Other Real Estate Owned, Net

12 Months Ended

Dec. 31, 2013

Other Real Estate Owned, Net

Note 7. Other Real Estate Owned, Net

Other real estate owned (“OREO”) is presented net of a valuation allowance for losses. An analysis of the valuation allowance on OREO is shown below.

	Years ended
	2013			2012
Balance, beginning of year	$	561,758		$	150,192
Provision for losses		300,341			505,766
Charge-offs		(324,150	)		(94,200	)
Balance, end of period	$	537,949		$	561,758

Expenses applicable to OREO include the following:

	Years ended
	2013		2012
Net loss on sales of real estate	$	263,116	$	230,840
Provision for losses		300,341		505,766
Operating expenses, net of income		124,164		186,161
Total expenses	$	687,621	$	922,767

Included in other assets are two properties, a former branch office and one residential property with a value of $983 thousand as of December 31, 2013. These properties are not owned as a result of foreclosures and are being marketed for sale.