investment portfolio , the interest rate 28 sensitivity of peoples ' consolidated balance sheet , and the income generated by peoples ' trust and investment activities ; ( 15 ) peoples ' ability to receive dividends from its subsidiaries ; ( 16 ) peoples ' ability to maintain required capital levels and adequate sources of funding and liquidity ; ( 17 ) the impact of new minimum capital thresholds established as a part of the implementation of basel iii ; ( 18 ) the impact of larger or similar sized financial institutions encountering problems , which may adversely affect the banking industry and or peoples ' business generation and retention , funding and liquidity ; ( 19 ) the costs and effects of regulatory and legal developments , including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations ; ( 20 ) peoples ' ability to secure confidential information through the use of computer systems and telecommunications networks , including those of peoples ' third-party vendors and other service providers , may prove inadequate , which could adversely affect customer confidence in peoples and or result in peoples incurring a financial loss ; ( 21 ) changes in consumer spending , borrowing and saving habits , whether due to changes in business and economic conditions , legislative or regulatory initiatives , or other factors , which may be different than anticipated ; ( 22 ) the overall adequacy of peoples ' risk management program ; ( 23 ) the impact on peoples ' businesses , as well as on the risks described above , of various domestic or international military or terrorist activities or conflicts ; ( 24 ) significant changes in the tax laws , which may adversely affect the fair values of net deferred tax assets and obligations of states and political subdivisions held in peoples ' investment securities portfolio ; and ( 25 ) other risk factors relating to the banking industry or peoples as detailed from time to time in peoples ' reports filed with the sec , including those risk factors included in the disclosures under the heading `` item 1a . risk factors `` of this form 10-k. all forward-looking statements speak only as of the filing date of this form 10-k and are expressly qualified in their entirety by the cautionary statements . although management believes the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management 's knowledge of peoples ' business and operations , it is possible that actual results may differ materially from these projections . additionally , peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the filing date of this form 10-k or to reflect the occurrence of unanticipated events except as may be required by applicable legal requirements . copies of documents filed with the sec are available free of charge at the sec 's website at www.sec.gov and or from peoples ' website – www.peoplesbancorp.com under the `` investor relations `` section . the following discussion and analysis of peoples ' consolidated financial statements is presented to provide insight into management 's assessment of the financial position and results of operations for the periods presented . this discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto , as well as the ratios and statistics , contained elsewhere in this form 10-k. summary of significant transactions and events the following is a summary of transactions or events that have impacted or are expected by management to impact peoples ' results of operations or financial condition : ◦ on january 31 , 2017 , peoples insurance acquired a third-party insurance administration company with annual net revenue of $ 0.4 million . this acquisition did not materially impact peoples ' financial position , results of operations or cash flows . ◦ on november 7 , 2016 , peoples converted its core banking system ( including the related operating systems , data systems and products ) . the conversion resulted in a pre-tax combined revenue and expense impact of $ 1.3 million , or $ 0.05 in earnings per diluted share , for the full year . deposit account service charges were impacted by the system conversion as peoples granted waivers of $ 85,000 related to account services charges in the month of the conversion . the remainder of the $ 1.3 million was recorded in various expense categories , primarily in other non-interest expense , professional fees , and salaries and employee benefit costs . 29 ◦ in 2016 , peoples closed three ohio branches that were located in owensville , marietta and the plains . additional branches to close in 2017 include two ohio offices located in belpre and wilmington , and two west virginia offices located in huntington and point pleasant . these four branches will remain open through march 31 , 2017 . ◦ peoples continually evaluates the overall balance sheet position given the interest rate environment . during 2016 , peoples executed transactions to take advantage of the low interest rates , which included : ▪ peoples restructured $ 20.0 million of fhlb long-term advance borrowings that had a weighted-average rate of 2.97 % , resulting in a $ 700,000 loss . peoples replaced these borrowings with a long-term fhlb advance , which has an interest rate of 2.17 % and matures in 2026 . ▪ peoples borrowed an additional $ 35.0 million of long-term fhlb amortizing advances , which had interest rates ranging from 1.08 % to 1.40 % , and mature between 2019 and 2031 . story_separator_special_tag peoples performs its required annual impairment test as of october 1st each year , beginning in 2016. peoples first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount , including goodwill . in this evaluation , peoples assesses relevant events and circumstances , which may include macroeconomic conditions , industry and market conditions , cost factors , overall financial performance , events specific to peoples , significant changes in the reporting unit , or a sustained decrease in stock price . if peoples determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount , then performing the two-step impairment test is unnecessary . however , if there are indicators of impairment , peoples must complete a two-step process that includes ( 1 ) determining if potential goodwill impairment exists and ( 2 ) measuring the impairment loss , if any . at october 1 , 2016 , management 's qualitative analysis concluded that the estimated fair value of peoples ' single reporting unit exceeded its carrying value . peoples is required to perform interim tests for goodwill impairment in subsequent quarters if events occur or circumstances change that indicate potential goodwill impairment exists , such as adverse changes to peoples ' business or a significant decline in peoples ' market capitalization . for further information regarding goodwill , refer to note 6 of the notes to the consolidated financial statements . peoples records servicing rights ( “ srs ” ) in connection with its mortgage banking and small business lending activities , which are intangible assets representing the right to service loans sold to third-party investors . these intangible assets are recorded initially at fair value and subsequently amortized over the estimated life of the loans sold . srs are stratified based on their predominant risk characteristics and assessed for impairment at the strata level at each reporting date based on their fair value . at december 31 , 2016 , management concluded no portion of the recorded srs was impaired since the fair value equaled or exceeded the carrying value . however , future events , such as a significant increase in prepayment speeds , could result in a fair value that is less than the carrying amount , which would require the recognition of an impairment loss in earnings . income taxes income taxes are recorded based on the liability method of accounting , which includes the recognition of deferred tax assets and liabilities for the temporary differences between carrying amounts and tax bases of assets and liabilities , computed using enacted tax rates . in general , peoples records deferred tax assets when the event giving rise to the tax benefit has been recognized in the consolidated financial statements . a valuation allowance is recognized to reduce any deferred tax asset when , based upon available information , it is more-likely-than-not all , or any portion , of the deferred tax asset will not be realized . assessing the need for , and amount of , a valuation allowance for deferred tax assets requires significant judgment and analysis of evidence regarding realization of the deferred tax assets . in most cases , the realization of deferred tax assets is dependent upon peoples generating a sufficient level of taxable income in future periods , which can be difficult to predict . peoples ' largest deferred tax assets involve differences related to peoples ' allowance for loan losses and accrued employee benefits . at december 31 , 2016 and december 31 , 2015 , management determined a valuation allowance would be recorded against the deferred tax assets associated with its investment in a partnership investment . no other valuation allowances were recorded at either december 31 , 2016 or 2015 . the calculation of tax liabilities is complex and requires the use of estimates and judgment since it involves the application of complex tax laws that are subject to different interpretations by peoples and the various tax authorities . peoples ' interpretations are subject to challenge by the tax authorities upon audit or to reinterpretation based on management 's ongoing assessment of facts and evolving case law . 33 from time-to-time and in the ordinary course of business , peoples is involved in inquiries and reviews by tax authorities that normally require management to provide supplemental information to support certain tax positions taken by peoples in its tax returns . uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities . such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 % likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts . the amount of unrecognized tax benefits was immaterial at both december 31 , 2016 and 2015 . management believes it has taken appropriate positions on its tax returns , although the ultimate outcome of any tax review can not be predicted with certainty . consequently , no assurance can be given that the final outcome of these matters will not be different than what is reflected in the current and historical financial statements . fair value measurements as a financial services company , the carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements , either directly or indirectly . in certain cases , an asset or liability is measured and reported at fair value on a recurring basis , such as available-for-sale investment securities . in other cases , management must rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be

cash flow hedges cash flow hedges are carried at fair value on peoples ' consolidated balance sheets . cash flow hedges do not trade in an active market with readily observable prices . management determines the fair value of cash flow hedges based on third-party pricing , which is driven by changes in market interest rates . as of december 31 , 2016 , the fair value of the cash flow hedges , based on market interest rates , resulted in an asset of $ 1.8 million . executive summary net income for the year ended december 31 , 2016 was $ 31.2 million , compared to $ 10.9 million in 2015 and $ 16.7 million in 2014 , representing earnings per diluted common share of $ 1.71 , $ 0.61 and $ 1.35 , respectively . the increase in earnings during 2016 was driven by a decrease in the provision for loan losses of $ 10.6 million , primarily due to the control of credit quality and associated credit costs . in 2016 , earnings also benefited from a decrease in acquisition-related charges of $ 10.7 million compared to 2015 , which was partially offset by costs related to the conversion of peoples ' core banking system of $ 1.3 million .


 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.
     ```cash flow hedges cash flow hedges are carried at fair value on peoples ' consolidated balance sheets . cash flow hedges do not trade in an active market with readily observable prices . management determines the fair value of cash flow hedges based on third-party pricing , which is driven by changes in market interest rates . as of december 31 , 2016 , the fair value of the cash flow hedges , based on market interest rates , resulted in an asset of $ 1.8 million . executive summary net income for the year ended december 31 , 2016 was $ 31.2 million , compared to $ 10.9 million in 2015 and $ 16.7 million in 2014 , representing earnings per diluted common share of $ 1.71 , $ 0.61 and $ 1.35 , respectively . the increase in earnings during 2016 was driven by a decrease in the provision for loan losses of $ 10.6 million , primarily due to the control of credit quality and associated credit costs . in 2016 , earnings also benefited from a decrease in acquisition-related charges of $ 10.7 million compared to 2015 , which was partially offset by costs related to the conversion of peoples ' core banking system of $ 1.3 million .
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 Suspicious Activity Report : investment portfolio , the interest rate 28 sensitivity of peoples ' consolidated balance sheet , and the income generated by peoples ' trust and investment activities ; ( 15 ) peoples ' ability to receive dividends from its subsidiaries ; ( 16 ) peoples ' ability to maintain required capital levels and adequate sources of funding and liquidity ; ( 17 ) the impact of new minimum capital thresholds established as a part of the implementation of basel iii ; ( 18 ) the impact of larger or similar sized financial institutions encountering problems , which may adversely affect the banking industry and or peoples ' business generation and retention , funding and liquidity ; ( 19 ) the costs and effects of regulatory and legal developments , including the outcome of potential regulatory or other governmental inquiries and legal proceedings and results of regulatory examinations ; ( 20 ) peoples ' ability to secure confidential information through the use of computer systems and telecommunications networks , including those of peoples ' third-party vendors and other service providers , may prove inadequate , which could adversely affect customer confidence in peoples and or result in peoples incurring a financial loss ; ( 21 ) changes in consumer spending , borrowing and saving habits , whether due to changes in business and economic conditions , legislative or regulatory initiatives , or other factors , which may be different than anticipated ; ( 22 ) the overall adequacy of peoples ' risk management program ; ( 23 ) the impact on peoples ' businesses , as well as on the risks described above , of various domestic or international military or terrorist activities or conflicts ; ( 24 ) significant changes in the tax laws , which may adversely affect the fair values of net deferred tax assets and obligations of states and political subdivisions held in peoples ' investment securities portfolio ; and ( 25 ) other risk factors relating to the banking industry or peoples as detailed from time to time in peoples ' reports filed with the sec , including those risk factors included in the disclosures under the heading `` item 1a . risk factors `` of this form 10-k. all forward-looking statements speak only as of the filing date of this form 10-k and are expressly qualified in their entirety by the cautionary statements . although management believes the expectations in these forward-looking statements are based on reasonable assumptions within the bounds of management 's knowledge of peoples ' business and operations , it is possible that actual results may differ materially from these projections . additionally , peoples undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the filing date of this form 10-k or to reflect the occurrence of unanticipated events except as may be required by applicable legal requirements . copies of documents filed with the sec are available free of charge at the sec 's website at www.sec.gov and or from peoples ' website – www.peoplesbancorp.com under the `` investor relations `` section . the following discussion and analysis of peoples ' consolidated financial statements is presented to provide insight into management 's assessment of the financial position and results of operations for the periods presented . this discussion and analysis should be read in conjunction with the audited consolidated financial statements and notes thereto , as well as the ratios and statistics , contained elsewhere in this form 10-k. summary of significant transactions and events the following is a summary of transactions or events that have impacted or are expected by management to impact peoples ' results of operations or financial condition : ◦ on january 31 , 2017 , peoples insurance acquired a third-party insurance administration company with annual net revenue of $ 0.4 million . this acquisition did not materially impact peoples ' financial position , results of operations or cash flows . ◦ on november 7 , 2016 , peoples converted its core banking system ( including the related operating systems , data systems and products ) . the conversion resulted in a pre-tax combined revenue and expense impact of $ 1.3 million , or $ 0.05 in earnings per diluted share , for the full year . deposit account service charges were impacted by the system conversion as peoples granted waivers of $ 85,000 related to account services charges in the month of the conversion . the remainder of the $ 1.3 million was recorded in various expense categories , primarily in other non-interest expense , professional fees , and salaries and employee benefit costs . 29 ◦ in 2016 , peoples closed three ohio branches that were located in owensville , marietta and the plains . additional branches to close in 2017 include two ohio offices located in belpre and wilmington , and two west virginia offices located in huntington and point pleasant . these four branches will remain open through march 31 , 2017 . ◦ peoples continually evaluates the overall balance sheet position given the interest rate environment . during 2016 , peoples executed transactions to take advantage of the low interest rates , which included : ▪ peoples restructured $ 20.0 million of fhlb long-term advance borrowings that had a weighted-average rate of 2.97 % , resulting in a $ 700,000 loss . peoples replaced these borrowings with a long-term fhlb advance , which has an interest rate of 2.17 % and matures in 2026 . ▪ peoples borrowed an additional $ 35.0 million of long-term fhlb amortizing advances , which had interest rates ranging from 1.08 % to 1.40 % , and mature between 2019 and 2031 . story_separator_special_tag peoples performs its required annual impairment test as of october 1st each year , beginning in 2016. peoples first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount , including goodwill . in this evaluation , peoples assesses relevant events and circumstances , which may include macroeconomic conditions , industry and market conditions , cost factors , overall financial performance , events specific to peoples , significant changes in the reporting unit , or a sustained decrease in stock price . if peoples determines that it is more likely than not that the fair value of the reporting unit is greater than its carrying amount , then performing the two-step impairment test is unnecessary . however , if there are indicators of impairment , peoples must complete a two-step process that includes ( 1 ) determining if potential goodwill impairment exists and ( 2 ) measuring the impairment loss , if any . at october 1 , 2016 , management 's qualitative analysis concluded that the estimated fair value of peoples ' single reporting unit exceeded its carrying value . peoples is required to perform interim tests for goodwill impairment in subsequent quarters if events occur or circumstances change that indicate potential goodwill impairment exists , such as adverse changes to peoples ' business or a significant decline in peoples ' market capitalization . for further information regarding goodwill , refer to note 6 of the notes to the consolidated financial statements . peoples records servicing rights ( “ srs ” ) in connection with its mortgage banking and small business lending activities , which are intangible assets representing the right to service loans sold to third-party investors . these intangible assets are recorded initially at fair value and subsequently amortized over the estimated life of the loans sold . srs are stratified based on their predominant risk characteristics and assessed for impairment at the strata level at each reporting date based on their fair value . at december 31 , 2016 , management concluded no portion of the recorded srs was impaired since the fair value equaled or exceeded the carrying value . however , future events , such as a significant increase in prepayment speeds , could result in a fair value that is less than the carrying amount , which would require the recognition of an impairment loss in earnings . income taxes income taxes are recorded based on the liability method of accounting , which includes the recognition of deferred tax assets and liabilities for the temporary differences between carrying amounts and tax bases of assets and liabilities , computed using enacted tax rates . in general , peoples records deferred tax assets when the event giving rise to the tax benefit has been recognized in the consolidated financial statements . a valuation allowance is recognized to reduce any deferred tax asset when , based upon available information , it is more-likely-than-not all , or any portion , of the deferred tax asset will not be realized . assessing the need for , and amount of , a valuation allowance for deferred tax assets requires significant judgment and analysis of evidence regarding realization of the deferred tax assets . in most cases , the realization of deferred tax assets is dependent upon peoples generating a sufficient level of taxable income in future periods , which can be difficult to predict . peoples ' largest deferred tax assets involve differences related to peoples ' allowance for loan losses and accrued employee benefits . at december 31 , 2016 and december 31 , 2015 , management determined a valuation allowance would be recorded against the deferred tax assets associated with its investment in a partnership investment . no other valuation allowances were recorded at either december 31 , 2016 or 2015 . the calculation of tax liabilities is complex and requires the use of estimates and judgment since it involves the application of complex tax laws that are subject to different interpretations by peoples and the various tax authorities . peoples ' interpretations are subject to challenge by the tax authorities upon audit or to reinterpretation based on management 's ongoing assessment of facts and evolving case law . 33 from time-to-time and in the ordinary course of business , peoples is involved in inquiries and reviews by tax authorities that normally require management to provide supplemental information to support certain tax positions taken by peoples in its tax returns . uncertain tax positions are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities . such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 % likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and all relevant facts . the amount of unrecognized tax benefits was immaterial at both december 31 , 2016 and 2015 . management believes it has taken appropriate positions on its tax returns , although the ultimate outcome of any tax review can not be predicted with certainty . consequently , no assurance can be given that the final outcome of these matters will not be different than what is reflected in the current and historical financial statements . fair value measurements as a financial services company , the carrying value of certain financial assets and liabilities is impacted by the application of fair value measurements , either directly or indirectly . in certain cases , an asset or liability is measured and reported at fair value on a recurring basis , such as available-for-sale investment securities . in other cases , management must rely on estimates or judgments to determine if an asset or liability not measured at fair value warrants an impairment write-down or whether a valuation reserve should be

