paBankerMag Fall 2023 : simplebooklet.com

PA Bankers Association » Fall 2023 5PA Bankers STAFF DIRECTORYGeneral Number (717) 255-6900PA Bankers Association Registrar and Records Coordinator jillametrano@pabankers.com | (717) 255-6927 Legal Assistant lbrandt@pabankers.com | (717) 255-6936President & Chief Executive Ocer dcampbell@pabankers.com | (717) 255-6916 Vice President, Professional Development jcatalano@pabankers.com | (717) 255-6939Administrative Assistant, Communications and Government Aairs adoyle@pabankers.com | (717) 255-6937 Director, Information Technology cferraro@pabankers.com | (717) 255-6921 Administrative Assistant, Member Engagement & Development mhenry@pabankers.com | (717) 255-6900 Director of Marketing and Communications shocker@pabankers.com | (717) 255-6912 Director, Finance amoshgat@pabankers.com | (717) 255-6938General Counsel lrynd@pabankers.com | (717) 255-6935 Chief Operating Ocer mstaton@pabankers.com | (717) 255-6923 Professional Development Assistant mwisniewski@pabankers.com | (717) 255-6934 PA Bankers Services Corporation Director, PA Bankers Services Corporation tchambers@pabankers.com | (717) 255-6928 Administrative Assistant, PA Bankers Services Corporation lscott@pabankers.com | (717) 255-6903 President, PA Bankers Services Corporation cwallett@pabankers.com | (717) 255-6913 Vice President, Business Development wwhipple@pabankers.com | (717) 255-6925magazineSTAFF  Sara E. Hocker     J. Duncan Campbell III   Jacqueline A. Catalano Tiani A. Chambers Louise A. Rynd Michelle L. Staton Cynthia L. Wallett PA Bankers Services Corporation Board of Directors and Ocers   M. Theresa Fosko, SPHR  Tracy E. Watkins, SPHR Treasurer J. Duncan Campbell III  Mary G. Cummings, Esq. Eugene J. Draganosky Philip L. Freeman, Jr. Scott E. Fritz John C. Gill Ginger G. Kunkel Brendan J. McGill John H. Montgomery Michael D. Peduzzi Joseph R. Toth Address Correspondence to: paBanker Magazine c/o Pennsylvania Bankers Association 3897 N. Front St., Harrisburg, PA 17110 Tel. (717) 255-6912 Email: adoyle@pabankers.compaBanker Magazine is published four times a year by the PA Bankers Services Corporation (Services Corporation), a subsidiary of the Pennsylvania Bankers Association (PA Bankers). The Association serves Pennsylvania banks and nancial institutions with educational programs, member services and represents members on the state and federal level. Since 1895, PA Bankers continuously worked to be the premier nancial services organization supporting a diversied membership through volunteer participation, a knowledgeable sta, state of the art technology and a commitment to excellence.paBanker Magazine is the ocial publication of PA Bankers.EditorialThe opinions expressed in articles by authors other than Association sta and ocers are the responsibility of the authors only and not necessarily those of the PA Bankers, the Services Corporation or its members. All articles, unless otherwise notied, have been written by paBanker Magazine sta. Questions and comments should be addressed to the Managing Editor. PA Bankers members may reproduce any non-commercial part of this publication with verbal permission from the editor. All others must receive written permission from the editor prior to reproduction of any part of this publication. Copyright ©2003 PA Bankers Services Corporation. All Rights Reserved.Printed by: HAAS Printing CoSponsored by:

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6 » PA Bankers Association pabankers.comy name is Angie Sargent, and it is a pleasure to serve as your 2023-24 PA Bankers chair. To begin my first article, I’d like to share just a little about who I am. I grew up in Northern Pennsylvania, went to college in Scranton, and landed in Lancaster. My husband, Todd, and I live in Lititz, and we are blessed to have a wonderful daughter, Ashley, currently living in Jacksonville, Fla. For my day job, and a lot of times my night job too, I serve as the senior vice president, chief information officer for Fulton Bank, where I have been for 31 years. I want to thank my Fulton teammates for the support that has allowed me to do this.Words cannot express how excited and humbled I am to serve as your chair this year. There are many reasons why I am excited, most notably because I am passionate about our industry and look forward to helping you share all the good and fight all the “not so good” we face. I have been happily volunteering for the PA Bankers Association for over 11 years. I began my PA Bankers journey on the PA Bankers Services Corporation Board. I was also a MGet to Know Your 2023-24 PA Bankers ChairAdapted from her remarks at the PA Bankers 2023 ConventionANGIE SARGENTSenior Executive Vice President, Chief Information OfficerFulton Bankmember of the inaugural Women in Banking Committee, which helped establish the Women in Banking Network and Women in Banking Conference under Patti Husic’s leadership. I then was honored to serve as chair of the Women in Banking Committee for three years, helping to grow the initiative and expand outreach. I have served on or led numerous other committees over the years as well, and I have loved every minute of it. Many things have impacted banking during those years. We are all aware of the details of the ups and downs, and we probably share some battle wounds too. We need support! This leads me to the second reason I am excited to serve you in this role. It is the wonderful people who work for our association. The one thing that stays constant is that the PA Bankers leadership team and staff remain laser focused and dedicated to helping each of us every day. They work tirelessly to support our industry. Whether through advocacy, research, education or just timely awareness, they stand at the ready…always. I would like to thank the past chairs for their support and guidance throughout the years. I would also like to thank my fellow board members and recognize the 2023-24 officer team: Randy Black, with whom I have worked over the last year, serves as your 1st Vice Chair; Bill Kuzo serves as your 2nd Vice Chair; and Mark Ritter serves as your immediate past chair. I look forward to a productive year while working with each of you! We all know as bankers that the looming uncertainty that lies ahead will put plenty on our already full plates. But I am confident we will continue to thrive and make progress as we navigate together. I am proud to be a banker and look forward to serving as your chair.Thank you for this honor and opportunity.chair’sINSIGHTS

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8 » PA Bankers Association pabankers.comast month, the PA Bankers Board, joined by five of the association’s past chairs, met for its annual strategic retreat. It was a great opportunity to take some time and really focus on the challenges facing our industry and our association. And challenges there are aplenty.We talked about the economic conditions in which we find ourselves, both as businesses, ourselves and on behalf of our customers; the regulatory environment, stemming from the unique failures of SVB and Signature; post-Covid workforce vacancies and operations that appear here to stay; how we deal with emerging technologies like AI, Crypto and Fintech; the ongoing issue of unlevel competition from credit unions and the Farm Credit system, among others; industry consolidation; the uncertain and divisive political environment; and more.What these challenges mean to our industry’s sustainability must drive our focus as the association. Stating the obvious, without a banking industry, we don’t have a PA Bankers Association. To this end, we must maintain and increase our relevance with policymakers in Harrisburg and Washington. We must continue to tell our story of how banks make people’s dreams come true--through education and advocacy and enunciating the importance of how our capitalist system leads to access to capital for small businesses in every corner of the commonwealth. We must be the leading trainer of the industry for new bank regulations and legislation. And we must remain committed to fostering the next generation of banking leaders through outreach at all levels of schools. These are all critical things that we need to do to ensure our industry remains viable and successful.So what does all of this mean for the association’s viability and success? In order to address these challenges, we need the expertise of our bankers to help guide our efforts. This comes through engagement, and that engagement only comes if there is value derived from the time given. We need to make sure that we are providing the members with a value proposition that they not only grasp, but that they seize, actively. And that we communicate it, accordingly. This is your association, and so being engaged in the committee work, the programming and the advocacy initiatives will allow your imprint to be placed on all that we do—our policy positions, conference line-ups and representation as an industry. I’m pleased to say that our members are engaged and involved because they care, and because they believe they are contributing to something bigger than just their individual institutions—they are contributing to the success of the banking industry, writ large, in Pennsylvania.Beyond the macro issues, we spent time at retreat discussing several key internal association efforts, as we reviewed the mission of the Groups, as well as our current deposit category structure. With the consolidation of the industry, both have been impacted. Throw in the personal demands on everyone’s time, as well as the changes in individual priorities coming out of COVID, participation in Group events is not where it used to be. How we engage with our members regionally, outside of Harrisburg, will be an issue of continued interest to the current board and for boards to come.I want to thank Winthrop Watson and all of the team at FHLBank Pittsburgh for their efforts on behalf of the industry. Winthrop and Dave Paulson joined us at retreat to offer an update about the bank and the FHFA review of the Federal Home Loan Bank System. Needless to say, we are exceedingly grateful for all of the support that FHLBank Pittsburgh provides to our members and to the association.We also had the opportunity to receive a briefing from Laurel Cline and Karen DiGioia from Herbein + Company, Inc. about current workforce trends—a topic of immense importance to our industry. Thanks to Laurel and Karen for taking the time to educate us, as we continue to try and understand the changing workforce issues, post-Covid.Recapping the 2023 PA Bankers Board Retreatfrom the CEO to the CEODUNCAN CAMPBELLPresident & CEO PA Bankers AssociationL

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PA Bankers Association » Fall 2023 9I would be remiss if I did not thank Paul Benda from the ABA for offering us his insights into the daunting world of Artificial Intelligence (AI). While AI has been around for a long time, we are now seeing it emerge specifically in our industry. I suspect that AI will be a topic of careful consideration for our members for some time and that it will get serious attention on the policy and regulatory fronts for the months and years to come.We had a great set of sponsors with us at Retreat—The Baker Group, Stevens & Lee/Griffin Financial Group, LLC, PWCampbell, Webber Advisors, FHLBank Pittsburgh and Herbein +Company, Inc. All of these Affiliate Member organizations demonstrated their commitment to PA Bankers and to our industry through their sponsorship support, and we greatly appreciate it!It really was a great couple of days. Any time our board, past chairs and staff can come together to focus on matters of importance to the industry and association, is a productive time. And in my humble opinion, we can confidently say that we moved the ball forward.A special thank you to our board of directors and to our past chairs for the time they committed to participating in this annual strategic planning session. Under the direction of our dedicated officer corps, led by Chair Angie Sargent (Fulton Bank), Randy Black (First Citizens Community Bank), 1st Vice Chair, Bill Kuzo (UNB Bank), 2nd Vice Chair, and Mark Ritter (The Northumberland National Bank), Immediate Past Chair, we are all excited for the year to come. Yes, we face significant challenges. We always have, and we always will. How we address them, together, is what drives our mission—to be the leading financial services trade association, dedicated to strengthening and providing value to institutions of all sizes through exception advocacy, education, leadership and member engagement.I’m proud to say that the PA Bankers team wakes up every morning wanting to fulfill that mission. And, with the leadership, engagement and support of our members, we are doing just that, as together, we are making a difference.Enjoy the fall, and we will look forward to seeing you at one of our events later this year.Sincerely,20232024

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10 » PA Bankers Association pabankers.comtenONpageTENDR. PAUL SPRADLEY, VICE PRESIDENT OF DIVERSITY, EQUITY AND INCLUSION FOR DOLLAR BANK AND CURRENT PA BANKERS BOARD MEMBER, SPOKE AT THE 2023 YOUNG PROFESSIONALS CONFERENCE ON “UNLEASHING THE POWER OF YOUR PROFESSIONAL NETWORK.” WE ASKED HIM A FEW QUESTIONS ABOUT HIS PRESENTATION. SEE HIS RESPONSES BELOW! 10 10 ON1.  I think young professionals face a lot of challenges as part of the workforce. From the stress of needing to do more with less, to navigating a hybrid work culture, there’s no question there are very real challenges. One of those challenges that almost feels hidden is lacking the skills or motivation to develop and maintain a professional network. Because so many young professionals have not invested in their professional network, they have the added weight of navigating the challenges that arise by themselves. Not having a well cultivated professional network connects to so many other challenges young professionals face, and it doesn’t have to be that way. 2.  There is an African Proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” I’ve always believed that every single person can support you directly or indirectly on your journey through life. It is not a matter of IF but HOW they will support you professionally, personally, spiritually or emotionally. When you are intentional in building connections, you control just how far and fast you wish to go in your career. 3.  Networking is the act of intentionally meeting someone with the goal of a mutually beneficial professional relationship. Lets say I have 15 people reach out to me at a networking event. If there is no follow up, sure we “networked” and made each other’s acquaintance, but they are not a connection for me yet. A “professional connection" is moving from merely being introduced to following up with a first conversation where you begin to see how you might align. That conversation is followed up with a second conversation several weeks/months later, and this is intentionally repeated for as long as its mutually valuable. Check out the book, “Three Cups of Tea” if you want more context on connecting with people (transformational) vs networking (transactional).4.  The basic steps of in-person networking is 1) You introduce yourself, 2) ask GOOD questions of the person you are meeting, 3) grab a business card and 4) follow up within the next 7 days to schedule time to meet for 30-60 minutes. Virtually, there is not the time to ask questions, so a little trick I do is I will shoot a person a private message with something like, “I really appreciated your comment. Before we log off, do you mind if I grab your email? If you’re open, I would love to connect in the next few weeks to learn more about (their job, expertise or the topic of the virtual meeting).5.  My biggest piece of advice is to learn to be incredibly curious. Ask good questions all the time, to folks in your field and folks adjacent to your field. Learning to be curious and then staying curious will advance your career in amazing ways. with Dr. Paul Spradley

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PA Bankers Association » Fall 2023 116.  When I am mentoring or coaching young professionals, I always encourage them to join a board. If there aren’t opportunities to join a board, I tell them to find an organization to volunteer with a few times a year. These activities serve similar purposes in that it supports 1) your professional development, 2) your professional network and 3) your professional brand (resume, LinkedIn, etc ). You don’t need to know how to serve on a board to serve, just like you don’t need to be an expert in community service. If you are willing, someone will tell you what they would like you to do.7.  Earlier, I referenced an African proverb about going far and needing a team of people to do that. Building a team of people who will invest in you is my second biggest piece of advice that I always share with young professionals. As part of your team, you will want a few peers that push you, a couple of mentors, at least 1 mentee, and a counselor/therapist. I truly can’t emphasize how important this is. Over the course of my professional career, my personal board of directors have been responsible for teaching me how to advocate for a higher salary, have helped me avoid major professional pitfalls I likely would have succumbed to based on my personality, and possibly most importantly, have been a champion for me in rooms where I was not present. My board of directors probably helped advance my career 5-7 years faster than if I did not have their support and guidance. 8.  I think the age professionals should stop networking is at 77 ½ … but hear me out! The only reason I picked that completely random number is because hopefully by that time, a working professional is enjoying their retirement, and thus, not in need to invest in their professional network. The truth is, you don’t stop networking. There is really not a reason to completely stop networking. I have had seasons where I was going through personal things that were really sad or tough to go through. I paused networking because I needed to focus on me, but I don’t stop doing it, because it is too important! In fact, during those tough times, it was a few of those folks in my network that breathed life into me with an encouraging word or text. You keep building your network. When you are 50, you won’t know it all. When you are 60, you won’t know it all. When you are the president of the company, you won’t know it all. You will need a team of folks around you for the rest of your professional life, that you can learn from and that you can teach.9.  Mentoring/sponsoring younger professionals will force you to stay sharp the more experience you have. By meeting with a mentee, you are gifted the opportunity to merge what you’ve learned with what they know. When done well, mentoring can help the more senior professional explore fresh ways to solve workplace challenges. If a more experienced professional is not interested or believe they have the time for mentoring, then they should be working with a coach because that is what the best at anything in the world does. That outside perspective is critical in keeping even the more experienced professional grounded. 10.  If I were a young professional, I would build out a professional development plan for myself that included opportunities unique for me as a PA Bankers Association member. My exact 3-step strategy would look like this: [STEP 1] I would commit to going to 1-2 conferences a year for the next five years, and add 1-3 people to professional network at every conference. The conferences I would have my bank pay for me to go would be a) The Young Professionals Conference, b) The DEI Conference and c) your choice of any one of the other 5 conferences PA Bankers offers. [STEP 2] In year two or three, I would advocate for my bank to send me through the Leadership Institute or one of PA Bankers' schools. Built into both of those are motivated folks I am adding to my professional network. [STEP 3] I would nominate myself for an advisory committee to support my professional development, network and brand (see my response to question 6).

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14 » PA Bankers Association pabankers.comS&T BankUNB BankSomerset Trust CompanyWayne BankWith Alex's Lemonade Stand Foundation (ALSF) headquartered in the Philadelphia region, S&T Bank branches in Central and Southeastern PA (as well as a few Western PA locations) participated in Lemonade Days from June 3 through June 11. The goal was to raise $20,000 for S&T’s inaugural ALSF fundraising week. The bank, along with generous customers and members of the public, exceeded that goal, tallying over $30,000 in just one week.UNB Bank has been working alongside Mt. Carmel School District by proudly sponsoring the Buddy Bag Program. Through the generous support of many local organizations and alumni, Mount Carmel Area School District provides healthy foods for students to take home each weekend during the school year. Somerset Trust Company, the Somerset County Foundation for Higher Education and Allegany College of Maryland (ACM) are excited to announce a collaboration that provides no-cost early college courses for Somerset County high school students for the upcoming 2023-24 academic year. Thanks to monetary support from Somerset Trust Company and the partnership between the Somerset County Foundation and ACM, every public, private and homeschooled student in the county has the option to enroll in one, no-cost, early college course per fall and spring semester.Wayne Bank recently donated $5,000 to the United Way of Lackawanna and Wayne Counties. The United Way of Lackawanna and Wayne Counties works with a dedicated team of educators and community stakeholders to help better align Early Childhood Education and school districts while building a strong bridge for families to ensure every child in the community is supported through all the stages of growth and development.communityCORNER

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18 » PA Bankers Association pabankers.comCHAIR: Senior Executive Vice President, Chief Information Officer,Fulton BankFIRST VICE CHAIR: President and Chief Executive Officer, First Citizens Community Bank SECOND VICE CHAIR: President & CEO, UNB Bank IMMEDIATE PAST CHAIR: Executive Vice President and Chief Administrative Officer, The Northumberland National BankCATEGORY A ($0-$400M in deposits): President & Chief Executive Officer,First United National BankCATEGORY B ($400M-$1B in deposits):Chief Executive Officer,First Resource BankCATEGORY C ($1B-$4B in deposits): President and Chief Executive Officer, FNCB Bank CATEGORY D ($4B+ in deposits): Vice Chairman, President and Chief Executive Officer,Univest Financial CorporationPolicy Committee Chairs:MEMBER ENGAGEMENT AND DEVELOPMENT: EVP/Human Resources Manager, First Commonwealth Bank GOVERNMENT RELATIONS: President and Chief Executive Officer, NexTier Bank, National Association2023-24 BOARD MEMBERSWelcomeDeposit Category Representatives:

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PA Bankers Association » Fall 2023 19At-Large Representatives:  Executive Vice President & Senior Chief Financial Officer & Senior Finance Group Head, 1ST SUMMIT BANK  President & CEO,The First National Bank & Trust Company President and Chief Executive Officer,Bank of Bird-in-Hand President and Chief Executive Officer, The Dime Bank Executive Vice President, Chief Marketing and Impact Officer, Penn Community Bank  Region Bank President, Wells Fargo Bank, N.A. President and Chief Executive Officer, United Bank of Philadelphia Vice President, Diversity, Equity & Inclusion, Dollar Bank, A Federal Savings Bank2023-24 BOARD MEMBERSWelcomePA Bankers Group Representatives: GROUP 1:  Senior Vice President, Commercial Banking Officer, Mars Bank GROUP 2: President & CEO, Presence Bank GROUP 3: President and Chief Executive Officer, First Keystone Community Bank GROUP 4: President, Chief Financial Officer,Penns Woods Bancorp., Inc. GROUP 5:  President & CEO, PEOPLESBANK, A Codorus Valley Bank GROUP 6: Senior Vice President, Enterprise Director of Private Banking, CNB BankNon-Voting Members: Executive Vice President, Director of Human Resources,Univest Financial Corporation President and CEOPennsylvania Bankers Association

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20 » PA Bankers Association pabankers.comfeatureARTICLEYOUR NEW 2ND   GET TO KNOW WILLIAM BELOW!WHAT WAS YOUR FIRST EXPERIENCE AND/OR EVENT WITH PA BANKERS? Attending the “Annual Group 4 Spring Get Together” in Williamsport. WHAT IS ONE PIECE OF ADVICE THAT YOU HAVE FOR THE NEXT GENERATION OF BANKERS? My advice to the next generation of bankers would be to stress the importance of “networking” for you to succeed in a career in banking. “Networking” is defined as the action or process of interacting with others to exchange information and develop professional or social contacts. “Networking” is a never-ending process of building, growing and maintaining trusted professional relationships within the organization in which you work, with your customers, the community or communities in which you live and work and amongst your peers in the industry. You will need a “network” of people in all of these areas who you can rely upon for help, advice, mentorship and business development throughout your career to be successful. Therefore, my advice to the next generation of bankers is to expose yourself fully! Don’t ever be afraid to ask questions or for help from your co-workers, colleagues, supervisors and peers. Obviously, this is how you learn, but it tells the other person that you’re engaged, value their insight and helps to build a long-term professional relationship with the person you’re asking. Make an effort to attend and participate in social events in the local area in which you live and work. Customers need to see who you are, feel that you are part of their community, and know that you can be trusted. Lastly, take advantage of opportunities that your institution may afford you to attend professional and educational events outside of work. Whether it’s going to local a Chamber of Commerce event or attending a PA Bankers seminar or school, these occasions provide chances for you to learn, develop business and build your network - all of which are important to having a successful career in banking.WHAT’S ONE GOAL THAT YOU’D LIKE TO ACCOMPLISH DURING YOUR TIME ON PA BANKERS’ BOARD?I would like to help champion, promote and therefore, increase the amount of participation and utilization of the PA Bankers Association throughout all the banks domiciled in the commonwealth of Pennsylvania.YOUR NEW VICE CHAIRMt

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24 » PA Bankers Association pabankers.comfeatureARTICLETO OUR 2023 SCHOOLS Cgrulis Cgrulis TOP HONORS TRACY STAKE InFirst BankBlake BureldKish BankAbbie JensenKish BankStephen JohnsInFirst BankDylan WoodardFirst Keystone Community Bank“It was an honor to attend the School of Banking, representing InFirst Bank. The experience and opportunity to access knowledge shared from industry experts was informative and valuable to myself and my organization. I can truly say the material covered will be a benet to my professional career for years to come. It was a great experience.” -Tracy Stake HONORSTOP HONORS LINDSEY PICKERING C&NCasey KuczynskiTraditions BankVishnu PatelPennian BankAndrea SplainS&T BankAnna Van AckerWayne Bank“I would highly recommend the School of Commercial Lending to banking professionals in all areas of focus and experience levels. The ability to collaborate with faculty members and students from other nancial institutions in the industry made for a perfectly well-rounded learning experience. From start-to-nish, the faculty, curriculum, and networking between participants were exceptional.” -Lindsey PickeringHONORS

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PA Bankers Association » Fall 2023 25GEORGE!DR. PHILIP O. BENHAM, JR. ACHIEVEMENT AWARDThe recipient is selected for outstanding academic achievement shown during the three-year course.VIKTORIA BEITER The Dime Bank“As soon as I learned about the Advanced School of Banking, I knew it was something that I wanted to be a part of. At The Dime Bank, being chosen to be a part of this program is seen as an honor and privilege. It has been more dicult and rewarding than I ever imagined, and I am grateful for all of the knowledge, growth, and experiences that I have been able to share with fellow students, professors, and advisors over the past three years. I am a rm believer that the best way to grow is to step outside of your comfort zone, and this program has pushed me to do that time and time again. Working together and learning with other banking professionals, especially during the BankExec simulation, has been an invaluable eye-opening experience. I will cherish this opportunity and knowledge for the rest of my career.” -Viktoria BeiterLeslie HubbertS&T BankAlexandra JespersenNorthwest BankJason RobinsonUnivest Bank & Trust Co.HONORSfter 37 years, George Kester retired from his faculty role at the School of Commercial Lending. We thank George for his hard work, leadership and friendship over the last three decades, and we wish him well in his next endeavor! Read what our 2023 School of Commercial Lending director had to say about his time with George:“George has been a long-time friend and instructor for the School of Commercial Lending for decades. His lessons in nancial statement analysis and his business case studies have educated thousands of Pennsylvania bankers. I am sure I can speak for everyone who was fortunate enough to take advantage of George’s training that we are all better bankers because of him. We can’t thank him enough.” – Mark Drenchko, SVP, Chief Commercial Banking Ocer for Mars BankAThank y,Thank y,

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26 » PA Bankers Association pabankers.comworkforceINITIATIVESs part of the PA Bankers Intern Program, the association partnered for the second year in a row with Shippensburg University to deliver a 10-week, live online series of professional and leadership development sessions for interns. During these 90-minute sessions, interns gained insight on critical career and professional development foundational skills, including DEI, interpersonal skills, communication, leadership, teamwork, problem-solving, critical thinking and emotional intelligence. Approximately 70 interns from six banks participated in the program. The program also featured an optional Intern Mentoring Initiative, which comprised of three sessions. The matching of mentor/mentee partners focused on the mentee’s challenge and the mentor’s area of expertise. Mentors, many of whom are part of the Young Professionals Network, met virtually with mentees on a SMART Goal and helped guide the mentees toward a solution. PA Bankers looks forward to further refining the Career Skills & Leadership Academy and the Intern Mentoring Program to expand its reach throughout the commonwealth.APA Bankers Intern Program Update: Career Skills & Leadership Academy - Year 2“This year, our 30+ Interns had the opportunity to participate in the Career and Leadership Skills Academy, led by PA Bankers and Shippensburg University. We feel that this opportunity greatly enhanced their learning and internship experience even further. During this virtual 10-week program, interns were given the unique opportunity to engage with intern peers from local community banks as they bonded together to engage and learn from collegiate professionals and corporate executives focus on a series of trending professional development topics. This program empowered our Interns to flex and build important soft skills, such as effective time management, accountability, communication, collaboration, and overall professionalism- especially in a remote work environment. The content offered opportunity for added enrichment to our already existing in-house program, creating weekly consistencies and check-ins for our interns and giving them the platform to learn and engage with diverse professionals, sharing diverse perspectives and experiences. Finally, our Interns were energized by the opportunity to engage with Intern peers from local banks while adding to their professional toolkits and expanding their network.“At Fulton we believe when we work together, we win together- and through this professional development program, we saw the truth in that. We saw local banks unite to empower our Interns to thrive, grow, and most importantly have some FUN as they learned more about the banking industry. We look forward to our continued partnership with Shippensburg University, and of course PA Bankers, as we continue to educate and develop young professionals in this industry- grooming the next generation of bankers!”That’s theFintexpert® Way.What’s a Fintexpert?LEARN MORE AT CSIWEB.COM/FINTEXPERTFor your business to compete, the tech is only half the story. You need a true technology partner, one with: • a laser focus on your goals • expertise you can trust • an obsession with service • the drive to innovate • the agility to pivot with your needsAll of that, plus cutting-edge ﬁnancial, regulatory and cybersecurity tech: that’s the Fintexpert Way.Tech you need. Agility you want.Service you deserve.PAB-LAYOUT-0423.indd 1PAB-LAYOUT-0423.indd 1 4/18/23 10:28 AM4/18/23 10:28 AMTHOUGHTS FROM A PARTICIPATING BANK:20232024

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28 » PA Bankers Association pabankers.comgovernmentRELATIONSarmers and ranchers today face numerous challenges: from the skyrocketing costs of materials to supply chain disruptions to difficulties purchasing rural land—all while interest rates are rising. As a result, many are relying more on credit than ever before. For those who are young, beginning, or socially disadvantaged farmers, these obstacles can seem insurmountable—in fact, 69% of young farmers say that access to capital is a top challenge to beginning a career in farming. Fortunately, there is a simple solution that can help make credit more accessible to these agricultural borrowers: the bipartisan ACRE Act, a bill that ABA is aggressively championing in Congress. Formerly known as ECORA, this bill would amend the IRS code to level the playing field for banks—especially community banks—by allowing lenders to exclude from gross income any interest they receive on loans that are secured by farm real estate or aquaculture facilities. The bill also allows for the exclusion of interest on certain home mortgage loans in rural communities. Removing the taxation of interest will bring down the cost of making these loans, making them more affordable for farmers, ranchers, and rural homeowners. In fact, ABA estimates that this important legislation could expand access to affordable agricultural and home loans to more than 4,000 rural communities across the U.S. and deliver approximately $1.4 billion in annual interest expense savings to farmers and ranchers in 2023—savings that can make a crucial difference to the nation’s producers. This simple, commonsense solution does not require the creation of new government payments or programs—quite the opposite. It provides an avenue for increasing competition and generating growth in rural communities efficiently and organically. It also levels the playing field between all agricultural lenders, which will result in more choices and lower rates for rural borrowers. ABA has been a vocal proponent of this bill, and we were pleased to see such a significant response from lawmakers in this Congress. The ACRE Act already has 20 bipartisan cosponsors in the House and has been introduced in the Senate by Sens. Jerry Moran (R-Kan.) and Angus King (I-Maine). Lawmakers now have an opportunity to help sustain and grow rural America by sending this bill to President Biden’s desk. That’s why ABA is urging bankers and their customers to get in touch with their members of Congress and urge them to pass the bill. Bankers can contact their lawmakers easily through ABA’s grassroots platform, SecureAmericanOpportunity.com. The association has also prepared a toolkit, accessible at aba.com/ACREtoolkit, that provides an issue backgrounder, talking points and key points that bankers can use when explaining to lawmakers why this law is needed. Our nation needs a thriving agricultural sector. With your help, we can help remove one of the roadblocks standing in the way of the nation’s farmers and ranchers. FAdvocating for ACRE: ABOUT THE AUTHOR: 

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PA Bankers Association » Fall 2023 29STATE FUNDINGPennsylvania’s FY 2023-24 budget consideration has been controversial and protracted. This is due in part to a disagreement regarding a program to fund private school tuition for students in certain school districts. On Aug. 3, the Governor received and signed the budget bill, but line-item vetoed its private school tuition funding provision. The enacted budget bill includes several other appropriations which the Budget Secretary deemed to lack sufficient legislative authorization to be funded. The partial budget was not accompanied by bills amending the Administrative, Fiscal, Tax Reform and Education Codes as is usually the case. PA Bankers will actively monitor all legislative activity throughout the fall and update the membership accordingly. OTHER LEGISLATION PA Bankers continues to advocate for legislative clarification that any goodwill is deductible from the bank shares tax.The association recently submitted a statement for the record on data privacy legislation which was the subject of a House Commerce Committee hearing.CRA Credit For Protecting Local SeniorsOur foundation partners with community banks on programs that promote safety in senior housing facilities. Join the hundreds of banks that already participate. Join our Peer Group to exchange ideas on current CRA topics______________________________thecracollaborative.comTHE To get involved contact: info@shcpfoundation.org20232024governmentRELATIONSState Government Relations Update

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32 » PA Bankers Association pabankers.comvendorARTICLESS Financial institutions may face a tough operating environment in the months ahead, driven by stagnating economic growth, high inflation, a liquidity crunch and a talent crunch. The failures of Silicon Valley Bank, Signature Bank of New York and First Republic Bank indicate the challenges due to tighter monetary conditions and their impact on asset prices and quality. However, banks and other major financial institutions have built resilience since the 2008 subprime crisis, as evidenced by their capital and liquidity parameters (tier 1 capital of 12-13% at present versus 10-11% in 2007, with aggregate loan-to-deposit ratio below 70%) and shedding non-core activities, which should help them survive the stress of the current economic slowdown. WE LIST BELOW SIX SALIENT BANKING TRENDS VISIBLE IN 2023:Rising interest rates have led to wider interest spreads and increased yields for lenders. However, surging deposit rates and deposit outflows to higher-yielding alternatives (such as money-market funds) may weigh on net interest income (NII) going forward. Furthermore, the high interest rate environment may dampen economic growth and reduce demand for credit for investment and consumption, while rising wage inflation and infrastructure costs may further offset benefits of interest rate hikes. For instance, although US banks recorded an all-time-high profit of approximately USD80bn in 1Q 2023, up 33% from 1Q 2022, their aggregate interest expenses also rose 10-fold from a year ago to USD85bn in 1Q 2023. Consequently, US bank earnings are expected to fall 18.3% in 2023 year-on-year as deposit outflows and higher deposit betas weigh on NIMs. Moreover, sustained high interest costs, combined with low demand, may lead to increased corporate delinquencies and arrears, although there is no clear distress visible at present.The chart below indicates that lower deposit growth rates of US banks would pressure their liquidity in the short term.Source: S&P Global Market IntelligenceUUS commercial and corporate lending trends in 2023

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PA Bankers Association » Fall 2023 3347% of the large US banks' senior loan officers surveyed by the Federal Reserve (Fed) stated that they tightened credit underwriting standards for commercial and industrial loans in 1Q 2023 due to an unfavourable economic outlook, reduced risk tolerance and sector-specific concerns. Demand for C&I loans was also subdued, more so from smaller firms. Stringent underwriting norms included mandating higher premiums for riskier loans, charging higher costs and interest rate spreads, lower maturity periods for loans and credit lines, and tightening loan covenants.The Fed’s Senior Loan Officer Opinion Survey shows how demand for different types of credit may be changing:Source: S&P Global Market IntelligenceThe chart below shows the share of banks restricting credit for different types of lending: Source: US Federal ReserveSustainable finance (which refers to financing the transition to cleaner technology and processes) rose by 5% in 1Q 2023. S&P estimates that green, sustainable and social bond issuance surpassed USD6tn in 2022. However, the focus would now be on ensuring greater transparency in ESG reporting by banks, and increased assessment of their ESG methodologies and impact. Banking regulators have identified greenwashing (companies using data to project that their products and policies are environmentally friendly) as one of Continued on page 34

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34 » PA Bankers Association pabankers.comthe main challenges that need to be overcome in the coming years. The US SEC fined Bank of New York Mellon and Goldman Sachs in 2H 2022 over misleading claims relating to ESG investments. US banking regulators need to identify focus areas for improving ESG reporting in the near term, including upskilling banks’ capabilities to assess and monitor ESG risks, sharing supervisory best practices, identifying common reporting guidelines and leveraging current data-analytical practices (such as stress testing and scenario analysis) for sustainable finance.Banks and corporate borrowers have traditionally been concerned about the impact of open banking and APIs, where third-party technological applications integrate with a bank’s core banking systems to increase functional efficiency and enhance user experience. Banks were reluctant to lose their monopoly over borrowers’ data, while companies worried about data privacy. However, continued digital innovation has increased the benefits of open banking, which may lead to greater adoption of APIs. A study by McKinsey states that 75% of the top 100 global banks have made APIs available to the public. North American and Asia Pacific banks are leading the trend, with Europe following closely behind. Key benefits of API use include the following:• Data accessibility and intelligence through extracting borrower data from different silos and presenting it in useful ways• Integrating disparate legacy banking systems to resolve data communication challenges• Automating manual tasks such as data entry and numerical calculations• Improving banks’ internal functioning and data management• Greater data security by using renowned programming standards such as REST and Open API• Enhancing revenue-generating sources and cost reductionAPIs such as Plaid and Yodlee are now commonly used in the small-business lending market to integrate borrower data directly with lenders’ systems, while PrimaDollar is used extensively for trade finance functions. Banks are now looking to leverage artificial Intelligence and generative language tools such as ChatGPT to improve productivity, streamline operations and enhance customer service. Some early-use cases implemented by banks include client-facing chatbots, fraud detection and AML, automating KYC and loan origination processes, and customisation of investment advice. vendorARTICLESContinued from page 33

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36 » PA Bankers Association pabankers.comvendorARTICLESContinued from page 35Managers may have to redefine post-pandemic workplaces to develop an agile and tech-enabled workforce, while facing challenges such as a talent crunch, resistance to technology adoption, experimental hybrid working models and gig economies. For instance, 4 of 10 financial services leaders surveyed by Deloitte stated that their employees were unwilling to reskill or take up new roles amid the pandemic. To counter these challenges, leaders would have to rely on softer skills such as understanding employee motivations, managing a distributed workforce, eliminating inequities between remote-working and in-office employees, and encouraging diversity. For example, managers would need to learn to recognise “unseen” work and pivot to task-based workdays rather than tracking employees’ screen time. While these strategies may help retain and recruit talent, banks may still need to increase reliance on outsourced workforces and gig-based contractors to augment capabilities in niche areas such as credit analysis and treasury operations.HOW ACUITY LENDING SERVICES CAN HELP YOUWith 22 years of credit experience and over 1,000 credit experts, Acuity’s services cover the end-to-end lending value chain, including origination, underwriting, credit monitoring and loan operations, across various asset classes and portfolios (C&I, CRE, ABL, Equipment Finance, Consumer Mortgage and Retail, etc). We have expertise across loan origination platforms and have developed our own proprietary automation tools across the credit analysis value chain encompassing financial spreading, covenant monitoring, credit reviews and workflow management.ABOUT THE AUTHORS: Rajul heads the lending practice at Acuity Knowledge Partners and has been with the firm for over 15 years. She is responsible for strategic planning, delivery oversight and management, quality assurance and supporting the innovation and technology initiatives in Lending. Rajul has extensive experience in investment banking analytics and commercial lending research services. Apart from banks, the teams she oversees also have in-depth experience in working across different lending products, processes and systems for Fortune 100 companies, SMEs and real-estate businesses. She holds a Master of Finance and Control and a Bachelor of Commerce from Delhi University. Sam has over 18 years of financial service experience, predominately residential lending management with commercial lending experience. Previously, he worked as an Area Market Manager for Bank of America and US Bank- managing 22 brick-and-mortar bank branches and being responsible for all consumer and commercial business line activities deriving from the branch. SOURCES:• US banks generated record $80bn first-quarter profits despite turmoil | Financial Times (ft.com)• Reuters – Banks tighten credit terms, see loan demand drop, Fed survey shows• S&P Global Market Intelligence – US Community Bank earnings to fall more than 22% this year• Deloitte – 2023 Banking and Capital Market Outlook• Deloitte – Bank of 2030 – The future of banking• Forrester – Predictions 2023• Deloitte – 2022 banking and capital markets outlook• Forbes – The Top 5 Trends In Fintech And Banking For 2022• S&P – Report on ESG Research• SEC.gov – SEC Charges BNY Mellon Investment Adviser for Misstatements and Omissions Concerning ESG Considerations• SEC.gov – SEC Charges Goldman Sachs Asset Management for Failing to Follow its Policies and Procedures Involving ESG Investments• McKinsey – What’s new in banking API programs• McKinsey – From tech tool to business asset: How banks are using B2B APIs to fuel growth• KPMG – Basel 4 – The final countdown?• KPMG – Basel 4 – The journey continues• Sustainable finance markets: Q1 2023 in charts | Nordea

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38 » PA Bankers Association pabankers.comvendorARTICLEShe strategic advantages of outsourced mortgage underwriting are many. With many banks and lenders grinding it out during the ebbs and flows of the residential mortgage industry, articulating differentiators and sharpening one’s competitive edge are major challenges. According to personnel costs account for 66% of loan origination cost on average. How do you empower your residential lending team to be more productive and efficient without sacrificing the quality of the borrower experience for the sake of said productivity?Outsourced fulfillment makes it easier to empower your team to deliver premium service to their borrowers. Meanwhile, management can focus on the core areas of the origination process that drive profitability by delegating the more complex and nuanced underwriting fulfillment needs to seasoned underwriting experts at an affordable cost.According to , business outsourcing is defined as “the act of contracting out a business function to an external supplier….”Must-Know Outsourcing Statistics for 2023 (https://fortunly.com/statistics/outsourcing-statistics/#gref)Here are some excerpts from the above link – updated July 2023:• Almost 54% of all companies use third-party support teams to connect with customers.• 78% of businesses all over the world feel positive about their outsourcing partners.• About 300,000 jobs get outsourced out of the US each year. (Ascentus One only use US based W-2 employees)• 71% of financial service executives outsource or offshore some of their services.• More than 93% of organizations are considering or have already adopted cloud services to improve outsourcing. (Ascentus One is built on Cloud based solutions from Citrix and Microsoft Azure)• Data security is a top concern for 68% of outsourcing companies that are considering moving to cloud technology. (Ascentus One is SOC 2 Type 2 compliant)• More than 44% of chief intelligence officers say they are now more likely to use outsourcing suppliers than they were just five years ago.• 29% of businesses with fewer than 50 employees outsource, compared to 66% with 50 or more employees.THE IMMEDIATE BENEFITS OF OUTSOURCED UNDERWRITING ARE NUMEROUS:Reduced internal costs such as staffing, training, health and 401K benefits while enjoying a variable cost model by using a per loan economics.Elimination or reduction in costs empowers organizations to not be at the mercy of fluctuating costs high and low volume times.Previously thought as something only accessible for large organizations, onshore mortgage underwriting fulfillment outsourcing is now accessible for everyone. Even small and midsize banks and mortgage lenders can now find trusted onshore fulfillment partners at economically attractive prices, thus freeing up budget to invest in more critical and impactful areas of the business without sacrificing the quality of the borrower experience or extending turn times.: Flexibility, Agility and Adaptability with the right outsourcing partner will lead to an improved time-to-value-to-market formula. Outsourcing can supplement the hard work your team already does even farther, by freeing up time and resources to invest in the areas of your business that drive the most realistic growth.  When will the mortgage industry rebound? Will the recovery be with the speed of an avalanche, or will it be a slow building crescendo? We believe there’s a tremendous pent-up demand but when is the question. Will your bench strength be able to handle rising production? TAdvantages of Outsourced Underwriting Fulfillment

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PA Bankers Association » Fall 2023 39Where do you invest to capture this growth again? In-house underwriting fulfillment is fine when volume is predictable but how realistic is foreseeing the future? The truth is that the housing market will always be unpredictable. How prepared is your bank to cope with volume declines and upticks?Outsourced fulfillment enables banks and lenders to invest their budget in the core competencies of their business without sacrificing the flexibility and ability to scale as market demands shift.Your bank customers deserve only the best in terms of speed, quality, and exceptional customer service.Top outsourced underwriting fulfillment companies will provide you access to a team of seasoned underwriters (caution as some use near-shore and off-shore personnel), a talent pool for which many banks and lenders can only dream of developing. While evaluating your potential outsourcing partners, it’s important to understand the experience and knowledge of the team with which you will be working. This can have a great impact as your business grows and you continue to expand your product offerings and develop new streams of revenue. Make sure you have the talent to capture any upswings in the marketplace and not be limited to geographical boundaries for hiring.Defining your competitive advantage lies in assessing your ability to scale and the flexibly to accommodate ever-changing market demands.While outsourcing mortgage underwriting might seem like something that only very large banks and lenders are able to utilize to maximize their flexibility, outsourcing your mortgage underwriting is not only accessible for small-to-midsize banks and lenders but can actually be the key to remaining nimble and staying ahead of the competition, regardless of market ebbs and flows. (Ascentus One has unlimited scalabilities).To quote an excerpt from McKinsey & Company: “As fast-paced innovation continues to disrupt the industry, it’s no longer a question of if you should outsource, it’s a question of if you’ll get there before your competitors.”In closing, Ascentus One invites you and your Residential Lending Dept. to invest some time with us on how we can enhance your operations with our products and services. Our dedication and commitment are to help your bank to be better prepared. You can contact me at bkyong@ascentus1.com.ABOUT THE AUTHOR:  ................................................................................................................................................................................................... 37 ................................................................................................................................................................................................................. 7 ........................................................................................................................................................... 4 ..........................................................................................................................................23 ................................................................................................................................................................................................... ............................................................................................................................................................................................21  .............................................................................................................................................................................................. 13 ......................................................................................................................................................................................................... 28 .......................................................................................................................................................................................................................................27 .................................................................................................................................................................................................. 26EVOLV ...............................................................................................................................................................................................................................41 ..................................................................................................................................................  ............................................................................................................................................................................................................51 .........................................................................................................................................................................................  ............................................................................................................................................................................................... 50.......................................................................................................................................... 29 .......................................................................................................................................................................................... 9adINDEX

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40 » PA Bankers Association pabankers.comvendorARTICLESs organizations continue to rely on technology to achieve their business objectives, information technology (IT) risks continue to evolve, becoming increasingly complex and challenging to many organizations. We are seeing a significant shift in the IT risk landscape, driven by emerging technologies, changing cybersecurity threats, and evolving regulatory requirements. How are you going to protect your company? Below are the top IT risk considerations for organizations to assess:EMERGING TECHNOLOGIESThe adoption of emerging technologies such as artificial intelligence, the Internet of Things, robotic process automation (RPA) and the proliferation of blockchain in everyday business finances is expected to continue to accelerate. While these technologies offer numerous benefits, they also introduce new IT risks that organizations must plan for and manage. For example, the implementation of RPA processes can expose sensitive data and systems to security threats. There is a misconception that automation does not require monitoring and human intervention. RPA solutions require appropriate access control, encryption and monitoring to protect data and maintain security. Governing bodies such as the U.S. Securities and Exchange Commission may pay closer attention to the impact of these technologies on financial reporting and the associated internal controls. IT auditors must ensure that organizations have appropriate controls in place to mitigate these risks.CYBERSECURITY THREATSThe threat of cyberattacks continues to be a top concern for organizations across all industries no matter their size. Public companies are encouraged to prioritize cybersecurity in their risk management and disclosure practices. Cybercriminals are becoming increasingly sophisticated, using advanced techniques such as ransomware attacks, phishing, and social engineering to gain access to sensitive data and systems. Usually, the weakest link coming from insider threats such as unauthorized access by employees, contractors and partners. Additionally, as more organizations move their operations to the cloud, the risk of cloud-specific cyberattacks is increasing. IT auditors must ensure that organizations have effective cybersecurity controls in place to prevent and detect cyberattacks.THIRD-PARTY RISK MANAGEMENTAs organizations continue to rely on third-party vendors and service providers to support their operations, the risk of third-party breaches and data breaches is increasing. Some common risks associated with engaging with third-party providers include the delegation of authority, quality control and non-compliance to applicable laws and regulations. Companies may face challenges in managing and monitoring the adherence to their standards by third-party providers. In some cases, companies may be held accountable for any legal violations committed by their third-party providers, leading to potential fines, penalties, or legal disputes. The steps in performing proper due diligence and establishing clear service-level agreements are key when selecting third-party providers. IT auditors must ensure that organizations have appropriate third-party risk management processes in place to monitor and manage the risks associated with third-party relationships.EVOLVING REGULATORY REQUIREMENTSAs the regulatory landscape continues to change, organizations must remain vigilant about compliance with new and evolving regulations. For example, the General Data Protection Regulation (GDPR) has been in effect for several years, but organizations must continue to monitor their compliance with the regulation’s requirements. Additionally, new regulations, such as the California Privacy Rights Act (CPRA) and the European Union’s ePrivacy Regulation, are expected to take effect in 2023, adding to the compliance burden for organizations operating or with employees in these areas.INTERNAL IT CONTROL ENVIRONMENTFinally, as a result of the ever-evolving risks described earlier, it is essential to consider the organization’s internal IT control environment more now than ever. A defined cadence to assess internal controls in order to maintain alignment with the business, technology and compliance changes is paramount. IT auditors must ensure that the organization has appropriate IT governance structures, policies, and procedures in place to manage IT risks effectively. Additionally, they must assess the effectiveness of IT controls and ensure that the organization has appropriate risk management processes in place.Top Information Technology Audit Risk Considerations in 2023A

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PA Bankers Association » Fall 2023 41ABOUT THE AUTHOR: As a director in Cherry Bekaert's Risk Advisory Services practice, Khai helps clients protect their IT assets and improve internal controls. Khai has led and coordinated IT audits for global and domestic clients across various industries in manufacturing, healthcare, life sciences, technology, utility and construction. He assesses, defines and implements best practices for IT audit, security, risk and compliance management.With over 20 years of experience, Khai helps his clients understand and manage complex information technology environments and controls over data integrity, confidentiality and availability of information. He has implemented IT audit frameworks at numerous companies in order to comply with Sarbanes-Oxley (SOX), FISCAM and FISMA requirements. He has audited complex business ERPs environments including SAP, Oracle and other financial applications.Prior to joining Cherry Bekaert, Khai was a director in the risk advisory practice of a leading accounting firm. He led a regional IT advisory group, oversaw all IT clients, grew the practice and its team, and improved internal quality controls. Earlier in his career, Khai spent eight years as an IT senior manager of a Big Four accounting firm.HOW CHERRY BEKAERT CAN HELPBy focusing on emerging technologies, evolving regulatory requirements, cybersecurity threats, third-party risks, and the internal IT control environment, organizations can stay ahead of the curve and navigate IT risks effectively in 2023.At Cherry Bekaert, our dedicated IT Audit professionals understand the IT universe and the current challenges with emerging technology integration, along with managing IT risk, financial reporting risk, compliance risk, and operational risk to help protect company assets, drive compliance, and increase stakeholder confidence.For more information on establishing or enhancing your organization’s risk and IT programs, contact Cherry Bekaert’s IT Audit & Consulting Advisory practice or your Cherry Bekaert advisor. 888.311.7248 ext 3009nschlachter@poweredbyevolv.comwww.poweredbyevolv.comStop LosingCommercialDepositorsto SquareIncrease Non-Interest IncomeRetain & attract commercial depositorsProvide solutions for startups, growing& established businessesAccess to four processing platformsOffer revenue-driving ancillary productsPartnership BenefitsSquare is aggressively pursuing--and winning--accounts that are typically the domain ofcommercial banks. In addition to giving you toolsto win these accounts, Evolv will increase yournon-interest income! Nellie SchlachterEvolv, Inc. is a registered ISO of Wells Fargo Bank, N.A., Concord, CA and Fifth Third Bank, N.A., Cincinnati, OH.Schedule A DiscoveryCall to Learn More2023202420232024

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42 » PA Bankers Association pabankers.comvendorARTICLESual pricing is a pricing strategy in which merchants offer customers two prices for the same product or service: one for cash payments and another for card payments. The card price reflects the cost of accepting card payments, including the merchant services fees and other costs associated with card acceptance. At Evolv, we call this model Buyer’s Choice, because the consumer chooses whether they want to pay with cash or to pay with card and a small fee for the convenience of using it. This pricing strategy is becoming increasingly popular within the US merchant payments industry as a way for merchants to offset the high costs associated with accepting card payments and avoid raising their prices. This article will examine the history and current state of a dual pricing model within the US merchant payments industry, including the legal and regulatory environment, the benefits and challenges for merchants and consumers, and potential future developments.WHY SO HIGH?The cost of accepting credit cards is high because of the fees associated with processing the transactions. Some of these fees include:1. Interchange fees: These are fees charged by the card issuer (such as Visa or Mastercard) to the merchant for accepting their card. These fees vary depending on the type of card, the transaction amount, and other factors.2. Assessment fees: These are fees charged by the card networks (such as Visa or Mastercard) for using their networks to process transactions.3. Processing fees: These are fees charged by the merchant's bank or payment processor for handling the transactions. These fees can include monthly or annual fees, as well as per-transaction fees.4. Chargeback fees: These are fees charged by the merchant's bank or payment processor when a customer disputes a charge and requests a refund.These fees can add up and add to the cost of accepting credit cards. With Traditional Pricing, processing fees paid by the merchant are used by credit card companies to incentivize their customers to pay with card by offering rewards or points, including cash back, travel points, or merchandise, depending on the card issuer and the type of card. Additionally, merchants may also have to purchase equipment and software to process credit card transactions, which can also add to the cost.LAYING THE GROUNDWORK FOR DUAL PRICINGThe merchant payments industry in the United States has been traditionally dominated by card networks such as Visa and Mastercard. These networks charge merchants a percentage of each transaction, known as the merchant discount rate (MDR), as well as other fees, such as chargebacks and monthly statements. These fees can add up to a significant cost for merchants—especially for small businesses. In addition, the Durbin Amendment, a provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act, caps the amount of MDR that can be charged on debit card transactions.Dual pricing has been used by merchants in the United States for several decades, particularly in the retail and service sectors. The practice became more prevalent in the 1990s and 2000s, as the popularity of credit and debit cards grew, and merchants began to incur higher costs for card acceptance.LEGAL AND REGULATORY ENVIRONMENTIn the United States, the legality of dual pricing is governed by a patchwork of federal and state laws and regulations. The most relevant federal law is the Truth in Lending Act (TILA), which requires merchants to disclose the terms and conditions of credit transactions and prohibits them from discriminating against customers who use credit. In addition, the Electronic Fund Transfer Act (EFTA), requires merchants to disclose the terms and conditions of electronic funds transfer (EFT) transactions, such as debit card transactions.At the state level, there are several laws and regulations that govern dual pricing, including state consumer protection laws, state usury laws, and state sales tax laws. Some states, such as California, have laws that specifically prohibit surcharging, while others, such as Texas, have laws that specifically allow it. In states where surcharging is legal, merchants are typically required to disclose the surcharge in a clear and conspicuous manner and to apply it consistently to all customers who use credit or debit cards. However, the recent Supreme Court ruling in the case of Expressions Hair Design v. Schneiderman, merchants now have a right to surcharge customers who use credit cards under the First Amendment.How Dual Pricing Benefits Financial Institutions’ Commercial Customers

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PA Bankers Association » Fall 2023 43ABOUT THE AUTHOR: For more information on how to offer Dual Pricing to your business customers through Evolv’s Buyer’s Choice program, contact Nellie Schlachter at Evolv at 888-311-7248 ext. 3009 or nschlachter@poweredbyevolv.com.THE DIFFERENCE BETWEEN DUAL PRICING AND SURCHARGINGDual pricing refers to charging customers two different prices, oftentimes a cash price and card price with payment fees built in. This is often done to save on the fees associated with processing card payments. Surcharging, on the other hand, refers to adding an additional fee to a customer's total purchase price if they choose to pay with a credit or debit card. This is typically done to cover the cost of card processing fees. In summary, dual pricing is a way to give customers a choice to pay with cash, while surcharging is a way to pass on the cost of card processing fees to customers who choose to pay with a credit or debit card.IMPLEMENTATION OF DUAL PRICINGDual pricing is implemented by merchants by displaying two prices for their products or services: one for cash payments and one for card payments. The card price is typically higher than the cash price to offset the costs of accepting card payments. This pricing strategy is typically used by businesses that have low-margin products or services, such as gas stations or convenience stores. In the last three years, more and different businesses are opting for this pricing strategy as the point-of-sale equipment is now available that will show both prices on the terminal screen allowing the consumer to choose the price they wish to pay or the payment method they wish to use.BENEFITS & CHALLENGES OF DUAL PRICING FOR MERCHANTSOne of the main benefits of dual pricing for merchants is that it allows them to recover some of the costs associated with card acceptance, such as merchant services fees. This can help to mitigate the impact of these costs on their bottom line and allow them to remain competitive in the marketplace without having to raise their prices. Additionally, dual pricing can help to encourage customers to pay with cash, which can be less expensive for merchants to accept and can also help to reduce the risk of fraud.Despite the benefits, there are also several challenges associated with dual pricing for merchants. One of the main challenges is the complexity of the legal and regulatory environment, which can make it difficult for merchants to comply with all the applicable laws and regulations. Additionally, merchants may also face challenges in communicating the dual pricing policy to customers in a clear and consistent manner, which can lead to confusion and dissatisfaction among customers.BENEFITS & CHALLENGES OF DUAL PRICING FOR CONSUMERSDual pricing provides many benefits for consumers, particularly those who choose to pay with cash. By offering a lower cash price, merchants can provide an incentive for customers to use cash, which can be less expensive for merchants to accept and can also help to reduce the risk of fraud. Additionally, dual pricing can also provide a greater level of transparency for consumers, allowing them to see the true cost of card acceptance and make more informed decisions about how to pay for goods and services.However, it can also be seen as a drawback, as it can be confusing and may create a sense of discrimination against card users. Furthermore, it could be argued that the practice is discriminatory against certain groups of people, such as those who are unbanked or underbanked and may not have access to cash.CONCLUSIONDual pricing is a pricing strategy that is becoming increasingly popular within the US merchant payments industry. By allowing merchants to offset the costs of accepting card payments, it can be a valuable tool for businesses, especially small businesses with low-margin products or services. However, it is important for merchants to be aware of the regulations regarding surcharging in their state before implementing this strategy. Financial Institutions that partner with Evolv have the added benefit of Account Executives, Relationship Managers, and an in-house Customer Support department that works with and educates their partner’s commercial customers ensuring that they arefully compliant in all instances.Having the option for the Merchant to choose whether they want to remain with Traditional Pricing or implement the Dual Pricing is an advantage for the Bank’s Merchant program. The Merchant is in control and can decide which processing strategy is best for their business. Note that if a Merchant chooses to try the Dual Pricing strategy and decides to revert back to Traditional Pricing, it can be done easily, will not cost anything, and they are not required to purchase new hardware. However, less than 1% of Evolv’s merchants switch back to Traditional Pricing after moving to Buyer’s Choice—Evolv’s Dual Pricing model. 20232024

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44 » PA Bankers Association pabankers.comvendorARTICLEShe U.S. Small Business Administration (SBA) was officially established in 1953, and over the past six-plus decades has provided millions of loans and other forms of financing to small businesses across the U.S., Puerto Rico, the U. S. Virgin Islands and Guam.The SBA works with lenders to provide loans to small businesses and is responsible for establishing guidelines for loans extended by lenders, community development organizations and other lending institutions; and it guarantees these loans will be repaid – mitigating much of the risk associated with lending to smaller and “riskier” businesses.Over the years, many community banks have avoided offering government loan programs for various reasons – the most common being the lack of a clear understanding of these programs. But the simple fact is, providing a full slate of lending solutions to small businesses is important, and gaining an understanding of these loan programs is not as complex as it may appear.The following is an easy-to-follow overview of the three most widely utilized loan programs offered by the SBA and the U.S. Department of Agriculture (USDA):SBA 7(A) LOAN GUARANTY PROGRAM• Real estate construction, purchase, expansion & refinance (minimum 51% owner-occupied)• Working capital• Purchase of furniture, fixtures, machinery & equipment• Business start-up or acquisition• Businesses must be For Profit• Tangible Net Worth < $15,000,000 and Net Income After Tax < $5,000,000 (2-Year Average)• Maximum loan amount of $5,000,000• Loan guaranty up to 90% of the loan amount with a maximum guaranty of $3,750,000• Maximum variable interest rate = Wall Street Journal Prime Rate + 2.75% or LIBOR alternative• Loan guaranty fee ranges from 2% to 3.75%• Loan terms vary depending on use of loan proceeds• U.S. Government Guaranty of up to 90% of the loan amount under the SBA 7(a) Loan Program.• Expand market share by utilizing government loan programs to meet the credit needs of business owners that do not qualify under conventional lending standards and guidelines while reducing loan portfolio risk and increasing profitability.• Reduced reliance on bank participations. Government-guaranteed loans are not subject to the bank’s legal lending limit.• Capital ratios can be improved – the guaranteed TSBA Lending at a Glance A Win-Win Solution

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PA Bankers Association » Fall 2023 45ABOUT THE AUTHOR: portion of the loan is not included in the calculation for risk-based assets or subject to reserve requirements.• Reduce loan portfolio credit risk through the guaranty and the concentration of risk through secondary market sales.• Increased liquidity and earnings through secondary market sales.• Significant yields can be achieved on invested funds due to substantial non-interest premium income on secondary market sales and through ongoing annual servicing income.SBA 504 LOAN PROGRAM• Real estate construction, purchase, expansion, & refinance (minimum 51% owner-occupied)• Purchase of furniture, fixtures, machinery & equipment• Business must be For Profit• Tangible Net Worth < $15,000,000 and Net Income After Tax < $5,000,000 (2-Year Average)• Maximum loan amount of up to $5,500,000• Lender finances up to 50% of project costs through a conventional 1st mortgage loan• Local Certified Development Company (CDC) finances up to 40% of eligible project costs though a 2nd mortgage loan• Maximum interest rates:o First mortgage lender provides variable or fixed conventional rateso CDC provides below market fixed rate financing• SBA fees are approximately 3% of the loan amount• Borrower must meet job retention or creation requirements• Competitive advantage gained by offering the borrower a blended fixed interest rate• Lender finances only 50% of project costs• No Agency documentation or reporting requirements• Lender can take advantage of CRA creditsUSDA BUSINESS AND INDUSTRY PROGRAM• Real estate construction, purchase, expansion & refinance• Working capital• Purchase of furniture, fixtures, machinery & equipment• Business start-up or acquisition• Businesses can be For Profit or Non-Profit• Business must be located in a qualifying rural area with a population center of 50,000 or less Maximum loan amount up to $25,000,000• Loan Guarantees vary as follows:o Up to 80% for loans of up to $5,000,000o Up to 70% for loans in excess of $5,000,000 up to $10,000,000o Up to 60% for loan in excess of $10,000,000 up to $25,000,000• Interest rates are negotiable with the lender• Minimum Tangible Net Equity Requirement of 10% for existing businesses and 20% for start-ups• Loan Guaranty Fee of 3% and Annual Renewal Fee (currently .50%). Both fees are calculated as a percentage of the guaranteed principal loan amount• Loan terms vary depending on use of loan proceeds• Same as those listed under SBA 7(a) Loan Guaranty ProgramSince the end of the Great Recession, more and more community banks are offering SBA and USDA loan programs to their customers and prospects – allowing these banks to extend credit to businesses that cannot typically qualify for conventional bank financing, while addressing the need to mitigate lending risk. The utilization of SBA and USDA Loan Programs is a positive step toward achieving this goal.To learn more about the many government guaranteed loan programs offered by the Small Business Administration and the U.S. Department of Agriculture, please call or email Michael Ryan at (610) 733- 9955 or mryan@innovfs.net.20232024

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46 » PA Bankers Association pabankers.comvendorARTICLESith the quick rise in interest rates over the past year, a question many bankers ask is “When will my BOLI yields increase?” This is a fair question that deserves consideration. LONG-TERM INVESTMENT PORTFOLIOBOLI carriers have long-term liabilities and, therefore, invest in long-term assets. Carriers typically have investment portfolio durations of 8 to 10 years. Because the move up in interest rates has only occurred over the past year, they have had minimal impact on the average investment yield of a carrier’s portfolio. For example, if 10 percent of a carrier’s portfolio has matured in the past 12 months and the investment yield on the new investments have been 1.00 percent higher than on the maturing investments, the average yield on the portfolio would increase by a mere .10 percent. If rates remain high, carrier investment returns will also move up over time and their crediting rates are expected to increase accordingly, but the increase will be on a lagging basis. Likewise, when market interest rates move down, like they did in 2020 and 2021, most carrier’s crediting rates were slow to decrease, remaining around 3.00 percent even though most other investment options for banks offered yields under 1.00 percent. BOLI IS A LONG-TERM INVESTMENTBOLI can be a 30 to 40 year investment for a bank. As a result of the long duration of the carriers’ investment portfolios, the types of assets carriers purchase, and because BOLI income is generally not subject to income taxes if paid as part of the proceeds from the life insurance policy, BOLI net yields are typically higher than alternative investments. However, at certain times, particularly when rates rise quickly or the yield curve is inverted, BOLI yields may be less than alternative investments. FOCUS ON LONG-TERM RESULTSTo test the hypothesis that BOLI produces superior returns over the long-term, I compared BOLI earnings of 100 of my client banks to what the banks would have earned on an alternative investment over the same period. In this case, I compared the cumulative BOLI income earned by the 100 banks, using only banks that have owned BOLI for more than 4 years, to the income they would have earned on five-year U.S. Agency bonds invested at the same time as each BOLI purchase. The results showed that the average income earned on BOLI investments was 2.6 times what the bank would have earned on the alternative investment. Said another way, for each $1.00 the bank would have earned on the alternative investment, the bank earned $2.60 on its BOLI investment. While $2.60 represents the average of the 100 banks, no individual bank earned less than $1.90 for every dollar it would have earned on the alternative investment. Also, it is important to note that investments in general account or hybrid separate account BOLI have no market value (AOCI) adjustment as do most alternative investments. With many banks having significant reductions in equity capital due to AOCI adjustments to their bond portfolios, the lack of such adjustments on BOLI assets is an attractive feature. The following chart summarizes my review of BOLI earnings versus earnings on a hypothetical five-year U.S. Agency bond*: Average multiple 2.6 times Lowest multiple 1.9 times Highest multiple 4.8 times Median multiple 2.5 timesSHOULD OUR BANK EXCHANGE CURRENT BOLI FOR NEW BOLI WITH A HIGHER RATE?While moving an insurance policy from one carrier to another can be accomplished on a tax-free basis under Section 1035 of the tax code, the general answer is no, although there may be exceptions. Interest Rates Have Increased 

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PA Bankers Association » Fall 2023 47Points to consider before entering into a 1035 exchange:1. Banks should remember that BOLI is a long-term investment and should be careful not to be overly swayed by more attractive new money rates. At certain times, new money rates will exceed portfolio rates and, at other times, portfolio rates will exceed new money rates. Over the long-term, they trend toward equalization.2. The credited interest rates for most existing BOLI policies will likely increase over time if overall market interest rates are moving up and remain higher for an extended period of time.3. Depending upon the length of time the existing BOLI polices have been in effect, a 1035 exchange fee may be applied against the cash value to be transferred. 4. Due to the low interest rate environment over the past several years, the minimum interest crediting rate guarantee for new BOLI products will likely be lower than the current BOLI policy.5. Often, a carrier will not allow the bank to purchase additional BOLI in the future if the bank has moved policies from that carrier via a 1035 exchange in the past.6. Under most current state insurable interest laws, the bank may only 1035 exchange BOLI policies on employees actively employed at the time of the exchange. 7. Under Section IRC 101(j), the bank may only 1035 exchange policies on employees in the top 35 percent of the bank’s wage earners and such employees must complete a positive consent form. 8. Most carriers will not provide guaranteed issue coverage for active employees over age 70, which may prevent certain policies from being exchanged to the new carrier.9. Due to recent carrier repricing of BOLI polices, the product issued by the new carrier may provide a lower death benefit than what is provided in the current BOLI policy. 10. If the bank has a split dollar benefit plan in effect, a lower death benefit may adversely affect existing participant benefits. 11. The bank should consider the total return, including the death proceeds. The policy with a lower current yield may ultimately pay a higher death benefit. Those points made, it is appropriate to consider 1035 exchanges in the following circumstances:1. Ratings downgrades or credit concerns regarding the current carrier.2. Carrier has exited the BOLI space and is simply managing its existing block.3. Rates have been higher for several years and the carrier has not moved its rates up.4. Product has market value adjustments and the bank’s cost to exit is not excessive.CONCLUDING COMMENTSWith the recent increases in interest rates, it is easy to get caught up in the desire for corresponding increases in yields on existing BOLI portfolios. However, it is important to remember that BOLI is a long-term investment and that crediting rates move up and down slowly due to the long duration of the carriers’ portfolios. That slow movement has been a benefit when rates moved down to near zero percent as most BOLI carriers continued to credit interest at close to 3.00 percent. However, now that rates have increased and the yield curve has inverted, the lag in BOLI crediting rate movement may cause BOLI yields to be less than alternative investments for a period of time. Over the long run, BOLI has almost always produced more earnings than typical bank alternative investments. If your bank is considering a 1035 exchange of existing policies, be sure to evaluate the alternatives thoroughly. *Source: The five-year agency bond yields are derived from the five-year non-callable agency notes per the Fannie Mae Constant Maturity Debt Index through November 28, 2008 and from the U.S. Government Agency Five-Year Index per Bloomberg L.P. after November 28, 2008. ABOUT THE AUTHOR:  is a  of which has assisted over 2,000 banks in the design of nonqualified benefit plans, performance-based compensation and BOLI. To learn more, contact David Shoemaker at 404.229.2941 or david.shoemaker@nfp.com.20232024

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48 » PA Bankers Association pabankers.comBANK HEALTH CARECONSORTIUM OF PA*A Unique Health Care Alternative for PA-Based Financial Institutions and Affiliate Members of the PA Bankers AssociationWayne Whipple, (717) 255-6925wwhipple@pabankers.com  PA Bankers Members *Vendors provide products and services to both financial institution members and Affiliate Members.ABA INSURANCE SERVICES*Bond, D&O, Cyber Insurance, andEmployment Practices LiabilityPatricia Williams, (216) 220-1280pwilliams@abais.comANDERSON GROUP*Integrated Marketing and Communications and Business IntelligenceLinda Anderson, (610) 678-1506LAnderson@ThinkAnderson.comAPPI ENERGY*Electricity and Natural Gas Procurement Services, Utilities Management PlatformKathryn S. Allen, (667) 330-1161KAllen@APPIEnergy.comBANKERS ALLIANCE*A Family of Bank Compliance ServicesThat Includes Compliance Alliance,Review Alliance andVirtual Compliance OfficerWayne Whipple, (717) 255-6925wwhipple@pabankers.comBANZAI!*Interactive, Award-Winning CourseTeaching Students Real-WorldFinance, No Upfront CostKatie Rigby, (801) 821-9055katie@banzai.orgCOMMONWEALTH CHARITABLEMANAGEMENT*Application and Administrationof EITC ProgramsCristine Clayton, (570) 278-3800cclayton@commonwealthcharitable.orgTHE BAKER GROUPAsset/Liability ManagementSoftware and ServicesCharles Amis, (405) 415-7231Charlie@gobaker.comBANKTALENTHQ*Diversity is Essential -Find Talent in all the Right PlacesWayne Whipple, (717) 255-6925wwhipple@pabankers.comCORNERSTONE ADVISORS*Core, Debit EFT, Card Program, LoanOrigination, Bill Pay, Mobile Banking &ATM Contract NegotiationJennifer Wagner, (480) 425-5204jwagner@crnrstone.comCRA PARTNERSTurnkey CRA Compliance/High-Yielding CRA CreditsKristine LaVigna, (877) 232-0859kristine.lavigna@shcpfoundation.orgCHERRY BEKAERT*Outsourced Internal Auditingand Risk Management ServicesNicole Lloyd, (717) 903-3142nicole.lloyd@cbh.com

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PA Bankers Association » Fall 2023 49GLOBALVISION SYSTEMS, INC.Anti-Money LaunderingCatherine Lew, (818) 998-7851 x128clew@gv-systems.comINNOVATIVE FINANCING SOLUTIONS, LLC.Your Trusted SBA/USDA ExpertsMichael D. Ryan, (610) 733-9955mryan@innovfs.netEVOLV*Merchant Processing, Search EngineOptimization, Website Design and SocialMedia ManagementNellie Schlachter, (888) 311-7248x3009nschlachter@poweredbyevolv.comPAYLOCITY*HCM Solutions andEngagement SoftwareLisa DeJoy, (717) 303-7663ldejoy@paylocity.comDEALERTRACK COLLATERALMANAGEMENT SERVICES, INC.Electronic Lien and Title ProgramWayne Whipple, (717) 255-6925wwhipple@pabankers.comMARKETSCANImmediate Financial Impact Through NegotiationsWayne Whipple, (717) 255-6925wwhipple@pabankers.comDELUXE CORPORATION*Check ProgramTodd Wroblewski, (724) 625-5599todd.wroblewski@deluxe.comINVESTORS TITLEINSURANCE COMPANYMulti-Bank Owned TitleInsurance ProgramKaren Barnett, (419) 577-5900kbarnett@invtitle.comKEYSTATE CAPTIVE MANAGEMENTCaptive Management andInvestment Portfolio ServicesDavid G. Guerino, (802) 233-262dguerino@key-state.comKLARIVIS*Data Analytics Solution Designed by Bankers for BankersAmber Robinson, (603) 860-3162amberrobinson@klarivis.comWEBBER ADVISORS*Multiple Medical, Drug, Dental &Vision Options and EB SolutionsBrad Webber, (814) 695-8066bwebber@lrwebber.comTHE KAFAFIAN GROUPPerformance & Profitability ManagementRobert E. Kafafian, (973) 299-0300 x106rkafafian@kafafiangroup.comNCONTRACTS*Integrated Compliance, Vendor and Risk Management, Board Encouragement PlatformJason McFarlane. (917) 504-6491jason.mcfarlane@ncontracts.comNFP EXECUTIVE BENEFITS*BOLI, Executive Compensationand Long-Term CareDavid Shoemaker, CPA/PFS, CFP®(901) 754-4924david.shoemaker@nfp.comPNC FIRSTPreferred Derivatives ProgramAmber L. Evanco, (724) 689-2178amber.evanco@pnc.comPWCAMPBELL*Design-build, Branch Experience and Consulting ServicesErin Campbell, (800) 253-7430erin.campbell@pwcampbell.comVIKAR TECHNOLOGIES, INC.Smarter Modern Banking: One View, One Vendor, One VikarNancy Schneier, (973) 495-4835nancy@vikartech.comNEW ERA TECHNOLOGY*Managed Service Provider for Voiceand Data CommunicationMichael Foglia, (973) 503-5809michael.foglia@neweratech.comVendor selections and recommendations are made in accordance with PA Bankers Services Corporation’s stated mission. It is believed that the promoted products and services merit strong consideration by PA Bankers member banks. PA Bankers Services Corporation due diligence and selection criteria should not be construed as a guarantee, as the ultimate appropriateness may vary from bank to bank. In addition, member banks are encouraged to conduct their own due diligence reviews of recommended vendors. Remuneration received by PA Bankers Services Corporation is utilized in-part to support the PA Bankers Association through contracted agreements, corporate sponsorships and overhead coverage. This financial support expands resources and strengthens the services and programs of the PA Bankers Association.

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