Other Real Estate Owned

12 Months Ended

Dec. 31, 2011

Other Real Estate Owned [Abstract]

Other Real Estate Owned

NOTE 5: Other Real Estate Owned

At December 31, 2011 and 2010, OREO was $6.06 million and $10.67 million, respectively. OREO is primarily comprised of residential properties and non-residential properties associated with commercial relationships, and are located primarily in the state of Virginia. Changes in the balance for OREO are as follows:

	Year Ended December 31,
(Dollars in thousands)	2011			2010
Balance at the beginning of year, gross	$	14,653		$	15,202
Transfers from loans		5,040			5,265
Capitalized costs		--			218
Charge-offs		(963	)		(585	)
Sales proceeds		(8,801	)		(5,492	)
Gain (loss) on disposition		57			45
Balance at the end of year, gross		9,986			14,653
Less allowance for losses		(3,927	)		(3,979	)
Balance at the end of year, net	$	6,059		$	10,674

Changes in the allowance for OREO losses are as follows:

	Year Ended December 31,
(Dollars in thousands)	2011			2010			2009
Balance at the beginning of year	$	3,979		$	2,402		$	73
Provision for losses		911			2,180			2,614
Charge-offs, net		(963	)		(603	)		(285	)
Balance at the end of year	$	3,927		$	3,979		$	2,402

Net expenses applicable to OREO, other than the provision for losses, were $516,000, $931,000 and $129,000 for the years ended December 31, 2011, 2010 and 2009, respectively.