During 2012, the Company recognized $4.7 million of acquisition and integration expenses associated with the completed acquisition of Virginia Savings Bancorp and the upcoming acquisition of Community Financial Corporation. In comparison, during 2011, the Company recorded a $3.0 million litigation reserve accrual. Excluding these expenses, noninterest expenses increased $4.6 million from $78.1 million for the year ended December 31, 2011 to $82.7 million for the year ended December 31, 2012. Included in this increase are expenses of $1.8 million related to the operation of the acquired Virginia Savings Bancorp facilities. Salaries and employee benefits increased $2.8 million due primarily to additional employees associated with the acquisition of Virginia Savings Bancorp ($1.0 million) and increased health insurance costs ($1.0 million). Repossessed asset losses increased $1.1 million due to the decline in estimated fair values of several residential properties located in the eastern panhandle of West Virginia and at the Greenbrier Resort located in southern West Virginia. The Company continually reevaluates the estimated fair value of properties that it has repossessed by obtaining updated appraisals on at least an annual basis. In addition, other expenses increased $0.8 million, advertising expenses increased $0.6 million, and bankcard expenses increased $0.4 million. These increases were partially offset by a decrease in FDIC insurance expense of $1.0 million due to a change in the assessment base methodology during the third quarter of 2011.
For the fourth quarter of 2012, total non-interest expenses increased $2.6 million, from $18.7 million for the fourth quarter of 2011 to $21.3 million. Salaries and employee benefit expense increased $1.0 million, primarily associated with the acquisition of Virginia Savings Bancorp and increased health insurance costs. In addition, advertising expense increased $0.4 million, merger related expenses increased $0.3 million, occupancy and equipment expenses increased $0.2 million, and repossessed asset losses increased $0.2 million from the fourth quarter of 2011.