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Other Real Estate Owned
 12 Months Ended
Dec. 31, 2012
Other Real Estate Owned [Abstract]  
Other Real Estate Owned

Note 5. Other Real Estate Owned

At December 31, 2012 and 2011, other real estate owned (OREO) totaled $5.6 million and $6.4 million, respectively. OREO was primarily comprised of residential lots, raw land, non-residential properties and residential properties associated with commercial relationships, and are located primarily in the Commonwealth of Virginia. Changes in the balance for OREO are as follows:

 

                 
    (in thousands)  
    2012     2011  

Balance at the beginning of year, gross

   $ 9,166     $ 7,387  

Transfers from loans

     5,578       8,117  

Charge-offs

     (1,808 )      (2,107 ) 

Sales proceeds

     (5,438 )      (3,321 ) 

Gain (loss) on disposition

     268       (910 ) 

Depreciation

     (2 )      —    

Balance at the end of year, gross

     7,764       9,166  

Less: allowance for losses

     (2,174 )      (2,792 ) 
   

 

 

    

 

 

  

Balance at the end of year, net

   $ 5,590     $ 6,374  
   

 

 

    

 

 

  

Changes in the allowance for OREO losses are as follows:

 

                         
          (in thousands)        
    2012     2011     2010  

Balance at beginning of year

   $ 2,792     $ 3,341     $ 994  

Provision for losses

     1,190       1,558       2,640  

Charge-offs, net

     (1,808 )      (2,107 )      (293 ) 
   

 

 

    

 

 

    

 

 

  

Balance at end of year

   $ 2,174     $ 2,792     $ 3,341  
   

 

 

    

 

 

    

 

 

  

Net expenses applicable to OREO, other than the provision for losses, were $443 thousand, $572 thousand and $242 thousand for the years ended December 31, 2012, 2011, and 2010, respectively.