5.	OTHER REAL ESTATE OWNED

Other real estate and certain other assets acquired in foreclosure are reported at the lower of the recorded investment or fair value of the property less estimated costs to sell. The following table summarizes foreclosed property activity as of December 31, 2013 and 2012.

 

		December 31, 2013
		FUSB				ALC				TOTAL
		(Dollars in Thousands)
Balance December 31, 2012		$	11,089			$	2,197			$	13,286
Transfers from loans			1,859				537				2,396
Sales proceeds			(3,051	)			(969	)			(4,020	)
Gross gains			69				27				96
Gross losses			(215	)			(729	)			(944	)
Net losses			(146	)			(702	)			(848	)
Impairment			(1,288	)			(216	)			(1,504	)
Balance December 31, 2013		$	8,463			$	847			$	9,310

 

		December 31, 2012
		FUSB				ALC				TOTAL
		(Dollars in Thousands)
Balance December 31, 2011		$	12,606			$	4,168			$	16,774
Transfers from loans			6,611				757				7,368
Sales proceeds			(4,514	)			(1,477	)			(5,991	)
Gross gains			42				63				105
Gross losses			(663	)			(725	)			(1,388	)
Net losses			(621	)			(662	)			(1,283	)
Impairment			(2,993	)			(589	)			(3,582	)
Balance December 31, 2012		$	11,089			$	2,197			$	13,286

 

Valuation adjustments are primarily recorded in other non-interest expense; adjustments are also recorded as a charge to the allowance for loan losses if incurred within 60 days after the date of transfer from loans. Valuation adjustments are primarily post-foreclosure write-downs that are a result of continued declining property values based on updated appraisals or other indications of value, such as offers to purchase.