6. Other Real Estate Owned

3 Months Ended

Mar. 31, 2013

Notes

6. 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.

Activity in other real estate owned for the periods was as follows: 

(in 000's)	Three  Months Ended	Three Months Ended
	March 31, 2013	March 31, 2012
Beginning balance	$775	$1,284
Additions, transfers from loans	-	75
Proceeds from sales	(27)	-
	748	1,359
Less: write-downs	(30)	(15)
Ending Balance	$718	$1,344

The following schedule reflects the components of other real estate owned:

(in 000's)	March 31, 2013	December 31, 2012
Commercial real estate	206	206
Residential real estate	512	569
Total	$718	$775

The following table details the components of net expense of other real estate owned:

	Three  Months Ended	Three  Months Ended
(in 000's)	March 31, 2013	March 31, 2012
Insurance	$6	$7
Professional fees	-	3
Real estate taxes	6	3
Utilities	2	6
Transfer-in write-up	-	(43)
Impairment charges (net)	30	15
Total	$44	$(9)