the tax-equivalent net interest margin increased to 3.90 % in 2018 compared to 3.80 % in 2017 for the same reasons , despite the 0.04 % negative impact from the early redemption of a subordinated debenture . pre-tax net income in 2018 was $ 43.4 million , up $ 14.6 million , or 50.6 % over 2017 pretax net income of $ 28.8 million . higher average balances and yields on both loans and investment securities favorably impacted earnings in the current year . the efficiency ratio was 57.3 % in 2018 , down from 64.7 % in 2017. for the year ended december 31 , 2018 , return on assets was 1.31 % and return on equity was 10.73 % . all capital ratios exceed regulatory requirements . the total risk-based capital ratio for bancorp was 14.9 % at both december 31 , 2018 and december 31 , 2017 . on april 23 , 2018 , bancorp announced that its board of directors approved a share repurchase program under which bancorp may repurchase up to $ 25.0 million of its outstanding common stock through may 1 , 2019. during 2018 , bancorp repurchased 171,217 shares for a total amount of $ 7.0 million . on october 22 , 2018 , bancorp announced a two-for-one stock split , which occurred on november 27 , 2018. the board of directors declared a cash dividend of $ 0.19 per share on january 25 , 2019 , a $ 0.015 increase from the prior quarter . this was the 55 th consecutive quarterly dividend paid by bank of marin bancorp . since august 2005 , bancorp 's average annual dividend growth rate has been 10.2 % . the cash dividend was paid on february 15 , 2019 to shareholders of record at the close of business on february 8 , 2019. looking forward into the new year , with a low cost and stable deposit base , solid opportunities for loan growth , and our unwavering commitment to relationship banking , we are well-positioned to carry our successful performance into 2019. we have ample liquidity and capital to support organic growth and acquisitions in coming years . acquisitions remain a component of our strategic plan and we will continue to evaluate merger and acquisition opportunities that fit with our culture and add value for our shareholders . our disciplined credit culture and relationship-focused banking continue to be critical components of our success . page-24 results of operations net interest income net interest income is the difference between the interest earned on loans , investments and other interest-earning assets and the interest expense incurred on deposits and other interest-bearing liabilities . net interest income is affected by changes in general market interest rates and by changes in the amounts and composition of interest-earning assets and interest-bearing liabilities . interest rate changes can create fluctuations in net interest income and or margin due to an imbalance in the timing of repricing or maturity of assets or liabilities . we manage interest rate risk exposure with the goal of minimizing the effect of interest rate volatility on net interest income . net interest margin is expressed as net interest income divided by average interest-earning assets . net interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate incurred on total interest-bearing liabilities . both of these measures are reported on a taxable-equivalent basis . net interest margin is the higher of the two because it reflects interest income earned on assets funded with non-interest-bearing sources of funds , which include demand deposits and stockholders ' equity . the following table compares interest income , average interest-earning assets , interest expense , and average interest-bearing liabilities for the periods presented . the table also presents net interest income , net interest margin and net interest rate spread for the years indicated . table 1 average statements of condition and analysis of net interest income year ended year ended december 31 , 2018 december 31 , 2017 interest interest average income/ yield/ average income/ yield/ ( dollars in thousands ; unaudited ) balance expense rate balance expense rate assets interest-bearing due from banks 1 $ 78,185 $ 1,461 1.84 % $ 80,351 $ 995 1.22 % investment securities 2 , 3 566,883 14,512 2.56 % 419,873 9,732 2.32 % loans 1 , 3 , 4 1,704,390 80,406 4.65 % 1,511,503 68,562 4.47 % total interest-earning assets 1 2,349,458 96,379 4.05 % 2,011,727 79,289 3.89 % cash and non-interest-bearing due from banks 41,595 42,511 bank premises and equipment , net 8,021 8,411 interest receivable and other assets , net 86,709 63,301 total assets $ 2,485,783 $ 2,125,950 liabilities and stockholders ' equity interest-bearing transaction accounts $ 143,706 $ 226 0.16 % $ 105,544 $ 108 0.10 % savings accounts 178,907 72 0.04 % 167,190 66 0.04 % money market accounts 612,372 1,355 0.22 % 542,592 555 0.10 % time accounts , including cdars 137,339 542 0.39 % 146,069 576 0.39 % fhlb and overnight borrowings 1 105 2 2.03 % 1 — 1.75 % subordinated debentures 1 5,025 1,339 26.29 % 5,664 439 7.65 % total interest-bearing liabilities 1,077,454 3,536 0.33 % 967,060 1,744 0.18 % demand accounts 1,085,870 899,289 interest payable and other liabilities 18,514 13,506 stockholders ' equity 303,945 246,095 total liabilities & stockholders ' equity $ 2,485,783 $ 2,125,950 tax-equivalent net interest income/margin 1 $ 92,843 3.90 % $ 77,545 3.80 % reported net interest income/margin 1 $ 91,544 3.84 % $ 74,852 3.67 % tax-equivalent net interest rate spread 3.72 % 3.71 % 1 interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms , where applicable . 2 yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value , as changes in fair value are reflected as a component of stockholders ' equity . story_separator_special_tag also , see item 1a , risk factors , regarding our loan concentration risk . the following table summarizes our commercial real estate loan portfolio by the geographic location in which the property is located as of december 31 , 2018 and 2017 . table 7 commercial real estate loans outstanding by geographic location replace_table_token_9_th commercial real estate loans increased by $ 62.7 million in 2018 and $ 152.0 million in 2017. the increase in 2018 was primarily in sonoma , napa , alameda and san francisco counties . the increase in 2017 included $ 92.3 million from the bank of napa acquisition , as well as lending activities in marin and alameda counties . of the commercial real estate loans at december 31 , 2018 , 74 % were non-owner occupied and 26 % were owner occupied . almost the entire commercial real estate loan portfolio is comprised of term loans for which the primary source of repayment is the operating cash flow from the leasing activities of the real estate collateral . originated loans are subject to our conservative credit underwriting standards and both the acquired and originated loans are actively managed . we occasionally provide interest-only term loans to borrowers who exhibit strong financial capacity and or for commercial real estate loans during the occupancy stabilization period . these interest-only term loans must meet our stringent underwriting standards and are generally short-term in nature , usually less than two years . in addition , we may make interest-only concessions in a modified troubled debt restructuring ( `` tdr `` ) . at december 31 , 2018 and 2017 , approximately 2.9 % and 2.0 % , respectively , of our total loans contained an interest-only feature as part of the loan terms . all of these loans were current with their payments as of december 31 , 2018. except for two tdr loans to one borrowing relationship totaling $ 7.0 million as of december 31 , 2018 , all were considered to have low credit risk ( graded `` pass `` ) . page-32 the following table shows an analysis of construction loans by type and location as of december 31 , 2018 and 2017 . table 8 construction loans outstanding by type and geographic location replace_table_token_10_th construction loans increased by $ 12.6 million in 2018 and decreased by $ 11.0 million in 2017. the increase in 2018 was primarily due to new construction projects , partially offset by payoffs related to completed construction projects . the $ 8.1 million decrease in napa construction loans primarily resulted from the successful completion of three projects and one completed project that converted to a commercial real estate term loan . the improving economy resulted in a number of new financing opportunities for existing and new customers who had successfully completed construction projects in the past . the following table presents the maturity distribution of our commercial and construction loans as of december 31 , 2018 based on their contractual maturity dates and does not include scheduled payments or potential prepayments . table 9a commercial and construction loan maturity distribution replace_table_token_11_th the following table shows the mix of variable-rate loans to fixed-rate loans for commercial and construction loans . the large majority of the variable-rate loans are tied to independent indices ( such as the wall street journal prime rate or a treasury constant maturity rate ) . most loans with original terms of more than five years have provisions for the fixed rates to reset , or convert to variable rates , after three , five or seven years . these loans are included in variable-rate balances below . page-33 table 9b commercial and construction loan interest rate sensitivity replace_table_token_12_th allowance for loan losses credit risk is inherent in the business of lending . as a result , we maintain an allowance for loan losses to absorb probable losses in our loan portfolio through a provision for loan losses charged against earnings . all specifically identifiable and quantifiable losses are charged off against the allowance . the balance of our allowance for loan losses is management 's best estimate of the remaining probable losses in the portfolio . the ultimate adequacy of the allowance is dependent upon a variety of factors beyond our control , including the real estate market , changes in interest rates and economic and political environments . based on the current conditions of the loan portfolio , management believes that the $ 15.8 million allowance for loan losses at december 31 , 2018 is adequate to absorb losses in our loan portfolio , but provides no assurance that adverse economic conditions or other circumstances will not result in increased losses in the portfolio . the components of the allowance for loan losses as stated in note 1 to the consolidated financial statements in item 8 of this report , the overall allowance consists of 1 ) specific allowances for individually identified impaired loans ( `` asc 310-10 `` ) and 2 ) general allowances for pools of loans ( `` asc 450-20 `` ) , which incorporate quantitative ( e.g . , historical loan loss rates ) and qualitative risk factors ( e.g . , portfolio growth and trends , credit concentrations , economic and regulatory factors , etc . ) . the first component , specific allowances , results from the analysis of identified problem credits and the evaluation of sources of repayment including collateral , as applicable . management evaluates these loans individually for impairment . management considers an originated loan to be impaired when it is probable we will be unable to collect all amounts due according to the contractual terms of the loan agreement . for pci loans , specific allowances are established to account for credit deterioration subsequent to acquisition if we have probable decreases in cash flows expected to be collected . for loans determined to be impaired , the extent of the impairment is measured based on the

liquidity the goal of liquidity management is to provide adequate funds to meet loan demand and to fund operating activities and deposit withdrawals . we accomplish this goal by maintaining an appropriate level of liquid assets and formal lines of credit with the fhlb , frbsf and correspondent banks that enable us to borrow funds as discussed in note 7 to the consolidated financial statement in item 8 of this report . our asset liability management committee ( `` alco '' ) , which is comprised of independent bank directors and the bank 's chief executive officer , is responsible for approving and monitoring our liquidity targets and strategies . alco has adopted a contingency funding plan that provides early detection of potential liquidity issues in the market or the bank and institutes prompt responses that may prevent or alleviate a potential liquidity crisis . management monitors liquidity daily and regularly adjusts our position based on current and future liquidity needs . we also have relationships with third-party deposit networks and can adjust the placement of our deposits via reciprocal or one-way sales as part of our cash management strategy . we obtain funds from the repayment and maturity of loans , deposit inflows , investment security maturities and paydowns , federal funds purchases , fhlb advances , other borrowings , and cash flow from operations . our primary uses of funds are the origination of loans , the purchase of investment securities , withdrawals of deposits , maturity of certificates of deposit , repayment of borrowings , and dividends to common stockholders .


 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 the goal of liquidity management is to provide adequate funds to meet loan demand and to fund operating activities and deposit withdrawals . we accomplish this goal by maintaining an appropriate level of liquid assets and formal lines of credit with the fhlb , frbsf and correspondent banks that enable us to borrow funds as discussed in note 7 to the consolidated financial statement in item 8 of this report . our asset liability management committee ( `` alco '' ) , which is comprised of independent bank directors and the bank 's chief executive officer , is responsible for approving and monitoring our liquidity targets and strategies . alco has adopted a contingency funding plan that provides early detection of potential liquidity issues in the market or the bank and institutes prompt responses that may prevent or alleviate a potential liquidity crisis . management monitors liquidity daily and regularly adjusts our position based on current and future liquidity needs . we also have relationships with third-party deposit networks and can adjust the placement of our deposits via reciprocal or one-way sales as part of our cash management strategy . we obtain funds from the repayment and maturity of loans , deposit inflows , investment security maturities and paydowns , federal funds purchases , fhlb advances , other borrowings , and cash flow from operations . our primary uses of funds are the origination of loans , the purchase of investment securities , withdrawals of deposits , maturity of certificates of deposit , repayment of borrowings , and dividends to common stockholders .
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 Suspicious Activity Report : the tax-equivalent net interest margin increased to 3.90 % in 2018 compared to 3.80 % in 2017 for the same reasons , despite the 0.04 % negative impact from the early redemption of a subordinated debenture . pre-tax net income in 2018 was $ 43.4 million , up $ 14.6 million , or 50.6 % over 2017 pretax net income of $ 28.8 million . higher average balances and yields on both loans and investment securities favorably impacted earnings in the current year . the efficiency ratio was 57.3 % in 2018 , down from 64.7 % in 2017. for the year ended december 31 , 2018 , return on assets was 1.31 % and return on equity was 10.73 % . all capital ratios exceed regulatory requirements . the total risk-based capital ratio for bancorp was 14.9 % at both december 31 , 2018 and december 31 , 2017 . on april 23 , 2018 , bancorp announced that its board of directors approved a share repurchase program under which bancorp may repurchase up to $ 25.0 million of its outstanding common stock through may 1 , 2019. during 2018 , bancorp repurchased 171,217 shares for a total amount of $ 7.0 million . on october 22 , 2018 , bancorp announced a two-for-one stock split , which occurred on november 27 , 2018. the board of directors declared a cash dividend of $ 0.19 per share on january 25 , 2019 , a $ 0.015 increase from the prior quarter . this was the 55 th consecutive quarterly dividend paid by bank of marin bancorp . since august 2005 , bancorp 's average annual dividend growth rate has been 10.2 % . the cash dividend was paid on february 15 , 2019 to shareholders of record at the close of business on february 8 , 2019. looking forward into the new year , with a low cost and stable deposit base , solid opportunities for loan growth , and our unwavering commitment to relationship banking , we are well-positioned to carry our successful performance into 2019. we have ample liquidity and capital to support organic growth and acquisitions in coming years . acquisitions remain a component of our strategic plan and we will continue to evaluate merger and acquisition opportunities that fit with our culture and add value for our shareholders . our disciplined credit culture and relationship-focused banking continue to be critical components of our success . page-24 results of operations net interest income net interest income is the difference between the interest earned on loans , investments and other interest-earning assets and the interest expense incurred on deposits and other interest-bearing liabilities . net interest income is affected by changes in general market interest rates and by changes in the amounts and composition of interest-earning assets and interest-bearing liabilities . interest rate changes can create fluctuations in net interest income and or margin due to an imbalance in the timing of repricing or maturity of assets or liabilities . we manage interest rate risk exposure with the goal of minimizing the effect of interest rate volatility on net interest income . net interest margin is expressed as net interest income divided by average interest-earning assets . net interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate incurred on total interest-bearing liabilities . both of these measures are reported on a taxable-equivalent basis . net interest margin is the higher of the two because it reflects interest income earned on assets funded with non-interest-bearing sources of funds , which include demand deposits and stockholders ' equity . the following table compares interest income , average interest-earning assets , interest expense , and average interest-bearing liabilities for the periods presented . the table also presents net interest income , net interest margin and net interest rate spread for the years indicated . table 1 average statements of condition and analysis of net interest income year ended year ended december 31 , 2018 december 31 , 2017 interest interest average income/ yield/ average income/ yield/ ( dollars in thousands ; unaudited ) balance expense rate balance expense rate assets interest-bearing due from banks 1 $ 78,185 $ 1,461 1.84 % $ 80,351 $ 995 1.22 % investment securities 2 , 3 566,883 14,512 2.56 % 419,873 9,732 2.32 % loans 1 , 3 , 4 1,704,390 80,406 4.65 % 1,511,503 68,562 4.47 % total interest-earning assets 1 2,349,458 96,379 4.05 % 2,011,727 79,289 3.89 % cash and non-interest-bearing due from banks 41,595 42,511 bank premises and equipment , net 8,021 8,411 interest receivable and other assets , net 86,709 63,301 total assets $ 2,485,783 $ 2,125,950 liabilities and stockholders ' equity interest-bearing transaction accounts $ 143,706 $ 226 0.16 % $ 105,544 $ 108 0.10 % savings accounts 178,907 72 0.04 % 167,190 66 0.04 % money market accounts 612,372 1,355 0.22 % 542,592 555 0.10 % time accounts , including cdars 137,339 542 0.39 % 146,069 576 0.39 % fhlb and overnight borrowings 1 105 2 2.03 % 1 — 1.75 % subordinated debentures 1 5,025 1,339 26.29 % 5,664 439 7.65 % total interest-bearing liabilities 1,077,454 3,536 0.33 % 967,060 1,744 0.18 % demand accounts 1,085,870 899,289 interest payable and other liabilities 18,514 13,506 stockholders ' equity 303,945 246,095 total liabilities & stockholders ' equity $ 2,485,783 $ 2,125,950 tax-equivalent net interest income/margin 1 $ 92,843 3.90 % $ 77,545 3.80 % reported net interest income/margin 1 $ 91,544 3.84 % $ 74,852 3.67 % tax-equivalent net interest rate spread 3.72 % 3.71 % 1 interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms , where applicable . 2 yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value , as changes in fair value are reflected as a component of stockholders ' equity . story_separator_special_tag also , see item 1a , risk factors , regarding our loan concentration risk . the following table summarizes our commercial real estate loan portfolio by the geographic location in which the property is located as of december 31 , 2018 and 2017 . table 7 commercial real estate loans outstanding by geographic location replace_table_token_9_th commercial real estate loans increased by $ 62.7 million in 2018 and $ 152.0 million in 2017. the increase in 2018 was primarily in sonoma , napa , alameda and san francisco counties . the increase in 2017 included $ 92.3 million from the bank of napa acquisition , as well as lending activities in marin and alameda counties . of the commercial real estate loans at december 31 , 2018 , 74 % were non-owner occupied and 26 % were owner occupied . almost the entire commercial real estate loan portfolio is comprised of term loans for which the primary source of repayment is the operating cash flow from the leasing activities of the real estate collateral . originated loans are subject to our conservative credit underwriting standards and both the acquired and originated loans are actively managed . we occasionally provide interest-only term loans to borrowers who exhibit strong financial capacity and or for commercial real estate loans during the occupancy stabilization period . these interest-only term loans must meet our stringent underwriting standards and are generally short-term in nature , usually less than two years . in addition , we may make interest-only concessions in a modified troubled debt restructuring ( `` tdr `` ) . at december 31 , 2018 and 2017 , approximately 2.9 % and 2.0 % , respectively , of our total loans contained an interest-only feature as part of the loan terms . all of these loans were current with their payments as of december 31 , 2018. except for two tdr loans to one borrowing relationship totaling $ 7.0 million as of december 31 , 2018 , all were considered to have low credit risk ( graded `` pass `` ) . page-32 the following table shows an analysis of construction loans by type and location as of december 31 , 2018 and 2017 . table 8 construction loans outstanding by type and geographic location replace_table_token_10_th construction loans increased by $ 12.6 million in 2018 and decreased by $ 11.0 million in 2017. the increase in 2018 was primarily due to new construction projects , partially offset by payoffs related to completed construction projects . the $ 8.1 million decrease in napa construction loans primarily resulted from the successful completion of three projects and one completed project that converted to a commercial real estate term loan . the improving economy resulted in a number of new financing opportunities for existing and new customers who had successfully completed construction projects in the past . the following table presents the maturity distribution of our commercial and construction loans as of december 31 , 2018 based on their contractual maturity dates and does not include scheduled payments or potential prepayments . table 9a commercial and construction loan maturity distribution replace_table_token_11_th the following table shows the mix of variable-rate loans to fixed-rate loans for commercial and construction loans . the large majority of the variable-rate loans are tied to independent indices ( such as the wall street journal prime rate or a treasury constant maturity rate ) . most loans with original terms of more than five years have provisions for the fixed rates to reset , or convert to variable rates , after three , five or seven years . these loans are included in variable-rate balances below . page-33 table 9b commercial and construction loan interest rate sensitivity replace_table_token_12_th allowance for loan losses credit risk is inherent in the business of lending . as a result , we maintain an allowance for loan losses to absorb probable losses in our loan portfolio through a provision for loan losses charged against earnings . all specifically identifiable and quantifiable losses are charged off against the allowance . the balance of our allowance for loan losses is management 's best estimate of the remaining probable losses in the portfolio . the ultimate adequacy of the allowance is dependent upon a variety of factors beyond our control , including the real estate market , changes in interest rates and economic and political environments . based on the current conditions of the loan portfolio , management believes that the $ 15.8 million allowance for loan losses at december 31 , 2018 is adequate to absorb losses in our loan portfolio , but provides no assurance that adverse economic conditions or other circumstances will not result in increased losses in the portfolio . the components of the allowance for loan losses as stated in note 1 to the consolidated financial statements in item 8 of this report , the overall allowance consists of 1 ) specific allowances for individually identified impaired loans ( `` asc 310-10 `` ) and 2 ) general allowances for pools of loans ( `` asc 450-20 `` ) , which incorporate quantitative ( e.g . , historical loan loss rates ) and qualitative risk factors ( e.g . , portfolio growth and trends , credit concentrations , economic and regulatory factors , etc . ) . the first component , specific allowances , results from the analysis of identified problem credits and the evaluation of sources of repayment including collateral , as applicable . management evaluates these loans individually for impairment . management considers an originated loan to be impaired when it is probable we will be unable to collect all amounts due according to the contractual terms of the loan agreement . for pci loans , specific allowances are established to account for credit deterioration subsequent to acquisition if we have probable decreases in cash flows expected to be collected . for loans determined to be impaired , the extent of the impairment is measured based on the

