Other Real Estate Owned

6 Months Ended

Jun. 30, 2013

Other Real Estate Owned [Abstract]

Other Real Estate Owned

Note 6. Other Real Estate Owned

OREO decreased $433,000 from $13.4 million at December 31, 2012 to $13.0 million at June 30, 2013.  Set forth below is a table which details the changes in OREO from December 31, 2012 to June 30, 2013.

	2013
(In thousands)	First Quarter			Second Quarter
Beginning balance	$	13,435		$	13,264
Net proceeds from sales		(2,277	)		(2,603	)
Net gain on sales		162			418
Assets acquired on non-accrual loans		1,956			2,252
Impairment charge		(12	)		(329	)
Ending balance	$	13,264		$	13,002

At June 30, 2013, OREO was comprised of $4.6 million in tax liens, $4.5 million in land, $3.6 million in commercial real estate, and residential real estate with a fair value of $283,000.  During the second quarter of 2013, the Company sold collateral related to land, received net proceeds of $765,000 and recorded a net gain of $12,000.The Company also sold nine condominiums related to a construction project in Minneapolis, Minnesota in which the Company is a participant. The Company received its pro rata share of net proceeds in the amount of $99,000 and recorded a net gain of $37,000.  The Company also sold collateral related to two residential real estate loans.  The Company received net proceeds of $114,000 and recorded a small net gain of $5,000.  In addition to these second quarter sales, the Company sold 15 properties acquired through the tax lien portfolio.  The Company received proceeds of $1.6 million and recorded net gains of $364,000 as a result of these sales.  During the second quarter of 2013, the Company recorded impairment charges of $146,000 related to residential real estate and $183,000 related to properties acquired through the tax lien portfolio.  In addition the Company acquired collateral related to the tax lien portfolio and transferred $2.3 million to OREO.

During the first quarter of 2013, the Company sold collateral related to land, received net proceeds of $1.8 million and recorded a loss of $38,000.  The Company also sold three condominiums related to a construction project mentioned above. The Company received its pro rata share of net proceeds in the amount of $24,000 and recorded a gain of $17,000.  Additionally the Company sold four single family homes related to two loans.  The Company received net proceeds of $43,000 and recorded a small net gain of $3,000.  In addition to these first quarter sales, the Company sold eleven properties acquired through the tax lien portfolio.  The Company received proceeds of $367,000 and recorded a net gain of $180,000 as a result of these sales. During the first quarter of 2013, the Company acquired collateral related to a residential real estate loan and transferred $100,000 to OREO.  In addition the Company acquired collateral related to the tax lien portfolio and transferred $1.9 million to OREO. The Company recorded impairment charges of $12,000 related to properties acquired through the tax lien portfolio.