paBanker Magazine Fall 2022 : simplebooklet.com

PA Bankers STAFF DIRECTORY magazineSTAFF General Number 717 255 6900 Managing Sara E Hocker Editor President Chief Executive Officer J Duncan Campbell III dcampbell pabankers com 717 255 6916 Government Affairs Amy L Doyle Administrative Assistant Communications and Government Affairs adoyle pabankers com 717 255 6937 Erin L Kanter Vice President Advocacy and Government Affairs ekanter pabankers com 717 255 6910 Editorial J Duncan Campbell III Advisors Jacqueline A Catalano Tiffani A Chambers Erin L Kanter Louise A Rynd Michelle L Staton Cynthia L Wallett Wayne R Whipple PA Bankers Services Corporation Board of Directors and Officers Chair M Theresa Fosko SPHR Secretary Tracy E Watkins SPHR Federal Government Relations General Counsel Lisa R Brandt Legal Assistant lbrandt pabankers com 717 255 6936 Louise A Rynd Esq General Counsel lrynd pabankers com 717 255 6935 Finance Operations Jill A Ametrano Registrar and Records Coordinator jillametrano pabankers com 717 255 6927 Michelle L Henry Receptionist and Administrative Assistant mhenry pabankers com 717 255 6900 Connie A Ferraro Director Information Technology cferraro pabankers com 717 255 6921 Sara E Hocker Director of Marketing Communications shocker pabankers com 717 255 6912 Annette M Moshgat Director Finance amoshgat pabankers com 717 255 6938 Michelle L Staton Senior Vice President Finance Operations mstaton pabankers com 717 255 6923 Member Relations Professional Development PA Bankers Services Corporation Jacqueline A Catalano Vice President Professional Development jcatalano pabankers com 717 255 6939 Tiffani A Chambers Director PA Bankers Services Corporation tchambers pabankers com 717 255 6928 Karen J McDermott Director Member Relations kmcdermott pabankers com 717 255 6914 Linda A Scott Member Relations Administrative Assistant lscott pabankers com 717 255 6903 Cynthia L Wallett Senior Vice President Member Relations and Professional Development and Managing Director PA Bankers Services Corporation cwallett pabankers com 717 255 6913 Wayne R Whipple Vice President Business Development wwhipple pabankers com 717 255 6925 Marilyn M Wisniewski Professional Development Assistant mwisniewski pabankers com 717 255 6934 Treasurer J Duncan Campbell III Officers Ginger G Kunkel John H Montgomery John C Gill Thomas C Graver Jr CPA Dale A Westwood Eugene J Draganosky Brendan J McGill Joseph R Toth Karl F Krebs Philip L Freeman Jr Scott E Fritz Timothy M Finnerty Esq CPA Address Correspondence to paBanker Magazine c o Pennsylvania Bankers Association 3897 N Front St Harrisburg PA 17110 Tel 717 255 6912 Email shocker pabankers com paBanker 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 financial 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 financial services organization supporting a diversified membership through volunteer participation a knowledgeable staff state of the art technology and a commitment to excellence paBanker Magazine is the official publication of PA Bankers Editorial The opinions expressed in articles by authors other than Association staff and officers 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 staff 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 Co Sponsored by PA Bankers Association Fall 2022 5

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chairman sINSIGHTS MARK RITTER Executive Vice President Chief Administrative Officer The Northumberland National Bank Standing Strong in the Face of Adversity Adapted from His Remarks at the PA Bankers 2022 Convention T hank you for the honor and privilege of serving as your board chair for the 2022 2023 fiscal year You have my commitment to sincerely and confidently lead and support policies and tactics that best serve our members our industry our communities and our shareholders I have been in the financial services industry for over 35 years In the banking world I have served as a commercial lender chief operating officer regional president and president and CEO of two wealth companies I also served as chief financial officer and treasurer of a life and health insurance company I am currently the executive vice president chief administrative officer of The Northumberland National Bank My experience spans from a 20 billion regional bank to a 700 million community bank I have been involved with the Pennsylvania Bankers Association for well over 20 years My wife Mary Anne and I live in Mount Joy Lancaster County We have three beautiful daughters and two great sons in law I want to thank Immediate Past Chair Wes Weymers for his leadership over the past year Our industry owes 6 PA Bankers Association him a debt of gratitude for the time and energy he committed during a challenging year I look forward to working with Wes again over the next year as he serves as our past chair Additionally I look forward to working with Angie and Randy over the next year as they serve as first vice chair and second vice chair respectively We are blessed to have a skilled and energetic officer corp I want to echo the chairs before me in that we are extremely fortunate to have the best association professional staff certainly in Harrisburg and likely in the country Duncan and the entire team serve our members and represent our industry with professionalism integrity and strong technical skills Most important of all they consistently generate positive results on behalf of Pennsylvania s banks Never before in my career have we needed our association more and I want to discuss three critical components of our association s strategic plan Since they are longer term issues that will require ongoing focus for as far as the eye can see they will remain priorities next year First ongoing advocacy on behalf of our industry at the federal and state level will continue to be critical As you all are keenly aware we are facing legislative and regulatory proposals which are not based upon strengthening our banking system and therefore supporting the American economy Rather some proposed changes are simply designed to use the banking system to implement an unrelated political agenda For example it is imperative we push back against unsettling and incorrect statements made by a handful of public officials asserting that banks are not doing enough to promote financial inclusion and then using this argument to promote absurd ideas such as public or postal banking I don t know about you but the notion of an organization that delivers Christmas cards in March running a bank is humorous at its best and in reality frightening On a positive note this takes us to the Bank On initiative Most importantly this is the right thing to do Practically it is also the best method of offering opportunities for all of our citizens to benefit from financial services This is a key project for our association I would highly encourage all of you to learn more about this program and become a part of it pabankers com

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Additionally a handful of public officials are advocating for ill conceived public policies and regulations that in the long run will not support an already strong banking system or help consumers The clearest example of this is the absurd rhetoric describing banking fees as junk We must work diligently to oppose any unreasonable and unproductive proposals that do not support our banking system and economy On a more positive note there are a number of important policy proposals where PA Bankers is advocating for positive changes to laws and regulations to help our industry and the Pennsylvania economy These include cannabis banking legislation creating an equal competitive playing field with credit unions and shadow banking organizations along with numerous others I want to emphasize the importance of each of us getting involved in our grassroots advocacy efforts on each of these important issues As an industry we are best when we can leverage the incredible skills and technical expertise of all of our member banks A second key priority in our strategic plan is continued development and execution of our diversity equity and inclusion initiative This is important to attracting and retaining the skilled employees who will be our banking leaders in the future We need to continue efforts to develop the next generation of bankers already in our industry and along with this reach out to all communities to educate young people about the exciting opportunities available in banking colleges and universities in Pennsylvania However I share with many of you the frustration that once our kids graduate many leave the commonwealth since we are not attracting and generating appealing and exciting industries and jobs We will work with our political leaders to develop and execute economic development plans and programs to attract businesses from other states foster the creation of new companies with good paying jobs within Pennsylvania and therefore entice our young people to stay These are exciting and challenging times for our industry Because of you I believe the future is bright for the Pennsylvania banking industry I thank you again for the honor and privilege to serve as your board chair next year This leads to our third major strategic focus We are blessed to have many fine It takes more than good intentions to transform communities It takes capital development capacity and trusted partnerships In 25 years we ve delivered more than 7 3 billion in community impact Overcoming challenges Solving problems Backed by a commitment to creating healthy communities that has never wavered The Return on Investment Safe Affordable Homes Healthy Communities Better Lives CINNAIRE COM Transforming Communities Transforming Lives PA Bankers Association Fall 2022 7

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from the CEO to the CEO DUNCAN CAMPBELL President CEO PA Bankers Association Summer Turns to Fall PA Bankers Focuses on Strategic Initiatives A h the changing of the seasons from summer to fall It happens every year despite our longing for more time in the pool and at the beach Kids going back to school Temperatures falling High school college and pro football returning And playoff baseball in PA Playoff baseball in PA Well it s been some time for that last one but as of this writing at least the Phils are still fightin for a wildcard It could happen On the association front as summer winds down it is a special time for the PA Bankers board of directors past chairs and staff as we met for our annual strategic retreat This gathering served as the first meeting of the new board of directors coupled with a review of our strategic plan with past PA Bankers chairs Throw in some social fellowship at the historic Bedford Springs property and this year s retreat proved to be another successful outing Many thanks to our event sponsors FHLBank Pittsburgh PWCampbell Webber Advisors and Benecon Stevens Lee and Griffin Financial Group for their strong support One of the highlights of this event was being able to pay tribute to the association s immediate past chair Wes Weymers executive chairman 8 PA Bankers Association of the Gratz Bank Wes gave his time and talent throughout his year as chair as well as during his four years as an officer three years as Professional Development Policy Committee chair and two years as Group 5 Chair We were able to celebrate Wes leadership and thank him and his wife Barb for their years of service to the Pennsylvania banking industry and to our association The next morning under the leadership of 2022 23 PA Bankers Chair Mark Ritter executive vice president chief administrative officer The Northumberland Bank the board and participating past chairs delved into the association s strategic plan The industry faces many challenges with issues ranging from an expanded regulatory environment to a polarized political environment to competition with credit unions Farm Credit Fintechs and other non bank entities competition that comes at a different standard of tax and regulatory schematic from what the banking industry experiences We spent time discussing the federal legislative landscape with Kirsten Sutton the American Bankers Association s executive vice president of congressional relations and legislative affairs Topics included expanded Durbin Amendment environmental social and governance issues enhancing credit for our farmers competition with credit unions Central Bank Digital Currency CFPB oversight and the list goes on and on There is no shortage of issues facing our industry as we try to serve our customers and communities I have confidence however that we are confronting these challenges as a unified industry For the past 10 months I have had the honor of serving as the ABA State Banker Association Alliance chair I have seen firsthand the power of this alliance working collaboratively as 51 state bankers associations and the ABA to devise consensus positions on complicated issues We have a diverse industry which makes us all the stronger Working together I can tell you we are making a difference One of the hot association topics tackled at retreat was how to better serve our members who are trying to break down and understand Fintech How can PA Bankers work to serve our members in understanding what Fintech is What companies have a history of serving banks as customers How can we work together Brad Smith partner for Cornerstone Advisors briefed the board on the current state of Fintech industry providing pabankers com

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them with a valuable overview of the industry Cornerstone is one of the PA Bankers Services Corporation s Select Vendors and we greatly appreciated Brad and Jen Wagner s involvement with this year s strategic retreat We closed out the first day by hearing from PA Senate Pro Tempore Jake Corman one of the industry s greatest legislative champions throughout his tenure in Harrisburg Senator Corman shared his perspectives on the most recent budget process as well as reflected on his 23 year career in the PA Senate a career that included leadership roles as Appropriations chair Majority Leader and Senate Pro Tempore We thanked Senator Corman for his leadership on our behalf as he will retire at the end of this term After another nice evening of fellowship where we had the opportunity to honor PA Bankers general counsel Louise Rynd for a milestone anniversary of 40 years with the association the board of directors met for its quarterly board meeting The meeting began with an update by FHLBank Pittsburgh President CEO Winthrop Watson and COO David Paulson We greatly appreciate the partnership that our member banks have with the FHLBank team in Pittsburgh We went on to elect four new directors to the PA Bankers Services Corporation Board Gene Draganosky Traditions Bank John Gill cfsbank Brendan McGill Harleysville Bank and John Montgomery Community Bank of Carmichaels We are very pleased to have these four member CEOs dedicate their time to ensuring that the Services Corp is offering the best products and services in a manner that will save the membership time necessary to perform due diligence as well as expense savings by being a member of the association As a whollyowned subsidiary of the association any revenue generated by the Services Corp will come back to the association through personnel logo licensing and sponsorship support ultimately defraying the dues that our members pay During our final day at retreat we were able to continue the previous day s strategic planning discussion with further conversation about our federal and state government relations efforts our fall programming and our resources available to the membership I would like to personally thank all of our board members for the time and energy that they devote to the association and to the industry Their efforts allow the professional staff to serve the membership in the most effective way and we greatly appreciate their leadership and support And so as summer turns to fall maybe just maybe the Phillies will have earned a playoff birth the Eagles and Steelers will be 5 0 and Penn State and Pitt will both be ranked in the top 10 I can t control any of those things but what I can promise is that your association is looking forward and will stay laser focused on addressing our strategic challenges for the industry so that you all can do what you do so well serve your customers anchor your communities and protect the economic well being of our commonwealth Thank you for all that you do Together let s continue to make a difference Diversity Equity and Inclusion Success Stories and Best Practices Would you like to share what your bank is doing in the diversity equity and inclusion space with PA Bankers Please reach out to Michelle Staton senior vice president finance operations mstaton pabankers com PA Bankers Association Fall 2022 9

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1 USE THE CORRECT TITLE 4 In the address block address them as The Honorable First and Last Name In the greeting address them as Senator Congressman Representative Last Name IF THERE IS A BILL NUMBER INCLUDE IT 5 EXPLAIN YOUR CONNECTION TO THEM Can you predict what regulators will ask 2 Are you a constituent Do you work in their district Do you go to the same church GET PERSONAL Why are you advocating for this issue Is it work related or personal 6 ADD STATS If you have numerical data add it to solidify your point 3 IN THE FIRST PARAGRAPH YOU SHOULD REFERENCE THE ISSUE 7 MAKE IT STANDOUT BILL NUMBER AND YOUR POSITION If your letter is lengthy offset important content ON IT the middle by usingand boldget or italics How will you prepare for your next exam Visit the Bank in Exam Prep Center the or even I am writing to you today in support of HB1234 use bullets insightwhich you need about how regulatory exams are being administered allows explain what the bill does 8 OFFER YOUR CONTACT What questions are examiners digging in on What are the hot topics as eld examiners meet with your peers How are regulators addressing COVID 19 lending practices What discussions are taking place over pandemic operational challenges Bank Exam Prep Center is your regulatory exam central Prep before your exam and be sure to return after to take a survey and share your experience Visit the Bank Exam Prep Center PA Bankers Association Fall 2022 11

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Welcome2022 23 BOARD MEMBERS CHAIR MARK A RITTER Executive Vice President Chief Administrative Officer The Northumberland National Bank Northumberland Pa FIRST VICE CHAIR ANGELA M SARGENT Senior Executive Vice President Chief Information Officer Fulton Bank Lancaster Pa Policy Committee Chairs SECOND VICE CHAIR RANDALL E BLACK President and Chief Executive Officer First Citizens Community Bank Mansfield Pa IMMEDIATE PAST CHAIR WESLEY M WEYMERS Executive Chairman The Gratz Bank Gratz Pa Deposit Category Representatives MEMBER ENGAGEMENT AND DEVELOPMENT CARRIE L RIGGLE Executive Vice President Human Resources First Commonwealth Bank Indiana Pa CATEGORY A 0 400M in deposits SCOTT B DAUM President and Chief Executive Officer First United National Bank Fryburg Pa GOVERNMENT RELATIONS BLAIR T RUSH Southeast Region President C N Wellsboro Pa CATEGORY C 1B 4B in deposits GERARD A CHAMPI President and Chief Executive Officer FNCB Bank Dunmore Pa 16 PA Bankers Association CATEGORY B 400M 1B in deposits GLENN B MARSHALL Chief Executive Officer First Resource Bank Exton Pa CATEGORY D B in deposits JEFFREY M SCHWEITZER President and Chief Executive Officer Univest Financial Corporation Souderton Pa pabankers com

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Welcome 2022 23 BOARD MEMBERS PA Bankers Group Representatives At Large Representatives GROUP 1 MARK D DRENCHKO Senior Vice President Commercial Banking Mars Bank Mars Pa CAROL A MYERS Executive Vice President Chief Financial Officer 1ST SUMMIT BANK Johnstown Pa GROUP 2 JANAK M AMIN President and Chief Executive Officer Presence Bank Coatesville Pa DANIEL J SCHAFFER President and Chief Executive Officer The First National Bank Trust Company Newtown Pa GROUP 3 ELAINE A WOODLAND President and Chief Executive Officer First Keystone Community Bank Berwick Pa GROUP 4 BRIAN L KNEPP President and Chief Financial Officer Penns Woods Bancorp Inc Williamsport Pa GROUP 5 CRAIG L KAUFFMAN President and Chief Executive Officer PEOPLESBANK A Codorus Valley Bank York Pa GROUP 6 CHRISTOPHER L STOTT Senior Vice President Enterprise Director CNB Bank Clearfield Pa MARY GRIFFIN CUMMINGS ESQ Executive Vice President General Counsel FNCB Bank Dunmore Pa SUSAN B SHIPLEY President Western PA and Ohio Valley The Huntington Bank Columbus Ohio K BERNARD TYNES Senior Vice President Director of Marketing and Data Analytics Penn Community Bank Perkasie Pa LAURA HAFFNER SVP Region Director Greater PA Region Wells Fargo Philadelphia Pa Non Voting Members M THERESA FOSKO Executive Vice President Director of Human Resources Univest Financial Corporation Souderton Pa EVELYN F SMALLS President and Chief Executive Officer United Bank of Philadelphia Philadelphia Pa J DUNCAN CAMPBELL III President Chief Executive Officer and Treasurer Pennsylvania Bankers Association Harrisburg Pa PA Bankers Association Fall 2022 17

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featureARTICLE YOUR t 2ND NEW ee M YOUR NEW VICE CHAIR We would like to welcome our second vice chair Randall Randy E Black president and chief executive officer of First Citizens Community Bank Get to know Randy below WHAT WAS YOUR FIRST EXPERIENCE AND OR EVENT WITH PA BANKERS When I started in banking in 1993 I was encouraged by our president CEO Dick Wilber to become involved with PA Bankers so I attended some seminars schools and conferences however I really became aware of all PA Bankers has to offer when I joined the Community Bankers Products Services Committee in 1998 Since 1998 I have sat on a various committees and board positions and was Group 4 Chair so I have come to appreciate how vital PA Bankers strong leadership is for the protection and survival of our industry WHAT IS ONE PIECE OF ADVICE THAT YOU HAVE FOR THE NEXT GENERATION OF BANKERS You have to be adaptive and willing to change Nothing stays the same especially in banking You have to be willing to get out of your comfort zone and not only accept change but create change But the most important thing to understand is it s all about the customer because without them we have nothing We must provide the products services and technology they want while balancing our regulatory requirements and shareholder expectations WHAT S ONE GOAL THAT YOU D LIKE TO ACCOMPLISH DURING YOUR TIME ON PA BANKERS BOARD I would like to find ways to show that banking is a rewarding career path Very few young people are entering the banking industry or if they do they don t stay in the field very long We need to promote our industry better and get the word out on all the opportunities there are in our ever changing industry and how exciting a career in banking can be I would like to see a Hire to Retire Mentality Campaign introduced whereby young people are educated on the tremendous opportunities that exist in a community bank for a life long career 18 PA Bankers Association pabankers com

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PA Team Wins 2nd Place in Annual CSBS Community Bank Case Study Competition The Conference of State Bankers Super visors CSBS announced the winning teams from its annual CSBS Community Bank Case Study Competition with a team from Pennsylvania taking second place Mansfield University paired with C N The competition is a national program that pairs undergraduate college university student teams with local community banks to provide valuable first hand insight into the banking industr y The 2021 22 competition focused on how community banks have navigated changes over the past decade and what can be expected in the next 10 years The second place team from Mansfield University included Ethan Allen Seth Anderson Hannah Caccia Sarah Hart and Quanwen Long Their faculty advisors were Dr Atika Benaddi Dr Xiaoxuan Ji and Dr Xia Zhou and their bank partner was C N All students will receive a 500 scholarship from CSBS PA Bankers will honor the top three Pennsylvania teams at the Young Professionals Conference including Mansfield University and C N Bloomsburg University First Citizens Community Bank and Ursinus College The Victory Bank Congratulations to all of the Pennsylvania participants Thank you for making us PABankersProud Interested in becoming involved next year Contact Karen McDermott for more information 20 PA Bankers Association pabankers com

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workforceDEVELOPMENT PA Bankers Intern Program Update A South Central PA Pilot Completed s reported in the last issue of paBanker the association partnered with Shippensburg University to develop a bank centered intern program for our member banks The first stage of the project included a 12 week pilot program in South Central PA to include banks of various sizes and 15 interns from local colleges universities The pilot ended in early August and work has shifted into the evaluation phase so that the program can be refined before launching statewide in 2023 to all member banks and state system schools across the commonwealth Shippensburg will work with career centers across the state system to market and recruit early talent and area specific interns for member banks when the program expands next year The association extends a huge THANK YOU to the three banks who partnered with us to bring this very valuable resources to our membership statewide CENTRIC BANK ORRSTOWN BANK AND TRADITIONS BANK Your commitment to the industry and recruitment of the next generation of bankers is amazing We would also like to wish all of the interns well as they return to their studies this fall We look forward to seeing you again next year Please stay turned for updates as we work to refine and develop the statewide program 22 PA Bankers Association pabankers com

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Building stronger financial futures for Pennsylvania residents Ensuring everyone has access to safe banking products and services is critically important and PA Bankers has partnered with the CFE Fund to expand the number of member banks in Pennsylvania offering certified Bank On certified accounts to reduce the number of unbanked and underbanked in the state PA Bankers is supporting the Bank On effort across Pennsylvania through the statewide Bank On Keystone Coalition as well as supporting the local Bank On Coalitions in Allegheny Allentown and Philadelphia The coalitions include banks nonprofits community based organizations and local government all interested in increasing the number of banks offering Bank On accounts and ensuring that all Pennsylvanians have the opportunity to be financially healthy If you are interested in learning more about the existing coalitions or seeing how you can get involved click here

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governmentRELATIONS No Deal States Slam on Brakes for CU Acquisitions of Community Banks I t would have been the largest acquisition of a community bank by a credit union but word came in mid June that the deal was off between VyStar Credit Union and Heritage Southeast Bancorporation after a failure to receive regulatory approvals If completed the deal would have made Jacksonville Florida based VyStar the 13th largest credit union in the nation The deal was just one of a growing list of mergers that have been announced between tax exempt credit unions and taxpaying banks in recent months but states are starting to sour on the idea Earlier this year the Minnesota Department of Commerce blocked the acquisition of state chartered Lake Area Bank by Royal Credit Union officially clarifying that state law does not permit the acquisitions of state chartered banks by credit unions Similar actions have taken place in Colorado Iowa Tennessee and Nebraska Meanwhile the Mississippi state legislature succeeded in passing a law stipulating that only FDIC insured banks can acquire or merge with Mississippi chartered state banks The law which goes into effect this July puts a halt to any deals in progress that don t comply with the new requirement These are encouraging developments The decision to merge is of course a business decision that must be made at the individual level But states are increasingly acknowledging that allowing taxexempt credit unions to gobble up taxpaying banks taking them off the tax rolls for good is poor public policy that imposes costs on consumers and taxpayers and they re taking sensible steps to prevent it from happening in the future The fact that states are beginning to take action is due in no small part to banker advocacy and it s a good reminder of the importance of speaking up whenever we see the credit union industry pushing the boundaries of the statutory limits imposed on it by Congress Unfortunately those attempts are only becoming more brazen Recently the industry lobbied to create a new loophole designed to enable credit unions to greatly expand their fields of membership and business lending capacity The House bill which we don t expect to advance in the Senate was included as part of a broader package of financial inclusion measures despite the fact that the bill contained no language to ensure that these expanded powers would be used by credit unions to serve underserved communities If credit unions were serious about promoting financial inclusion they should welcome the opportunity to demonstrate their commitment to serving low to moderate income communities by meeting the same Community Reinvestment Act requirements banks must meet But it s become clear that credit unions aren t interested in that mission in fact recent data has shown a general pattern of credit unions opening more branches on net in upper and middle income census tracts and closing more branches on net in lowto moderate income census tracts It s wrong for credit unions to try and shoehorn self serving pieces of legislation through Congress under the guise of promoting financial inclusion just as it s wrong for them to exploit their tax advantaged status to subsidize acquisitions of taxpaying banks pay for stadium naming rights or private jets or open multi million dollar headquarters It s encouraging that states are starting to scrutinize the credit union industry more closely Now Congress must do the same ABOUT THE AUTHOR ROB NICHOLS PRESIDENT AND CEO AMERICAN BANKERS ASSOCIATION 24 PA Bankers Association pabankers com

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governmentRELATIONS PaBPAC State and the Importance of Electing Pro Banking Candidates T urn on the TV You ll see political ads for the democrat republican and everyone else running for insert elected position here After watching the ads and probably laughing or being annoyed at most of them you probably do not know anything more about the candidate than you did before you saw it The PaBPAC Board of Directors carefully reviews candidates for public office Staff even meets with candidates in open seats and makes recommendations as appropriate We contribute to the campaigns of probanking and pro business candidates with your best interest in mind We understand that electing pro banking candidates is instrumental in serving your clients You have limited dollars to contribute to candidates How do you know that you are picking the right one If you need information about an internal solicitation campaign please contact Erin Kanter 717 255 6910 This is not a solicitation for PaBPAC federal ABOUT THE AUTHOR ERIN LOUDENSLAGER KANTER VICE PRESIDENT OF ADVOCACY AND GOVERNMENT AFFAIRS PA BANKERS ASSOCIATION PA Bankers Association Fall 2022 25

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governmentRELATIONS PA Bankers Day at the State Capitol Returns Joe Bower Wins Annual William S Latoff Advocacy Award F ifty bankers from across the commonwealth attended the annual PA Bankers Day at the State Capitol on June 13 The action packed day included meetings with state legislators a panel on Pennsylvania s political climate with Gene Barr former CEO and current advisor to the PA Chamber and Christopher Nicholas GOP consultant for Eagle Consulting Group Inc an update from the secretary of the PA Department of Banking and Securities The Honorable Richard Vague and a reception attended by 200 bankers and legislators At the evening reception PA Bankers honored Dan Reisteter PA Bankers former VP of government relations for his service to the association and the industry Sen Mike Regan R York and Rep Sheryl Delozier R Cumberland each presented service citations to Dan and highlighted several of his career accomplishments PA Bankers also awarded the 2022 William S Latoff Advocacy Award to Joseph B Joe Bower Jr president and chief executive officer of CNB Bank at the event The award recognizes an individual who displays excellence in advocacy as an active policymaker for PA Bankers an outspoken and successful advocate for the industry and a committed supporter of Pennsylvania Bankers Public Affairs Committee PaBPAC Throughout his tenure as a PA Bankers volunteer Joe served as the PA Bankers chair as well as a member 26 PA Bankers Association of the PA Bankers Board of Directors Diversity Equity and Inclusion Advisory Group and PaBPAC Board of Directors Additionally he held positions on his local school board the American Bankers Association Political Action Committee and Philadelphia Federal Reserve Bank Community Depository Institutions Advisory Council The award honors the late William S Latoff former chairman and CEO of DNB First National Association in Downingtown Latoff was the chair of the PaBPAC Board of Directors from 2007 10 a PA Bankers Government Relations Policy Committee member the chairman of the Nominating Advisory Committee of the Federal Reserve Bank of Philadelphia and a representative to the American Bankers Association s BankPAC Committee pabankers com

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alookahead As you plan your training and development we hope you ll consider learning with us Here s a sneak peek at some of the opportunities to learn with PA Bankers this coming year Visit www pabankers com for more information and pricing details about each event Please note all dates and locations are subject to change This includes changing in person events to virtual offerings Compliance Regulatory and Risk Management 10 20 22 BSA COMPLIANCE SEMINAR PA BANKERS TRAINING ROOM HARRISBURG PA General Association 10 19 22 4 19 20 23 6 11 15 23 7 23 28 23 30 PA Bankers Association PA BANKERS CLASSIC EAST SAUCON VALLEY COUNTRY CLUB BETHLEHEM PA DEI CONFERENCE HERSHEY LODGE CONVENTION CENTER HERSHEY PA SCHOOL OF BANKING THE PENN STATER CONFERENCE CENTER STATE COLLEGE PA ADVANCED SCHOOL OF BANKING THE PENN STATER CONFERENCE CENTER STATE COLLEGE PA pabankers com

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vendorARTICLES Detections Collections or Integrations Which Phase is Your Cybersecurity In C ybersecurity is still a relatively young competency as a core function of business Talk with business leaders of any organization and they ll probably tell you that they take cybersecurity seriously Their goal is ensuring their organization is safe but it feels like cybersecurity changes by the week It is a constant effort to know whether they are doing enough The answer to the question Am I doing enough is what allows business leaders to sleep at night They know who s attacking their peers who is attacking them and how well or not so well their cybersecurity program is working against those threats Their risks have been quantified They know where they ve invested successfully and where to invest further based on those risks Safe is now defined and quantified arming leadership with the ability to make informed decisions just like they do for other areas of their business At a high level achieving this milestone for a cybersecurity program typically involves the organization sequentially moving through three different phases of cybersecurity maturity Detections Phase Collections Phase and Integrations Phase What follows are the details to identifying the phases and insights into how an organization can catapult itself towards its ultimate operating state 34 PA Bankers Association DETECTIONS PHASE ACTIVE PERIMETER DEFENSE A few things a business in the Detections phase might say are We bought highly regarded tools by reputable vendors for IDS firewall email and endpoint The auditors did a black box test and we passed easily We scan regularly no issues The business has accumulated tools from well known IT companies that monitor activity such as managed firewall endpoint detection EDR antivirus email with malware protection and a basic log collection tool These tools are in place and they are expected to work They scan for vulnerabilities regularly Auditors and regulators have offered little if any pushback Attacks seem to be stopped as there haven t been any serious problems and then something happens There is a struggle to get answers as the detections tools are operating in silos What did the attackers see What did they take How did they get by our defenses Each of my vendors says it wasn t them There is no efficient way to know what the coverage should be for this attack or future attacks the organization will face The organization typically realizes it only has defenses for a given attack from one of its tools or vendor and only for the part of infrastructure where the attack typically originates not where it will advance to if successful To get answers they look to figure out a more active process for reviewing data and taking actions and thus progress to the Collections phase COLLECTIONS PHASE CENTRALIZATION OF DATA Our vendor tools are good but they re not interacting with each other Alerts are still high volume and we don t have the process to cut them down pabankers com

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We have to log in to 6 different systems to address a problem The team overseeing security gets more active in reviewing data collected from across the infrastructure They want greater visibility and to address gaps The ensuing volume of visible activity produces an overwhelming number of alerts and data to discern There is a bottleneck between feedback from vendors and actionable response to take Without an efficient process aggregating the tools logs and external threat data the team isn t able to figure out which of these alerts are real and if they are a threat now And that doesn t factor in obtaining 24 7 coverage For those threats that they determine are real is there protection in place for that specific attack If not how can the right controls be created or put in place Sharing communities and search engines become the team s best friend but over time they re slowly falling behind In thinking through what to do about it the detection tools are not the problem The problem is that they can t make it all work together and prioritize threats Thus the team explores a subsequent investment into a SIEM tool or finding an MSSP MDR vendor INTEGRATIONS PHASE COORDINATED SYSTEM OF CONSTANT MATURITY For active threats our coverage needs to extend beyond just the perimeter When a threat is active we want to confirm which of our controls are working and more importantly which controls aren t working or haven t fired off recently so we can focus our efforts Our aim is to be attackeragnostic It would be nice to get that attribution but it s more important to identify the tactics being used and control for that A system is not the sum but the product of its parts The hurdle to functioning at this level is the precision of integration in particular the consistency of which tools are a part of the toolset All tools have nuance and security experts need to be experts with them Aligning those enables the team to turn their own data and intelligence into protections Now when threats are active the response can be swift and targeted The team can do this because it has a centralized single pane of glass Whether the primary roles of the team members are signals operations policy and procedures control writing threat hunting etc each team member focuses their efforts to pull in the same direction There is visibility into past threats current threats and expected threats The historical success current success and expected success or failure of their security program against those threats is known The security program has moved beyond just using indicators of compromise like IP addresses domain names and hashes instead the defenses target the tactics techniques and procedures of the attackers Operating at this level has injected leverage into the process with an infinite feedback loop of information from internal data sources and external threat information Control writing is deployed across the infrastructure at each phase of an attack and tested for effectiveness enabling true defense in depth And with that risk is quantified for business decisions At this level this is how the cyber program can deliver to the business the answer to the question Are we doing enough SUMMARY Cybersecurity has evolved to a multivector problem to solve Guarding the perimeter is important Multiple tools are better Creating defense in depth by writing controls for specific threats across and throughout the infrastructure is excellent Getting into the integrations phase isn t a tactical decision such as assessing things like talent time and budget Integrations is a strategic decision assessing the security program as it is currently constructed and whether a leap forward involves a deliberate step backwards Cybersecurity has changed quickly and we are still young in the process of adapting When evaluating the next phase of your program is the decision at hand just ultimately another tool for the toolset For more information visit www seic com sphere ABOUT THE AUTHOR STEVE BOMBERGER HEAD OF SEI SPHERE PA Bankers Association Fall 2022 35

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vendorARTICLES Lessons Learned From HBO s Succession M y wife and I recently watched all three seasons of HBO s Succession It s a wild ride on many levels full of deceitful and dysfunctional family dynamics corporate political backstabbing and plain old evil greed Despite this over the top intertwined family and business drama there are quite a few relevant lessons worthy of attention from corporate leaders and board members Three in particular stand out to me First Succession Planning is always vital and never more so in an organization public or private with any element of familial involvement As is well known all boards of directors should be paying close attention to succession for the CEO role and other key leadership positions Yet in Succession there is no clear line of succession and the company s 80 year old patriarch who experiences major health issues early in Season 1 has not only failed to plan for his eventual departure but has all four children thinking they can and should take over the family business Only one of the four is even close to qualified and he becomes compromised by external events Meanwhile Daddy plays each sibling against each other It is a mess which devolves into chaos at various times seriously impacting both the fortunes and future of the business Second Where is the Board of Directors In this instance while the company Waystar RoyCo a global media and entertainment conglomerate is actually publicly traded the board is not governing at all The single most important responsibility of any board of directors is the decision of who leads This goes beyond the obvious CEO succession in a planned orderly leadership transition or emergency succession situation It more broadly relates to an ongoing evaluation of the CEO and their competency to lead relative to their skills experiences leadership capabilities temperament and market dynamics within the context of the current operating environment Too many boards allow CEOs to determine when their time is up rather than jointly crafting a plan for a bloodless transition of power that encourages or even forces a constructive change of leadership In Succession the board is comprised of cronies of the patriarch and his disengaged brother who are both beholden to and intimidated by their successful yet autocratic CEO Lastly in any company with a sizable element of family ownership the separation of economic ownership and managerial involvement is vital While at times the progeny of a successful founder leader prove extremely capable see Comcast s Brian Roberts this is often the exception rather than the rule Therefore the board and or owners ideally will address this dynamic head on accepting that professional management is indeed the best way to enhance economic value for shareholders and family members while encouraging the offspring and descendants to keep their hands off and simply cash the checks Such decisions of course are fraught with peril for those involved which Succession endlessly highlights Creating the proper governance structure and succession plans is often not easy especially when personal and financial implications weigh heavily on the individuals impacted Still with the Board s prime directive of leadership selection top of mind and a commitment to candor and transparency the outcome will likely be much better than simply ignoring the elephant in the room ABOUT THE AUTHOR ALAN J KAPLAN FOUNDER CEO KAPLAN PARTNERS Alan J Kaplan is founder CEO of Kaplan Partners a retained executive search and board advisory firm headquartered in suburban Philadelphia You can reach him at 610 642 5644 or alan KaplanPartners com 36 PA Bankers Association 2022 2023 pabankers com

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Interest Rate Risk and Investment Strategies Seminar October 19 21 2022 Oklahoma City OK The Skirvin Hotel OCT The Skirvin Hotel One Park Avenue Oklahoma City OK 73102 405 272 3040 WHO SHOULD ATTEND Financial institutions CEOs CFOs investment officers board members and those who are directly or indirectly responsible for financial management functions will benefit from this seminar There is no cost for this seminar ACCOMMODATIONS A block of rooms is available at The Skirvin Hotel Identify yourself as a Baker Seminar attendee or group code TBG3 when calling 1 800 HILTONS The special room rate will be available until the room block is sold out AGENDA Wednesday 19th Twin Hills Golf 1 00 pm Thursday 20th Breakfast 7 30 am Seminar 8 30 am Lunch 12 00 pm Adjourn 4 00 pm Dinner 7 00 pm Two years after the pandemic left financial institutions drowning in excess liquidity at historically low interest rates the industry faces a new challenge rising interest rates The Fed has quickly pivoted from supporting the economy to fighting inflation and institutions are now facing the first rising rate environment in years Regulators have watched with concern as loan and investment durations extended to record highs in a search for yield and will have a renewed focus on the Investment Portfolio and Interest Rate Risk Management Portfolio managers can no longer be reactive but must be proactive in managing their investment portfolio and balance sheet in the face of rising rates and a flattening yield curve This seminar will examine all of these concerns and present actionable strategies to better prepare your institution for the uncertainty ahead Join us for an in depth discussion of the following topics Economic and Market Update Review of current economic conditions and the outlook for growth inflation and interest rates The Powell Pivot Update on rate hikes tapering and the outlook for Federal Reserve monetary policy Interest Rate Risk How to ensure you are prepared for the heightened regulatory focus coming in the years ahead Liquidity Risk Management Best practices for managing liquidity risk as rates rise Investment Portfolio Strategies Adapting your strategy and finding the best relative value for rising rates and a flattening yield curve MBS CMO Market Balancing prepayment and extension risk in an uncertain mortgage rate environment Municipal Market Update The latest on managing municipal credit risk and finding the best relative value 11 hours of Economics and Finance CPE credits will be earned for your attendance Friday 21st Breakfast 7 30 am Seminar 8 30 am Conclusion 12 00 pm For your convenience register for the seminar online at GoBaker com oklahoma Call Skoshi Heron at 888 990 0010 for more information Member FINRA and SIPC www GoBaker com 800 937 2257 Oklahoma City OK Austin TX Dallas TX Houston TX PA Bankers Association Fall 2022 37 Indianapolis IN Long Island NY Salt Lake City UT Springfield IL

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vendorARTICLES 3 Considerations for Your Next Strategic Planning Session M This article was originally published on bankdirector com odernizing a bank s technology has the potential to improve efficiency reduce errors and free up resources for further investment Still with all those benefits many banks are still woefully behind where they need to be to compete in today s digital environment According to Cornerstone Advisors What s Going On In Banking 2022 research just 11 of banks will have launched a digital transformation strategy by the end of 2022 So what s the holdup For one thing transformation is hamstrung by the industry structure that has evolved with banking vendors Stories of missed deadlines releases with dingbat issues integrations that stop working and too few knowledgeable professionals to assist in system implementation and support are commonplace A large part of a bank s future depends on how it hires and develops technical talent manages fintech partnerships and scrutinizes and optimizes its technology contracts Here are three key truths for bank officers and directors to consider in advance of their next strategic planning session 1 THERE IS NO UNIVERSITY DIPLOMA THAT CAN BE OBTAINED FOR MANY AREAS OF THE BANK Our research finds that 63 of financial institution executives cited the ability to attract qualified talent as a top concern this year up dramatically from just 19 in 2021 But even in the face of an industry shift to digital first delivery and a need to better automate processes and leverage strong data intelligence most banks have neither invested enough nor sufficiently developed their IT team for the next decade Every financial institution has a unique combination of line of business processes regulatory challenges and vendors and systems the expertise to manage these areas can only be developed internally Identifying existing 38 PA Bankers Association skill sets across the organization will be critical as will providing education and training to employees to help the organization grow A good place for directors and executives to start is by developing a clear and comprehensive list of the jobs skills and knowledge the bank needs to develop across four key areas of the bank payments commercial credit digital marketing and data analytics 2 FINANCIAL INSTITUTIONS AND FINTECHS ARE ON DIFFERENT SIDES OF TABLE Over the past decade there have been profound changes in the relationship between financial technology and financial institutions Banking as usual no longer exists as much as banks and fintechs want to work at the same table together they have very different needs different areas of dissatisfaction with the relationship and are sitting on different sides of that table A fintech can create viable software or a platform for the bank to build upon but the bank needs to have the internal talent to leverage it see No 1 A culture of disciplined execution and accountability that ensures the fintech solution will be deployed in a high performance referenceable way will go a long away in strengthening the partnership pabankers com

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3 TRAINING AND SYSTEM UTILIZATION REVIEWS NEED TO FIND THEIR WAY INTO VENDOR CONTRACTS see No 1 and 2 on the previous page When it comes to software solutions banks are looking at multimillion dollar contracts and allocating tens of thousands of dollars in training on top of that This is not the time to be penny wise and pound foolish One way to launch this effort is with an inventory for executive management that details how many users have gone through which modules of training This tool can be vitally important involves only minor add on costs and can and should be embedded in every vendor contract Every organization needs to build a tightly integrated change team that can extend integrate lightly customize and monitor a growing stack of new primarily cloud based platform solutions For CFOs and the finance department this means a punctuated investment in the raw talent to make the bank more self sufficient from a tech perspective Many financial institutions subject themselves to unfavorable technology contract terms by entering negotiations with too little knowledge of market pricing letting contracts auto renew and failing to prioritize contracts that need the most attention If managed properly vendor contracts represent a huge opportunity for savings ABOUT THE AUTHOR RYAN RACKLEY CORNERSTONE ADVISORS A partner at Cornerstone Advisors Ryan Rackley leads a team of highly specialized technology contract negotiation consultants in the firm s Contract Negotiation and Payments practices 2022 2023 WE VE GOT THE TOOLS YOU VE GOT THE TALENT You want to attract retain and take care of top talent for your business We ll listen and pull together our insights technology and expertise to find the best benefit solutions for you Contact David Shoemaker CPA PFS CFP at david shoemaker nfp com or 404 229 2941 executivebenefits nfp com Endorsed by the American Bankers Association Insurance services provided by Equias Alliance LLC a subsidiary of NFP Corp NFP Doing business in California as Equias Alliance Insurance Services LLC License 0H52337 Securities offered through Kestra Investment Services LLC Kestra IS member FINRA SIPC Kestra IS is not affiliated with Equias Alliance LLC or NFP Investor Disclosures kestrafinancial com disclosures PA Bankers Association Fall 2022 39

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vendorARTICLES Auditing Your Bank s Microsoft 365 Products It s More Important Than Ever I t s rare today to find a financial institution not using any cloudbased products Of the more than 120 bank clients our firm works with throughout nine different states only a handful are not using at least one cloud based vendor The most popular cloud based software used in businesses today including the financial industry are the suite of Microsoft 365 products Below is a list of products that currently fall under the Microsoft 365 umbrella Email Teams for live meetings chat VoIP calls or file sharing Azure Active Directory OneDrive SharePoint Office Suite Word Excel PowerPoint WHAT ARE THE BENEFITS OF USING A CLOUD BASED VENDOR FOR THESE SERVICES First and foremost security Maintaining email and data in house has rapidly become a larger and larger risk and more difficult to manage Maintaining system functions on an internal network allows an attack vector for threat actors to attack an institution directly Most small to mid size institutions do not have the resources expertise or staffing to monitor their endpoints 24 7 and it is becoming increasingly expensive to do so even if those resources are present A company the size of Microsoft allows the institution to rest easier knowing they can perform more than adequate security monitoring reliably and properly 40 PA Bankers Association Another major reason financial institutions outsource these services is disaster recovery Exchange servers are complex systems that require constant backups redundant mirrored systems monitoring and constant upgrading of hardware equipment and software When a disaster occurs it becomes the top priority since every department in the institution requires email and file sharing products to function At the same time exchange servers are also one of the most complex systems to restore due to their use of domain names external IP address routing etc These two reasons among others are why we continue to see such a growing trend to outsource these products to a cloud based vendor If an institution is considering making this switch or already has the next question should be How do we audit these products Regulators and auditors rarely perform an examination without asking about vendor management and will certainly dive deeper if they are aware of cloud based vendor products in use Auditing of this entire suite of products can involve depending on which products the institution is utilizing the following general topics Authentication including multifactor authentication Password reset services Password expiration Synching of active directory information to the cloud for single sign on purposes Auditing logging Sharing of calendars and personal corporate information Data loss prevention Data retention policies Secure email abilities Virus Malware scanning Phishing protection File sharing Teams OneDrive SharePoint Permissions Teams OneDrive SharePoint Administrative rights Product oversight security monitoring Mobile Device Management MDM Backup of cloud data Azure backups are for their disaster recovery purposes only and not for on demand restores While some of the items on the above list can be considered set it and forget it settings meaning once you have decided upon and set the security parameters they rarely need reviewed again unless a change was made other items are ongoing audit topics Security monitoring admin rights permissions for file sharing products and other settings require regular input from IT staff or internal auditors to ensure proper settings and or permissions Further the wide range of products and features available in the Microsoft 365 suite can create a we don t know what we don t know situation Because there are so many items available with so many different settings institutions are often not even aware of what needs to be audited or what actions are required for such a broad suite of products Properly auditing the use of these products requires significant technical expertise to gather the required documentation A recent Microsoft pabankers com

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365 benchmark document listed 186 pages of security and operational controls which should be reviewed In some cases Microsoft defaults to the most secure values but often does not for the sake of operational ease Financial institutions should never assume default security values will suffice as defense for their ever growing threat environment and should utilize the most stringent possible security controls and logging The following list shows some of the important security features that are disabled by default or security concerns which are enabled by default where noted Synching active directory with Azure cloud services Multifactor authentication Social media integration enabled by default Calendar sharing enabled by default Data loss prevention for emails External file sharing enabled by default Safe links reviewing hyperlinks to ensure they do not direct the user to a malicious site Online spam policies Audit logging Document sharing restrictions Password re use restrictions Password change requirements Mobile device wipe upon a certain number of failed login attempts Forced Screen Locking of mobile devices Mobile device encryption The above list is only a partial representation of settings enabled or disabled by default the importance of auditing these settings on a regular basis to ensure data is secure via a layered security approach cannot be understated HOW SHOULD A FINANCIAL INSTITUTION BEGIN THE AUDIT PROCESS HERE S A LIST OF THE STEPS WE RECOMMEND 1 Determine which Microsoft 365 product s are currently in use whether the institution s active directory is synching with the Azure cloud or not and what options are paid for in the existing contract 2 Obtain management and audit committee approval for review of the Microsoft 365 suite Proving this is a required add on to internal audit services may be challenging until these committees are shown the magnitude of how involved and complex the security of this suite of products can be Hopefully the terms cloud vendor and or vendor management make it clear to these committees how often regulators and examiners conduct these reviews 3 Determine if the institution has the expertise in house to review these benchmark security items or if it will require the use of a thirdparty auditing firm While some areas of the benchmarks require only the gathering of simple screenshots others require the use of PowerShell which requires knowledge of non graphical user interface green screen like commands Without the expertise in house it would be highly recommended to utilize a thirdparty auditing firm that specializes in these types of audits 4 Independence of the review is often a determining factor Smaller institutions may not have a dedicated internal audit team and IT staff should not be permitted to perform their own audit for independence reasons If it is determined that in house expertise is present and independence issues do not exist the institution should obtain the latest benchmark security standards for the Microsoft 365 products utilized and develop a detailed audit program similar to other internal audit work papers used in other areas 5 If a third party firm is used to perform the review contacting them to initiate an engagement would of course be the next logical step The audit will almost always reveal several security settings and areas that require attention Once completed an action project plan should be created to remediate any issues brought to light by the audit The number and complexity of the issues identified should determine the frequency of auditing this suite of products and the timing of the next review As stated the importance of financial institutions using Microsoft 365 auditing these settings on a regular basis to ensure data is secure via a layered security approach is more important than ever For more detailed information on this topic please feel free to contact S R Snodgrass PC at it srsnodgrass com ABOUT THE AUTHOR JEREMY BURRIS CISA CISSP MCP L PT CPTS C EH CICP ECSA SECURITY PRINCIPAL TECHNOLOGY SERVICES Jeremy is a principal with S R Snodgrass P C Jeremy has more than 20 years of information systems audit experience and holds numerous certifications including Certified Information Systems Auditor CISA and Certified Information Systems Security Professional CISSP and is a Licensed Penetration Tester L PT PA Bankers Association Fall 2022 41

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vendorARTICLES Diving into Digital Currency What You Need to Know about Crypto T he digital currency environment is a space that traditional financial institutions should watch in order to stay competitive There is much to gain from understanding and staying ahead of digital currency trends including cryptocurrencies As they navigate this new digital currency landscape bankers should consider customer demands and how to best position themselves for success WHAT IS A CRYPTOCURRENCY Cryptocurrencies are digital or virtual currencies protected by encryption making counterfeiting and doublespending practically impossible Many cryptocurrencies use blockchain technology a distributed ledger enforced by a network of computers In short cryptocurrencies leverage advanced mathematical formulas 42 PA Bankers Association to create digital assets The value of these digital assets ebbs and flows much like traditional currencies or stocks Sophisticated cryptography prevents counterfeiting and fraudulent transactions Cryptocurrencies have also become more popular in recent years Time reported the world s cryptocurrency as worth more than 3 trillion globally and consumers transact trillions of dollars in value each year While there has been much debate over the true value of cryptocurrencies these digital assets have undoubtedly made headlines both positive and negative for the value the marketplace has placed upon them It s important to remember that volatility is part of any emerging market and has been a part of the crypto space since its inception though the general trend has consistently been upward More established crypto assets have gained additional certainty from a regulatory perspective making them more attractive offerings as banks begin to explore this space The volatility in the crypto space has caused some to question if consumers should participate but this creates even more demand for banks to serve as a trusted partner that can guide consumers to safer more established options like Bitcoin WHY SHOULD YOUR BANK CONSIDER ENTERING THE CRYPTOCURRENCY MARKETPLACE In short Banks should care about cryptocurrencies because many of their customers are showing interest and competitors are getting there first Capitalizing on this trend could ensure that customers engage in the space safely and deepen the connection with their institution pabankers com

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According to Visa 32 of crypto aware consumers own cryptocurrency with 21 being active owners who have transferred crypto or used it in a transaction Despite the difficulties banks have implementing digital currency services there s no reason they can t dip their toes in the water A recent Cornerstone Advisors survey found 60 of crypto owners would use their bank to invest in cryptocurrencies and another 32 might Customers are interested in digital assets and banks can use this interest to further their position at the center of their financial lives As with previous innovations like digital banking the capacity to control customer experience and truly drive strategy depends upon how quickly a bank adopts Financial institutions have an opportunity to maintain their role as financial advisors regarding crypto Many consumers want to participate but need a trusted partner such as their bank to better understand how In addition to offering education allowing customers to try their hand in the crypto space could generate additional revenue WHAT DO THE REGULATORS SAY ABOUT CRYPTO ASSETS As the space evolves regulations governing digital currencies are updated on an ongoing basis Financial institutions should stay up to date on regulations and instructions from federal regulators regarding decentralized cryptocurrencies Recent guidance from the Federal Reserve FDIC and OCC has focused on the need for greater clarity with tentative guidance around Crypto asset custody Facilitation of customer purchases and sales of crypto assets Loans collateralized by crypto assets Activities involving payments Activities that may result in crypto asset holding on an institution s balance sheet Institutions should look for additional clarity from the agencies throughout 2022 and beyond to best understand policies potential gray areas and what might come next Looking ahead it s wise to keep an eye on the Federal Reserve and additional regulatory changes Keep in mind that while there may be risk in emerging spaces inaction could pose risk as well WHAT IS CRYPTO CUSTODIAL MANAGEMENT Bankers needn t worry about the ins and outs of crypto to offer custodial management services Banks can simply become channels through which customers engage A bank s role in working with a custodial management system is to remove some of the risks and act as a trusted vault of information The implications are straightforward A bank partners with a technology provider to offer Bitcoin wallets through digital banking Customers buy sell and hold Bitcoin as an asset rather than currency Banks generate fee revenue gaining a certain percentage for each transaction amount The technology partner facilitates tax filings and offers downloadable tax forms Effective custodial management uses best practices to safeguard crypto assets and the keys to access them These safeguards require avoiding hot wallets whose keys are still connected to the internet and therefore vulnerable Another best practice is breaking keys into parts so that no one person has access GETTING AHEAD OF DIGITAL CURRENCY TRENDS The adoption of digital banking bank apps and self service options shows that financial institutions can adapt to new trends in technology Banks must now continue to innovate to meet consumer needs in an increasingly competitive landscape This space deserves continued attention by all financial institutions and it is time to craft a strategy before someone else does it for you Listen to CSI s Fintech Focus podcast for additional insight into cryptocurrencies and how financial institutions should move forward in this space ABOUT THE AUTHOR MATT HERREN is the DIRECTOR OF STRATEGIC PRODUCT MANAGEMENT at CSI With a strong focus on emerging technologies and how they apply to the financial industry Matt has led CSI s effort to drive innovation in the payment space PA Bankers Association Fall 2022 43

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vendorARTICLES Minimizing Budgetary Risk Effective Energy Management M inimizing budgetary risk is consistently top of mind for organizations particularly as commodity prices across the board continue to uptick from gas to food to electricity and natural gas While no one can predict where energy prices will go or when market volatility as it relates to electricity and natural gas prices will subside what businesses can do is take smart steps to minimize budgetary risk through trusted procurement strategies as well as implement technologies and solutions to reduce energy usage GET A GREEN APPLES TO GREEN APPLES COMPARISON An integral component of an energy management strategy is to seek consultation regarding market timing the procurement process and suppliers and their contracts Businesses that are proactive have a competitive advantage when addressing their energy supply needs They are positioned to make more 44 PA Bankers Association fully informed decisions that decrease costs and provide improved budget planning and forecasting A core component of risk management is mitigating exposure to volatile energy prices that can cause budget uncertainty and operating cost increases Effectively managing energy supply contracts yields substantial cost reductions and improved business performance For organizations in deregulated energy states energy choice allows you to shop around for the most favorable rates Getting a true green apples togreen apples comparison of pricing across a pool of carefully vetted suppliers leaves you well positioned to secure not only the best pricing but also the most favorable contract terms Pro Tip Beware of false promises If it seems too good to be true it just may be The unfortunate downside to energy choice is the slew of bad actors that are too eager to take advantage of organizations that don t have the time or knowledge to fully understand the complexities of energy procurement and supply contracts ACT SOONER RATHER THAN LATER A common misconception is on the timing of when energy supply agreements can be executed Many believe they must wait until just before their current contract expires to decide what to do next They are not aware they can begin the process much earlier in fact at any time during their current contract term without negotiating or harming their current contract Favorable electricity price trends also greatly determine when executives evaluate prices and suppliers as well as when to go the route of a consultant The question is do you have adequate time and knowledge to track energy price trends and compare suppliers For a business that consumes one million kilowatt hours of electricity annually the cost difference between supplier price quotes could be several thousand dollars annually pabankers com

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Pro Tip Many utilities and suppliers require as much as 60 days notice of your intent to drop or add service so do not wait until the last minute or you may be subject to additional fees Further energy prices become more volatile as the delivery date gets closer due to the impact of weather so starting early is generally the best approach LIGHTEN UP BRIGHTEN UP Lighting is one of the largest electricity expenses in your buildings which is why upgrading to LED lighting is one of the smartest decisions you can make With on bill funding tax rebates and incentives significant savings on your energy bill and little to no operational disruption to install the new lighting it s often referred to as the low hanging fruit for reducing energy costs and usage and for good reason An LED retrofit is ideal for organizations with lights running 10 12 hours a day and can drastically reduce current energy costs What many often don t realize is the amount of money and time being wasted on the maintenance of old inefficient lighting With LEDs guaranteed to last at least 5 years that s added savings to your already reduced energy bill What s more LEDs have the ability to improve the visibility and aesthetic with brighter and cleaner looking lights yielding an improved product increased worker productivity and improved safety Pro tip Explore funding opportunities for LED retrofits In addition to working with a partner that can effectively identify incentives and rebates the right team can also bring funding opportunities to the table Qualified clients can get an entire lighting project installed and funded without any upfront capital CURTAIL YOUR WAY TO SAVINGS The least expensive kilowatt hour is the one you don t use One way to curb costs is to curb usage Demand response is a financially rewarding energy solution that reduces your organization s energy usage during periods of high stress to the electric grid For large electricity consumers particularly where electricity usage is consistent it could be as simple as not running or curtailing energy usage during certain times of the day during peak events In addition to realizing the savings associated with your energy curtailment you ll also receive payment for doing so allowing you to maximize earnings while minimizing operational disruption Pro tip Usage can be reduced by dimming lighting adjusting thermostat settings shutting down equipment or using onsite power generators EXPLORE YOUR OPTIONS Renewables are certainly on the rise A quick scan of the news cycle reflects the increasing push for renewable energy sources not to mention pressure many businesses are facing from stakeholders to reduce greenhouse gas emissions The good news is there are a wide variety of options from installing solar PV on your rooftops adjacent land or parking lots to procuring green energy by way of renewable energy certificates RECs For organizations where solar is a good fit the benefits include increased energy savings reduced energy usage improved resiliency and independence from the grid and more Pro tip Not all solutions are the right fit for every business so taking a comprehensive look at your energy goals and balancing those with budgetary constraints and mounting pressure from your stakeholders supply chain or pending legislation is key THINK BIG PICTURE Whether you re securing a new energy supply contract or exploring on site generation an effective energy management strategy is allencompassing Taking a comprehensive holistic look at your current energy usage as well as your operations budget and goals both long and short term positions your organization for continued success while minimizing budget uncertainty There are many moving pieces to an effective energy strategy by considering how all of those pieces fit together you ll be saving yourself valuable time and money NEXT STEPS Get the conversation started with an expert from APPI Energy Our complimentary assessment comes at no upfront cost or obligation to you Contact our team today at info appienergy com or 800 520 6685 ABOUT THE AUTHOR DAN FORGACS is VICE PRESIDENT OF MARKET INTELLIGENCE ANALYTICS for APPI ENERGY As VP of Market Intelligence Analytics Dan is responsible for staying acutely attuned to the energy markets both past present and future so that APPI Energy consultants and their clients are armed with the most in depth up to date information on market activity 2022 2023 PA Bankers Association Fall 2022 45

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PA Bankers Services Corporation Select Vendors Provide PA Bankers Members Savings Service and Quality Vendors provide products and services to both financial institution members and Affiliate Members THE BAKER GROUP Asset Liability Management Software and Services ABA INSURANCE SERVICES Bond D O Cyber Insurance and Employment Practices Liability Charles Amis 405 415 7231 Charlie gobaker com Katie Rigby 801 821 9055 katie banzai org Patricia Williams 216 220 1280 pwilliams abais com ACCUME PARTNERS Outsourced Internal Auditing and Risk Management Services Nicole Lloyd 717 903 3142 nlloyd accumepartners com BANZAI Interactive Award Winning Course Teaching Students Real World Finance No Upfront Cost BANK HEALTH CARE CONSORTIUM OF PA 43 Banks Received Credits in Surplus of Over 13 9 Million in 2021 With an Average Net Funding Increase in Single Digits Wayne Whipple 717 255 6925 wwhipple pabankers com CRA PARTNERS Turnkey CRA Compliance High Yielding CRA Credits Terry B Rooker 901 529 4781 terry rooker SHCPFoundation org ANDERSON GROUP Integrated Marketing and Communications and Business Intelligence Linda Anderson 610 678 1506 LAnderson ThinkAnderson com APPI ENERGY BANKTALENTHQ Diversity is Essential Find Talent in all the Right Places Wayne Whipple 717 255 6925 wwhipple pabankers com BANKERS ALLIANCE COMMONWEALTH CHARITABLE MANAGEMENT Application and Administration of EITC Programs Cristine Clayton 570 278 3800 cclayton commonwealthcharitable org CORNERSTONE ADVISORS Electricity and Natural Gas Procurement Services Utilities Management Platform A Family of Bank Compliance Services That Includes Compliance Alliance Review Alliance and Virtual Compliance Officer Core Debit EFT Card Program Loan Origination Bill Pay Mobile Banking ATM Contract Negotiation Margo Madden 667 330 1239 mmadden appienergy com Wayne Whipple 717 255 6925 wwhipple pabankers com Jennifer Wagner 480 425 5204 jwagner crnrstone com 46 PA Bankers Association pabankers com

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DEALERTRACK COLLATERAL MANAGEMENT SERVICES INC INVESTORS TITLE INSURANCE COMPANY Electronic Lien and Title Program Multi Bank Owned Title Insurance Program Wayne Whipple 717 255 6925 wwhipple pabankers com Karen Barnett 419 577 5900 kbarnett invtitle com NCONTRACTS Integrated Compliance Vendor and Risk Management Board Encouragement Platform Nick Radocckia Vice President Sales 781 424 4650 nick radocckia ncontracts com DELUXE CORPORATION Check Program Todd Wroblewski 724 625 5599 todd wroblewski deluxe com NFP EXECUTIVE BENEFITS THE KAFAFIAN GROUP Performance Profitability Management Robert E Kafafian 973 299 0300 x106 rkafafian kafafiangroup com BOLI Executive Compensation and Long Term Care David Shoemaker CPA PFS CFP 901 754 4924 david shoemaker nfp com EVOLV Merchant Processing Search Engine Optimization Website Design and Social Media Management Joy West 540 235 7111 Jwest poweredbyevolv com KEYSTATE CAPTIVE MANAGEMENT NEW ERA TECHNOLOGY Captive Management and Investment Portfolio Services Managed Service Provider for Voice and Data Communication Brian Amend 302 425 5158 bamend key state com Christian Ericson 973 474 1828 christian ericson bitsnetwork com THE FULCRUM GROUP INTERNATIONAL INC Reviewing Re Negotiating and Bidding Check Printing Relationship Ted Amon 770 736 5787 ted thefulcrumgroupintl com KLARIVIS Data Analytics Solution Designed by Bankers for Bankers GLOBALVISION SYSTEMS INC Amber Robinson 603 860 3162 amberrobinson klarivis com Anti Money Laundering PAYLOCITY HCM Solutions and Engagement Software Lisa DeJoy 717 303 7663 ldejoy paylocity com Catherine Lew 818 998 7851 x128 clew gv systems com GRADIENT CYBER Automated CAT Tool Digital Forensic Investigation Network Consensus Cybersecurity Chris Warman 412 600 7860 cwarmanjr gradientcyber com WEBBER ADVISORS PWCAMPBELL Multiple Medical Drug Dental Vision Options and EB Solutions Planning Design Coordination and Construction Management Brad Webber 814 695 8066 bwebber lrwebber com Erin Campbell 800 253 7430 erin campbell pwcampbell com Vendor 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 PA Bankers Association Fall 2022 47

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2022 2023 debt repayment solutions Now you can accept Debit payments for loans from your lendees Debit Acceptance has benefits for various types of loans Evolv has a program for debit acceptance for debt repayment Evolv can provide research analytics and best practices for deploying this payment option Allow lendees to set up recurring payments that automatically Credit Cards Student Debt Mortgage Loans Consumer Loans Auto Loans ends when the bill is paid in full Optionally pass on the cost of the transaction to the card user as a convenience fee Stay Compliant Our program searches BIN numbers to make sure you are only accepting Debit card payments to keep you compliant Virtual Payments More and more consumers prefer to pay online bills using their Debit card especially now due to the pandemic Our software accepts online debit card payments from your lendees Website Portal Have separate portal pages on your website for each type of loan up to five pages per license Do More With Evolv Revenue Generating Digital Marketing Solutions Maximize Profits while Eliminating Card Acceptance Fees for Your Merchants programinfo poweredbyevolv com Real Time Reporting and Dedicated Relationship Advocates poweredbyevolv com Evolv Inc is a registered ISO of Wells Fargo Bank N A Concord CA and Fifth Third Bank N A Cincinnati OH

paBanker Magazine Fall 2022

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