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, 2016		December 31, 2015
Residential Real Estate 1-4 Family
Consumer first liens	$	103,125	$	103,698
Commercial first lien		65,445		57,780
Total first liens		168,570		161,478

Consumer junior liens and lines of credit		44,817		44,996
Commercial junior liens and lines of credit		5,396		5,917
Total junior liens and lines of credit		50,213		50,913
Total residential real estate 1-4 family		218,783		212,391

Residential real estate - construction
Consumer		1,350		545
Commercial		7,625		7,343
Total residential real estate construction		8,975		7,888

Commercial real estate		390,584		340,695
Commercial		270,826		215,942
Total commercial		661,410		556,637

Consumer		4,705		5,100
		893,873		782,016
Less: Allowance for loan losses		(11,075)		(10,086)
Net Loans	$	882,798	$	771,930

Included in the loan balances are the following:
Net unamortized deferred loan costs (fees)	$	242	$	436

Loans pledged as collateral for borrowings and commitments from:
FHLB	$	711,682	$	643,449
Federal Reserve Bank		41,152		45,111
Total	$	752,834	$	688,560

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



(Dollars in thousands)	2016		2015
Balance at beginning of year	$	$18,954	$	$18,904
New loans made		$6,400		$4,327
Repayments		($2,111)		($4,277)
Balance at end of year	$	$23,243	$	$18,954