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Other Real Estate Assets Owned (OREO)
 9 Months Ended
Sep. 30, 2016
Other Real Estate [Abstract]  
Other Real Estate Owned (OREO)
Other Real Estate Owned (OREO)

At September 30, 2016 and December 31, 2015, OREO balances were $3.4 million and $3.3 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, 2016
 
December 31, 2015
Balance at the beginning of year, net
$
3,345

 
$
4,051

Transfers from loans and to premises and equipment, net
526

 
287

Sales proceeds
(224
)
 
(814
)
Gains (losses) on disposition
50

 
(100
)
Less valuation adjustments
(310
)
 
(79
)
Balance at the end of the period, net
$
3,387

 
$
3,345



Expenses applicable to net OREO, including gains and losses on sales as well as valuation adjustments, were $183,000 and $193,000 during the three months ended September 30, 2016 and 2015, respectively and $339,000 and $285,000 during the nine months ended September 30, 2016 and 2015, respectively.

The major classifications of OREO in the consolidated balance sheets at September 30, 2016 and December 31, 2015 were as follows:
(Dollars in thousands)
September 30, 2016
 
December 31, 2015
Real estate loans:
 
 
 
Construction
$
858

 
$
853

Secured by farmland
—

 
—

Secured by 1-4 family residential
2,169

 
1,958

Other real estate loans
360

 
534

Total real estate loans
$
3,387

 
$
3,345



At September 30, 2016, the Company had no consumer mortgage loans secured by residential real estate for which foreclosure was in process. At December 31, 2015, the Company had one consumer mortgage loan secured by residential real estate that totaled $533,000 for which foreclosure was in process and subsequently transfered to OREO.