Other Real Estate Owned

12 Months Ended

Dec. 31, 2017

Other Real Estate Owned

Other Real Estate Owned

NOTE 6: OREO

At December 31, 2017 and 2016, OREO was $168,000 and $195,000, 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)	2017		2016
Balance at the beginning of year, gross	$	281	$	998
Transfers between loans and other real estate owned		208		618
Capitalized expenses		—		21
Charge-offs		(29)		(106)
Sales proceeds		(245)		(1,384)
Gain on disposition		10		134
Balance at the end of year, gross		225		281
Less valuation allowance		(57)		(86)
Balance at the end of year, net	$	168	$	195

Changes in the allowance for OREO losses are as follows:

	Year Ended December 31,
(Dollars in thousands)	2017		2016		2015
Balance at the beginning of year	$	86	$	56	$	29
Provision for losses		—		135		90
Charge-offs, net		(29)		(105)		(63)
Balance at the end of year	$	57	$	86	$	56

Other net noninterest (expense) income applicable to OREO, other than the provision for losses, were $(72,000),  $(22,000) and $19,000 for the years ended December 31, 2017, 2016 and 2015, respectively.