Other Real Estate Owned ("OREO")

6 Months Ended

Jun. 30, 2014

Other Real Estate Owned ("OREO") [Abstract]

Other Real Estate Owned ("OREO")

NOTE 9 - OTHER REAL ESTATE OWNED (“OREO”)

OREO assets are presented net of valuation allowances. The Company considers OREO as classified assets for regulatory and financial reporting. An analysis of OREO activity follows.

	Six Months Ended June 30,		Year Ended December 31,
(dollars in thousands)	2014	2013	2013
Balance at beginning of year	$                  6,797	$                  6,891	$                  6,891
Additions of underlying property	1,082	371	1,853
Disposals of underlying property	(1,092)	-	(1,346)
Valuation allowance	(234)	(330)	(601)
Balance at end of period	$                  6,553	$                  6,932	$                  6,797

During the six months ended June 30, 2014 additions consisted oftwo residential properties totaling $441,000 and a commercial building of $640,000 compared to $371,000 of additions for a residential property for the six months ended June 30, 2013. Additions were offset by disposals of three residential properties during the six months ended June 30, 2014. There were no disposals of OREO during the six months ended June 30, 2013. Valuation allowances further reduced OREO carrying values$234,000and $330,000to current appraised values for the six months ended June 30, 2014 and 2013, respectively. OREO carrying amounts reflect management’s estimate of the realizable value of these properties incorporating current appraised values, local real estate market conditions and related costs.

Expenses applicable to OREO assets include the following.

	Three Months Ended June 30,		Six Months Ended June 30,
(dollars in thousands)	2014	2013	2014	2013
Valuation allowance	$                      152	$                        19	$                      234	$                      330
Operating expenses	13	24	60	64
	$                      165	$                        43	$                      294	$                      394