for the full year of 2019 , cost of total deposits remained low at 0.20 % , compared to 0.10 % in 2018. net interest income totaled $ 95.7 million and $ 91.5 million in 2019 and 2018 , respectively . the increase of $ 4.2 million in 2019 was primarily due to higher average loan balances and asset yields and the early redemption of a high-rate subordinated debenture in the fourth quarter of 2018. positive variances were partially offset by higher balances and rates on money market accounts . the tax-equivalent net interest margin increased to 3.98 % in 2019 , compared to 3.90 % in 2018 for the same reasons . the efficiency ratio was 55.3 % in 2019 , down from 57.3 % in 2018. notably , 2019 non-interest expenses decreased from the prior year due to higher consulting expenses in 2018 for core processing contract renegotiations and lower fdic deposit insurance fund expenses in 2019 as discussed in table 4 below . for the year ended december 31 , 2019 , return on assets and return on equity were 1.34 % and 10.49 % , respectively , compared to 1.31 % and 10.73 % in the prior year . all capital ratios exceed regulatory requirements . the total risk-based capital ratio for bancorp was 15.1 % at december 31 , 2019 up from 14.9 % at december 31 , 2018 . the board of directors declared a cash dividend of $ 0.23 per share on january 24 , 2019 , a $ 0.02 increase from the prior quarter . this was the 59 th consecutive quarterly dividend paid by bank of marin bancorp . the cash dividend was paid on february 14 , 2020 to shareholders of record at the close of business on february 7 , 2020. looking forward into the new year , with a low cost and stable deposit base , opportunities for loan growth , and our unwavering commitment to relationship banking , we believe we are well-positioned to carry our successful performance into 2020. we have ample liquidity and capital to support organic growth and acquisitions in coming years . acquisitions remain a component of our strategic plan and we will continue to evaluate merger and acquisition opportunities that fit with our culture and add value for our shareholders . our disciplined credit culture and relationship-focused banking continue to be critical components of our success . page-25 results of operations net interest income net interest income is the difference between the interest earned on loans , investments and other interest-earning assets and the interest expense incurred on deposits and other interest-bearing liabilities . net interest income is affected by changes in general market interest rates and by changes in the amounts and composition of interest-earning assets and interest-bearing liabilities . interest rate changes can create fluctuations in net interest income and or margin due to an imbalance in the timing of repricing or maturity of assets or liabilities . we manage interest rate risk exposure with the goal of minimizing the effect of interest rate volatility on net interest income . net interest margin is expressed as net interest income divided by average interest-earning assets . net interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate incurred on total interest-bearing liabilities . both of these measures are reported on a taxable-equivalent basis . net interest margin is the higher of the two because it reflects interest income earned on assets funded with non-interest-bearing sources of funds , which include demand deposits and stockholders ' equity . the following table compares interest income , average interest-earning assets , interest expense , and average interest-bearing liabilities for the periods presented . the table also presents net interest income , net interest margin and net interest rate spread for the years indicated . table 1 average statements of condition and analysis of net interest income year ended year ended december 31 , 2019 december 31 , 2018 interest interest average income/ yield/ average income/ yield/ ( dollars in thousands ; unaudited ) balance expense rate balance expense rate assets interest-bearing due from banks 1 $ 67,192 $ 1,321 1.94 % $ 78,185 $ 1,461 1.84 % investment securities 2 , 3 555,618 15,102 2.72 % 566,883 14,512 2.56 % loans 1 , 3 , 4 1,775,193 85,062 4.73 % 1,704,390 80,406 4.65 % total interest-earning assets 1 2,398,003 101,485 4.17 % 2,349,458 96,379 4.05 % cash and non-interest-bearing due from banks 35,956 41,595 bank premises and equipment , net 6,911 8,021 interest receivable and other assets , net 109,837 86,709 total assets $ 2,550,707 $ 2,485,783 liabilities and stockholders ' equity interest-bearing transaction accounts $ 133,922 $ 347 0.26 % $ 143,706 $ 226 0.16 % savings accounts 172,273 70 0.04 % 178,907 72 0.04 % money market accounts 680,296 3,439 0.51 % 612,372 1,355 0.22 % time accounts , including cdars 106,783 595 0.56 % 137,339 542 0.39 % borrowings and other obligations 1 2,935 77 2.57 % 105 2 2.03 % subordinated debentures 1 2,673 229 8.44 % 5,025 1,339 26.29 % total interest-bearing liabilities 1,098,882 4,757 0.43 % 1,077,454 3,536 0.33 % demand accounts 1,094,806 1,085,870 interest payable and other liabilities 30,578 18,514 stockholders ' equity 326,441 303,945 total liabilities & stockholders ' equity $ 2,550,707 $ 2,485,783 tax-equivalent net interest income/margin 1 $ 96,728 3.98 % $ 92,843 3.90 % reported net interest income/margin 1 $ 95,680 3.94 % $ 91,544 3.84 % tax-equivalent net interest rate spread 3.74 % 3.72 % 1 interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms , where applicable . 2 yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value , as changes in fair value are reflected as a component of stockholders ' equity . story_separator_special_tag most loans with original terms of more than five years have provisions for the fixed rates to page-33 reset , or convert to variable rates , after three , five or seven years . these loans are included in variable-rate balances below . table 9b commercial and construction loan interest rate sensitivity replace_table_token_12_th allowance for loan losses credit risk is inherent in the business of lending . as a result , we maintain an allowance for loan losses to absorb probable losses in our loan portfolio through a provision for loan losses charged against earnings . all specifically identifiable and quantifiable losses are charged off against the allowance . the balance of our allowance for loan losses is management 's best estimate of the remaining probable losses in the portfolio . the ultimate adequacy of the allowance is dependent upon a variety of factors beyond our control , including the real estate market , changes in interest rates and economic and political environments . based on the current conditions of the loan portfolio , management believes that the $ 16.7 million allowance for loan losses at december 31 , 2019 is adequate to absorb losses in our loan portfolio under accounting standards in effect at december 31 , 2019 , but provides no assurance that adverse economic conditions or other circumstances over the life of the loans will not result in increased losses in the portfolio . for information on the adoption of fasb asu no . 2016-13 , financial instruments - credit losses ( topic 326 ) : measurement of credit losses on financial instruments , effective january 1 , 2020 , and potential impact on the allowance for loan losses , refer to note 1 to the consolidated financial statements in item 8 , under `` accounting standards not yet effective . `` the components of the allowance for loan losses as stated in note 1 to the consolidated financial statements in item 8 of this report , the overall allowance consists of 1 ) specific allowances for individually identified impaired loans ( `` asc 310-10 `` ) and 2 ) general allowances for pools of loans ( `` asc 450-20 `` ) , which incorporate quantitative ( e.g . , historical loan loss rates ) and qualitative risk factors ( e.g . , portfolio growth and trends , credit concentrations , economic and regulatory factors , etc . ) . the first component , specific allowances , results from the analysis of identified problem credits and the evaluation of sources of repayment including collateral , as applicable . management evaluates these loans individually for impairment . management considers an originated loan to be impaired when it is probable we will be unable to collect all amounts due according to the contractual terms of the loan agreement . for pci loans , specific allowances are established to account for credit deterioration subsequent to acquisition if we have probable decreases in cash flows expected to be collected . for loans determined to be impaired , the extent of the impairment is measured based on the present value of expected future cash flows discounted at the loan 's effective interest rate at origination ( for originated loans ) , based on the loan 's observable market price , or based on the fair value of the collateral if the loan is collateral dependent or if foreclosure is imminent . generally , for problem credits that are collateral dependent , we obtain appraisals of the collateral at least annually . we may obtain appraisals more frequently if we believe the collateral is subject to market volatility , if a specific event has occurred to the collateral , or if we believe foreclosure is imminent . impaired loan balances decreased to $ 11.5 million at december 31 , 2019 from $ 15.0 million at december 31 , 2018. the specific allowance for impaired loans decreased to $ 397 thousand at december 31 , 2019 from $ 778 thousand at december 31 , 2018 . the decrease in impaired loan balances primarily related to the payoff of a land development loan with recorded investment of $ 2.7 million at december 31 , 2018 and paydowns on other tdr loans . the decrease in reserves for impaired loans was primarily due to two unsecured commercial loans that paid down outstanding balances during 2019 and exhibited improved expected cash flows . the second component is an estimate of the probable inherent losses in each loan pool with similar risk characteristics . this analysis encompasses the entire loan portfolio , excluding individually identified impaired loans and acquired loans whose purchase discount has not been fully accreted . under our allowance model , loans are evaluated on a pool basis by federal regulatory reporting codes ( `` call codes `` or `` segments `` ) , which are further delineated by assigned credit risk ratings , as described in note 3 to the consolidated financial statements in item 8 of this report . at december 31 , 2019 and 2018 , the allowance allocated for the second component totaled $ 16.3 million and $ 15.0 million , respectively . the increase in the general allowance was almost entirely attributed to growth in loans subject page-34 to general allowance reserves ( i.e . , second component ) . loans classified substandard decreased by $ 2.7 million during 2019 primarily due to the payoff of the land development loan mentioned previously . loans designated special mention increased by $ 56.1 million during 2019 due primarily to new commercial loan originations to three borrowing relationships totaling $ 17.7 million that were experiencing perceived temporary financial conditions that warranted the initial designation , and downgrades of existing commercial real estate loans to two borrowing relationships totaling $ 26.7 million . these loans are either well-secured or have strong sponsorship and are not indicative of deteriorating credit quality in the loan portfolio . table 10 shows the allocation of the allowance by

liquidity the goal of liquidity management is to provide adequate funds to meet loan demand and to fund operating activities and deposit withdrawals . we accomplish this goal by maintaining an appropriate level of liquid assets and formal lines of credit with the fhlb , frbsf and correspondent banks that enable us to borrow funds as discussed in note 7 to the consolidated financial statement in item 8 of this report . our asset liability management committee ( `` alco '' ) , which is comprised of independent bank directors and the bank 's chief executive officer , is responsible for approving and monitoring our liquidity targets and strategies . alco has adopted a contingency funding plan that provides early detection of potential liquidity issues in the market or the bank and institutes prompt responses that may prevent or alleviate a potential liquidity crisis . management monitors liquidity daily and regularly adjusts our position based on current and future liquidity needs . we also have relationships with third-party deposit networks and can adjust the placement of our deposits via reciprocal or one-way sales as part of our cash management strategy . we obtain funds from the repayment and maturity of loans , deposit inflows , investment security maturities and paydowns , federal funds purchases , fhlb advances , other borrowings , and cash flow from operations . our primary uses of funds are the origination of loans , the purchase of investment securities , withdrawals of deposits , maturity of certificates of deposit , repayment of borrowings , and dividends to common stockholders .


 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 the goal of liquidity management is to provide adequate funds to meet loan demand and to fund operating activities and deposit withdrawals . we accomplish this goal by maintaining an appropriate level of liquid assets and formal lines of credit with the fhlb , frbsf and correspondent banks that enable us to borrow funds as discussed in note 7 to the consolidated financial statement in item 8 of this report . our asset liability management committee ( `` alco '' ) , which is comprised of independent bank directors and the bank 's chief executive officer , is responsible for approving and monitoring our liquidity targets and strategies . alco has adopted a contingency funding plan that provides early detection of potential liquidity issues in the market or the bank and institutes prompt responses that may prevent or alleviate a potential liquidity crisis . management monitors liquidity daily and regularly adjusts our position based on current and future liquidity needs . we also have relationships with third-party deposit networks and can adjust the placement of our deposits via reciprocal or one-way sales as part of our cash management strategy . we obtain funds from the repayment and maturity of loans , deposit inflows , investment security maturities and paydowns , federal funds purchases , fhlb advances , other borrowings , and cash flow from operations . our primary uses of funds are the origination of loans , the purchase of investment securities , withdrawals of deposits , maturity of certificates of deposit , repayment of borrowings , and dividends to common stockholders .
```    
 Suspicious Activity Report : for the full year of 2019 , cost of total deposits remained low at 0.20 % , compared to 0.10 % in 2018. net interest income totaled $ 95.7 million and $ 91.5 million in 2019 and 2018 , respectively . the increase of $ 4.2 million in 2019 was primarily due to higher average loan balances and asset yields and the early redemption of a high-rate subordinated debenture in the fourth quarter of 2018. positive variances were partially offset by higher balances and rates on money market accounts . the tax-equivalent net interest margin increased to 3.98 % in 2019 , compared to 3.90 % in 2018 for the same reasons . the efficiency ratio was 55.3 % in 2019 , down from 57.3 % in 2018. notably , 2019 non-interest expenses decreased from the prior year due to higher consulting expenses in 2018 for core processing contract renegotiations and lower fdic deposit insurance fund expenses in 2019 as discussed in table 4 below . for the year ended december 31 , 2019 , return on assets and return on equity were 1.34 % and 10.49 % , respectively , compared to 1.31 % and 10.73 % in the prior year . all capital ratios exceed regulatory requirements . the total risk-based capital ratio for bancorp was 15.1 % at december 31 , 2019 up from 14.9 % at december 31 , 2018 . the board of directors declared a cash dividend of $ 0.23 per share on january 24 , 2019 , a $ 0.02 increase from the prior quarter . this was the 59 th consecutive quarterly dividend paid by bank of marin bancorp . the cash dividend was paid on february 14 , 2020 to shareholders of record at the close of business on february 7 , 2020. looking forward into the new year , with a low cost and stable deposit base , opportunities for loan growth , and our unwavering commitment to relationship banking , we believe we are well-positioned to carry our successful performance into 2020. we have ample liquidity and capital to support organic growth and acquisitions in coming years . acquisitions remain a component of our strategic plan and we will continue to evaluate merger and acquisition opportunities that fit with our culture and add value for our shareholders . our disciplined credit culture and relationship-focused banking continue to be critical components of our success . page-25 results of operations net interest income net interest income is the difference between the interest earned on loans , investments and other interest-earning assets and the interest expense incurred on deposits and other interest-bearing liabilities . net interest income is affected by changes in general market interest rates and by changes in the amounts and composition of interest-earning assets and interest-bearing liabilities . interest rate changes can create fluctuations in net interest income and or margin due to an imbalance in the timing of repricing or maturity of assets or liabilities . we manage interest rate risk exposure with the goal of minimizing the effect of interest rate volatility on net interest income . net interest margin is expressed as net interest income divided by average interest-earning assets . net interest rate spread is the difference between the average rate earned on total interest-earning assets and the average rate incurred on total interest-bearing liabilities . both of these measures are reported on a taxable-equivalent basis . net interest margin is the higher of the two because it reflects interest income earned on assets funded with non-interest-bearing sources of funds , which include demand deposits and stockholders ' equity . the following table compares interest income , average interest-earning assets , interest expense , and average interest-bearing liabilities for the periods presented . the table also presents net interest income , net interest margin and net interest rate spread for the years indicated . table 1 average statements of condition and analysis of net interest income year ended year ended december 31 , 2019 december 31 , 2018 interest interest average income/ yield/ average income/ yield/ ( dollars in thousands ; unaudited ) balance expense rate balance expense rate assets interest-bearing due from banks 1 $ 67,192 $ 1,321 1.94 % $ 78,185 $ 1,461 1.84 % investment securities 2 , 3 555,618 15,102 2.72 % 566,883 14,512 2.56 % loans 1 , 3 , 4 1,775,193 85,062 4.73 % 1,704,390 80,406 4.65 % total interest-earning assets 1 2,398,003 101,485 4.17 % 2,349,458 96,379 4.05 % cash and non-interest-bearing due from banks 35,956 41,595 bank premises and equipment , net 6,911 8,021 interest receivable and other assets , net 109,837 86,709 total assets $ 2,550,707 $ 2,485,783 liabilities and stockholders ' equity interest-bearing transaction accounts $ 133,922 $ 347 0.26 % $ 143,706 $ 226 0.16 % savings accounts 172,273 70 0.04 % 178,907 72 0.04 % money market accounts 680,296 3,439 0.51 % 612,372 1,355 0.22 % time accounts , including cdars 106,783 595 0.56 % 137,339 542 0.39 % borrowings and other obligations 1 2,935 77 2.57 % 105 2 2.03 % subordinated debentures 1 2,673 229 8.44 % 5,025 1,339 26.29 % total interest-bearing liabilities 1,098,882 4,757 0.43 % 1,077,454 3,536 0.33 % demand accounts 1,094,806 1,085,870 interest payable and other liabilities 30,578 18,514 stockholders ' equity 326,441 303,945 total liabilities & stockholders ' equity $ 2,550,707 $ 2,485,783 tax-equivalent net interest income/margin 1 $ 96,728 3.98 % $ 92,843 3.90 % reported net interest income/margin 1 $ 95,680 3.94 % $ 91,544 3.84 % tax-equivalent net interest rate spread 3.74 % 3.72 % 1 interest income/expense is divided by actual number of days in the period times 360 days to correspond to stated interest rate terms , where applicable . 2 yields on available-for-sale securities are calculated based on amortized cost balances rather than fair value , as changes in fair value are reflected as a component of stockholders ' equity . story_separator_special_tag most loans with original terms of more than five years have provisions for the fixed rates to page-33 reset , or convert to variable rates , after three , five or seven years . these loans are included in variable-rate balances below . table 9b commercial and construction loan interest rate sensitivity replace_table_token_12_th allowance for loan losses credit risk is inherent in the business of lending . as a result , we maintain an allowance for loan losses to absorb probable losses in our loan portfolio through a provision for loan losses charged against earnings . all specifically identifiable and quantifiable losses are charged off against the allowance . the balance of our allowance for loan losses is management 's best estimate of the remaining probable losses in the portfolio . the ultimate adequacy of the allowance is dependent upon a variety of factors beyond our control , including the real estate market , changes in interest rates and economic and political environments . based on the current conditions of the loan portfolio , management believes that the $ 16.7 million allowance for loan losses at december 31 , 2019 is adequate to absorb losses in our loan portfolio under accounting standards in effect at december 31 , 2019 , but provides no assurance that adverse economic conditions or other circumstances over the life of the loans will not result in increased losses in the portfolio . for information on the adoption of fasb asu no . 2016-13 , financial instruments - credit losses ( topic 326 ) : measurement of credit losses on financial instruments , effective january 1 , 2020 , and potential impact on the allowance for loan losses , refer to note 1 to the consolidated financial statements in item 8 , under `` accounting standards not yet effective . `` the components of the allowance for loan losses as stated in note 1 to the consolidated financial statements in item 8 of this report , the overall allowance consists of 1 ) specific allowances for individually identified impaired loans ( `` asc 310-10 `` ) and 2 ) general allowances for pools of loans ( `` asc 450-20 `` ) , which incorporate quantitative ( e.g . , historical loan loss rates ) and qualitative risk factors ( e.g . , portfolio growth and trends , credit concentrations , economic and regulatory factors , etc . ) . the first component , specific allowances , results from the analysis of identified problem credits and the evaluation of sources of repayment including collateral , as applicable . management evaluates these loans individually for impairment . management considers an originated loan to be impaired when it is probable we will be unable to collect all amounts due according to the contractual terms of the loan agreement . for pci loans , specific allowances are established to account for credit deterioration subsequent to acquisition if we have probable decreases in cash flows expected to be collected . for loans determined to be impaired , the extent of the impairment is measured based on the present value of expected future cash flows discounted at the loan 's effective interest rate at origination ( for originated loans ) , based on the loan 's observable market price , or based on the fair value of the collateral if the loan is collateral dependent or if foreclosure is imminent . generally , for problem credits that are collateral dependent , we obtain appraisals of the collateral at least annually . we may obtain appraisals more frequently if we believe the collateral is subject to market volatility , if a specific event has occurred to the collateral , or if we believe foreclosure is imminent . impaired loan balances decreased to $ 11.5 million at december 31 , 2019 from $ 15.0 million at december 31 , 2018. the specific allowance for impaired loans decreased to $ 397 thousand at december 31 , 2019 from $ 778 thousand at december 31 , 2018 . the decrease in impaired loan balances primarily related to the payoff of a land development loan with recorded investment of $ 2.7 million at december 31 , 2018 and paydowns on other tdr loans . the decrease in reserves for impaired loans was primarily due to two unsecured commercial loans that paid down outstanding balances during 2019 and exhibited improved expected cash flows . the second component is an estimate of the probable inherent losses in each loan pool with similar risk characteristics . this analysis encompasses the entire loan portfolio , excluding individually identified impaired loans and acquired loans whose purchase discount has not been fully accreted . under our allowance model , loans are evaluated on a pool basis by federal regulatory reporting codes ( `` call codes `` or `` segments `` ) , which are further delineated by assigned credit risk ratings , as described in note 3 to the consolidated financial statements in item 8 of this report . at december 31 , 2019 and 2018 , the allowance allocated for the second component totaled $ 16.3 million and $ 15.0 million , respectively . the increase in the general allowance was almost entirely attributed to growth in loans subject page-34 to general allowance reserves ( i.e . , second component ) . loans classified substandard decreased by $ 2.7 million during 2019 primarily due to the payoff of the land development loan mentioned previously . loans designated special mention increased by $ 56.1 million during 2019 due primarily to new commercial loan originations to three borrowing relationships totaling $ 17.7 million that were experiencing perceived temporary financial conditions that warranted the initial designation , and downgrades of existing commercial real estate loans to two borrowing relationships totaling $ 26.7 million . these loans are either well-secured or have strong sponsorship and are not indicative of deteriorating credit quality in the loan portfolio . table 10 shows the allocation of the allowance by

