any forward-looking statement speaks only as of the date on which it is made , and the company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made . in addition , past results of operations are not necessarily indicative of future results . general the company 's primary source of earnings is net interest income , and its principal market risk exposure is interest rate risk . the company is not able to predict market interest rate fluctuations and its asset/liability management strategy may not prevent interest rate changes from having a material adverse effect on the company 's results of operations and financial condition . although we endeavor to minimize the credit risk inherent in the company 's loan portfolio , we must necessarily make various assumptions and judgments about the collectability of the loan portfolio based on our experience and evaluation of economic conditions . if such assumptions or judgments prove to be incorrect , the current allowance for loan losses may not be sufficient to cover loan losses and additions to the allowance may be necessary , which would have a negative impact on net income . results of operations the following presents management 's discussion and analysis of the financial condition of the company at december 31 , 2018 and 2017 , and results of operations for the company for the years ended december 31 , 2018 and 2017. this discussion should be read in conjunction with the company 's audited financial statements and the notes thereto appearing elsewhere in this annual report . summary the company recorded net income of $ 3,037,000 and net income available to common shareholders , which deducts from net income the dividends on preferred stock , of $ 2,924,000 , or $ 2.04 per fully diluted share in 2018 , compared to a net loss of $ 3,096,000 and net loss available to common shareholders of $ 3,594,000 , or ( $ 2.55 ) per fully diluted share in 2017. the company 's results for the year ended december 31 , 2017 were significantly impacted by a reduction in the corporate tax rate . on december 22 , 2017 , the president signed into law the tax reform act . the tax reform act includes a number of changes in existing tax law impacting businesses . one of the most significant changes is a permanent reduction in the corporate income tax rate from 35 % to 21 % . the rate reduction took effect on january 1 , 2018. accounting principles generally accepted in the united states of america ( “ gaap ” ) require companies to re-value their deferred tax assets and liabilities as of the date of enactment , with resulting tax effects accounted for in the reporting period of enactment . as of december 31 , 2017 , the company had net deferred tax assets of $ 11 million . the company recorded a re-valuation of its deferred tax assets and liabilities as of december 31 , 2017 , at the new rate of 21 % , based upon balances in existence at date of enactment . as a result , the company 's net deferred tax assets were written down by approximately $ 4,181,000 in the fourth quarter of 2017 with a corresponding increase in tax expense . this write down decreased earnings per share for the year by $ 2.96. although the tax reform act had a significant negative impact on the company 's earnings for 2017 because of the re-valuation of its deferred tax assets and liabilities , the reduction in the corporate tax rate to 21 % had a positive benefit to the company in 2018 and is expected to have a continued positive benefit in future periods . 31 net interest income net interest income , which represents the difference between interest earned on interest-earning assets and interest incurred on interest-bearing liabilities , is the company 's primary source of earnings . net interest income can be affected by changes in market interest rates as well as the level and composition of assets , liabilities and shareholders ' equity . net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities . the net yield on interest-earning assets ( “ net interest margin ” ) is calculated by dividing tax equivalent net interest income by average interest-earning assets . generally , the net interest margin will exceed the net interest spread because a portion of interest-earning assets are funded by various noninterest-bearing sources , principally noninterest-bearing deposits and shareholders ' equity . replace_table_token_1_th the increase in net interest income of $ 2,583,000 for the year ended december 31 , 2018 was a result of positive movements in interest income . interest income increased $ 3,770,000 with interest income on loans held for investment increasing $ 3,434,000 and interest income on investments increasing by $ 311,000. the increase in interest income on loans held for investment was attributable to an increase in average loans outstanding of $ 54,285,000 and an increase in the yield of 22 basis points . the increase in interest income on securities was due to an increase in average investment securities of $ 1,234,000 and an increase in the yield of 62 basis points . interest expense increased by $ 1,187,000 because of an increase in average interest bearing liabilities of $ 32,225,000 and an increase in the cost of interest bearing liabilities of 26 basis points . the following table illustrates average balances of total interest-earning assets and total interest-bearing liabilities for the periods indicated , showing the average distribution of assets , liabilities , shareholders ' equity and related income , expense and corresponding weighted-average yields and rates ( dollars in thousands ) . the average balances used in these tables and other statistical data were calculated using daily average balances . story_separator_special_tag if the evaluation shows that a loan is individually impaired , then a specific reserve is established for the amount of impairment . loans are grouped by similar characteristics , including the type of loan , the assigned loan classification and the general collateral type . a loss rate reflecting the expected loss inherent in a group of loans is derived based upon historical net charge-off rates , the predominant collateral type for the group and the terms of the loan . the resulting estimate of losses for groups of loans is adjusted for relevant environmental factors and other conditions of the portfolio of loans and leases , including : borrower and industry concentrations ; levels and trends in delinquencies , charge-offs and recoveries ; changes in underwriting standards and risk selection ; level of experience , ability and depth of lending management ; and national and local economic conditions . the amounts of estimated impairment for individually evaluated loans and groups of loans are added together for a total estimate of loan losses . this estimate of losses is compared to our allowance for loan losses as of the evaluation date and , if the estimate of losses is greater than the allowance , an additional provision to the allowance would be made . if the estimate of losses is less than the allowance , the degree to which the allowance exceeds the estimate is evaluated to determine whether the allowance falls outside a range of estimates . we recognize the inherent imprecision in estimates of losses due to various uncertainties and variability related to the factors used , and therefore a reasonable range around the estimate of losses is derived and used to ascertain whether the allowance is too high . if different assumptions or conditions were to prevail and it is determined that the allowance is not adequate to absorb the new estimate of probable losses , an additional provision for loan losses would be made , which amount may be material to the financial statements . 44 troubled debt restructurings a loan is accounted for as a troubled debt restructuring if we , for economic or legal reasons , grant a concession to a borrower considered to be experiencing financial difficulties that we would not otherwise consider . a troubled debt restructuring may involve the receipt of assets from the debtor in partial or full satisfaction of the loan , or a modification of terms such as a reduction of the stated interest rate or balance of the loan , a reduction of accrued interest , an extension of the maturity date or renewal of the loan at a stated interest rate lower than the current market rate for a new loan with similar risk , or some combination of these concessions . troubled debt restructurings can be in either accrual or nonaccrual status . nonaccrual troubled debt restructurings are included in nonperforming loans . accruing troubled debt restructurings are generally excluded from nonperforming loans as it is considered probable that all contractual principal and interest due under the restructured terms will be collected . troubled debt restructurings generally remain categorized as nonperforming loans and leases until a six-month payment history has been maintained . in accordance with current accounting guidance , loans modified as troubled debt restructurings are , by definition , considered to be impaired loans . impairment for these loans is measured on a loan-by-loan basis similar to other impaired loans as described above under allowance for loan losses . certain loans modified as troubled debt restructurings may have been previously measured for impairment under a general allowance methodology ( i.e . , pooling ) , thus at the time the loan is modified as a troubled debt restructuring the allowance will be impacted by the difference between the results of these two measurement methodologies . loans modified as troubled debt restructurings that subsequently default are factored into the determination of the allowance in the same manner as other defaulted loans . other real estate owned other real estate owned represents properties acquired through foreclosure or physical possession . write-downs to fair value of foreclosed assets less estimate costs to sell at the time of transfer are charged to allowance for loan losses . subsequent to foreclosure , the company periodically evaluates the value of foreclosed assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs . if fair value declines subsequent to foreclosure a valuation allowance is recorded through expense . operating costs after acquisition are expensed as incurred . the valuation allowance was $ 52,000 and $ 281,000 at december 31 , 2018 and 2017 , respectively . fair value is based on an assessment of information available at the end of a reporting period and depends upon a number of factors , including historical experience , economic conditions , and issues specific to individual properties . the evaluation of these factors involves subjective estimates and judgments that may change . assets held for sale assets held for sale at december 31 , 2018 and december 31 , 2017 included a branch building we previously closed . the company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs . income taxes the company uses the asset and liability method of accounting for income taxes . under this method , deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled . if current available information raises doubt as to the realization of the deferred tax assets , a valuation allowance may be established .

capital resources shareholders ' equity at december 31 , 2018 was $ 37,133,000 , compared to $ 39,334,000 at december 31 , 2017. the $ 2,201,000 decrease in shareholders ' equity during 2018 is primarily due to the redemption of the company 's remaining 5,027 shares ( $ 5,027,000 redemption value ) of fixed rate cumulative perpetual preferred stock , series a on march 30 , 2018 which was offset by net income for the year of $ 3,037,000. the $ 4,280,000 decrease in shareholders ' equity in 2017 was primarily due to the reduction in the corporate tax rate . on december 22 , 2017 , the president signed into law the tax reform act . the tax reform act includes a number of changes in existing tax law impacting businesses . one of the most significant changes is a permanent reduction in the corporate income tax rate from 35 % to 21 % . the rate reduction took effect on january 1 , 2018. gaap requires companies to re-value their deferred tax assets and liabilities as of the date of enactment , with resulting tax effects accounted for in the reporting period of enactment . 41 the following table presents the composition of regulatory capital and the capital ratios for the bank at the dates indicated ( dollars in thousands ) . replace_table_token_12_th for more financial data and other information about capital resources refer to note 13 “ shareholders ' equity and regulatory matters ” and note 15 “ trust preferred securities ” in the “ notes to consolidated financial statements ” contained in item 8 of this form 10-k. liquidity liquidity represents the ability of a company to convert assets into cash or cash equivalents without significant loss , and the ability to raise additional funds by increasing liabilities . liquidity management involves monitoring our sources and uses of funds in order to meet our day-to-day cash flow requirements while maximizing profits . liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management control .


 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.
     ```capital resources shareholders ' equity at december 31 , 2018 was $ 37,133,000 , compared to $ 39,334,000 at december 31 , 2017. the $ 2,201,000 decrease in shareholders ' equity during 2018 is primarily due to the redemption of the company 's remaining 5,027 shares ( $ 5,027,000 redemption value ) of fixed rate cumulative perpetual preferred stock , series a on march 30 , 2018 which was offset by net income for the year of $ 3,037,000. the $ 4,280,000 decrease in shareholders ' equity in 2017 was primarily due to the reduction in the corporate tax rate . on december 22 , 2017 , the president signed into law the tax reform act . the tax reform act includes a number of changes in existing tax law impacting businesses . one of the most significant changes is a permanent reduction in the corporate income tax rate from 35 % to 21 % . the rate reduction took effect on january 1 , 2018. gaap requires companies to re-value their deferred tax assets and liabilities as of the date of enactment , with resulting tax effects accounted for in the reporting period of enactment . 41 the following table presents the composition of regulatory capital and the capital ratios for the bank at the dates indicated ( dollars in thousands ) . replace_table_token_12_th for more financial data and other information about capital resources refer to note 13 “ shareholders ' equity and regulatory matters ” and note 15 “ trust preferred securities ” in the “ notes to consolidated financial statements ” contained in item 8 of this form 10-k. liquidity liquidity represents the ability of a company to convert assets into cash or cash equivalents without significant loss , and the ability to raise additional funds by increasing liabilities . liquidity management involves monitoring our sources and uses of funds in order to meet our day-to-day cash flow requirements while maximizing profits . liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management control .
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 Suspicious Activity Report : any forward-looking statement speaks only as of the date on which it is made , and the company undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made . in addition , past results of operations are not necessarily indicative of future results . general the company 's primary source of earnings is net interest income , and its principal market risk exposure is interest rate risk . the company is not able to predict market interest rate fluctuations and its asset/liability management strategy may not prevent interest rate changes from having a material adverse effect on the company 's results of operations and financial condition . although we endeavor to minimize the credit risk inherent in the company 's loan portfolio , we must necessarily make various assumptions and judgments about the collectability of the loan portfolio based on our experience and evaluation of economic conditions . if such assumptions or judgments prove to be incorrect , the current allowance for loan losses may not be sufficient to cover loan losses and additions to the allowance may be necessary , which would have a negative impact on net income . results of operations the following presents management 's discussion and analysis of the financial condition of the company at december 31 , 2018 and 2017 , and results of operations for the company for the years ended december 31 , 2018 and 2017. this discussion should be read in conjunction with the company 's audited financial statements and the notes thereto appearing elsewhere in this annual report . summary the company recorded net income of $ 3,037,000 and net income available to common shareholders , which deducts from net income the dividends on preferred stock , of $ 2,924,000 , or $ 2.04 per fully diluted share in 2018 , compared to a net loss of $ 3,096,000 and net loss available to common shareholders of $ 3,594,000 , or ( $ 2.55 ) per fully diluted share in 2017. the company 's results for the year ended december 31 , 2017 were significantly impacted by a reduction in the corporate tax rate . on december 22 , 2017 , the president signed into law the tax reform act . the tax reform act includes a number of changes in existing tax law impacting businesses . one of the most significant changes is a permanent reduction in the corporate income tax rate from 35 % to 21 % . the rate reduction took effect on january 1 , 2018. accounting principles generally accepted in the united states of america ( “ gaap ” ) require companies to re-value their deferred tax assets and liabilities as of the date of enactment , with resulting tax effects accounted for in the reporting period of enactment . as of december 31 , 2017 , the company had net deferred tax assets of $ 11 million . the company recorded a re-valuation of its deferred tax assets and liabilities as of december 31 , 2017 , at the new rate of 21 % , based upon balances in existence at date of enactment . as a result , the company 's net deferred tax assets were written down by approximately $ 4,181,000 in the fourth quarter of 2017 with a corresponding increase in tax expense . this write down decreased earnings per share for the year by $ 2.96. although the tax reform act had a significant negative impact on the company 's earnings for 2017 because of the re-valuation of its deferred tax assets and liabilities , the reduction in the corporate tax rate to 21 % had a positive benefit to the company in 2018 and is expected to have a continued positive benefit in future periods . 31 net interest income net interest income , which represents the difference between interest earned on interest-earning assets and interest incurred on interest-bearing liabilities , is the company 's primary source of earnings . net interest income can be affected by changes in market interest rates as well as the level and composition of assets , liabilities and shareholders ' equity . net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities . the net yield on interest-earning assets ( “ net interest margin ” ) is calculated by dividing tax equivalent net interest income by average interest-earning assets . generally , the net interest margin will exceed the net interest spread because a portion of interest-earning assets are funded by various noninterest-bearing sources , principally noninterest-bearing deposits and shareholders ' equity . replace_table_token_1_th the increase in net interest income of $ 2,583,000 for the year ended december 31 , 2018 was a result of positive movements in interest income . interest income increased $ 3,770,000 with interest income on loans held for investment increasing $ 3,434,000 and interest income on investments increasing by $ 311,000. the increase in interest income on loans held for investment was attributable to an increase in average loans outstanding of $ 54,285,000 and an increase in the yield of 22 basis points . the increase in interest income on securities was due to an increase in average investment securities of $ 1,234,000 and an increase in the yield of 62 basis points . interest expense increased by $ 1,187,000 because of an increase in average interest bearing liabilities of $ 32,225,000 and an increase in the cost of interest bearing liabilities of 26 basis points . the following table illustrates average balances of total interest-earning assets and total interest-bearing liabilities for the periods indicated , showing the average distribution of assets , liabilities , shareholders ' equity and related income , expense and corresponding weighted-average yields and rates ( dollars in thousands ) . the average balances used in these tables and other statistical data were calculated using daily average balances . story_separator_special_tag if the evaluation shows that a loan is individually impaired , then a specific reserve is established for the amount of impairment . loans are grouped by similar characteristics , including the type of loan , the assigned loan classification and the general collateral type . a loss rate reflecting the expected loss inherent in a group of loans is derived based upon historical net charge-off rates , the predominant collateral type for the group and the terms of the loan . the resulting estimate of losses for groups of loans is adjusted for relevant environmental factors and other conditions of the portfolio of loans and leases , including : borrower and industry concentrations ; levels and trends in delinquencies , charge-offs and recoveries ; changes in underwriting standards and risk selection ; level of experience , ability and depth of lending management ; and national and local economic conditions . the amounts of estimated impairment for individually evaluated loans and groups of loans are added together for a total estimate of loan losses . this estimate of losses is compared to our allowance for loan losses as of the evaluation date and , if the estimate of losses is greater than the allowance , an additional provision to the allowance would be made . if the estimate of losses is less than the allowance , the degree to which the allowance exceeds the estimate is evaluated to determine whether the allowance falls outside a range of estimates . we recognize the inherent imprecision in estimates of losses due to various uncertainties and variability related to the factors used , and therefore a reasonable range around the estimate of losses is derived and used to ascertain whether the allowance is too high . if different assumptions or conditions were to prevail and it is determined that the allowance is not adequate to absorb the new estimate of probable losses , an additional provision for loan losses would be made , which amount may be material to the financial statements . 44 troubled debt restructurings a loan is accounted for as a troubled debt restructuring if we , for economic or legal reasons , grant a concession to a borrower considered to be experiencing financial difficulties that we would not otherwise consider . a troubled debt restructuring may involve the receipt of assets from the debtor in partial or full satisfaction of the loan , or a modification of terms such as a reduction of the stated interest rate or balance of the loan , a reduction of accrued interest , an extension of the maturity date or renewal of the loan at a stated interest rate lower than the current market rate for a new loan with similar risk , or some combination of these concessions . troubled debt restructurings can be in either accrual or nonaccrual status . nonaccrual troubled debt restructurings are included in nonperforming loans . accruing troubled debt restructurings are generally excluded from nonperforming loans as it is considered probable that all contractual principal and interest due under the restructured terms will be collected . troubled debt restructurings generally remain categorized as nonperforming loans and leases until a six-month payment history has been maintained . in accordance with current accounting guidance , loans modified as troubled debt restructurings are , by definition , considered to be impaired loans . impairment for these loans is measured on a loan-by-loan basis similar to other impaired loans as described above under allowance for loan losses . certain loans modified as troubled debt restructurings may have been previously measured for impairment under a general allowance methodology ( i.e . , pooling ) , thus at the time the loan is modified as a troubled debt restructuring the allowance will be impacted by the difference between the results of these two measurement methodologies . loans modified as troubled debt restructurings that subsequently default are factored into the determination of the allowance in the same manner as other defaulted loans . other real estate owned other real estate owned represents properties acquired through foreclosure or physical possession . write-downs to fair value of foreclosed assets less estimate costs to sell at the time of transfer are charged to allowance for loan losses . subsequent to foreclosure , the company periodically evaluates the value of foreclosed assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs . if fair value declines subsequent to foreclosure a valuation allowance is recorded through expense . operating costs after acquisition are expensed as incurred . the valuation allowance was $ 52,000 and $ 281,000 at december 31 , 2018 and 2017 , respectively . fair value is based on an assessment of information available at the end of a reporting period and depends upon a number of factors , including historical experience , economic conditions , and issues specific to individual properties . the evaluation of these factors involves subjective estimates and judgments that may change . assets held for sale assets held for sale at december 31 , 2018 and december 31 , 2017 included a branch building we previously closed . the company periodically evaluates the value of assets held for sale and records an impairment charge for any subsequent declines in fair value less selling costs . income taxes the company uses the asset and liability method of accounting for income taxes . under this method , deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled . if current available information raises doubt as to the realization of the deferred tax assets , a valuation allowance may be established .

