Other real estate and certain other assets acquired in foreclosure are reported at the net realizable value of the property, less estimated costs to sell. The following table summarizes foreclosed property activity during the years ended December 31, 2021 and 2020:

	December 31, 2021			December 31, 2020
	(Dollars in Thousands)
Beginning balance	$	949		$	1,078
Additions ⁽¹⁾		1,981			293
Sales proceeds		(1,205	)		(413	)
Gross gains		491			48
Gross losses		—			(47	)
Net gains		491			1
Impairment		(67	)		(10	)
Ending balance	$	2,149		$	949

Valuation adjustments are recorded in other non-interest expense and 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. Net realizable value less estimated costs to sell of foreclosed residential real estate held by the Company was $151 thousand and $28 thousand as of December 31, 2021 and 2020, respectively. In addition, the Company did not hold any consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of both December 31, 2021 and 2020.

In addition to the other real estate and other assets acquired in foreclosure, the Company also acquires assets through the repossession of the underlying collateral of loans in default. The following table summarizes repossessed asset activity during the years ended December 31, 2021 and 2020:

	December 31, 2021			December 31, 2020
	(Dollars in Thousands)
Beginning balance	$	245		$	256
Transfers from loans		803			1,095
Sales proceeds		(798	)		(674	)
Gross gains		—			—
Gross losses		(96	)		(432	)
Net losses		(96	)		(432	)
Impairment		—			—
Ending balance	$	154		$	245

Repossessed assets are included in Other Assets in the Company’s consolidated balance sheet.