Other Real Estate Owned

9 Months Ended

Sep. 30, 2014

Banking and Thrift [Abstract]

Other Real Estate Owned

8. OTHER REAL ESTATE OWNED

Other real estate and certain other assets acquired in foreclosure are reported at the lower of the investment in the loan or fair value of the property, less estimated costs to sell. The following table summarizes foreclosed property activity as of the nine months ended September 30, 2014 and 2013:

	September 30, 2014
	FUSB			ALC			Total
	(Dollars in Thousands)
Beginning Balance	$	8,463		$	847		$	9,310
Transfers from loans		4,152			361			4,513
Sales proceeds		(3,113	)		(214	)		(3,327	)
Gross gains		231			4			235
Gross losses		(128	)		(99	)		(227	)
Net gains (losses)		103			(95	)		8
Impairment		(146	)		(47	)		(193	)
Ending Balance	$	9,459		$	852		$	10,311

	September 30, 2013
	FUSB			ALC			Total
	(Dollars in Thousands)
Beginning Balance	$	11,089		$	2,197		$	13,286
Transfers from loans		1,770			426			2,196
Sales proceeds		(1,876	)		(905	)		(2,781	)
Gross gains		62			28			90
Gross losses		(155	)		(687	)		(842	)
Net gains (losses)		(93	)		(659	)		(752	)
Impairment		(368	)		(209	)		(577	)
Ending Balance	$	10,522		$	850		$	11,372

Valuation adjustments are primarily recorded in other non-interest expense; adjustments are also recorded as a charge to the allowance for loan losses if incurred within 60 days after the date of transfer from loans. Valuation adjustments are primarily post-foreclosure write-downs that are a result of continued declining property values based on updated appraisals or other indications of value, such as offers to purchase.