Other Real Estate Owned ("OREO")

6 Months Ended

Jun. 30, 2015

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

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)	2015	2014	2014
Balance at beginning of year	$ 5,883	$ 6,797	$ 6,797
Additions of underlying property	1,556	1,082	2,742
Disposals of underlying property	(643)	(1,092)	(2,422)
Transfers of OREO to loans	-	-	(1,000)
Valuation allowance	(374)	(234)	(234)
Balance at end of period	$ 6,422	$ 6,553	$ 5,883

During the six months ended June 30, 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 six months ended June 30, 2014, additions of $1.1 million consisted of two residential properties totaling $442,000 and a commercial building of $640,000. The Company disposed of two residential properties and two finished residential lots at a loss of $18,000 for the six months ended June 30, 2015 compared to disposals of three residential properties at a gain of $4,000 for the six months ended June 30, 2014. Additions to the valuation allowances of $374,000 and $234,000 were taken to adjust properties to current appraised values for the six months ended June 30, 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 June 30,		Six Months Ended June 30,
(dollars in thousands)	2015	2014	2015	2014
Valuation allowance	$ 249	$ 152	$ 374	$ 234
Operating expenses	85	13	179	60
	$ 334	$ 165	$ 553	$ 294