31 integral to our allowance methodology is the use of a loan grading system whereby all loans are assigned a grade based on the risk profile of each loan . loan grades are initially assigned at origination and are routinely evaluated to determine if grades need to be changed . through our internal credit review function , ongoing credit monitoring , and continuous review of past due trends , loan grades are adjusted by management either to respond to improvements in or deterioration of credit . loan grades are determined based on an evaluation of relevant information about the ability of borrowers to service their debt such as current financial information , historical payment experience , credit documentation , public information , and current economic trends , among other factors . the allowance methodology consists of two parts : an evaluation of loss for specific loans and an evaluation of loss for homogenous pools of loans , commonly referred to as the specific and general valuation allowance . certain loans exhibiting signs of potential credit weakness are evaluated individually for impairment . a loan is considered to be impaired if it is probable that we will not receive substantially all contractual principal and interest payments . the amount of impairment , or specific valuation allowance , is measured by a comparison of the present value of expected future cash flows less selling expenses to the loan 's carrying value , or in the case of collateral dependent loans a comparison to the fair value of the collateral less selling costs . to the extent the carrying value of the loan exceeds the present value of a loan 's expected cash flows less selling expenses , a specific allowance is recorded . if the carrying value is less than the present value of the impaired loan 's expected future cash flows , no specific allowance is recorded however the loan is not included in the determination of the general valuation allowance . as a substantial amount of our loan portfolio is collateralized by real estate , appraisals of the underlying value of property securing loans and discounted cash flow valuations of properties are critical in determining the amount of the allowance required for specific loans . assumptions for appraisals and discounted cash flow valuations are instrumental in determining the value of properties . overly optimistic assumptions or negative changes to assumptions could significantly impact the valuation of a property securing a loan and the related allowance determined . the assumptions supporting such appraisals and discounted cash flow valuations are carefully reviewed by management to determine that the resulting values reasonably reflect amounts realizable on the related loans . the general valuation allowance is determined for loans not determined to be impaired . we segregate our loan portfolio into portfolio segments . these portfolio segments share common characteristics such as the type of loan , its purpose , its underlying collateral , and other risk characteristics . once segregated , these loans are further segregated by loan grade . to calculate the allowance by grade , we apply internally developed loss factors comprised of both quantitative and qualitative considerations . we estimate our loss factors by taking into consideration both quantitative and qualitative aspects that would affect our estimation of probable incurred losses . these aspects include , but are not limited to historical charge-offs ; loan delinquencies and foreclosure trends ; current economic trends and demographic data within our market area , such as unemployment rates and population trends ; current trends in real estate values ; charge-off trends of other comparable institutions ; the results of any internal loan reviews ; loan-to-value ratios ; our historically conservative credit risk policy ; the strength of our underwriting and ongoing credit monitoring function ; and other relevant factors . this evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision based on changes in economic and real estate market conditions . actual loan losses may be significantly more than the allowance for loan losses we have established , which could have a material negative effect on our financial results . see note 1 “ summary of significant accounting policies ” and note 4 “ loans ” to the accompanying consolidated financial statements contained in item 8 for additional discussion on the allowance for loan losses . business combinations . business combinations are accounted for using the acquisition method of accounting . as such , assets acquired , including identified intangible assets , and liabilities assumed are recorded at their fair value , which often involves estimates based on third party valuations , such as appraisals , or internal valuations based on discounted cash flow analyses or other valuation techniques , all of which are inherently subjective . identified intangible assets are amortized based upon the estimated economic benefits to be received , which is also subjective . management will review identified intangible assets for impairment at least annually , or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable , in which case an impairment charge would be recorded . goodwill is subject to impairment testing on at least an annual basis . in addition , goodwill is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount . our reporting unit for purposes of testing our goodwill for impairment is our banking operations unit , which contains all other activities performed by the company . 32 valuation of goodwill . the testing for impairment of goodwill is a two-step process . the first step in testing for impairment is to determine the fair value of our reporting unit and compare that fair value with the carrying value of the reporting unit ( including goodwill . ) story_separator_special_tag to the best of our knowledge , we have recorded all losses that are both probable and reasonably estimable for the years ended june 30 , 2019 and 2018 . 35 noninterest income . for the year ended june 30 , 2019 , noninterest income increased $ 31 thousand , or 1.9 % , to $ 1.69 million from $ 1.66 million for the year ended june 30 , 2018. gains on the sale of mortgage loans , which totaled $ 122 thousand for the year ended june 30 , 2019 , increased $ 58 thousand compared to $ 64 thousand for the year ended june 30 , 2018. the adoption of new accounting guidelines that require the recognition of the change in fair value of equity securities through the income statement totaled $ 82 thousand for the year ended june 30 , 2019 compared to zero for the year ended june 30 , 2018. mortgage servicing income totaled $ 211 thousand for the year ended june 30 , 2019 compared to $ 244 thousand for the year ended june 30 , 2018. the mortgage servicing income is reducing due to the decreasing size of the loan servicing portfolio . losses on the sale of securities totaled $ 40 thousand for the year ended june 30 , 2019 compared to $ 7 thousand for the year ended june 30 , 2018. gains or losses on the sale of securities are largely market driven . securities were sold at a loss during the year ended june 30 , 2019 so that funds could be more beneficially used to yield higher net earnings going forward . gains on the disposition of purchase credit impaired loans , which totaled $ 64 thousand for the year ended june 30 , 2019 , decreased $ 61 thousand compared to $ 125 thousand for the year ended june 30 , 2018. w e did not have the same opportunities for gains on the disposition of purchase credit impaired loans in the year ending june 30 , 2019 as we did in the year ending june 30 , 2018. noninterest expense . noninterest expense increased $ 84 thousand , or 0.7 % , to $ 12.13 million for the year ended june 30 , 2019 from $ 12.10 million for the year ended june 30 , 2018. salaries and employee benefits increased by $ 355 thousand , or 5.4 % to $ 6.9 million for the year ended june 30 , 2019 from $ 6.6 million for the year ended june 30 , 2018 due to routine increases . occupancy and equipment expenses increased by $ 32 thousand , or 1.9 % to $ 1.75 million for the year ended june 30 , 2019 from $ 1.72 million for the year ended june 30 , 2018 due to routine upgrades and improvements . data processing expenses decreased by $ 97 thousand , or 9.8 % to $ 893 thousand for the year ended june 30 , 2019 from $ 990 thousand for the year ended june 30 , 2018 due to fewer routine upgrades in the current year as well as more favorable third-party service pricing . professional and supervisory fee expenses decreased by $ 364 thousand , or 36.2 % to $ 642 thousand for the year ended june 30 , 2019 from $ 1.0 million for the year ended june 30 , 2018 primarily due to reduced audit and legal expenses . for the year ended june 30 , 2019 , we recognized an expense for the decrease in value of the loan servicing asset of $ 225 thousand compared to $ 48 thousand for the year ended june 30 , 2018. when mortgage loans are sold with servicing retained , servicing rights are initially recorded at fair value . these servicing rights are then measured at each reporting date and changes are recorded as “ change in loan servicing asset ” on the consolidated statements of income and comprehensive income . the fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses . foreclosed asset expenses increased by $ 68 thousand , or 188.9 % to $ 104 thousand for the year ended june 30 , 2019 from $ 36 thousand for the year ended june 30 , 2018. in the prior year , we recognized more gains from the sale of properties to offset foreclosure expenses than in the current year . changes in all other noninterest expense items were due to normal periodic fluctuations . income tax expense . income tax expense decreased $ 831 thousand , or 48.7 % , to $ 874 thousand for the year ended june 30 , 2019 from $ 1.7 million for the year ended june 30 , 2018. the decrease was primarily due to a reduction in the federal corporate tax rate from 35 % to 21 % along with a $ 973 thousand adjustment to the company 's deferred tax asset in the prior year as a result of the tax cuts and jobs act that was enacted on december 22 , 2017. our effective income tax rate was 19 % and 36 % for the years ended june 30 , 2019 and 2018 , respectively . analysis of net interest income net interest income represents the difference between the income we earn on interest-earning assets and the interest expense we pay on interest-bearing liabilities . net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them . 36 the following table sets forth average balance sheets , average yields and costs , and certain other information at the dates and for the periods indicated . all average balances are daily average balances . nonaccrual loans were included in the computation of average balances , but have been reflected in the tables as loans carrying

liquidity and capital resources our primary sources of funds are deposits and the proceeds from principal and interest payments on loans and investment securities . while maturities and scheduled amortization of loans and securities are predictable sources of funds , deposit flows and mortgage prepayments are greatly influenced by general interest rates , economic conditions and competition . we generally manage the pricing of our deposits to be competitive within our market and to increase core deposit relationships . our cash flows are derived from operating activities , investing activities and financing activities . net cash flows provided by operating activities were $ 5.8 million for the year ended june 30 , 2019 and $ 6.4 million for the year ended june 30 , 2018. net cash flows used in investing activities were $ 11.4 million for the year ended june 30 , 2019 and $ 22.2 million for the year ended june 30 , 2018. net cash flows provided by financing activities for the year ended june 30 , 2019 were $ 32.4 million and $ 4.9 million for the year ended june 30 , 2018. our most liquid assets are cash and short-term investments . the levels of these assets are dependent on our operating , financing , lending , and investing activities during any given period . at june 30 , 2019 and 2018 , cash and short-term investments totaled $ 36.7 million and $ 9.9 million , respectively . we may also utilize as sources of funds the sale of securities available-for-sale , federal funds purchased , federal home loan bank of atlanta advances and other borrowings . at june 30 , 2019 and 2018 , we had outstanding commitments to originate loans of $ 7.7 million and $ 23.1 million , respectively .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources our primary sources of funds are deposits and the proceeds from principal and interest payments on loans and investment securities . while maturities and scheduled amortization of loans and securities are predictable sources of funds , deposit flows and mortgage prepayments are greatly influenced by general interest rates , economic conditions and competition . we generally manage the pricing of our deposits to be competitive within our market and to increase core deposit relationships . our cash flows are derived from operating activities , investing activities and financing activities . net cash flows provided by operating activities were $ 5.8 million for the year ended june 30 , 2019 and $ 6.4 million for the year ended june 30 , 2018. net cash flows used in investing activities were $ 11.4 million for the year ended june 30 , 2019 and $ 22.2 million for the year ended june 30 , 2018. net cash flows provided by financing activities for the year ended june 30 , 2019 were $ 32.4 million and $ 4.9 million for the year ended june 30 , 2018. our most liquid assets are cash and short-term investments . the levels of these assets are dependent on our operating , financing , lending , and investing activities during any given period . at june 30 , 2019 and 2018 , cash and short-term investments totaled $ 36.7 million and $ 9.9 million , respectively . we may also utilize as sources of funds the sale of securities available-for-sale , federal funds purchased , federal home loan bank of atlanta advances and other borrowings . at june 30 , 2019 and 2018 , we had outstanding commitments to originate loans of $ 7.7 million and $ 23.1 million , respectively .
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 Suspicious Activity Report : 31 integral to our allowance methodology is the use of a loan grading system whereby all loans are assigned a grade based on the risk profile of each loan . loan grades are initially assigned at origination and are routinely evaluated to determine if grades need to be changed . through our internal credit review function , ongoing credit monitoring , and continuous review of past due trends , loan grades are adjusted by management either to respond to improvements in or deterioration of credit . loan grades are determined based on an evaluation of relevant information about the ability of borrowers to service their debt such as current financial information , historical payment experience , credit documentation , public information , and current economic trends , among other factors . the allowance methodology consists of two parts : an evaluation of loss for specific loans and an evaluation of loss for homogenous pools of loans , commonly referred to as the specific and general valuation allowance . certain loans exhibiting signs of potential credit weakness are evaluated individually for impairment . a loan is considered to be impaired if it is probable that we will not receive substantially all contractual principal and interest payments . the amount of impairment , or specific valuation allowance , is measured by a comparison of the present value of expected future cash flows less selling expenses to the loan 's carrying value , or in the case of collateral dependent loans a comparison to the fair value of the collateral less selling costs . to the extent the carrying value of the loan exceeds the present value of a loan 's expected cash flows less selling expenses , a specific allowance is recorded . if the carrying value is less than the present value of the impaired loan 's expected future cash flows , no specific allowance is recorded however the loan is not included in the determination of the general valuation allowance . as a substantial amount of our loan portfolio is collateralized by real estate , appraisals of the underlying value of property securing loans and discounted cash flow valuations of properties are critical in determining the amount of the allowance required for specific loans . assumptions for appraisals and discounted cash flow valuations are instrumental in determining the value of properties . overly optimistic assumptions or negative changes to assumptions could significantly impact the valuation of a property securing a loan and the related allowance determined . the assumptions supporting such appraisals and discounted cash flow valuations are carefully reviewed by management to determine that the resulting values reasonably reflect amounts realizable on the related loans . the general valuation allowance is determined for loans not determined to be impaired . we segregate our loan portfolio into portfolio segments . these portfolio segments share common characteristics such as the type of loan , its purpose , its underlying collateral , and other risk characteristics . once segregated , these loans are further segregated by loan grade . to calculate the allowance by grade , we apply internally developed loss factors comprised of both quantitative and qualitative considerations . we estimate our loss factors by taking into consideration both quantitative and qualitative aspects that would affect our estimation of probable incurred losses . these aspects include , but are not limited to historical charge-offs ; loan delinquencies and foreclosure trends ; current economic trends and demographic data within our market area , such as unemployment rates and population trends ; current trends in real estate values ; charge-off trends of other comparable institutions ; the results of any internal loan reviews ; loan-to-value ratios ; our historically conservative credit risk policy ; the strength of our underwriting and ongoing credit monitoring function ; and other relevant factors . this evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision based on changes in economic and real estate market conditions . actual loan losses may be significantly more than the allowance for loan losses we have established , which could have a material negative effect on our financial results . see note 1 “ summary of significant accounting policies ” and note 4 “ loans ” to the accompanying consolidated financial statements contained in item 8 for additional discussion on the allowance for loan losses . business combinations . business combinations are accounted for using the acquisition method of accounting . as such , assets acquired , including identified intangible assets , and liabilities assumed are recorded at their fair value , which often involves estimates based on third party valuations , such as appraisals , or internal valuations based on discounted cash flow analyses or other valuation techniques , all of which are inherently subjective . identified intangible assets are amortized based upon the estimated economic benefits to be received , which is also subjective . management will review identified intangible assets for impairment at least annually , or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable , in which case an impairment charge would be recorded . goodwill is subject to impairment testing on at least an annual basis . in addition , goodwill is tested for impairment between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount . our reporting unit for purposes of testing our goodwill for impairment is our banking operations unit , which contains all other activities performed by the company . 32 valuation of goodwill . the testing for impairment of goodwill is a two-step process . the first step in testing for impairment is to determine the fair value of our reporting unit and compare that fair value with the carrying value of the reporting unit ( including goodwill . ) story_separator_special_tag to the best of our knowledge , we have recorded all losses that are both probable and reasonably estimable for the years ended june 30 , 2019 and 2018 . 35 noninterest income . for the year ended june 30 , 2019 , noninterest income increased $ 31 thousand , or 1.9 % , to $ 1.69 million from $ 1.66 million for the year ended june 30 , 2018. gains on the sale of mortgage loans , which totaled $ 122 thousand for the year ended june 30 , 2019 , increased $ 58 thousand compared to $ 64 thousand for the year ended june 30 , 2018. the adoption of new accounting guidelines that require the recognition of the change in fair value of equity securities through the income statement totaled $ 82 thousand for the year ended june 30 , 2019 compared to zero for the year ended june 30 , 2018. mortgage servicing income totaled $ 211 thousand for the year ended june 30 , 2019 compared to $ 244 thousand for the year ended june 30 , 2018. the mortgage servicing income is reducing due to the decreasing size of the loan servicing portfolio . losses on the sale of securities totaled $ 40 thousand for the year ended june 30 , 2019 compared to $ 7 thousand for the year ended june 30 , 2018. gains or losses on the sale of securities are largely market driven . securities were sold at a loss during the year ended june 30 , 2019 so that funds could be more beneficially used to yield higher net earnings going forward . gains on the disposition of purchase credit impaired loans , which totaled $ 64 thousand for the year ended june 30 , 2019 , decreased $ 61 thousand compared to $ 125 thousand for the year ended june 30 , 2018. w e did not have the same opportunities for gains on the disposition of purchase credit impaired loans in the year ending june 30 , 2019 as we did in the year ending june 30 , 2018. noninterest expense . noninterest expense increased $ 84 thousand , or 0.7 % , to $ 12.13 million for the year ended june 30 , 2019 from $ 12.10 million for the year ended june 30 , 2018. salaries and employee benefits increased by $ 355 thousand , or 5.4 % to $ 6.9 million for the year ended june 30 , 2019 from $ 6.6 million for the year ended june 30 , 2018 due to routine increases . occupancy and equipment expenses increased by $ 32 thousand , or 1.9 % to $ 1.75 million for the year ended june 30 , 2019 from $ 1.72 million for the year ended june 30 , 2018 due to routine upgrades and improvements . data processing expenses decreased by $ 97 thousand , or 9.8 % to $ 893 thousand for the year ended june 30 , 2019 from $ 990 thousand for the year ended june 30 , 2018 due to fewer routine upgrades in the current year as well as more favorable third-party service pricing . professional and supervisory fee expenses decreased by $ 364 thousand , or 36.2 % to $ 642 thousand for the year ended june 30 , 2019 from $ 1.0 million for the year ended june 30 , 2018 primarily due to reduced audit and legal expenses . for the year ended june 30 , 2019 , we recognized an expense for the decrease in value of the loan servicing asset of $ 225 thousand compared to $ 48 thousand for the year ended june 30 , 2018. when mortgage loans are sold with servicing retained , servicing rights are initially recorded at fair value . these servicing rights are then measured at each reporting date and changes are recorded as “ change in loan servicing asset ” on the consolidated statements of income and comprehensive income . the fair values of servicing rights are subject to significant fluctuations as a result of changes in estimated and actual prepayment speeds and default rates and losses . foreclosed asset expenses increased by $ 68 thousand , or 188.9 % to $ 104 thousand for the year ended june 30 , 2019 from $ 36 thousand for the year ended june 30 , 2018. in the prior year , we recognized more gains from the sale of properties to offset foreclosure expenses than in the current year . changes in all other noninterest expense items were due to normal periodic fluctuations . income tax expense . income tax expense decreased $ 831 thousand , or 48.7 % , to $ 874 thousand for the year ended june 30 , 2019 from $ 1.7 million for the year ended june 30 , 2018. the decrease was primarily due to a reduction in the federal corporate tax rate from 35 % to 21 % along with a $ 973 thousand adjustment to the company 's deferred tax asset in the prior year as a result of the tax cuts and jobs act that was enacted on december 22 , 2017. our effective income tax rate was 19 % and 36 % for the years ended june 30 , 2019 and 2018 , respectively . analysis of net interest income net interest income represents the difference between the income we earn on interest-earning assets and the interest expense we pay on interest-bearing liabilities . net interest income also depends upon the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on them . 36 the following table sets forth average balance sheets , average yields and costs , and certain other information at the dates and for the periods indicated . all average balances are daily average balances . nonaccrual loans were included in the computation of average balances , but have been reflected in the tables as loans carrying

