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 December 31 is as follows:




(Dollars in thousands)	2017		2016
Residential Real Estate 1-4 Family
Consumer first liens	$	97,159	$	103,125
Commercial first lien		61,275		65,445
Total first liens		158,434		168,570

Consumer junior liens and lines of credit		45,043		44,817
Commercial junior liens and lines of credit		5,328		5,396
Total junior liens and lines of credit		50,371		50,213
Total residential real estate 1-4 family		208,805		218,783

Residential real estate - construction
Consumer		1,813		1,350
Commercial		8,088		7,625
Total residential real estate construction		9,901		8,975

Commercial real estate		428,428		390,584
Commercial		291,519		270,826
Total commercial		719,947		661,410

Consumer		5,047		4,705
		943,700		893,873
Less: Allowance for loan losses		(11,792)		(11,075)
Net Loans	$	931,908	$	882,798

Included in the loan balances are the following:
Net unamortized deferred loan costs	$	98	$	242

Loans pledged as collateral for borrowings and commitments from:
FHLB	$	737,313	$	711,682
Federal Reserve Bank		35,740		41,152
Total	$	773,053	$	752,834

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


(Dollars in thousands)	2017		2016
Balance at beginning of year	$	23,243	$	18,954
New loans made		1,513		6,400
Repayments		(2,633)		(2,111)
Balance at end of year	$	22,123	$	23,243