because the company intentionally decreased assets for the three years prior to 2016 as it was resolving problem assets and attempting to improve capital ratios , as well as declines in yields on earning assets , net interest income declined from $ 13,018,000 in 2014 to $ 12,637,000 in 2015. with improved capital ratios and asset quality in 2016 , the company 's asset strategy changed to one of growth , with interest earning assets increasing by $ 7,765,000. this increase in interest earning assets as well as an increase of 0.05 % ( 5 basis points ) on their yield , combined with a decline in interest bearing liabilities of $ 11,365,000 and a 0.05 % ( 5 basis points ) decline in their cost , increased net interest income to $ 13,380,000 in 2016. 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 , 2016 and 2015 , and results of operations for the company for the years ended december 31 , 2016 , 2015 and 2014. this discussion should be read in conjunction with the company 's audited financial statements and the notes thereto appearing elsewhere in this annual report . 21 the following table sets forth selected financial ratios : replace_table_token_2_th ( 1 ) return on average assets and return on average equity for 2016 were positively impacted by the reversal in the third quarter of 2016 of an $ 11,997,000 valuation allowance previously recorded against the net deferred tax asset . ( 2 ) net interest margin is computed by dividing net interest income for the period by average interest earning assets . ( 3 ) efficiency ratio is computed by dividing noninterest expense by the sum of net interest income and noninterest income . ( 4 ) student loans are guaranteed by the department of education for approximately 98 % of principal and interest and are evaluated separately for alll . such ratios are not measurements under accounting principles generally accepted in the united states ( “ gaap ” ) and are not intended to be a substitute for our balance sheet or income statement prepared in accordance with gaap . income statement analysis summary we recorded net income of $ 13,513,000 and net income available to common shareholders of $ 12,776,000 or $ 8.99 in 2016 compared to income of $ 646,000 and net income available to common shareholders of $ 6,591,000 or $ 5.49 per fully diluted share in 2015 and a net loss of $ 1,037,000 and a net loss available to common shareholders of $ 2,473,000 , or $ ( 7.39 ) per fully diluted share , in 2014. net income and net income available to common shareholders for the year ended december 31 , 2016 were positively impacted by the reversal in the third quarter of 2016 of an $ 11,997,000 valuation allowance previously recorded against the net deferred tax asset . netting this reversal against income tax expense for 2016 of $ 825,000 resulted in an income tax benefit of $ 11,172,000 for the year ended december 31 , 2016. net income available to common shareholders for the year ended december 31 , 2015 was positively impacted by the forgiveness of principal and dividends on preferred stock amounting to $ 6,619,000 associated with the rights offering to shareholders and concurrent standby offering completed in march 2015 . 22 there were significant changes in income and expense items when comparing the 2016 and 2015 results and 2015 to 2014. these changes are listed in the following table ( in thousands ) : replace_table_token_3_th 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_4_th 23 the increase in net interest income of $ 743,000 in 2016 was a result of positive movements in both interest income and interest expense . interest income increased by $ 485,000 with interest income on loans increasing by $ 706,000 offset by a decrease in interest income on investments of $ 261,000. the increase in interest income on loans was attributable to an increase in average loans outstanding of $ 27,388,000. the decline in interest income on securities was due to a decline in average investment securities of $ 10,619,000 as we sold securities to reduce our exposure to interest rate changes . interest expense declined by $ 258,000 primarily as a result of a decline in average interest bearing liabilities of $ 11,365,000. replace_table_token_5_th the decline in net interest income of $ 381,000 in 2015 was a result of declines in both interest income and interest expense . interest income declined by $ 1,074,000 in 2015 primarily due to a decline of 0.24 story_separator_special_tag the company recorded franchise tax expense of approximately $ 75,000 for the year ended december 31 , 2016. due to the company 's adjusted capital level we were not subject to franchise tax expense for the years ended december 31 , 2015 and 2014. during 2016 , the internal revenue service completed an examination of the company 's federal income tax return for the year ended december 31 , 2013. no changes to the return were proposed . balance sheet analysis investment securities at december 31 , 2016 and 2015 , all of our investment securities were classified as available for sale . investment securities classified as available for sale may be sold in the future , prior to maturity . these securities are carried at fair value . net aggregate unrealized gains or losses on these securities are included , net of taxes , as a component of shareholders ' equity . given the generally high credit quality of the portfolio , management expects to realize all of its investment upon market recovery or the maturity of such instruments , and thus believes that any impairment in value is interest rate related and therefore temporary . available for sale securities included net unrealized losses of $ 275,000 and $ 665,000 at december 31 , 2016 and 2015 , respectively . as of december 31 , 2016 , management does not have the intent to sell any of the securities classified as available for sale and which have unrealized losses , and believes that it is more likely than not that the company will not have to sell any such securities before a recovery of cost . the company sold approximately $ 22 million and $ 8 million of investment securities available for sale at a gain of $ 162,000 and $ 6,000 in 2016 and 2015 , respectively . the sale of these securities , which had fixed interest rates , allowed the company to decrease its exposure to the anticipated upward movement in interest rates that would result in unrealized losses being recognized in shareholders ' equity . in november and december 2016 , the company purchased approximately $ 18 million in investment securities available for sale to invest liquidity in higher yielding assets . the securities purchased have durations of less than five years to minimize exposure to upward movement in interest rates and , in some cases , have returning cash flows that can be reinvested should interest rates rise . 32 the following table presents the composition of our investment portfolio at the dates indicated ( in thousands ) . replace_table_token_14_th loans one of management 's objectives is to improve the quality of the loan portfolio . the company seeks to achieve this objective by maintaining rigorous underwriting standards coupled with regular evaluation of the creditworthiness of and the designation of lending limits for each borrower . the portfolio strategies include seeking industry , loan type and loan size diversification in order to minimize credit concentration risk . management also focuses on originating loans in markets with which the company is familiar . additionally , as a significant amount of the loan losses we have experienced in the past is attributable to construction and land development loans , our strategy has shifted from reducing this type of lending to closely manage the quality and concentration in these loan types . approximately 74 % of all loans are secured by mortgages on real property located principally in the commonwealth of virginia . we are much less reliant on real estate secured lending than was the case in 2012 when 90 % of our loan portfolio consisted of this type of lending . approximately 14 % of the loan portfolio consists of rehabilitated student loans purchased by the bank in 2016 , 2015 and 2014 ( see discussion following ) . commercial and industrial loans represented $ 39 million , or 11 % , of the portfolio at december 31 , 2016. loans in this category are typically made to individuals , small and medium-sized businesses and range between $ 250,000 and $ 2.5 million . based on underwriting standards , these loans may be secured in whole or in part by collateral such as liquid assets , accounts receivable , equipment , inventory , and real property . the collateral securing any loan may depend on the type of loan and may vary in value based on market conditions . the remainder of our loan portfolio is in consumer loans which represent less than 1 % of the total . the bank purchased one portfolio of rehabilitated student loans guaranteed by the doe totaling approximately $ 7 million on july 16 , 2016. the bank had previously purchased two portfolios totaling approximately $ 23 million in 2015 and two portfolios totaling approximately $ 33 million in 2014. the guarantee covers approximately 98 % of principal and accrued interest . the loans are serviced by a third-party servicer that specializes in handling the special needs of the doe student loan programs . the bank used excess liquidity to purchase the loans . 33 the following tables present the composition of our loan portfolio at the dates indicated and maturities of selected loans at december 31 , 2016 ( in thousands ) . replace_table_token_15_th replace_table_token_16_th 34 the company assigns risk rating classifications to its loans . these risk ratings are divided into the following groups : · risk rated 1 to 4 loans are considered of sufficient quality to preclude an adverse rating . these assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral ; · risk rated 5 loans are defined as having potential weaknesses that deserve management 's close attention ; · risk rated 6 loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged , if any ;

capital resources shareholders ' equity at december 31 , 2016 was $ 43,614,000 , compared to $ 30,359,000 at december 31 , 2015 and $ 19,058,000 at december 31 , 2014. the $ 13,254,000 increase in shareholders ' equity in 2016 is primarily due to net income for the year of $ 13,513,000 , which includes the reversal of the $ 11,977,000 valuation allowance previously recorded against the net deferred tax asset , offset by dividends on preferred stock of $ 737,000. the $ 11,301,000 increase in shareholders ' equity in 2015 is primarily due to the rights offering to shareholders and concurrent standby offering completed in march 2015. net cash proceeds from the offering amounted to $ 8,717,000. in addition , as part of the standby offering , $ 2,215,000 in accrued and unpaid dividends on our preferred stock was forgiven . shareholders ' equity was also increased by $ 646,000 from net income for the year and decreased by dividends on preferred stock of $ 674,000. on may 1 , 2009 , the company received a $ 14,738,000 investment by the united states department of the treasury under the tarp program . the tarp program is a voluntary program designed to provide capital for healthy banks to improve the flow of funds from banks to their customers . under the tarp program , the company issued to the treasury $ 14,738,000 of preferred stock and warrants to purchase 31,190 shares of the company 's common stock at a purchase price of $ 70.88 per share . the preferred stock issued by the company under the tarp program carried a 5 % dividend until may 1 , 2014 , and now carries a 9 % dividend . in november 2013 , the company participated in a successful auction of the company 's preferred stock securities by the u.s. treasury that resulted in the purchase of the securities by private and institutional investors . the u.s. treasury continues to own the warrants . this freed the company from some constraints and costs that were in place while the u.s. treasury held the securities .


 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 , 2016 was $ 43,614,000 , compared to $ 30,359,000 at december 31 , 2015 and $ 19,058,000 at december 31 , 2014. the $ 13,254,000 increase in shareholders ' equity in 2016 is primarily due to net income for the year of $ 13,513,000 , which includes the reversal of the $ 11,977,000 valuation allowance previously recorded against the net deferred tax asset , offset by dividends on preferred stock of $ 737,000. the $ 11,301,000 increase in shareholders ' equity in 2015 is primarily due to the rights offering to shareholders and concurrent standby offering completed in march 2015. net cash proceeds from the offering amounted to $ 8,717,000. in addition , as part of the standby offering , $ 2,215,000 in accrued and unpaid dividends on our preferred stock was forgiven . shareholders ' equity was also increased by $ 646,000 from net income for the year and decreased by dividends on preferred stock of $ 674,000. on may 1 , 2009 , the company received a $ 14,738,000 investment by the united states department of the treasury under the tarp program . the tarp program is a voluntary program designed to provide capital for healthy banks to improve the flow of funds from banks to their customers . under the tarp program , the company issued to the treasury $ 14,738,000 of preferred stock and warrants to purchase 31,190 shares of the company 's common stock at a purchase price of $ 70.88 per share . the preferred stock issued by the company under the tarp program carried a 5 % dividend until may 1 , 2014 , and now carries a 9 % dividend . in november 2013 , the company participated in a successful auction of the company 's preferred stock securities by the u.s. treasury that resulted in the purchase of the securities by private and institutional investors . the u.s. treasury continues to own the warrants . this freed the company from some constraints and costs that were in place while the u.s. treasury held the securities .
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 Suspicious Activity Report : because the company intentionally decreased assets for the three years prior to 2016 as it was resolving problem assets and attempting to improve capital ratios , as well as declines in yields on earning assets , net interest income declined from $ 13,018,000 in 2014 to $ 12,637,000 in 2015. with improved capital ratios and asset quality in 2016 , the company 's asset strategy changed to one of growth , with interest earning assets increasing by $ 7,765,000. this increase in interest earning assets as well as an increase of 0.05 % ( 5 basis points ) on their yield , combined with a decline in interest bearing liabilities of $ 11,365,000 and a 0.05 % ( 5 basis points ) decline in their cost , increased net interest income to $ 13,380,000 in 2016. 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 , 2016 and 2015 , and results of operations for the company for the years ended december 31 , 2016 , 2015 and 2014. this discussion should be read in conjunction with the company 's audited financial statements and the notes thereto appearing elsewhere in this annual report . 21 the following table sets forth selected financial ratios : replace_table_token_2_th ( 1 ) return on average assets and return on average equity for 2016 were positively impacted by the reversal in the third quarter of 2016 of an $ 11,997,000 valuation allowance previously recorded against the net deferred tax asset . ( 2 ) net interest margin is computed by dividing net interest income for the period by average interest earning assets . ( 3 ) efficiency ratio is computed by dividing noninterest expense by the sum of net interest income and noninterest income . ( 4 ) student loans are guaranteed by the department of education for approximately 98 % of principal and interest and are evaluated separately for alll . such ratios are not measurements under accounting principles generally accepted in the united states ( “ gaap ” ) and are not intended to be a substitute for our balance sheet or income statement prepared in accordance with gaap . income statement analysis summary we recorded net income of $ 13,513,000 and net income available to common shareholders of $ 12,776,000 or $ 8.99 in 2016 compared to income of $ 646,000 and net income available to common shareholders of $ 6,591,000 or $ 5.49 per fully diluted share in 2015 and a net loss of $ 1,037,000 and a net loss available to common shareholders of $ 2,473,000 , or $ ( 7.39 ) per fully diluted share , in 2014. net income and net income available to common shareholders for the year ended december 31 , 2016 were positively impacted by the reversal in the third quarter of 2016 of an $ 11,997,000 valuation allowance previously recorded against the net deferred tax asset . netting this reversal against income tax expense for 2016 of $ 825,000 resulted in an income tax benefit of $ 11,172,000 for the year ended december 31 , 2016. net income available to common shareholders for the year ended december 31 , 2015 was positively impacted by the forgiveness of principal and dividends on preferred stock amounting to $ 6,619,000 associated with the rights offering to shareholders and concurrent standby offering completed in march 2015 . 22 there were significant changes in income and expense items when comparing the 2016 and 2015 results and 2015 to 2014. these changes are listed in the following table ( in thousands ) : replace_table_token_3_th 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_4_th 23 the increase in net interest income of $ 743,000 in 2016 was a result of positive movements in both interest income and interest expense . interest income increased by $ 485,000 with interest income on loans increasing by $ 706,000 offset by a decrease in interest income on investments of $ 261,000. the increase in interest income on loans was attributable to an increase in average loans outstanding of $ 27,388,000. the decline in interest income on securities was due to a decline in average investment securities of $ 10,619,000 as we sold securities to reduce our exposure to interest rate changes . interest expense declined by $ 258,000 primarily as a result of a decline in average interest bearing liabilities of $ 11,365,000. replace_table_token_5_th the decline in net interest income of $ 381,000 in 2015 was a result of declines in both interest income and interest expense . interest income declined by $ 1,074,000 in 2015 primarily due to a decline of 0.24 story_separator_special_tag the company recorded franchise tax expense of approximately $ 75,000 for the year ended december 31 , 2016. due to the company 's adjusted capital level we were not subject to franchise tax expense for the years ended december 31 , 2015 and 2014. during 2016 , the internal revenue service completed an examination of the company 's federal income tax return for the year ended december 31 , 2013. no changes to the return were proposed . balance sheet analysis investment securities at december 31 , 2016 and 2015 , all of our investment securities were classified as available for sale . investment securities classified as available for sale may be sold in the future , prior to maturity . these securities are carried at fair value . net aggregate unrealized gains or losses on these securities are included , net of taxes , as a component of shareholders ' equity . given the generally high credit quality of the portfolio , management expects to realize all of its investment upon market recovery or the maturity of such instruments , and thus believes that any impairment in value is interest rate related and therefore temporary . available for sale securities included net unrealized losses of $ 275,000 and $ 665,000 at december 31 , 2016 and 2015 , respectively . as of december 31 , 2016 , management does not have the intent to sell any of the securities classified as available for sale and which have unrealized losses , and believes that it is more likely than not that the company will not have to sell any such securities before a recovery of cost . the company sold approximately $ 22 million and $ 8 million of investment securities available for sale at a gain of $ 162,000 and $ 6,000 in 2016 and 2015 , respectively . the sale of these securities , which had fixed interest rates , allowed the company to decrease its exposure to the anticipated upward movement in interest rates that would result in unrealized losses being recognized in shareholders ' equity . in november and december 2016 , the company purchased approximately $ 18 million in investment securities available for sale to invest liquidity in higher yielding assets . the securities purchased have durations of less than five years to minimize exposure to upward movement in interest rates and , in some cases , have returning cash flows that can be reinvested should interest rates rise . 32 the following table presents the composition of our investment portfolio at the dates indicated ( in thousands ) . replace_table_token_14_th loans one of management 's objectives is to improve the quality of the loan portfolio . the company seeks to achieve this objective by maintaining rigorous underwriting standards coupled with regular evaluation of the creditworthiness of and the designation of lending limits for each borrower . the portfolio strategies include seeking industry , loan type and loan size diversification in order to minimize credit concentration risk . management also focuses on originating loans in markets with which the company is familiar . additionally , as a significant amount of the loan losses we have experienced in the past is attributable to construction and land development loans , our strategy has shifted from reducing this type of lending to closely manage the quality and concentration in these loan types . approximately 74 % of all loans are secured by mortgages on real property located principally in the commonwealth of virginia . we are much less reliant on real estate secured lending than was the case in 2012 when 90 % of our loan portfolio consisted of this type of lending . approximately 14 % of the loan portfolio consists of rehabilitated student loans purchased by the bank in 2016 , 2015 and 2014 ( see discussion following ) . commercial and industrial loans represented $ 39 million , or 11 % , of the portfolio at december 31 , 2016. loans in this category are typically made to individuals , small and medium-sized businesses and range between $ 250,000 and $ 2.5 million . based on underwriting standards , these loans may be secured in whole or in part by collateral such as liquid assets , accounts receivable , equipment , inventory , and real property . the collateral securing any loan may depend on the type of loan and may vary in value based on market conditions . the remainder of our loan portfolio is in consumer loans which represent less than 1 % of the total . the bank purchased one portfolio of rehabilitated student loans guaranteed by the doe totaling approximately $ 7 million on july 16 , 2016. the bank had previously purchased two portfolios totaling approximately $ 23 million in 2015 and two portfolios totaling approximately $ 33 million in 2014. the guarantee covers approximately 98 % of principal and accrued interest . the loans are serviced by a third-party servicer that specializes in handling the special needs of the doe student loan programs . the bank used excess liquidity to purchase the loans . 33 the following tables present the composition of our loan portfolio at the dates indicated and maturities of selected loans at december 31 , 2016 ( in thousands ) . replace_table_token_15_th replace_table_token_16_th 34 the company assigns risk rating classifications to its loans . these risk ratings are divided into the following groups : · risk rated 1 to 4 loans are considered of sufficient quality to preclude an adverse rating . these assets generally are well protected by the current net worth and paying capacity of the obligor or by the value of the asset or underlying collateral ; · risk rated 5 loans are defined as having potential weaknesses that deserve management 's close attention ; · risk rated 6 loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged , if any ;

