table 1 – average balances and tax-equivalent interest rates replace_table_token_21_th ( 1 ) interest on nontaxable securities and loans has been adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets . the adjustment uses an incremental tax rate of 34 % for the years presented . ( 2 ) interest on loans included net origination fees charged on loans of approximately $ 873,000 , $ 909,000 , and $ 885,000 in 2014 , 2013 , and 2012 , respectively . ( 3 ) interest on taxable securities includes dividends on federal home loan bank and federal reserve bank stock . ( 4 ) noninterest-earning assets include loans on a nonaccrual status , which averaged approximately $ 3,613,000 , $ 2,132,000 , and $ 4,364,000 in 2014 , 2013 , and 2012 , respectively . 18 table 2 – changes in tax-equivalent net interest income replace_table_token_22_th ( 1 ) the volume variance is computed as the change in volume ( average balance ) multiplied by the previous year 's interest rate . the rate variance is computed as the change in interest rate multiplied by the previous year 's volume ( average balance ) . the change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each . ( 2 ) interest on tax-exempt securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 34 % for the years presented . net interest income as shown in tables 1 and 2 , tax-equivalent net interest income increased $ 264,000 in 2014 compared to 2013. the increase was attributed to $ 25.6 million in interest-earning assets and a decrease of 8 basis points on interest-bearing liabilities , partially offset by a 23 basis point decline in the average rate on interest-earning assets . choiceone 's net interest spread declined 15 basis points in 2014 compared to 2013 as growth of average interest-earning assets was offset by the compression of net interest margin . the average balance of loans increased $ 17.6 million in 2014 compared to 2013 . $ 19.9 million of growth came from loans to businesses in choiceone 's markets as calling efforts were emphasized in 2014. consumer loans increased $ 1.0 million due to marketing and choiceone 's referral program . residential mortgage loans declined $ 3.3 million as some loans held in portfolio were refinanced during 2014 and sold in the secondary market . offsetting the loan growth with a 28 basis point decrease in the average rate earned on loans , interest income on loans declined $ 39,000 in 2014 compared to the prior year . the average balance of total securities increased by $ 8.7 million in 2014 compared to 2013 as securities were purchased to provide earning assets growth . this growth in the average balance was partially offset by a lower average rate earned on securities , which caused interest income from securities to increase $ 38,000 in 2014 compared to the prior year . the average balance of other interest-earning assets decreased $ 652,000 as excess funds were deployed toward loan and securities growth , resulting in a decrease of $ 3,000 in interest income for 2014 compared to 2013. the average balance of interest-bearing demand deposits increased $ 5.9 million in 2014 compared to 2013. the effect of this increase , partially offset by a 4 basis point decline in the average rate paid , caused interest expense to be $ 40,000 lower in 2014 than in the prior year . the effect of $ 2.4 million of growth in average savings deposits caused a $ 1,000 increase in interest expense in 2014 compared to the prior year . the average balance of certificates of deposit was $ 11.7 million lower in 2014 than in the prior year . the average balance decrease plus the effect of a 13 basis point decline in the average rate paid caused interest expense on certificates of deposit to fall $ 247,000 in 2014 compared to 2013. a $ 7.1 million increase in the average balance of federal home loan bank advances , partially offset by an 18 basis point decrease in the average rate paid , caused interest expense to increase $ 18,000 in 2014 compared to the prior year . the growth experienced in non-interest bearing demand deposits and savings deposits was primarily due to depositors choosing the liquidity and safety afforded by this type of deposit as compared to certificates of deposit or nonbank investments . choiceone 's net interest income spread was 3.81 % ( shown in table 1 ) for 2014 and 3.96 % for 2013. the average yield received on interest-earning assets in 2014 decreased 23 basis points to 4.14 % while the average rate paid on interest-bearing liabilities in 2014 fell 8 basis points to 0.33 % . the decline in general market interest rates in both 2013 and 2014 caused the reduction in rates for both assets and liabilities in the two time periods . as shown in tables 1 and 2 , tax-equivalent net interest income decreased $ 65,000 in 2013 compared to 2012. the decrease was attributed to a 31 basis point decline in the average rate on interest earning assets offset by a 31 basis point decline in the average rate on interest-bearing liabilities , . choiceone 's net interest spread remained constant in 2013 compared to 2012 as growth of $ 4.3 million in average interest-earning assets were offset by a decline of $ 9.5 million in average interest-bearing liabilities . 19 the average balance of loans increased $ 5.2 million in 2013 compared to 2012 . story_separator_special_tag if local deposit growth is insufficient to support asset growth , management believes that advances from the fhlb , repurchase agreements and brokered certificates of deposit can address corresponding funding needs . shareholders ' equity total shareholders ' equity increased $ 4.6 million from december 31 , 2013 to december 31 , 2014. the growth in equity resulted from the retention of earnings in 2014 as net income exceeded dividends paid by $ 3.8 million . other comprehensive income increased $ 925,000 in 2014 primarily due to declining interest rates affecting unrealized gains on available for sale securities . note 20 to the consolidated financial statements presents regulatory capital information for the bank at the end of 2014 and 2013. management will monitor these capital ratios closely during 2015 as they relate to asset growth and earnings retention . choiceone 's board of directors and management do not plan to allow capital to decrease below those levels necessary to be considered “ well capitalized ” by regulatory guidelines . at december 31 , 2014 , the bank was categorized as “ well-capitalized . ” on july 3 , 2013 , the fdic board of directors approved the regulatory capital interim final rule , implementing basel iii . this rule redefines tier 1 capital as two components ( common equity tier 1 and additional tier 1 ) , creates a new capital ratio ( common equity tier 1 risk-based capital ratio ) and implements a capital conservation buffer . it also revises the prompt corrective action thresholds and makes changes to risk weights for certain assets and off-balance-sheet exposures . banks are required to transition into the new rule beginning on january 1 , 2015. based on choiceone 's capital levels and balance sheet composition at december 31 , 2014 , management believes implementation of the new rule will have no material impact on choiceone 's capital needs . table 4 – contractual obligations the following table discloses information regarding the maturity of choiceone 's contractual obligations at december 31 , 2014 : replace_table_token_29_th 25 story_separator_special_tag management believes the accounting estimate related to loan servicing rights is a “ critical accounting estimate ” because ( 1 ) the estimate is highly susceptible to change from period to period because of significant changes within long-term interest rates affecting the prepayment speeds for current loans being serviced and ( 2 ) the impact of recognizing an impairment loss could have a material effect on choiceone 's net income . management has obtained a third-party valuation of its loan servicing rights to corroborate its current carrying value at the end of each reporting period . 26 goodwill generally accepted accounting principles require that the fair values of the assets and liabilities of an acquired entity be recorded at their fair value on the date of acquisition . the fair values are determined using both internal computations and information obtained from outside parties when deemed necessary . the net difference between the price paid for the acquired company and the net value of its balance sheet is recorded as goodwill . accounting principles also require that goodwill be evaluated for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable . under recently issued accounting pronouncements , choiceone is permitted to first perform a qualitative assessment to determine whether it is more likely than not ( that is , a likelihood of more than 50 percent ) that the fair value of equity is less than its carrying value . if the conclusion is that it is more likely than not that the fair value of equity is more than its carrying value , no further testing in the form of a quantitative assessment is necessary . if the conclusion is that it is more likely than not that the fair value of equity is less than its carrying value , then a two-step quantitative assessment test is performed to identify any potential goodwill impairment . prior to 2013 , choiceone was required to perform a quantitative assessment and engaged an outside consulting firm to assist in the goodwill impairment analysis . the following steps were used in the valuation : determination of the reporting unit , determination of the appropriate standard of value , determination of the appropriate level of value , calculation of fair value , and comparison of the fair value computed to the equity carrying value . it was determined that the relevant reporting unit to be valued was choiceone bank . the standard of value used in the valuation was fair value as determined by generally accepted accounting principles . the appropriate level of value was determined to be the controlling interest level . the appraisal methodology used to calculate the fair value included the following valuation approaches : income approach : a discounted cash flow value was calculated based on earnings capacity . the discount rate used for the calculation was 12.50 % . the growth assumption for assets was 1.8 % for the first year and 2.0 % in subsequent years . in addition , it was assumed that cost savings of 20 % of noninterest expense would occur as a result of synergies and cost reductions from a change in control . market approach : the analysis was based on price-to-earnings multiples , price-to-tangible book value ratios , and core deposit premiums for selected bank sale transactions . the asset approach was also an approach reviewed , but it was not used in determining the fair value since it did not render a control level indication of value . the results from the valuation approaches were used to calculate an estimate of the fair value of choiceone 's equity . the fair value was compared to the carrying value of equity to determine whether the step 1 test under generally accepted accounting principles that govern the valuation of goodwill was passed . the goodwill

liquidity and interest rate risk net cash from operating activities was $ 7.5 million for 2014 compared to $ 10.4 million for 2013. lower net proceeds from loan sales was the main reason for the decrease . cash used in investing activities was $ 38.7 million in 2014 compared to $ 13.4 million in 2013. the change was caused by a higher level of loan growth in 2014 than in 2013 and the purchase of additional bank owned life insurance . cash flows from financing activities were $ 27.4 million in 2014 compared to $ 4.5 million in the prior year . the effect of growth in deposits in 2014 in contrast to a decline in 2013 plus a higher level of net proceeds from federal home loan bank advances was partially offset by a lower level of growth in repurchase agreements in 2014 than in the prior year . choiceone 's primary market risk exposure occurs in the form of interest rate risk . liquidity risk also can have an impact but to a lesser extent . choiceone 's business is transacted in u.s. dollars with no foreign exchange risk exposure . agricultural loans comprise a relatively small portion of choiceone 's total assets . management believes that choiceone 's exposure to changes in commodity prices is insignificant . management believes that the current level of liquidity is sufficient to meet the bank 's normal operating needs . this belief is based upon the availability of deposits from both the local and national markets , maturities of securities , normal loan repayments , income retention , federal funds purchased lines of credit from correspondent banks , and advances available from the fhlb . liquidity risk deals with choiceone 's ability to meet its cash flow requirements . these requirements include depositors desiring to withdraw funds and borrowers seeking credit . relatively short-term liquid funds exist in the form of lines of credit to purchase federal funds at four of the bank 's correspondent banks .


 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 and interest rate risk net cash from operating activities was $ 7.5 million for 2014 compared to $ 10.4 million for 2013. lower net proceeds from loan sales was the main reason for the decrease . cash used in investing activities was $ 38.7 million in 2014 compared to $ 13.4 million in 2013. the change was caused by a higher level of loan growth in 2014 than in 2013 and the purchase of additional bank owned life insurance . cash flows from financing activities were $ 27.4 million in 2014 compared to $ 4.5 million in the prior year . the effect of growth in deposits in 2014 in contrast to a decline in 2013 plus a higher level of net proceeds from federal home loan bank advances was partially offset by a lower level of growth in repurchase agreements in 2014 than in the prior year . choiceone 's primary market risk exposure occurs in the form of interest rate risk . liquidity risk also can have an impact but to a lesser extent . choiceone 's business is transacted in u.s. dollars with no foreign exchange risk exposure . agricultural loans comprise a relatively small portion of choiceone 's total assets . management believes that choiceone 's exposure to changes in commodity prices is insignificant . management believes that the current level of liquidity is sufficient to meet the bank 's normal operating needs . this belief is based upon the availability of deposits from both the local and national markets , maturities of securities , normal loan repayments , income retention , federal funds purchased lines of credit from correspondent banks , and advances available from the fhlb . liquidity risk deals with choiceone 's ability to meet its cash flow requirements . these requirements include depositors desiring to withdraw funds and borrowers seeking credit . relatively short-term liquid funds exist in the form of lines of credit to purchase federal funds at four of the bank 's correspondent banks .
```    
 Suspicious Activity Report : table 1 – average balances and tax-equivalent interest rates replace_table_token_21_th ( 1 ) interest on nontaxable securities and loans has been adjusted to a fully tax-equivalent basis to facilitate comparison to the taxable interest-earning assets . the adjustment uses an incremental tax rate of 34 % for the years presented . ( 2 ) interest on loans included net origination fees charged on loans of approximately $ 873,000 , $ 909,000 , and $ 885,000 in 2014 , 2013 , and 2012 , respectively . ( 3 ) interest on taxable securities includes dividends on federal home loan bank and federal reserve bank stock . ( 4 ) noninterest-earning assets include loans on a nonaccrual status , which averaged approximately $ 3,613,000 , $ 2,132,000 , and $ 4,364,000 in 2014 , 2013 , and 2012 , respectively . 18 table 2 – changes in tax-equivalent net interest income replace_table_token_22_th ( 1 ) the volume variance is computed as the change in volume ( average balance ) multiplied by the previous year 's interest rate . the rate variance is computed as the change in interest rate multiplied by the previous year 's volume ( average balance ) . the change in interest due to both volume and rate has been allocated to the volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each . ( 2 ) interest on tax-exempt securities and loans has been adjusted to a fully tax-equivalent basis using an incremental tax rate of 34 % for the years presented . net interest income as shown in tables 1 and 2 , tax-equivalent net interest income increased $ 264,000 in 2014 compared to 2013. the increase was attributed to $ 25.6 million in interest-earning assets and a decrease of 8 basis points on interest-bearing liabilities , partially offset by a 23 basis point decline in the average rate on interest-earning assets . choiceone 's net interest spread declined 15 basis points in 2014 compared to 2013 as growth of average interest-earning assets was offset by the compression of net interest margin . the average balance of loans increased $ 17.6 million in 2014 compared to 2013 . $ 19.9 million of growth came from loans to businesses in choiceone 's markets as calling efforts were emphasized in 2014. consumer loans increased $ 1.0 million due to marketing and choiceone 's referral program . residential mortgage loans declined $ 3.3 million as some loans held in portfolio were refinanced during 2014 and sold in the secondary market . offsetting the loan growth with a 28 basis point decrease in the average rate earned on loans , interest income on loans declined $ 39,000 in 2014 compared to the prior year . the average balance of total securities increased by $ 8.7 million in 2014 compared to 2013 as securities were purchased to provide earning assets growth . this growth in the average balance was partially offset by a lower average rate earned on securities , which caused interest income from securities to increase $ 38,000 in 2014 compared to the prior year . the average balance of other interest-earning assets decreased $ 652,000 as excess funds were deployed toward loan and securities growth , resulting in a decrease of $ 3,000 in interest income for 2014 compared to 2013. the average balance of interest-bearing demand deposits increased $ 5.9 million in 2014 compared to 2013. the effect of this increase , partially offset by a 4 basis point decline in the average rate paid , caused interest expense to be $ 40,000 lower in 2014 than in the prior year . the effect of $ 2.4 million of growth in average savings deposits caused a $ 1,000 increase in interest expense in 2014 compared to the prior year . the average balance of certificates of deposit was $ 11.7 million lower in 2014 than in the prior year . the average balance decrease plus the effect of a 13 basis point decline in the average rate paid caused interest expense on certificates of deposit to fall $ 247,000 in 2014 compared to 2013. a $ 7.1 million increase in the average balance of federal home loan bank advances , partially offset by an 18 basis point decrease in the average rate paid , caused interest expense to increase $ 18,000 in 2014 compared to the prior year . the growth experienced in non-interest bearing demand deposits and savings deposits was primarily due to depositors choosing the liquidity and safety afforded by this type of deposit as compared to certificates of deposit or nonbank investments . choiceone 's net interest income spread was 3.81 % ( shown in table 1 ) for 2014 and 3.96 % for 2013. the average yield received on interest-earning assets in 2014 decreased 23 basis points to 4.14 % while the average rate paid on interest-bearing liabilities in 2014 fell 8 basis points to 0.33 % . the decline in general market interest rates in both 2013 and 2014 caused the reduction in rates for both assets and liabilities in the two time periods . as shown in tables 1 and 2 , tax-equivalent net interest income decreased $ 65,000 in 2013 compared to 2012. the decrease was attributed to a 31 basis point decline in the average rate on interest earning assets offset by a 31 basis point decline in the average rate on interest-bearing liabilities , . choiceone 's net interest spread remained constant in 2013 compared to 2012 as growth of $ 4.3 million in average interest-earning assets were offset by a decline of $ 9.5 million in average interest-bearing liabilities . 19 the average balance of loans increased $ 5.2 million in 2013 compared to 2012 . story_separator_special_tag if local deposit growth is insufficient to support asset growth , management believes that advances from the fhlb , repurchase agreements and brokered certificates of deposit can address corresponding funding needs . shareholders ' equity total shareholders ' equity increased $ 4.6 million from december 31 , 2013 to december 31 , 2014. the growth in equity resulted from the retention of earnings in 2014 as net income exceeded dividends paid by $ 3.8 million . other comprehensive income increased $ 925,000 in 2014 primarily due to declining interest rates affecting unrealized gains on available for sale securities . note 20 to the consolidated financial statements presents regulatory capital information for the bank at the end of 2014 and 2013. management will monitor these capital ratios closely during 2015 as they relate to asset growth and earnings retention . choiceone 's board of directors and management do not plan to allow capital to decrease below those levels necessary to be considered “ well capitalized ” by regulatory guidelines . at december 31 , 2014 , the bank was categorized as “ well-capitalized . ” on july 3 , 2013 , the fdic board of directors approved the regulatory capital interim final rule , implementing basel iii . this rule redefines tier 1 capital as two components ( common equity tier 1 and additional tier 1 ) , creates a new capital ratio ( common equity tier 1 risk-based capital ratio ) and implements a capital conservation buffer . it also revises the prompt corrective action thresholds and makes changes to risk weights for certain assets and off-balance-sheet exposures . banks are required to transition into the new rule beginning on january 1 , 2015. based on choiceone 's capital levels and balance sheet composition at december 31 , 2014 , management believes implementation of the new rule will have no material impact on choiceone 's capital needs . table 4 – contractual obligations the following table discloses information regarding the maturity of choiceone 's contractual obligations at december 31 , 2014 : replace_table_token_29_th 25 story_separator_special_tag management believes the accounting estimate related to loan servicing rights is a “ critical accounting estimate ” because ( 1 ) the estimate is highly susceptible to change from period to period because of significant changes within long-term interest rates affecting the prepayment speeds for current loans being serviced and ( 2 ) the impact of recognizing an impairment loss could have a material effect on choiceone 's net income . management has obtained a third-party valuation of its loan servicing rights to corroborate its current carrying value at the end of each reporting period . 26 goodwill generally accepted accounting principles require that the fair values of the assets and liabilities of an acquired entity be recorded at their fair value on the date of acquisition . the fair values are determined using both internal computations and information obtained from outside parties when deemed necessary . the net difference between the price paid for the acquired company and the net value of its balance sheet is recorded as goodwill . accounting principles also require that goodwill be evaluated for impairment on an annual basis or more frequently whenever events or changes in circumstances indicate that the carrying value may not be recoverable . under recently issued accounting pronouncements , choiceone is permitted to first perform a qualitative assessment to determine whether it is more likely than not ( that is , a likelihood of more than 50 percent ) that the fair value of equity is less than its carrying value . if the conclusion is that it is more likely than not that the fair value of equity is more than its carrying value , no further testing in the form of a quantitative assessment is necessary . if the conclusion is that it is more likely than not that the fair value of equity is less than its carrying value , then a two-step quantitative assessment test is performed to identify any potential goodwill impairment . prior to 2013 , choiceone was required to perform a quantitative assessment and engaged an outside consulting firm to assist in the goodwill impairment analysis . the following steps were used in the valuation : determination of the reporting unit , determination of the appropriate standard of value , determination of the appropriate level of value , calculation of fair value , and comparison of the fair value computed to the equity carrying value . it was determined that the relevant reporting unit to be valued was choiceone bank . the standard of value used in the valuation was fair value as determined by generally accepted accounting principles . the appropriate level of value was determined to be the controlling interest level . the appraisal methodology used to calculate the fair value included the following valuation approaches : income approach : a discounted cash flow value was calculated based on earnings capacity . the discount rate used for the calculation was 12.50 % . the growth assumption for assets was 1.8 % for the first year and 2.0 % in subsequent years . in addition , it was assumed that cost savings of 20 % of noninterest expense would occur as a result of synergies and cost reductions from a change in control . market approach : the analysis was based on price-to-earnings multiples , price-to-tangible book value ratios , and core deposit premiums for selected bank sale transactions . the asset approach was also an approach reviewed , but it was not used in determining the fair value since it did not render a control level indication of value . the results from the valuation approaches were used to calculate an estimate of the fair value of choiceone 's equity . the fair value was compared to the carrying value of equity to determine whether the step 1 test under generally accepted accounting principles that govern the valuation of goodwill was passed . the goodwill

