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REAL ESTATE OWNED, NET
 12 Months Ended
Dec. 31, 2012
Real Estate [Abstract]  
REAL ESTATE OWNED, NET
REAL ESTATE OWNED, NET

The following table presents the changes in real estate owned (REO), net of valuation allowance, for the years ended December 31, 2012, 2011 and 2010 (in thousands):
 
Years Ended December 31
 
2012

 
2011

 
2010

Balance, beginning of period
$
42,965

 
$
100,872

 
$
77,743

Additions from loan foreclosures
13,930

 
53,197

 
87,761

Additions from capitalized costs
300

 
4,404

 
4,006

Dispositions of REO
(40,965
)
 
(99,070
)
 
(51,651
)
Gain (loss) on sale of REO
4,725

 
(1,374
)
 
(1,891
)
Valuation adjustments in the period
(5,177
)
 
(15,064
)
 
(15,096
)
Balance, end of period
$
15,778

 
$
42,965

 
$
100,872



The following table shows REO by type and geographic location by state as of December 31, 2012 (dollars in thousands):
 
Washington
 
Oregon
 
Idaho
 
Total
Commercial real estate
$
390

 
$
—

 
$
199

 
$
589

Land development—commercial
—

 
—

 
177

 
177

Land development—residential
3,174

 
6,438

 
70

 
9,682

Agricultural land
365

 
—

 
—

 
365

One- to four-family real estate
1,866

 
3,099

 
—

 
4,965

Total REO
$
5,795

 
$
9,537

 
$
446

 
$
15,778

Percent of total REO
36.7
%
 
60.5
%
 
2.8
%
 
100.0
%


REO properties are recorded at the lower of the estimated fair value of the property, less expected selling costs, or the carrying value of the defaulted loan, establishing a new cost basis.  Subsequently, REO properties are carried at the lower of the new cost basis or updated fair market values, based on updated appraisals of the underlying properties, as received.  Valuation allowances on the carrying value of REO may be recognized based on updated appraisals or on management’s authorization to reduce the selling price of a property.