total assets increased to $ 913.9 million at december 31 , 2019 from $ 877.3 million at december 31 , 2018. total loans including net deferred fees and unearned income increased by $ 7.3 million , or 1.0 % , to $ 775.6 million as of december 31 , 2019 compared to $ 768.2 million as of december 31 , 2018. total deposits increased by 4.9 % to $ 750.9 million as of december 31 , 2019 from $ 716.0 million as of december 31 , 2018. results of operations the following table sets forth a summary financial overview for the comparable years : replace_table_token_5_th 17 index interest rates and differentials the following table illustrates average yields on interest-earning assets and average rates on interest-bearing liabilities for the periods indicated : replace_table_token_6_th ( 1 ) includes nonaccrual loans . ( 2 ) net interest margin is computed by dividing net interest income by total average earning assets . ( 3 ) net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities . 18 index replace_table_token_7_th ( 1 ) includes nonaccrual loans . ( 2 ) net interest margin is computed by dividing net interest income by total average earning assets . ( 3 ) net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities . the table below sets forth the relative impact on net interest income of changes in the volume of earning assets and interest-bearing liabilities and changes in rates earned and paid by the company on such assets and liabilities . for purposes of this table , nonaccrual loans have been included in the average loan balances . replace_table_token_8_th ( 1 ) changes due to both volume and rate have been allocated to volume changes . 19 index comparison of interest income , interest expense and net interest margin commercial loans consist of term loans and revolving business lines of credit . under the terms of the revolving lines of credit , the company grants a maximum loan amount , which remains available to the business during the loan term . the collateral for these loans typically are by uniform commercial code ( “ ucc-1 ” ) lien filings , real estate and personal guarantees . the company does not extend material loans of this type in excess of five years . interest expense for the year ended december 31 , 2019 increased compared to 2018 by $ 2.4 million and increased compared to 2017 by $ 6.7 million , respectively , to $ 11.4 million . the increase for 2019 compared to 2018 was mostly the result of the increase of deposits and increased rates paid on interest-bearing demand deposits and time deposits . the average cost on interest-bearing deposits also increased to 165 basis points in 2019 compared to 128 basis points in 2018. total cost of funds increased by 28 basis points for 2019 compared to 2018 and by 78 basis points compared to 2017. the net impact of the changes in yields on interest-earning assets and the rates paid on interest-bearing liabilities was to decrease the margin for 2019 compared to 2018. the net interest margin was 4.06 % for 2019 compared to 4.07 % for 2018 and 4.34 % in 2017. net interest income increased by $ 0.7 million for 2019 compared to 2018 and $ 1.7 million , compared to 2017. total interest income increased by $ 5.2 million to $ 42.6 million in 2018 compared to 2017. the interest income was impacted by increased yields on earning assets in 2018 which increased to 5.16 % compared to 4.96 % for 2017. the average yield on loans increased to 5.44 % for 2018 compared to 5.24 % for 2017. total interest expense increased by $ 4.3 million in 2018 compared to 2017. this increase was primarily due to increased total cost of funds which include non-interest bearing deposits from 68 basis points for 2017 to 118 basis points for 2018. net interest income increased by $ 1.0 million for 2018 compared to 2017. provision for loan losses the provision for loan losses in each period is reflected as a charge against earnings in that period . the provision for loan losses is equal to the amount required to maintain the allowance for loan losses at a level that is adequate to absorb probable losses inherent in the loan portfolio . the provision ( credit ) for loan losses was $ ( 165,000 ) in 2019 compared to $ 14,000 in 2018 and $ 411,000 in 2017. the provision ( credit ) for loan losses for 2019 resulted primarily from net recoveries and change in the loan portfolio mix . the provision for 2018 resulted primarily from loan growth and change in loan portfolio mix . as a result of improvements in credit quality , decreased historical loss rates , and net recoveries for the year , the ratio of the allowance for loan losses to loans held for investment decreased to 1.19 % at december 31 , 2019 from 1.21 % at december 31 , 2018. additional information regarding improved credit quality can be found beginning on page 26 . 20 index the following table summarizes the provision ( credit ) , charge-offs ( recoveries ) by loan category for the year ended december 31 , 2019 , 2018 and 2017 : replace_table_token_9_th the percentage of net non-accrual loans ( net of government guarantees ) to the total loan portfolio has decreased to 0.31 % as of december 31 , 2019 from 0.44 % at december 31 , 2018 primarily due to commercial loan repayments . story_separator_special_tag the company 's business is concentrated in these areas and the loan portfolio includes significant credit exposure to the manufactured housing and commercial real estate markets of these areas . as of december 31 , 2019 and 2018 , manufactured housing loans comprised 33.2 % and 32.2 % , of total loans , respectively . as of december 31 , 2019 and 2018 , commercial real estate loans accounted for approximately 49.7 % and 47.6 % of total loans , respectively . approximately 31.9 % and 33.8 % of these commercial real estate loans were owner occupied at december 31 , 2019 and 2018 , respectively . substantially all of these loans are secured by first liens with an average loan to value ratios of 54.3 % and 57.9 % at december 31 , 2019 and 2018 , respectively . the company was within established policy limits at december 31 , 2019 and 2018 . 27 index interest reserves interest reserves are generally established at the time of the loan origination as an expense item in the budget for a construction and land development loan . the company 's practice is to monitor the construction , sales and or leasing progress to determine the feasibility of ongoing construction and development projects . if , at any time during the life of the loan , the project is determined not to be viable , the company discontinues the use of the interest reserve and may take appropriate action to protect its collateral position via renegotiation and or legal action as deemed appropriate . at december 31 , 2019 , the company had 11 loans with an outstanding balance of $ 24.0 million with available interest reserves of $ 2.8 million . total construction and land loans are approximately 5 % and 10 % of the company 's loan portfolio at december 31 , 2019 and 2018 , respectively . impaired loans a loan is considered impaired when , based on current information , it is probable that the company will be unable to collect the scheduled payments of principal and or interest under the contractual terms of the loan agreement . factors considered by management in determining impairment include payment status , collateral value and the probability of collecting scheduled principal and or interest payments . loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired . management determines the significance of payment delays or payment shortfalls on a case-by-case basis . when determining the possibility of impairment , management considers the circumstances surrounding the loan and the borrower , including the length of the delay , the reasons for the delay , the borrower 's prior payment record and the amount of the shortfall in relation to the principal and interest owed . for collateral-dependent loans , the company uses the fair value of collateral method to measure impairment . all other loans are measured for impairment based on the present value of future cash flows . impairment is measured on a loan-by-loan basis for all impaired loans in the portfolio . a loan is considered a troubled debt restructured loan ( “ tdr ” ) when concessions have been made to the borrower and the borrower is in financial difficulty . these concessions include but are not limited to term extensions , rate reductions and principal reductions . forgiveness of principal is rarely granted and modifications for all classes of loans are predominantly term extensions . tdr loans are also considered impaired . the recorded investment in loans that are considered impaired is as follows : replace_table_token_16_th 28 index the following schedule summarizes impaired loans and specific reserves by loan class as of the periods indicated : replace_table_token_17_th $ 0.6 million of the above impaired loans are government guaranteed . replace_table_token_18_th $ 3.1 million of the above impaired loans are government guaranteed . total impaired loans decreased by $ 11.1 million at december 31 , 2019 compared to december 31 , 2018. the manufactured housing impaired loans decreased by $ 4.0 million and commercial impaired loans decreased by $ 6.0 million in 2019 compared to 2018. both the sba and single family real estate impaired loans decreased by $ 0.5 million each in 2019 compared to 2018. impaired manufactured housing loans decreased mainly due to upgrades and payoffs of existing loans . impaired commercial loans decreased in 2019 compared to 2018 primarily due to loan payoffs and payments paired with a couple of foreclosed properties transferred into other real estate owned . 29 index the following schedule reflects recorded investment in certain types of loans at the dates indicated : replace_table_token_19_th the accrual of interest is discontinued when substantial doubt exists as to collectability of the loan ; generally at the time the loan is 90 days delinquent . any unpaid but accrued interest is reversed at that time . thereafter , interest income is usually no longer recognized on the loan . interest income may be recognized on impaired loans to the extent they are not past due by 90 days . interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method , until qualifying for return to accrual . loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured . the following table summarizes the composition of nonaccrual loans : replace_table_token_20_th total nonaccrual balances decreased $ 3.5 million to $ 2.7 million at december 31 , 2019 , from $ 6.2 million at december 31 , 2018. nonaccrual balances include $ 0.3 million and $ 2.8 million of loans that are government guaranteed at december 31 , 2019 and 2018 , respectively . nonaccrual loans net of government guarantees decreased $ 1.0 million or 29 % , from $ 3.4 million at december 31 , 2018 to $ 2.4 million at december 31 , 2019. the percentage of nonaccrual loans to the total loan

capital resources the federal banking agencies have adopted risk-based capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding companies and banks . in july 2013 , the federal banking agencies approved the final rules ( “ final rules ” ) to establish a new comprehensive regulatory capital framework with a phase-in period beginning january 1 , 2015 and ending january 1 , 2019. the final rules implement the third installment of the basel accords ( “ basel iii ” ) regulatory capital reforms and changes required by the dodd-frank wall street reform and consumer protection act ( “ dodd-frank act ” ) and substantially amended the regulatory risk-based capital rules applicable to the company . basel iii redefined the regulatory capital elements and minimum capital ratios , introduced regulatory capital buffers above those minimums , revised rules for calculating risk-weighted assets and added a new component of tier 1 capital called common equity tier 1 , which includes common equity and retained earnings and excludes preferred equity . the following tables illustrates the bank 's regulatory ratios and the current adequacy guidelines as of december 31 , 2019 and 2018. the fully-phased in guidelines applicable on january 1 , 2019 are also summarized . replace_table_token_30_th contractual obligations and off-balance sheet arrangements the company enters into contracts for services in the ordinary course of business that may require payment for services to be provided in the future and may contain penalty clauses for early termination of the contracts . to meet the financing needs of customers , the company has financial instruments with off-balance sheet risk , including commitments to extend credit and standby letters of credit . the company does not believe that these off-balance sheet arrangements have or are reasonably likely to have a material effect on its financial condition , changes in financial condition , revenues or expenses , results of operations , liquidity , capital expenditures , or capital resources . however , there can be no assurance that such arrangements will not have a future effect .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```capital resources the federal banking agencies have adopted risk-based capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding companies and banks . in july 2013 , the federal banking agencies approved the final rules ( “ final rules ” ) to establish a new comprehensive regulatory capital framework with a phase-in period beginning january 1 , 2015 and ending january 1 , 2019. the final rules implement the third installment of the basel accords ( “ basel iii ” ) regulatory capital reforms and changes required by the dodd-frank wall street reform and consumer protection act ( “ dodd-frank act ” ) and substantially amended the regulatory risk-based capital rules applicable to the company . basel iii redefined the regulatory capital elements and minimum capital ratios , introduced regulatory capital buffers above those minimums , revised rules for calculating risk-weighted assets and added a new component of tier 1 capital called common equity tier 1 , which includes common equity and retained earnings and excludes preferred equity . the following tables illustrates the bank 's regulatory ratios and the current adequacy guidelines as of december 31 , 2019 and 2018. the fully-phased in guidelines applicable on january 1 , 2019 are also summarized . replace_table_token_30_th contractual obligations and off-balance sheet arrangements the company enters into contracts for services in the ordinary course of business that may require payment for services to be provided in the future and may contain penalty clauses for early termination of the contracts . to meet the financing needs of customers , the company has financial instruments with off-balance sheet risk , including commitments to extend credit and standby letters of credit . the company does not believe that these off-balance sheet arrangements have or are reasonably likely to have a material effect on its financial condition , changes in financial condition , revenues or expenses , results of operations , liquidity , capital expenditures , or capital resources . however , there can be no assurance that such arrangements will not have a future effect .
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 Suspicious Activity Report : total assets increased to $ 913.9 million at december 31 , 2019 from $ 877.3 million at december 31 , 2018. total loans including net deferred fees and unearned income increased by $ 7.3 million , or 1.0 % , to $ 775.6 million as of december 31 , 2019 compared to $ 768.2 million as of december 31 , 2018. total deposits increased by 4.9 % to $ 750.9 million as of december 31 , 2019 from $ 716.0 million as of december 31 , 2018. results of operations the following table sets forth a summary financial overview for the comparable years : replace_table_token_5_th 17 index interest rates and differentials the following table illustrates average yields on interest-earning assets and average rates on interest-bearing liabilities for the periods indicated : replace_table_token_6_th ( 1 ) includes nonaccrual loans . ( 2 ) net interest margin is computed by dividing net interest income by total average earning assets . ( 3 ) net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities . 18 index replace_table_token_7_th ( 1 ) includes nonaccrual loans . ( 2 ) net interest margin is computed by dividing net interest income by total average earning assets . ( 3 ) net interest spread represents average yield earned on interest-earning assets less the average rate paid on interest-bearing liabilities . the table below sets forth the relative impact on net interest income of changes in the volume of earning assets and interest-bearing liabilities and changes in rates earned and paid by the company on such assets and liabilities . for purposes of this table , nonaccrual loans have been included in the average loan balances . replace_table_token_8_th ( 1 ) changes due to both volume and rate have been allocated to volume changes . 19 index comparison of interest income , interest expense and net interest margin commercial loans consist of term loans and revolving business lines of credit . under the terms of the revolving lines of credit , the company grants a maximum loan amount , which remains available to the business during the loan term . the collateral for these loans typically are by uniform commercial code ( “ ucc-1 ” ) lien filings , real estate and personal guarantees . the company does not extend material loans of this type in excess of five years . interest expense for the year ended december 31 , 2019 increased compared to 2018 by $ 2.4 million and increased compared to 2017 by $ 6.7 million , respectively , to $ 11.4 million . the increase for 2019 compared to 2018 was mostly the result of the increase of deposits and increased rates paid on interest-bearing demand deposits and time deposits . the average cost on interest-bearing deposits also increased to 165 basis points in 2019 compared to 128 basis points in 2018. total cost of funds increased by 28 basis points for 2019 compared to 2018 and by 78 basis points compared to 2017. the net impact of the changes in yields on interest-earning assets and the rates paid on interest-bearing liabilities was to decrease the margin for 2019 compared to 2018. the net interest margin was 4.06 % for 2019 compared to 4.07 % for 2018 and 4.34 % in 2017. net interest income increased by $ 0.7 million for 2019 compared to 2018 and $ 1.7 million , compared to 2017. total interest income increased by $ 5.2 million to $ 42.6 million in 2018 compared to 2017. the interest income was impacted by increased yields on earning assets in 2018 which increased to 5.16 % compared to 4.96 % for 2017. the average yield on loans increased to 5.44 % for 2018 compared to 5.24 % for 2017. total interest expense increased by $ 4.3 million in 2018 compared to 2017. this increase was primarily due to increased total cost of funds which include non-interest bearing deposits from 68 basis points for 2017 to 118 basis points for 2018. net interest income increased by $ 1.0 million for 2018 compared to 2017. provision for loan losses the provision for loan losses in each period is reflected as a charge against earnings in that period . the provision for loan losses is equal to the amount required to maintain the allowance for loan losses at a level that is adequate to absorb probable losses inherent in the loan portfolio . the provision ( credit ) for loan losses was $ ( 165,000 ) in 2019 compared to $ 14,000 in 2018 and $ 411,000 in 2017. the provision ( credit ) for loan losses for 2019 resulted primarily from net recoveries and change in the loan portfolio mix . the provision for 2018 resulted primarily from loan growth and change in loan portfolio mix . as a result of improvements in credit quality , decreased historical loss rates , and net recoveries for the year , the ratio of the allowance for loan losses to loans held for investment decreased to 1.19 % at december 31 , 2019 from 1.21 % at december 31 , 2018. additional information regarding improved credit quality can be found beginning on page 26 . 20 index the following table summarizes the provision ( credit ) , charge-offs ( recoveries ) by loan category for the year ended december 31 , 2019 , 2018 and 2017 : replace_table_token_9_th the percentage of net non-accrual loans ( net of government guarantees ) to the total loan portfolio has decreased to 0.31 % as of december 31 , 2019 from 0.44 % at december 31 , 2018 primarily due to commercial loan repayments . story_separator_special_tag the company 's business is concentrated in these areas and the loan portfolio includes significant credit exposure to the manufactured housing and commercial real estate markets of these areas . as of december 31 , 2019 and 2018 , manufactured housing loans comprised 33.2 % and 32.2 % , of total loans , respectively . as of december 31 , 2019 and 2018 , commercial real estate loans accounted for approximately 49.7 % and 47.6 % of total loans , respectively . approximately 31.9 % and 33.8 % of these commercial real estate loans were owner occupied at december 31 , 2019 and 2018 , respectively . substantially all of these loans are secured by first liens with an average loan to value ratios of 54.3 % and 57.9 % at december 31 , 2019 and 2018 , respectively . the company was within established policy limits at december 31 , 2019 and 2018 . 27 index interest reserves interest reserves are generally established at the time of the loan origination as an expense item in the budget for a construction and land development loan . the company 's practice is to monitor the construction , sales and or leasing progress to determine the feasibility of ongoing construction and development projects . if , at any time during the life of the loan , the project is determined not to be viable , the company discontinues the use of the interest reserve and may take appropriate action to protect its collateral position via renegotiation and or legal action as deemed appropriate . at december 31 , 2019 , the company had 11 loans with an outstanding balance of $ 24.0 million with available interest reserves of $ 2.8 million . total construction and land loans are approximately 5 % and 10 % of the company 's loan portfolio at december 31 , 2019 and 2018 , respectively . impaired loans a loan is considered impaired when , based on current information , it is probable that the company will be unable to collect the scheduled payments of principal and or interest under the contractual terms of the loan agreement . factors considered by management in determining impairment include payment status , collateral value and the probability of collecting scheduled principal and or interest payments . loans that experience insignificant payment delays or payment shortfalls generally are not classified as impaired . management determines the significance of payment delays or payment shortfalls on a case-by-case basis . when determining the possibility of impairment , management considers the circumstances surrounding the loan and the borrower , including the length of the delay , the reasons for the delay , the borrower 's prior payment record and the amount of the shortfall in relation to the principal and interest owed . for collateral-dependent loans , the company uses the fair value of collateral method to measure impairment . all other loans are measured for impairment based on the present value of future cash flows . impairment is measured on a loan-by-loan basis for all impaired loans in the portfolio . a loan is considered a troubled debt restructured loan ( “ tdr ” ) when concessions have been made to the borrower and the borrower is in financial difficulty . these concessions include but are not limited to term extensions , rate reductions and principal reductions . forgiveness of principal is rarely granted and modifications for all classes of loans are predominantly term extensions . tdr loans are also considered impaired . the recorded investment in loans that are considered impaired is as follows : replace_table_token_16_th 28 index the following schedule summarizes impaired loans and specific reserves by loan class as of the periods indicated : replace_table_token_17_th $ 0.6 million of the above impaired loans are government guaranteed . replace_table_token_18_th $ 3.1 million of the above impaired loans are government guaranteed . total impaired loans decreased by $ 11.1 million at december 31 , 2019 compared to december 31 , 2018. the manufactured housing impaired loans decreased by $ 4.0 million and commercial impaired loans decreased by $ 6.0 million in 2019 compared to 2018. both the sba and single family real estate impaired loans decreased by $ 0.5 million each in 2019 compared to 2018. impaired manufactured housing loans decreased mainly due to upgrades and payoffs of existing loans . impaired commercial loans decreased in 2019 compared to 2018 primarily due to loan payoffs and payments paired with a couple of foreclosed properties transferred into other real estate owned . 29 index the following schedule reflects recorded investment in certain types of loans at the dates indicated : replace_table_token_19_th the accrual of interest is discontinued when substantial doubt exists as to collectability of the loan ; generally at the time the loan is 90 days delinquent . any unpaid but accrued interest is reversed at that time . thereafter , interest income is usually no longer recognized on the loan . interest income may be recognized on impaired loans to the extent they are not past due by 90 days . interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method , until qualifying for return to accrual . loans are returned to accrual status when all of the principal and interest amounts contractually due are brought current and future payments are reasonably assured . the following table summarizes the composition of nonaccrual loans : replace_table_token_20_th total nonaccrual balances decreased $ 3.5 million to $ 2.7 million at december 31 , 2019 , from $ 6.2 million at december 31 , 2018. nonaccrual balances include $ 0.3 million and $ 2.8 million of loans that are government guaranteed at december 31 , 2019 and 2018 , respectively . nonaccrual loans net of government guarantees decreased $ 1.0 million or 29 % , from $ 3.4 million at december 31 , 2018 to $ 2.4 million at december 31 , 2019. the percentage of nonaccrual loans to the total loan

