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 nine months ended September 30, 2023 and 2022:


	September 30, 2023			September 30, 2022
	(Dollars in Thousands)
Beginning balance	$	686		$	2,149
Additions		—			411
Sales proceeds		—			(2,215	)
Gross gains		—			369
Gross losses		—			(27	)
Net gains		—			342
Impairment		(69	)		(1	)
Ending balance	$	617		$	686

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 September 30, 2023 and September 30, 2022, respectively. In addition, the Company held zero and $19 thousand in consumer mortgage loans collateralized by residential real estate that were in the process of foreclosure as of September 30, 2023 and 2022, respectively.

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 nine months ended September 30, 2023 and 2022:


	September 30, 2023			September 30, 2022
	(Dollars in Thousands)
Beginning balance	$	83		$	154
Transfers from loans		1,178			635
Sales proceeds		(453	)		(331	)
Gross gains		—			—
Gross losses		(535	)		(292	)
Net losses		(535	)		(292	)
Impairment		—			—
Ending balance	$	273		$	166

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