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Other Real Estate Assets Owned (OREO)
 9 Months Ended
Sep. 30, 2015
Other Real Estate [Abstract]  
Other Real Estate Owned (OREO)
Other Real Estate Owned (OREO)

At September 30, 2015 and December 31, 2014, OREO balances were $3.9 million and $4.1 million, respectively. OREO is primarily comprised of residential properties and non-residential properties, and are located primarily in the state of Virginia. Changes in the balance for OREO, net of valuation allowances, are as follows:
(Dollars in thousands)
September 30, 2015
 
December 31, 2014
Balance at the beginning of year, net
$
4,051

 
$
3,424

Transfers between loans and other real estate owned
720

 
3,301

Sales proceeds
(677
)
 
(2,663
)
Loss on disposition
(46
)
 
(14
)
Less valuation adjustments
(177
)
 
3

Balance at the end of year, net
$
3,871

 
$
4,051



Expenses applicable to OREO, were $193,000 and $(33,000) during the three months ended September 30, 2015 and 2014, respectively and $285,000 and $145,000 during the nine months ended September 30, 2015 and 2014, respectively.

The major classifications of OREO in the consolidated balance sheets at September 30, 2015 and December 31, 2014 were as follows:
(Dollars in thousands)
September 30, 2015
 
December 31, 2014
Real estate loans:
 
 
 
Construction
$
853

 
$
871

Secured by farmland
—

 
—

Secured by 1-4 family residential
1,598

 
1,035

Other real estate loans
1,420

 
2,145

Total real estate loans
$
3,871

 
$
4,051



At September 30, 2015, the Company had $817,000 in two consumer mortgage loans secured by residential real estate for which foreclosure was in process. At December 31, 2014, there were no consumer mortgage loans secured by residential real estate for which foreclosure was in process.