Note 10 – Other Real Estate Owned and Property Acquired in Settlement of Loans

OREO represents properties acquired through foreclosure or deed in lieu thereof. The property is classified as held for sale. The property is initially carried at fair value based on recent appraisals, less estimated costs to sell. Declines in the fair value of properties included in other real estate below carrying value are recognized by a charge to income.

Total OREO and foreclosed assets increased $48.2 million from $62.2 million at December 31, 2010, to $110.4 million at December 31, 2011, which represents 51.0% of total nonperforming assets. At December 31, 2010, OREO and foreclosed assets represented 15.9% of total nonperforming assets.

The following table summarizes real estate acquired in settlement of loans and personal property acquired in settlement of loans, the latter of which is included within the other assets financial statement line item on the Consolidated Balance Sheet at the dates indicated.


(dollars in thousands)	December 31, 2011		December 31, 2010
Real estate acquired in settlement of loans	$	110,009	$	62,058
Personal property acquired in settlement of loans		377		138

Total property acquired in settlement of loans	$	110,386	$	62,196

The following table summarizes the changes in real estate acquired in settlement of loans at the periods indicated.


(dollars in thousands)	For Twelve Months Ended
	December 31, 2011			December 31, 2010
Real estate acquired in settlement of loans, beginning of period	$	62,058		$	35,170
Plus: New real estate acquired in settlement of loans		132,546			47,808
Plus: Real estate acquired in BOGC acquisition		18,436			—
Less: Sales of real estate acquired in settlement of loans		(58,027	)		(10,981	)
Less: Write-downs and net loss on sales charged to expense		(45,004	)		(9,939	)

Real estate acquired in settlement of loans, end of period	$	110,009		$	62,058

At December 31, 2011, 25 assets with a net carrying amount of $21.3 million were under contract for sale and are expected to close in the first quarter of 2012. Estimated losses with these sales have been recognized in the Consolidated Statements of Operations. At December 31, 2010, four assets with a net carrying amount of $0.8 million were under contract for sale and closed in the first quarter of 2011. Estimated losses with these sales have been recognized in the Consolidated Statements of Operations.