Note 7. FDIC Indemnification Asset

In connection with the FDIC-assisted acquisition of Waccamaw Bank (“Waccamaw”) in 2012, the Company entered into loss share agreements with the FDIC that covered $61.84 million of loans and $2.44 million of OREO as of September 30, 2016, compared to $83.04 million of loans and $4.03 million of OREO as of December 31, 2015. Under the loss share agreements, the FDIC agrees to cover 80% of most loan and foreclosed real estate losses and reimburse certain expenses incurred in relation to these covered assets. The Company’s consolidated statements of income include the expense on covered assets net of estimated reimbursements. The following table presents activity in the FDIC indemnification asset for the periods indicated:


	Three Months Ended September 30,						Nine Months Ended September 30,
(Amounts in thousands)	2016			2015			2016			2015
Beginning balance	$	16,431		$	23,653		$	20,844		$	27,900
Decrease in estimated losses on covered loans		—			(75	)		(1	)		(29	)
Increase in estimated losses on covered OREO		277			801			851			1,359
Reimbursable expenses from the FDIC		60			44			134			409
Net amortization		(1,369	)		(1,768	)		(3,856	)		(5,179	)
Reimbursements from the FDIC		(1,067	)		(606	)		(3,640	)		(2,411	)

Ending balance	$	14,332		$	22,049		$	14,332		$	22,049