Loans are summarized as follows:



	December 31,
(Dollar amounts in thousands)	2019			2018
Commercial	$	1,584,447		$	1,166,352
Residential	682,077			443,670
Consumer	386,006			341,041
Total gross loans	2,652,530			1,951,063
Deferred costs, net	3,860			2,925
Allowance for loan losses	(19,943		)	(20,436		)
TOTAL	$	2,636,447		$	1,933,552

The Corporation periodically sells residential mortgage loans it originates based on the overall loan demand of the Corporation and the outstanding balances in the residential mortgage portfolio. At December 31, 2019 and 2018, loans held for sale were $5.8 million and $3.2 million, respectively, and are included in the totals above.

In the normal course of business, the Corporation’s subsidiary banks make loans to directors and executive officers and to their associates. In 2019, the aggregate dollar amount of these loans to directors and executive officers who held office amounted to $53.0 million at the beginning of the year. During 2019, advances of $78.2 million, repayments of $58.1 million, and additions for new directors of $16.4 million were made with respect to related party loans for an aggregate dollar amount outstanding of $89.5 million at December 31, 2019.

Loans serviced for others, which are not reported as assets, total $477.0 million and $473.8 million at year-end 2019 and 2018. Custodial escrow balances maintained in connection with serviced loans were $3.1 million and $3.0 million at year-end 2019 and 2018.

Activity for capitalized mortgage servicing rights (included in other assets) was as follows:



	December 31,
(Dollar amounts in thousands)	2019			2018			2017
Servicing rights:
Beginning of year	$	1,431		$	1,434		$	1,549
Additions	579			513			477
Amortized to expense	(575		)	(516		)	(592		)
End of year	$	1,435		$	1,431		$	1,434

Third party valuations are conducted periodically for mortgage servicing rights. Based on these valuations, fair values were approximately $2.7 million and $2.3 million at year end 2019 and 2018. There was no valuation allowance in 2019 or 2018.

Fair value for 2019 was determined using a discount rate of 12.5%, prepayment speeds ranging from 118% to 263%, depending on the stratification of the specific right. Fair value at year end 2018 was determined using a discount rate of 13%, prepayment speeds ranging from 88% to 189%, depending on the stratification of the specific right. Mortgage servicing rights are amortized over 8 years, the expected life of the sold loans.