a valuation allowance is established for an amount equal to the impairment when the carrying amount of the loan exceeds the present value of the expected future cash flows , discounted at the loan 's original effective interest rate or the fair value of the underlying collateral ( specific component ) . the company recognizes the change in present value of expected future cash flows on impaired loans attributable to the passage of time as bad debt expense . on an ongoing basis , at least quarterly for financial reporting purposes , the fair value of collateral dependent impaired loans and real estate owned is determined or reaffirmed by the following procedures : obtaining updated real estate appraisals or performing updated discounted cash flow analysis ; confirming that the physical condition of the real estate has not significantly changed since the last valuation date ; comparing the estimated current book value to that of updated sales values experienced on similar real estate owned ; comparing the estimated current book value to that of updated values seen on more current appraisals of similar properties ; and comparing the estimated current book value to that of updated listed sales prices on our real estate owned and that of similar properties ( not owned by the company ) . waterstone bank also establishes valuation allowances based on an evaluation of the various risk components that are inherent in the credit portfolio ( general component ) . the risk components that are evaluated include past loan loss experience ; the level of non-performing and classified assets ; current economic conditions ; volume , growth , and composition of the loan portfolio ; adverse situations that may affect the borrower 's ability to repay ; the estimated value of any underlying collateral ; regulatory guidance ; and other relevant factors . the allowance is increased by provisions charged to earnings and recoveries of previously charged-off loans and reduced by charge-offs . charge-offs approximate the amount by which the outstanding principal balance exceeds the estimated net realizable value of the underlying collateral . the appropriateness of the allowance for loan losses is reviewed and approved quarterly by the waterstone bank board of directors . the allowance reflects management 's best estimate of the amount needed to provide for the probable loss on impaired loans and other inherent losses in the loan portfolio , and is based on a risk model developed and implemented by management and approved by the waterstone bank board of directors . actual results could differ from this estimate , and future additions to the allowance may be necessary based on unforeseen changes in loan quality and economic conditions . more specifically , if our future charge-off experience increases substantially from our past experience , or if the value of underlying loan collateral , in our case mostly real estate , declines in value by a substantial amount , or if unemployment in our primary market area increases significantly , our allowance for loan losses may be inadequate and we will incur higher provisions for loan losses and lower net income in the future . in addition , state and federal regulators periodically review the waterstone bank allowance for loan losses . such regulators have the authority to require waterstone bank to recognize additions to the allowance at the time of their examination . - 43 - income taxes . the company and its subsidiaries file consolidated federal , combined state income tax , and separate state income tax returns . the provision for income taxes is based upon income in the consolidated financial statements , rather than amounts reported on the income tax return . deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as for net operating loss carry forwards . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled . the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date . under generally accepted accounting principles , a valuation allowance is required to be recognized if it is `` more likely than not `` that a deferred tax asset will not be realized . the determination of the realizability of deferred tax assets is highly subjective and dependent upon judgment concerning management 's evaluation of both positive and negative evidence , the forecasts of future income , applicable tax planning strategies , and assessments of current and future economic and business conditions . examples of positive evidence may include the existence of taxes paid in available carry-back years as well as the probability that taxable income will be generated in future periods . examples of negative evidence may include cumulative losses in a current year and prior two years and general business and economic trends . positions taken in the company 's tax returns are subject to challenge by the taxing authorities upon examination . the benefit of uncertain tax positions are initially recognized in the financial statements only when it is more likely than not that the position will be sustained upon examination by the tax authorities . such tax positions are both initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 % likelihood of being realized upon settlement with the tax authority , assuming full knowledge of the position and all relevant facts . interest and penalties on income tax uncertainties are classified within income tax expense in the income statement . fair value measurements . story_separator_special_tag · fdic insurance premiums decreased in 2016 compared to 2015 due to improved asset quality metrics . · other noninterest expense increased primarily due to increased expense at the mortgage banking segment which correlated with the increased origination and funding volumes . income taxes income tax expense increased $ 7.2 million to $ 16.5 million during the year ended december 31 , 2016 , compared to $ 9.2 million during the year ended december 31 , 2015. income tax expense was recognized during the year ended december 31 , 2016 at an effective rate of 39.2 % compared to an effective rate of 35.8 % during the year ended december 31 , 2015. the increase in the effective rate was due to the write off of a deferred tax asset and an increase in pretax income , which minimizes the impact of tax deductions and tax-exempt income . at the beginning of the year , the company had a deferred tax asset of $ 857,000 related to stock options awarded in 2007. during the year ended december 31 , 2016 , all of the options that gave rise to the deferred tax asset were exercised and a tax deduction was realized to the extent that the exercise price exceeded the option strike price . the amount of the deduction realized by the company was significantly less than the deferred tax asset . as a result , the remaining deferred tax asset was written off and the company recognized $ 658,000 in additional income tax expense . comparison of community banking segment operations for the years ended december 31 , 2015 and 2014 net income from our community banking segment for the year ended december 31 , 2015 totaled $ 8.3 million compared to net income of $ 10.0 million for the year ended december 31 , 2014. net interest income decreased $ 1.9 million to $ 37.7 million for the year ended december 31 , 2015 compared to $ 39.6 million the year ended december 31 , 2014 due to a decrease in average rate driven by turnover of the loan portfolio . the provision for loan losses increased $ 850,000 compared to the prior year . compensation , payroll taxes , and other employee benefits expense increased $ 1.5 million to $ 16.5 million due to the distribution of additional equity awards in 2015. the immediate vesting of 94,100 restricted share awards amounted to $ 1.2 million in additional compensation expense . occupancy , office furniture , and equipment expense decreased slightly from the prior year . fdic insurance premium expense decreased $ 337,000 due to a decrease in the fdic assessment as a result of the bank 's improved camels ratings and continued improvement in asset quality ratios . real estate owned expense increased for the year ended december 31 , 2015 compared to prior year due to a larger amount of writedowns which reflects management 's plan to expedite the sale of older properties . other non-interest expenses decreased from the prior year . - 50 - comparison of mortgage banking segment operations for the years ended december 31 , 2015 and 2014 net income from our mortgage banking segment for the year ended december 31 , 2015 totaled $ 8.3 million compared to net income of $ 2.4 million for the year ended december 31 , 2014. mortgage banking segment revenues increased $ 19.8 million , or 24.2 % , to $ 101.5 million for the year ended december 31 , 2015 compared to the year ended december 31 , 2014. the increase in mortgage banking revenues was attributable to an increase in sales volume along with an increase in margin . loans originated for sale in the secondary market totaled $ 2.0 billion during the year ended december 31 , 2015 , representing a $ 324.8 million , or 19.6 % , increase in originations from the year ended december 31 , 2014 which totaled $ 1.7 billion . in addition to the increases in revenue resulting from an increase in origination volume , mortgage banking revenues increased due to an increase in average sales margin across all product types and geographic markets . loans originated for the purpose of a residential property purchase increased 14.1 % and comprised 83.7 % of production during the year ended december 31 , 2015. the mix of loan type changed slightly with the purpose of a residential property purchase and the purpose of refinance loans comprising 83.7 % and 16.3 % of all loan originations , respectively , during the year ended december 31 , 2015 compared to 87.0 % and 13.0 % in the prior year . origination volumes of conventional loans increased 25.8 % and governmental loans increased 6.6 % . the mix of loan type changed slightly with conventional loans and governmental loans comprising 66.4 % and 33.6 % of all loan originations , respectively , during the year ended december 31 , 2015. during the year ended december 31 , 2014 conventional loans and governmental loans comprised 62.6 % and 37.4 % of all loan originations , respectively . conventional loans include loans that conform to fannie mae and freddie mac standards , whereas governmental loans are those loans guaranteed by the federal government , such as a federal housing authority or u.s. department of agriculture loan . during the year ended december 31 , 2015 , mortgage servicing rights related to $ 580.2 million in loans receivable with a book value of $ 4.4 million were sold at a gain of $ 901,000. during the year ended december 31 , 2014 , mortgage servicing rights related to $ 713.0 million in loans receivable with a book value of $ 4.6 million were sold at a gain of $ 2.5 million . total compensation , payroll taxes and other employee benefits increased $ 11.1 million , or 20.3 % , to $ 65.7 million for the year ended december 31 , 2015 compared to

cash surrender value of life insurance . total cash surrender value of life insurance increased $ 11.9 million , or 24.1 % , from december 31 , 2015. during the year ended december 31 , 2016 , the company purchased a $ 10.0 million bank owned life insurance policy , along with continued earnings aiding in increasing the policy values . real estate owned . total real estate owned decreased by $ 3.1 million , or 33.4 % , to $ 6.1 million at december 31 , 2016 , compared to $ 9.2 million at december 31 , 2015. during the year ended december 31 , 2016 , $ 4.6 million was transferred from loans to real estate owned upon completion of foreclosure . during the same period , sales of real estate owned totaled $ 7.0 million . write-downs totaled $ 656,000 during the year ended december 31 , 2016. deposits . deposits increased by $ 56.1 million to $ 949.4 million at december 31 , 2016 , from $ 893.4 million at december 31 , 2015 . the increase was driven by an increase in more cost effective transaction accounts along with an increase in time deposits to help fund loan and loans held for sale growth and reduce our reliance on wholesale funding . borrowings . total borrowings decreased $ 54.0 million to $ 387.2 million at december 31 , 2016 , from $ 441.2 million at december 31 , 2015. a total of $ 220.0 million of fixed rate borrowings matured and were paid off during the current year . these were replaced with $ 100.0 million of new fixed rate long-term borrowings with the federal home loan bank and with funds raised through our retail delivery channels . short term borrowings increased $ 66.0 million at december 31 , 2016 from december 31 , 2015 for both the community banking and mortgage banking segment to fund loans held for sale . other liabilities .


 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 surrender value of life insurance . total cash surrender value of life insurance increased $ 11.9 million , or 24.1 % , from december 31 , 2015. during the year ended december 31 , 2016 , the company purchased a $ 10.0 million bank owned life insurance policy , along with continued earnings aiding in increasing the policy values . real estate owned . total real estate owned decreased by $ 3.1 million , or 33.4 % , to $ 6.1 million at december 31 , 2016 , compared to $ 9.2 million at december 31 , 2015. during the year ended december 31 , 2016 , $ 4.6 million was transferred from loans to real estate owned upon completion of foreclosure . during the same period , sales of real estate owned totaled $ 7.0 million . write-downs totaled $ 656,000 during the year ended december 31 , 2016. deposits . deposits increased by $ 56.1 million to $ 949.4 million at december 31 , 2016 , from $ 893.4 million at december 31 , 2015 . the increase was driven by an increase in more cost effective transaction accounts along with an increase in time deposits to help fund loan and loans held for sale growth and reduce our reliance on wholesale funding . borrowings . total borrowings decreased $ 54.0 million to $ 387.2 million at december 31 , 2016 , from $ 441.2 million at december 31 , 2015. a total of $ 220.0 million of fixed rate borrowings matured and were paid off during the current year . these were replaced with $ 100.0 million of new fixed rate long-term borrowings with the federal home loan bank and with funds raised through our retail delivery channels . short term borrowings increased $ 66.0 million at december 31 , 2016 from december 31 , 2015 for both the community banking and mortgage banking segment to fund loans held for sale . other liabilities .
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 Suspicious Activity Report : a valuation allowance is established for an amount equal to the impairment when the carrying amount of the loan exceeds the present value of the expected future cash flows , discounted at the loan 's original effective interest rate or the fair value of the underlying collateral ( specific component ) . the company recognizes the change in present value of expected future cash flows on impaired loans attributable to the passage of time as bad debt expense . on an ongoing basis , at least quarterly for financial reporting purposes , the fair value of collateral dependent impaired loans and real estate owned is determined or reaffirmed by the following procedures : obtaining updated real estate appraisals or performing updated discounted cash flow analysis ; confirming that the physical condition of the real estate has not significantly changed since the last valuation date ; comparing the estimated current book value to that of updated sales values experienced on similar real estate owned ; comparing the estimated current book value to that of updated values seen on more current appraisals of similar properties ; and comparing the estimated current book value to that of updated listed sales prices on our real estate owned and that of similar properties ( not owned by the company ) . waterstone bank also establishes valuation allowances based on an evaluation of the various risk components that are inherent in the credit portfolio ( general component ) . the risk components that are evaluated include past loan loss experience ; the level of non-performing and classified assets ; current economic conditions ; volume , growth , and composition of the loan portfolio ; adverse situations that may affect the borrower 's ability to repay ; the estimated value of any underlying collateral ; regulatory guidance ; and other relevant factors . the allowance is increased by provisions charged to earnings and recoveries of previously charged-off loans and reduced by charge-offs . charge-offs approximate the amount by which the outstanding principal balance exceeds the estimated net realizable value of the underlying collateral . the appropriateness of the allowance for loan losses is reviewed and approved quarterly by the waterstone bank board of directors . the allowance reflects management 's best estimate of the amount needed to provide for the probable loss on impaired loans and other inherent losses in the loan portfolio , and is based on a risk model developed and implemented by management and approved by the waterstone bank board of directors . actual results could differ from this estimate , and future additions to the allowance may be necessary based on unforeseen changes in loan quality and economic conditions . more specifically , if our future charge-off experience increases substantially from our past experience , or if the value of underlying loan collateral , in our case mostly real estate , declines in value by a substantial amount , or if unemployment in our primary market area increases significantly , our allowance for loan losses may be inadequate and we will incur higher provisions for loan losses and lower net income in the future . in addition , state and federal regulators periodically review the waterstone bank allowance for loan losses . such regulators have the authority to require waterstone bank to recognize additions to the allowance at the time of their examination . - 43 - income taxes . the company and its subsidiaries file consolidated federal , combined state income tax , and separate state income tax returns . the provision for income taxes is based upon income in the consolidated financial statements , rather than amounts reported on the income tax return . deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases as well as for net operating loss carry forwards . deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled . the effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date . under generally accepted accounting principles , a valuation allowance is required to be recognized if it is `` more likely than not `` that a deferred tax asset will not be realized . the determination of the realizability of deferred tax assets is highly subjective and dependent upon judgment concerning management 's evaluation of both positive and negative evidence , the forecasts of future income , applicable tax planning strategies , and assessments of current and future economic and business conditions . examples of positive evidence may include the existence of taxes paid in available carry-back years as well as the probability that taxable income will be generated in future periods . examples of negative evidence may include cumulative losses in a current year and prior two years and general business and economic trends . positions taken in the company 's tax returns are subject to challenge by the taxing authorities upon examination . the benefit of uncertain tax positions are initially recognized in the financial statements only when it is more likely than not that the position will be sustained upon examination by the tax authorities . such tax positions are both initially and subsequently measured as the largest amount of tax benefit that has a greater than 50 % likelihood of being realized upon settlement with the tax authority , assuming full knowledge of the position and all relevant facts . interest and penalties on income tax uncertainties are classified within income tax expense in the income statement . fair value measurements . story_separator_special_tag · fdic insurance premiums decreased in 2016 compared to 2015 due to improved asset quality metrics . · other noninterest expense increased primarily due to increased expense at the mortgage banking segment which correlated with the increased origination and funding volumes . income taxes income tax expense increased $ 7.2 million to $ 16.5 million during the year ended december 31 , 2016 , compared to $ 9.2 million during the year ended december 31 , 2015. income tax expense was recognized during the year ended december 31 , 2016 at an effective rate of 39.2 % compared to an effective rate of 35.8 % during the year ended december 31 , 2015. the increase in the effective rate was due to the write off of a deferred tax asset and an increase in pretax income , which minimizes the impact of tax deductions and tax-exempt income . at the beginning of the year , the company had a deferred tax asset of $ 857,000 related to stock options awarded in 2007. during the year ended december 31 , 2016 , all of the options that gave rise to the deferred tax asset were exercised and a tax deduction was realized to the extent that the exercise price exceeded the option strike price . the amount of the deduction realized by the company was significantly less than the deferred tax asset . as a result , the remaining deferred tax asset was written off and the company recognized $ 658,000 in additional income tax expense . comparison of community banking segment operations for the years ended december 31 , 2015 and 2014 net income from our community banking segment for the year ended december 31 , 2015 totaled $ 8.3 million compared to net income of $ 10.0 million for the year ended december 31 , 2014. net interest income decreased $ 1.9 million to $ 37.7 million for the year ended december 31 , 2015 compared to $ 39.6 million the year ended december 31 , 2014 due to a decrease in average rate driven by turnover of the loan portfolio . the provision for loan losses increased $ 850,000 compared to the prior year . compensation , payroll taxes , and other employee benefits expense increased $ 1.5 million to $ 16.5 million due to the distribution of additional equity awards in 2015. the immediate vesting of 94,100 restricted share awards amounted to $ 1.2 million in additional compensation expense . occupancy , office furniture , and equipment expense decreased slightly from the prior year . fdic insurance premium expense decreased $ 337,000 due to a decrease in the fdic assessment as a result of the bank 's improved camels ratings and continued improvement in asset quality ratios . real estate owned expense increased for the year ended december 31 , 2015 compared to prior year due to a larger amount of writedowns which reflects management 's plan to expedite the sale of older properties . other non-interest expenses decreased from the prior year . - 50 - comparison of mortgage banking segment operations for the years ended december 31 , 2015 and 2014 net income from our mortgage banking segment for the year ended december 31 , 2015 totaled $ 8.3 million compared to net income of $ 2.4 million for the year ended december 31 , 2014. mortgage banking segment revenues increased $ 19.8 million , or 24.2 % , to $ 101.5 million for the year ended december 31 , 2015 compared to the year ended december 31 , 2014. the increase in mortgage banking revenues was attributable to an increase in sales volume along with an increase in margin . loans originated for sale in the secondary market totaled $ 2.0 billion during the year ended december 31 , 2015 , representing a $ 324.8 million , or 19.6 % , increase in originations from the year ended december 31 , 2014 which totaled $ 1.7 billion . in addition to the increases in revenue resulting from an increase in origination volume , mortgage banking revenues increased due to an increase in average sales margin across all product types and geographic markets . loans originated for the purpose of a residential property purchase increased 14.1 % and comprised 83.7 % of production during the year ended december 31 , 2015. the mix of loan type changed slightly with the purpose of a residential property purchase and the purpose of refinance loans comprising 83.7 % and 16.3 % of all loan originations , respectively , during the year ended december 31 , 2015 compared to 87.0 % and 13.0 % in the prior year . origination volumes of conventional loans increased 25.8 % and governmental loans increased 6.6 % . the mix of loan type changed slightly with conventional loans and governmental loans comprising 66.4 % and 33.6 % of all loan originations , respectively , during the year ended december 31 , 2015. during the year ended december 31 , 2014 conventional loans and governmental loans comprised 62.6 % and 37.4 % of all loan originations , respectively . conventional loans include loans that conform to fannie mae and freddie mac standards , whereas governmental loans are those loans guaranteed by the federal government , such as a federal housing authority or u.s. department of agriculture loan . during the year ended december 31 , 2015 , mortgage servicing rights related to $ 580.2 million in loans receivable with a book value of $ 4.4 million were sold at a gain of $ 901,000. during the year ended december 31 , 2014 , mortgage servicing rights related to $ 713.0 million in loans receivable with a book value of $ 4.6 million were sold at a gain of $ 2.5 million . total compensation , payroll taxes and other employee benefits increased $ 11.1 million , or 20.3 % , to $ 65.7 million for the year ended december 31 , 2015 compared to

