paBanker Magazine 2025 Summer : simplebooklet.com

4 » PA Bankers Association pabankers.comSince 1979, we’ve helped our clients improve decision-making, manage interest rate risk, and maximize overall balance sheet performance. The Baker approach utilizes software and products developed by Baker’s Software Solutions* combined with the ﬁrm’s knowledge, experience, and advice. Our platform was developed to oer solutions that cover the entire balance sheet. We welcome the opportunity to discuss any of our services in more detail with you and your management team.Solutions As UniqueAs Your BankSelect VendorSince 2016800.937.2257 www.GoBaker.com Oklahoma City, OK | Austin, TX | Long Island, NY | Salt Lake City, UT | Springfield, IL | Member: FINRA and SIPC*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.The Baker Group’s Strategic ServicesFixed Income Investing• Strategic security selection process• Full range of investment sectors— Treasuries and agencies— Agency mortgage backed securities and CMOs— Municipal bonds— Negotiable CDsRegulatory Support• Policy review and development• Full exam prep and support• Ongoing education and training for board and ALCOBaker Loan Solutions• Loan participations and sales across many asset classes• Enhance the performance of your loan portfolio• Improve liquidity while reducing concentration risk issuesBaker Funding Solutions• Fast access to intermediate and long-term deposits• No risk of core deposit cannibalization• Increased eciency: single certiﬁcate per maturity• No collateral required• No risk of early withdrawalFinancial Strategies Group• Decades of experience measuring, monitoring, and managing risk• Develop, implement, and update custom ﬁnancial strategies• Speciﬁc focus on executable strategies with step-by-step guidance• Ability to serve client needs as a “C-Suite in a box”Education• Combination of timely topics and fundamental concepts• Seminars and speaking events throughout the U.S.• Quarterly webinars• Client-speciﬁc training and educationMunicipal Credit Analysis • Pre-purchase and post-purchase credit analysis• Regulatory education• Monthly Reporting• Ratings change notiﬁcations• Individual credit monitoringThe Baker Group’s Software SolutionsAsset Liability Management – Interest Rate Risk Monitor (IRRM®)• Full regulatory and strategic support• No binding contracts• Easy-to-understand reporting• Foundation for improved balance sheet management and performanceBond Accounting – Baker Bond Accounting® (BBA)• Executive summary and management reports• Reduces accounting and regulatory burdens• Current and historical ﬁles available via internet/emailInvestment Analysis – Advanced Portfolio Monitor (APM®)• Accurately measure and manage your portfolio’s risk proﬁle• Easy-to-read cashﬂow and performance reports• Includes all the best practice stress tests• Ability to simulate “what-if” scenarios before transactions take placeTo ﬁnd out how The Baker Group can assist your institution in deﬁning and meeting its ﬁnancial objectives, call your Baker representative or Charles Amis at 405.415.7231, or Todd Hardberger at 405.415.7297.

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PA Bankers Association » 5Summer 2025PA Bankers STAFF DIRECTORYGeneral Number (717) 255-6900PA Bankers AssociationJill A. Ametrano, Registrar and Records Coordinator jillametrano@pabankers.com | (717) 255-6927Lisa R. Brandt, Legal and Policy Coordinator lbrandt@pabankers.com | (717) 255-6936J. Duncan Campbell III, President & Chief Executive Ocer dcampbell@pabankers.com | (717) 255-6916Jacqueline A. Catalano, Vice President, Professional Development jcatalano@pabankers.com | (717) 255-6939Amy L. Doyle, Communications and Government Aairs Coordinator adoyle@pabankers.com | (717) 255-6937Connie A. Ferraro, Director, Information Technology cferraro@pabankers.com | (717) 255-6921Michelle L. Henry, Administrative Assistant, Member Engagement & Development mhenry@pabankers.com | (717) 255-6900Sara E. Hocker, Director of Marketing and Communications shocker@pabankers.com | (717) 255-6912Annette M. Moshgat, Director, Finance amoshgat@pabankers.com | (717) 255-6938Louise A. Rynd, Esq., General Counsel lrynd@pabankers.com | (717) 255-6935Michelle L. Staton, Chief Operating Ocer mstaton@pabankers.com | (717) 255-6923Timothy P. Ward, Vice President, Government Relations tward@pabankers.com | (717) 255-6933Marilyn M. Wisniewski, Professional Development Assistant mwisniewski@pabankers.com | (717) 255-6934 PA Bankers Services CorporationTiani A. Chambers, Director, PA Bankers Services Corporation tchambers@pabankers.com | (717) 255-6928Cynthia L. Wallett, President, PA Bankers Services Corporation cwallett@pabankers.com | (717) 255-6913Wayne R. Whipple, Vice President, Business Development wwhipple@pabankers.com | (717) 255-6925magazineSTAFF Managing Sara E. Hocker Editor Editorial J. Duncan Campbell III Advisors Jacqueline A. Catalano Tiani A. Chambers Louise A. Rynd Michelle L. Staton Cynthia L. Wallett Timothy P. Ward PA Bankers Services Corporation Board of Directors and Ocers Chair Tracy E. Watkins, SPHR Secretary Ginger G. Kunkel Treasurer J. Duncan Campbell III Directors Janak M. Amin Mary G. Cummings, Esq Brett D. Fulk John C. Gill Andrew Linn Brendan J. McGill John H. Montgomery Michael D. Peduzzi Brian J. Richardson Jerey S. Stauer Joseph R. TothAddress Correspondence to: paBanker Magazine c/o Pennsylvania Bankers Association 3897 N. Front St., Harrisburg, PA 17110 Tel. (717) 255-6912 Email: shocker@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.Designed by: Hot Frog Print & MediaSponsored by:

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6 » PA Bankers Association pabankers.comn preparing my final chair remarks, I took some time to reflect on this industry that I deeply respect and am so passionate about. Sometimes, I wonder why anyone would ever get into banking with all of the changes and challenges that the industry faces. Challenges like regulations, legislation, examinations, compliance, the big ‘F’ word – fraud, cybersecurity, credit risk and let’s not forget about political risk and political climate, especially since we are just a few months into a new Administration. I bet if I were to walk around this room and ask each one of you why you got into banking, your answers would be very similar. Yes, of course, there would be a few responses like: “I like to work with numbers,” or “someone told me to apply for a job at the local bank,” but I would wager that the most common response would be: “I just want to help people and make a difference in someone’s life.” Banking is a very noble profession. We are here to partner with individuals and businesses to help them reach their financial goals, assist local communities so that they can grow and thrive, and be part of their success. That is why we got into banking – to help someone purchase the first home or open the doors to their very own business, or help them realize the dream of early retirement, and, yes, to even make that donation to the community soccer or baseball team so that they can purchase jerseys for the current season. Yes, we make a difference in so many people’s lives because bankers are caring, committed and trusted people who work really hard to find a way to be able to say “Yes” to every customer request. Luckily for us, PA Bankers is here to help us help them to meet their goals.When I began my banking career in 1993, I attended some seminars, schools and conferences, but I really became aware of all PA Bankers had to offer when I joined the Community Bankers Products & Services Committee in 1998. Since 1998, I have sat on various committees, including the Agricultural & Rural Issues Committee, Audit, Budget & Finance Committee, plus other various board committees, including the PaBPAC Board of Directors. I have come to appreciate how vital PA Bankers’ strong leadership is for the protection and survival of the industry that we love. For more than 27 years, I have made it a priority to support the association through various events, volunteer opportunities and the PA Bankers Services Corp’s Select Vendor Program. Throughout this time, the association has brought incredible value to my bank and, specifically, my personal growth. Over the years, First Citizens has used many services and select vendors through the PA Bankers Services Corporation, which has saved my bank millions of dollars. The current slate of selected vendors and relationships used by First Citizens include: • Bank Health Care Consortium of PA• Bankers Settlement Services of the Capital Region, LLC• ABA Insurance Services• Cornerstone Advisors• Compliance Alliance• Ncontracts• Dark Defend• KlariVis• Paylocity• Environ• NFP Executive BenefitsTrust me when I tell you that the association, along with the Select Vendor Program, can make your life easier, save you time and effort, and save you money, as they certainly have for me and my institution! In fact, FCCB has saved over $7 million between the Bank Health Care Consortium of PA, Bankers Settlement Services and our select vendor utilization over the years. chairman’sINSIGHTSRANDALL E. BLACKPresident & Chief Executive OfficerFirst Citizens Community BankIPeople Helping PeopleAdapted From His Remarks at the PA Bankers 2025 Convention

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PA Bankers Association » 7Summer 2025I would be willing to bet that the Select Vendor Program has a vendor for most of you in the room today, but did you know that they have vendors that will bring personal value to your employees as well? Back in 1997, my bank hosted an employee health fair, with my bank paying for a portion of the bloodwork. My bloodwork showed that I had a condition called hemochromatosis – a serious life-threatening condition if it had gone un-diagnosed. So, to this day, I owe my life to the bank and practice health screenings because if it wasn’t for this bloodwork, I would not have known that I had this condition. Let’s face it: we spend a lot of time with our bank family – working together makes us co-workers, but spending many hours together and sharing good and bad times with each other makes us friends and family. So, I just want to take this opportunity to remind you of the biometric healthcare screenings offered by Webber Advisors to members of the Bank Health Care Consortium of PA. It very well could save a life, like it did mine!Seriously though, I want to thank the PA Bankers Association for its tireless commitment to the industry and to each one of us. I was so excited last year when Angie announced and rolled out the “Stronger Together” theme – because we are truly stronger together – and as I went into my year as chair, I wanted to expand upon it throughout my tenure by encouraging increased engagement with the association, which ultimately results in more industry strength and sustainability. There has been a lot of energy around this year’s Chair’s Challenge, and despite some bank consolidations leading to fewer member banks, there are bright spots of increased member engagement with the association. In addition to increased interest in products and services, we have increased banker and affiliate member attendance this year over last year at the following events:• Annual Convention• Women in Banking Conference• Bank Technology Conference• Lending Conference• Advanced School of Banking• FDIC Directors College• Washington Visit• Federal Regulatory Visit Thank you all for responding to the program and supporting this challenge. I encourage you all to keep going, even beyond this fiscal year.I am so very humbled to have been selected by all of you to serve as your Chair this past year. Although my role as Chair is soon coming to an end, please know that I will continue to work tirelessly to endorse and advocate for our great industry! I was so encouraged by the ABA Washington Summitt visit that occurred earlier this year, when 33 bankers went to the Hill to talk with legislators. I believe that all of us came away very energized and optimistic about the future of banking and our ability, as one voice – one body, to impact change. There has been a change in attitude and energy, which is positive for all of us. We all know that the next few years will bring large changes in how our industry works, especially in regulation and modernization, and we need to push to direct that change as opposed to simply reacting to it. I cannot stress enough the need for each and every one of us in this room to do our part for advocacy. As bankers, each year, we need to participate in the PA Bankers Day at the State Capitol in Harrisburg, the Federal Regulatory Visit in Washington and the ABA Washington Summit, and, yes, we need to contribute to PaBPAC – banking is our livelihood why would we not want to invest in it and be involved? Additionally, I would ask you to take this one step further and invite local representatives into your institution so that they can hear firsthand about the challenges we all face as bankers. My bank recently invited in three representatives, and I can tell you that each of them had no idea what our front-line and back-office people deal with every day as far as fraud, scams, BSA, regulation, etc. To say that they were shocked would be an understatement. They need to hear from each one of us! There are so many wonderful things that lie ahead for our industry, and there are so many more lives for us, as bankers, to impact. I encourage each and every one of you to stay involved in our association, and to simply keep doing what bankers do best, which is people helping people. We are Stronger Together! We are PA Bankers! Thank you,

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8 » PA Bankers Association pabankers.come continue to live and operate in challenging times. Uncertain times. Economic uncertainty. Regulatory uncertainty. Technological uncertainty. Workforce uncertainty. Bankers do not prefer uncertainty. That said, I have the fullest confidence that Pennsylvania’s bankers will always rise up and meet any challenge with thoughtfulness and assurance for the good of your customers and your communities. That I know for sure. Coming together supports the notion that we, as an industry, are stronger together. Individual banks, one industry. Our efforts to advocate together demonstrated this strength. Our ability to learn together as we do at our schools and our programs demonstrates this strength. Our 2024-25 chair, Randy Black, who has done an outstanding job representing all of you for the past year, has challenged our members to engage more deeply with their industry peers and the association. Through his Chair’s Challenge, Randy has recognized that the more we engage together, the stronger we will be as an industry. And the stronger PA Bankers will be as an association. Engagement takes many different forms: serving on a committee, participating in our educational programming, attending our advocacy events, meeting with our Services Corp. staff and our select vendors to learn how best to utilize our products and services, visiting with our professional development staff to learn about our training opportunities, and getting involved with our intern program and BankOn coalition work. By advocating together, we have seen real, measurable results—most recently with the President signing into law a resolution overturning the Consumer Financial Protection Bureau’s rule limiting overdraft fees. We are committed to seeing more success on other policy issues, both legislative and regulatory—issues like ACRE (Access to Capital for Rural Economies), which will help our agriculture and rural lending efforts by leveling the playing field with Farm Credit, and small business lending (CFPB’s 1071 rule), which is under agency review. We continue to oppose interchange restriction expansion. And we continue to emphasize the importance of fair tax treatment for all financial institutions and consistent regulatory structures for all entities performing bank-like activities. At the state level, we experienced similar success through our collective advocacy, achieving the clarification of the goodwill deduction during last summer’s budget session. What could have amounted to a $100 million tax on the industry was clarified and put to rest for the future, we believe. This year, the Governor has proposed merging the three bank taxes that are paid in the commonwealth (Bank Shares, Mutual Thrift and Private Bank) into the Corporate Net Income Tax. Changes in tax structures cut many different ways. And how a tax conversion impacts an individual institution depends on many variables—many of which remain uncertain at this time. This is a very complex issue, and one that we know is viewed differently by our diverse set of members. We have not taken a position on this proposal, and we may not be able to come to a consensus position due to the complexity of this tax issue. We continue to await from the CEO to the CEODUNCAN CAMPBELLPresident & CEO PA Bankers AssociationWStronger Together: Serving Your Customers and CommunitiesAdapted From His Remarks at the PA Bankers 2025 Convention

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PA Bankers Association » 9Summer 2025legislative language to know the specific details. As part of this legislative session, we believe that we have a significant chance to see elder financial protection legislation passed in the state legislature and signed into law, but again, this will require concerted and committed advocacy from all of our bankers. Who better to recognize unusual and fraudulent activity than the bankers on the front line. I was talking to a friend of mine recently and she informed me that her father had been a victim of an AI phone scam, where he received a phone call from the voice of his grandson, who had supposedly been in a car accident and needed $5,000. This elderly gentleman went to his bank, and when the very astute teller inquired about the purpose for the withdrawal, he told her the story. She instantly encouraged him to call his grandson to double-check with him, and sure enough, he was fine. This teller is a hero, and we have so many others who want to step in and help. All of our bankers have a role to play in industry advocacy.We have more than 70,000 bankers in Pennsylvania, unified by a common mission: serving their customers and their communities. While times remain uncertain, our industry is resilient and poised to respond with leadership and service. On behalf of the professional staff at the PA Bankers Association, we are proud to work alongside you and for you. Watching what you do for your customers—what you do to make their dreams come true—makes us want to work even harder on your behalf, so that you can continue to serve your customers and communities in the most meaningful way possible. Thank you for the confidence that you have in us and for allowing us to be a part of all that you do. Thank you very much.PNC’s Financial Institutions GroupBrilliant Solutions forFinancial InstitutionsCollaborate with an experienced team of ﬁnancial professionals who can help you to potentially:• Manage balance sheet performance through dynamic trade strategies • Achieve more efﬁcient interest rate risk management • Enhance product offerings and create opportunities for fee income • Gain access to capital market solutions and technology • Optimize investment portfolio performance • Improve operational effectiveness and business resiliency >pnc.com/ﬁg

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10 » PA Bankers Association pabankers.comtenONpageTEN10 Reasons to Send Your Leaders to the PA Bankers Leadership InstituteThe PA Bankers Leadership Institute is an elite leadership development program specifically crafted for current and emerging leaders in the banking industry. This immersive experience is intentionally designed as a small, select cohort that meets six times over nine months to engage in high-impact leadership training, collaborative dialogue, and practical skill-building activities. Each session is built around real-world banking challenges and leadership strategies that influence how banks serve employees, customers, shareholders, and communities. Participants focus on what it means to lead with influence, resilience, and relevance in today's rapidly evolving financial landscape.What are the top 10 reasons that you should send your leaders to the next program? See our answers below. Build a leadership mindset of confidence, collaboration and influence.Enhance skills in communication, emotional intelligence, engagement, and decision-making.Foster strategic thinking, problem-solving, and conflict management.Strengthen principles of accountability, transparency, responsibility, and commitment.Create cross-departmental initiatives and alliances for effective teamwork. Study effective leaders and organizations; interview heads of key businesses to develop fresh perspectives.Engage in mastermind groups, sharing industry knowledge and enhancing presentation skills.Employ principles of leadership by developing a project implementation plan that delivers on current bank objectives. Embrace your leadership journey as you bring your best self to the bank.Spearhead a culture of growth and positivity.12637594810DATESOct. 29-30, 2025Dec. 3 -4, 2025Jan. 28-29, 2026March 18-19, 2026April 15-16, 2026June 3-4, 2026(June 4 – Graduation)COSTMember - $5,500Aliate Member - $5,900Non-Member - $8,250REGISTER NOW

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12 » PA Bankers Association pabankers.comcommunityCORNERBrentwood BankF&M TrustBrentwood Bank employees volunteered to serve lunch to residents at City Mission, a homeless and rehabilitation center that serves the Washington, Pa. area.F&M Trust donated $6,000 to the United Way of Franklin County to support the organization’s work in the community.FCCBHatboro Federal JBTTeam members from First Citizens Community Bank's Southcentral Region team volunteered at the Lebanon County Salvation Army's Free Noon Meal Program, helping to prepare and serve a warm meal for their neighbors and stock the food pantry.Hatboro Federal Savings donated $25,000 to the Bucks County Opportunity Council, an anti-poverty and leading food agency in Bucks County that provided food to over 8,600 households suffering from food insecurity last year.Jonestown Bank & Trust Co. donated $10,000 to Kenbrook Bible Camp to assist in its plan to convert an outdoor pavilion into a year-round space for school groups, homeschool co-ops, partnering agencies that work with children impacted by incarceration and the community to use.

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14 » PA Bankers Association pabankers.comSomerset Trust CompanyPA BankersWomen in Banking ConferenceAttendees of the PA Bankers Women in Banking Conference donated items to Dress for Success South Central PA and Dress for Success Lackawanna, nonprofit organizations dedicated to helping women achieve economic independence through a network of support, professional attire and development tools.Somerset Trust Company presented the Friends of Flight 93 Memorial with a $5,000 donation to its education scholarship program, which offers students in grades 4-12 the opportunity to visit the Flight 93 National Memorial for a unique on-site learning experience. Students within the program are accompanied by a National Park Service Ranger and learn about the events of 9/11, including the actions of the 40 passengers and crew members on Flight 93. The students also get the opportunity to tour the Visitor Center, Wall of Names and the Tower of Voices. WelcomeNEW TO PA BANKERSAFFILIATE MEMBERS:• All Covered• Alden Investment Group• Artificial Intelligence Risk, Inc.• Cennox• Hogan Lovells LLP• IntelliCredit• IronwoodcommunityCORNER

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16 » PA Bankers Association pabankers.comconventionWRAP-UPearly 300 bankers, Affiliate Members, sponsors and guests traveled to the JW Marriott Marco Island Beach Resort in Marco Island, Fla. for the PA Bankers 2025 Convention from May 14 to May 18. Throughout the event, attendees had the opportunity to network and gain industry insights from professionals specializing in risk volatility, investment banking, director and C-Suite succession, strategic alternatives analysis, compensation trends, balance sheet, check fraud, customer engagement, AI and more. On Friday, May 16, we celebrated Immediate Past Chair Randy Black as he gave his last remarks, and on Saturday, May 17, we officially welcomed Chair Bill Kuzo with a pinning ceremony and his first speech as chair.General session speakers included: Kirsten Sutton, EVP, congressional relations and legislative affairs for the American Bankers Association, who gave us an update on the American Bankers Association and its initiatives; Kathy Kraninger, president & CEO of the Florida Bankers Association, who participated in a fireside chat with PA Bankers’ president and CEO, Duncan Campbell, and Kirsten Sutton; Don Musso, president of FinPro, who spoke on the future of banking; Ron Plesco, Jr., partner with DLA Piper, who discussed the intersection of cybersecurity and AI; and Cael Sanderson, head coach of the 2025 National Champion Penn State Wrestling team, who shared lessons in leadership.PA Bankers would like to thank all of its convention guests and sponsors for making the journey with us, especially our Ruby sponsors, PA Bankers Services Corporation and The Baker Group; Diamond sponsor, PNC; and our Platinum sponsors, FHLBank Pittsburgh, Pillar +Aught, PWCampbell, Fulton Bank, UNB Bank, FCCB, The Dime Bank, Benecon, Webber Advisors, Stevens & Lee and Griffin Financial Group.NWrap- U

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18 » PA Bankers Association pabankers.comconventionWRAP-UPTHANK YOU TO OUR SPONSORSDIAMOND SPONSORRUBY SPONSORSPLATINUM SPONSORSSILVER SPONSORSBRONZE SPONSORSABA Insurance ServicesAdvantage, Powered by JMFAAmerican Bankers AssociationAtlantic Community Bankers BankCornerstone AdvisorsD.A. Davidson Co.First Commonwealth BankJack HenryNew Era TechnologyPCBBPiper Sandler & Co.Stradley Ronon Stevens & Young, LLPYHB | CPAs & ConsultantsArnold & Porter - Saturday General Session SnacksBarley Snyder - Opening CeremoniesBHG Financial - Co-Sponsor: Friday Continental BreakfastBurns White LLC - Printing of Convention Pocket GuideBybel Rutledge LLP - Afternoon Welcome Reception EntertainmentCherry Bekaert LLP - Golf PrizesCOCC - Co-Sponsor: Saturday Continental BreakfastCrowe LLP - Badge Lanyards/HoldersForvis Mazars - Co-Sponsor: Afternoon Welcome ReceptionHartman Executive Advisors - Co-Sponsor: Snackbox Room DropHerbein + Company, Inc. - Co-Sponsor: Saturday Continental BreakfastChair’s ReceptionSaturday General Session Closing Keynote Speaker (Co-Sponsor)Saturday General Session Closing Keynote Speaker (Co-Sponsor)Board, Past Chairs & Sta Dinner (Private Event)“Ocer Giveaway”“Ocer Giveaway”Closing Theme Party - Entertainment(Co-Sponsor)Closing Theme Party - Entertainment(Co-Sponsor)Board, Past Chairs & Sta Reception (Private Event) & St. Matthew’s House Volunteer Event“Ocer Giveaway”Closing Theme PartyFood & BeverageClosing Theme Party & Ocial Family Farewell (Private Event)Ocial Family Farewell (Private Event)Convention WiFiGOLD SPONSORSFriday General Session Keynote Speaker“Ocer Giveaway”Janney Montgomery Scott, LLC - Co-Sponsor: Friday Continental BreakfastKeefe, Bruyette & Woods, Inc. - Co-Sponsor: Afternoon Welcome ReceptionNcontracts - Friday General Session SnacksRaymond James - Co-Sponsor: Airport ShuttleS.R. Snodgrass - Convention Room KeysThe Bonadio Group - Co-Sponsor: Snackbox Room DropThe Kafaan Group, Inc. - Sta ShirtsTroutman Pepper Locke - Digital Conrmation KitsWipi LLP - Co-Sponsor: Airport ShuttleWolf & Company, P.C. - Golf Boxed Lunches

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PA Bankers Association » 19Summer 2025HR Consulting & Human Capital Services Scan to learn more about ouradvisors and services Regulatory Compliance Monitoring + TrainingVulnerability Testing (Internal + External)BSA/AML Model ValidationsBSA/AML ExaminationsRisk Assessment + Gap AnalysisInternal Audit Plans + TestingTrust Department ExamsFraud ExamsInformation Technology ExamsSocial Engineering TestingSOX Documentation/TestingFDICIA Documentation/TestingRecruitment/Retention HR Audits & AssessmentsHR OutsourcingInterim HRSuccession PlanningExecutive SearchExecutive CompensationAffirmative Action Plan PreparationLeadership Coaching and DevelopmentCompensation Studieswww.herbein.com I 610-378-1175Risk Management Services Empower your executive team and confidently navigate the intricate world of bankingand finance with solutions from Herbein’s Risk Management and HR Consulting &Human Capital practices. As a leading CPA advisory firm, we are your trusted partner in fostering businessstability, achieving compliance excellence, and building a workplace that attracts andretains top talent. Let us guide your financial institution through the ever-changingregulatory landscape while helping you cultivate a motivated, high-performingworkforce.A GREAT TEAM SERVING EXTRAORDINARY BANKSQuestions? Contact us today and learn how we can help with your organizational needs. Debbi Fetter, CFIRS, CISA, CFSA, CRMA, CRCM, CCSA, CERP – Partner & Managing Director, Risk Management Laurel Cline – Managing Director, Human Capital & HR Consulting

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20 » PA Bankers Association pabankers.comfeatureACTRICLEt is both an honor and a privilege to recognize my colleague, friend, and mentor, Lance Kessler, who has chosen to retire from his long-standing teaching role at the PA Bankers Advanced School of Banking after an extraordinary 36 years of service.Lance’s decision to step away was motivated by a desire to spend more time with family and to pursue the things he loves—traveling, cycling, and simply enjoying life. Yet those of us who know Lance can attest: his energy and enthusiasm remain as strong as ever. Ask him how he’s doing, and he’ll still say with his signature smile, “I love what I do!”Many readers will already know Lance—perhaps as a teacher, a colleague, a consultant, or a friend. His contributions to the banking industry are both broad and deep, touching countless professionals through his teaching on topics including Marketing, Ethics, Competitive Strategy, Customer Experience, Sales, Client Service, and Strategic Planning.I first met Lance nearly 30 years ago, when I served as a class advisor at the Advanced School—back when it was still held at Bucknell. Just last week, we caught up by phone, reminiscing about those early days and sharing a few laughs about evenings spent with students at the “Bull Run.” That long-ago meeting sparked a professional connection that eventually brought Lance in as an advisor to the bank I worked for—and from there, a lasting friendship and collegial relationship grew.Lance is, quite simply, one of the most likable people I have ever known—genuine, approachable, and endlessly generous with his time and insight. He is a person of both warmth and substance: deeply experienced, widely respected, and always ready with good advice.His academic background reflects his lifelong commitment to learning:• B.S. in Psychology, York College of Pennsylvania• M.S. in Management, Johns Hopkins University• Graduate, Stonier Graduate School of Banking• Executive Program, Consumer Marketing Strategy, Northwestern UniversityAnd his professional teaching credentials are equally impressive:• Faculty, ABA Bank Marketing School• Faculty, ABA Stonier Graduate School of Banking• Faculty, Graduate School of Banking at the University of Wisconsin–Madison• Faculty, New England School for Financial Studies• Faculty, PA Bankers Trust School• Faculty, Tennessee Bankers School of Sales and MarketingWhile Lance is retiring from his role at the Advanced School, he is not retiring entirely. He plans to continue teaching and consulting—a decision we all applaud, as his contributions to the industry are far from finished.On behalf of all of us at the Advanced School, and surely many more across the banking community, I want to express our deep gratitude. We will miss his wisdom, his kindness, his sense of humor, and his calming presence in the classroom and beyond.Thank you, Lance, for everything. We wish you all the best in this next chapter—and please, don’t be a stranger!IA Tribute to Lance KesslerSubmitted by:JOE MAJORBank Leader, Chairman & CEOThe Victory Bank

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22 » PA Bankers Association pabankers.comfeatureACTRICLEA Bankers is partnering with the Association of Military Banks of America (AMBA) to bring the Veterans Benefits Banking Program (VBBP) to its member banks across Pennsylvania. The goal of the VBBP is to provide veterans, beneficiaries and their caregivers (VA Benefit recipients) with a safe, reliable and inexpensive way to receive and manage their VA benefits. VBBP guides VA benefit recipients on how to set-up direct deposit of their VA benefits before connecting them with participating banks that understand the financial needs of the veteran community. VBBP simplifies banking options through a marketplace of veteran-friendly financial institutions that are committed to helping VA benefit recipients open checking accounts and enroll in direct deposit. In addition to having a safe, convenient and low-to-no cost checking account where VA benefits are directly deposited, VA benefit recipients also have access to the following programs through VBBP:• Free financial or credit counseling through the National Foundation for Credit Counseling (NFCC) and the Association for Financial Counseling & Planning Education (AFCPE);• VetCents – a financial education program created specifically for veterans and their beneficiaries;• Veteran Saves - a program designed to help veterans save money, reduce debt and build wealth; and • Financial education resources - to help veterans and their families with budgeting and saving.PVeterans Benefits Banking ProgramPA Bankers is encouraging its member banks to consider participating in the Veterans Benefits Banking Program to support veterans across the commonwealth by providing the following products and services to eligible veterans, beneficiaries and caregivers (VA benefit recipients):• Offering low-to-no cost (with no monthly maintenance fee and no minimum balance) checking accounts to VA benefit recipients who have their monthly benefits directly deposited to the financial institution;• Assisting VA benefit recipients who do not currently qualify to open an account. At the bank’s discretion, this assistance can be provided through financial products, education and/or counseling.• Accepting Department of Veterans Affairs (VA) identification (ID) and a VA Homeless Coordinator’s office address to open a checking or savings account for veterans who are homeless, formerly homeless, or simply do not have a permanent address. According to the Veterans Administration, having the VA ID and VA Homeless Coordinator’s office address is sufficient to meet BSA/AML requirements for new account opening. Information about banking veterans without permanent housing can be found on the Veterans Administration’s website. To find out more about VBBP, please click here. Ready to take the next step to become a participant in the VBBP? Complete and submit the commitment form.

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PA Bankers Association » 23Summer 2025VA1224Achieve CRA Compliance with VBBPHelp Your Bank or Saving Association Meet Community Reinvestment Act (CRA) Requirements* with VBBP.A bank or savings association’s (nancial institution) participation in VA’s Veterans Benets Banking Program (VBBP) may qualify as a retail banking service creditable under CRA’s service test (12 CFR 25.24).Service Test†The service test evaluates a nancial institution’s record of helping to meet the credit needs of its assessment area(s) by analyzing both the availability and eectiveness of a nancial institution’s systems for delivering retail banking services and the extent and innovativeness of its community development services. When performing a CRA exam, federal regulators evaluate the availability and eectiveness of a nancial institution’s systems for delivering retail banking services. The regulator will assess the range of a nancial institution’s services provided in low-, moderate-, middle-, and upper-income geographies, and the degree to which those services are tailored to meet the needs of those geographies (12 CFR 25.24(d)(4)).For VBBP-participating nancial institutions to earn credit under the service test, nancial institutions should record and make the following information available to CRA examiners:• The number of Veterans, VA beneciaries, caregivers, and survivors (VA benet recipients) who opened accounts and enrolled in direct deposit because of VBBP.• Any counseling the nancial institution provided to enable a VA benet recipient to open an account using VBBP.• Documentation to show how many VA benet recipients who opened accounts through VBBP were low- or moderate-income (LMI) individuals or came from LMI census tracts.• Documentation to demonstrate how the nancial institution’s participation in VBBP met the needs of the nancial institution’s assessment area(s) or a broader statewide or regional area that included the assessment area(s). Such documentation could include an analysis of the volume of VA benet recipients living in the assessment area(s) or the broader region, and how the nancial institution addressed their needs, especially the needs of LMI individuals.Resource Links• OCC CRA: https://www.occ.treas.gov/topics/consumers-and-communities/cra/index-cra.html• FDIC CRA: https://www.fdic.gov/resources/bankers/community-reinvestment-act/index.html• Federal Reserve CRA: https://www.federalreserve.gov/consumerscommunities/cra_about.htm• FFIEC CRA: https://www.ffiec.gov/cra/default.htm• VBBP: https://veteransbenefitsbanking.org/vbbp-resources*Disclaimer: VA and AMBA created this guidance to help banks receive CRA compliance credit for VBBP participation. No federal or state regulatory agency has approvedthis guidance. Financial institutions’ CRA compliance requirements vary based on factors such as asset size and assessment area(s). Financial institutions must perform their own due diligence, such as by consulting with their primary regulator, when determining whether a loan, investment, or service is eligible for CRA consideration. †Department of the Treasury. “Community Reinvestment Act Regulations.” Federal Register 86, no. 238 (December 15, 2021): 71328. https://www.govinfo.gov/content/pkg/FR-2021-12-15/pdf/2021-27171.pdf

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32 » PA Bankers Association pabankers.comgovernmentRELATIONSach year, we celebrate Teach Children to Save Day on the fourth Thursday in April—a day dedicated to helping kids in grades K-8 learn valuable lessons about saving money, budgeting and distinguishing wants from needs. I’ve been participating in Teach Children to Save Day events since I became CEO at ABA ten years ago, and I always look forward to going out into classrooms and spending time with young people in our community—just as I know so many of you do. As we commemorate Teach Children to Save Day 2025, I’m reminded of the incredible legacy of the ABA Foundation, which is celebrating its 100th anniversary this year. The foundation was launched in 1925 (in conjunction with ABA’s 50th anniversary) as the Foundation for Education in Economics Trust Fund. Funded through voluntary contributions, the trust fund sponsored college scholarships and research grants in economics, banking and finance. In the 1970s, the foundation launched its first consumer education program—the Personal Economics Program—to help volunteer bankers bring financial education presentations to their local schools and communities, and in 1997, Teach Children to Save Day was created. Education is at the heart of the foundation’s mission, and today, the organization empowers bankers with the tools and resources to help build long-term financial capability for Americans of all ages. We do this through our many flagship programs—including Teach Children to Save; Get Smart About Credit; Safe Banking for Seniors; and Lights, Camera, Save!—as well as through training, consumer resources and campaigns. I’m incredibly proud of the work the foundation has done throughout its history to support banks as they help build long-term financial security, promote revitalized and resilient communities and advance economic opportunity for all—and the work continues! In fact, the foundation has set an ambitious goal of reaching 5 million people with financial education programs by 2026. We are already well on our way: so far, more than 1,100 banks have reached 2.2 million customers and counting. If you’re not already participating in these programs, I encourage you to explore our offerings and join us in this effort. Thanks to financial support from the foundation’s sponsors, we are able to provide our programs and resources for free to every bank in the nation. You can register at any time at aba.com/FinEd. As bankers know all too well, you’re never too old—or too young—to deepen your understanding of personal finance and increase financial literacy. By volunteering your time and expertise in your community, bankers like you can help Americans of all ages chart their course to a bright financial future. EA Legacy of Financial LiteracyABOUT THE AUTHOR: ROB NICHOLS, PRESIDENT AND CEO, AMERICAN BANKERS ASSOCIATIONEmail Rob at nichols@aba.com.

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34 » PA Bankers Association pabankers.comhe commonwealth of Pennsylvania’s 25-26 fiscal year began July 1 without an enacted budget. The delay is due to disagreement among the Shapiro Administration, and the state Senate and House Majorities over how much to increase spending on major items such as mass transit and basic education considering the state’s existing structural deficit of over $3 billion. Uncertainty regarding the impact of federal allocations to states complicates the decision.Updates ELDER FINANCIAL ABUSE PREVENTION & RESPONSE An Elder Financial Abuse Prevention Working Group consisting of PA Bankers, the Pennsylvania Association of Community Bankers and CrossState Credit Union Association worked with the Senate Banking & Insurance Majority Committee (SBIC) Chair and his staff on financial exploitation prevention and response amendments (SB 738) to the Older Adult Protective Services Act (OAPSA). Amendments to the OAPSA have been estimated by the Department of Aging to incur $10-30 million of additional expense. Given the budgetary concerns noted above, the Chair of the Senate Appropriations Committee has paused consideration of legislation estimated to incur a significant expense. Thus, SB 738 has not yet advanced.The House Aging and Older Adult Services and Commerce Committees held a hearing on this issue on June 10 at which our Working Group was represented. The House Aging Committee’s Chair then introduced comprehensive OAPSA legislation (HB 1611) which does not include sufficient tools to prevent and respond to elder financial exploitation and protection for institutions which would use them. The Chair’s staff has stated that the bill as introduced is a starting point. We have suggested amendatory language and hope to meet with the Chair and her staff soon.FINANCIAL INSTITUTION TAXATION The Association’s Tax-Financial Institution Advisory Committee (TFIAC) and its Corporate Net Income (CNI) Subcommittee had been analyzing a potential financial institution taxation change from the bank shares tax (BST) to the corporate net income tax (CNI) for some time prior to the Governor’s proposing in February a shift of all bank taxes (BST, mutual thrift institution (MTIT) and Private Bank Gross Receipts) into the CNI as of 2026. The Administration’s proposal would impose a tax increase for FY 25-26 of almost $100 million on the banking industry with a projected $30 million decrease in total financial institution tax revenue by FY 28-29.Bank taxation is unique, thus some institutions would need to consolidate their entities’ reporting to support a switch to the CNI, while others have concerns about consolidation. Preserving financial institutions’ exemptions from local taxation and canned software sales and use taxation are other issues presented by this proposal. The Gov. has also proposed an accelerated reduction in the CNI rate to 4.99 percent by 2029 but has tied that acceleration to enactment of mandatory combined reporting which the PA Chamber of Business and Industry opposes (HB 1610). Our TFIAC and its CNI Subcommittee continue their efforts toward developing policy principles in response to the Gov.’s proposal recognizing that this issue affects individual institutions differently. State BudgetgovernmentRELATIONST

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PA Bankers Association » 35Summer 2025PA Bankers and the PA Association of Community Bankers met at the request of Senate Banking and Insurance Committee Chair Chris Gebhard with Revenue Secretary Browne and his team on May 7. The meeting afforded the associations the opportunity to outline the multiple, complex issues posed by a shift in financial institution taxation, which has not been adequately crafted in time for enactment along with the 25-26 fiscal year budget.OVERDRAFT PROTECTION/NSF RESTRICTIONHouse Bill 1553, which would restrict overdraft protection programs and NSF fees, passed the PA House of Representatives on a party-line (102-101) vote on June 30 Despite that result, we deeply appreciate our members’ outreach to their lawmakers to explain the negative consequences of this bill for their constituents. We also appreciate Representatives Kephart, Gleim, Marcell, Benninghoff and D’Orsie voicing their opposition to HB 1553 during the bill’s consideration on the House floor. This legislation will next head to the Senate, where it will likely be referred to the Banking & Insurance Committee. We do not expect HB 1553 to be supported by the Senate’s Republican Majority.EXPANSION OF MECHANICS’ LIEN LAW TO RENTED EQUIPMENTEach member of the PA House has been asked to oppose HB 1319.VIRTUAL CURRENCY Federal stablecoin and digital asset market structure legislation will have implications for state regulation of digital currency, thus our Government Relations Policy Committee directed that the Association form a Digital Assets Working Group to review and recommend policy position/responses and priority levels regarding state legislative proposals on these issues. Additional members will be welcomed. NEW PA CONSUMER PROTECTION HOTLINE, WEBSITE AND EMAIL ADDRESSThe Shapiro Administration announced the activation of a “one-stop shop” to report consumer protection issues.GOVERNOR’S HOUSING ACTION PLANMembers of the PA Bankers Association and others convened as a Bankers Roundtable on May 7 to provide input regarding the state of housing in PA. This meeting was part of an effort delegated to the Department of Community and Economic Development to develop a Housing Action Plan by the fall of this year which several other states have done. Input is being gathered via these roundtables and general outreach. Questions, suggestions and comments can be submitted via RA-DCEDHousingPlan@pa.gov.POLITICAL ADVOCACYThe 2025 PaBPAC campaign brochure has been released. More information can be requested from Amy Doyle. Individuals may read more about PaBPAC and contribute here. (This is not a solicitation for PaBPAC (Federal).

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38 » PA Bankers Association pabankers.comvendorARTICLESn today’s rapidly evolving financial landscape, traditional banks face a formidable new challenger—Square. Originally known for its sleek system that revolutionized small business transactions, Square has transformed into a full-fledged financial services provider. With Square Banking products- Square Checking, Square Savings, and Square Loans- the company is making an aggressive push into the banking space, targeting the very customers that financial institutions rely on.SQUARE FINANCIAL SERVICES: A BRIEF OVERVIEWSquare Financial Services, Inc., a member of the FDIC, is based in Salt Lake City, Utah. Though it only operates one branch, it boasts assets of $882 million and has lent over $24.5 Billion since October 2013. Additionally, Square’s checking accounts are provided through Sutton Bank, an Ohio-based financial institution with $1.5 billion in assets. Despite its relatively small physical footprint, Square wields significant influence due to its innovative and user-friendly digital banking products.WHAT MAKES SQUARE ATTRACTIVE?Square’s appeal is rooted in its convenience. The company has positioned itself as the simplest financial solution for merchants. Here’s what draws business owners to Square:• Instant access to sales revenue – Merchants using Square Checking can access their funds immediately. With a traditional Merchant account, businesses don’t standardly have access to their funds until the next business day. Square’s Checking has ZERO fees (no opening deposit required, no minimum balance requirements, no overdraft fees, literally NO account fees whatsoever).• User-friendly app – The digital interface is intuitive and easy to navigate.• Square’s Business Debit Cards – Merchants can get up to five debit cards for distribution to their employees.• Square Bill Pay & Check Payment Options – Square provides robust payment processing features.• Square Savings – Square’s savings pays 1.75% APY and is FDIC-insured up to $2.5 Million, not the standard $250,000.• Automated Savings – Square Savings helps businesses set aside money effortlessly by defining savings folders and gives them the ability to set aside a certain % of each transaction to go towards a particular savings goal.• Proactive Lending – Square offers pre-approved loans to its merchants based on their transaction history, with no application, no credit pull, and no interest- just a flat fee. Square Loans are set up on flexible payments. Merchants pay less on slow days and a little more when sales are strong.• Minimal onboarding hurdles – No monthly fees on the basic Square plan and an almost instant approval process make signing up seamless.THE CONVENIENCE FACTORBusiness owners prioritize ease of use, and Square’s banking services are designed for ultimate simplicity. The ability to sign up independently without lengthy paperwork is a game-changer. Additionally, Square has bundled its financial services with operational tools, including:• Square Shifts (scheduling, attendance tracking, labor-cost reporting, payroll prep)• Square Payroll • Square Invoices (streamlined billing and payment collection)• Square Team Communications (internal team management solutions)Square’s marketing emphasizes a frictionless experience, which resonates with busy entrepreneurs who want to focus on running their businesses, not dealing with banking complexities.THE DRAWBACKS OF SQUAREWhile Square offers undeniable convenience, it also comes with notable disadvantages. Many merchants who Square Is Coming After Your DepositorsI

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PA Bankers Association » 39Summer 2025sign up for Square may not realize its limitations until they encounter issues.Cons:• Account Freezes – Square’s merchant accounts can be frozen due to irregular activity, leading to major disruptions.• Higher Costs – While Square’s base plan is affordable, transaction fees can quickly add up, making it less cost-effective for high-volume businesses.• Limited Customer Support – Merchants often have to chat with an automated bot before reaching a live representative.• Restricted Business Types – Square does not cater to higher-risk industries.• System Downtime – Square’s systems have experienced outages, sometimes lasting for more than 24 hours, leaving merchants unable to process payments.SQUARE’S PRICING STRUCTURESquare’s pricing may seem straightforward, but it’s important to analyze the cost implications for businesses:• Card-present transactions: 2.6% + $0.15• Remote (online) transactions: 2.9% + $0.30• Keyed transactions: 3.5% + $0.15• E-invoicing: 3.3% + $0.30Compared to traditional merchant service providers, these rates can be steep, especially for businesses processing high volumes. Additionally, Square does not offer dual pricing or cash discounting, limiting cost-saving options for merchants.HOW FINANCIAL INSTITUTIONS CAN COMPETEBanks and credit unions can still retain and attract customers by leveraging their own strengths. Here are key strategies to counter Square’s growing influence:1. Educate Business Customers – Many merchants sign up with Square simply because they are unaware of other options. Financial institutions should proactively inform customers about alternative solutions.2. Offer Competitive Merchant Services – Ensure that your bank’s merchant services include competitive pricing, personalized customer support, and features such as offline processing for transactions during internet outages.3. Use Data to Identify Square Users – Banks can request a Foreign ACH Receiver’s Report from their core systems. This report will contain an ACH descriptor column, where Square users can easily be identified. These customers can then be contacted to discuss alternative banking options.4. Emphasize Personalized Service – Unlike Square, which relies on automation, traditional financial institutions can provide dedicated account managers who offer personalized assistance tailored to business needs.5. Market the Stability of Traditional Banking – While Square may be convenient, its history of service outages and account freezes highlight its vulnerabilities. Banks can position themselves as a more stable and secure option.THE FUTURE OF BUSINESS BANKINGAs Square continues its expansion, traditional banks must adapt. The financial industry is shifting towards digital-first solutions, and Square’s rapid rise is proof that business owners demand seamless, tech-driven banking experiences. Financial institutions that prioritize innovation, competitive pricing, and exceptional service will be best positioned to retain their customers and compete effectively in this new landscape.CONCLUSIONSquare is no longer just a payment processor—it’s a financial powerhouse targeting your customers. By recognizing the threat and taking proactive steps, banks can fight back and retain their business clients. The key lies in education, personalized service, and leveraging technology to offer a competitive, value-driven alternative to Square’s one-size-fits-all approach. Now is the time to act before Square captures even more of your depositors.ABOUT THE AUTHOR: NELLIE SCHLACHTER,DIRECTOR OF STRATEGIC PARTNERSHIPS, EVOLVE

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40 » PA Bankers Association pabankers.comvendorARTICLESifteen years ago, leading a loan portfolio meant managing growth, following policy, and minimizing losses. Working under a zero interest-rate policy, there wasn’t much pressure to rethink that model. Rates didn’t move. Margins held. Reports came in at month-end and — for the most part — that was good enough.This was true throughout my time at my community bank, but that environment is now gone. The stakes have changed. Most all leaders have recognized this, less are proactively finding ways to stay competitive amidst it.Today, margins are tighter. Risk is rising. Banks no longer have the luxury of waiting for the month to close out before finding out how they did. The top-performing CLOs and CCOs know this. They aren’t just managing credit, they’re managing people who manage credit. That shift requires a new level of visibility and a new kind of leadership, one that prioritizes data, agility, and visibility.PUTTING THE RELATIONSHIP BACK IN RELATIONSHIP MANAGERProactive portfolio management means paying attention before something goes wrong. But that can only happen if the data is visible — daily, not monthly (and definitely not quarterly).The best officers aren’t just reacting to past-dues or maturing credits. They’re watching deposit behavior. They’re flagging loans priced well below average for the same risk profile. They’re noticing missing financials, overfunded lines, and industry-specific risk trends. And they’re doing something about it.This shift — from reactive cleanup to proactive engagement — is what separates good lending and credit teams from great ones. It’s also what allows officers to step more fully into the role of relationship manager. They’re no longer stuck in the cycle of chasing documents and fighting fires. They’re advising. They’re anticipating. And they’re adding irreplaceable value.COACHING AT THE SPEED OF CHANGEThe banks seeing the strongest returns right now aren’t overhauling their pricing strategies. They’re making smarter decisions, more often.I had one CLO tell me (who is a KlariVis client) that his team saw a 50-basis-point lift in loan yield without hitting their volume goal. That wasn’t an accident. It was daily visibility at work paired with a leader who valued coaching his team.He didn’t have to wait until the end of the month to make changes. He saw pricing behavior in real time (as did his officers). He spotted trends and coached his team while deals were still in progress. That’s the difference. It wasn’t about a giant overhaul that the team may or may not have been able to carry out. It was about making incremental shifts every day that added up to real performance gains.This kind of coaching doesn’t just protect yield. It shapes culture. The most effective leaders are hands-on — not with approvals, but with development. They’re using data to mentor their teams and tighten execution, making small pivots when necessary or when looking to try something new. They know that waiting to correct at the end of the month means missed opportunities and margin left on the table.MAKE IT RAIN (FOR EVERYONE)Transparency isn’t about control. It’s about clarity. One of our bank clients had a strong producer everyone referred to as the “rainmaker.” After putting KlariVis in place, they found out just how much more rain he was making.It completely changed the dynamic across the team.How Data Visibility is Rewriting the Rules for Credit and Lending LeadersF

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PA Bankers Association » 41Summer 2025ABOUT THE AUTHOR: KIM SNYDER, CEO & FOUNDER, KLARIVISKim Snyder is the CEO & Founder of KlariVis, a leading data analytics enterprise solution that empowers community financial institutions to make informed decisions with actionable insights. A former community banker and visionary leader, she brings over 30 years of financial services experience to help banks harness data to drive profitability, growth, and operational efficiency.When officers can see how they compare — on yield, volume, portfolio performance, risk metrics — they show up differently. They’re more engaged. More disciplined. More accountable. And not because someone’s breathing down their neck, but because they can finally see what works and when.That’s what data visibility does: It completely removes ambiguity and empowers officers across the board. When everyone sees the same truth, accountability gets baked into new processes and decisions start being made with that return in mind, not just production.VISIBILITY OVER HYPEThere’s a lot of talk right now about predictive models and AI in banking. Yes, it’s here (to be specific, it’s been here for decades), but more banks are beginning to implement AI in a more public way. I believe, however, that before we all run into the future, we need to make sure that our present reality is in working order.Banks aren’t starving for more data – they’re starving for visibility. Cleanly. Clearly. Daily. I still remember the struggle of trying to pull a simple report that tied loans and deposits to the same customer. That level of friction is still too common. And until that changes, all the talk about automation and AI needs to take a back seat. I’m not saying stop innovating, but know what you’re solving for first.Because strategy should always come before execution.Real transformation starts when visibility is part of your daily rhythm, not something tacked on after the fact.DON’T FLIP THE TABLEYou don’t need to blow up your org chart or rebuild your tech stack to lead differently. But you do need to understand how your bankers are engaging with your customers — every day. There are other financial services companies that do this extremely well. We have an opportunity to not only keep pace, but gain the advantage.It starts with data visibility. Not just into portfolios, but into the behaviors driving it. That’s where proactive data management gives leaders an edge: You can’t coach what you can’t see. And in this market, coaching matters more than ever.The fundamentals of leadership haven’t changed. What’s changed is how clearly you can see them in action.adINDEXAGRI-ACCESS .................................................................................................................21AGRICULTURAL BANKERS CONFERENCE ...............................................29BANK HEALTH CARE CONSORTIUM OF PA ............................................ 28BANK ON KEYSTONE COALITION...................................................................21BANKTALENTHQ ......................................................................................................IBCCHAIR'S CHALLENGE ...............................................................................................33COMPLIANCE ALLIANCE .................................................................................... IFCCSI ..........................................................................................................................................45HERBEIN ............................................................................................................................19INVESTORS TITLE INSURANCE COMPANY..............................................31MOBILE APP .................................................................................................................... 11N CONTRACTS...............................................................................................................21PNC .......................................................................................................................................... 9S.R. SNODGRASS, P.C. ............................................................................................BCTHE BAKER GROUP ..................................................................................................... 4

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42 » PA Bankers Association pabankers.comvendorARTICLES1. INTRODUCTIONAccording to supervisory guidelines, models refer to “a quantitative method, system, or approach that applies statistical, economic, financial, or mathematical theories, techniques, and assumptions to process input data into quantitative estimates.” While models with less complexity have been used for several years, as the banking industry has moved forward over the past 20 years or so, it has become increasingly complex, and models have become more prevalent for managing risk, operational efficiency, and for key financial estimates. Our goal is to address how to identify the models currently utilized by your institution, establishing a framework for managing model-related risks, and the importance of an effective validation program.2. MODEL INVENTORYIn order to properly manage model risk, management must ensure all models currently used by the Bank are identified, assess their risk to the institution, and apply appropriate mitigation procedures, including governance, training, succession, and model validation. When identifying models utilized by the institution, all areas of the Bank must be considered, including Bank Secrecy Act/Anti-Money Laundering (BSA/AML), Asset Liability Management/Interest Rate Risk (ALM/IRR), Current Expected Credit Losses (CECL), and Automated Valuation Models (AVM), among others. As the types of models used are so diverse, it can be difficult to ensure all models are properly identified. After identifying each model, assessing them for their risk to the institution is a key measure to make sure the model owner(s) have the requisite knowledge and experience to operate the model, training is up to date, the model has been validated when applicable, and known issues or limitations are resolved. We frequently see institutions manage each model within their own silo with inconsistent application of risk mitigation procedures. As a result, the identification of the need for additional training, validation, etc. are the result of comments from regulatory examinations. Management should make sure to be proactive in this area as models become more relied upon within more aspects of the institution. 3. GOVERNANCE AND POLICY As with all key management functions, governance is a critical aspect of model risk management as it establishes an effective environment for models to be managed. Making sure there are key lines of authority from model users/owners to senior management to the Board of Directors will allow for effective and timely reporting of problems or complications. Institutions can consider the need to identify a risk officer, or similar, position and/or risk committee to ensure models are discussed and inventoried. Adopting a model risk management policy should also be a priority for the Board and management, identifying roles and responsibilities, validation/testing expectations for each model, vendor management for any third-party involvement, reporting procedures, and expectations for the resolution of any issues identified. It should provide guidance and acceptable procedures for management to make sure risk management procedures are consistent with the tolerance established by the Board of Directors. The Bank should also ensure internal audit’s involvement in assessing whether or not those charged with the day-to-day aspects of the model risk management policy are adhering to those requirements, including retention of all supporting documentation of testing the model, accurate reporting to senior management and the Board, timely clearing of any significant validation findings, and adherence to vendor management requirements. Without an effective policy, we frequently see that management of each model is, at best, inconsistent; however, we generally see that a majority of models in use are not considered part of the overall risk management framework.4. IMPORTANCE OF A MODEL VALIDATIONModel validations are an integral part of model risk management. Model validations should be performed when reasonable after implementation. There are certain aspects of the model that can be validated soon after implementation, which include mapping, parameters, rules, etc. On the other hand, there are aspects of the model that cannot be validated until sufficient data has been input and run through the model such as backtesting, alert generation, etc.Model Risk Management Best Practices, With A Substantial Focus On Definition, Governance Best Practices, And An Emphasis On Model Validations

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PA Bankers Association » 43Summer 2025Institutions should focus on two types of model validations: (1) third-party model validation and (2) a validation of the institution’s specific usage of the model. A third-party model validation should be obtained and reviewed when performing due diligence in model selection and then annually or as completed thereafter. The institution is not responsible for contracting this type of validation but, rather, it is the model provider’s responsibility to hire a third party to validate the software. The results of this validation should be available to model users to ensure they are aware of any model capabilities not functioning properly or identification of any known limitations. Depending on the type of model, a model certificate may also be available, which certifies the model functionality to process and provide necessary outputs. This should not take the place of model validation but provides a determination on whether the technical aspect of the model is functioning properly.The second type of model validation that should be performed validates the institution’s specific use of the model. It is the responsibility of the institution to contract a third party or independent individual to complete validations on a periodic basis. The current guidance does not explicitly state the frequency of which validations are to be performed, except to say that validations should be performed periodically considering the complexity of the model and the institution’s risk profile. We typically see validations performed annually for complex, higher risk institutions every three and years for less complex institutions. If significant updates or changes are made to the model, this should trigger whether a model validation is necessary on a more frequent basis. The model validation should focus on the model capabilities in use to determine whether the necessary information is input to produce the expected outputs. Typically, this validation would not include verification of mathematical accuracy, algorithms, or any other proprietary information. Both types of validations mentioned are equally important and validate the model from the vendor and user perspective. It is imperative that management integrate model validations into their model risk management.5. WHAT TO EXPECT DURING A MODEL VALIDATIONThe primary source for formal regulatory guidance on model governance issued is the Supervisory Guidance on Model Risk Management in 2011 by the Office of the Comptroller of the Currency (OCC) jointly with the Board of Governors of the Federal Reserve, later adopted by the Federal Deposit Insurance Corporation in 2017. Model validations should focus on three major components: information input, processing, and model outcomes. • The information input component: how data is delivered to the model• The processing component: transformation of data for monitoring• The model outcomes component: translate data into results, reports, alerts, and useful information.The validation process varies depending on the specifics of the model and model type. The validation section of the guidance referenced above should be followed for each model type; however, the data analyzed, objectives, usage of the model results, etc. will vary for BSA/AML, ALM/IRR, and CECL models.Assuming issues are not identified in the third-party model validation completed for the model provider or during vendor management reviews, the validation will focus on the information controlled by the institution, quality of data, controls over data, manual manipulation, assumptions, estimates made by management, parameters, etc. We frequently identify issues specific to the information input component when completing model validations. It is a best practice to understand how information is mapped from source systems to the model at implementation. Another best practice relates to default settings or parameters. Typically, model providers will activate default settings based on information they have gathered from peers or other data available. It is important that management review any defaults and either accept with an explanation to support why those fit their risk profile or adjust with an explanation to support why the change was made. The results of the validation should be remediated timely to maximize model use in managing risk. The key takeaway from this should be that model validations are important when relying on them as a tool to manage risk.ABOUT THE AUTHOR: KAITLYN E. GASPER, CAMS, CFE, VICE PRESIDENT/PRINCIPAL AT S.R. SNODGRASSKaitlyn E. Gasper brings extensive experience working with financial institutions, including exceptional expertise with BSA (Bank Secrecy Act) Model Validations. She also works closely with both public and privately held corporations, nonprofit organizations, partnerships, limited liability corporations, and S corporations.

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44 » PA Bankers Association pabankers.comvendorARTICLESABOUT THE AUTHOR: LUKE MIKLES, SENIOR VICE PRESIDENT, THE BAKER GROUPLuke Mikles is a senior vice president in the Financial Strategies Group at The Baker Group. He joined the firm in 2019, serving in the Interest Rate Risk Department. In 2023, Luke moved to the Financial Strategies Group, where he assists institutions with the risk management process and speaks at Baker’s educational seminars across the country. Luke holds a Bachelor of Business Administration degree in energy economics from the University of Central Oklahoma.he big question over the past year has been, will the Fed achieve the soft landing they are aiming for or will we hit a recession? Both outcomes have distinct impacts on interest rate risk, as the Federal Open Market Committee (FOMC) would be required to react differently in terms of cuts to the federal funds rate depending on the economic environment. A soft landing, where the economy slows down but does not result in a recession, would lead to a gradual lower fed funds rate. A soft landing, in theory, would also allow the FOMC to keep its long-term target rate at an elevated level for a longer period. A recession, a more pronounced and elongated downturn in the economy, typically leads to more severe cuts in rates both in terms of timing and magnitude in which the fed funds rate is decreased. This difference creates unique challenges for community financial institutions through changes in deposit pricing and composition, varying loan cash flows, and underscores the importance of accurate interest rate risk model assumptions. First let’s discuss a soft landing. It should come as no surprise to anyone that during the last rising rate cycle, deposit rates and the cost of funds surged. There was also a shift in deposit composition as non-maturing deposits saw an outflow of funds into certificates of deposits. The era of the “sleepy depositor” seems to have come to an end. If the FOMC achieves a soft landing, meaning the fed funds fate would be higher for longer, it could mean that those same depositors would be less willing to take a lower rate. If deposit competition continues to be strong, the strain on cost of funds could remain. Deposit betas, which measure the sensitivity of deposit rates to changes in the federal funds rate, are a critical assumption that should be reviewed and discussed on a regular basis during this rate cycle. Overestimating the deposit beta and savings in interest expense as rates fall, creates an unrealistic and inaccurate picture of potential risks. What issues does a recession bring to the interest rate risk world? Prepayment activity on loans has remained steady for the past few years due to the rapid increase in rates and the long end of the yield curve staying relatively steady. If a recession were to come, and in turn lead to fast and aggressive rate cuts, that prepayment activity for loans could accelerate aggressively. This presents increased option and reinvestment risk to the loan portfolio. If those cash flows come back much faster than anticipated at lower yields, interest income will see a direct hit. It will also be difficult to replace those yields, as the FOMC would have already decreased rates in this scenario. Ensuring accurate prepayment speeds, CPRs, is another critical assumption that should be reviewed and discussed on a regular basis. Both scenarios present the need for differing model assumptions. In this current environment, it is important to run assumptions studies to review historical changes in those assumptions. A good example of an assumption study is a historical deposit beta analysis. This study would allow someone to look at deposit betas over a specific rate cycle and see what the actual impact of changes in fed funds was to deposit rates. Utilizing different stress tests and simulations within an interest rate risk/ALM model is also important. Even if a scenario seems unlikely, model what that impact would be to earnings and capital. Factoring in the examples above, stress deposits rates by significantly lowering the beta in falling rate environments or stress prepayments and loan cashflows by raising them in the more aggressive falling rate environments. These simple simulations can help management plan against unlikely events and make informed decisions. As economic uncertainty persists, financial institutions must remain strong in their interest rate risk management. Whether the economy experiences a soft landing or enters a recession, accurately modeling assumptions such as deposit betas, prepayment speeds, and deposit composition is essential for managing and mitigating interest rate risk. Implementing a proactive stress testing process and conducting regular historical assumption studies will help ensure that institutions are equipped to tackle whichever rate environment may lie ahead.Soft Landing Versus Recession and the Impacts on Interest Rate RiskT

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46 » PA Bankers Association pabankers.comFINOVIFIAI-Powered Fraud Prevention SolutionsChuck Diulus, (412) 697-9125cdiulus@finovifi.comBANK HEALTH CARECONSORTIUM OF PAA Unique Health Care Alternative for PA-Based Financial Institutions and Aliate Members of the PA Bankers AssociationWayne Whipple, (717) 255-6925wwhipple@pabankers.comPA Bankers Services CorporationSelect Vendors Provide PA Bankers MembersSAVINGS, SERVICE AND QUALITYABA INSURANCE SERVICESBond, D&O, P&C, Cyber Insurance and Employment Practices LiabilityPatricia Williams, (216) 220-1280pwilliams@abais.comCOMPLIANCE ALLIANCEA Family of Bank Compliance ServicesThat Includes Compliance Alliance, Review Alli-ance and Virtual Compliance OcerTiani Chambers, (717) 255-6928tchambers@pabankers.comBANZAI!Interactive, Award-Winning CourseTeaching Students Real-WorldFinance, No Upfront CostKatie Rigby, (801) 821-9055katie@banzai.orgCOMMONWEALTH CHARITABLEMANAGEMENTApplication and Administrationof EITC ProgramsCristine Clayton, (570) 278-3800cclayton@commonwealthcharitable.orgBANKTALENTHQDiversity is Essential -Find Talent in all the Right PlacesTiani Chambers, (717) 255-6928tchambers@pabankers.comBANK PERFORMANCE REPORTA Proven Tool for Improving SuccessQuarterly performance reports subscription available for all states; custom/historical reports upon requestTiani Chambers, (717) 255-6928tchambers@pabankers.comCORNERSTONE ADVISORSCore, Debit EFT, Card Program, LoanOrigination, Bill Pay, Mobile Banking &ATM Contract NegotiationJennifer Wagner, (480) 425-5204jwagner@crnrstone.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 nancial support expands resources and strengthens the services and programs of the PA Bankers Association.DELUXE CORPORATIONCheck ProgramTodd Wroblewski, (724) 625-5599todd.wroblewski@deluxe.comENVIRONElectricity and Natural Gas Procurement Services, Utilities Management PlatformKathryn S. Allen, (667) 330-1161KAllen@APPIEnergy.comVendors with the green outline provide products and services to both nancial institutions and Affiliate Members.GRUDITechnology. Support. Results.Frank Potter, (717) 585-7344wgrudi@grudiassociates.com

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PA Bankers Association » 47Summer 2025INNOVATIVE FINANCING SOLUTIONS, LLC.Your Trusted SBA/USDA ExpertsMichael D. Ryan, (610) 733-9955mryan@innovfs.netMARKETSCANImmediate Financial Impact Through NegotiationsWayne Whipple, (717) 255-6925wwhipple@pabankers.comINVESTORS TITLEINSURANCE COMPANYMulti-Bank Owned TitleInsurance ProgramKaren Barnett, (419) 577-5900kbarnett@invtitle.comKLARIVISData Analytics Solution Designed by Bankers for BankersAmber Robinson, (603) 860-3162amberrobinson@klarivis.comWEBBER ADVISORSMultiple Medical, Drug, Dental &Vision Options and EB SolutionsBrad Webber, (814) 695-8066bwebber@lrwebber.comNCONTRACTSIntegrated Compliance, Vendor and Risk Management, Board Encouragement PlatformMichael Harrison, VP, Account Executive(888) 370-5552michael.harrison@ncontracts.comNFP, AN AON COMPANYBOLI, Executive Compensationand Long-Term CareDavid Shoemaker, CPA/PFS, CFP®(901) 754-4924david.shoemaker@nfp.comPAYLOCITYHCM Solutions andEngagement SoftwareLisa DeJoy, (717) 303-7663ldejoy@paylocity.comPWCAMPBELLDesign-Build, Branded Environments, Technology Solutions, Consulting ServicesErin Campbell, (800) 253-7430erin.campbell@pwcampbell.comHARTMAN EXECUTIVE ADVISORSFractional IT and Cyber LeadershipShea Gabrielleschi, (410) 600-3329sgabrielleschi@hartmanadvisors.comODP BUSINESS SOLUTIONSOce and banking supplies, furniture, print and copy services, promotional products and moreTiani Chambers, (717) 255-6928tchambers@pabankers.comTHE PLATEAU GROUP, INC.Tailored Credit Enhancement and Debt Protection SolutionsGreg Janssen, (317) 403-0777greg.janssen@pabankers.comTHE BAKER GROUPAsset/Liability ManagementSoftware and ServicesCharles Amis, (405) 415-7231Charlie@gobaker.comPNC FIRSTPreferred Derivatives ProgramJe Mazur, (412) 762-1469jerey.mazur@pnc.comASSET EXCHANGEOnline Marketplace Clint Miller, (205) 297-7553clint.miller@pnc.comVITU COLLATERALMANAGEMENT SOLUTIONS, INC.Electronic Lien and Title ProgramTiani Chambers, (717) 255-6928tchambers@pabankers.comKEYTAXSales & Lease Tax Reverse AuthorMichael Schuenemann, (717) 421-9279mikes@keytaxllc.com

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