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 as of the three months ended March 31, 2023 and 2022:


	March 31, 2023			March 31, 2022
	(Dollars in Thousands)
Beginning balance	$	686		$	2,149
Additions		—			—
Sales proceeds		—			(1,431	)
Gross gains		—			183
Gross losses		—			(27	)
Net gains		—			156
Impairment		(69	)		—
Ending balance	$	617		$	874

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 $20 thousand and zero as of March 31, 2023 and March 31, 2022, respectively. In addition, the Company held zero and $18 thousand in consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of March 31, 2023 and 2022, respectively.

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 as of the three months ended March 31, 2023 and 2022:


	March 31, 2023			March 31, 2022
	(Dollars in Thousands)
Beginning balance	$	83		$	154
Transfers from loans		490			51
Sales proceeds		(128	)		(100	)
Gross gains		—			—
Gross losses		(180	)		(44	)
Net losses		(180	)		(44	)
Impairment		—			—
Ending balance	$	265		$	61

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