15 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_5_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 . 16 index 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 . 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_7_th ( 1 ) changes due to both volume and rate have been allocated to volume changes . 17 index comparison of interest income , interest expense and net interest margin the company 's primary source of revenue is interest income . interest income for the year ended december 31 , 2018 was $ 42.6 million , an increase from $ 37.4 million and $ 32.2 million , respectively , for the years ended december 31 , 2017 and 2016. the interest income was positively impacted by increased average earning assets primarily loans in 2018. average loans for the year increased 8.8 % over 2017 and 46.3 % over 2016. average earning asset yields declined for 2018 as competition for new quality loans continued to further compress the interest rates and the margin . in 2016 the margin benefited by 8 basis points from the payoff of one large nonaccrual loan relationship . interest expense for the year ended december 31 , 2018 increased compared to 2017 by $ 4.3 million and increased compared to 2016 by $ 5.9 million , respectively , to $ 9.0 million . the increase for 2018 compared to 2017 was mostly the result of the increased volume of deposits and increased rates paid on interest-bearing deposits . average interest-bearing deposits increased 8.3 % in 2018 compared to 2017. the average cost on interest-bearing deposits also increased to 128 basis points in 2018 compared to 77 basis points in 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 2018 compared to 2017. the net interest margin was 4.07 % for 2018 compared to 4.34 % for 2017 and 4.60 % in 2016. net interest income increased by $ 1.0 million for 2018 compared to 2017 and $ 4.6 million , compared to 2016. total interest income increased by $ 5.2 million to $ 37.4 million in 2017 compared to 2016. the interest income was negatively impacted by decreased yields on earning assets in 2017 which decreased to 4.96 % compared to 5.09 % for 2016. the average yield on loans decreased to 5.24 % for 2017 compared to 5.43 % for 2016. total interest expense increased by $ 1.4 million in 2017 compared to 2016. this increase was primarily due to increased total cost of funds which include non-interest bearing deposits from 54 basis points for 2016 to 68 basis points for 2017. net interest income increased by $ 3.6 million for 2017 compared to 2016 . 18 index 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 $ 14,000 in 2018 compared to $ 0.4 million in 2017 and ( $ 48,000 ) in 2016. the provision for loan losses for 2018 resulted primarily from loan growth and change in loan portfolio mix . the credit to provision for 2016 resulted from $ 0.6 million net recoveries , reduced historical loss factors partially offset by loan growth . 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 1.21 % at december 31 , 2018 from 1.24 % at december 31 , 2017. additional information regarding improved credit quality can be found beginning on page 26. the following table summarizes the provision ( credit ) , charge-offs ( recoveries ) by loan category for the year ended december 31 , 2018 , 2017 and 2016 : replace_table_token_8_th the percentage of net non-accrual loans ( net of government guarantees ) to the total loan portfolio has decreased to 0.44 % as of december 31 , 2018 from 0.61 % at december 31 , 2017 primarily due to commercial loan repayments .. the allowance for loan losses compared to net non-accrual loans has increased to 257 % as of december 31 , 2018 from 188 % as of december 31 , 2017. total past due loans were $ 3.7 million as of december 31 , 2018 compared to $ 0.4 million as of december 31 , 2017 . 19 index non-interest income the company earned non-interest income primarily through fees related to services provided to loan and deposit customers . the following tables present a summary of non-interest income for the periods presented : replace_table_token_9_th total non-interest income decreased $ 0.1 million for 2018 compared to 2017. the decrease was mostly from lower loan servicing and loan fee collection . story_separator_special_tag 24 index the following table presents total gross loans based on remaining scheduled contractual repayments of principal as of the periods indicated : replace_table_token_14_th concentrations of lending activities the company 's lending activities are primarily driven by the customers served in the market areas where the company has branch offices in the central coast of california . the company monitors concentrations within selected categories such as geography and product . the company makes manufactured housing , commercial , sba , construction , commercial real estate and consumer loans to customers through branch offices located in the company 's primary markets . 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 , 2018 and 2017 , manufactured housing loans comprised 32.2 % and 30.4 % , of total loans , respectively . as of december 31 , 2018 and 2017 , commercial real estate loans accounted for approximately 47.6 % and 48.3 % of total loans , respectively . approximately 33.8 % and 33.9 % of these commercial real estate loans were owner occupied at december 31 , 2018 and 2017 , respectively . substantially all of these loans are secured by first liens with an average loan to value ratios of 57.9 % and 55.0 % at december 31 , 2018 and 2017 , respectively . the company was within established policy limits at december 31 , 2018 and 2017. 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 , 2018 , the company had 18 loans with an outstanding balance of $ 70.5 million with available interest reserves of $ 3.5 million . total construction and land loans are approximately 11 % and 8 % of the company 's loan portfolio and december 31 , 2018 and 2017 , 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 . 25 index the recorded investment in loans that are considered impaired is as follows : replace_table_token_15_th the following schedule summarizes impaired loans and specific reserves by loan class as of the periods indicated : replace_table_token_16_th $ 3.1 million of the above impaired loans are government guaranteed . 26 index replace_table_token_17_th $ 2.6 million of the above impaired loans are government guaranteed . total impaired loans increased by $ 3.3 million at december 31 , 2018 compared to december 31 , 2017. the manufactured housing impaired loans increased by $ 4.0 million and single family real estate impaired loans increased by $ 0.4 million in 2018 compared to 2017. both the sba and commercial real estate impaired loans decreased by $ 0.2 million each in 2018 compared to 2017. further offsetting the overall increase in impaired loans was a $ 0.8 million decrease in commercial impaired loans and a slight decrease to impaired heloc loans . impaired manufactured housing loans increased mainly due to extending the maturities on 37 existing loans totaling $ 5.2 million less pay-offs and pay-downs . impaired commercial loans decreased in 2018 compared to 2017 primarily due to the loan payoffs and payments partially offset by one new loan added for $ 0.1 million . the following schedule reflects recorded investment in certain types of loans at the dates indicated : replace_table_token_18_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

liquidity liquidity is the ongoing ability to fund asset growth and business operations , to accommodate liability maturities and deposit withdrawals and meet contractual obligations through unconstrained access to funding at reasonable market rates . liquidity management involves forecasting funding requirements and maintaining sufficient capacity to meet the needs and accommodate fluctuations in asset and liability levels due to changes in our business operations or unanticipated events . 33 index the ability to have readily available funds sufficient to repay fully maturing liabilities is of primary importance to depositors , creditors and regulators . our liquidity , represented by cash and amounts due from banks , federal funds sold and non-pledged marketable securities , is a result of our operating , investing and financing activities and related cash flows . in order to ensure funds are available when necessary , on at least a quarterly basis , we project the amount of funds that will be required , and we strive to maintain relationships with a diversified customer base . liquidity requirements can also be met through short-term borrowings or the disposition of short-term assets . the company has federal funds borrowing lines at correspondent banks totaling $ 20.0 million . in addition , loans and securities are pledged to the fhlb providing $ 35.9 million in available borrowing capacity as of december 31 , 2018. loans pledged to the frb discount window provided $ 103.8 million in borrowing capacity . as of december 31 , 2018 , there were no outstanding borrowings from the frb . the company has established policies as well as analytical tools to manage liquidity . proper liquidity management ensures that sufficient funds are available to meet normal operating demands in addition to unexpected customer demand for funds , such as high levels of deposit withdrawals or increased loan demand , in a timely and cost effective manner . the most important factor in the preservation of liquidity is maintaining public confidence that facilitates the retention and growth of core deposits .


 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 liquidity is the ongoing ability to fund asset growth and business operations , to accommodate liability maturities and deposit withdrawals and meet contractual obligations through unconstrained access to funding at reasonable market rates . liquidity management involves forecasting funding requirements and maintaining sufficient capacity to meet the needs and accommodate fluctuations in asset and liability levels due to changes in our business operations or unanticipated events . 33 index the ability to have readily available funds sufficient to repay fully maturing liabilities is of primary importance to depositors , creditors and regulators . our liquidity , represented by cash and amounts due from banks , federal funds sold and non-pledged marketable securities , is a result of our operating , investing and financing activities and related cash flows . in order to ensure funds are available when necessary , on at least a quarterly basis , we project the amount of funds that will be required , and we strive to maintain relationships with a diversified customer base . liquidity requirements can also be met through short-term borrowings or the disposition of short-term assets . the company has federal funds borrowing lines at correspondent banks totaling $ 20.0 million . in addition , loans and securities are pledged to the fhlb providing $ 35.9 million in available borrowing capacity as of december 31 , 2018. loans pledged to the frb discount window provided $ 103.8 million in borrowing capacity . as of december 31 , 2018 , there were no outstanding borrowings from the frb . the company has established policies as well as analytical tools to manage liquidity . proper liquidity management ensures that sufficient funds are available to meet normal operating demands in addition to unexpected customer demand for funds , such as high levels of deposit withdrawals or increased loan demand , in a timely and cost effective manner . the most important factor in the preservation of liquidity is maintaining public confidence that facilitates the retention and growth of core deposits .
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 Suspicious Activity Report : 15 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_5_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 . 16 index 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 . 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_7_th ( 1 ) changes due to both volume and rate have been allocated to volume changes . 17 index comparison of interest income , interest expense and net interest margin the company 's primary source of revenue is interest income . interest income for the year ended december 31 , 2018 was $ 42.6 million , an increase from $ 37.4 million and $ 32.2 million , respectively , for the years ended december 31 , 2017 and 2016. the interest income was positively impacted by increased average earning assets primarily loans in 2018. average loans for the year increased 8.8 % over 2017 and 46.3 % over 2016. average earning asset yields declined for 2018 as competition for new quality loans continued to further compress the interest rates and the margin . in 2016 the margin benefited by 8 basis points from the payoff of one large nonaccrual loan relationship . interest expense for the year ended december 31 , 2018 increased compared to 2017 by $ 4.3 million and increased compared to 2016 by $ 5.9 million , respectively , to $ 9.0 million . the increase for 2018 compared to 2017 was mostly the result of the increased volume of deposits and increased rates paid on interest-bearing deposits . average interest-bearing deposits increased 8.3 % in 2018 compared to 2017. the average cost on interest-bearing deposits also increased to 128 basis points in 2018 compared to 77 basis points in 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 2018 compared to 2017. the net interest margin was 4.07 % for 2018 compared to 4.34 % for 2017 and 4.60 % in 2016. net interest income increased by $ 1.0 million for 2018 compared to 2017 and $ 4.6 million , compared to 2016. total interest income increased by $ 5.2 million to $ 37.4 million in 2017 compared to 2016. the interest income was negatively impacted by decreased yields on earning assets in 2017 which decreased to 4.96 % compared to 5.09 % for 2016. the average yield on loans decreased to 5.24 % for 2017 compared to 5.43 % for 2016. total interest expense increased by $ 1.4 million in 2017 compared to 2016. this increase was primarily due to increased total cost of funds which include non-interest bearing deposits from 54 basis points for 2016 to 68 basis points for 2017. net interest income increased by $ 3.6 million for 2017 compared to 2016 . 18 index 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 $ 14,000 in 2018 compared to $ 0.4 million in 2017 and ( $ 48,000 ) in 2016. the provision for loan losses for 2018 resulted primarily from loan growth and change in loan portfolio mix . the credit to provision for 2016 resulted from $ 0.6 million net recoveries , reduced historical loss factors partially offset by loan growth . 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 1.21 % at december 31 , 2018 from 1.24 % at december 31 , 2017. additional information regarding improved credit quality can be found beginning on page 26. the following table summarizes the provision ( credit ) , charge-offs ( recoveries ) by loan category for the year ended december 31 , 2018 , 2017 and 2016 : replace_table_token_8_th the percentage of net non-accrual loans ( net of government guarantees ) to the total loan portfolio has decreased to 0.44 % as of december 31 , 2018 from 0.61 % at december 31 , 2017 primarily due to commercial loan repayments .. the allowance for loan losses compared to net non-accrual loans has increased to 257 % as of december 31 , 2018 from 188 % as of december 31 , 2017. total past due loans were $ 3.7 million as of december 31 , 2018 compared to $ 0.4 million as of december 31 , 2017 . 19 index non-interest income the company earned non-interest income primarily through fees related to services provided to loan and deposit customers . the following tables present a summary of non-interest income for the periods presented : replace_table_token_9_th total non-interest income decreased $ 0.1 million for 2018 compared to 2017. the decrease was mostly from lower loan servicing and loan fee collection . story_separator_special_tag 24 index the following table presents total gross loans based on remaining scheduled contractual repayments of principal as of the periods indicated : replace_table_token_14_th concentrations of lending activities the company 's lending activities are primarily driven by the customers served in the market areas where the company has branch offices in the central coast of california . the company monitors concentrations within selected categories such as geography and product . the company makes manufactured housing , commercial , sba , construction , commercial real estate and consumer loans to customers through branch offices located in the company 's primary markets . 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 , 2018 and 2017 , manufactured housing loans comprised 32.2 % and 30.4 % , of total loans , respectively . as of december 31 , 2018 and 2017 , commercial real estate loans accounted for approximately 47.6 % and 48.3 % of total loans , respectively . approximately 33.8 % and 33.9 % of these commercial real estate loans were owner occupied at december 31 , 2018 and 2017 , respectively . substantially all of these loans are secured by first liens with an average loan to value ratios of 57.9 % and 55.0 % at december 31 , 2018 and 2017 , respectively . the company was within established policy limits at december 31 , 2018 and 2017. 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 , 2018 , the company had 18 loans with an outstanding balance of $ 70.5 million with available interest reserves of $ 3.5 million . total construction and land loans are approximately 11 % and 8 % of the company 's loan portfolio and december 31 , 2018 and 2017 , 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 . 25 index the recorded investment in loans that are considered impaired is as follows : replace_table_token_15_th the following schedule summarizes impaired loans and specific reserves by loan class as of the periods indicated : replace_table_token_16_th $ 3.1 million of the above impaired loans are government guaranteed . 26 index replace_table_token_17_th $ 2.6 million of the above impaired loans are government guaranteed . total impaired loans increased by $ 3.3 million at december 31 , 2018 compared to december 31 , 2017. the manufactured housing impaired loans increased by $ 4.0 million and single family real estate impaired loans increased by $ 0.4 million in 2018 compared to 2017. both the sba and commercial real estate impaired loans decreased by $ 0.2 million each in 2018 compared to 2017. further offsetting the overall increase in impaired loans was a $ 0.8 million decrease in commercial impaired loans and a slight decrease to impaired heloc loans . impaired manufactured housing loans increased mainly due to extending the maturities on 37 existing loans totaling $ 5.2 million less pay-offs and pay-downs . impaired commercial loans decreased in 2018 compared to 2017 primarily due to the loan payoffs and payments partially offset by one new loan added for $ 0.1 million . the following schedule reflects recorded investment in certain types of loans at the dates indicated : replace_table_token_18_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

