NOTE 6 – FORECLOSED ASSETS

Foreclosed assets activity is as follows for the three and nine months ended September 30, 2019 and 2018:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
	(dollars in thousands)
Beginning balance	$	9,707	$	11,916	$	9,559	$	16,545
Transfers from loans		27		—		1,788		1,889
Capitalized improvements		41		—		41		—
Proceeds from sales		(3,173)		(1,545)		(4,142)		(6,092)
Sales through loan origination		—		—		(360)		(1,174)
Net gain (loss) on sales		135		39		240		(281)
Direct write-downs		(163)		(234)		(552)		(711)
Ending balance	$	6,574	$	10,176	$	6,574	$	10,176

Gains (losses) on foreclosed assets shown on the consolidated statements of income include net gains (losses) on sales, direct write-downs, gains on foreclosure, and guarantee reimbursements. During the nine months ended September 30, 2019, gains (losses) on foreclosed assets also include a gain on settlement of $375,000. There were no gains on settlement recognized in gains (losses) on foreclosed assets during for the three months ended September 30, 2019 and 2018 or the nine months ended September 30, 2018.

The carrying value of foreclosed one-to-four family residential real estate property as of September 30, 2019 and December 31, 2018, was $2,268,000 and $2,558,000, respectively. As of September 30, 2019, there were 16 one-to-four family residential real estate loans in the process of foreclosure totaling approximately $725,000. As of December 31, 2018, there were 14 residential real estate loans in the process of foreclosure totaling approximately $1,097,000.