paBanker Magazine Summer 2023 : simplebooklet.com

DATA DRIVEN ENERGY MANAGEMENT SOLUTIONS Energy management solutions include LED Lighting Retrofits Solar PV Community Solar Emissions Benchmarking Renewable Energy Certificates Battery Storage Demand Response Energy Utility Management for Multi Facility Customers Our team of experts will assess your facilities energy needs build a custom client specific electricity or natural gas procurement strategy and take the burden of energy management off your plate We are here to serve as an extension of your team helping you to reduce energy costs reduce energy demand and improve efficiency and sustainability AS YOUR TRUSTED ENERGY ADVISOR WE CAN Provide a real time apples to apples comparison of supplier pricing Negotiate on your behalf Minimize budgetary risk Provide customized energy management solutions Set meet energy efficiency sustainability goals 4 PA Bankers Association APPI Energy consultants craft solutions that fit each client s needs Contact your dedicated Energy Consultant for more information Peter Chaconas ENERGY CONSULTANT e pchaconas appienergy com d 805 698 1548 pabankers com

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PA Bankers STAFF DIRECTORY General Number 717 255 6900 PA Bankers Association Jill A Ametrano Registrar and Records Coordinator jillametrano pabankers com 717 255 6927 Lisa R Brandt Legal Assistant lbrandt pabankers com 717 255 6936 J Duncan Campbell III President Chief Executive Officer dcampbell pabankers com 717 255 6916 Jacqueline A Catalano Vice President Professional Development jcatalano pabankers com 717 255 6939 Amy L Doyle Administrative Assistant Communications and Government Affairs adoyle pabankers com 717 255 6937 Connie A Ferraro Director Information Technology cferraro pabankers com 717 255 6921 Michelle L Henry Administrative Assistant Member Engagement Development mhenry pabankers com 717 255 6900 Sara E Hocker Director of Marketing and Communications shocker pabankers com 717 255 6912 Karen J McDermott Sr Director Membership kmcdermott pabankers com 717 255 6914 Annette M Moshgat Director Finance amoshgat pabankers com 717 255 6938 Louise A Rynd Esq General Counsel lrynd pabankers com 717 255 6935 Michelle L Staton Chief Operating Officer mstaton pabankers com 717 255 6923 Marilyn M Wisniewski Professional Development Assistant mwisniewski pabankers com 717 255 6934 PA Bankers Services Corporation Tiffani A Chambers Director PA Bankers Services Corporation tchambers pabankers com 717 255 6928 Linda A Scott Administrative Assistant PA Bankers Services Corporation lscott pabankers com 717 255 6903 Cynthia L Wallett President PA Bankers Services Corporation cwallett pabankers com 717 255 6913 Wayne R Whipple Vice President Business Development wwhipple pabankers com 717 255 6925 magazineSTAFF Managing Sara E Hocker Editor Editorial J Duncan Campbell III Advisors Jacqueline A Catalano Tiffani A Chambers Louise A Rynd Michelle L Staton Cynthia L Wallett PA Bankers Services Corporation Board of Directors and Officers Chair M Theresa Fosko SPHR Secretary Tracy E Watkins SPHR Treasurer J Duncan Campbell III Directors Mary G Cummings Esq Eugene J Draganosky Philip L Freeman Jr Scott E Fritz John C Gill Ginger G Kunkel Karl F Krebs Brendan J McGill John H Montgomery Michael D Peduzzi Shawn R Proper Joseph R Toth Address Correspondence to paBanker Magazine c o Pennsylvania Bankers Association 3897 N Front St Harrisburg PA 17110 Tel 717 255 6912 Email adoyle pabankers 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 Summer 2023 5

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chairman sINSIGHTS MARK RITTER Executive Vice President Chief Administrative Officer The Northumberland National Bank Celebrating America and the American Banking System Adapted From His Remarks at the PA Bankers 2023 Convention T he past year has been filled with valuable and exciting experiences in working with bankers across our commonwealth and our nation I thought it would be interesting to highlight some of the more important observations I have gathered First as I have met banking executives from across the nation I have been amazed at how our industry attracts some of the most talented businesswomen and men in our country To an individual they are dedicated to doing what is best for their customers communities shareholders and employees They take very seriously the industry s responsibility as the lifeblood of our economy This commitment by all of you in this room makes me even more proud to be an American banker The second observation is that I have witnessed countless examples of why the American banking system is the envy of the world For over 100 years the United States economy has been the source of capital for the world and as I said earlier our industry is the lifeblood of that system Our community regional and large banks foster healthy market competition which results in robust economic growth efficient capital generation and real value for our customers Each allocates capital to distinct segments of our economy Just as we have across our great nation in Pennsylvania we are very fortunate to have a broad mix of community regional and large banks The approximately 130 banks chartered in Pennsylvania and numerous other institutions domiciled in surrounding states doing business in the commonwealth provide tremendous value to our local economies We should all be very proud of the diverse system of banks serving our communities The third observation is that despite the countless examples of how well the American banking system serves our nation there is an assault on our industry by a small group of elected and appointed government officials who believe a single central bank or just a handful of very large banks are preferable to our system which is based on healthy competition between thousands of banks in a free open market It is even more critical that as an industry our banks community regional and large all remain unified behind efforts to maintain the most competitive and effective banking system in the world These challenges to our industry lead to the fourth observation It is essential we return to a more civil public and political discourse in our nation and employ honest compromise to solve our nation s problems We have built the most affluent society the world has ever seen based on the free movement of capital and the freedom to express alternative views without the risk of ridicule or even more concerning physical harm The fifth observation is that we must be forever diligent in advocating for our industry This was made abundantly clear with recent events in our industry such as the failures of Silicon Valley Bank SVB First Republic Bank and Signature Bank The failures of these banks are being used by a minority of politicians who do not value our system and wish to migrate to a European or Canadian system of just a few very large banks or support a broader political agenda A good number of these leaders sadly do not value our capitalist and democratic systems that have made us the envy of the world and created the richest nation on earth Additionally there were a handful of less than honorable major investors who reacted to the SVB and Signature Bank failures by attempting to create at least the perception of a contagion because it would have supported their firms investment strategy These investors in some cases have shorts on their bank stocks and stood to make more money as the price of bank shares dropped and so they were using every opportunity to portray that our industry was in trouble I applaud the ABA for their efforts to bring these investors to the attention of the Securities and Exchange Commission so that appropriate measures are taken 6 PA Bankers Association pabankers com

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to stop these abusive short selling tactics from continuing Since the reaction by regulators and political leaders to these bank failures is being debated as I speak to you I believe it is imperative we repeatedly reinforce that these banks were nothing like the vast majority of Pennsylvania and American commercial banks First they had extreme customer concentration in a small number of industries including technology and start ups In the case of SVB an overwhelming percentage of their commercial clients were in these two industries Second their uninsured deposits those greater than the 250 000 guaranteed by the Federal Deposit Insurance Corporation were dramatically higher than the industry average Third they were not governed by individuals with proven experience in business banking or financial services Frankly they looked more like a hedge fund or mutual fund rather than a commercial bank As outlined in a report by Federal Reserve Governor for Supervision Michael Barr these failures were the result of three drivers 1 incompetent management 2 regulators who did not recognize or failed to expose material weaknesses in these institutions and 3 social media which fueled a run on the bank based on limited information My point in raising this is that there was not a crisis in the banking industry that manifested itself in these failures These were banks that had assumed extreme risk and were allowed to get away with it This bank profile is nothing like the stable wellcapitalized highly liquid institutions we have in the commonwealth and across the nation To be clear just as there was not a crisis back in March and April there is no banking crisis today Conditions in our industry are nothing at all like the events of 2008 and 2009 when a real estate bubble burst due to a surplus of 5 million homes across the country and reckless secondary market banking rules that resulted in a near collapse of the overall financial system not just banking Our industry is far better capitalized and liquid than it was in 2008 and 2009 Additionally today we have a shortage of 5 million homes across the country and we have returned to the tried and tested secondary market mortgage rules that have worked well since the early part of the last century Full disclosure yes there are unrealized bond losses on bank balance sheets These losses are a result of the dramatic increase in interest rates over the past 16 months designed to tamp down inflation We have been here before and I am confident that America s skilled banking leaders will continue to position our industry as the catalyst of economic growth I share your pain and frustration with how these recent events have been portrayed and that our industry continues to be used as a political tool by some rather than being valued for the outstanding job each of our institutions do to help our citizens meet or exceed their financial goals However I remain as optimistic as ever that we will emerge even stronger as an industry once we get past our current economic and political challenges These recent events demonstrate why we must be forever vigilant in advocating with our policy leaders to maintain a banking system that is based on free market capitalism This is why we encourage all the 70 000 bankers in Pennsylvania to engage with our political leaders to ensure we maintain and improve the best banking system on the planet These observations were the motivation for my selection of the theme for this year s convention Celebrate America We have many reasons to celebrate In 1789 Alexander Hamilton as a young 34 year old Secretary of the Treasury under President George Washington established the American banking system that we enjoy today The Bank of the United States served as a stabilizing force to foster the creation of banks across the country Hamilton conducted his duties as Secretary of the Treasury from both New York and Philadelphia Twice in the past 100 years the United States ended world wide conflicts Without the American commitment of our industry treasury and people these conflicts would have lasted much longer and resulted in millions of more deaths It s hard to imagine what the world would look like today without our nation serving as the arsenal of democracy and the bravery of many of our citizens The United States led the world out of deep economic depressions in the 1870s and the 1930s and numerous recessions along the way American leadership with creative policies and programs to stimulate the resumption of economic growth have been copied around the world Our leaders have also developed programs to strengthen our financial system and significantly reduce the chances of another catastrophic economic event like The Great Depression For 40 years the United States fought the Cold War Our national security and military leaders were successful in winning the war and avoiding widescale loss of life As a result the United States was widely recognized as the world s undisputed superpower which has kept the world as a whole at peace for nearly 80 years The commonwealth played a major role in the creation of our great nation The city of Philadelphia was home Continued on page 11 PA Bankers Association Summer 2023 7

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from the CEO to the CEO DUNCAN CAMPBELL President CEO PA Bankers Association Facing a Challenging Year Adapted From His Remarks at the PA Bankers 2023 Convention A s we all know it s been quite a year Steep and rapid interest rate increases significant cost of funds impact stark inflationary pressures unrealized losses niche bank failures We are not devoid of challenges right now I heard from one of our veteran bankers recently that this is the hardest time in his 50 year banking career Think about that Harder than the recent COVID period Harder than 2008 2009 Harder than the Savings Loan crisis Harder than the inflationary period of the late 70s early 80s That s saying a lot I am confident that we will get through this as we always do And the PA Bankers Association is here as we have been through each of those difficult times to offer our support Earlier this spring we witnessed several bank failures There have been bank failures before and there will be bank failures again As luck would have it we were scheduled to be in Washington on March 13 for our annual Congressional visits this on the heels of the FDIC stepping in to close SVB and Signature Banks the day before Our messaging for these meetings quickly pivoted from credit unions cannabis banking and agricultural lending to the fact that the Commonwealth s banking industry is safe and sound Pennsylvania is home to a resilient banking industry comprised of strong community banks regional banks and large banks Our banks are wellcapitalized have strong liquidity and serve a wide range of different customers All of this is to say that our banks did not and do not have the same risk models compared to these banks that failed There will be a policy reaction to these failures We ve seen a special assessment from the FDIC to cover the costs to the Deposit Insurance Fund There s a larger and very appropriate discussion ongoing about the future of deposit insurance Do you change the limits Do you increase them on small business accounts or in a targeted way Do you make them limitless during times of significant failure What about capital levels Does Congress rollback S 2155 which was the regulatory relief bill that we all worked so hard on in 2018 and which has become a scapegoat for the recent bank failures All of that will be hashed out and we are fortunate to have a very supportive congressional delegation in Pennsylvania In the days ahead we are going to need their support And we are going to need yours as well We are going to need to stand together as a united industry as these policy issues are debated so that we don t end up with a Dodd Frank like Act as we did in 2010 At the state level we want to make you aware of a tax issue we are working to clarify specific to goodwill Back in 2001 FASB adopted a rule that required goodwill to be recognized for combinations and acquisitions Many of you will recall the work that we did back in 2007 to enact Act 55 preventing this FASB change from increasing bank shares tax liabilities Recently the Department of Revenue has begun to deny the goodwill deduction in instances when two bank holding companies are merged This change is inconsistent with the intent of Act 55 and runs contrary to the long standing prior practice of the Department In essence if this position were to continue we would be looking at a significant tax increase for the industry 8 PA Bankers Association pabankers com

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We have received strong bipartisan support in both legislative chambers Senate Bill 742 introduced by Senator Scott Hutchinson was reported out of committee on June 7 House Bill 1336 was introduced by Representative Napoleon Nelson on the same day We will continue our efforts to try and resolve this issue as part of the commonwealth s budget process There is so much more great work being done by our team to address the needs of our industry I m so proud of our banker training and education whether that be through our schools Leadership Institute Women in Banking Young Professionals DEI Lending and Wealth Management and Trust Conferences annual seminars on new regulatory policies and more our DEI roadmap which was released in April our workforce development efforts punctuated by our commitment to Bankworks and the PA Bankers Intern Program which is now operating statewide in partnership with Shippensburg University our member volunteer engagement through all of the committee and task force work and our products and services efforts that include the Bank Health Care Consortium of PA our two title agencies Bankers Alliance as well as our best of breed Select Vendors We have a lot going on but we love the pace because we are mirroring yours A rolling stone gathers no moss as they say We re excited to attack all of these challenges head on and we re excited to do so together with you I have no doubt that together we will continue to make a difference Which special projects does your team need to tackle to have all C your 2023 submissions M Y ready for exams CM MY CY Scan the QR code CMY K for R A s capabilities Holding Company of Compliance Alliance and Review Alliance The community bank compliance partner That s Review Alliance Explore how R A can help Talk with our team at info bankersalliance org or 833 683 0701 PA Bankers Association Summer 2023 9

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tenONpageTEN 10 Ways DEI TRACC Can Help Your Bank With Your DEI Efforts The PA Bankers DEI roadmap DEI TRACC Taking Responsibility and Creating Culture is a blueprint for member banks of all sizes to begin refine and sustain effective DEI efforts Here are a few ways the roadmap can help with your bank s DEI efforts 1 DEI TRACC outlines the various phases involved in establishing long term sustainable change as well as what strategic steps should be taken to create a diverse equitable and inclusive organization 2 DEI TRACC is a tool designed to provide practical tools and resources for our member banks to use and it is scalable based on the bank size and resources available 3 There are four phases of TRACC envision plan implement and manage Each phase outlines who from the bank is involved anticipated outcomes and action steps to be taken 4 There are templates linked throughout for your bank to use like score cards self assessments goals planning progress tracking sheet etc 5 Guidance is included around establishing your leadership team creating your DEI statement assessing the current state of your bank in the areas of DEI 6 Once the leadership team is established guidance is offered around creating the bank s DEI goals designing a communications strategy for internal and external DEI communications 7 Guidance is included around employee information sharing sessions and a DEI training program for all employees as well as establishing DEI metrics and target outcomes 8 A framework for reviewing recruitment promotion succession mentorship and leadership development practices is included to ensure the bank is attractive to diverse communities considering employment and that opportunities exist for career development and upward mobility for all 9 Best practices are offered for creating Employee Resource Groups ERGs in an effort to build inclusive cultures and support employee development at your bank 10 Guidance on creating a supplier diversity policy at your bank is included as well as strategies and potential partnership ideas for consideration Member banks can download DEI TRACC today at www pabankers com We encourage you to reach out to Michelle Staton PA Bankers COO as you use this tool 10 PA Bankers Association pabankers com

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chairman sINSIGHTS Continued from page 7 to our founding in 1776 hosted the Constitutional Convention in 1787 and was also where The Bank of the United States was formed in 1791 Pittsburgh was home to one of the leading bankers in the history of our nation Andrew Mellon and one of our great member banks that bears his family name Pennsylvanians established and led some of the greatest industries in our nation Railroads oil steel timber mining textiles and of course banking saw their early foundations in the commonwealth Some of America s greatest entrepreneurs were from Pennsylvania We all have our personal reasons to celebrate For me both sides of my family my mother s side from France and my father s side from Germany and Ireland have been in Pennsylvania since the 1600s I am very proud of our rich history in our commonwealth My family s service to our nation is a source of pride My father served in the U S Army attached to General Patton s third army during World War II He was trapped behind enemy lines during the Battle of the Bulge and earned four bronze campaign stars During Korea he served in the United States Marine Corps in a regimental recon unit My father in law John Glowa a disabled veteran served in the U S Navy during World War II on a sea plane tender in both the Atlantic and Pacific theaters My brother served as a forward observer in an artillery unit in the U S Army Reserve and as a Nuclear Physicist in the U S Air Force My son inlaw Matthew a graduate of the United States Naval Academy at Annapolis served as a nuclear reactor officer on a nuclear fast attack submarine For the past several years we have spent much of our national energy focused on the challenges facing what I continue to believe to be the greatest nation on earth Instead I want to focus on the many reasons to celebrate being Americans What we do as bankers each and every day is a celebration of America We make individual dreams come true and we make the American dream come true We should all be proud of the work we do to support all our citizens and the world I thank you for the privilege of being the PA Bankers Chair for the past year It has been the honor of a lifetime and an experience Mary Anne and I will always treasure May God bless all of you and may God bless The United States of America It takes more than good intentions to transform communities It takes capital development capacity and trusted partnerships In 30 years we ve delivered more than 9 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 Summer 2023 11

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communityCORNER C N ACNB Bank ACNB Bank had two very successful weekends of bowling and fundraising at Bowl for Kids Sake 2023 in Hanover and Gettysburg in April They had 81 participants and 21 teams and raised a total of 7 298 48 for Big Brothers Big Sisters of York Adams Counties ACNB Bank remains committed to supporting local nonprofit organizations in their footprint Orrstown Bank Citizens Northern Bank C N donated 20 000 to support a YWCA Northcentral PA Neighborhood Assistance Program project that will replace the plumbing infrastructure in a local building Orrstown Bank donated 15 000 to the Conestoga Valley Education Foundation The donation will be used to fund innovative technology programs throughout Conestoga Valley schools NEW TO PA BANKERSWelcome NEW SELECT VENDORS IFS New offerings from Ncontracts Nconnect intranet and Ncyber PNC First Vikar Technologies FINANCIAL INSTITUTIONS 1ST Colonial Community Bank AFFILIATE MEMBERS Acuity Knowledge Partners Agri Access Dunbar LLC Farmers National Company Hovde Group R T Deposit Solutions SEI Sphere The Bonadio Group 12 PA Bankers Association pabankers com

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The Honesdale National Bank The Honesdale National Bank Foundation recently made a 3 500 contribution to Honesdale High School The funds will be used to support the costs associated with the students participation in the Future Business Leaders of America Inc FBLA Conference to be held in Hershey Pa The bank also made a 3 000 contribution to The Susquehanna County Interfaith through the EITC Program The funds will go specifically to the organization s Parent Pathways Program The Northumberland National Bank The Northumberland National Bank committed to contributing 25 000 over three years to assist with the building project of Haven Ministry Haven Ministry in Sunbury has been providing emergency shelter support and advocacy for individuals and families in Northumberland Snyder and Union counties for more than 30 years The bank also donated to the Selinsgrove Area Little League to support the Kratzerville Field renovations First Citizens Community Bank Fidelity Bank First Citizens Community Bank donated 10 000 to ASSETS a nonprofit organization focused on transforming communities through business They provide training 1 on 1 coaching and financing to entrepreneurs and leaders looking to start or grow their business and improve their community Fidelity Bank supported Community Action Lehigh Valley s SHE program with a donation of 9 150 The SHE program helps young girls reach their full potential through various strategies that inspire self esteem well being resilience and healthy relationships PA Bankers Association Summer 2023 13

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Wayne Bank Wayne Bank recently donated 6 250 to the Pocono Mountains United Way through the Educational Improvement Pre K Program According to the Pocono Mountains United Way of the over 2 300 children eligible for Pre K in Monroe County 77 percent do not have access to high quality funded Pre K programs The Poconos Mountains United Way advocates at the local and state levels for opportunities for all young children in Monroe County to develop the skills and abilities they need to thrive in school The bank also donated 25 000 to the United Way of Lackawanna and Wayne Counties and the Canaan Christian Academy with a donation through the PennGift Foundation The PennGift Foundation is a partnering program for business and private school scholarships It is solely dedicated to helping private schools and their students throughout Pennsylvania PennGift s Tax Credit Scholarship Organization initiative has provided millions of dollars to private schools from donors for more than 20 years Do you have hometown happenings that you d like to share Send your bank s community news to Sara Hocker for a chance to be featured in paBanker Magazine or on PA Bankers social media channels and website PA Bankers Association Summer 2023 15

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communityCORNER The Dime Bank The Dime Bank donated 10 000 to NeighborWorks Northeastern Pennsylvania via the Neighborhood Assistance Program NeighborWorks rejuvenates neighborhoods and creates opportunities for individuals and families to improve their lives through quality housing and financial guidance This donation will support the 2023 Scranton Beautiful Blocks Program which provides matching grants of up to 1 000 to each member of a group of at least five Scranton residents to help them make exterior improvements to their homes Grants are awarded annually through a competitive application process The bank also donated 15 000 to the American Readers Theatre ART and Greater Pike Community Foundation GPCF in partnership with the Delaware Valley School District DVSD to enrich students lives The ART program brought the historical understanding of the Holocaust through The Diary of Anne Frank to DVSD middle school students with an interactive format including professional actors performing a dramatic reading music exploration and journal writing The GPCF program focused on STEM literacy for DVSD middle school students to prepare for high school The MakerSpace lab and Lego Coding Club were expanded and two new programs were introduced Drone Certification and an Aquaponics Lab for elementary school students Additionally the bank contributed 9 000 to the nonprofit Brighter Financial Futures doing business as the Pennsylvania Council on Financial Literacy This donation which was made through the EITC Program supports students in the Wayne Highlands Wallenpaupack and Delaware Valley School Districts and Canaan Christian Academy through the Personal Finance Education Program The Personal Finance Program hosts three programs in one a personal financial curriculum teaching personal finance and business a stock market challenge simulation that teaches students how to invest in the stock market and a personal budgeting game simulation where students learn about credit budgeting net worth and financial balance for quality of life 16 PA Bankers Association pabankers com

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featureARTICLE 18 PA Bankers Association Wrap up M ore than 350 bankers Affiliate Members sponsors and guests traveled to The Boca Raton in sunny Boca Raton Fla for the PA Bankers 2023 Convention from June 8 to June 11 2023 Throughout the event attendees had the opportunity to network and gain industry insights from professionals specializing in succession planning CRA strategy enterprise data strategy ESG Millennials and Gen Z groups among many other topics On Friday June 9 we celebrated Immediate Past Chair Mark Ritter as he gave his last remarks and on Saturday June 10 we officially welcomed Chair Angie Sargent with a pinning ceremony and her first speech as chair General session speakers included Daniel Robb ABA chair and president and CEO for Jonesburg State Bank who gave us an update on the American Bankers Association and its initiatives James Olson former directorate of operations for the CIA and professor of the Practice Emeritus for the Bush School of Government and Public Affairs who spoke about his time working uncover in the CIA and Governor Jeb Bush the former governor of Florida who delivered informative remarks that shared his perspective on the current state of world affairs 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 Benecon Webber Advisors Stevens Lee Griffin Financial Group The Northumberland National Bank Fulton Bank First Citizens Community Bank and LINKBANK pabankers com

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featureARTICLE THANK YOU TO OUR SPONSORS RUBY SPONSORS DIAMOND SPONSOR Closing Pool Party at the Beach Club TBD Closing Pool Party at the Beach Club TBD PLATINUM SPONSORS Chair s Reception General Session Keynote Speaker Friday Board Past Chair Staff Dinner Officer Giveaway Co Sponsor Officer Giveaway Co Sponsor Officer Giveaway Co Sponsor Officer Giveaway Co Sponsor Saturday General Session Closing Keynote Speaker Co Sponsor Saturday General Session Closing Keynote Speaker Co Sponsor Closing Theme Party Entertainment Co Sponsor GOLD SPONSORS Closing Theme Party Entertainment Co Sponsor Convention WiFi Snackbox Board Past Chair Staff Reception SILVER SPONSORS APPI Energy Charter Catamaran Sail Snorkel Arnold Porter Saturday General Session Snacks Atlantic Community Bankers Bank Co Sponsor Friday Continental Breakfast Barley Snyder Opening Ceremonies BHG Financial Co Sponsor Welcome Reception Burns White LLC Printing of Convention Pocket Guide Bybel Rutledge LLP Welcome Reception Entertainment COCC Co Sponsor Welcome Reception Crowe LLP Badge Lanyards Deluxe Friday General Session Snacks FORVIS Co Sponsor Saturday Continental Breakfast Herbein Company Inc Digital Confirmation Kits Janney Montgomery Scott Co Sponsor Saturday Continental Breakfast Ncontracts Golf Tournament Prizes Paylocity Craft Beer Tour Piper Sandler Co Shuttle to Closing Pool Party at the Beach Club S R Snodgrass P C Convention Room Keys The Bonadio Group Co Sponsor Friday Continental Breakfast The Kafafian Group Inc Staff Shirts Wolf Company P C Golf Box Lunches American Bankers Association Apiture Baker Donelson Baker Tilly CSI D A Davidson Co BRONZE SPONSORS First Commonwealth Bank ICI Consulting JMFA Keefe Bruyette Woods A Stifel Company La Macchia Group As of 5 23 2023 PCBB Stradley Ronon Stevens Young LLP 20 PA Bankers Association pabankers com

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The Baker Advantage Interest Rate Risk and Investment Strategies Seminar OCT October 18 20 2023 Oklahoma City OK The Skirvin Hotel In 2020 the global COVID pandemic set into motion a series of historically unprecedented economic policies that upended markets and financial institutions as well as the global economy itself Massive amounts of liquidity and stimulus by policymakers enabled a fast recovery but financial institutions found themselves awash in excess liquidity needing to be put to work at historic lows in yield With time the explosion of reserves also triggered an inflationary impulse unlike anything seen in decades The Fed has been scrambling to get back in front of events and regain control of inflation ever since The resulting rate hikes and monetary policy tightening have been unprecedented in both speed and magnitude Portfolio managers now find themselves with scarce liquidity and deep unrealized losses not because of poor management or asset quality but simply because of the enormous swing in liquidity This seminar will examine the challenges now faced by CEOs CFOs and investment officers who must navigate the next phase of these uncharted waters 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 Fed s Next Moves Update on the rate outlook and likely next steps for Federal Reserve monetary policy Interest Rate Risk How to ensure you are prepared for uncertain balance sheet challenges and a constantly changing regulatory focus Liquidity Risk Management Tools and best practices for managing liquidity risk Investment Portfolio Strategies Adapting your strategy and finding the best relative value for the rate environment MBS CMO Market Balancing prepayment and extension risk in a changing environment for mortgage securities Municipal Market Update Thoughts and strategies 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 The Skirvin Hotel One Park Avenue Oklahoma City OK 73102 405 272 3040 AGENDA Wednesday October 18 Twin Hills Golf 1 00 pm Thursday October 19 Breakfast 7 30 am Seminar 8 30 am Lunch 12 00 pm Adjourn 4 00 pm Cocktails Dinner 6 00 pm come and go Friday October 20 Breakfast 7 30 am Seminar 8 30 am Conclusion 12 00 pm 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 September 16 2023 or until the room block is sold out Hotel price 159 fees tax For your convenience register for the seminar online at GoBaker com oklahoma seminar 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 Indianapolis IN Long Island NY Salt Lake City UT Springfield IL PA Bankers Association Summer 2023 25

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workforceINITIATIVES Banking Discovery EXTERNSHIP PROGRAM I n mid May PA Bankers and Shippensburg University executed the first Banking Discovery Externship program which welcomed 15 college aged students to Shippensburg s campus and local banks to increase awareness of opportunities in banking Students spent seven days exploring different topics in the banking industry through classroom sessions on campus and visits to local member banks to further their exposure to the specific topic of the day Topics included Retail Banking Commercial Banking Wealth Management Credit Management and Banking Support Services The students also worked with mentors from member banks to complete and present a case study to a faculty led panel We thank Orrstown Bank F M Trust LINKBANK M T Community State Bank and Penn Community Bank for their participation in the program Though I have not taken a finance class or considered the banking industry before I decided to participate in the externship program to explore different careers within banking I was amazed to find that banking was more than just accounting and finance and that employers look for many other transferrable skills such as communications relationship building empathy and attention to detail In addition I was surprised to learn that many professionals in the industry are accidental bankers and come from diverse educational backgrounds I found that financial advising human resources or marketing roles within the banking industry might be good fits for my psychology background which I had not considered before After this externship I feel I have a better understanding of the banking industry s strengths and opportunities and I am more interested in a banking career than ever before XHONAITA OLIVAS Externship Student 26 PA Bankers Association pabankers com

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We were so excited that we could participate in so many days of the program The students were engaged with each presentation visit and asked a lot of great questions We really enjoyed the time that we got to spend with them and are so appreciative of the opportunity to partner with you and share our banking knowledge with a whole new generation of potential bankers We look forward to the next one HEATHER KNISLEY SHRM CP SVP Chief Human Resources Officer Orrstown Bank When we were asked to be a part of the externship program and provide students with a glimpse into a day in the life of employees working in our Investment Trust Services Department we jumped at the chance We recognize that not all financial institutions provide this line of service to their customers so we were proud to have the opportunity to not only promote our bank but also showcase the talented employees we have on our Investment Trust Services team and the good work they do with our customers that contributes to the overall success of our bank We enjoyed getting to know the students and were impressed by their interest in learning about F M Trust They were actively engaged throughout the session provided their perspectives and asked great questions which made it an enriching experience for everyone involved Hopefully the students came away with a greater understanding of Investment Trust Services and how it can be a meaningful career path for them to consider within banking DR KAREN CARMACK SVP Chief Human Resources Officer F M Trust PA Bankers Association Summer 2023 27

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CHAMPION FOR WOMEN AWARD AFFILIATE MEMBER PAUL MATTAINI Partner Barley Snyder CHAMPION FOR WOMEN AWARD FINANCIAL INSTITUTION MEMBER PAULA BARRON Community Banking Division Manager Tompkins Community Bank Paul and Paula were recognized as seasoned professionals who through personal commitment application and dedication are invested in the success of others and foster growth to ensure women maximize their potential TOMORROW S PROMISE AWARD ALETA HEARD Senior Specialist Product Manager Bank of New York Mellon Aleta was recognized as a woman aged 35 or younger who continues to make a significant impact in the banking field and her community making her one to watch in Pennsylvania s banking industry The Women in Banking Recognition of Excellence Program is spearheaded by the association s Women in Banking Network which provides hundreds of women with opportunities for professional development networking mentorship recognition advocacy financial literacy and volunteerism within their institution the association and the industry The 2023 Women in Banking Recognition of Excellence Program was sponsored by Herbein Mosteller HR Consulting and Schneider Downs Co Inc and the winners were honored at the association s Women in Banking Conference in March PA Bankers Association Summer 2023 29

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40 FUTURE FUTURE UNDER 40 Honoring Future Leaders of Our Industry Do you know someone under the age of 40 who demonstrates business success community involvement leadership ability and influence Nominate your peers for the Future Under 40 Awards The Future Under 40 Awards honor young industry leaders who have made a tremendous impact in their institution the community and the industry YOUNG PROFESSIONALS CHAMPION Honoring an Influential Senior Leader in Our Industry Do you know an influential senior leader who inspires and promotes the growth of young professionals in the industry Nominate them for the Young Professionals Champion Award Thank you to our sponsor Eligibility Criteria Who may nominate a qualified candidate Nominations will be accepted from any member source however submissions may not be anonymous You may not nominate yourself Who is eligible for nomination Future Under 40 Nominees must be a current banker or Affiliate Member of PA Bankers and 40 years of age and younger Young Professionals Champion Nominees must be a PA Bankers financial institution member Nomination Details The nomination deadline is Aug 15 2023 The nominee will be made aware of the nomination and will be required to attend the PA Bankers Young Professionals Conference on Sept 27 2023 Nominate Your Peers Today FUTURE UNDER 40 YOUNG PROFESSIONALS CHAMPION Questions Contact Karen McDermott kmcdermott pabanPkAeBrasn ckeorsmAs so 7ci1at7io n25 5S u6m9m1e4r 2023 31

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governmentRELATIONS Partners in the Fight Against Elder Abuse E ach year in mid June we observe World Elder Abuse Awareness Day WEAAD a day intended to call attention to the pervasive and worsening problem of elder abuse including financial exploitation According to a 2022 FinCEN advisory elder fraud scams affect at least 10 of older adults in the U S annually But because fraud and scams are often significantly underreported it means that the actual percentage of victims is likely much higher Elder financial exploitation generally falls into one of two categories The first is elder theft in which a trusted individual like a family member or caregiver steals from an older person by forging checks stealing retirement or Social Security benefits using credit cards or bank accounts without permission or other means The second is elder scams in which a stranger succeeds in coercing an older adult into transferring money to them through tech support scams romance scams or other impostor scams Seniors are often targeted for their accumulated wealth and these scams can be financially and mentally devastating to the victims In fact the average loss per older adult was just over 35 000 in 2022 according to the FBI s Internet Crime Complaint Center In worst cases seniors may lose their life savings or their homes That s why it s critical for bankers who are on the front lines in the fight against elder financial exploitation to have a solid understanding of the red flags that can signal when an older customer is potentially being exploited This might look like an older customer making sudden or unusual changes to their account like adding new contacts located overseas making uncharacteristic attempts to wire large sums of money or seeming fearful of or submissive to a caregiver or family member This year the ABA Foundation has partnered with the FBI to create a new guide for bankers to help them recognize respond and report suspected elder financial exploitation to the proper authorities The guide outlines red flags provides steps bankers can take if elder abuse is suspected and includes a list of agencies and other partners that can provide additional resources The ABA Foundation also offers its popular Safe Banking for Seniors program a free national program that provides bankers with helpful tools and resources to connect with their local communities to discuss topics like avoiding scams preventing identify theft choosing a financial caregiver and more Any bank in the country member or non member can access these free resources by registering at aba com Seniors You can also access a comprehensive list of resources for older Americans at aba com OlderAmericans Finally ABA continues to support the fight against fraud more broadly through its award winning BanksNeverAskThat campaign The consumer facing awareness campaign aimed at educating the public about the types of information banks would never ask them to disclose over the phone or via text or email will be back this fall complete with updated resources Check it out at aba com BanksNeverAskThat and register to join the more than 2200 banks across the country doing their part to protect their customers We observe World Elder Abuse Awareness Day on June 15 but working to protect seniors from financial exploitation is an ongoing responsibility for all bankers Email Rob at nichols aba com ABOUT THE AUTHOR ROB NICHOLS PRESIDENT AND CEO AMERICAN BANKERS ASSOCIATION 32 PA Bankers Association pabankers com

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governmentRELATIONS PaBPAC Campaign Snapshot Dear Fellow Bankers Identifying and managing risk is a responsibility of every employee at our banks it is essential to what we do as bankers from compliance risk to fraud risk to credit risk But we also need to be aware of our political risk We must consider that political risk when investing in candidates All of us have one thing in common the banking industry I think there is no better place to work than in banking We are dream makers This industry makes dreams come true We serve individuals small businesses and communities Our industry must thrive so that these individuals small businesses and communities can thrive Who we support for elections is essential to achieving this goal I chair the PaBPAC Board of Directors and we carefully weigh the political risk of supporting each candidate for the industry Small midsize and large banks alike all provide input to the political strategy By contributing to PaBPAC you are supporting our future as bankers I assure you that we support candidates who support us That is the qualifying factor that we consider In the near future a member the PaBPAC Board of Directors will be contacting you to request your participation and your banks participation in PaBPAC In the meantime please review the brochure to learn more about the 2023 campaign Our 2023 contribution goal is 425 000 We cannot fully champion candidates that support the banking industry without your involvement By contributing to PaBPAC you are helping us speak with one voice Consider contributing to PaBPAC as a way to manage our collective political risk Please address any contributions and correspondence to PaBPAC 3897 N Front St Harrisburg PA 17110 If you have any questions or would like a PA Bankers staff member to visit with you do not hesitate to contact me or Amy Doyle 717 255 6937 or adoyle pabankers com Sincerely 103 CONTRIBUTORS GIVEN TO TOTAL 34 PHILIP H JOHNSON 2023 24 Chairman PaBPAC Board of Directors Regional President M T Bank DEMOCRATS REPUBLICANS 69 2022 CAMPAIGN ACHIEVEMENTS 2022 Campaign Goal 415 000 Total Raised in 2022 416 980 50 1 712 Total Number of Bankers Who Contributed Employees team members and board of directors from 73 financial institutions participated PA Bankers Association Summer 2023 33

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vendorARTICLES Energy Market Insight Q A with Energy Consultant Thomas Best Q It s been a challenging 18 months in the energy industry which has posed setbacks for our clients in a number of ways the most notable being price volatility What have you seen transpire with your clients and do you see things shifting now that we are experiencing some relief in prices for electricity and natural gas A concept that has certainly always existed but has become more prevalent as volatility reaches all time highs is the idea of timing the market When markets are moving up we see client hesitation due to the fact that there is hesitancy around the risk of locking in at the peak Conversely when markets are moving down we still see hesitation as clients hold out hope that they will sign at the bottom of the market As anyone in the industry will tell you and we say this all the time no one has the crystal ball on where energy prices will go The only way to know with certainty that we ve reached the bottom is when the market starts trending up again At APPI we advise our clients not to worry about timing the market perfectly but rather selecting a procurement strategy and price that aligns with their budgetary goals If the pricing is outside of a client s budget it s not unusual for our team to advise clients to wait monitoring the market on their behalf We are operating first and foremost for our client so their best interest are our best interests We can also explore a variety of pricing products beyond the traditional fixed all in But the key in all of this is starting the process early The more proactive you are with your renewal the more time we have to monitor the market explore various products Don t wait just because you think pricing is high now Let us get to work on your behalf as soon as possible Q Beyond a fully fixed procurement contracts explain why other options such as block and index for example might be a more viable option for some clients Many of our clients that have been on fixed all in products for years are now looking to other options based on their level of risk tolerance or individual goals or needs In Ameren IL for example we are seeing record high capacity costs so rather than lock capacity in for four or five years when it is at such a high point why not pass it through and pay it at market cost There is no avoiding the high cost of capacity this calendar year but the hope is that in years 2 3 4 etc of your agreement those capacity costs will decrease as more generation is attracted to the region allowing organizations to reap the benefit of that decreased cost Capacity pass through is also more favorable for customers participating in efficiency projects programs and want to see the immediate benefits of their reduced demand Block and index as you mentioned is becoming more popular for some of our larger users who are coming out of agreements signed in 2018 2020 when markets bottomed out Rather than fix a price for 100 of their load on one day when the rate is higher than what they currently are paying instead we employ a block index strategy to take some of the risk off the table hedging say 25 of the total load and then monitor the market over a period of time for other favorable hedges to strike While fixed all in is still a very viable strategy for a large portion of our customers for others the days of fix it and forget it are gone Q You work with a large portfolio of schools and nonprofits what are some of the energy challenges for that type of client Many schools and non profits have made commitments to become more green or sustainable with many receiving additional pressure from their boards to move in that direction As a school non profit it can be difficult to know where to even start Luckily we at APPI can help our clients achieve the green goals they have set or even help them to set those goals It typically starts by looking back at their historical data because you can t know where you re going until we ve collectively established where you ve been Once we ve completed that analysis there are a variety of ways to 36 PA Bankers Association pabankers com

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go about hitting those sustainability goals and reducing your carbon footprint and our team is here to facilitate that process Solar is a great opportunity for schools but it s not the only one For those who do not have the land roof space or can t make the capital investment there are options to participate in solar wind geothermal projects that don t involve any changes to the property physical building Two increasingly popular options with the ability to get an organization to 100 green are participating in community solar projects and purchasing Renewable Energy Certificates RECs Additionally a great way to reduce your carbon footprint is by using less power and becoming more efficient We can help find low hanging fruit opportunities with very short payback times via LED lighting retrofits and boiler chiller HVAC replacement Oftentimes these projects will include financial help from the utility state or can be completely funded on the electricity bill with little to no out of pocket payments Q Same question but for the banking industry where you also have a strong base of clients For our larger bank clients I ll go back to the block and index product This product makes a lot of sense for these large users as it s a similar idea to dollar cost averaging Do you want to buy 100 of your power for a four year term on one day If the price is right maybe you do But if you re not completely sure then let s employ block and index that will allow us to purchase portions of the load throughout the year and lessen the impact of market volatility Carbon accounting is also a growing need which I will discuss more below Q Outside of the procurement of electricity and natural gas what are some of the energy solutions that have moved to the forefront for your clients and prospects In the school non profit space we re seeing a resurgence in organizations looking at solar opportunities Just about everyone wants to be greener but maybe they looked at solar a year or two ago and the numbers didn t pencil Now as a result of the solar bill from August 2022 we are seeing increased opportunities for non profits where solar does make substantially more sense than before We can conduct our entire solar analysis for any organization at no obligation and no upfront cost For banking clients there is an increased focus on carbon accounting tracking through our utility data management software Every bank knows this is something to keep track of but a lot were unsure about how to actually do it This all in one portal is a game changer for many and most users see a reduction in overall energy usage spend just by having a system to accurately monitor their energy Q In your opinion what makes APPI Energy unique in our approach to energy management Our holistic approach to energy We re not just a broker shop or solar consultant or lighting expert We re all of those wrapped into one I think that is a huge benefit to our clients because rather than reaching out to three to four people for their various energy needs they can have one point of contact that will handle everything on their behalf and allow them to get back to doing their job or running their business organization Q How do you see the industry evolving over the next few years And what advice would you give to clients to navigate that landscape Whether you are in favor of it or not we will continue to see a push towards renewable green energy and there is a cost associated with that This will grow on both a state and federal level It will be interesting to see how we balance our grid with the extremely reliable sources of power like nuclear and natural gas with other sources like wind and solar especially in terms of capacity the cost to keep the grid reliable The energy world is also becoming more global It is no longer just about what is going on in the United States that will impact your pricing As we continue to be a world leader in natural gas exports we will continue to see factors like the war in Ukraine and weather in Europe Asia have a financial impact on our own energy costs My advice to clients and anyone else is to lean on your energy consultant for advice and recommendations Energy is typically a top 3 operating expense of any organization but it can be easily forgotten Take time to connect with your energy consultant and develop an actionable plan to help your organization navigate through these volatile and challenging times For more information contact Energy Consultant Thomas Best at 240 405 5702 or tbest appienergy com ABOUT THE AUTHOR THOMAS BEST is an energy consultant with APPI ENERGY Thomas is a graduate of Salisbury University in Salisbury MD and earned credentials from The Energy Professionals Association TEPA Thomas is also a Certified Energy Procurement Professional CEP through the Association of Energy Engineers AEE He has proven experience working with medium to large commercial and industrial clients government entities manufacturing hospitality and distributing sectors To contact Thomas for a customized energy solution call 240 405 5702 or email TBest appienergy com PA Bankers Association Summer 2023 37

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vendorARTICLES Section 1071 Final Rule What You Need to Know W hether you were counting down the minutes until its release or hoping it would be put off as long as possible it s finally here the Section 1071 Final Rule The Final Rule caps a more than 10 year wait from the enactment of the original statute which prescribed these requirements in the 2010 DoddFrank Act and it was released a mere day before the CFPB s publication deadline Surprisingly perhaps there were several changes from the Proposed Rule to the Final Rule that should provide some much needed relief to community banks However the majority of the rules were finalized as proposed so for those institutions who fall within the rules scope it will still be quite the mountain to climb until compliance day WHAT CHANGED FROM PROPOSED TO FINAL Many were happy to see that the final rule contained some key changes from the proposal issued in September 2021 According to the CFPB the changes reflect the consideration of more than 2 100 public comments on the Proposed Rule as well as extensive public input predating the proposal Threshold Increase Undoubtedly the biggest and most welcome change from the proposal is the threshold increase Whereas the Proposed Rule called for institutions to be covered when making as few as 25 covered loans per year the Final Rule increases this all the way to 100 per year To be clear this still covers a large majority of bank small business lending and those under the threshold should note that the CFPB made clear that Lenders originating less than 100 loans per year will still be required to adhere to fair lending laws Of course we always knew that banks are subject to fair lending laws regardless of the number of loans originated but the question will be how the CFPB and or other regulators may interpret this assertion in this new Section 1071 world Phased Implementation Probably the second most welcome change is the phased implementation which means that even for those institutions that are covered some do not have to collect and report until 2026 and 2027 respectively Specifically the Final Rule includes compliance date tiers for when a covered financial institution must begin collecting and reporting data TIER ANNUAL ORIGINATIONS IN 2022 2023 Tier 1 2 500 or more covered credit transactions Tier 2 500 2 499 covered credit transactions Tier 3 100 499 covered credit transactions DATA COLLECTION START DATE October 1 2024 April 1 2025 January 1 2026 DATA REPORTING START DATE June 1 2025 June 1 2026 June 1 2027 Note that even if your institution originated fewer than 100 covered originations in 2022 or 2023 if you originate at least 100 covered originations in 2024 and 2025 you still must collect and otherwise comply with the rule starting on January 1 2026 38 PA Bankers Association pabankers com

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Additionally the bank must have a method to determine how many covered credit transactions it originated in order to determine its appropriate compliance tier If the bank happens to not have readily available information needed to make this determination the Final Rule says that it can use any reasonable method to estimate its covered originations for 2022 and 2023 and provides several examples of this Visual Observation Requirement A third important change from the Proposed Rule is that the bank will no longer be required or allowed to collect a business owners demographic information by way of visual observation or surname This made many breathe a huge sigh of relief as the idea of trying to collect ethnicity and race through these means raised a variety of concerns during the time of the Proposed Rule So under the Final Rule this information will only be able to be collected directly from the applicant s and not through any other means WHAT DATA POINTS DOES THIS COVER It is interesting that the original 2010 Dodd Frank statute which enacted the 1071 rule required 13 data points which have now ballooned in the Final Rule to be reportable through 81 data fields One notable change in the data points for the final rule is the addition of LGBTQI business status Whereas in the Proposed Rule there were two separate data points for business status one for women owned and one for minority owned the Final Rule just includes one data point for business status which encompasses all three of these The Bureau notes that proposed 1002 107 a 19 women owned business status has been combined with proposed 1002 107 a 18 minority owned business status and the final 1002 107 a 18 274 data point now addresses minority owned women owned and LGBTQI owned business statuses As a result the data points in proposed 1002 107 20 and 21 have been renumbered as final 1002 107 19 and 20 p 274 https files consumerfinance gov f documents cfpb_1071 final rule pdf While we can t reasonably cover them all here the remaining data points were similar to the Proposed Rule and may be reviewed in the CFPB s Data Points Chart linked below WHAT TRANSACTIONS ARE COVERED Covered Credit Transactions Very generally a covered credit transaction is an extension of business credit under Regulation B but with certain exclusions some specifically for purposes of Section 1071 such as Trade credit Leases HMDA reportable transactions Insurance premium financing Public utilities credit Securities credit Certain incidental credit Factoring Consumer designated credit used for business or agricultural purposes Purchases of a credit transaction Purchases of an interest in a pool of credit transactions and Purchases of a partial interest in a credit transaction such as a loan participation agreement Despite the length of this list of exclusions the definition is still extremely broad and covers a wide variety of transactions including closed end loans open end lines of credit credit cards merchant cash advances and various credit products used for agricultural purposes Covered Originations A very important thing to note in this area is that covered originations for purposes of determining institutional coverage and compliance dates is narrower than the above A common question we have been getting on the Hotline is whether extensions and renewals should be counted For this purpose extensions renewals and certain other loan amendments are not considered covered originations even if they increase the credit line or credit amount of the existing transaction Continued on page 40 PA Bankers Association Summer 2023 39

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vendorARTICLES Continued from page 39 WHAT ELSE SHOULD I BE THINKING ABOUT Firewall A very unique aspect of this rule is the so called firewall provision which bears mentioning here In general employees and officers should be prohibited from accessing the following responses if that employee or officer is involved in making any determination about the application The applicant s minority owned women owned and LGBTQI owned business statuses and Its principal owners ethnicity race and sex There are limited exceptions to this firewall requirement including a notice allowance and the Final Rule also prohibits the bank from disclosing this demographic information to other parties again with limited exceptions Safe Harbors Interestingly the Final Rule has a safe harbor for certain incorrect census tracts NAICS codes and application dates It also has a safe harbor regarding incorrect determinations of small business status covered credit transactions and covered applications For example if the bank initially determines that an applicant is a small business but then later concludes the applicant is not a small business the bank would not be in violation if at the time the bank collected the demographic data it had a reasonable basis for believing that the application was from a small business Action Plan Now that the Final Rule has arrived there are a variety of questions and action steps our members should be considering such as Is my bank covered under the new Final Rule If so what is the bank s mandatory compliance date How will this affect the bank s Compliance Management System CMS What policies procedures and other governance documents or materials may need to be amended Is everyone well informed of the changes and their effects including the Board senior management business lines and other stakeholders What type of training is planned and for whom What do the bank s business lending processes look like currently and what change management will be required to implement these changes correctly and in a timely manner Has the bank established relationships with any vendors Do the modules or other software offered need to be tailored to meet the bank s needs What will the institution be employing for data integrity purposes What does a tailored project implementation plan look like for my institution Other Resources In addition to the Final Rule itself the CFPB published a bevy of other accompanying materials One is a Fact Sheet which outlines the history of the Section 1071 rulemaking and the various policy objectives driving it Another is a Policy Statement which indicates that the CFPB intends to focus its supervisory and enforcement activities on ensuring that covered lenders do not discourage small business loan applicants from providing responsive data including ECOA mandated demographic data requests The CFPB also published a Filing Instructions Guide which provides an overview of the filing process instructions for what to enter in each data field validation requirements that must be met before the register can be filed and additional resources to assist with inquiries A Data Points Chart provides a visual guide to the various data point fields and their respective regulatory references along with a brief description and filing instructions for each An Executive Summary lays out an overview of the main facets of the Final Rule Compliance Alliance will be publishing its own summary of the Final Rule very soon Finally a Key Dates chart provides a visual representation of the three compliance tiers and their respective mandatory compliance collection and reporting dates Note that there are some additional tools on the CFPB s resources page and more may be added in the future We re here to help It goes without saying that this is just an extremely brief overview of all the Final Rule entails As you approach your compliance date or just work to determine whether your institution may be covered at all we re here to help Feel free to reach out to our compliance Hotline by chat email or phone and one of our advisors will be happy to walk through your questions with you ABOUT THE AUTHOR VICTORIA E STEPHEN BANKERS ALLIANCE 40 PA Bankers Association pabankers com

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vendorARTICLES Careers in Banking Overcoming Industry Image Challenges and Emphasizing Opportunities T he banking industry is the backbone of the American economy with a bright future and numerous opportunities for young talent looking to build a rewarding career Yet the industry is continuously fighting an uphill battle of attracting and engaging the next generation entering the workforce With increasing competition growing staffing shortages and the preexisting perceptions of careers in financial services banks must recognize the importance of proactively engaging the next generation of bankers to remain competitive and successful As with many industries banks face a big challenge when it comes to the perceptions of the younger generation Today s talent pool is falling victim to misunderstandings and inaccuracies deeply rooted in public perception of the industry From the long held belief that banking lacks flexibility and is overly traditional to the pigeonholing of available career areas in financial services the industry s outdated reputation is hindering the development and growth of its workforce To overcome these banking image issues banks must advocate for the industry proactively engage with the next generation of potential banking talent and demonstrate what modern day banking has to offer Recognizing the obstacles that may discourage the younger generation from pursuing a career in banking is a crucial first step However to guarantee the industry s future success bankers need to be proactive in overcoming these reputation challenges and reevaluate their strategies for promoting the opportunities that the banking industry offers After all banking is an attractive career choice offering so much to those who decide to enter the field A career in banking is rewarding positively impacting people s lives daily creating opportunities for new businesses and helping organizations expand It also offers competitive salaries and excellent benefits a wide range of job roles career advancement professional development good work life balance stable hours and more Enticing the next generation of bankers is less about what banking doesn t offer and more about overcoming those misperceptions discussed earlier and being strategic and intentional about outreach efforts So what can organizations do to attract the best talent and reconsider their hiring strategy Consider these 7 tips for engaging students and upping your talent outreach game 1 BE PROACTIVE Start early and reach out often to local colleges and universities Engage in career fairs or work to set up events for students to learn more about your bank and what opportunities you offer Help connect future generations to the industry by providing touchpoints where students and young bankers can engage 2 EMBRACE TRENDS Help your bank stand out by being active on platforms that students relate to Social media isn t going anywhere and banks should engage a younger audience wherever possible 3 THINK OUTSIDE OF THE BOX Do you offer benefits like generous paid leave Do you have pet insurance Remote work opportunities Opportunities for your team to impact the nonprofits that matter to them The next wave of talent hitting the workforce is not exclusively focused on salary as their top priority Think about what benefits your bank offers and what appeals to an ever changing workforce 4 OFFER SCHOLARSHIPS Invest in the future of the industry Consider offering scholarships that help foster interest in the industry 42 PA Bankers Association pabankers com

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vendorARTICLES 5 CONSIDER INTERNSHIPS AND MENTORSHIPS Pave the way for interested students Consider implementing in house internship or mentorship programs Or if you don t have the staff or the resources to manage a full time internship program consider utilizing partners like Parker Dewey s Micro Internship Program that allow banks to engage with college students and recent grads in a more flexible arena 6 FOSTER PROFESSIONAL GROWTH What does your bank do to encourage professional growth Do more to show a younger generation of employees the potential for growth within your organization and know you have the resources to support their career goals 7 RELY ON YOUR STATE BANKING ASSOCIATION AND THEIR PARTNERS Your state banking association has resources curated for your banks needs and is the single biggest advocate for industry growth Utilize them Collaborate with their partners and work together to help ensure the future of banking is bright For employment needs BankTalentHQ com is just the platform needed to showcase incredible career opportunities available in the industry As a niche job board dedicated solely to the financial services BankTalentHQ com is curated to meet the needs of the industry and help banks stay competitive in today s job market BankTalentHQ com partners with the Pennsylvania Bankers Association and 39 other state banking associations across the country to help banks grow their workforce and support the industry Visit BankTalentHQ com to learn more To overcome the banking industry s outdated reputation and attract the next generation of bankers financial institutions must not only be actively promoting what banking has to offer but they must also be strategic with how they promote career opportunities By being strategic with outreach showcasing what the industry has to offer and promoting job opportunities banks can appeal to a younger audience and raise awareness about the possibilities of a rewarding and fulfilling career in the banking industry for the future ABOUT THE AUTHOR MADDISON AUGUSTINE DIRECTOR OF BANKTALENTHQ adINDEX APPI ENERGY 4 BANK HEALTH CARE CONSORTIUM OF PA BC BANKON 23 BANKTALENTHQ IBC BANKERS ALLIANCE 9 CSI 52 CINNAIRE 11 S R SNODGRASS P C IFC THE BAKER GROUP 52 INVESTORS TITLE INSURANCE COMPANY 41 PA Bankers Association Summer 2023 43

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vendorARTICLES Risk Management Controls A PRIMER R isk management is a critical aspect of banking operations However one area that often draws resistance is risk management controls The concept may seem intimidating or overwhelming but when you break down the components you ll find risk management controls aren t nearly as complicated as you think UNDERSTANDING RISK MANAGEMENT CONTROLS Risk management controls are measures or mechanisms implemented to mitigate risk They aim to reduce the likelihood of a risk event or minimize its impact should it occur Controls can be classified as preventive detective or corrective Preventive controls aim to prevent a risk event from happening Examples include automated software controls employee training and firewalls Detective controls identify and detect risk events or issues that have occurred to quickly address them and reduce their impact Examples include audits monitoring systems and fair lending data analysis Corrective controls resolve issues once they have been identified with the goal of reducing the impact of risk events and preventing them from recurring Examples include incident response root cause analysis and contingency plans Effective risk management involves implementing a combination of these controls to comprehensively balance potential risks UNDERSTANDING THE RESISTANCE TO RISK MANAGEMENT CONTROLS Despite their importance risk management controls can be a source of stress The reasons include the sheer number of controls to implement and monitor the perceived arbitrariness of measuring control effectiveness limited experience in risk management resistance to change and the perception of risk management as a technical complicated subject Understanding the challenges that make people avoid risk management controls allows us to address these objections effectively 1 The number of controls While there are indeed many controls not all are directly managed by those assessing them Many controls are activities a financial institution is already engaging in such as risk governance risk identification and assessment procedures incident management business continuity planning vendor risk management technology risk management employee training and awareness physical security measures and performance metrics and monitoring Risk managers can either assess these controls themselves or delegate the job to the person or department that oversee the controls It doesn t have to all fall on the risk manager 2 Measuring controls feels arbitrary There are ways to assess control effectiveness using data Audits reports and quality assurance are all great sources of objective information 3 Limited experience Collaboration and crossdepartmental training can help individuals unfamiliar with control areas gain a better understanding and contribute meaningfully to risk management Risk managers can also ask internal subject matter experts to review controls Again it doesn t all have to fall on the risk manager 4 Overconfidence resistance to change The dynamic nature of risk requires an open mind and readiness to adjust risk management strategies as needed You can t rest on previous risk assessments and assume nothing has changed 5 Perception of risk management While risk management requires expertise training and support can help employees understand controls as part of their everyday activities making the topic less intimidating PRIORITIZING KEY CONTROLS Given the variety of controls it s essential to prioritize those providing the most significant risk mitigation your key controls These controls may require more frequent monitoring and review adopting a risk based approach to control monitoring 44 PA Bankers Association pabankers com

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Weighing controls helps you identify controls that have the greatest impact For example automated controls may prove more effective than manual processes because they are completed more frequently and eliminate human error Weighing controls might even reveal that control isn t contributing much to risk mitigation and is no longer needed RISK MANAGEMENT AS COLLABORATION Risk management should be a collaborative effort Training individuals in different departments or business lines to evaluate their controls or provide feedback on outside evaluations can improve the overall effectiveness of your risk management strategies While discussing risk management controls can seem daunting the challenges are surmountable By addressing these issues and fostering an open supportive environment financial institutions can encourage employees to engage in discussions about risk management controls and collectively build a robust risk management practice ABOUT THE AUTHORS MICHAEL CARPENTER is an indispensable resource in helping bankers understand the importance of risk management compliance and effective third party vendor management His motivational approach empowers bankers to build stronger more proactive and more resilient institutions Prior to joining NCONTRACTS he served as the vice president of risk management at several banks and credit unions His broad base of industry knowledge is the result of building and running programs including director training and reporting compliance management information security BSA AML among others at both small community financial institutions and larger institutions such as KeyBank and Chase Bank He is the veteran of the U S Army PNC S FINANCIAL INSTITUTIONS GROUP IMPROVE YOUR COMPETITIVE POSITION Collaborate with an experienced team of financial professionals who can help Leverage our broad base of client relationships and expertise in capital issuance and M A 1 Lower cost of interest rate risk management Enhance product offerings and create opportunities for fee income Gain access to capital markets based solutions and technology Optimize investment portfolio performance 1 Strengthen and diversify your liquidity position Visit pnc com fig 1 PNCCM is not providing investment legal tax financial accounting or other advice to you or any other party PNCCM is not acting as an advisor or fiduciary in any respect in connection with providing this information and no information or material contained herein is to be construed as either projections or predictions Past performance is not indicative of future results PNCCM is a member of FINRA and SIPC and is a wholly owned subsidiary of The PNC Financial Services Group Inc PNC Investment banking and capital markets activities are conducted by PNC through its subsidiaries PNC Bank National Association PNCCM Harris Williams LLC Solebury Capital LLC and Sixpoint Partners LLC Services such as public finance investment banking services securities underwriting and securities sales and trading are provided by PNCCM https brokercheck finra org PNC is a registered service mark of The PNC Financial Services Group Inc PNC Bank deposit treasury management and lending products and services are provided by PNC Bank National Association PNC Bank a wholly owned subsidiary of PNC and Member FDIC Investment banking and capital markets activities are conducted by PNC through its subsidiaries PNC Bank PNC Capital Markets LLC including through its trade name PNC FIG Advisory Harris Williams LLC Solebury Capital LLC and Sixpoint Partners LLC Services such as public finance investment banking services securities underwriting and securities sales and trading are provided by PNC Capital Markets LLC and PNC FIG Advisory Mergers acquisitions advisory and related services are provided by PNC Capital Markets LLC PNC FIG Advisory Fortis Advisors LLC and Harris Williams LLC PNC Capital Markets LLC Harris Williams LLC Solebury Capital LLC and Sixpoint Partners LLC are registered broker dealers and members of FINRA and SIPC Important Investor Information Securities insurance foreign exchange and derivative products are Not FDIC Insured Not Bank Guaranteed Not A Deposit Not Insured By Any Federal Government Agency May Lose Value Lending leasing and equity products and services as well as certain other banking products and services require credit approval 2023 The PNC Financial Services Group Inc All rights reserved CIB CM PDF 0423 099 2247004 PA Bankers Association Summer 2023 45

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vendorARTICLES REFRESH The Latest Trend in Branch Transformation Remain Competitive with REFRESH T he idea of updating your retail branch network may be a little overwhelming especially during these tough economic and uncertain times however if you want to remain competitive doing nothing is not an option If your branches need an overhaul but you are hesitant to act due to budgetary reasons not knowing where to begin or have a lack of time and expertise to manage the project then perhaps the latest strategy in branch transformation which overcomes all of these hurdles is for you Branch Refresh WHAT IS REFRESH Refresh allows you to update and modernize your retail branch network at a fraction of the cost and in a much shorter time span all the while staying open for business Stopping just short of needing permits as with most remodels and renovations refresh projects covers all details related to cosmetic changes This can include fresh paint new flooring decluttering updating and replacing casework merchandising and updating furniture perhaps Refresh is a great opportunity to introduce and integrate in branch technology while showcasing consistent branding CONSIDERING THE REFRESH STRATEGY FOR THE MULTIGENERATIONAL CONSUMER As society evolves financial institutions must adapt to stay relevant Many banks and credit unions were built more than 20 years ago and at least 60 of those branches may need an update Financial institutions should consider a Refresh that aligns the branch experience with the overall brand to keep current clients attract today s multigenerational consumers and increase profitability and grow deposits Roughly 70 of Americans are banking online the need for visiting branches is no longer transactional but geared towards providing financial advice and education to help consumers select the best products and services based on the institution s goals With transaction volume down the stakes are even higher for a great branch experience when they walk through the door Today s consumers are retail driven and attracted to an environment that reflects a more modern approach HOW TO GET STARTED If you like many financial institutions have locations with old carpeting stained furniture and outdated finishes with limited or no brand messaging it is time to consider an update Our four tiered approach can help you navigate the process while keeping your goals and budget at the forefront Tiers 1 and 2 outline a true Refresh that can be accomplished without permitting or interruptions to daily operations Projects that fall within these two tiers can typically be completed within three to four weeks with the work taking place on weeknights and weekends and under the most strict security measures With careful planning and execution multiple branches can be completed at once giving the effect of a drastic and quick transformation sometimes overnight Tier 3 takes Refresh to the next level This level of transformation goes beyond merchandising and cosmetic changes and adds an analysis of the branch layout to determine its efficiency and functionality to best serve the needs of today s consumer and to optimize your business model 46 PA Bankers Association pabankers com

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dmgred3iottinhancdelaigeseonldokpieritTEbdnndirifrvaoedefafoinemrlonyolcTocltos1vrcao footfpoiehyi taevuvstptbhonnrmireiipBeemneunade3gsrrmentgwpaaatirtmtsztrtaniwesaosfiecodeodokrohajcrdyecnriereolnvhhmoeelsscwrsgea t uatt eanUintrRaalrthdlgpmimnbeoeieddsfunosirniasnneSuaeitgsgentinnenhoateiddc getnsossasstdabfnooebdamrtffaeiidtrfmmidhtoynscooedcpeiMadenhernnanaoelede ynvrcasxc mdeysnthaacawtealtheolnrnytivecnthdsdhehsiilsilosfuoas uunilomoTnentdkfhgvceiitneiotrshsitlifoaeenlcyennrgaborvdaunruealapiltnrtnotydicnhg nrmbeseilumdeotrefeirbsntiranwtasicsrImgfnnnoeooiagcfcrelsrdroentlfopsuhoirsTEyitarscienuhdnrpomgaftiitmtciefetaouigeeasen crtarrricatpeNgelnaratr1ettbsakr tgntuiiovasivoririe ndnnp etceahetngtlttsntnaBedie iimncnlndcewlrigblapgsghaysgeurnhps earntnideldctcnisadreiinahehnayteiwiacacntisglfcylnl tgsuuahtChdtoedtnaihtooinpcedesnergnheirdptnseripnnbaaaigxSsoegritmitntalsrci eoacotnatornigenniennduntpysdpgingnib talmai tacgUrornadcoopndpdenienfrndldocMosetuglaifiuvmupnmtejfmeitugdlrnetoestcaeenpghothtrartilreisnsabnsainnirgyndlmaagogasdln ewnoipkiaardxkclseieneitihvs rphnodeiteutlfgoi agsanpuoclugaditrtlnaatgres wYhOenUa ntmdoohrreoefu lwpoemodsetoraxaitdntbieenglnirgsnashenitivxnrdeuig ssootatifrenscdgtarbsroiprngaegnntaidbng rgeaT nhaidnendstpeerdgeerissalepetimlnnacygeesnt aetscnhdcnacnorleionagctyilnuagdnead nuoemdwg rnaiAepattirehpsrsdRopsaidetrbnnaofugsTCylforrbiuaeaaigocfieroglencrnatsheuwansnrshvphctrmCnchraiiaaa2ciishahnneobarnsygeeohnmoei ocgtofcrlewdemiecfntdptalnn lxseuoihC hsicnss cg mtrdpatsrdaoiisehcweaassneesnlitesnehdebhfetsrpdagicmimenrdetv lgieslloeinaefFalbitewssrsetoscnntyracxhrttmtuttteoedophlaiobihhihpcaisrssrennahnvareeeketohraRgcktediie nlncpnerierpiasausingeodfntnah rcrrsgvigidcewctnuniaeaosrseetsgamrolh nl rpt leepdnenplstimlfdaiuogecllrowareomwoebbtnysvnorrrsiehfneorbtaalraksronfnasauiaovannjddnpaunrild gdldtoispidnTasitknanrg glheretsggdirievie sna omogweesIgnflneonuuepidttrcaclrhehlianoeneclnbereirodataaumpmualtrnnophmptoretdodeedeerrnoski araatcnstdaittcnrasagienetenggns cidarnigd anttngnoiiefgzneyigneeg l furniture and signage Tier 3 Renovation and Remodel This level of change in Tier 3 can involve new teller line configuration adding or removing walls inTcieorr3poRreantoinvgatsioelnf asenrdvReedmigoitdaelloptions and more TThheispleervmelitotifncgharenqgueirinedTfieorr3thciasnkiinnvdoolvfeunpegwratdeellwerillline lickoenlyfigeuxtreantiodnt haedtdiminge forrarmeme noeveindgedwfaollrs thinecporrpojoercatting asnedlf asffeercvteddaiiglyitaolpoepratitoinosn sabnudt misowreo rTthheit pNeromt iattlilng lorecqautiiorends wfoirllthmisekriint dthoisf luepvgelraodfetrwanillsfliokremlyaetixotnen bdutthiet time isfraanmienvneesetdmeednftowr othrethpcroonjescidt earnidngafffoercmt daariklyetospwehraetrioens tahbtmnrueadatncrmskiosfemoawtkrspmoeweraittthhittieaoiioltrnm en Ntobahosunetttdaaciltcolroielmsonqacpsunaueitrmtiieniotmvienoersnesbnwtaamtinslfledeomnrdcteisocwurntictaosctturehetmhsitssrec elroenbvndeassilsdeoefdrinicgtaftoer trends and make it almost a requirement for success IS REFRESH RIGHT FOR YOU TIhSeRqEuFeRsEtiSoHn RisIGnHotTifF ObRutYwOhUe n and how extensive of aTRheefrqeusehsitsionneiesdneodt iAf nbuutpwdahteendabnrdanhcohwexetxetnendssivtheeof a mRoerfreemshoidsenreneadnedd aApnpeuaplidnagteadppbrroaancchhoefxfeterenddsonthleinme ore tomtohdeeirnn apnedrsaopnpeexapleinrgieanpcpe roAacRheforfefsehresdoloidnilfiniees ttohethe mine spseargseotnheatxpyoeuriernincset iAtuRtieofnreisshstsaobllideiafineds t hheermeetossage that sytaoyu r Pinlsutsit uitiopnroivsisdteasbsletaaffnwdi thhearne teonvstiraoyn mPleuns t ithpartovides mstaakfef swiitthexacniteinngvitroonsmelel ynot uthraptrmodaukectssitanexdcsiteinrvgictoessell your apnrdodeuascitesratnodensegravgiececsonansudmeearssieirntoa wenagyatgheatciosnssuuremers in a towashyothwaat ipsossuirteivteorsehtuorwn a positive return About the Author nEaaalrkllstlcOeooqitlnauiacteiratyl erapetreojeencgta TCmaaggnliiioovnoedesngrdm cgtei2mharewr neptpiiailtcCzeochsittoofniuponskglmltg ahaay yenenoltridaduigcfrchfuRertbrueiAJydmaernnlcAeanfiBigriorinasdlMeaO lefhricclos EsaUihothpncncSio lTcaaasdgFnoGsrlsToaetr dm HfbcewPieCasnsplW EsoeAhnqliurgeALuCspkptpnIUoaeaEa o drlmTiaNubemlnainHtustDptfiadiohe iObnlOkdnnemeRagesteilaosSrlawoifnvel ohnafldfewrafdrrfrleseeoro oetsvrworahmtekraiolriiaeylarnnkrsngsedebdizdraevonwidpckieetfehasrJetsuhifsxacnehaecxofanetearismeielisrvtdtcvoilcm1itaoweeieutuync1ubrsfrtoet a3lirtGJpiserv5Iiveilnokymfert s0eisoaneeoCra t0pasdimsjlahnlaeurdaiwandeflnt cioiciinrIednifotlnnetelpndd uhnacodnattdesontwhoioonsoopefcveotscPwneieiicsprirag2rr naaareePnl0p5getvssi fWi0tinrmeaoobdye02rrstnueeCiys0emtfnlaiailiialsndityltdeeiromuesz arsennapaetnpbninasdrgaoCcbasctodliafneneEoaaaf lrgksllstlcOneooqiitCnelinauniactg eEiratfyl eul rOuapenimtreedaonpjeteencatcrgihtncJa eitggmfiu1n1 lsg3 impactful and BEFORE AFTER PA Bankers Association Summer 2023 47

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vendorARTICLES The Fortress Balance Sheet and Community Banking S eventeenth century Europe was a period of political and social upheaval led by several powerful countries including France England Spain and the Dutch Republic S bastien Le Prestre de Vauban better known as simply Vauban was a French military engineer who is considered one of the most important figures in the history of fortifications Vauban s designs were so effective that they helped to make France the most powerful nation in Europe for over a century One of the key principles of Vauban s fortifications was the concept of balance He believed that a strong fortress must have a balance of different types of defenses each with its own strengths and weaknesses For example a fortress should have a strong outer wall to protect it from attack but it should also have a moat cannons and other defenses to provide additional protection By having a balance of different types of defenses a fortress could be more difficult to attack and more likely to withstand an attack The principles of balance that Vauban outlined centuries ago are also applicable to bank balance sheet management today A strong bank must have a balance of different types of assets each with its own risks and returns profiles For example a bank should not have all its assets invested in loans It should also have investments in cash government securities such as mortgaged backed securities municipal bonds and other earning assets It should properly monitor the duration of the balance sheet and potential changes in asset fair values By having a diverse balance sheet a bank can reduce its overall risk and increase its chances of success in weathering a recession or economic downturn Balance is also important for banks when it comes to managing interest rate risk Regardless if the financial institution is asset sensitive or liability sensitive it is prudent to have stable earnings across various rate environments within approved risk limits In addition to balance Vauban also emphasized the importance of preparation in his defensive tactics He Vauban argued that a strong fortress must be well built and wellsupplied The walls must be strong the cannons must be in good condition and the soldiers must be well trained and well equipped By being prepared a fortress could withstand an attack and continue to function even in the event of a siege The preparation and planning that Vauban implemented are also relevant to bank management as we think about the asset liability committee Banks are exposed to a wide range of risks including interest rate risk liquidity risk and credit risk Effective risk management 48 PA Bankers Association pabankers com

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View of Neuf Brisach a unique fortified octagonal town built in 1698 policies are essential for banks to protect their capital and ensure the safety and soundness of the financial system A strong bank must have a well developed risk management policy in place ALM liquidity contingency funding plan These plans should identify the bank s risks assess the likelihood and impact of these risks and develop strategies to mitigate these risks The various risk policies should also be adaptable to different business conditions and interest rate scenarios The bank must also have a strong internal control system in place to prevent modeling issues and errors Periodic risk assessments and stress testing of mode variables assist with this ongoing process By following the same concepts of balance and preparation banks can reduce their risks and increase the chances of long term success On the other hand letting the balance sheet be open to external risks that can be controlled through proper risk management is an invitation for trouble Just as Vauban s fortifications helped to make France the most powerful nation in Europe a successful risk management framework can help a bank to weather recession and improve long term earnings and shareholder value ABOUT THE AUTHOR MATT HARRIS CFA is ASSOCIATE PARTNER AT THE BAKER GROUP where he serves as Director of Asset Liability Management He started with the firm in 2007 as an intern while attending the University of Texas Austin where he earned a Bachelor of Arts degree in government and economics In 2010 he joined the firm s Financial Strategies Group at the home office in Oklahoma City where he works directly with bankers examiners and auditors regarding fixed income portfolio analysis and asset liability management Harris is also involved in the development and testing of The Baker Group s proprietary bond accounting and interest rate risk software Contact 405 415 7251 mharris GoBaker com PA Bankers Association Summer 2023 49

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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 ABA INSURANCE SERVICES Bond D O Cyber Insurance and Employment Practices Liability Patricia Williams 216 220 1280 pwilliams abais com THE BAKER GROUP Asset Liability Management Software and Services Charles Amis 405 415 7231 Charlie gobaker com BANZAI Interactive Award Winning Course Teaching Students Real World Finance No Upfront Cost Katie Rigby 801 821 9055 katie banzai org ACCUME PARTNERS BY CHERRY BEKAERT Outsourced Internal Auditing and Risk Management Services Nicole Lloyd 717 903 3142 nlloyd accumepartners com BANK HEALTH CARE CONSORTIUM OF PA A Unique Health Care Alternative for PA Based Financial Institutions and Affiliate Members of the PA Bankers Association Wayne Whipple 717 255 6925 wwhipple pabankers com CRA PARTNERS Turnkey CRA Compliance High Yielding CRA Credits Kristine LaVigna 877 232 0859 Klavigna shcpfoundation org ANDERSON GROUP Integrated Marketing and Communications and Business Intelligence Linda Anderson 610 678 1506 LAnderson ThinkAnderson com BANKTALENTHQ Diversity is Essential Find Talent in all the Right Places Wayne Whipple 717 255 6925 wwhipple pabankers com COMMONWEALTH CHARITABLE MANAGEMENT Application and Administration of EITC Programs Cristine Clayton 570 278 3800 cclayton commonwealthcharitable org APPI ENERGY Electricity and Natural Gas Procurement Services Utilities Management Platform Margo Madden 667 330 1239 mmadden appienergy com 50 PA Bankers Association BANKERS ALLIANCE A Family of Bank Compliance Services That Includes Compliance Alliance Review Alliance and Virtual Compliance Officer Wayne Whipple 717 255 6925 wwhipple pabankers com CORNERSTONE ADVISORS Core Debit EFT Card Program Loan Origination Bill Pay Mobile Banking ATM Contract Negotiation Jennifer Wagner 480 425 5204 jwagner crnrstone com pabankers com

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DEALERTRACK COLLATERAL MANAGEMENT SERVICES INC Electronic Lien and Title Program Wayne Whipple 717 255 6925 wwhipple pabankers com INVESTORS TITLE INSURANCE COMPANY Multi Bank Owned Title Insurance Program Karen Barnett 419 577 5900 kbarnett invtitle com DELUXE CORPORATION Check Program Todd Wroblewski 724 625 5599 todd wroblewski deluxe com THE KAFAFIAN GROUP Performance Profitability Management Robert E Kafafian 973 299 0300 x106 rkafafian kafafiangroup com EVOLV Merchant Processing Search Engine Optimization Website Design and Social Media Management Nellie Schlachter 888 311 7248x3009 nschlachter poweredbyevolv com KEYSTATE CAPTIVE MANAGEMENT Captive Management and Investment Portfolio Services David G Guerino 802 233 262 dguerino key state 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 Amber Robinson 603 860 3162 amberrobinson klarivis com NFP EXECUTIVE BENEFITS BOLI Executive Compensation and Long Term Care David Shoemaker CPA PFS CFP 901 754 4924 david shoemaker nfp com NEW ERA TECHNOLOGY Managed Service Provider for Voice and Data Communication Michael Foglia 973 503 5809 michael foglia neweratech com PNC FIRST Preferred Derivatives Program Amber L Evanco 724 689 2178 amber evanco pnc com PAYLOCITY HCM Solutions and Engagement Software Lisa DeJoy 717 303 7663 ldejoy paylocity com GLOBALVISION SYSTEMS INC Anti Money Laundering Catherine Lew 818 998 7851 x128 clew gv systems com WEBBER ADVISORS Multiple Medical Drug Dental Vision Options and EB Solutions Brad Webber 814 695 8066 bwebber lrwebber com PWCAMPBELL Design build Branch Experience and Consulting Services Erin Campbell 800 253 7430 erin campbell pwcampbell com INNOVATIVE FINANCING SOLUTIONS LLC Your Trusted SBA USDA Experts Michael D Ryan 610 733 9955 mryan innovfs net NCONTRACTS Integrated Compliance Vendor and Risk Management Board Encouragement Platform Jason McFarlane 917 504 6491 jason mcfarlane ncontracts com VIKAR TECHNOLOGIES INC Smarter Modern Banking One View One Vendor One Vikar Nancy Schneier 973 495 4835 nancy vikartech 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 Summer 2023 51

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The Ultimate Talent Solution for Banks BankTalentHQ is a premier online career center dedicated to connecting top talent with banking employers across the United States Our mission is to support the growth and success of the banking industry by facilitating connections and empowering career advancement Recruitment Solutions BankTalentHQ provides a comprehensive job board exclusively for the banking industry Find top talent to drive your banking business forward with BTHQ Training and Certifications Great bankers never stop learning Reskill upskill and hone your expertise with training from the American Bankers Association BankTalentHQ job seekers receive discounted pricing on all ABA online training certificate programs and professional certification exam prep Retention Strategies BTHQ s newest partner Whistle works to help employers in the industry increase employee engagement reduce turnover and improve overall retention This platform is offered as a discounted solution to complement BTHQ s recruitment offerings www BankTalentHQ com

paBanker Magazine Summer 2023

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