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 residential real estate loans include long-term loans to individuals and businesses secured by mortgages on the borrower’s real property and include home equity loans. 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 real estate loans include construction, owner and non-owner occupied properties and farm real estate. Commercial loans are made to businesses of various sizes for a variety of purposes including property, plant and equipment, working capital and 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 loans and unsecured personal lines of credit.

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



	March 31,		December 31,
(Dollars in thousands)	2019		2018
Residential Real Estate 1-4 Family
Consumer first liens	$	89,212	$	89,673
Commercial first lien		58,210		59,227
Total first liens		147,422		148,900

Consumer junior liens and lines of credit		41,831		42,504
Commercial junior liens and lines of credit		4,859		4,716
Total junior liens and lines of credit		46,690		47,220
Total residential real estate 1-4 family		194,112		196,120

Residential real estate - construction
Consumer		2,750		1,667
Commercial		11,231		8,558
Total residential real estate construction		13,981		10,225

Commercial real estate		497,974		487,980
Commercial		269,243		274,054
Total commercial		767,217		762,034

Consumer		5,156		4,996
		980,466		973,375
Less: Allowance for loan losses		(12,681)		(12,415)
Net Loans	$	967,785	$	960,960

Included in the loan balances are the following:
Net unamortized deferred loan costs	$	125	$	123

Loans pledged as collateral for borrowings and commitments from:
FHLB	$	787,055	$	772,564
Federal Reserve Bank		33,645		34,160
	$	820,700	$	806,724