Other Real Estate Owned and Property Acquired in Settlement of Loans

6 Months Ended

Jun. 30, 2014

Repossessed Assets [Abstract]

Other Real Estate Owned and Property Acquired in Settlement of Loans

Other Real Estate Owned and Property Acquired in Settlement of Loans

OREO consists of real estate acquired through foreclosure or deed in lieu thereof. The property is classified as held for sale. The property is initially carried at fair value based on recent appraisals, less estimated costs to sell. Declines in the fair value of properties included in other real estate below carrying value are recognized by a charge to income.

Total OREO and property acquired in settlement of loans decreased $6.5 million during the first six months of 2014 from $28.4 million at December 31, 2013, to $21.9 million at June 30, 2014. This represents 41% of total nonperforming assets. At December 31, 2013, OREO and property acquired in settlement of loans represented 45% of total nonperforming assets.

The following table summarizes OREO and property acquired in settlement of loans at the periods indicated:

(dollars in thousands)	June 30, 2014		December 31, 2013
Real estate acquired in settlement of loans	$	21,742	$	28,353
Property acquired in settlement of loans	129		42
Total property acquired in settlement of loans	$	21,871	$	28,395

The following tables summarize the changes in real estate acquired in settlement of loans at the periods indicated:

	For Three Months Ended
(dollars in thousands)	June 30, 2014			June 30, 2013
Real estate acquired in settlement of loans, beginning of period	$	24,573		$	46,307
Plus: New real estate acquired in settlement of loans	983			2,824
Less: Sales of real estate acquired in settlement of loans	(3,154		)	(10,422		)
Less: Write-downs and net gain (loss) on sales charged to expense	(660		)	(3,047		)
Real estate acquired in settlement of loans, end of period	$	21,742		$	35,662

	For Six Months Ended
(dollars in thousands)	June 30, 2014			June 30, 2013
Real estate acquired in settlement of loans, beginning of period	$	28,353		$	62,796
Plus: New real estate acquired in settlement of loans	1,251			6,793
Less: Sales of real estate acquired in settlement of loans	(6,928		)	(30,661		)
Less: Write-downs and net loss on sales charged to expense	(934		)	(3,266		)
Real estate acquired in settlement of loans, end of period	$	21,742		$	35,662

At June 30, 2014, 18 assets with a net carrying amount of $4.3 million were under contract for sale. Estimated losses on these sales have been recognized in the Consolidated Statements of Operations in the first six months of 2014.