collectively , the registrant and its subsidiaries are referred to herein as “ the company . ” net interest margin is presented in this discussion on a fully taxable equivalent ( fte ) basis . average balances discussed are daily averages unless otherwise described . the audited consolidated financial statements and related notes as of december 31 , 2012 and 2011 and for each of the years in the three-year period ended december 31 , 2012 should be read in conjunction with this review . amounts in prior period consolidated financial statements are reclassified whenever necessary to conform to the 2012 presentation . 34 critical accounting policies the company has identified policies as being critical because they require management to make particularly difficult , subjective and or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions . these policies relate to the allowance for loan losses , pension accounting , other-than-temporary impairment , provision for income taxes and intangible assets . management of the company considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the uncertainty in evaluating the level of the allowance required to cover credit losses inherent in the loan portfolio and the material effect that such judgments can have on the results of operations . while management 's current evaluation of the allowance for loan losses indicates that the allowance is adequate , under adversely different conditions or assumptions , the allowance may need to be increased . for example , if historical loan loss experience significantly worsened or if current economic conditions significantly deteriorated , additional provision for loan losses would be required to increase the allowance . in addition , the assumptions and estimates used in the internal reviews of the company 's nonperforming loans and potential problem loans have a significant impact on the overall analysis of the adequacy of the allowance for loan losses . while management has concluded that the current evaluation of collateral values is reasonable under the circumstances , if collateral values were significantly lower , the company 's allowance for loan policy would also require additional provision for loan losses . management is required to make various assumptions in valuing its pension assets and liabilities . these assumptions include the expected rate of return on plan assets , the discount rate , and the rate of increase in future compensation levels . changes to these assumptions could impact earnings in future periods . the company takes into account the plan asset mix , funding obligations , and expert opinions in determining the various rates used to estimate pension expense . the company also considers the citigroup pension liability index , market interest rates and discounted cash flows in setting the appropriate discount rate . in addition , the company reviews expected inflationary and merit increases to compensation in determining the rate of increase in future compensation levels . management of the company considers the accounting policy relating to other-than-temporary impairment to be a critical accounting policy . management systematically evaluates certain assets for other-than-temporary declines in fair value , primarily investment securities . management considers historical values and current market conditions as a part of the assessment . the amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings and the amount of the total other-than-temporary impairment related to other factors is generally recognized in other comprehensive income , net of applicable taxes . the company is subject to examinations from various taxing authorities . such examinations may result in challenges to the tax return treatment applied by the company to specific transactions . management believes that the assumptions and judgments used to record tax-related assets or liabilities have been appropriate . should tax laws change or the taxing authorities determine that management 's assumptions were inappropriate , an adjustment may be required which could have a material effect on the company 's results of operations . as a result of acquisitions , the company has acquired goodwill and identifiable intangible assets . goodwill represents the cost of acquired companies in excess of the fair value of net assets at the acquisition date . goodwill is evaluated at least annually or when business conditions suggest that an impairment may have occurred . goodwill will be reduced to its carrying value through a charge to earnings if impairment exists . core deposits and other identifiable intangible assets are amortized to expense over their estimated useful lives . the determination of whether or not impairment exists is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows . it also requires them to select a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates , required equity market premiums and company-specific risk indicators , all of which are susceptible to change based on changes in economic conditions and other factors . future events or changes in the estimates used to determine the carrying value of goodwill and identifiable intangible assets could have a material impact on the company 's results of operations . 35 the company 's policies on the allowance for loan losses , pension accounting , provision for income taxes and intangible assets are disclosed in note 1 to the consolidated financial statements . a more detailed description of the allowance for loan losses is included in the “ risk management ” section of this form 10-k. all significant pension accounting assumptions , income tax assumptions , and intangible asset assumptions and detail are disclosed in notes 18 , 15 and 10 , respectively , to the consolidated financial statements . story_separator_special_tag 42 the average balance of securities held to maturity decreased from $ 81.6 million in 2011 to $ 65.6 million in 2012. at december 31 , 2012 , securities held to maturity were comprised primarily of tax-exempt municipal securities . the yield on securities held to maturity increased from 5.33 % in 2011 to 5.46 % in 2012. the average balance of frb and fhlb stock increased to $ 28.4 million in 2012 from $ 27.1 million in 2011 due in large part to the aforementioned acquisition of hampshire first . the yield from investments in frb and fhlb banks decreased from 5.13 % in 2011 to 4.86 % in 2012. replace_table_token_14_th in the available for sale category at december 31 , 2012 , federal agency securities were comprised of government-sponsored enterprise ( “ gse ” ) securities ; mortgaged-backed securities were comprised of gses with an amortized cost of $ 221.1 million and a fair value of $ 232.3 million and u.s. government agency securities with an amortized cost of $ 16.4 million and a fair value of $ 18.0 million ; collateralized mortgage obligations ( “ cmos ” ) were comprised of gses with an amortized cost of $ 399.2 million and a fair value of $ 403.6 million and us government agency securities with an amortized cost of $ 44.8 million and a fair value of $ 46.2 million . at december 31 , 2012 , all of the mortgaged-backed securities held to maturity were comprised of u.s. government agency securities . our mortgage backed securities , u.s. agency notes , and cmos are all “ prime/conforming ” and are guaranteed by fannie mae , freddie mac , the fhlb , the federal farm credit banks , or ginnie mae ( “ gnma ” ) . gnma securities are considered equivalent to u.s. treasury securities , as they are backed by the full faith and credit of the u.s. government . currently , there are no securities backed by subprime mortgages in our investment portfolio . 43 the following tables set forth information with regard to contractual maturities of debt securities at december 31 , 2012 : replace_table_token_15_th funding sources and corresponding interest expense the company utilizes traditional deposit products such as time , savings , now , money market , and demand deposits as its primary source for funding . other sources , such as short-term fhlb advances , federal funds purchased , securities sold under agreements to repurchase , brokered time deposits , and long-term fhlb borrowings are utilized as necessary to support the company 's growth in assets and to achieve interest rate sensitivity objectives . the average balance of interest-bearing liabilities increased $ 237.9 million from 2011 , totaling $ 4.1 billion in 2012. the rate paid on interest-bearing liabilities decreased from 1.03 % in 2011 to 0.86 % in 2012. this decrease in rates , offset by an increase in average balances , caused a decrease in interest expense of $ 4.5 million , or 11.4 % , from $ 39.7 million in 2011 to $ 35.2 million in 2012 . 44 deposits average interest bearing deposits increased $ 227.9 million , or 7.0 % , from 2011 to 2012 , due primarily to the acquisition of hampshire first in june 2012. average time deposits increased $ 79.8 million , or 8.7 % , during 2012 as compared to 2011. average money market deposits increased $ 46.6 million or 4.4 % during 2012 when compared to 2011. average now accounts increased $ 24.3 million or 3.6 % during 2012 as compared to 2011. the average balance of savings accounts increased $ 77.2 million or 12.8 % during 2012 when compared to 2011. the average balance of demand deposits increased $ 173.6 million , or 18.0 % , from $ 966.3 million in 2011 to $ 1.1 billion in 2012. this growth in demand deposits was driven principally by increases in accounts from retail , municipal , and commercial customers spurred by strategic expansion into new markets . the rate paid on average interest-bearing deposits decreased from 0.70 % during 2011 to 0.54 % in 2012. the decrease in the rate on interest-bearing deposits was driven primarily by pricing decreases from money market accounts and time deposits , which are sensitive to interest rate changes . the pricing decreases for these products resulted from the frb maintaining a historic low fed funds target rate as well as an overall decrease in all interest rates . the rate paid for money market deposit accounts decreased from 0.34 % during 2011 to 0.18 % during 2012. the rate paid for now accounts decreased from 0.34 % during 2011 to 0.26 % during 2012. the rate paid for savings deposits decreased from 0.11 % in 2011 to 0.08 % in 2012 and the rate paid on time deposits decreased from 1.80 % during 2011 to 1.45 % during 2012. the following table presents the maturity distribution of time deposits of $ 100,000 or more at december 31 : replace_table_token_16_th borrowings average short-term borrowings increased slightly to $ 165.7 million in 2012 from $ 154.0 million in 2011. the average rate paid on short-term borrowings decreased from 0.13 % in 2011 to 0.11 % in 2012 , which was primarily driven by the frb maintaining a historic low fed funds target rate of 0.25 % ( which directly impacts short-term borrowing rates ) . average long-term debt decreased from $ 370.0 million in 2011 to $ 368.3 million in 2012. the average balance of trust preferred debentures remained at $ 75.4 million in 2012 compared to 2011. the average rate paid for trust preferred debentures in 2012 was 2.29 % , down from 2.77 % in 2011. the decrease in rate on the trust preferred debentures is due primarily to the reset of interest rate terms in two trust preferred debentures to variable rate from fixed rate . the third trust preferred debenture reset to a variable

capital resources consistent with its goal to operate a sound and profitable financial institution , the company actively seeks to maintain a “ well-capitalized ” institution in accordance with regulatory standards . the principal source of capital to the company is earnings retention . the company 's capital measurements are in excess of both regulatory minimum guidelines and meet the requirements to be considered well-capitalized . the company 's principal source of funds to pay interest on trust preferred debentures and pay cash dividends to its shareholders are dividends from its subsidiaries . various laws and regulations restrict the ability of banks to pay dividends to their shareholders . generally , the payment of dividends by the company in the future as well as the payment of interest on the capital securities will require the generation of sufficient future earnings by its subsidiaries . the bank also is subject to substantial regulatory restrictions on its ability to pay dividends to the company . under occ regulations , the bank may not pay a dividend , without prior occ approval , if the total amount of all dividends declared during the calendar year , including the proposed dividend , exceeds the sum of its retained net income to date during the calendar year and its retained net income over the preceding two years . at december 31 , 2012 , approximately $ 21.3 million of the total stockholders ' equity of the bank was available for payment of dividends to the company without approval by the occ . the bank 's ability to pay dividends also is subject to the bank being in compliance with regulatory capital requirements . the bank is currently in compliance with these requirements . stock repurchase plan under previously disclosed stock repurchase plans , the company purchased 769,568 shares of its common stock during the year ended december 31 , 2012 , for a total of $ 15.5 million at an average price of $ 20.13 per share . at december 31 , 2012 , there were 748,013 shares available for repurchase under a previously disclosed repurchase plan , which expires on december 31 , 2013 .


 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 consistent with its goal to operate a sound and profitable financial institution , the company actively seeks to maintain a “ well-capitalized ” institution in accordance with regulatory standards . the principal source of capital to the company is earnings retention . the company 's capital measurements are in excess of both regulatory minimum guidelines and meet the requirements to be considered well-capitalized . the company 's principal source of funds to pay interest on trust preferred debentures and pay cash dividends to its shareholders are dividends from its subsidiaries . various laws and regulations restrict the ability of banks to pay dividends to their shareholders . generally , the payment of dividends by the company in the future as well as the payment of interest on the capital securities will require the generation of sufficient future earnings by its subsidiaries . the bank also is subject to substantial regulatory restrictions on its ability to pay dividends to the company . under occ regulations , the bank may not pay a dividend , without prior occ approval , if the total amount of all dividends declared during the calendar year , including the proposed dividend , exceeds the sum of its retained net income to date during the calendar year and its retained net income over the preceding two years . at december 31 , 2012 , approximately $ 21.3 million of the total stockholders ' equity of the bank was available for payment of dividends to the company without approval by the occ . the bank 's ability to pay dividends also is subject to the bank being in compliance with regulatory capital requirements . the bank is currently in compliance with these requirements . stock repurchase plan under previously disclosed stock repurchase plans , the company purchased 769,568 shares of its common stock during the year ended december 31 , 2012 , for a total of $ 15.5 million at an average price of $ 20.13 per share . at december 31 , 2012 , there were 748,013 shares available for repurchase under a previously disclosed repurchase plan , which expires on december 31 , 2013 .
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 Suspicious Activity Report : collectively , the registrant and its subsidiaries are referred to herein as “ the company . ” net interest margin is presented in this discussion on a fully taxable equivalent ( fte ) basis . average balances discussed are daily averages unless otherwise described . the audited consolidated financial statements and related notes as of december 31 , 2012 and 2011 and for each of the years in the three-year period ended december 31 , 2012 should be read in conjunction with this review . amounts in prior period consolidated financial statements are reclassified whenever necessary to conform to the 2012 presentation . 34 critical accounting policies the company has identified policies as being critical because they require management to make particularly difficult , subjective and or complex judgments about matters that are inherently uncertain and because of the likelihood that materially different amounts would be reported under different conditions or using different assumptions . these policies relate to the allowance for loan losses , pension accounting , other-than-temporary impairment , provision for income taxes and intangible assets . management of the company considers the accounting policy relating to the allowance for loan losses to be a critical accounting policy given the uncertainty in evaluating the level of the allowance required to cover credit losses inherent in the loan portfolio and the material effect that such judgments can have on the results of operations . while management 's current evaluation of the allowance for loan losses indicates that the allowance is adequate , under adversely different conditions or assumptions , the allowance may need to be increased . for example , if historical loan loss experience significantly worsened or if current economic conditions significantly deteriorated , additional provision for loan losses would be required to increase the allowance . in addition , the assumptions and estimates used in the internal reviews of the company 's nonperforming loans and potential problem loans have a significant impact on the overall analysis of the adequacy of the allowance for loan losses . while management has concluded that the current evaluation of collateral values is reasonable under the circumstances , if collateral values were significantly lower , the company 's allowance for loan policy would also require additional provision for loan losses . management is required to make various assumptions in valuing its pension assets and liabilities . these assumptions include the expected rate of return on plan assets , the discount rate , and the rate of increase in future compensation levels . changes to these assumptions could impact earnings in future periods . the company takes into account the plan asset mix , funding obligations , and expert opinions in determining the various rates used to estimate pension expense . the company also considers the citigroup pension liability index , market interest rates and discounted cash flows in setting the appropriate discount rate . in addition , the company reviews expected inflationary and merit increases to compensation in determining the rate of increase in future compensation levels . management of the company considers the accounting policy relating to other-than-temporary impairment to be a critical accounting policy . management systematically evaluates certain assets for other-than-temporary declines in fair value , primarily investment securities . management considers historical values and current market conditions as a part of the assessment . the amount of the total other-than-temporary impairment related to the credit loss is recognized in earnings and the amount of the total other-than-temporary impairment related to other factors is generally recognized in other comprehensive income , net of applicable taxes . the company is subject to examinations from various taxing authorities . such examinations may result in challenges to the tax return treatment applied by the company to specific transactions . management believes that the assumptions and judgments used to record tax-related assets or liabilities have been appropriate . should tax laws change or the taxing authorities determine that management 's assumptions were inappropriate , an adjustment may be required which could have a material effect on the company 's results of operations . as a result of acquisitions , the company has acquired goodwill and identifiable intangible assets . goodwill represents the cost of acquired companies in excess of the fair value of net assets at the acquisition date . goodwill is evaluated at least annually or when business conditions suggest that an impairment may have occurred . goodwill will be reduced to its carrying value through a charge to earnings if impairment exists . core deposits and other identifiable intangible assets are amortized to expense over their estimated useful lives . the determination of whether or not impairment exists is based upon discounted cash flow modeling techniques that require management to make estimates regarding the amount and timing of expected future cash flows . it also requires them to select a discount rate that reflects the current return requirements of the market in relation to present risk-free interest rates , required equity market premiums and company-specific risk indicators , all of which are susceptible to change based on changes in economic conditions and other factors . future events or changes in the estimates used to determine the carrying value of goodwill and identifiable intangible assets could have a material impact on the company 's results of operations . 35 the company 's policies on the allowance for loan losses , pension accounting , provision for income taxes and intangible assets are disclosed in note 1 to the consolidated financial statements . a more detailed description of the allowance for loan losses is included in the “ risk management ” section of this form 10-k. all significant pension accounting assumptions , income tax assumptions , and intangible asset assumptions and detail are disclosed in notes 18 , 15 and 10 , respectively , to the consolidated financial statements . story_separator_special_tag 42 the average balance of securities held to maturity decreased from $ 81.6 million in 2011 to $ 65.6 million in 2012. at december 31 , 2012 , securities held to maturity were comprised primarily of tax-exempt municipal securities . the yield on securities held to maturity increased from 5.33 % in 2011 to 5.46 % in 2012. the average balance of frb and fhlb stock increased to $ 28.4 million in 2012 from $ 27.1 million in 2011 due in large part to the aforementioned acquisition of hampshire first . the yield from investments in frb and fhlb banks decreased from 5.13 % in 2011 to 4.86 % in 2012. replace_table_token_14_th in the available for sale category at december 31 , 2012 , federal agency securities were comprised of government-sponsored enterprise ( “ gse ” ) securities ; mortgaged-backed securities were comprised of gses with an amortized cost of $ 221.1 million and a fair value of $ 232.3 million and u.s. government agency securities with an amortized cost of $ 16.4 million and a fair value of $ 18.0 million ; collateralized mortgage obligations ( “ cmos ” ) were comprised of gses with an amortized cost of $ 399.2 million and a fair value of $ 403.6 million and us government agency securities with an amortized cost of $ 44.8 million and a fair value of $ 46.2 million . at december 31 , 2012 , all of the mortgaged-backed securities held to maturity were comprised of u.s. government agency securities . our mortgage backed securities , u.s. agency notes , and cmos are all “ prime/conforming ” and are guaranteed by fannie mae , freddie mac , the fhlb , the federal farm credit banks , or ginnie mae ( “ gnma ” ) . gnma securities are considered equivalent to u.s. treasury securities , as they are backed by the full faith and credit of the u.s. government . currently , there are no securities backed by subprime mortgages in our investment portfolio . 43 the following tables set forth information with regard to contractual maturities of debt securities at december 31 , 2012 : replace_table_token_15_th funding sources and corresponding interest expense the company utilizes traditional deposit products such as time , savings , now , money market , and demand deposits as its primary source for funding . other sources , such as short-term fhlb advances , federal funds purchased , securities sold under agreements to repurchase , brokered time deposits , and long-term fhlb borrowings are utilized as necessary to support the company 's growth in assets and to achieve interest rate sensitivity objectives . the average balance of interest-bearing liabilities increased $ 237.9 million from 2011 , totaling $ 4.1 billion in 2012. the rate paid on interest-bearing liabilities decreased from 1.03 % in 2011 to 0.86 % in 2012. this decrease in rates , offset by an increase in average balances , caused a decrease in interest expense of $ 4.5 million , or 11.4 % , from $ 39.7 million in 2011 to $ 35.2 million in 2012 . 44 deposits average interest bearing deposits increased $ 227.9 million , or 7.0 % , from 2011 to 2012 , due primarily to the acquisition of hampshire first in june 2012. average time deposits increased $ 79.8 million , or 8.7 % , during 2012 as compared to 2011. average money market deposits increased $ 46.6 million or 4.4 % during 2012 when compared to 2011. average now accounts increased $ 24.3 million or 3.6 % during 2012 as compared to 2011. the average balance of savings accounts increased $ 77.2 million or 12.8 % during 2012 when compared to 2011. the average balance of demand deposits increased $ 173.6 million , or 18.0 % , from $ 966.3 million in 2011 to $ 1.1 billion in 2012. this growth in demand deposits was driven principally by increases in accounts from retail , municipal , and commercial customers spurred by strategic expansion into new markets . the rate paid on average interest-bearing deposits decreased from 0.70 % during 2011 to 0.54 % in 2012. the decrease in the rate on interest-bearing deposits was driven primarily by pricing decreases from money market accounts and time deposits , which are sensitive to interest rate changes . the pricing decreases for these products resulted from the frb maintaining a historic low fed funds target rate as well as an overall decrease in all interest rates . the rate paid for money market deposit accounts decreased from 0.34 % during 2011 to 0.18 % during 2012. the rate paid for now accounts decreased from 0.34 % during 2011 to 0.26 % during 2012. the rate paid for savings deposits decreased from 0.11 % in 2011 to 0.08 % in 2012 and the rate paid on time deposits decreased from 1.80 % during 2011 to 1.45 % during 2012. the following table presents the maturity distribution of time deposits of $ 100,000 or more at december 31 : replace_table_token_16_th borrowings average short-term borrowings increased slightly to $ 165.7 million in 2012 from $ 154.0 million in 2011. the average rate paid on short-term borrowings decreased from 0.13 % in 2011 to 0.11 % in 2012 , which was primarily driven by the frb maintaining a historic low fed funds target rate of 0.25 % ( which directly impacts short-term borrowing rates ) . average long-term debt decreased from $ 370.0 million in 2011 to $ 368.3 million in 2012. the average balance of trust preferred debentures remained at $ 75.4 million in 2012 compared to 2011. the average rate paid for trust preferred debentures in 2012 was 2.29 % , down from 2.77 % in 2011. the decrease in rate on the trust preferred debentures is due primarily to the reset of interest rate terms in two trust preferred debentures to variable rate from fixed rate . the third trust preferred debenture reset to a variable

