under this method , the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws . a valuation allowance is established against deferred tax assets when , based upon available evidence including historical and projected taxable income , it is more likely than not that some or all of the deferred tax assets will not be realized . in 2014 , we established a 100 % valuation allowance for our net deferred tax assets after completing an assessment of our recent operating results , including significant non-recurring items , and projected operating results . this assessment led us to conclude that it was more likely than not that we would be unable to realize our deferred tax assets . in performing subsequent assessments , management concluded that no significant changes in the key factors affecting the realizability of our deferred tax assets had occurred and that a valuation allowance for all deferred tax assets should be maintained . because we maintain a full valuation allowance , reduction of the corporate tax rate from 35 % to 21 % under the tax cuts and jobs act of 2017 ( the “ act ” ) required no adjustment to our net deferred tax assets . 39 we do not have any uncertain tax positions at december 31 , 2017 and 2016 w hich require accrual or disclosure . we record interest and penalties as part of income tax expense . no interest or penalties were recorded for th e years ended december 31 , 2017 and 2016 . comparison of financial condition at december 31 , 2017 and 2016 total assets . total assets increased $ 50.7 million , or 10.5 % , to $ 531.9 million at december 31 , 2017 from $ 481.2 million at december 31 , 2016. the growth in assets was concentrated in our loan portfolio which increased by $ 67.4 million , or 20.2 % , and was funded by $ 37.3 million of additional net advances from the fhlbb , $ 15.7 million in deposit growth and $ 7.1 million from maturities and principal payments from the investment portfolio . premises and equipment increased by $ 2.4 million in 2017. cash and cash equivalents and loans held for sale decreased by $ 6.0 million and $ 5.1 million in 2017 , respectively . investment securities . investment securities , all of which are classified as available for sale , decreased $ 7.1 million , or 10.3 % , to $ 61.6 million at december 31 , 2017 from $ 68.6 million at december 31 , 2016. at december 31 , 2017 , investment securities represented 11.6 % of total assets compared to 14.3 % at december 31 , 2016. this decrease is a consequence of our strategic shift to investing a higher proportion of interest-earning assets in loans . investment securities as a percentage of total assets are currently at the low end of our target range of 10 % - 15 % . we expect to make investment purchases in 2018 as part of our plan to continue to increase our interest-earning assets . loans held for sale . we are actively involved in the secondary mortgage market and designate the majority of our residential first mortgage loan production for sale . total originations of one-to four-family residential mortgage loans for sale in the secondary mortgage market were $ 398.7 million in 2017 and $ 404.5 million in 2016. loan originations in 2017 included first eastern for the entire year while loan originations in 2016 included first eastern for the six-month period subsequent to its acquisition on july 1 , 2016. if the company had owned first eastern for all of 2016 , originations of loan for sale in the secondary market would have decreased by 32 % in 2017 compared to 2016 based on first eastern 's originations in 2016 prior to the acquisition . this decrease is principally due to lower loan refinancing activity in 2017 and a decline in the percentage of loan originations that were sold in the secondary market from 93 % in 2016 to 88 % in 2017. for the years ended december 31 , 2017 and 2016 , refinanced residential mortgage loans accounted for 28 % and 45 % , respectively , of total residential loan production . the decrease in loan refinancing activity in 2017 is due to the rise in mortgage rates during the year . at december 31 , 2017 , loans held for sale , which consist of closed residential first mortgage loans which the bank intends to sell to investors , totaled $ 25.4 million compared to $ 30.5 million at december 31 , 2016. included in loans held for sale at december 31 , 2017 are $ 6.5 million of loans not readily saleable to fannie mae or freddie mac due to one or more exceptions to their requirements . the bank expects to sell these loans in 2018. net loans . net loans increased $ 67.4 million , or 20.2 % , to $ 400.4 million at december 31 , 2017 from $ 333.0 million at december 31 , 2016. included in this increase are $ 38.1 million of organic growth in real estate secured loans , as well as increases of $ 19.7 million in commercial and industrial loans due to the purchase of loan participations and $ 9.8 million in consumer loans due to purchases of student loans and auto loans . the increase during 2017 in real estate secured loans occurred in all categories of such loans led by commercial real estate loans , which increased by $ 13.4 million and residential real estate loans , which increased by $ 19.5 million . story_separator_special_tag the company continues to maintain the 100 % valuation allowance for its net deferred tax assets originally recorded in 2014. the valuation allowance amounted to $ 3.3 million at december 31 , 2017 and $ 4.7 million at december 31 , 2016. the decrease in 44 2017 was attributable to two tax law changes under the act , namely , a reduction in the federal corporate tax rate from 35 % to 21 % and the provisions related to the amt discussed in the preceding paragraph . non-gaap measures when management assesses the company 's financial performance for purposes of making day-to-day and strategic decisions , it does so based upon the performance of its core banking business which is derived from the combination of net interest income and non-interest income reduced by the provision for loan losses and non-interest expenses and the impact of income taxes , if any , all as adjusted for any non-core items . the company 's financial reporting is determined in accordance with gaap , which sometimes includes items that management believes are unrelated to its core banking business and are not expected to have a material financial impact on operating results in future periods , such as merger and integration costs , acquisition related bargain purchase gains , life insurance settlements and other items . management computes the company 's non-gaap operating earnings , non-interest income as a percentage of total income and the efficiency ratio on an operating basis , which excludes these items , in order to measure the performance of the company 's core banking business . non-gaap measures should not be viewed as a substitute for operating results determined in accordance with gaap . an item that management determines to be non-core and excludes when computing these non-core measures can be of substantial importance to the company 's results for any particular reporting period . the company 's non-gaap performance measures are not necessarily comparable to such measures that may be used by other companies . the following table summarizes the impact of non-core items recorded for the reporting periods indicated below and reconciles them in accordance with gaap : replace_table_token_19_th management of market risk overview . market risk is the risk that the market value , or estimated fair value , of our assets , liabilities and derivatives will decline as a result of changes in interest rates or that our net interest income and results of operations will be adversely affected by interest rate changes . our most significant form of market risk is interest rate risk because , as a financial institution , the majority of our assets and liabilities are sensitive to change in interest rates . therefore , a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates . our asset/liability management committee ( “ alco ” ) is responsible for evaluating the interest rate risk inherent in our assets and liabilities , for determining the level of risk that is appropriate given our business strategy , operating environment , capital , liquidity , and performance objectives , and for managing risk consistent with the policy and guidelines approved by our board of directors . interest rate risk management . we manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment on net interest income . to reduce the potential volatility of our earnings , we have sought to improve the match between asset and liability maturities and rates , while maintaining an acceptable interest rate spread . our strategy for managing interest rate risk emphasizes originating shorter-term commercial real estate loans and consumer loans ; loans that re-price either daily or monthly , such as home equity lines of credit , commercial and industrial loans , and constructions loans ; and adjustable-rate residential mortgage loans for retention in our loan portfolio . we also promote core deposit products and time deposits . we also manage interest rate risk by selling newly originated conforming fixed rate residential mortgage loans in the secondary market . we currently do not participate in hedging programs , interest rate swaps or other activities involving the use of derivative financial instruments except for interest rate lock agreements with borrowers and forward loan sale commitments with investors both in connection with our mortgage banking activities . 45 net interest income analysis . we analyze our sensitivity to changes in interest rates through our net interest income simulation model which is provided to us by an independent third party . net interest inco me is the difference between the interest income we earn on our interest-earning assets , such as loans and securities , and the interest we pay on our interest-bearing liabilities , such as deposits and borrowings . we estimate what our net interest income wo uld be over specified time horizons based on current interest rates . we then calculate what the net interest income would be for the same period under different interest rate assumptions . the comparative scenarios assume immediate parallel shifts in the yi eld curve in increments of 100 basis point ( bp ) rate movements . a basis point equals one-hundredth of one percent , and 100 basis points equals one percent . an increase in interest rates from 3.0 % to 4.0 % would mean , for example , a 100 basis point increase in the “ change in interest rates ” column below . the following table shows the estimated impact on net interest income for the one-year period beginning december 31 , 2017 resulting from potential changes in interest rates . the model is run quarterly showing shocks from +300bp to -100bp , as we believe a decline of greater than -100bp is currently improbable . these estimates require certain assumptions to be

liquidity 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 fhlbb . 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 . management regularly 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 , and ( 4 ) the objectives of our interest-rate risk and investment policies . 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 $ 6.6 million and $ 914,000 for the years ended december 31 , 2017 and 2016 , respectively . net cash used in investing activities , which consists primarily of disbursements for portfolio loan originations and loan purchases , the purchase of securities and certificates of deposit , offset by principal collections on loans , proceeds from the sale of securities , proceeds from maturing securities and pay downs on mortgage-backed securities , was $ 64.7 million and $ 31.2 million for the years ended december 31 , 2017 and 2016 , 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 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 fhlbb . 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 . management regularly 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 , and ( 4 ) the objectives of our interest-rate risk and investment policies . 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 $ 6.6 million and $ 914,000 for the years ended december 31 , 2017 and 2016 , respectively . net cash used in investing activities , which consists primarily of disbursements for portfolio loan originations and loan purchases , the purchase of securities and certificates of deposit , offset by principal collections on loans , proceeds from the sale of securities , proceeds from maturing securities and pay downs on mortgage-backed securities , was $ 64.7 million and $ 31.2 million for the years ended december 31 , 2017 and 2016 , respectively .
```    
 Suspicious Activity Report : under this method , the net deferred tax asset or liability is determined based on the tax effects of the temporary differences between the book and tax bases of the various balance sheet assets and liabilities and gives current recognition to changes in tax rates and laws . a valuation allowance is established against deferred tax assets when , based upon available evidence including historical and projected taxable income , it is more likely than not that some or all of the deferred tax assets will not be realized . in 2014 , we established a 100 % valuation allowance for our net deferred tax assets after completing an assessment of our recent operating results , including significant non-recurring items , and projected operating results . this assessment led us to conclude that it was more likely than not that we would be unable to realize our deferred tax assets . in performing subsequent assessments , management concluded that no significant changes in the key factors affecting the realizability of our deferred tax assets had occurred and that a valuation allowance for all deferred tax assets should be maintained . because we maintain a full valuation allowance , reduction of the corporate tax rate from 35 % to 21 % under the tax cuts and jobs act of 2017 ( the “ act ” ) required no adjustment to our net deferred tax assets . 39 we do not have any uncertain tax positions at december 31 , 2017 and 2016 w hich require accrual or disclosure . we record interest and penalties as part of income tax expense . no interest or penalties were recorded for th e years ended december 31 , 2017 and 2016 . comparison of financial condition at december 31 , 2017 and 2016 total assets . total assets increased $ 50.7 million , or 10.5 % , to $ 531.9 million at december 31 , 2017 from $ 481.2 million at december 31 , 2016. the growth in assets was concentrated in our loan portfolio which increased by $ 67.4 million , or 20.2 % , and was funded by $ 37.3 million of additional net advances from the fhlbb , $ 15.7 million in deposit growth and $ 7.1 million from maturities and principal payments from the investment portfolio . premises and equipment increased by $ 2.4 million in 2017. cash and cash equivalents and loans held for sale decreased by $ 6.0 million and $ 5.1 million in 2017 , respectively . investment securities . investment securities , all of which are classified as available for sale , decreased $ 7.1 million , or 10.3 % , to $ 61.6 million at december 31 , 2017 from $ 68.6 million at december 31 , 2016. at december 31 , 2017 , investment securities represented 11.6 % of total assets compared to 14.3 % at december 31 , 2016. this decrease is a consequence of our strategic shift to investing a higher proportion of interest-earning assets in loans . investment securities as a percentage of total assets are currently at the low end of our target range of 10 % - 15 % . we expect to make investment purchases in 2018 as part of our plan to continue to increase our interest-earning assets . loans held for sale . we are actively involved in the secondary mortgage market and designate the majority of our residential first mortgage loan production for sale . total originations of one-to four-family residential mortgage loans for sale in the secondary mortgage market were $ 398.7 million in 2017 and $ 404.5 million in 2016. loan originations in 2017 included first eastern for the entire year while loan originations in 2016 included first eastern for the six-month period subsequent to its acquisition on july 1 , 2016. if the company had owned first eastern for all of 2016 , originations of loan for sale in the secondary market would have decreased by 32 % in 2017 compared to 2016 based on first eastern 's originations in 2016 prior to the acquisition . this decrease is principally due to lower loan refinancing activity in 2017 and a decline in the percentage of loan originations that were sold in the secondary market from 93 % in 2016 to 88 % in 2017. for the years ended december 31 , 2017 and 2016 , refinanced residential mortgage loans accounted for 28 % and 45 % , respectively , of total residential loan production . the decrease in loan refinancing activity in 2017 is due to the rise in mortgage rates during the year . at december 31 , 2017 , loans held for sale , which consist of closed residential first mortgage loans which the bank intends to sell to investors , totaled $ 25.4 million compared to $ 30.5 million at december 31 , 2016. included in loans held for sale at december 31 , 2017 are $ 6.5 million of loans not readily saleable to fannie mae or freddie mac due to one or more exceptions to their requirements . the bank expects to sell these loans in 2018. net loans . net loans increased $ 67.4 million , or 20.2 % , to $ 400.4 million at december 31 , 2017 from $ 333.0 million at december 31 , 2016. included in this increase are $ 38.1 million of organic growth in real estate secured loans , as well as increases of $ 19.7 million in commercial and industrial loans due to the purchase of loan participations and $ 9.8 million in consumer loans due to purchases of student loans and auto loans . the increase during 2017 in real estate secured loans occurred in all categories of such loans led by commercial real estate loans , which increased by $ 13.4 million and residential real estate loans , which increased by $ 19.5 million . story_separator_special_tag the company continues to maintain the 100 % valuation allowance for its net deferred tax assets originally recorded in 2014. the valuation allowance amounted to $ 3.3 million at december 31 , 2017 and $ 4.7 million at december 31 , 2016. the decrease in 44 2017 was attributable to two tax law changes under the act , namely , a reduction in the federal corporate tax rate from 35 % to 21 % and the provisions related to the amt discussed in the preceding paragraph . non-gaap measures when management assesses the company 's financial performance for purposes of making day-to-day and strategic decisions , it does so based upon the performance of its core banking business which is derived from the combination of net interest income and non-interest income reduced by the provision for loan losses and non-interest expenses and the impact of income taxes , if any , all as adjusted for any non-core items . the company 's financial reporting is determined in accordance with gaap , which sometimes includes items that management believes are unrelated to its core banking business and are not expected to have a material financial impact on operating results in future periods , such as merger and integration costs , acquisition related bargain purchase gains , life insurance settlements and other items . management computes the company 's non-gaap operating earnings , non-interest income as a percentage of total income and the efficiency ratio on an operating basis , which excludes these items , in order to measure the performance of the company 's core banking business . non-gaap measures should not be viewed as a substitute for operating results determined in accordance with gaap . an item that management determines to be non-core and excludes when computing these non-core measures can be of substantial importance to the company 's results for any particular reporting period . the company 's non-gaap performance measures are not necessarily comparable to such measures that may be used by other companies . the following table summarizes the impact of non-core items recorded for the reporting periods indicated below and reconciles them in accordance with gaap : replace_table_token_19_th management of market risk overview . market risk is the risk that the market value , or estimated fair value , of our assets , liabilities and derivatives will decline as a result of changes in interest rates or that our net interest income and results of operations will be adversely affected by interest rate changes . our most significant form of market risk is interest rate risk because , as a financial institution , the majority of our assets and liabilities are sensitive to change in interest rates . therefore , a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates . our asset/liability management committee ( “ alco ” ) is responsible for evaluating the interest rate risk inherent in our assets and liabilities , for determining the level of risk that is appropriate given our business strategy , operating environment , capital , liquidity , and performance objectives , and for managing risk consistent with the policy and guidelines approved by our board of directors . interest rate risk management . we manage the interest rate sensitivity of our interest-bearing liabilities and interest-earning assets in an effort to minimize the adverse effects of changes in the interest rate environment on net interest income . to reduce the potential volatility of our earnings , we have sought to improve the match between asset and liability maturities and rates , while maintaining an acceptable interest rate spread . our strategy for managing interest rate risk emphasizes originating shorter-term commercial real estate loans and consumer loans ; loans that re-price either daily or monthly , such as home equity lines of credit , commercial and industrial loans , and constructions loans ; and adjustable-rate residential mortgage loans for retention in our loan portfolio . we also promote core deposit products and time deposits . we also manage interest rate risk by selling newly originated conforming fixed rate residential mortgage loans in the secondary market . we currently do not participate in hedging programs , interest rate swaps or other activities involving the use of derivative financial instruments except for interest rate lock agreements with borrowers and forward loan sale commitments with investors both in connection with our mortgage banking activities . 45 net interest income analysis . we analyze our sensitivity to changes in interest rates through our net interest income simulation model which is provided to us by an independent third party . net interest inco me is the difference between the interest income we earn on our interest-earning assets , such as loans and securities , and the interest we pay on our interest-bearing liabilities , such as deposits and borrowings . we estimate what our net interest income wo uld be over specified time horizons based on current interest rates . we then calculate what the net interest income would be for the same period under different interest rate assumptions . the comparative scenarios assume immediate parallel shifts in the yi eld curve in increments of 100 basis point ( bp ) rate movements . a basis point equals one-hundredth of one percent , and 100 basis points equals one percent . an increase in interest rates from 3.0 % to 4.0 % would mean , for example , a 100 basis point increase in the “ change in interest rates ” column below . the following table shows the estimated impact on net interest income for the one-year period beginning december 31 , 2017 resulting from potential changes in interest rates . the model is run quarterly showing shocks from +300bp to -100bp , as we believe a decline of greater than -100bp is currently improbable . these estimates require certain assumptions to be

