cre loans decreased $ 30.8 million as a result of the payoff of several large loans and ongoing scheduled principal payments . acquisition and development ( “ a & d ” ) loans decreased $ 21.2 million due primarily to $ 5.0 million of principal amortization and $ 28.7 million of payoffs , offset by $ 17.9 million of new loans . commercial and industrial ( “ c & i ” ) loans decreased $ 9.2 million due primarily to $ 8.7 million of payoffs and scheduled principal payments . residential mortgages increased by $ 4.0 million due to increased production of loans primarily in our 10/1 adjustable rate mortgage program . the bank continues to use fannie mae for the majority of new , longer-term , fixed-rate residential loan originations , although production for these loans slowed during the third and fourth quarters of 2013. the consumer portfolio decreased $ 7.4 million due primarily to repayment activity in the indirect auto portfolio offsetting new production . at december 31 , 2013 , approximately 57 % of the commercial loan portfolio was collateralized by real estate , compared to 60 % at december 31 , 2012 . [ 29 ] interest income on loans in 2013 decreased by $ 4.5 million ( on a fte basis ) when compared to 2012 due to the continued low rate environment and a decline in loan balances during 2013. interest income on the investment securities increased by $ 1.1 million ( on a fte basis ) due to purchases during 2013 . ( additional information on the composition of interest income is available in table 1 that appears on page 34 ) . total deposits increased $ .5 million during 2013 when compared to deposits at december 31 , 2012. the slight increase in deposits was due to increases of $ 6.6 million in traditional savings accounts , $ 9.8 million in interest-bearing demand deposits , $ 13.1 million in money market accounts and $ 28.0 million in non-interest bearing demand deposits . these increases were offset by a $ 19.2 million decrease in time deposits less than $ 100,000 and a $ 37.8 million decrease in time deposits greater than $ 100,000. the decrease in time deposits was a result of management 's plan to reduce cost of funds by changing the mix of the deposit portfolio . interest expense decreased $ 2.2 million in 2013 when compared to 2012. the decline was primarily due to our strategic focus to shift the mix of our portfolio from higher cost certificates of deposit to core deposits during 2013 as discussed above . other operating income/other operating expense – other operating income , exclusive of gains , decreased $ .6 million during 2013 when compared to 2012. the decrease was due to the reduction in boli income due to the one-time death benefit of $ .7 million that was received in march 2012. trust department income increased $ .4 million when comparing 2013 to 2012. trust assets under management were $ 675 million at december 31 , 2013 and $ 637 million at december 31 , 2012. net gains of $ .2 million were reported through other income during 2013 , compared to net gains of $ 1.7 million during 2012. the reduction in net gains during 2013 was due to reduced gains on sales of investment securities . operating expenses increased $ 2.9 million for the year ended 2013 when compared to the same period of 2012 due to a $ 2.0 million increase in oreo expenses primarily related to the valuation allowance on oreo properties . salaries and benefits increased $ .5 million in 2013 when compared to 2012 due to increased 401k expense for a discretionary contribution into the plan as a result of the “ soft freeze ” on the defined benefit pension plan . other expenses increased $ .3 million in 2013 when compared to the 2012 due to increases in miscellaneous expenses such as legal and professional expenses . dividends – during 2013 , the corporation did not declare or pay any dividends on the shares of its common stock due to the board of directors ' decision in november 2010 to defer quarterly cash dividends on the series a preferred stock . the board did not declare or pay any dividends on the outstanding shares of series a preferred stock in 2013 , but the quarterly dividends that would have been paid had they been declared continue to accrue and must be paid in full before the corporation may resume the payment of regularly-scheduled quarterly dividends . looking forward – we will continue to face risks and challenges in the future , including , without limitation , changes in local economic conditions in our core geographic markets , potential yield compression on loan and deposit products from existing competitors and potential new entrants in our markets , fluctuations in interest rates , and changes to existing federal and state laws and regulations that apply to banks and financial holding companies . for a more complete discussion of these and other risk factors , see item 1a of part i of this annual report . [ 30 ] recent developments at the request of the reserve bank in december 2010 , the corporation 's board of directors elected to defer quarterly interest payments under the tps debentures beginning with the payments due in march 2011. in february 2014 , the corporation received approval from the reserve bank to terminate this deferral by making the quarterly interest payments due to the trusts in march 2014. at the time it makes those quarterly interest payments , the corporation will be required pursuant to the terms of the tps debentures to also pay all unpaid interest that has accrued during the deferral period . story_separator_special_tag the decrease in net interest income was primarily due to the reduction in the average balances of loans as well as the reduction in the average rate paid on interest earning assets . the slightly lower yield on loans and the reduction in average loan balances contributed to the decline in interest income when comparing 2013 to 2012. the reduction in the average balances on interest-bearing liabilities was also a contributing factor of the decrease in the net interest margin of 5 basis points , as it decreased to 3.25 % for the year ended december 31 , 2013 from 3.30 % for the year ended december 31 , 2012. there was an overall $ 16.7 million decrease in average interest-earning assets , driven by the $ 64.2 million reduction in loans offset by the increase of $ 50.8 million in average investment securities . interest expense decreased for the year ended december 31 , 2013 when compared to the year ended december 31 , 2012 due to an overall reduction in deposit balances and interest rates on deposit products . the average balance of interest-bearing liabilities decreased by $ 54.0 million when comparing december 31 , 2013 to december 31 , 2012. during 2013 , management continued its strategic focus on shifting the mix of our deposits from higher cost certificates of deposit to core deposit products . the overall effect was a 15 basis point decrease in the average rate paid on our average interest-bearing liabilities , from 1.29 % for the year ended december 31 , 2012 to 1.14 % for the year ended december 31 , 2013. as shown below , the composition of total interest income between 2013 and 2012 remained constant between interest and fees on loans and investment securities . replace_table_token_7_th [ 34 ] table 1 sets forth the average balances , net interest income and expense , and average yields and rates for our interest-earning assets and interest-bearing liabilities for 2013 , 2012 and 2011. table 2 sets forth an analysis of volume and rate changes in interest income and interest expense of our average interest-earning assets and average interest-bearing liabilities for 2013 , 2012 and 2011. table 2 distinguishes between the changes related to average outstanding balances ( changes in volume created by holding the interest rate constant ) and the changes related to average interest rates ( changes in interest income or expense attributed to average rates created by holding the outstanding balance constant ) . [ 35 ] distribution of assets , liabilities and shareholders ' equity interest rates and interest differential – tax equivalent basis table 1 replace_table_token_8_th notes : ( 1 ) the above table reflects the average rates earned or paid stated on a fte basis assuming a tax rate of 35 % for 2013 , 2012 and 2011. the fte adjustments for the years ended december 31 , 2013 , 2012 and 2011 were $ 979 , $ 1,145 and $ 1,533 , respectively . ( 2 ) the average balances of non-accrual loans for the years ended december 31 , 2013 , 2012 and 2011 , which were reported in the average loan balances for these years , were $ 18,343 , $ 29,208 and $ 39,806 , respectively . ( 3 ) net interest margin is calculated as net interest income divided by average earning assets . ( 4 ) the average yields on investments are based on amortized cost . [ 36 ] interest variance analysis ( 1 ) table 2 replace_table_token_9_th note : ( 1 ) the change in interest income/expense due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each . provision for loan losses the provision for loan losses was $ .4 million for the year ended 2013 , compared to $ 9.4 million for 2012. the lower provision expense was primarily due to the significantly lower net charge-offs in 2013 and due to a large recovery on a commercial real estate credit as well as overall lower loan balances . during 2013 , we continued to see stabilization in our total rolling historical loss rates and the qualitative factors utilized in the determination of the all , as well as stabilization in the level of classified assets ( discussed below in the section entitled “ financial condition ” under the heading “ allowance and provision for loan losses ” ) . management strives to ensure that the all reflects a level commensurate with the risk inherent in our loan portfolio . other operating income the following table shows the major components of other operating income for the past two years , exclusive of net gains/ ( losses ) , and the percentage changes during these years : replace_table_token_10_th [ 37 ] other operating income , exclusive of gains , decreased $ .6 million during 2013 when compared to 2012. the decrease was due to the reduction in boli income due to the one-time death benefit of $ .7 million occurred in march 2012. trust department income increased $ .4 million when comparing 2013 to 2012. trust assets under management were $ 675 million at december 31 , 2013 and $ 637 million at december 31 , 2012. net gains of $ .2 million were reported through other income during 2013 , compared to net gains of $ 1.7 million during 2012. the reduction was due to reduced gains on sales of investment securities when comparing 2013 to 2012. other operating expense the following table compares the major components of other operating expense for 2013 and 2012 : replace_table_token_11_th operating expenses increased $ 2.9 million for the year ended december 31 , 2013 when compared to 2012 due to a $ 2.0 million increase in oreo expenses primarily related to the valuation allowance on oreo properties . salaries and benefits increased $ .5 million in 2013 when compared to 2012

capital resources we require capital to fund loans , satisfy our obligations under the bank 's letters of credit , meet the deposit withdraw demands of the bank 's customers , and satisfy our other monetary obligations . to the extent that deposits are not adequate to fund our capital requirements , we can rely on the funding sources identified below under the heading “ liquidity management ” . at december 31 , 2013 , the bank had $ 25.0 million available through unsecured lines of credit with correspondent banks , $ 30.4 million available through a secured line of credit with the fed discount window and approximately $ 11.2 million available through the fhlb . management is not aware of any demands , commitments , events or uncertainties that are likely to materially affect our ability to meet our future capital requirements . in addition to operational requirements , the bank and the corporation are subject to risk-based capital regulations , which were adopted and are monitored by federal banking regulators . these regulations are used to evaluate capital adequacy and require an analysis of an institution 's asset risk profile and off-balance sheet exposures , such as unused loan commitments and stand-by letters of credit . the regulations require that a portion of total capital be tier 1 capital , consisting of common shareholders ' equity , the qualifying portion of trust issued preferred securities , and perpetual preferred stock , less goodwill and certain other deductions . the remaining capital , or tier 2 capital , consists of subordinated debt , mandatory convertible debt , the remaining portion of trust issued preferred securities , grandfathered senior debt and the all , subject to certain limitations . banking organizations are currently required to maintain a minimum 8 % ( 10 % for well capitalized banks ) total risk-based capital ratio ( total qualifying capital divided by risk-weighted assets ) , including a tier 1 ratio of 4 % ( 6 % for well capitalized banks ) . the risk-based capital rules have been further supplemented by a leverage ratio , defined as tier i capital divided by average assets , after certain adjustments .


 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.
     ```capital resources we require capital to fund loans , satisfy our obligations under the bank 's letters of credit , meet the deposit withdraw demands of the bank 's customers , and satisfy our other monetary obligations . to the extent that deposits are not adequate to fund our capital requirements , we can rely on the funding sources identified below under the heading “ liquidity management ” . at december 31 , 2013 , the bank had $ 25.0 million available through unsecured lines of credit with correspondent banks , $ 30.4 million available through a secured line of credit with the fed discount window and approximately $ 11.2 million available through the fhlb . management is not aware of any demands , commitments , events or uncertainties that are likely to materially affect our ability to meet our future capital requirements . in addition to operational requirements , the bank and the corporation are subject to risk-based capital regulations , which were adopted and are monitored by federal banking regulators . these regulations are used to evaluate capital adequacy and require an analysis of an institution 's asset risk profile and off-balance sheet exposures , such as unused loan commitments and stand-by letters of credit . the regulations require that a portion of total capital be tier 1 capital , consisting of common shareholders ' equity , the qualifying portion of trust issued preferred securities , and perpetual preferred stock , less goodwill and certain other deductions . the remaining capital , or tier 2 capital , consists of subordinated debt , mandatory convertible debt , the remaining portion of trust issued preferred securities , grandfathered senior debt and the all , subject to certain limitations . banking organizations are currently required to maintain a minimum 8 % ( 10 % for well capitalized banks ) total risk-based capital ratio ( total qualifying capital divided by risk-weighted assets ) , including a tier 1 ratio of 4 % ( 6 % for well capitalized banks ) . the risk-based capital rules have been further supplemented by a leverage ratio , defined as tier i capital divided by average assets , after certain adjustments .
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 Suspicious Activity Report : cre loans decreased $ 30.8 million as a result of the payoff of several large loans and ongoing scheduled principal payments . acquisition and development ( “ a & d ” ) loans decreased $ 21.2 million due primarily to $ 5.0 million of principal amortization and $ 28.7 million of payoffs , offset by $ 17.9 million of new loans . commercial and industrial ( “ c & i ” ) loans decreased $ 9.2 million due primarily to $ 8.7 million of payoffs and scheduled principal payments . residential mortgages increased by $ 4.0 million due to increased production of loans primarily in our 10/1 adjustable rate mortgage program . the bank continues to use fannie mae for the majority of new , longer-term , fixed-rate residential loan originations , although production for these loans slowed during the third and fourth quarters of 2013. the consumer portfolio decreased $ 7.4 million due primarily to repayment activity in the indirect auto portfolio offsetting new production . at december 31 , 2013 , approximately 57 % of the commercial loan portfolio was collateralized by real estate , compared to 60 % at december 31 , 2012 . [ 29 ] interest income on loans in 2013 decreased by $ 4.5 million ( on a fte basis ) when compared to 2012 due to the continued low rate environment and a decline in loan balances during 2013. interest income on the investment securities increased by $ 1.1 million ( on a fte basis ) due to purchases during 2013 . ( additional information on the composition of interest income is available in table 1 that appears on page 34 ) . total deposits increased $ .5 million during 2013 when compared to deposits at december 31 , 2012. the slight increase in deposits was due to increases of $ 6.6 million in traditional savings accounts , $ 9.8 million in interest-bearing demand deposits , $ 13.1 million in money market accounts and $ 28.0 million in non-interest bearing demand deposits . these increases were offset by a $ 19.2 million decrease in time deposits less than $ 100,000 and a $ 37.8 million decrease in time deposits greater than $ 100,000. the decrease in time deposits was a result of management 's plan to reduce cost of funds by changing the mix of the deposit portfolio . interest expense decreased $ 2.2 million in 2013 when compared to 2012. the decline was primarily due to our strategic focus to shift the mix of our portfolio from higher cost certificates of deposit to core deposits during 2013 as discussed above . other operating income/other operating expense – other operating income , exclusive of gains , decreased $ .6 million during 2013 when compared to 2012. the decrease was due to the reduction in boli income due to the one-time death benefit of $ .7 million that was received in march 2012. trust department income increased $ .4 million when comparing 2013 to 2012. trust assets under management were $ 675 million at december 31 , 2013 and $ 637 million at december 31 , 2012. net gains of $ .2 million were reported through other income during 2013 , compared to net gains of $ 1.7 million during 2012. the reduction in net gains during 2013 was due to reduced gains on sales of investment securities . operating expenses increased $ 2.9 million for the year ended 2013 when compared to the same period of 2012 due to a $ 2.0 million increase in oreo expenses primarily related to the valuation allowance on oreo properties . salaries and benefits increased $ .5 million in 2013 when compared to 2012 due to increased 401k expense for a discretionary contribution into the plan as a result of the “ soft freeze ” on the defined benefit pension plan . other expenses increased $ .3 million in 2013 when compared to the 2012 due to increases in miscellaneous expenses such as legal and professional expenses . dividends – during 2013 , the corporation did not declare or pay any dividends on the shares of its common stock due to the board of directors ' decision in november 2010 to defer quarterly cash dividends on the series a preferred stock . the board did not declare or pay any dividends on the outstanding shares of series a preferred stock in 2013 , but the quarterly dividends that would have been paid had they been declared continue to accrue and must be paid in full before the corporation may resume the payment of regularly-scheduled quarterly dividends . looking forward – we will continue to face risks and challenges in the future , including , without limitation , changes in local economic conditions in our core geographic markets , potential yield compression on loan and deposit products from existing competitors and potential new entrants in our markets , fluctuations in interest rates , and changes to existing federal and state laws and regulations that apply to banks and financial holding companies . for a more complete discussion of these and other risk factors , see item 1a of part i of this annual report . [ 30 ] recent developments at the request of the reserve bank in december 2010 , the corporation 's board of directors elected to defer quarterly interest payments under the tps debentures beginning with the payments due in march 2011. in february 2014 , the corporation received approval from the reserve bank to terminate this deferral by making the quarterly interest payments due to the trusts in march 2014. at the time it makes those quarterly interest payments , the corporation will be required pursuant to the terms of the tps debentures to also pay all unpaid interest that has accrued during the deferral period . story_separator_special_tag the decrease in net interest income was primarily due to the reduction in the average balances of loans as well as the reduction in the average rate paid on interest earning assets . the slightly lower yield on loans and the reduction in average loan balances contributed to the decline in interest income when comparing 2013 to 2012. the reduction in the average balances on interest-bearing liabilities was also a contributing factor of the decrease in the net interest margin of 5 basis points , as it decreased to 3.25 % for the year ended december 31 , 2013 from 3.30 % for the year ended december 31 , 2012. there was an overall $ 16.7 million decrease in average interest-earning assets , driven by the $ 64.2 million reduction in loans offset by the increase of $ 50.8 million in average investment securities . interest expense decreased for the year ended december 31 , 2013 when compared to the year ended december 31 , 2012 due to an overall reduction in deposit balances and interest rates on deposit products . the average balance of interest-bearing liabilities decreased by $ 54.0 million when comparing december 31 , 2013 to december 31 , 2012. during 2013 , management continued its strategic focus on shifting the mix of our deposits from higher cost certificates of deposit to core deposit products . the overall effect was a 15 basis point decrease in the average rate paid on our average interest-bearing liabilities , from 1.29 % for the year ended december 31 , 2012 to 1.14 % for the year ended december 31 , 2013. as shown below , the composition of total interest income between 2013 and 2012 remained constant between interest and fees on loans and investment securities . replace_table_token_7_th [ 34 ] table 1 sets forth the average balances , net interest income and expense , and average yields and rates for our interest-earning assets and interest-bearing liabilities for 2013 , 2012 and 2011. table 2 sets forth an analysis of volume and rate changes in interest income and interest expense of our average interest-earning assets and average interest-bearing liabilities for 2013 , 2012 and 2011. table 2 distinguishes between the changes related to average outstanding balances ( changes in volume created by holding the interest rate constant ) and the changes related to average interest rates ( changes in interest income or expense attributed to average rates created by holding the outstanding balance constant ) . [ 35 ] distribution of assets , liabilities and shareholders ' equity interest rates and interest differential – tax equivalent basis table 1 replace_table_token_8_th notes : ( 1 ) the above table reflects the average rates earned or paid stated on a fte basis assuming a tax rate of 35 % for 2013 , 2012 and 2011. the fte adjustments for the years ended december 31 , 2013 , 2012 and 2011 were $ 979 , $ 1,145 and $ 1,533 , respectively . ( 2 ) the average balances of non-accrual loans for the years ended december 31 , 2013 , 2012 and 2011 , which were reported in the average loan balances for these years , were $ 18,343 , $ 29,208 and $ 39,806 , respectively . ( 3 ) net interest margin is calculated as net interest income divided by average earning assets . ( 4 ) the average yields on investments are based on amortized cost . [ 36 ] interest variance analysis ( 1 ) table 2 replace_table_token_9_th note : ( 1 ) the change in interest income/expense due to both volume and rate has been allocated to volume and rate changes in proportion to the relationship of the absolute dollar amounts of the change in each . provision for loan losses the provision for loan losses was $ .4 million for the year ended 2013 , compared to $ 9.4 million for 2012. the lower provision expense was primarily due to the significantly lower net charge-offs in 2013 and due to a large recovery on a commercial real estate credit as well as overall lower loan balances . during 2013 , we continued to see stabilization in our total rolling historical loss rates and the qualitative factors utilized in the determination of the all , as well as stabilization in the level of classified assets ( discussed below in the section entitled “ financial condition ” under the heading “ allowance and provision for loan losses ” ) . management strives to ensure that the all reflects a level commensurate with the risk inherent in our loan portfolio . other operating income the following table shows the major components of other operating income for the past two years , exclusive of net gains/ ( losses ) , and the percentage changes during these years : replace_table_token_10_th [ 37 ] other operating income , exclusive of gains , decreased $ .6 million during 2013 when compared to 2012. the decrease was due to the reduction in boli income due to the one-time death benefit of $ .7 million occurred in march 2012. trust department income increased $ .4 million when comparing 2013 to 2012. trust assets under management were $ 675 million at december 31 , 2013 and $ 637 million at december 31 , 2012. net gains of $ .2 million were reported through other income during 2013 , compared to net gains of $ 1.7 million during 2012. the reduction was due to reduced gains on sales of investment securities when comparing 2013 to 2012. other operating expense the following table compares the major components of other operating expense for 2013 and 2012 : replace_table_token_11_th operating expenses increased $ 2.9 million for the year ended december 31 , 2013 when compared to 2012 due to a $ 2.0 million increase in oreo expenses primarily related to the valuation allowance on oreo properties . salaries and benefits increased $ .5 million in 2013 when compared to 2012

