goodwill was $ 5.0 million at december 31 , 2018 and 2017. during the fourth quarter of 2018 , the market value of our stock price dropped below our tangible book value . we engaged a third party to assist the company in determining the fair value of the company as a single reporting unit pursuant to step 1 of the 33 financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) 350-20-35 ( the “ step 1 analysis ” ) as of december 31 , 2018. the step 1 analysis included an income and market approaches . the income approach used as discounted cash flow method . this method estimates value by forecasting income for a forecast period and estimates the terminal value . these amounts were then discounted back to december 31 , 2018. the market approach used the market value of equity to tangible book value multiple of similar publicly traded commercial banks ( e.g . tota l tangible assets , pre-tax return on average assets , located in the midwest ) . the market approach also includes the acquisition price/tangible book value multiple on similar sized banks in the midwest occurring after january 1 , 2017. more weighting was p laced on the income method . through the step 1 analysis it was determined there was no impairment charge to goodwill in the year ended december 31 , 2018. goodwill is included on the consolidated balance sheets . the future value of goodwill could be im pacted by the company 's future earnings , largely related to unanticipated losses from the company 's loan portfolio . allowance for loan losses the allowance for loan losses is established through a provision for loan losses charged to expense , which affects our earnings directly . loans are charged against the allowance for loan losses when management believes that the collectability of all or some of the principal is unlikely . subsequent recoveries are added to the allowance . the allowance is an amount that reflects management 's estimate of the level of probable incurred losses in the loan portfolio . factors considered by management in determining the adequacy of the allowance include , but are not limited to , detailed reviews of individual loans , historical and current trends in loan charge-offs for the various portfolio segments evaluated , the level of the allowance in relation to total loans and to historical loss levels , levels and trends in non-performing and past due loans , volume of and migratory direction of adversely graded loans , external factors including regulatory requirements , reputation , and competition , and management 's assessment of economic conditions . our board of directors reviews the recommendations of management regarding the appropriate level for the allowance for loan losses based upon these factors . the provision for loan losses is the charge to operating earnings necessary to maintain an adequate allowance for loan losses . we have developed policies and procedures for evaluating the overall quality of our loan portfolio and the timely identification of problem credits . management continuously reviews these policies and procedures and makes further improvements as needed . the adequacy of our allowance for loan losses and the effectiveness of our internal policies and procedures are also reviewed periodically by our regulators and our auditors and external loan review personnel . our regulators may advise us to recognize additions to the allowance based upon their judgments about information available to them at the time of their examination . such regulatory guidance is taken under consideration by management , and we may recognize additions to the allowance as a result . we continually refine our methodology for determining the allowance for loan losses by comparing historical loss ratios utilized to actual experience and by classifying loans for analysis based on similar risk characteristics . cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreements ; however , cash receipts on impaired and nonaccrual loans for which the accrual of interest has been discontinued are applied to principal and interest income depending upon the overall risk of principal loss to us . other real estate owned assets acquired through or in lieu of loan foreclosure are initially recorded at lower of cost or fair value less estimated costs to sell , establishing a new cost basis . subsequent to foreclosure , independent valuations are performed annually and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell . revenue and expenses from operations and changes in the valuation allowance are included in other non-interest expense . costs related to the development and improvement of other real estate owned is capitalized . fair value of financial instruments a significant portion of the company 's assets are financial instruments carried at fair value . this includes securities available for sale and certain impaired loans . the majority of assets carried at fair value are based on either quoted market prices or market prices for similar instruments . for additional disclosures regarding the fair value of financial instruments , see note 20 . “ fair value measurements ” to our consolidated financial statements . jobs act transition period the jumpstart our business startups ( jobs ) act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards . thus , as an emerging growth company , the company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies . we have elected to avail ourselves of this extended transition period . 34 comparison of financ ial condition at december 31 , 2018 and 2017 total assets . story_separator_special_tag the average cost of funds for the year ended december 31 , 2018 was 1.82 % , which was 47 basis points higher than the year ended december 31 , 2017. the increase interest expenses represented a 57.9 % increase related to rate variances as the result of the increase in the target federal funds rate , and a 42.1 % increase related to volume variances . income . net interest income for the year ended december 31 , 2018 increased $ 3.1 million , or 7.9 % , to $ 42.0 million compared to the year ended december 31 , 2017. our average interest-earning assets increased by $ 188.0 million , or 15.0 % , to $ 1.4 billion for the year ended december 31 , 2018 compared to the same period of 2017. our net interest rate spread decreased to 2.64 % for the year ended december 31 , 2018 from 2.89 % for the year ended december 31 , 2017. our net interest margin decreased to 2.91 % for the year ended december 31 , 2018 from 3.11 % for the year ended december 31 , 2017. the decreases in our interest rate spread and net interest margin reflect rates of interest bearing deposits increasing in response to target federal funds interest rate increases quicker than yields on interest-earning assets . provision for loan losses . based on our analysis of the components of the allowance for loan losses described in “ allowance for loan losses ” below , we recorded a provision for loan losses of $ 3.2 million for the year ended december 31 , 2018 , as the result of continued growth in the loan portfolio and charge-offs taken during 2018 compared to a provision for loan losses of $ 2.3 million for the year ended december 31 , 2017. for the year ended december 31 , 2018 , we charged-off $ 1.3 million in loans , compared to $ 1.9 million the year ended december 31 , 2017 , and recovered previously charged-off loans of $ 1.3 million and $ 0.2 million for the same periods , respectively . of the $ 1.3 million in loan recoveries for the year ended december 31 , 2018 , $ 1.2 million was from a single customer . the total allowance for loan losses was $ 16.5 million , or 1.37 % of total loans , and $ 13.2 million , or 1.15 % of total loans , at december 31 , 2018 and 2017 , respectively . total non-performing loans , excluding performing troubled debt restructurings , were $ 23.0 million and $ 11.6 million at december 31 , 2018 and 2017 , respectively . this $ 11.4 million increase was the result of the strained agricultural economy and the four-year sustained low prices of class iii milk . the allowance for loan losses reflects the estimate we believe to be appropriate to cover probable incurred losses inherent in the loan portfolio at december 31 , 2018. non-interest income . non-interest income increased by $ 1.1 million , or 15.4 % , to $ 8.8 million for the year ended december 31 , 2018 compared to $ 7.7 million for the same period of 2017. the primary factor contributing to the annual fluctuation in non-interest income is the bank 's volume and activity in loan servicing fees and loan servicing rights income . for the year ended december 31 , 2018 , loan servicing fees increased to $ 6.1 million from $ 5.5 million for the year ended december 31 , 2017 . 40 non-interest expense . non-interest expense increased $ 2.3 million , or 8.8 % , to $ 28.3 million for the year ended december 31 , 2018 , compared $ 26.0 million for the same period of 2017 , primarily as the result of an increase in employee compensation and benefits of $ 1.3 million in connection with the addition of eight full-time equivale nt employees , or 5.6 % , to 152 for the year-ended december 31 , 2018. also during 2018 , there was a $ 0.4 million increase in occupancy expenses related to the relocation of our company headquarters during the third quarter of 2018 , and a $ 0.5 million increa se in information processing expenses related to technology investments and implementations made throughout the year , which were included in other expenses . income taxes . income tax expense for the year ended december 31 , 2018 was $ 5.1 million compared to $ 7.8 million for the year ended december 31 , 2017. the effective tax rates as a percent of pre-tax income were approximately 26 % and 43 % for the years ended december 31 , 2018 and 2017 , respectively . the decrease in income tax expense and the effective tax rate for the year ended december 31 , 2018 compared to the year ended december 31 , 2017 was due to the reduction of the federal corporate income tax rate from 35 % to 21 % as a result of the tax act that was enacted late in the 4 th quarter of 2017 , as well as , the 2017 revaluation of our net deferred tax asset which resulted in $ 1.0 million of additional income tax expense . analysis of net interest income net interest income represents the difference between income we earn on our interest-earning assets and the expense we pay on interest-bearing liabilities . net interest income depends on the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned on such assets and paid on such liabilities . average balances and yields . the following table sets forth average balance sheets , average yields and rates , income and expenses , and certain other information for the periods indicated . all average balances are daily average balances . nonaccrual loans were included in the computation of average balances , but have been reflected in the table

liquidity management and capital resources liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature . our primary sources of funds consist of deposit inflows , loan repayments , maturities and sales of securities and borrowings from the fhlb . while maturities and scheduled amortization of loans and securities are predictable sources of funds , deposit flows , calls of investment securities and borrowed funds and prepayments on loans are greatly influenced by general interest rates , economic conditions and competition . at december 31 , 2018 , the bank had fixed rate advances outstanding with fhlb of $ 89.4 million and no borrowings outstanding at the federal reserve bank of chicago . the bank had unused collateral of $ 90.8 million with fhlb , a $ 143.4 million line-of-credit available with the federal reserve bank of chicago , and a $ 15.0 million line-of-credit with u.s. bank at december 31 , 2018. management adjusts our investments in liquid assets based upon an assessment of ( 1 ) expected loan demand , ( 2 ) expected deposit flows , ( 3 ) yields available on interest-earning deposits and securities , ( 4 ) the objectives of our interest-rate risk and investment policies and ( 5 ) the risk tolerance of management and our board of directors . our cash flows are composed of three primary classifications : cash flows from operating activities , investing activities , and financing activities . net cash provided by operating activities was $ 26.2 million and $ 11.3 million , for the years ended december 31 , 2018 and 2017 , respectively . net cash used in investing activities , which consists primarily of purchases of and proceeds from the sale , maturities/calls , and principal repayments of securities available for sale , as well as loan purchases , sales and originations , net of repayments was $ 139.8 million and $ 131.5 million , for the years ended december 31 , 2018 and 2017 , respectively .


 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 management and capital resources liquidity is the ability to meet current and future financial obligations of a short-term and long-term nature . our primary sources of funds consist of deposit inflows , loan repayments , maturities and sales of securities and borrowings from the fhlb . while maturities and scheduled amortization of loans and securities are predictable sources of funds , deposit flows , calls of investment securities and borrowed funds and prepayments on loans are greatly influenced by general interest rates , economic conditions and competition . at december 31 , 2018 , the bank had fixed rate advances outstanding with fhlb of $ 89.4 million and no borrowings outstanding at the federal reserve bank of chicago . the bank had unused collateral of $ 90.8 million with fhlb , a $ 143.4 million line-of-credit available with the federal reserve bank of chicago , and a $ 15.0 million line-of-credit with u.s. bank at december 31 , 2018. management adjusts our investments in liquid assets based upon an assessment of ( 1 ) expected loan demand , ( 2 ) expected deposit flows , ( 3 ) yields available on interest-earning deposits and securities , ( 4 ) the objectives of our interest-rate risk and investment policies and ( 5 ) the risk tolerance of management and our board of directors . our cash flows are composed of three primary classifications : cash flows from operating activities , investing activities , and financing activities . net cash provided by operating activities was $ 26.2 million and $ 11.3 million , for the years ended december 31 , 2018 and 2017 , respectively . net cash used in investing activities , which consists primarily of purchases of and proceeds from the sale , maturities/calls , and principal repayments of securities available for sale , as well as loan purchases , sales and originations , net of repayments was $ 139.8 million and $ 131.5 million , for the years ended december 31 , 2018 and 2017 , respectively .
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 Suspicious Activity Report : goodwill was $ 5.0 million at december 31 , 2018 and 2017. during the fourth quarter of 2018 , the market value of our stock price dropped below our tangible book value . we engaged a third party to assist the company in determining the fair value of the company as a single reporting unit pursuant to step 1 of the 33 financial accounting standards board ( “ fasb ” ) accounting standards codification ( “ asc ” ) 350-20-35 ( the “ step 1 analysis ” ) as of december 31 , 2018. the step 1 analysis included an income and market approaches . the income approach used as discounted cash flow method . this method estimates value by forecasting income for a forecast period and estimates the terminal value . these amounts were then discounted back to december 31 , 2018. the market approach used the market value of equity to tangible book value multiple of similar publicly traded commercial banks ( e.g . tota l tangible assets , pre-tax return on average assets , located in the midwest ) . the market approach also includes the acquisition price/tangible book value multiple on similar sized banks in the midwest occurring after january 1 , 2017. more weighting was p laced on the income method . through the step 1 analysis it was determined there was no impairment charge to goodwill in the year ended december 31 , 2018. goodwill is included on the consolidated balance sheets . the future value of goodwill could be im pacted by the company 's future earnings , largely related to unanticipated losses from the company 's loan portfolio . allowance for loan losses the allowance for loan losses is established through a provision for loan losses charged to expense , which affects our earnings directly . loans are charged against the allowance for loan losses when management believes that the collectability of all or some of the principal is unlikely . subsequent recoveries are added to the allowance . the allowance is an amount that reflects management 's estimate of the level of probable incurred losses in the loan portfolio . factors considered by management in determining the adequacy of the allowance include , but are not limited to , detailed reviews of individual loans , historical and current trends in loan charge-offs for the various portfolio segments evaluated , the level of the allowance in relation to total loans and to historical loss levels , levels and trends in non-performing and past due loans , volume of and migratory direction of adversely graded loans , external factors including regulatory requirements , reputation , and competition , and management 's assessment of economic conditions . our board of directors reviews the recommendations of management regarding the appropriate level for the allowance for loan losses based upon these factors . the provision for loan losses is the charge to operating earnings necessary to maintain an adequate allowance for loan losses . we have developed policies and procedures for evaluating the overall quality of our loan portfolio and the timely identification of problem credits . management continuously reviews these policies and procedures and makes further improvements as needed . the adequacy of our allowance for loan losses and the effectiveness of our internal policies and procedures are also reviewed periodically by our regulators and our auditors and external loan review personnel . our regulators may advise us to recognize additions to the allowance based upon their judgments about information available to them at the time of their examination . such regulatory guidance is taken under consideration by management , and we may recognize additions to the allowance as a result . we continually refine our methodology for determining the allowance for loan losses by comparing historical loss ratios utilized to actual experience and by classifying loans for analysis based on similar risk characteristics . cash receipts for accruing loans are applied to principal and interest under the contractual terms of the loan agreements ; however , cash receipts on impaired and nonaccrual loans for which the accrual of interest has been discontinued are applied to principal and interest income depending upon the overall risk of principal loss to us . other real estate owned assets acquired through or in lieu of loan foreclosure are initially recorded at lower of cost or fair value less estimated costs to sell , establishing a new cost basis . subsequent to foreclosure , independent valuations are performed annually and the assets are carried at the lower of carrying amount or fair value less estimated costs to sell . revenue and expenses from operations and changes in the valuation allowance are included in other non-interest expense . costs related to the development and improvement of other real estate owned is capitalized . fair value of financial instruments a significant portion of the company 's assets are financial instruments carried at fair value . this includes securities available for sale and certain impaired loans . the majority of assets carried at fair value are based on either quoted market prices or market prices for similar instruments . for additional disclosures regarding the fair value of financial instruments , see note 20 . “ fair value measurements ” to our consolidated financial statements . jobs act transition period the jumpstart our business startups ( jobs ) act provides that an emerging growth company can take advantage of an extended transition period for complying with new or revised accounting standards . thus , as an emerging growth company , the company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies . we have elected to avail ourselves of this extended transition period . 34 comparison of financ ial condition at december 31 , 2018 and 2017 total assets . story_separator_special_tag the average cost of funds for the year ended december 31 , 2018 was 1.82 % , which was 47 basis points higher than the year ended december 31 , 2017. the increase interest expenses represented a 57.9 % increase related to rate variances as the result of the increase in the target federal funds rate , and a 42.1 % increase related to volume variances . income . net interest income for the year ended december 31 , 2018 increased $ 3.1 million , or 7.9 % , to $ 42.0 million compared to the year ended december 31 , 2017. our average interest-earning assets increased by $ 188.0 million , or 15.0 % , to $ 1.4 billion for the year ended december 31 , 2018 compared to the same period of 2017. our net interest rate spread decreased to 2.64 % for the year ended december 31 , 2018 from 2.89 % for the year ended december 31 , 2017. our net interest margin decreased to 2.91 % for the year ended december 31 , 2018 from 3.11 % for the year ended december 31 , 2017. the decreases in our interest rate spread and net interest margin reflect rates of interest bearing deposits increasing in response to target federal funds interest rate increases quicker than yields on interest-earning assets . provision for loan losses . based on our analysis of the components of the allowance for loan losses described in “ allowance for loan losses ” below , we recorded a provision for loan losses of $ 3.2 million for the year ended december 31 , 2018 , as the result of continued growth in the loan portfolio and charge-offs taken during 2018 compared to a provision for loan losses of $ 2.3 million for the year ended december 31 , 2017. for the year ended december 31 , 2018 , we charged-off $ 1.3 million in loans , compared to $ 1.9 million the year ended december 31 , 2017 , and recovered previously charged-off loans of $ 1.3 million and $ 0.2 million for the same periods , respectively . of the $ 1.3 million in loan recoveries for the year ended december 31 , 2018 , $ 1.2 million was from a single customer . the total allowance for loan losses was $ 16.5 million , or 1.37 % of total loans , and $ 13.2 million , or 1.15 % of total loans , at december 31 , 2018 and 2017 , respectively . total non-performing loans , excluding performing troubled debt restructurings , were $ 23.0 million and $ 11.6 million at december 31 , 2018 and 2017 , respectively . this $ 11.4 million increase was the result of the strained agricultural economy and the four-year sustained low prices of class iii milk . the allowance for loan losses reflects the estimate we believe to be appropriate to cover probable incurred losses inherent in the loan portfolio at december 31 , 2018. non-interest income . non-interest income increased by $ 1.1 million , or 15.4 % , to $ 8.8 million for the year ended december 31 , 2018 compared to $ 7.7 million for the same period of 2017. the primary factor contributing to the annual fluctuation in non-interest income is the bank 's volume and activity in loan servicing fees and loan servicing rights income . for the year ended december 31 , 2018 , loan servicing fees increased to $ 6.1 million from $ 5.5 million for the year ended december 31 , 2017 . 40 non-interest expense . non-interest expense increased $ 2.3 million , or 8.8 % , to $ 28.3 million for the year ended december 31 , 2018 , compared $ 26.0 million for the same period of 2017 , primarily as the result of an increase in employee compensation and benefits of $ 1.3 million in connection with the addition of eight full-time equivale nt employees , or 5.6 % , to 152 for the year-ended december 31 , 2018. also during 2018 , there was a $ 0.4 million increase in occupancy expenses related to the relocation of our company headquarters during the third quarter of 2018 , and a $ 0.5 million increa se in information processing expenses related to technology investments and implementations made throughout the year , which were included in other expenses . income taxes . income tax expense for the year ended december 31 , 2018 was $ 5.1 million compared to $ 7.8 million for the year ended december 31 , 2017. the effective tax rates as a percent of pre-tax income were approximately 26 % and 43 % for the years ended december 31 , 2018 and 2017 , respectively . the decrease in income tax expense and the effective tax rate for the year ended december 31 , 2018 compared to the year ended december 31 , 2017 was due to the reduction of the federal corporate income tax rate from 35 % to 21 % as a result of the tax act that was enacted late in the 4 th quarter of 2017 , as well as , the 2017 revaluation of our net deferred tax asset which resulted in $ 1.0 million of additional income tax expense . analysis of net interest income net interest income represents the difference between income we earn on our interest-earning assets and the expense we pay on interest-bearing liabilities . net interest income depends on the volume of interest-earning assets and interest-bearing liabilities and the interest rates earned on such assets and paid on such liabilities . average balances and yields . the following table sets forth average balance sheets , average yields and rates , income and expenses , and certain other information for the periods indicated . all average balances are daily average balances . nonaccrual loans were included in the computation of average balances , but have been reflected in the table

