Other Real Estate Owned

6 Months Ended

Jun. 30, 2012

Other Real Estate Owned [Abstract]

Other Real Estate Owned

Note 6.              Other Real Estate Owned

Other real estate owned ("OREO") increased $2.7 million from $21.0 million at December 31, 2011 to $23.7 million at June 30, 2012.  Set forth below is a table which details the changes in OREO from December 31, 2011 to June 30, 2012.

	2012
(In thousands)	First Quarter			Second Quarter
Beginning balance	$	21,016		$	24,304
Net proceeds from sales		(4,531	)		(922	)
Net gain (loss) on sales		(138	)		255
Assets acquired on non-accrual loans		8,010			1,086
Impairment charge		(53	)		(996	)
Ending balance	$	24,304		$	23,727

During the second quarter of 2012, the Company sold collateral related to four loans.  The Company received net proceeds of $433,000 and recorded a gain of $133,000 as a result of these sales. In addition to the sales mentioned above the Company sold seven properties acquired through the tax lien portfolio.  The Company received proceeds of $489,000 and recorded gains of $122,000 as a result of these sales.  During the second quarter of 2012, the Company recorded impairment charges of $442,000 on two properties based on expected net sales proceeds and $554,000 related to properties acquired through the tax lien portfolio.  In addition the Company acquired collateral related to the tax lien portfolio and transferred $1.1 million to OREO.

During the first quarter of 2012, the Company foreclosed on and sold collateral related to one commercial real estate loan.  The Company received net proceeds of $4.1 million and recorded a gain of $36,000. Additionally the Company sold eight single family homes related to three loans.  The Company received net proceeds of $104,000 and recorded a small net gain of $3,000.  As a result of these sales the Company recorded an impairment charge of $44,000 on the remaining collateral for two of these loans.  In addition to the sales mentioned above, the Company sold ten properties acquired through the tax lien portfolio.  The Company received proceeds of $332,000 and recorded a net loss of $177,000 as a result of these sales.During the first quarter of 2012, the collateral for a completed hotel and condominium construction project in Minneapolis, Minnesota, in which the Company is a participant, was foreclosed on by the lead lender.  The Company transferred the fair value of $3.2 million to OREO which represents the Company's participation rate of approximately 7.5%. The Company had previously recorded total charge-offs of $1.5 million to the allowance for loan and lease losses during the period the participation loan was non-accrual.  In addition the Company acquired collateral related to the tax lien portfolio and transferred $789,000 to OREO.The Company recorded impairment charges of $9,000 related to properties acquired through the tax lien portfolio.