as a result , of the $ 48 million in loan downgrades during the three months ended september 30 , 2016 , $ 13.7 million in principal payments were received and $ 2.2 million in loan upgrades were made during the fourth quarter of 2016. this represents a 33 % reduction and improvement from september 30 , 2016 to december 31 , 2016 , leaving $ 32 million in loan downgrades taken in the third quarter of 2016 that we continue to manage and currently anticipate being paid down or upgraded by the middle of 2017. during the year ended december 31 , 2016 , the company recorded income tax expense of $ 16.8 million to reflect a full valuation allowance established against its deferred tax asset . see “ results of operations—provision for income tax ” below in this item 7 for additional information . while we believe the company will generate taxable income in future periods that will eventually enable the company to release all or a portion of the valuation allowance , we are not able to assert as to the timing of that event . until such time as we are able to release the valuation allowance on our deferred tax asset , there is a material impact to future periods in that management expects this to result in minimal income tax expense . as a result of the net loss we incurred during the year ended december 31 , 2016 , our regulatory capital ratios declined during the year . notwithstanding this , the company and the bank remain well capitalized under applicable regulatory standards . see “ capital resources—regulatory capital requirements applicable to banking institutions ” below in this item 7 for further information . 31 results of operations discontinued operations in connection with our exit from the mortgage banking business in 2013 , the revenues and expenses of our mortgage banking division have been classified as discontinued operations for all periods presented . as a result , all comparisons below reflect results from continuing operations . income from discontinued operations was zero for the year s ended december 31 , 2016 and 2015 , while our income from discontinued operations was $ 1.2 million for the year ended december 31 , 2014 . we had no income from discontinued operations during the years ended december 31 , 2016 and 2015 as a result of the final wind down of the mortgage banking division during 2014. during the year ended december 31 , 2014 , we recorded a gain in the amount of $ 558 thousand on the sale of the mortgage servicing rights that we sold in april 2014 , which is included in income from discontinued operations in the consolidated statements of operations . operating results for the years ended december 31 , 2016 , 2015 , and 2014 our operating results for the year ended december 31 , 2016 , compared to december 31 , 2015 , and for the year ended december 31 , 2015 , compared to december 31 , 2014 , were as follows : replace_table_token_9_th interest income 2016 vs. 2015 . total interest income increased 5.7 % to $ 41.0 million for the year ended december 31 , 2016 from $ 38.8 million for the year ended december 31 , 2015 . this increase is primarily due to an increase in interest income on loans during the year ended december 31 , 2016 compared to the prior year due to an increase in average loan balances , as well as an increase in the average yield on loans . during the year ended december 31 , 2016 and 2015 , interest income on loans was $ 38.6 million and $ 36.7 million , respectively , yielding 4.50 % and 4.43 % on average loan balances of $ 857.7 million and $ 827.9 million , respectively . the increase in the average loan balances is attributable to an increase in loan demand . the increase in loan yield is primarily attributable to the actions of the board of governors of the federal reserve system ( “ federal reserve board ” ) to raise short-term interest rates by 25 basis points in the fourth quarter of 2016. the average yield on interest-earning assets was 3.81 % for the year ended december 31 , 2016 compared to 3.76 % for the year ended december 31 , 2015 . during the year ended december 31 , 2016 and 2015 , interest income from our securities available-for-sale and stock , was $ 1.6 million and $ 1.7 million , yielding 2.76 % and 2.63 % on average balances of $ 57.1 million and $ 65.0 million , respectively . the average securities balances decreased as a result of maturities of , and payments on , securities which we did not fully replace due to liquidity needs . interest income from our short-term investments , including our federal funds sold and interest-bearing deposits , was $ 842 thousand and $ 370 thousand for the year ended december 31 , 2016 and 2015 , respectively , yielding 0.52 % and 0.27 % on average balances of $ 162.6 million and $ 139.3 million , respectively . the increase in the average yield is attributable to the federal reserve board raising interest rates by 25 basis points in the fourth quarter of 2016. as a result , total interest income on investments increased for the year ended december 31 , 2016 . 2015 vs. 2014 . total interest income increased 1.3 % to $ 38.8 million for the year ended december 31 , 2015 from $ 38.3 million for the year ended december 31 , 2014 . this increase is primarily due to an increase in interest income on loans during the year ended december 31 , 2015 compared to the prior year due to an increase in average loan balances , partially offset by a decline in the 32 average yield on loans . story_separator_special_tag positive evidence included projected taxable income utilizing objective assumptions based on 2015 actual results , tax planning strategies , improvement in economic conditions and at least 17 years remaining on the life of our $ 8.3 million deferred tax asset generated from our net operating loss carryforward . additionally , the company has generated positive core earnings for the trailing six quarters which demonstrates the ability to be profitable in what is considered to be the company 's core business . while the decision to exit the mortgage business in 2013 did not necessarily ensure that the company would become profitable , the results provide positive evidence that the decision to exit the unprofitable business is sufficient to overcome the losses incurred in recent years . negative evidence we considered in making this determination included our three-year cumulative loss deficit and our accumulated deficit . management determined that the expectation of future taxable income supported by our recent history of positive core earnings after adjusting for aberrational items that caused our cumulative loss condition , including discontinued operations , provided enough positive evidence to outweigh the negative evidence . therefore , we concluded that it is more-likely-than-not that the existing $ 17.6 million net deferred tax asset will be realized , resulting in the reversal of the entire valuation allowance against the company 's deferred tax asset . although we do not expect to be required to pay income tax to the appropriate taxing authorities of any sizeable amount until we have depleted our net operating loss carryforwards , we expect to recognize income tax expense in our financial statements beginning in 2016 at a combined rate of approximately 41 % on our pretax income . during the year ended december 31 , 2014 , we recorded an income tax benefit of $ 608 thousand . per financial accounting standards board 's ( “ fasb ” ) accounting standards codification ( “ asc ” ) 740-20-45-7 all sources of pre-tax income must be considered in determining the tax benefit that results from a loss from continuing operations and that shall be allocated to continuing operations . this benefit is the result of an intraperiod tax allocation where the benefit of the income tax provision that is recorded in discontinued operations and other comprehensive income created a tax benefit in continuing operations . on a net basis we recorded no income tax provision . based on the analysis performed , and the positive and negative evidence considered , management chose not to release any portion of the $ 12.1 million valuation allowance as of december 31 , 2014. positive evidence included improvement in our asset quality , tax planning strategies , projected taxable income , and improvement in economic conditions . negative evidence included historical operating losses . management determined the negative evidence was significant enough that until such time as we are in continuous periods of pre-tax income we would not make any reversals of our valuation allowance ; however , we did conclude that it is more-likely-than-not that the existing $ 5.9 million net deferred tax asset will be realized . see `` – critical accounting policies - utilization and valuation of deferred income tax benefits ” below for additional information regarding our deferred tax asset . financial condition assets our total consolidated assets increased by $ 78 million at december 31 , 2016 from $ 1.1 billion at december 31 , 2015 . the following table sets forth the composition of our interest earning assets at : 38 replace_table_token_14_th ( 1 ) includes interest-earning balances maintained at the federal reserve bank of san francisco ( “ frbsf ” ) . securities available for sale securities available for sale . securities that we intend to hold for an indefinite period of time , but which may be sold in response to changes in liquidity needs , interest rates , or prepayment risks or other similar factors , are classified as “ securities available for sale ” . such securities are recorded on our balance sheet at their respective fair values and increases or decreases in those values are recorded as unrealized gains or losses , respectively , and are reported as other comprehensive income ( loss ) on our accompanying consolidated balance sheet , rather than included in or deducted from our earnings . the following is a summary of the major components of securities available for sale and a comparison of the amortized cost , estimated fair values and the gross unrealized gains and losses attributable to those securities , as of december 31 , 2016 , 2015 and 2014 : replace_table_token_15_th at december 31 , 2016 , 2015 and 2014 , u.s. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $ 21.1 million , $ 2.9 million and $ 3.6 million , respectively , were pledged to secure fhlb borrowings , repurchase agreements , local agency deposits and treasury , tax and loan accounts . the amortized cost of securities available for sale at december 31 , 2016 is shown in the table below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments . expected maturities will differ from contractual maturities and historical prepayments , particularly with respect to collateralized mortgage 39 obligations , primarily because prepayment rates are affected by changes in conditions in the interest rate market and , therefore , future prepayment rates may differ from historical prepayment rates . december 31 , 2016 maturing in one year or less over one year through five years over five years through ten years over ten years total ( dollars in thousands ) amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield securities available for sale : residential mortgage backed securities issued by u.s. agencies $ 7,584 1.37 % $ 19,014 1.43 % $ 9,933

cash flow used in investing activities . in 2016 , investing activities used net cash of $ 92.3 million , primarily attributable to $ 101.3 million used to fund an increase in loans , partially offset by $ 8.2 million of cash from maturities of and principal payments on securities available for sale , a $ 996 thousand decrease in our interest bearing time deposits with financial institutions and $ 757 thousand of proceeds from sales of oreo . in 2015 , investing activities used net cash of $ 14.4 million , primarily attributable to $ 25.2 million used to fund an increase in loans , partially offset by $ 8.4 million of cash from maturities of and principal payments on securities available for sale , $ 2.1 million of cash from principal payments on other investments and $ 1.2 million of proceeds from sales of oreo . cash flow provided by ( used in ) financing activities . in 2016 , financing activities provided net cash of $ 112.9 million , consisting primarily of a $ 82.9 million net increase in noninterest bearing deposits and a $ 24.6 million net increase in interest bearing deposits , which resulted from a decision to increase our core deposit base , and a $ 5.0 million net increase in borrowings . in 2015 , financing activities used net cash of $ 50.8 million , consisting primarily of a $ 34.7 million net decrease in interest bearing deposits , which resulted from a decision to increase our core deposit base , which included the transition of a portion of our certificates of deposit customers to savings account customers , and a $ 29.5 million decrease in borrowings , partially offset by an increase in noninterest bearing deposits of $ 12.2 million . ratio of loans to deposits . the relationship between gross loans and total deposits can provide a useful measure of a bank 's liquidity . since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources , the higher the loan-to-deposit ratio the less liquid are our assets .


 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.
     ```cash flow used in investing activities . in 2016 , investing activities used net cash of $ 92.3 million , primarily attributable to $ 101.3 million used to fund an increase in loans , partially offset by $ 8.2 million of cash from maturities of and principal payments on securities available for sale , a $ 996 thousand decrease in our interest bearing time deposits with financial institutions and $ 757 thousand of proceeds from sales of oreo . in 2015 , investing activities used net cash of $ 14.4 million , primarily attributable to $ 25.2 million used to fund an increase in loans , partially offset by $ 8.4 million of cash from maturities of and principal payments on securities available for sale , $ 2.1 million of cash from principal payments on other investments and $ 1.2 million of proceeds from sales of oreo . cash flow provided by ( used in ) financing activities . in 2016 , financing activities provided net cash of $ 112.9 million , consisting primarily of a $ 82.9 million net increase in noninterest bearing deposits and a $ 24.6 million net increase in interest bearing deposits , which resulted from a decision to increase our core deposit base , and a $ 5.0 million net increase in borrowings . in 2015 , financing activities used net cash of $ 50.8 million , consisting primarily of a $ 34.7 million net decrease in interest bearing deposits , which resulted from a decision to increase our core deposit base , which included the transition of a portion of our certificates of deposit customers to savings account customers , and a $ 29.5 million decrease in borrowings , partially offset by an increase in noninterest bearing deposits of $ 12.2 million . ratio of loans to deposits . the relationship between gross loans and total deposits can provide a useful measure of a bank 's liquidity . since repayment of loans tends to be less predictable than the maturity of investments and other liquid resources , the higher the loan-to-deposit ratio the less liquid are our assets .
```    
 Suspicious Activity Report : as a result , of the $ 48 million in loan downgrades during the three months ended september 30 , 2016 , $ 13.7 million in principal payments were received and $ 2.2 million in loan upgrades were made during the fourth quarter of 2016. this represents a 33 % reduction and improvement from september 30 , 2016 to december 31 , 2016 , leaving $ 32 million in loan downgrades taken in the third quarter of 2016 that we continue to manage and currently anticipate being paid down or upgraded by the middle of 2017. during the year ended december 31 , 2016 , the company recorded income tax expense of $ 16.8 million to reflect a full valuation allowance established against its deferred tax asset . see “ results of operations—provision for income tax ” below in this item 7 for additional information . while we believe the company will generate taxable income in future periods that will eventually enable the company to release all or a portion of the valuation allowance , we are not able to assert as to the timing of that event . until such time as we are able to release the valuation allowance on our deferred tax asset , there is a material impact to future periods in that management expects this to result in minimal income tax expense . as a result of the net loss we incurred during the year ended december 31 , 2016 , our regulatory capital ratios declined during the year . notwithstanding this , the company and the bank remain well capitalized under applicable regulatory standards . see “ capital resources—regulatory capital requirements applicable to banking institutions ” below in this item 7 for further information . 31 results of operations discontinued operations in connection with our exit from the mortgage banking business in 2013 , the revenues and expenses of our mortgage banking division have been classified as discontinued operations for all periods presented . as a result , all comparisons below reflect results from continuing operations . income from discontinued operations was zero for the year s ended december 31 , 2016 and 2015 , while our income from discontinued operations was $ 1.2 million for the year ended december 31 , 2014 . we had no income from discontinued operations during the years ended december 31 , 2016 and 2015 as a result of the final wind down of the mortgage banking division during 2014. during the year ended december 31 , 2014 , we recorded a gain in the amount of $ 558 thousand on the sale of the mortgage servicing rights that we sold in april 2014 , which is included in income from discontinued operations in the consolidated statements of operations . operating results for the years ended december 31 , 2016 , 2015 , and 2014 our operating results for the year ended december 31 , 2016 , compared to december 31 , 2015 , and for the year ended december 31 , 2015 , compared to december 31 , 2014 , were as follows : replace_table_token_9_th interest income 2016 vs. 2015 . total interest income increased 5.7 % to $ 41.0 million for the year ended december 31 , 2016 from $ 38.8 million for the year ended december 31 , 2015 . this increase is primarily due to an increase in interest income on loans during the year ended december 31 , 2016 compared to the prior year due to an increase in average loan balances , as well as an increase in the average yield on loans . during the year ended december 31 , 2016 and 2015 , interest income on loans was $ 38.6 million and $ 36.7 million , respectively , yielding 4.50 % and 4.43 % on average loan balances of $ 857.7 million and $ 827.9 million , respectively . the increase in the average loan balances is attributable to an increase in loan demand . the increase in loan yield is primarily attributable to the actions of the board of governors of the federal reserve system ( “ federal reserve board ” ) to raise short-term interest rates by 25 basis points in the fourth quarter of 2016. the average yield on interest-earning assets was 3.81 % for the year ended december 31 , 2016 compared to 3.76 % for the year ended december 31 , 2015 . during the year ended december 31 , 2016 and 2015 , interest income from our securities available-for-sale and stock , was $ 1.6 million and $ 1.7 million , yielding 2.76 % and 2.63 % on average balances of $ 57.1 million and $ 65.0 million , respectively . the average securities balances decreased as a result of maturities of , and payments on , securities which we did not fully replace due to liquidity needs . interest income from our short-term investments , including our federal funds sold and interest-bearing deposits , was $ 842 thousand and $ 370 thousand for the year ended december 31 , 2016 and 2015 , respectively , yielding 0.52 % and 0.27 % on average balances of $ 162.6 million and $ 139.3 million , respectively . the increase in the average yield is attributable to the federal reserve board raising interest rates by 25 basis points in the fourth quarter of 2016. as a result , total interest income on investments increased for the year ended december 31 , 2016 . 2015 vs. 2014 . total interest income increased 1.3 % to $ 38.8 million for the year ended december 31 , 2015 from $ 38.3 million for the year ended december 31 , 2014 . this increase is primarily due to an increase in interest income on loans during the year ended december 31 , 2015 compared to the prior year due to an increase in average loan balances , partially offset by a decline in the 32 average yield on loans . story_separator_special_tag positive evidence included projected taxable income utilizing objective assumptions based on 2015 actual results , tax planning strategies , improvement in economic conditions and at least 17 years remaining on the life of our $ 8.3 million deferred tax asset generated from our net operating loss carryforward . additionally , the company has generated positive core earnings for the trailing six quarters which demonstrates the ability to be profitable in what is considered to be the company 's core business . while the decision to exit the mortgage business in 2013 did not necessarily ensure that the company would become profitable , the results provide positive evidence that the decision to exit the unprofitable business is sufficient to overcome the losses incurred in recent years . negative evidence we considered in making this determination included our three-year cumulative loss deficit and our accumulated deficit . management determined that the expectation of future taxable income supported by our recent history of positive core earnings after adjusting for aberrational items that caused our cumulative loss condition , including discontinued operations , provided enough positive evidence to outweigh the negative evidence . therefore , we concluded that it is more-likely-than-not that the existing $ 17.6 million net deferred tax asset will be realized , resulting in the reversal of the entire valuation allowance against the company 's deferred tax asset . although we do not expect to be required to pay income tax to the appropriate taxing authorities of any sizeable amount until we have depleted our net operating loss carryforwards , we expect to recognize income tax expense in our financial statements beginning in 2016 at a combined rate of approximately 41 % on our pretax income . during the year ended december 31 , 2014 , we recorded an income tax benefit of $ 608 thousand . per financial accounting standards board 's ( “ fasb ” ) accounting standards codification ( “ asc ” ) 740-20-45-7 all sources of pre-tax income must be considered in determining the tax benefit that results from a loss from continuing operations and that shall be allocated to continuing operations . this benefit is the result of an intraperiod tax allocation where the benefit of the income tax provision that is recorded in discontinued operations and other comprehensive income created a tax benefit in continuing operations . on a net basis we recorded no income tax provision . based on the analysis performed , and the positive and negative evidence considered , management chose not to release any portion of the $ 12.1 million valuation allowance as of december 31 , 2014. positive evidence included improvement in our asset quality , tax planning strategies , projected taxable income , and improvement in economic conditions . negative evidence included historical operating losses . management determined the negative evidence was significant enough that until such time as we are in continuous periods of pre-tax income we would not make any reversals of our valuation allowance ; however , we did conclude that it is more-likely-than-not that the existing $ 5.9 million net deferred tax asset will be realized . see `` – critical accounting policies - utilization and valuation of deferred income tax benefits ” below for additional information regarding our deferred tax asset . financial condition assets our total consolidated assets increased by $ 78 million at december 31 , 2016 from $ 1.1 billion at december 31 , 2015 . the following table sets forth the composition of our interest earning assets at : 38 replace_table_token_14_th ( 1 ) includes interest-earning balances maintained at the federal reserve bank of san francisco ( “ frbsf ” ) . securities available for sale securities available for sale . securities that we intend to hold for an indefinite period of time , but which may be sold in response to changes in liquidity needs , interest rates , or prepayment risks or other similar factors , are classified as “ securities available for sale ” . such securities are recorded on our balance sheet at their respective fair values and increases or decreases in those values are recorded as unrealized gains or losses , respectively , and are reported as other comprehensive income ( loss ) on our accompanying consolidated balance sheet , rather than included in or deducted from our earnings . the following is a summary of the major components of securities available for sale and a comparison of the amortized cost , estimated fair values and the gross unrealized gains and losses attributable to those securities , as of december 31 , 2016 , 2015 and 2014 : replace_table_token_15_th at december 31 , 2016 , 2015 and 2014 , u.s. agency mortgage backed securities and collateralized mortgage obligations with an aggregate fair market value of $ 21.1 million , $ 2.9 million and $ 3.6 million , respectively , were pledged to secure fhlb borrowings , repurchase agreements , local agency deposits and treasury , tax and loan accounts . the amortized cost of securities available for sale at december 31 , 2016 is shown in the table below by contractual maturities taking into consideration historical prepayments based on the prior twelve months of principal payments . expected maturities will differ from contractual maturities and historical prepayments , particularly with respect to collateralized mortgage 39 obligations , primarily because prepayment rates are affected by changes in conditions in the interest rate market and , therefore , future prepayment rates may differ from historical prepayment rates . december 31 , 2016 maturing in one year or less over one year through five years over five years through ten years over ten years total ( dollars in thousands ) amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield amortized cost weighted average yield securities available for sale : residential mortgage backed securities issued by u.s. agencies $ 7,584 1.37 % $ 19,014 1.43 % $ 9,933

