NOTE 5 – FORECLOSED ASSETS

Foreclosed assets at year-end were as follows:


	2012		2011
Commercial	$	—	$	—
Commercial real estate		1,525		3,509

Subtotal		1,525		3,509
Valuation allowance		—		(1,139	)

Total	$	1,525	$	2,370

Activity in the valuation allowance was as follows:


	2012			2011		2010
Beginning of year	$	1,139		$	—	$	—
Additions charged to expense		962			1,139		—
Direct write-downs		(2,101	)		—		—

End of year	$	—		$	1,139	$	—

Expenses related to foreclosed assets include:


	2012			2011			2010
Net loss (gain) on sales	$	(338	)	$	(7	)	$	—
Provision for unrealized losses		962			1,139			—
Operating expenses, net of rental income		28			55			4

	$	652		$	1,187		$	4

Foreclosed assets at December 31, 2012 related to two loans, while foreclosed assets at December 31, 2011 included three commercial real estate properties. During the year ended December 31, 2011, a $1,139 valuation allowance was established on one of the commercial real estate properties, undeveloped commercial real estate located in Columbus, Ohio, due to a decline in real estate values. This loan was further written down in September 2012 to approximately $447 and was then sold in December at an approximate gain of $288