such agencies may require us to make additional provisions for loan losses based upon information available to them at the time of their examination . all of the factors considered in the analysis of the adequacy of the allowance for loan losses may be subject to change . to the extent actual outcomes differ from management estimates , additional provisions for loan losses may be required that could materially adversely impact earnings in future periods . additional information can be found in note 1 of the notes to consolidated financial statements . income taxes the objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity 's financial statements or tax returns . judgment is required in assessing the future tax consequences of events that have been recognized in the company 's consolidated financial statements or tax returns . fluctuations in the actual outcome of these future tax consequences could impact the company 's consolidated financial condition or results of operations . note 1 ( under the caption “ use of estimates ” ) and note 12 of the notes to consolidated financial statements include additional discussion on the accounting for income taxes . - 28 - goodwill the company has adopted the provisions of fasb asc 350-10-05 , which requires that goodwill be reported separate from other intangible assets in the consolidated statements of condition and not be amortized but tested for impairment annually or more frequently if indicators arise for impairment . no impairment charge was deemed necessary for the years ended december 31 , 2018 , 2017 and 2016. overview and strategy we serve as a holding company for the bank , which is our primary asset and only operating subsidiary . we follow a business plan that emphasizes the delivery of customized banking services in our market area to customers who desire a high level of personalized service and responsiveness . the bank conducts a traditional banking business , making commercial loans , consumer loans and residential and commercial real estate loans . in addition , the bank offers various non-deposit products through non-proprietary relationships with third party vendors . the bank relies upon deposits as the primary funding source for its assets . the bank offers traditional deposit products . many of our customer relationships start with referrals from existing customers . we then seek to cross sell our products to customers to grow the customer relationship . for example , we will frequently offer an interest rate concession on credit products for customers that maintain a noninterest-bearing deposit account at the bank . this strategy has helped maintain our funding costs and the growth of our interest expense even as we have substantially increased our total deposits . it has also helped fuel our significant loan growth . we believe that the bank 's significant growth and increasing profitability demonstrate the need for and success of our brand of banking . our results of operations depend primarily on our net interest income , which is the difference between the interest earned on our interest-earning assets and the interest paid on funds borrowed to support those assets , primarily deposits . net interest margin is the difference between the weighted average rate received on interest-earning assets and the weighted average rate paid to fund those interest-earning assets , which is also affected by the average level of interest-earning assets as compared with that of interest-bearing liabilities . net income is also affected by the amount of noninterest income and noninterest expenses . general the following discussion and analysis presents the more significant factors affecting the company 's financial condition as of december 31 , 2018 and 2017 and results of operations for each of the years in the three-year period ended december 31 , 2018. the md & a should be read in conjunction with the consolidated financial statements , notes to consolidated financial statements and other information contained in this report . - 29 - operating results overview net income for the year ended december 31 , 2018 was $ 60.4 million , an increase of $ 17.1 million , or 39.6 % , compared to net income of $ 43.2 million for 2017. diluted earnings per share were $ 1.86 for 2018 , a 38.8 % increase from $ 1.34 for 2017. the change in net income from 2017 to 2018 was attributable to the following : · increased net interest income of $ 12.1 million primarily due to organic growth . · increased provision for loan losses of $ 15.1 million primarily due to $ 17.0 million increase in specific reserves ( then concurrently charged-off ) within the taxi medallion loan portfolio , offset by a decrease in provision on the remaining loan portfolio due to slower loan growth . · decrease in noninterest income of $ 2.5 million primarily resulting from lower net gains on the sale of investment securities ( $ 1.6 million ) and lower net gains on the sale of loans held-for-sale in 2018 ( $ 0.6 million ) . · decrease in noninterest expense of approximately $ 8.0 million primarily due to a $ 15.6 million increase in valuation allowance for loans held-for-sale related to the company 's taxi medallion loans in 2017 , offset by increase in salaries and employee benefits ( $ 4.7 million ) , merger expenses ( $ 1.3 million ) and other expenses ( $ 1.5 million ) . story_separator_special_tag interest income is not accrued on these loans until the borrower 's financial condition and payment record demonstrate an ability to service the debt . real estate acquired as a result of foreclosure is classified as other real estate owned ( “ oreo ” ) until sold . oreo is recorded at the lower of cost or fair value less estimated selling costs . costs associated with acquiring and improving a foreclosed property are usually capitalized to the extent that the carrying value does not exceed fair value less estimated selling costs . holding costs are charged to expense . gains and losses on the sale of oreo are charged to operations , as incurred . a loan is considered impaired when , based on current information and events , it is probable that the bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement . factors considered by management in determining impairment include payment status and the probability of collecting scheduled principal and interest payments when due . loans for which the terms have been modified as a concession to the borrower due to the borrower experiencing financial difficulties are considered troubled debt restructurings ( “ tdr ” ) and are classified as impaired . loans considered to be tdrs can be categorized as nonaccrual or performing . the impairment of a loan can be measured at ( 1 ) the fair value of the collateral less costs to sell , if the loan is collateral dependent , ( 2 ) at the value of expected future cash flows using the loan 's effective interest rate , or ( 3 ) at the loan 's observable market price . generally , the bank measures impairment of such loans by reference to the fair value of the collateral less costs to sell . loans that experience minor payment delays and payment shortfall generally are not classified as impaired . generally , impaired loans consist of nonaccrual loans and performing troubled debt restructurings . of this group of impaired loans , loans of $ 250,000 and over are individually evaluated for impairment , while loans with balances less than $ 250,000 are collectively evaluated for impairment , and , accordingly , are not separately identified for impairment disclosures . asset classification . federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets . we have incorporated an internal asset classification system , substantially consistent with federal banking regulations , as a part of our credit monitoring system . federal banking regulations set forth a classification scheme for problem and potential problem assets as “ substandard , ” “ doubtful ” or “ loss ” assets . an asset is considered “ substandard ” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged , if any . “ substandard ” assets include those characterized by the “ distinct possibility ” that the insured institution will sustain “ some loss ” if the deficiencies are not corrected . assets classified as “ doubtful ” have all of the weaknesses inherent in those classified “ substandard ” with the added characteristic that the weaknesses present make “ collection or liquidation in full , ” on the basis of currently existing facts , conditions , and values , “ highly questionable and improbable . ” assets classified as “ loss ” are those considered “ uncollectible ” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted . assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “ special mention . ” when an insured institution classifies one or more assets , or portions thereof , as “ substandard ” or “ doubtful , ” it is required that a general valuation allowance for loan losses must be established for loan losses in an amount deemed prudent by management . general valuation allowances represent loss allowances which have been established to recognize the inherent losses associated with lending activities , but which , unlike specific allowances , have not been allocated to particular problem assets . when an insured institution classifies one or more assets , or portions thereof , as “ loss , ” it is required either to establish a specific allowance for losses equal to 100 % of the amount of the asset so classified or to charge off such amount . a bank 's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by federal bank regulators which can order the establishment of additional general or specific loss allowances . the federal banking agencies have adopted an interagency policy statement on the allowance for loan losses . the policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines . generally , the policy statement recommends that institutions have effective systems and controls to identify , monitor and address asset quality problems ; that management analyze all significant factors that affect the collectability of the portfolio in a reasonable manner ; and that management establish acceptable allowance evaluation processes that meet the objectives set forth in the policy statement . our management believes that , based on information currently available , our allowance for loan losses is maintained at a level which covers all known and probable incurred losses in the portfolio at each reporting date . however , actual losses are dependent upon future events and , as such , further additions to the

liquidity liquidity is a measure of a bank 's ability to fund loans , withdrawals or maturities of deposits , and other cash outflows in a cost-effective manner . our principal sources of funds are deposits , scheduled amortization and prepayments of loan principal , maturities of investment securities , and funds provided by operations . while scheduled loan payments and maturing investments are relatively predictable sources of funds , deposit flow and loan prepayments are greatly influenced by general interest rates , economic conditions and competition . at december 31 , 2018 , the amount of liquid assets remained at a level management deemed adequate to ensure that , on a short and long-term basis , contractual liabilities , depositors ' withdrawal requirements , and other operational and client credit needs could be satisfied . as of december 31 , 2018 , liquid assets ( cash and due from banks , interest-bearing deposits with banks and unencumbered investment securities ) were $ 441.4 million , which represented 8.1 % of total assets and 9.4 % of total deposits and borrowings , compared to $ 423.4 million at december 31 , 2017 , which represented 8.3 % of total assets and 9.5 % of total deposits and borrowings on such date . the bank is a member of the federal home loan bank of new york and , based on available qualified collateral as of december 31 , 2018 , had the ability to borrow $ 1.7 billion . in addition , at december 31 , 2018 , the bank had in place borrowing capacity of $ 25 million through correspondent banks .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity liquidity is a measure of a bank 's ability to fund loans , withdrawals or maturities of deposits , and other cash outflows in a cost-effective manner . our principal sources of funds are deposits , scheduled amortization and prepayments of loan principal , maturities of investment securities , and funds provided by operations . while scheduled loan payments and maturing investments are relatively predictable sources of funds , deposit flow and loan prepayments are greatly influenced by general interest rates , economic conditions and competition . at december 31 , 2018 , the amount of liquid assets remained at a level management deemed adequate to ensure that , on a short and long-term basis , contractual liabilities , depositors ' withdrawal requirements , and other operational and client credit needs could be satisfied . as of december 31 , 2018 , liquid assets ( cash and due from banks , interest-bearing deposits with banks and unencumbered investment securities ) were $ 441.4 million , which represented 8.1 % of total assets and 9.4 % of total deposits and borrowings , compared to $ 423.4 million at december 31 , 2017 , which represented 8.3 % of total assets and 9.5 % of total deposits and borrowings on such date . the bank is a member of the federal home loan bank of new york and , based on available qualified collateral as of december 31 , 2018 , had the ability to borrow $ 1.7 billion . in addition , at december 31 , 2018 , the bank had in place borrowing capacity of $ 25 million through correspondent banks .
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 Suspicious Activity Report : such agencies may require us to make additional provisions for loan losses based upon information available to them at the time of their examination . all of the factors considered in the analysis of the adequacy of the allowance for loan losses may be subject to change . to the extent actual outcomes differ from management estimates , additional provisions for loan losses may be required that could materially adversely impact earnings in future periods . additional information can be found in note 1 of the notes to consolidated financial statements . income taxes the objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entity 's financial statements or tax returns . judgment is required in assessing the future tax consequences of events that have been recognized in the company 's consolidated financial statements or tax returns . fluctuations in the actual outcome of these future tax consequences could impact the company 's consolidated financial condition or results of operations . note 1 ( under the caption “ use of estimates ” ) and note 12 of the notes to consolidated financial statements include additional discussion on the accounting for income taxes . - 28 - goodwill the company has adopted the provisions of fasb asc 350-10-05 , which requires that goodwill be reported separate from other intangible assets in the consolidated statements of condition and not be amortized but tested for impairment annually or more frequently if indicators arise for impairment . no impairment charge was deemed necessary for the years ended december 31 , 2018 , 2017 and 2016. overview and strategy we serve as a holding company for the bank , which is our primary asset and only operating subsidiary . we follow a business plan that emphasizes the delivery of customized banking services in our market area to customers who desire a high level of personalized service and responsiveness . the bank conducts a traditional banking business , making commercial loans , consumer loans and residential and commercial real estate loans . in addition , the bank offers various non-deposit products through non-proprietary relationships with third party vendors . the bank relies upon deposits as the primary funding source for its assets . the bank offers traditional deposit products . many of our customer relationships start with referrals from existing customers . we then seek to cross sell our products to customers to grow the customer relationship . for example , we will frequently offer an interest rate concession on credit products for customers that maintain a noninterest-bearing deposit account at the bank . this strategy has helped maintain our funding costs and the growth of our interest expense even as we have substantially increased our total deposits . it has also helped fuel our significant loan growth . we believe that the bank 's significant growth and increasing profitability demonstrate the need for and success of our brand of banking . our results of operations depend primarily on our net interest income , which is the difference between the interest earned on our interest-earning assets and the interest paid on funds borrowed to support those assets , primarily deposits . net interest margin is the difference between the weighted average rate received on interest-earning assets and the weighted average rate paid to fund those interest-earning assets , which is also affected by the average level of interest-earning assets as compared with that of interest-bearing liabilities . net income is also affected by the amount of noninterest income and noninterest expenses . general the following discussion and analysis presents the more significant factors affecting the company 's financial condition as of december 31 , 2018 and 2017 and results of operations for each of the years in the three-year period ended december 31 , 2018. the md & a should be read in conjunction with the consolidated financial statements , notes to consolidated financial statements and other information contained in this report . - 29 - operating results overview net income for the year ended december 31 , 2018 was $ 60.4 million , an increase of $ 17.1 million , or 39.6 % , compared to net income of $ 43.2 million for 2017. diluted earnings per share were $ 1.86 for 2018 , a 38.8 % increase from $ 1.34 for 2017. the change in net income from 2017 to 2018 was attributable to the following : · increased net interest income of $ 12.1 million primarily due to organic growth . · increased provision for loan losses of $ 15.1 million primarily due to $ 17.0 million increase in specific reserves ( then concurrently charged-off ) within the taxi medallion loan portfolio , offset by a decrease in provision on the remaining loan portfolio due to slower loan growth . · decrease in noninterest income of $ 2.5 million primarily resulting from lower net gains on the sale of investment securities ( $ 1.6 million ) and lower net gains on the sale of loans held-for-sale in 2018 ( $ 0.6 million ) . · decrease in noninterest expense of approximately $ 8.0 million primarily due to a $ 15.6 million increase in valuation allowance for loans held-for-sale related to the company 's taxi medallion loans in 2017 , offset by increase in salaries and employee benefits ( $ 4.7 million ) , merger expenses ( $ 1.3 million ) and other expenses ( $ 1.5 million ) . story_separator_special_tag interest income is not accrued on these loans until the borrower 's financial condition and payment record demonstrate an ability to service the debt . real estate acquired as a result of foreclosure is classified as other real estate owned ( “ oreo ” ) until sold . oreo is recorded at the lower of cost or fair value less estimated selling costs . costs associated with acquiring and improving a foreclosed property are usually capitalized to the extent that the carrying value does not exceed fair value less estimated selling costs . holding costs are charged to expense . gains and losses on the sale of oreo are charged to operations , as incurred . a loan is considered impaired when , based on current information and events , it is probable that the bank will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement . factors considered by management in determining impairment include payment status and the probability of collecting scheduled principal and interest payments when due . loans for which the terms have been modified as a concession to the borrower due to the borrower experiencing financial difficulties are considered troubled debt restructurings ( “ tdr ” ) and are classified as impaired . loans considered to be tdrs can be categorized as nonaccrual or performing . the impairment of a loan can be measured at ( 1 ) the fair value of the collateral less costs to sell , if the loan is collateral dependent , ( 2 ) at the value of expected future cash flows using the loan 's effective interest rate , or ( 3 ) at the loan 's observable market price . generally , the bank measures impairment of such loans by reference to the fair value of the collateral less costs to sell . loans that experience minor payment delays and payment shortfall generally are not classified as impaired . generally , impaired loans consist of nonaccrual loans and performing troubled debt restructurings . of this group of impaired loans , loans of $ 250,000 and over are individually evaluated for impairment , while loans with balances less than $ 250,000 are collectively evaluated for impairment , and , accordingly , are not separately identified for impairment disclosures . asset classification . federal regulations and our policies require that we utilize an internal asset classification system as a means of reporting problem and potential problem assets . we have incorporated an internal asset classification system , substantially consistent with federal banking regulations , as a part of our credit monitoring system . federal banking regulations set forth a classification scheme for problem and potential problem assets as “ substandard , ” “ doubtful ” or “ loss ” assets . an asset is considered “ substandard ” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged , if any . “ substandard ” assets include those characterized by the “ distinct possibility ” that the insured institution will sustain “ some loss ” if the deficiencies are not corrected . assets classified as “ doubtful ” have all of the weaknesses inherent in those classified “ substandard ” with the added characteristic that the weaknesses present make “ collection or liquidation in full , ” on the basis of currently existing facts , conditions , and values , “ highly questionable and improbable . ” assets classified as “ loss ” are those considered “ uncollectible ” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted . assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “ special mention . ” when an insured institution classifies one or more assets , or portions thereof , as “ substandard ” or “ doubtful , ” it is required that a general valuation allowance for loan losses must be established for loan losses in an amount deemed prudent by management . general valuation allowances represent loss allowances which have been established to recognize the inherent losses associated with lending activities , but which , unlike specific allowances , have not been allocated to particular problem assets . when an insured institution classifies one or more assets , or portions thereof , as “ loss , ” it is required either to establish a specific allowance for losses equal to 100 % of the amount of the asset so classified or to charge off such amount . a bank 's determination as to the classification of its assets and the amount of its valuation allowances is subject to review by federal bank regulators which can order the establishment of additional general or specific loss allowances . the federal banking agencies have adopted an interagency policy statement on the allowance for loan losses . the policy statement provides guidance for financial institutions on both the responsibilities of management for the assessment and establishment of allowances and guidance for banking agency examiners to use in determining the adequacy of general valuation guidelines . generally , the policy statement recommends that institutions have effective systems and controls to identify , monitor and address asset quality problems ; that management analyze all significant factors that affect the collectability of the portfolio in a reasonable manner ; and that management establish acceptable allowance evaluation processes that meet the objectives set forth in the policy statement . our management believes that , based on information currently available , our allowance for loan losses is maintained at a level which covers all known and probable incurred losses in the portfolio at each reporting date . however , actual losses are dependent upon future events and , as such , further additions to the

