Other Real Estate Owned

12 Months Ended

Dec. 31, 2012

Notes

Other Real Estate Owned

6.  OTHER REAL ESTATE OWNED

Other real estate owned (“OREO”) consists of properties acquired as a result of deed in-lieu-of foreclosure and foreclosures. Properties or other assets are classified as OREO and are reported at the lower of carrying value or fair value, less estimated costs to sell. Costs relating to the development or improvement of assets are capitalized, and costs relating to holding the property are charged to expense.

The following schedule reflects the components of other real estate owned at December 31, 2012 and 2011:

(in 000's)	2012	2011
Commercial real estate	$206	$206
Residential real estate	569	1,079
Total	$775	$1,285

A summary of the change in other real estate owned follows:

(in 000's)	Year Ended	Year Ended
	December 31, 2012	December 31, 2011
Beginning balance	$1,285	$1,417
Additions, transfers from loans	156	602
Proceeds from sales, net	(434)	(730)
	1,007	1,289
Less: write-downs	(232)	(4)
Ending balance	$775	$1,285

The following table details the components of net expense of other real estate owned for the years ended December 31, 2012 and 2011:

(in 000's)
	Year ended December 31, 2012	Year ended December 31, 2011
Insurance	$24	$20
Legal fees	5	-
Maintenance	3	9
Professional fees	8	19
Real estate taxes	99	15
Utilities	21	9
Transfer-in write-up	(43)	-
Impairment charges	232	4
	$349	$76