Note 6 – Foreclosed Assets

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


	Six months ended June 30, 2018			Six months ended June 30, 2017
	Total			Noncovered			Covered			Total
Beginning balance, net	$	3,226		$	3,763		$	223		$	3,986
Additions/transfers from loans		—			684			—			684
Dispositions/sales		(1,762	)		(930	)		(223	)		(1,153	)
Valuation adjustments		(90	)		(28	)		—			(28	)

Ending balance, net	$	1,374		$	3,489			—		$	3,489

Ending valuation allowance	$	(152	)	$	(179	)		—		$	(179	)
Ending number of foreclosed assets		8			12			—			12
Proceeds from sale of foreclosed assets	$	2,150		$	1,424		$	—		$	1,424
Gain on sale of foreclosed assets	$	388		$	271		$	—		$	271

As of June 30, 2018, $837,000 of foreclosed residential real estate properties, all of which the Company has obtained physical possession of, are included in foreclosed assets. At June 30, 2018, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are underway is $743,000.