core earnings can be described as income before taxes , with the exclusion of gain on sale of loans and adjustments to the market value of our loans serviced portfolio . management believes that we will need to continue to focus on increasing net interest margin , other areas of fee income , and control operating expenses to achieve earnings growth going forward . management 's strategy of growing the loan portfolio and deposit base is expected to help achieve these goals : loans typically earn higher rates of return than investments ; a larger deposit base will yield higher fee income ; increasing the asset base will reduce the relative impact of fixed operating costs . the biggest challenge to management 's strategy is funding the growth of our balance sheet in an efficient manner . though deposit growth this last year was steady , it may become more difficult to maintain due to significant competition and possible reduced customer demand for deposits as customers may shift into other asset classes . 21 other than in limited circumstances for certain high-credit-quality customers , we do not offer “ interest only ” mortgage loans on residential ( 1-4 family ) properties ( where the borrower pays interest but no principal for an initial period , after which the loan converts to a fully amortizing loan ) . we also do not offer loans that provide for negative amortization of principal , such as “ option arm ” loans , where the borrower can pay less than the interest owed on their loan , resulting in an increased principal balance during the life of the loan . we do not offer “ subprime loans ” ( loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies , previous charge-offs , judgments , bankruptcies , or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios ) or alt-a loans ( traditionally defined as loans having less than full documentation ) . the level and movement of interest rates impacts the bank 's earnings as well . the federal open market committee ( “ fomc ” ) changed the federal funds target rate from 0.5 % to 0.75 % in december 2016. from time to time the bank has considered growth through mergers or acquisition as an alternative to its strategy of organic growth . in this regard , the bank has experienced an increase in loan originations due to the sterling branch acquisition which closed in december 2012. deposit fee income has also increased due to the increase in the number of accounts . the addition of the wealth management division from the acquisition has also increased noninterest income and furthered the bank 's strategy to increase fee income to complement its margin . operating expenses , primarily salaries and employee benefits also increased as a result of the acquisition . the bank completed a core systems conversion during the third quarter of 2015. future cost savings are anticipated due to the core systems conversion . recent accounting pronouncements in may 2014 , the fasb issued accounting standards update no . 2014-9 , revenue from contracts with customers ( topic 606 ) . this guidance is a comprehensive new revenue recognition standard that will supersede substantially all existing revenue recognition guidance . the new standard 's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services . in doing so , companies will need to use more judgment and make more estimates than under existing guidance . these may include identifying performance obligations in the contract , estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation . on july 9 , 2015 , the fasb agreed to delay the effective date of the standard by one year . therefore , the new standard will be effective in the first quarter of 2018 and is not expected to have a significant impact to the company 's consolidated financial statements . in january 2016 , the fasb issued asu no . 2016-01 “ financial instruments – overall : recognition and measurement of financial assets and financial liabilities . ” the amendment has a number of provisions including the requirements that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes , a separate presentation of financial assets and financial liabilities by measurement category and form of financial asset ( i.e . securities or loans receivables ) , and eliminating the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost . the amendment is effective for annual and interim reporting periods beginning after december 15 , 2017 and is not expected to have a significant impact to the company 's consolidated financial statements . in february 2016 , the fasb issued asu no . 2016-2 , leases ( topic 842 ) intended to improve financial reporting regarding leasing transactions . the new standard affects all companies and organizations that lease assets . the standard will require organizations to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases if the lease terms are more than 12 months . the guidance also will require qualitative and quantitative disclosures providing additional information about the amounts recorded in the financial statements . the amendments in this update are effective for fiscal years beginning after december 15 , 2018 , including interim periods within those fiscal years . the company is evaluating the potential impact of the amendment on the company 's consolidated financial statements . story_separator_special_tag during the year ended december 31 , 2016 , the bank sold five real estate owned and other repossessed assets resulting in a net gain of $ 6,000. there were no write-downs on fair value less cost to sell for foreclosed real estate property and other repossessed during the year ended december 31 , 2016. during the year ended december 31 , 2016 , a minimal amount of interest was recorded on loans previously accounted for on a non-accrual basis . 30 management , in compliance with regulatory guidelines , conducts an internal loan review program , whereby loans are placed or classified in categories depending upon the level of risk of nonpayment or loss . these categories are special mention , substandard , doubtful or loss . when a loan is classified as substandard or doubtful , management is required to establish an allowance for loan loss in an amount that is deemed prudent . when management classifies a loan as a loss asset , an allowance equal up to 100.0 % of the loan balance is required to be established or the loan is required to be charged-off . the allowance for loan losses is composed of an allowance for both inherent risk associated with lending activities and specific problem assets . management 's evaluation of the classification of assets and the adequacy of the allowance for loan losses is reviewed by the board on a regular basis and by regulatory agencies as part of their examination process . in addition , each loan that exceeds $ 750,000 and each group of loans that exceeds $ 750,000 is monitored more closely . the following table reflects our classified assets : replace_table_token_10_th 31 allowance for loan losses and real estate owned . the bank segregates its loan portfolio for loan losses into the following broad categories : real estate loans ( residential mortgages ( 1-4 family ) , real estate construction , commercial real estate and land ) home equity loans , consumer loans and commercial business loans . the bank provides for a general allowance for losses inherent in the portfolio in the categories referenced above . general loss percentages which are calculated based on historical analyses and other factors such as volume and severity of delinquencies , local and national economy , underwriting standards and other factors . this portion of the allowance is calculated for inherent losses which probably exist as of the evaluation date even though they might not have been identified by the more objective processes used . this is due to the risk of error and or inherent imprecision in the process . this portion of the allowance is subjective in nature and requires judgments based on qualitative factors which do not lend themselves to exact mathematical calculations such as : trends in delinquencies and non-accruals ; trends in volume ; terms and portfolio mix ; new credit products ; changes in lending policies and procedures ; and changes in the outlook for the local , regional and national economy . at least quarterly , the management of the bank evaluates the need to establish an allowance against losses on loans based on estimated losses on specific loans when a finding is made that a loss is estimable and probable . such evaluation includes a review of all loans for which full collectability may not be reasonably assured and considers , among other matters : the estimated market value of the underlying collateral of problem loans ; prior loss experience ; economic conditions ; and overall portfolio quality . real estate owned is evaluated annually and recorded at fair value . provisions for , or adjustments to , estimated losses are included in earnings in the period they are established . at december 31 , 2016 , we had $ 4.77 million in allowances for loan losses . while we believe we have established our existing allowance for loan losses in accordance with generally accepted accounting principles , there can be no assurance that bank regulators , in reviewing our loan portfolio , will not request that we significantly increase our allowance for loan losses , or that general economic conditions , a deteriorating real estate market , or other factors will not cause us to significantly increase our allowance for loan losses , therefore negatively affecting our financial condition and earnings . in making loans , we recognize that credit losses will be experienced and that the risk of loss will vary with , among other things , the type of loan being made , the creditworthiness of the borrower over the term of the loan and , in the case of a secured loan , the quality of the security for the loan . it is our policy to review our loan portfolio , in accordance with regulatory classification procedures , on at least a quarterly basis . 32 the following table includes information for allowance for loan losses : replace_table_token_11_th 33 the following table presents allocation of the allowance for loan losses by loan category and the percentage of loans in each category to total loans : replace_table_token_12_th deposits and other sources of funds deposits . deposits are the company 's primary source of funds . core deposits are deposits that are more stable and somewhat less sensitive to rate changes . they also represent a lower cost source of funds than rate sensitive , more volatile accounts such as certificates of deposit . we believe that our core deposits are our checking , savings accounts , money market accounts and ira accounts . based on our historical experience , we include ira accounts funded by certificates of deposit as core deposits because they exhibit the principal features of core deposits in that they are stable and generally are not rate sensitive . core deposits were $ 378.79 million or 73.87 % of the bank 's deposits at december 31 , 2016 ( $ 347.52 million or 67.8 % excluding

liquidity the bank is required to maintain minimum levels of liquid assets as defined by the montana division of banking and frb regulations . the liquidity requirement is retained for safety and soundness purposes , and that appropriate levels of liquidity will depend upon the types of activities in which the company engages . for internal reporting purposes , the bank uses policy minimums of 1.0 % , and 8.0 % for “ basic surplus ” and “ basic surplus with fhlb ” as internally defined . in general , the “ basic surplus ” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of cd maturities and other deposits that may leave the bank in the next 90 days divided by total assets . “ basic surplus with fhlb ” adds to “ basic surplus ” the additional borrowing capacity the bank has with the fhlb of des moines . the bank exceeded those minimum ratios as of december 31 , 2016 and 2015. the bank 's primary sources of funds are deposits , repayment of loans and mortgage-backed securities , maturities of investments , funds provided from operations , advances from the fhlb of des moines and other borrowings . scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable . however , other sources of funds , such as deposit flows and loan prepayments , can be greatly influenced by the general level of interest rates , economic conditions and competition . the bank uses liquidity resources principally to fund existing and future loan commitments . it also uses them to fund maturing certificates of deposit , demand deposit withdrawals and to invest in other loans and investments , maintain liquidity , and meet operating expenses . liquidity may be adversely affected by unexpected deposit outflows , higher interest rates paid by competitors , and similar matters .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity the bank is required to maintain minimum levels of liquid assets as defined by the montana division of banking and frb regulations . the liquidity requirement is retained for safety and soundness purposes , and that appropriate levels of liquidity will depend upon the types of activities in which the company engages . for internal reporting purposes , the bank uses policy minimums of 1.0 % , and 8.0 % for “ basic surplus ” and “ basic surplus with fhlb ” as internally defined . in general , the “ basic surplus ” is a calculation of the ratio of unencumbered short-term assets reduced by estimated percentages of cd maturities and other deposits that may leave the bank in the next 90 days divided by total assets . “ basic surplus with fhlb ” adds to “ basic surplus ” the additional borrowing capacity the bank has with the fhlb of des moines . the bank exceeded those minimum ratios as of december 31 , 2016 and 2015. the bank 's primary sources of funds are deposits , repayment of loans and mortgage-backed securities , maturities of investments , funds provided from operations , advances from the fhlb of des moines and other borrowings . scheduled repayments of loans and mortgage-backed securities and maturities of investment securities are generally predictable . however , other sources of funds , such as deposit flows and loan prepayments , can be greatly influenced by the general level of interest rates , economic conditions and competition . the bank uses liquidity resources principally to fund existing and future loan commitments . it also uses them to fund maturing certificates of deposit , demand deposit withdrawals and to invest in other loans and investments , maintain liquidity , and meet operating expenses . liquidity may be adversely affected by unexpected deposit outflows , higher interest rates paid by competitors , and similar matters .
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 Suspicious Activity Report : core earnings can be described as income before taxes , with the exclusion of gain on sale of loans and adjustments to the market value of our loans serviced portfolio . management believes that we will need to continue to focus on increasing net interest margin , other areas of fee income , and control operating expenses to achieve earnings growth going forward . management 's strategy of growing the loan portfolio and deposit base is expected to help achieve these goals : loans typically earn higher rates of return than investments ; a larger deposit base will yield higher fee income ; increasing the asset base will reduce the relative impact of fixed operating costs . the biggest challenge to management 's strategy is funding the growth of our balance sheet in an efficient manner . though deposit growth this last year was steady , it may become more difficult to maintain due to significant competition and possible reduced customer demand for deposits as customers may shift into other asset classes . 21 other than in limited circumstances for certain high-credit-quality customers , we do not offer “ interest only ” mortgage loans on residential ( 1-4 family ) properties ( where the borrower pays interest but no principal for an initial period , after which the loan converts to a fully amortizing loan ) . we also do not offer loans that provide for negative amortization of principal , such as “ option arm ” loans , where the borrower can pay less than the interest owed on their loan , resulting in an increased principal balance during the life of the loan . we do not offer “ subprime loans ” ( loans that generally target borrowers with weakened credit histories typically characterized by payment delinquencies , previous charge-offs , judgments , bankruptcies , or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burden ratios ) or alt-a loans ( traditionally defined as loans having less than full documentation ) . the level and movement of interest rates impacts the bank 's earnings as well . the federal open market committee ( “ fomc ” ) changed the federal funds target rate from 0.5 % to 0.75 % in december 2016. from time to time the bank has considered growth through mergers or acquisition as an alternative to its strategy of organic growth . in this regard , the bank has experienced an increase in loan originations due to the sterling branch acquisition which closed in december 2012. deposit fee income has also increased due to the increase in the number of accounts . the addition of the wealth management division from the acquisition has also increased noninterest income and furthered the bank 's strategy to increase fee income to complement its margin . operating expenses , primarily salaries and employee benefits also increased as a result of the acquisition . the bank completed a core systems conversion during the third quarter of 2015. future cost savings are anticipated due to the core systems conversion . recent accounting pronouncements in may 2014 , the fasb issued accounting standards update no . 2014-9 , revenue from contracts with customers ( topic 606 ) . this guidance is a comprehensive new revenue recognition standard that will supersede substantially all existing revenue recognition guidance . the new standard 's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services . in doing so , companies will need to use more judgment and make more estimates than under existing guidance . these may include identifying performance obligations in the contract , estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation . on july 9 , 2015 , the fasb agreed to delay the effective date of the standard by one year . therefore , the new standard will be effective in the first quarter of 2018 and is not expected to have a significant impact to the company 's consolidated financial statements . in january 2016 , the fasb issued asu no . 2016-01 “ financial instruments – overall : recognition and measurement of financial assets and financial liabilities . ” the amendment has a number of provisions including the requirements that public business entities use the exit price notion when measuring the fair value of financial instruments for disclosure purposes , a separate presentation of financial assets and financial liabilities by measurement category and form of financial asset ( i.e . securities or loans receivables ) , and eliminating the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost . the amendment is effective for annual and interim reporting periods beginning after december 15 , 2017 and is not expected to have a significant impact to the company 's consolidated financial statements . in february 2016 , the fasb issued asu no . 2016-2 , leases ( topic 842 ) intended to improve financial reporting regarding leasing transactions . the new standard affects all companies and organizations that lease assets . the standard will require organizations to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases if the lease terms are more than 12 months . the guidance also will require qualitative and quantitative disclosures providing additional information about the amounts recorded in the financial statements . the amendments in this update are effective for fiscal years beginning after december 15 , 2018 , including interim periods within those fiscal years . the company is evaluating the potential impact of the amendment on the company 's consolidated financial statements . story_separator_special_tag during the year ended december 31 , 2016 , the bank sold five real estate owned and other repossessed assets resulting in a net gain of $ 6,000. there were no write-downs on fair value less cost to sell for foreclosed real estate property and other repossessed during the year ended december 31 , 2016. during the year ended december 31 , 2016 , a minimal amount of interest was recorded on loans previously accounted for on a non-accrual basis . 30 management , in compliance with regulatory guidelines , conducts an internal loan review program , whereby loans are placed or classified in categories depending upon the level of risk of nonpayment or loss . these categories are special mention , substandard , doubtful or loss . when a loan is classified as substandard or doubtful , management is required to establish an allowance for loan loss in an amount that is deemed prudent . when management classifies a loan as a loss asset , an allowance equal up to 100.0 % of the loan balance is required to be established or the loan is required to be charged-off . the allowance for loan losses is composed of an allowance for both inherent risk associated with lending activities and specific problem assets . management 's evaluation of the classification of assets and the adequacy of the allowance for loan losses is reviewed by the board on a regular basis and by regulatory agencies as part of their examination process . in addition , each loan that exceeds $ 750,000 and each group of loans that exceeds $ 750,000 is monitored more closely . the following table reflects our classified assets : replace_table_token_10_th 31 allowance for loan losses and real estate owned . the bank segregates its loan portfolio for loan losses into the following broad categories : real estate loans ( residential mortgages ( 1-4 family ) , real estate construction , commercial real estate and land ) home equity loans , consumer loans and commercial business loans . the bank provides for a general allowance for losses inherent in the portfolio in the categories referenced above . general loss percentages which are calculated based on historical analyses and other factors such as volume and severity of delinquencies , local and national economy , underwriting standards and other factors . this portion of the allowance is calculated for inherent losses which probably exist as of the evaluation date even though they might not have been identified by the more objective processes used . this is due to the risk of error and or inherent imprecision in the process . this portion of the allowance is subjective in nature and requires judgments based on qualitative factors which do not lend themselves to exact mathematical calculations such as : trends in delinquencies and non-accruals ; trends in volume ; terms and portfolio mix ; new credit products ; changes in lending policies and procedures ; and changes in the outlook for the local , regional and national economy . at least quarterly , the management of the bank evaluates the need to establish an allowance against losses on loans based on estimated losses on specific loans when a finding is made that a loss is estimable and probable . such evaluation includes a review of all loans for which full collectability may not be reasonably assured and considers , among other matters : the estimated market value of the underlying collateral of problem loans ; prior loss experience ; economic conditions ; and overall portfolio quality . real estate owned is evaluated annually and recorded at fair value . provisions for , or adjustments to , estimated losses are included in earnings in the period they are established . at december 31 , 2016 , we had $ 4.77 million in allowances for loan losses . while we believe we have established our existing allowance for loan losses in accordance with generally accepted accounting principles , there can be no assurance that bank regulators , in reviewing our loan portfolio , will not request that we significantly increase our allowance for loan losses , or that general economic conditions , a deteriorating real estate market , or other factors will not cause us to significantly increase our allowance for loan losses , therefore negatively affecting our financial condition and earnings . in making loans , we recognize that credit losses will be experienced and that the risk of loss will vary with , among other things , the type of loan being made , the creditworthiness of the borrower over the term of the loan and , in the case of a secured loan , the quality of the security for the loan . it is our policy to review our loan portfolio , in accordance with regulatory classification procedures , on at least a quarterly basis . 32 the following table includes information for allowance for loan losses : replace_table_token_11_th 33 the following table presents allocation of the allowance for loan losses by loan category and the percentage of loans in each category to total loans : replace_table_token_12_th deposits and other sources of funds deposits . deposits are the company 's primary source of funds . core deposits are deposits that are more stable and somewhat less sensitive to rate changes . they also represent a lower cost source of funds than rate sensitive , more volatile accounts such as certificates of deposit . we believe that our core deposits are our checking , savings accounts , money market accounts and ira accounts . based on our historical experience , we include ira accounts funded by certificates of deposit as core deposits because they exhibit the principal features of core deposits in that they are stable and generally are not rate sensitive . core deposits were $ 378.79 million or 73.87 % of the bank 's deposits at december 31 , 2016 ( $ 347.52 million or 67.8 % excluding

