LOANS

The loan portfolio of the Company consisted of the following:

AT DECEMBER 31,

2014

2013

(IN THOUSANDS)

Commercial

139,126

120,102

Commercial loans secured by real estate

410,329

411,691

Real estate-mortgage

258,616

235,689

Consumer

19,009

15,864

Loans, net of unearned income

827,080

783,346

Loan balances at December 31, 2014 and 2013 are net of unearned income of $554,000 and $581,000, respectively. Real estate construction loans comprised 3.5% and 3.0% of total loans net of unearned income at December 31, 2014 and 2013, 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, 2014 and 2013, 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 250 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 $847,000 and $853,000 at December 31, 2014 and 2013, respectively.