the following discussion will provide a summary review of important items relating to : ● challenges ● key performance indicators ● industry results ● critical accounting policies ● income statement review ● balance sheet review ● asset quality review and credit risk management ● liquidity and capital resources ● interest rate risk ● inflation ● forward-looking statements and business risks ● non-gaap financial measures 24 challenges management has identified certain events or circumstances that have the potential to negatively impact the company 's financial condition and results of operations in the future and is attempting to position the company to best respond to those challenges . ● if interest rates increase significantly over a relatively short period of time due to improving national employment levels or higher inflationary numbers , the interest rate environment may present a challenge to the company . increases in interest rates may negatively impact the company 's net interest margin if interest expense increases more quickly than interest income , thus placing downward pressure on net interest income . the company 's earning assets ( primarily its loan and investment portfolio ) have longer maturities than its interest bearing liabilities ( primarily deposits and other borrowings ) ; therefore , in a rising interest rate environment , interest expense will tend to increase more quickly than interest income as the interest bearing liabilities reprice more quickly than earning assets , resulting in a reduction in net interest income . in response to this challenge , the banks model quarterly the changes in income that would result from various changes in interest rates . management believes bank earning assets have the appropriate maturity and repricing characteristics to optimize earnings and the banks ' interest rate risk positions . ● if market interest rates in the three to five year term remain at low levels as compared to the short term interest rates , the interest rate environment may present a challenge to the company . the company 's earning assets ( typically priced at market interest rates in the three to five year range ) will reprice at lower interest rates , but the deposits will not reprice at significantly lower interest rates , therefore the net interest income may decrease . management believes bank earning assets have the appropriate maturity and repricing characteristics to optimize earnings and the banks ' interest rate risk positions . ● the agricultural community is subject to commodity price fluctuations . extended periods of low commodity prices , higher input costs or poor weather conditions could result in reduced profit margins , reducing demand for goods and services provided by agriculture-related businesses , which , in turn , could affect other businesses in the company 's market area . moreover , the recent changes in u.s. trade policy , including the imposition of tariffs by the u.s. government and retaliatory tariffs imposed in response by foreign governments , could create further volatility for commodities prices as the volume of exports of agricultural products to these foreign markets could be adversely impacted . any combination of these factors could produce losses within the company 's agricultural loan portfolio and in the commercial loan portfolio with respect to borrowers whose businesses are directly or indirectly impacted by the health of the agricultural economy . key performance indicators certain key performance indicators for the company and the industry are presented in the following chart . the industry figures are compiled by the federal deposit insurance corporation ( fdic ) and are derived from 5,406 commercial banks and savings institutions insured by the fdic . management reviews these indicators on a quarterly basis for purposes of comparing the company 's performance from quarter to quarter against the industry as a whole . selected indicators for the company and the industry replace_table_token_2_th 25 key performance indicators include : ● return on assets this ratio is calculated by dividing net income by average assets . it is used to measure how effectively the assets of the company are being utilized in generating income . the company 's return on assets ratio is lower than that of the industry , primarily as a result of the company 's net interest margin being lower than the industry . ● return on equity this ratio is calculated by dividing net income by average equity . it is used to measure the net income or return the company generated for the shareholders ' equity investment in the company . the company 's return on equity ratio is lower than the industry primarily as a result of the company 's higher capital ratio and lower net interest margin as compared to the industry . ● net interest margin this ratio is calculated by dividing net interest income by average earning assets . earning assets consist primarily of loans and investments that earn interest . this ratio is used to measure how well the company is able to maintain interest rates on earning assets above those of interest-bearing liabilities , which is the interest expense paid on deposit accounts and other borrowings . the company 's net interest margin is in line with the industry net interest margin . ● efficiency ratio this ratio is calculated by dividing noninterest expense by net interest income and noninterest income . the ratio is a measure of the company 's ability to manage noninterest expenses . the company 's efficiency ratio is slightly lower than the industry average . ● capital ratio the capital ratio is calculated by dividing average total equity capital by average total assets . it measures the level of average assets that are funded by shareholders ' equity . given an equal level of risk in the financial condition of two companies , the higher the capital ratio , generally the more financially sound the company . the company 's capital ratio is significantly higher than the industry average . story_separator_special_tag the net interest margin is equal to the interest income less the interest expense divided by average earning assets . refer to the net interest income discussion following the tables for additional detail . ( dollars in thousands ) replace_table_token_4_th ( 1 ) average loan balance includes nonaccrual loans , if any . interest income collected on nonaccrual loans has been included . ( 2 ) tax-exempt income has been adjusted to a tax-equivalent basis using an incremental tax rate of 21 % for the year ended december 31 , 2018 and 35 % for the years ended december 31 , 2017 . 31 average balances and interest rates ( continued ) replace_table_token_5_th 32 rate and volume analysis the rate and volume analysis is used to determine how much of the change in interest income or expense is the result of a change in volume or a change in interest rate . for example , real estate loan interest income increased $ 2,862,000 in 2018 compared to 2017. increased volume of real estate loans increased interest income in 2018 by $ 1,671,000 and higher interest rates increased interest income in 2018 by $ 1,191,000. the following table sets forth , on a tax-equivalent basis , a summary of the changes in net interest income resulting from changes in volume and rates . ( dollars in thousands ) replace_table_token_6_th ( 1 ) the change in interest due to both volume and yield/rate has been allocated to change due to volume and change due to yield/rate in proportion to the absolute value of the change in each . net interest income the company 's largest contributing component to net income is net interest income , which is the difference between interest earned on earning assets and interest paid on interest bearing liabilities . the volume of and yields earned on earning assets and the volume of and the rates paid on interest bearing liabilities determine net interest income . refer to the tables preceding this paragraph for additional detail . interest earned and interest paid is also affected by general economic conditions , particularly changes in market interest rates , by government policies and the action of regulatory authorities . net interest income divided by average earning assets is referred to as net interest margin . for the years december 31 , 2018 and 2017 , the company 's net interest margin was 3.23 % and 3.25 % , respectively , computed on a fte basis . 33 net interest income during 2018 and 2017 totaled $ 42,124,000 and $ 40,213,000 , respectively , representing a 4.8 % increase in 2018 compared to 2017. net interest income increased in 2018 as compared to 2017 due primarily to increases in the average balance and rates of real estate loans , offset in part by increases in rates on deposits . the high level of competition in the local markets will continue to put downward pressure on the net interest margin of the company . currently , the company 's primary market in ames , iowa , has ten banks , six credit unions and several other financial investment companies . multiple banks are also located in the company 's other market areas in central , north-central and south-central iowa creating similarly competitive environments . provision for loan losses the provision for loan losses reflects management 's judgment of the expense to be recognized in order to maintain an adequate allowance for loan losses . the company 's provision for loan losses for the year ended december 31 , 2018 was $ 639,000 compared to $ 1,520,000 for the previous year . the provision for loan losses in 2018 and 2017 was necessary to maintain an adequate allowance for loan loss on the increasing outstanding loan portfolio , as well as funding net charge offs of $ 276,000 and $ 706,000 for 2018 and 2017 , respectively . classified assets increased $ 26,229,000 due in part to several agricultural credits and a large hospitality credit , however the nonperforming loans have decreased from $ 4,828,000 in 2017 to $ 3,384,000 in 2018. refer to the “ asset quality and credit risk management ” discussion for additional details with regard to loan loss provision expense . management believes the allowance for loan losses is adequate to absorb probable losses in the current portfolio . this statement is based upon management 's continuing evaluation of inherent risks in the current loan portfolio , current levels of classified assets and general economic factors . the company will continue to monitor the allowance and make future adjustments to the allowance as conditions dictate . due to potential changes in conditions , it is at least reasonably possible that change in estimates will occur in the near term and that such changes could be material to the amounts reported in the company 's financial statements . noninterest income and expense total noninterest income is comprised primarily of fee-based revenues from wealth management and trust services , bank-related service charges on deposit activities , net securities gains , merchant and card fees related to electronic processing of merchant and cash transactions and gain on the sale of loans held for sale . noninterest income during the years ended 2018 and 2017 totaled $ 7,901,000 and $ 7,993,000 , respectively . the decrease in noninterest income in 2018 compared to 2017 is primarily due to no security gains in 2018 as compared to $ 505,000 gains in 2017. partially offsetting this decrease was higher wealth management income and a gain on the foreclosure of other real estate owned . the increase in wealth management income is primarily due to increases in estate fees in 2018. excluding securities gains , noninterest income increased 5.5 % in 2018 as compared to 2017. noninterest expense for the company consists of all operating expenses other than interest expense on deposits and other borrowed funds . salaries and employee benefits are the largest component of the

liquidity and capital resources liquidity management is the process by which the company , through its banks ' asset and liability committees ( alco ) , ensures adequate liquid funds are available to meet its financial commitments on a timely basis , at a reasonable cost and within acceptable risk tolerances . these commitments include funding credit obligations to borrowers , funding of mortgage originations pending delivery to the secondary market , withdrawals by depositors , maintaining adequate collateral for pledging for public funds , trust deposits and borrowings , paying dividends to shareholders , payment of operating expenses , funding capital expenditures and maintaining deposit reserve requirements . liquidity is derived primarily from core deposit growth and retention ; principal and interest payments on loans ; principal and interest payments , sale , maturity and prepayment of investment securities ; net cash provided from operations ; and access to other funding sources . other funding sources include federal funds purchased lines , fhlb advances and other capital market sources . as of december 31 , 2018 , the level of liquidity and capital resources of the company remain at a satisfactory level and compare favorably to that of other fdic insured institutions . management believes that the company 's liquidity sources will be sufficient to support its existing operations for the foreseeable future . the liquidity and capital resources discussion will cover the following topics : ● review of the company 's current liquidity sources ● review of the consolidated statements of cash flows ● review of company only cash flows ● review of commitments for capital expenditures , cash flow uncertainties and known trends in liquidity and cash flow needs ● capital resources review of the company 's current liquidity sources liquid assets of cash on hand , balances due from other banks and interest-bearing deposits in financial institutions for december 31 , 2018 and 2017 totaled $ 56,442,000 and $ 69,420,000 , respectively . the lower balance of liquid assets at december 31 , 2018 primarily relates to a decrease in funds at the federal reserve bank , partially offset by an increase in interest-bearing deposits at financial institutions .


 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 management is the process by which the company , through its banks ' asset and liability committees ( alco ) , ensures adequate liquid funds are available to meet its financial commitments on a timely basis , at a reasonable cost and within acceptable risk tolerances . these commitments include funding credit obligations to borrowers , funding of mortgage originations pending delivery to the secondary market , withdrawals by depositors , maintaining adequate collateral for pledging for public funds , trust deposits and borrowings , paying dividends to shareholders , payment of operating expenses , funding capital expenditures and maintaining deposit reserve requirements . liquidity is derived primarily from core deposit growth and retention ; principal and interest payments on loans ; principal and interest payments , sale , maturity and prepayment of investment securities ; net cash provided from operations ; and access to other funding sources . other funding sources include federal funds purchased lines , fhlb advances and other capital market sources . as of december 31 , 2018 , the level of liquidity and capital resources of the company remain at a satisfactory level and compare favorably to that of other fdic insured institutions . management believes that the company 's liquidity sources will be sufficient to support its existing operations for the foreseeable future . the liquidity and capital resources discussion will cover the following topics : ● review of the company 's current liquidity sources ● review of the consolidated statements of cash flows ● review of company only cash flows ● review of commitments for capital expenditures , cash flow uncertainties and known trends in liquidity and cash flow needs ● capital resources review of the company 's current liquidity sources liquid assets of cash on hand , balances due from other banks and interest-bearing deposits in financial institutions for december 31 , 2018 and 2017 totaled $ 56,442,000 and $ 69,420,000 , respectively . the lower balance of liquid assets at december 31 , 2018 primarily relates to a decrease in funds at the federal reserve bank , partially offset by an increase in interest-bearing deposits at financial institutions .
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 Suspicious Activity Report : the following discussion will provide a summary review of important items relating to : ● challenges ● key performance indicators ● industry results ● critical accounting policies ● income statement review ● balance sheet review ● asset quality review and credit risk management ● liquidity and capital resources ● interest rate risk ● inflation ● forward-looking statements and business risks ● non-gaap financial measures 24 challenges management has identified certain events or circumstances that have the potential to negatively impact the company 's financial condition and results of operations in the future and is attempting to position the company to best respond to those challenges . ● if interest rates increase significantly over a relatively short period of time due to improving national employment levels or higher inflationary numbers , the interest rate environment may present a challenge to the company . increases in interest rates may negatively impact the company 's net interest margin if interest expense increases more quickly than interest income , thus placing downward pressure on net interest income . the company 's earning assets ( primarily its loan and investment portfolio ) have longer maturities than its interest bearing liabilities ( primarily deposits and other borrowings ) ; therefore , in a rising interest rate environment , interest expense will tend to increase more quickly than interest income as the interest bearing liabilities reprice more quickly than earning assets , resulting in a reduction in net interest income . in response to this challenge , the banks model quarterly the changes in income that would result from various changes in interest rates . management believes bank earning assets have the appropriate maturity and repricing characteristics to optimize earnings and the banks ' interest rate risk positions . ● if market interest rates in the three to five year term remain at low levels as compared to the short term interest rates , the interest rate environment may present a challenge to the company . the company 's earning assets ( typically priced at market interest rates in the three to five year range ) will reprice at lower interest rates , but the deposits will not reprice at significantly lower interest rates , therefore the net interest income may decrease . management believes bank earning assets have the appropriate maturity and repricing characteristics to optimize earnings and the banks ' interest rate risk positions . ● the agricultural community is subject to commodity price fluctuations . extended periods of low commodity prices , higher input costs or poor weather conditions could result in reduced profit margins , reducing demand for goods and services provided by agriculture-related businesses , which , in turn , could affect other businesses in the company 's market area . moreover , the recent changes in u.s. trade policy , including the imposition of tariffs by the u.s. government and retaliatory tariffs imposed in response by foreign governments , could create further volatility for commodities prices as the volume of exports of agricultural products to these foreign markets could be adversely impacted . any combination of these factors could produce losses within the company 's agricultural loan portfolio and in the commercial loan portfolio with respect to borrowers whose businesses are directly or indirectly impacted by the health of the agricultural economy . key performance indicators certain key performance indicators for the company and the industry are presented in the following chart . the industry figures are compiled by the federal deposit insurance corporation ( fdic ) and are derived from 5,406 commercial banks and savings institutions insured by the fdic . management reviews these indicators on a quarterly basis for purposes of comparing the company 's performance from quarter to quarter against the industry as a whole . selected indicators for the company and the industry replace_table_token_2_th 25 key performance indicators include : ● return on assets this ratio is calculated by dividing net income by average assets . it is used to measure how effectively the assets of the company are being utilized in generating income . the company 's return on assets ratio is lower than that of the industry , primarily as a result of the company 's net interest margin being lower than the industry . ● return on equity this ratio is calculated by dividing net income by average equity . it is used to measure the net income or return the company generated for the shareholders ' equity investment in the company . the company 's return on equity ratio is lower than the industry primarily as a result of the company 's higher capital ratio and lower net interest margin as compared to the industry . ● net interest margin this ratio is calculated by dividing net interest income by average earning assets . earning assets consist primarily of loans and investments that earn interest . this ratio is used to measure how well the company is able to maintain interest rates on earning assets above those of interest-bearing liabilities , which is the interest expense paid on deposit accounts and other borrowings . the company 's net interest margin is in line with the industry net interest margin . ● efficiency ratio this ratio is calculated by dividing noninterest expense by net interest income and noninterest income . the ratio is a measure of the company 's ability to manage noninterest expenses . the company 's efficiency ratio is slightly lower than the industry average . ● capital ratio the capital ratio is calculated by dividing average total equity capital by average total assets . it measures the level of average assets that are funded by shareholders ' equity . given an equal level of risk in the financial condition of two companies , the higher the capital ratio , generally the more financially sound the company . the company 's capital ratio is significantly higher than the industry average . story_separator_special_tag the net interest margin is equal to the interest income less the interest expense divided by average earning assets . refer to the net interest income discussion following the tables for additional detail . ( dollars in thousands ) replace_table_token_4_th ( 1 ) average loan balance includes nonaccrual loans , if any . interest income collected on nonaccrual loans has been included . ( 2 ) tax-exempt income has been adjusted to a tax-equivalent basis using an incremental tax rate of 21 % for the year ended december 31 , 2018 and 35 % for the years ended december 31 , 2017 . 31 average balances and interest rates ( continued ) replace_table_token_5_th 32 rate and volume analysis the rate and volume analysis is used to determine how much of the change in interest income or expense is the result of a change in volume or a change in interest rate . for example , real estate loan interest income increased $ 2,862,000 in 2018 compared to 2017. increased volume of real estate loans increased interest income in 2018 by $ 1,671,000 and higher interest rates increased interest income in 2018 by $ 1,191,000. the following table sets forth , on a tax-equivalent basis , a summary of the changes in net interest income resulting from changes in volume and rates . ( dollars in thousands ) replace_table_token_6_th ( 1 ) the change in interest due to both volume and yield/rate has been allocated to change due to volume and change due to yield/rate in proportion to the absolute value of the change in each . net interest income the company 's largest contributing component to net income is net interest income , which is the difference between interest earned on earning assets and interest paid on interest bearing liabilities . the volume of and yields earned on earning assets and the volume of and the rates paid on interest bearing liabilities determine net interest income . refer to the tables preceding this paragraph for additional detail . interest earned and interest paid is also affected by general economic conditions , particularly changes in market interest rates , by government policies and the action of regulatory authorities . net interest income divided by average earning assets is referred to as net interest margin . for the years december 31 , 2018 and 2017 , the company 's net interest margin was 3.23 % and 3.25 % , respectively , computed on a fte basis . 33 net interest income during 2018 and 2017 totaled $ 42,124,000 and $ 40,213,000 , respectively , representing a 4.8 % increase in 2018 compared to 2017. net interest income increased in 2018 as compared to 2017 due primarily to increases in the average balance and rates of real estate loans , offset in part by increases in rates on deposits . the high level of competition in the local markets will continue to put downward pressure on the net interest margin of the company . currently , the company 's primary market in ames , iowa , has ten banks , six credit unions and several other financial investment companies . multiple banks are also located in the company 's other market areas in central , north-central and south-central iowa creating similarly competitive environments . provision for loan losses the provision for loan losses reflects management 's judgment of the expense to be recognized in order to maintain an adequate allowance for loan losses . the company 's provision for loan losses for the year ended december 31 , 2018 was $ 639,000 compared to $ 1,520,000 for the previous year . the provision for loan losses in 2018 and 2017 was necessary to maintain an adequate allowance for loan loss on the increasing outstanding loan portfolio , as well as funding net charge offs of $ 276,000 and $ 706,000 for 2018 and 2017 , respectively . classified assets increased $ 26,229,000 due in part to several agricultural credits and a large hospitality credit , however the nonperforming loans have decreased from $ 4,828,000 in 2017 to $ 3,384,000 in 2018. refer to the “ asset quality and credit risk management ” discussion for additional details with regard to loan loss provision expense . management believes the allowance for loan losses is adequate to absorb probable losses in the current portfolio . this statement is based upon management 's continuing evaluation of inherent risks in the current loan portfolio , current levels of classified assets and general economic factors . the company will continue to monitor the allowance and make future adjustments to the allowance as conditions dictate . due to potential changes in conditions , it is at least reasonably possible that change in estimates will occur in the near term and that such changes could be material to the amounts reported in the company 's financial statements . noninterest income and expense total noninterest income is comprised primarily of fee-based revenues from wealth management and trust services , bank-related service charges on deposit activities , net securities gains , merchant and card fees related to electronic processing of merchant and cash transactions and gain on the sale of loans held for sale . noninterest income during the years ended 2018 and 2017 totaled $ 7,901,000 and $ 7,993,000 , respectively . the decrease in noninterest income in 2018 compared to 2017 is primarily due to no security gains in 2018 as compared to $ 505,000 gains in 2017. partially offsetting this decrease was higher wealth management income and a gain on the foreclosure of other real estate owned . the increase in wealth management income is primarily due to increases in estate fees in 2018. excluding securities gains , noninterest income increased 5.5 % in 2018 as compared to 2017. noninterest expense for the company consists of all operating expenses other than interest expense on deposits and other borrowed funds . salaries and employee benefits are the largest component of the

