4. LOANS

The loan portfolio of the Company consisted of the following:

	AT DECEMBER 31,
	2017		2016
	(IN THOUSANDS)
Commercial	$	159,192	$	171,529
Commercial loans secured by real estate		463,780		446,598
Real estate-mortgage		247,278		245,765
Consumer		19,383		19,872
Loans, net of unearned income	$	889,633	$	883,764

Loan balances at December 31, 2017 and 2016 are net of unearned income of $399,000 and $476,000, respectively. Real estate construction loans comprised 4.1% and 4.7% of total loans net of unearned income at December 31, 2017 and 2016, respectively. The Company has no exposure to subprime mortgage loans in either the loan or investment portfolios. The Company has no direct loan exposure to foreign countries. Additionally, the Company has no significant industry lending concentrations. As of December 31, 2017 and 2016, loans to customers engaged in similar activities and having similar economic characteristics, as defined by standard industrial classifications, did not exceed 10% of total loans. Additionally, the majority of the Company’s lending occurs within a 250 mile radius of the Johnstown market.

In the ordinary course of business, the subsidiaries have transactions, including loans, with their officers, directors, and their affiliated companies. In management’s opinion, these transactions were on substantially the same terms as those prevailing at the time for comparable transactions with unaffiliated parties and do not involve more than the normal credit risk. These loans totaled $554,000 and $578,000 at December 31, 2017 and 2016, respectively.