allowance for credit losses we account for the credit risk associated with our lending activities through the allowance and provision for credit losses . the allowance represents management 's best estimate of probable losses that have been incurred in our existing loan portfolio as of the balance sheet date . the provision is a periodic charge to earnings in an amount necessary to maintain the allowance at a level that is appropriate based on management 's assessment of probable estimated losses . management determines and reviews with the board of directors the adequacy of the allowance on a quarterly basis in accordance with the methodology described below . 25 individual loans are selected for review in accordance with financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) topic 310 , “ receivables . ” these are generally large balance commercial loans and commercial mortgages that are rated less than “ satisfactory ” based on our internal credit-rating process . we assess whether the loans identified for review in step one are “ impaired , ” which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement , which generally represents loans that management has placed on nonaccrual status . for impaired loans we calculate the estimated fair value of the loans that are selected for review based on observable market prices , discounted cash flows or the value of the underlying collateral and record an allowance if needed . we then select pools of homogeneous smaller balance loans , having similar risk characteristics , as well as unimpaired larger commercial loans , that have similar risk characteristics , for evaluation collectively under the provisions of fasb asc topic 450 , “ contingencies . ” these smaller balance loans generally include residential mortgages , consumer loans , installment loans and some commercial loans . fasb asc topic 450 loans are segmented into groups with similar characteristics and an allowance for credit losses is allocated to each segment based on recent loss history and other relevant information . we then review the results to determine the appropriate balance of the allowance for credit losses . this review includes consideration of additional factors , such as the mix of loans in the portfolio , the balance of the allowance relative to total loans and nonperforming assets , trends in the overall risk profile in the portfolio , trends in delinquencies and nonaccrual loans , and local and national economic information and industry data , including trends in the industries we believe are higher risk . there are many factors affecting the allowance for credit losses ; some are quantitative , while others require qualitative judgment . these factors require the use of estimates related to the amount and timing of expected future cash flows , appraised values on impaired loans , estimated losses for each loan category based on historical loss experience by category , loss emergence periods for each loan category and consideration of current economic trends and conditions , all of which may be susceptible to significant judgment and change . to the extent that actual outcomes differ from estimates , additional provisions for credit losses could be required that could adversely affect our earnings or financial position in future periods . the loan portfolio represents the largest asset category on our consolidated statements of financial condition . fair values of financial instruments fasb asc topic 820 , “ fair value measurements and disclosures , ” establishes a framework for measuring fair value . in accordance with fasb asc topic 820 , first commonwealth groups financial assets and financial liabilities measured at fair value into three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value . level 1 valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities . level 2 valuations are for instruments that trade in less active dealer or broker markets and incorporate values obtained for identical or comparable instruments . level 3 valuations are derived from other valuation methodologies , including option pricing models , discounted cash flow models and similar techniques , and not based on market exchange , dealer or broker traded transactions . level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to each instrument . level 2 investment securities are valued by a recognized third party pricing service using observable inputs . management validates the market values provided by the third party service by having another recognized pricing service price 100 % of securities on an annual basis and a random sample of securities each quarter , monthly monitoring of variances from prior period pricing and on a monthly basis evaluating pricing changes compared to expectations based on changes in the financial markets . level 3 investments include pooled trust preferred collateralized debt obligations . the fair values of these investments are determined by a specialized third party valuation service . management validates the fair value of the pooled trust preferred collateralized debt obligations by monitoring the performance of the underlying collateral , discussing the discount rate , cash flow assumptions and general market trends with the specialized third party and by confirming changes in the underlying collateral to the trustee and underwriter reports . management 's monitoring of the underlying collateral includes deferrals of interest payments , payment defaults , cures of previously deferred interest payments , any regulatory filings or actions and general news related to the underlying collateral . management also evaluates fair value changes compared to expectations based on changes in the interest rates used in determining the discount rate and general financial markets . story_separator_special_tag the most notable change is a $ 4.4 million increase in net securities gains ( losses ) due to the early redemption of two of our pooled trust preferred securities . the majority of this increase is the result of a successful auction call completed on pretsl xiii , a pooled trust preferred security on which other-than-temporary impairment charges were recognized in 2009 and 2010. as a result , the security was called at par resulting in a gain of $ 4.3 million . additionally , the liquidation of pretsl vii provided for a gain of $ 0.7 million . the gain on sale of mortgage loans increased $ 1.3 million due to continued growth in mortgage loan originations since the company reentered the secondary mortgage market . the derivatives mark to market decreased $ 0.7 million . this reflects a change in fair value due to movements in corporate bond spreads and not a realized loss on the swaps . if the company 's total assets would equal or exceed $ 10 billion we would no longer qualify for exemption from the interchange fee cap included in the dodd-frank act . the estimated impact of this change would decrease interchange income by $ 7.6 million . 32 noninterest expense the components of noninterest expense for each year in the three-year period ended december 31 are as follows : replace_table_token_11_th noninterest expense , excluding the loss on sale or write-down of assets , litigation and operational losses , and merger and acquisition related expense , increased $ 32.0 million , or 21 % , for the year ended 2017 compared to 2016 . contributing to the 2017 increase is a $ 16.6 million increase in salaries and employee benefits primarily due to an increase of 98 full-time equivalent employees at december 31 , 2017 compared to december 31 , 2016 . the higher number of employees is a result of the acquisition of 13 branches from firstmerit in december 2016 , the acquisition of dcb financial in april 2017 and the continued expansion of our mortgage and commercial banking businesses in ohio . also contributing to the increase in salaries and employee benefits was $ 2.5 million of expense for a one-time bonus of $ 1,500 paid to all full and part-time employees ( other than the top five named executive officers ) following the passage of the tax cuts and jobs act . the two noted acquisitions also accounted for all of the $ 2.5 million increase in net occupancy expense , $ 1.0 million of the increase in furniture and equipment expense and all of the $ 2.5 million increase in intangible amortization . other operating expense increased $ 5.5 million for the year 2017 compared to 2016 , primarily due to a $ 1.4 million increase in expense related to the reserve for unfunded loan commitments , a $ 1.7 million increase in data processing expense primarily relates to additional volume associated with increased debit cards and card usage as well as an increase in usage of digital channels . merger related expenses totaled $ 10.2 million and $ 3.2 million for the years 2017 and 2016 , respectively . expenses in 2017 reflect one-time expenses related to the acquisition of dcb financial while expenses in 2016 reflect those expenses related to the acquisition of 13 firstmerit branches . merger expense in 2015 relates to the acquisition of first community bank . income tax the provision for income taxes of $ 48.6 million in 2017 reflects an increase of $ 22.9 million compared to the provision for income taxes in 2016 . the majority of this change , $ 16.7 million , relates to a non-cash charge recorded for the revaluation of deferred tax assets in connection with the passage of the tax cuts and jobs act . the remaining increase in the provision for income taxes relates to the increase in the level of pretax income of $ 103.7 million and $ 85.2 million for 2017 and 2016 , respectively . the effective tax rate was 47 % and 30 % for tax expense in 2017 and 2016 , respectively . excluding the $ 16.7 million charge related to the revaluation of deferred tax assets , the effective tax rate for 2017 would have been 31 % . we ordinarily generate an annual effective tax rate that is less than the statutory rate of 35 % due to benefits resulting from tax-exempt interest , income from bank owned life insurance and tax benefits associated with low income housing tax credits , which are relatively consistent regardless of the level of pretax income . 33 financial condition first commonwealth 's total assets increased $ 624.5 million in 2017 . loans , including loans held for sale , increased $ 535.8 million , or 11 % , while investments increased $ 2.3 million , or less than 1 % . loan growth in 2017 was impacted by $ 383.1 million of loans acquired as part of the dcb financial acquisition , including $ 44.8 million in commercial , financial , agricultural and other , $ 25.2 million in real estate construction , $ 197.5 million in residential real estate , $ 109.8 million in commercial real estate and $ 5.8 million in loans to individuals . during 2017 , approximately $ 343.5 million in investment securities were sold , called or matured . some of these securities were lower yielding securities and as such , their replacement contributed to the increase in yield earned on the portfolio . in total , $ 241.1 million in mortgage-backed securities , $ 10.0 million in corporate securities and $ 2.0 million in municipal securities were purchased in 2017 to help increase earnings from the portfolio while maintaining a reduced risk profile . first commonwealth 's total liabilities increased $ 486.3 million , or 8 % , in 2017 . deposits increased $ 633.3 million , or 13 % , largely due

liquidity liquidity refers to our ability to meet the cash flow requirements of depositors and borrowers as well as our operating cash needs with cost-effective funding . liquidity risk arises from the possibility that we may not be able to meet our financial obligations and operating cash needs or may become overly reliant upon external funding sources . in order to manage this risk , our board of directors has established a liquidity policy that identifies primary sources of liquidity , establishes procedures for monitoring and measuring liquidity and quantifies minimum liquidity requirements based on limits approved by our board of directors . this policy designates our asset/liability committee ( “ alco ” ) as the body responsible for meeting these objectives . the alco , which includes members of executive management , reviews liquidity on a periodic basis and approves significant changes in strategies that affect balance sheet or cash flow positions . liquidity is centrally managed on a daily basis by our treasury department , which monitors it by using such measures as a 30 day liquidity stress analysis , liquidity gap ratios and noncore funding ratios . we generate funds to meet our cash flow needs primarily through the core deposit base of fcb and the maturity or repayment of loans and other interest-earning assets , including investments . core deposits are the most stable source of liquidity a bank can have due to the long-term relationship with a deposit customer . the level of deposits during any period is sometimes influenced by factors outside of management 's control , such as the level of short-term and long-term market interest rates and yields offered on competing investments , such as money market mutual funds .


 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 liquidity refers to our ability to meet the cash flow requirements of depositors and borrowers as well as our operating cash needs with cost-effective funding . liquidity risk arises from the possibility that we may not be able to meet our financial obligations and operating cash needs or may become overly reliant upon external funding sources . in order to manage this risk , our board of directors has established a liquidity policy that identifies primary sources of liquidity , establishes procedures for monitoring and measuring liquidity and quantifies minimum liquidity requirements based on limits approved by our board of directors . this policy designates our asset/liability committee ( “ alco ” ) as the body responsible for meeting these objectives . the alco , which includes members of executive management , reviews liquidity on a periodic basis and approves significant changes in strategies that affect balance sheet or cash flow positions . liquidity is centrally managed on a daily basis by our treasury department , which monitors it by using such measures as a 30 day liquidity stress analysis , liquidity gap ratios and noncore funding ratios . we generate funds to meet our cash flow needs primarily through the core deposit base of fcb and the maturity or repayment of loans and other interest-earning assets , including investments . core deposits are the most stable source of liquidity a bank can have due to the long-term relationship with a deposit customer . the level of deposits during any period is sometimes influenced by factors outside of management 's control , such as the level of short-term and long-term market interest rates and yields offered on competing investments , such as money market mutual funds .
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 Suspicious Activity Report : allowance for credit losses we account for the credit risk associated with our lending activities through the allowance and provision for credit losses . the allowance represents management 's best estimate of probable losses that have been incurred in our existing loan portfolio as of the balance sheet date . the provision is a periodic charge to earnings in an amount necessary to maintain the allowance at a level that is appropriate based on management 's assessment of probable estimated losses . management determines and reviews with the board of directors the adequacy of the allowance on a quarterly basis in accordance with the methodology described below . 25 individual loans are selected for review in accordance with financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) topic 310 , “ receivables . ” these are generally large balance commercial loans and commercial mortgages that are rated less than “ satisfactory ” based on our internal credit-rating process . we assess whether the loans identified for review in step one are “ impaired , ” which means that it is probable that all amounts will not be collected according to the contractual terms of the loan agreement , which generally represents loans that management has placed on nonaccrual status . for impaired loans we calculate the estimated fair value of the loans that are selected for review based on observable market prices , discounted cash flows or the value of the underlying collateral and record an allowance if needed . we then select pools of homogeneous smaller balance loans , having similar risk characteristics , as well as unimpaired larger commercial loans , that have similar risk characteristics , for evaluation collectively under the provisions of fasb asc topic 450 , “ contingencies . ” these smaller balance loans generally include residential mortgages , consumer loans , installment loans and some commercial loans . fasb asc topic 450 loans are segmented into groups with similar characteristics and an allowance for credit losses is allocated to each segment based on recent loss history and other relevant information . we then review the results to determine the appropriate balance of the allowance for credit losses . this review includes consideration of additional factors , such as the mix of loans in the portfolio , the balance of the allowance relative to total loans and nonperforming assets , trends in the overall risk profile in the portfolio , trends in delinquencies and nonaccrual loans , and local and national economic information and industry data , including trends in the industries we believe are higher risk . there are many factors affecting the allowance for credit losses ; some are quantitative , while others require qualitative judgment . these factors require the use of estimates related to the amount and timing of expected future cash flows , appraised values on impaired loans , estimated losses for each loan category based on historical loss experience by category , loss emergence periods for each loan category and consideration of current economic trends and conditions , all of which may be susceptible to significant judgment and change . to the extent that actual outcomes differ from estimates , additional provisions for credit losses could be required that could adversely affect our earnings or financial position in future periods . the loan portfolio represents the largest asset category on our consolidated statements of financial condition . fair values of financial instruments fasb asc topic 820 , “ fair value measurements and disclosures , ” establishes a framework for measuring fair value . in accordance with fasb asc topic 820 , first commonwealth groups financial assets and financial liabilities measured at fair value into three levels based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value . level 1 valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities . level 2 valuations are for instruments that trade in less active dealer or broker markets and incorporate values obtained for identical or comparable instruments . level 3 valuations are derived from other valuation methodologies , including option pricing models , discounted cash flow models and similar techniques , and not based on market exchange , dealer or broker traded transactions . level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to each instrument . level 2 investment securities are valued by a recognized third party pricing service using observable inputs . management validates the market values provided by the third party service by having another recognized pricing service price 100 % of securities on an annual basis and a random sample of securities each quarter , monthly monitoring of variances from prior period pricing and on a monthly basis evaluating pricing changes compared to expectations based on changes in the financial markets . level 3 investments include pooled trust preferred collateralized debt obligations . the fair values of these investments are determined by a specialized third party valuation service . management validates the fair value of the pooled trust preferred collateralized debt obligations by monitoring the performance of the underlying collateral , discussing the discount rate , cash flow assumptions and general market trends with the specialized third party and by confirming changes in the underlying collateral to the trustee and underwriter reports . management 's monitoring of the underlying collateral includes deferrals of interest payments , payment defaults , cures of previously deferred interest payments , any regulatory filings or actions and general news related to the underlying collateral . management also evaluates fair value changes compared to expectations based on changes in the interest rates used in determining the discount rate and general financial markets . story_separator_special_tag the most notable change is a $ 4.4 million increase in net securities gains ( losses ) due to the early redemption of two of our pooled trust preferred securities . the majority of this increase is the result of a successful auction call completed on pretsl xiii , a pooled trust preferred security on which other-than-temporary impairment charges were recognized in 2009 and 2010. as a result , the security was called at par resulting in a gain of $ 4.3 million . additionally , the liquidation of pretsl vii provided for a gain of $ 0.7 million . the gain on sale of mortgage loans increased $ 1.3 million due to continued growth in mortgage loan originations since the company reentered the secondary mortgage market . the derivatives mark to market decreased $ 0.7 million . this reflects a change in fair value due to movements in corporate bond spreads and not a realized loss on the swaps . if the company 's total assets would equal or exceed $ 10 billion we would no longer qualify for exemption from the interchange fee cap included in the dodd-frank act . the estimated impact of this change would decrease interchange income by $ 7.6 million . 32 noninterest expense the components of noninterest expense for each year in the three-year period ended december 31 are as follows : replace_table_token_11_th noninterest expense , excluding the loss on sale or write-down of assets , litigation and operational losses , and merger and acquisition related expense , increased $ 32.0 million , or 21 % , for the year ended 2017 compared to 2016 . contributing to the 2017 increase is a $ 16.6 million increase in salaries and employee benefits primarily due to an increase of 98 full-time equivalent employees at december 31 , 2017 compared to december 31 , 2016 . the higher number of employees is a result of the acquisition of 13 branches from firstmerit in december 2016 , the acquisition of dcb financial in april 2017 and the continued expansion of our mortgage and commercial banking businesses in ohio . also contributing to the increase in salaries and employee benefits was $ 2.5 million of expense for a one-time bonus of $ 1,500 paid to all full and part-time employees ( other than the top five named executive officers ) following the passage of the tax cuts and jobs act . the two noted acquisitions also accounted for all of the $ 2.5 million increase in net occupancy expense , $ 1.0 million of the increase in furniture and equipment expense and all of the $ 2.5 million increase in intangible amortization . other operating expense increased $ 5.5 million for the year 2017 compared to 2016 , primarily due to a $ 1.4 million increase in expense related to the reserve for unfunded loan commitments , a $ 1.7 million increase in data processing expense primarily relates to additional volume associated with increased debit cards and card usage as well as an increase in usage of digital channels . merger related expenses totaled $ 10.2 million and $ 3.2 million for the years 2017 and 2016 , respectively . expenses in 2017 reflect one-time expenses related to the acquisition of dcb financial while expenses in 2016 reflect those expenses related to the acquisition of 13 firstmerit branches . merger expense in 2015 relates to the acquisition of first community bank . income tax the provision for income taxes of $ 48.6 million in 2017 reflects an increase of $ 22.9 million compared to the provision for income taxes in 2016 . the majority of this change , $ 16.7 million , relates to a non-cash charge recorded for the revaluation of deferred tax assets in connection with the passage of the tax cuts and jobs act . the remaining increase in the provision for income taxes relates to the increase in the level of pretax income of $ 103.7 million and $ 85.2 million for 2017 and 2016 , respectively . the effective tax rate was 47 % and 30 % for tax expense in 2017 and 2016 , respectively . excluding the $ 16.7 million charge related to the revaluation of deferred tax assets , the effective tax rate for 2017 would have been 31 % . we ordinarily generate an annual effective tax rate that is less than the statutory rate of 35 % due to benefits resulting from tax-exempt interest , income from bank owned life insurance and tax benefits associated with low income housing tax credits , which are relatively consistent regardless of the level of pretax income . 33 financial condition first commonwealth 's total assets increased $ 624.5 million in 2017 . loans , including loans held for sale , increased $ 535.8 million , or 11 % , while investments increased $ 2.3 million , or less than 1 % . loan growth in 2017 was impacted by $ 383.1 million of loans acquired as part of the dcb financial acquisition , including $ 44.8 million in commercial , financial , agricultural and other , $ 25.2 million in real estate construction , $ 197.5 million in residential real estate , $ 109.8 million in commercial real estate and $ 5.8 million in loans to individuals . during 2017 , approximately $ 343.5 million in investment securities were sold , called or matured . some of these securities were lower yielding securities and as such , their replacement contributed to the increase in yield earned on the portfolio . in total , $ 241.1 million in mortgage-backed securities , $ 10.0 million in corporate securities and $ 2.0 million in municipal securities were purchased in 2017 to help increase earnings from the portfolio while maintaining a reduced risk profile . first commonwealth 's total liabilities increased $ 486.3 million , or 8 % , in 2017 . deposits increased $ 633.3 million , or 13 % , largely due

