Note 6 – Foreclosed Assets

A summary of the activity in the balance of foreclosed assets follows (dollars in thousands):


	Year ended December 31, 2017									Year ended December 31, 2016
	Noncovered			Covered			Total			Noncovered			Covered		Total
Beginning balance, net	$	3,763		$	223		$	3,986		$	5,369			—	$	5,369
Additions/transfers from loans		1,563			—			1,563			2,282		$	223		2,505
Dispositions/sales		(1,938	)	$	(223	)		(2,161	)		(3,748	)		—		(3,748	)
Valuation adjustments		(162	)		—			(162	)		(140	)		—		(140	)

Ending balance, net	$	3,226			—		$	3,226		$	3,763		$	223	$	3,986

Ending valuation allowance	$	(200	)		—		$	(200	)	$	(314	)		—	$	(314	)

Ending number of foreclosed assets		16			—			16			14			1		15

Proceeds from sale of foreclosed assets	$	2,656		$	216		$	2,872		$	4,010			—	$	4,010

Gain on sale of foreclosed assets	$	718		$	(7	)	$	711		$	262			—	$	262

At December 31, 2017, the balance of real estate owned includes $1,186,000 of foreclosed residential real estate properties recorded as a result of obtaining physical possession of the property. At December 31, 2017, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are underway is $178,000.