Foreclosed Property

3 Months Ended

Mar. 31, 2013

Note 6 – Foreclosed Property

Major classifications of foreclosed properties at March 31, 2013, December 31, 2012 and March 31, 2012 are summarized as follows (in thousands).

	March 31,			December 31,			March 31,
	2013			2012			2012
Commercial real estate	$	6,658		$	6,368		$	11,463
Commercial construction		3,027			2,204			3,266
Total commercial		9,685			8,572			14,729
Residential mortgage		3,768			5,192			6,757
Residential construction		8,260			11,454			28,147
Total foreclosed property		21,713			25,218			49,633
Less valuation allowance		(4,979	)		(6,954	)		(17,746	)
Foreclosed property, net	$	16,734		$	18,264		$	31,887
Balance as a percentage of original loan unpaid principal		45.0	%		39.7	%		36.1	%

Activity in the valuation allowance for foreclosed property for the three months ended March 31, 2013 and 2012 is presented in the following table (in thousands).

	Three Months Ended
	March 31,
	2013			2012
Balance at beginning of year	$	6,954		$	18,982
Additions charged to expense		1,041			2,111
Disposals		(3,016	)		(3,347	)
Balance at end of period	$	4,979		$	17,746

Expenses related to foreclosed assets for the three months ended March 31, 2013 and 2012 is presented in the following table (in thousands).

	Three Months Ended
	March 31,
	2013		2012
Net loss on sales	$	105	$	93
Provision for unrealized losses		1,041		2,111
Operating expenses		1,187		1,621
Total foreclosed property expense	$	2,333	$	3,825