Other Real Estate Owned ("OREO")

3 Months Ended

Mar. 31, 2015

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.

	Three Months Ended March 31,		Year Ended December 31,
(dollars in thousands)	2015	2014	2014
Balance at beginning of year	$                  5,883	$                  6,797	$                  6,797
Additions of underlying property	1,556	739	2,742
Disposals of underlying property	(453)	-	(2,422)
Transfers of OREO to loans	-	-	(1,000)
Valuation allowance	(125)	(82)	(234)
Balance at end of period	$                  6,861	$                  7,454	$                  5,883

During the three months ended March 31, 2015, additions of $1.6 million consisted of $784,000 for five residential properties, $378,000 for three residential lots and $400,000 for a commercial building. During the three months ended March 31, 2014, additions of $739,000 consisted of a residential property of $99,000 and a commercial building of $640,000. The Company disposed of one residential property and two finished residential lots at no gain for the three months ended March 31, 2015. There were no disposals of OREO during the three months ended March 31, 2014.  Additions to the valuation allowances of $125,000 and $82,000 were taken to adjust properties to current appraised values for the three months ended March 31, 2015 and 2014, 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 March 31,
(dollars in thousands)	2015	2014
Valuation allowance	$                      125	$                        82
Operating expenses	94	47
	$                      219	$                      129