Note 5. Loans

The Bank reports its loan portfolio based on the primary collateral of the loan. It further classifies these loans by the primary purpose, either consumer or commercial. The Bank’s mortgage loans include long-term loans to individuals and businesses secured by mortgages on the borrower’s real property. Construction loans are made to finance the purchase of land and the construction of residential and commercial buildings thereon, and are secured by mortgages on real estate. Commercial loans are made to businesses of various sizes for a variety of purposes including construction, property, plant and equipment, and working capital. Commercial loans also include loans to government municipalities. Commercial lending is concentrated in the Bank’s primary market, but also includes purchased loan participations. Consumer loans are comprised of installment, home equity and unsecured personal lines of credit.

A summary of loans outstanding, by primary collateral, at the end of the reporting periods is as follows:



(Dollars in thousands)	December 31, 2014			December 31, 2013
Residential Real Estate 1-4 Family
Consumer first liens	$	105,014	$	103,573
Consumer junior liens and lines of credit		38,132		34,636
Total consumer		143,146		138,209

Commercial first lien		56,300		58,466
Commercial junior liens and lines of credit		5,663		5,939
Total		61,963		64,405
Total residential real estate 1-4 family		205,109		202,614

Residential real estate - construction
Consumer purpose		1,627		3,960
Commercial purpose		8,088		8,559
Total residential real estate construction		9,715		12,519

Commercial real estate		326,482		329,373
Commercial		179,071		170,327
Total commercial		505,553		499,700

Consumer		6,154		8,580
		726,531		723,413
Less: Allowance for loan losses		(9,111)		(9,702)
Net Loans	$	717,420	$	713,711

Included in the loan balances are the following:
Net unamortized deferred loan costs	$	(76)	$	372
Unamortized discount on purchased loans	$	-	$	(92)

Loans pledged as collateral for borrowings and commitments from:
FHLB	$	602,633	$	607,524
Federal Reserve Bank		56,367		45,809
	$	659,000	$	653,333

Loans to directors and executive officers and related interests and affiliated enterprises were as follows:



(Dollars in thousands)	2014		2013
Balance at beginning of year	$	18,353	$	16,925
New loans made		1,973		3,749
Repayments		(1,422)		(2,321)
Balance at end of year	$	18,904	$	18,353