4. LOANS

The loan portfolio of the Company consisted of the following:


	AT DECEMBER 31,
	2013		2012
	(IN THOUSANDS)
Commercial	$	120,102	$	102,822
Commercial loans secured by real estate		411,691		383,339
Real estate-mortgage		235,689		217,584
Consumer		15,864		17,420
Loans, net of unearned income	$	783,346	$	721,165

Loan balances at December 31, 2013 and 2012 are net of unearned income of $581,000 and $637,000, respectively. Real estate construction loans comprised 3.0% and 2.0% of total loans net of unearned income at December 31, 2013 and 2012, respectively. The Company has no exposure to subprime mortgage loans in either the loan or investment portfolios. The Company has no direct loan exposure to foreign countries. Additionally, the Company has no significant industry lending concentrations. As of December 31, 2013 and 2012, loans to customers engaged in similar activities and having similar economic characteristics, as defined by standard industrial classifications, did not exceed 10% of total loans. Additionally, the majority of the Company's lending occurs within a 150 mile radius of the Johnstown market.

In the ordinary course of business, the subsidiaries have transactions, including loans, with their officers, directors, and their affiliated companies. In management's opinion, these transactions were on substantially the same terms as those prevailing at the time for comparable transactions with unaffiliated parties and do not involve more than the normal credit risk. These loans totaled $853,000 and $1.0 million at December 31, 2013 and 2012, respectively.