2013 2012 Commercial 56, 797 55, 430 Construction and land development 11, 602 10, 073 Farmland 1, 773 2, 252 Residential real estate 71, 937 64, 049 Commercial real estate 78, 009 72, 982 Consumer 724 1, 749 Total loans 220, 842 206, 535 Allowance for loan losses 2, 305)  2, 220)  Net Loans 218, 537 204, 315 FTII The Bank monitors ongoing risk for loans with a commercial purpose using an eight point internal grading system. The first four rating categories, representing the lowest risk to the Bank, are combined and given a Pass rating. The Special Mention category includes loans that have potential weaknesses that may, if not monitored or corrected, weaken the asset or inadequately protect the Bank’ s position at some future date. These assets pose elevated risk, but their weakness does not justify a more severe, or criticized rating.  The above amounts are recorded net of unamortized deferred fees of $ 159, 000 at December 31,  2013 and $ 200, 000 at December 31, 2012.  Commercial real estate loans secured by nonfarm nonresidential real estate can be owner or non -owner occupied. Commercial real estate loans generally have greater credit risk as they typically involve larger loan balances concentrated with single borrowers or groups of related borrowers.  Multi - family and non -owner occupied share similar risk characteristics as repayment is based on occupancy levels and cash flows.  Owner- occupied nonfarm,  nonresidential real estate is dependent on the successful operation of the borrower’ s business.  Loans secured by farmland and 1 - 4 family residential properties have risks depending on the underlying purpose. Loans for consumer purposes are dependent on the credit worthiness of the individual borrower. Loans for a commercial purpose may be dependent on the borrower’ s ability to generate a sufficient level of occupancy to produce sufficient rental income or may be dependent on the successful operation of the borrower’ s business.  Construction and land development loans generally carry greater credit risk as payment expectations are dependent upon the successful and timely completion of the construction,  sales of the subject property and the operation of the related business. As a result, such loans may be subject to a greater extent to adverse conditions in the real estate market and in the general economy.  Consumer loans may be secured or unsecured.  Collateral may include autos,  cash or marketable securities. Such loans generally have smaller balances and are dependent on the credit worthiness of the borrower and their personal financial stability.  The composition of net loans receivable consists of the following as of December 31,  2013 and 2012 ( in thousands): 