(in thousands)
Net loss (gain) on sales of real estate	$	94	$	(54	)
Provision for losses (net write-downs)		60		1,011
Operating expenses, net of income (1)		160		219
Total Expenses	$	314	$	1,176
(1) Included in other operating income and other operating expense on the Consolidated Statements of Income.