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STRONGERTOGETHERIN THIS EDITION      

2 » PA Bankers Association pabankers.com20232024

PA Bankers Association » Winter 2023 3BRINGING TIMELY NEWS AND INFORMATION TO THE MEMBERSHIP OF THE PA BANKERSthisISSUEIN EVERY ISSUEFEATURES6 Chair’s Insights8 From the CEO to the CEO10 Ten on Page Ten14 Community Corner20 Workforce Initiatives24 Recognition Round-Up28 A Look Ahead30 Vendor Articles18 Community Bank Case Study Competition 19 Sta Updates 14STRONGERTOGETHERIN THIS EDITION2023 WILLIAM S. LATOFF ADVOCACY AWARD WINNER2024 CSBS COMMUNITY BANK CASE STUDY COMPETITION 2024 WOMEN IN BANKING RECOGNITION OF EXCELLENCE PROGRAM ON THE COVER19

4 » PA Bankers Association pabankers.comBaker’s Software Solutions Service Package Includes:Asset/Liability Analysis – Interest Rate Risk Monitor (IRRM®)Your management team will find that The Baker Group’s quarterly review of the loan and deposit information outlined in the Interest Rate Risk Monitor and Asset Liability Analysis is an eective tool in managing your risk and performance.Bond Accounting – Baker Bond Accounting® (BBA)The Baker Group will provide you with accurate, easy-to-read reports delivered electronically to you each month.Investment Analysis – Advanced Portfolio Monitor (APM®)The Advanced Portfolio Monitor is a key monthly report that we utilize to help you measure, monitor, and manage the overall risk and performance of your investments.Balance Sheet Liquidity – Dynamic Liquidity Monitor (DLM)The Dynamic Liquidity Monitor allows users to simulate multiple “what if” scenarios to assess impacts on balance sheet liquidity. It is eectively a dynamic “sources and uses” model that enables you to adjust assumptions on a variety of things.*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.To obtain the resources you need to maximize the performance of your financial institution, contact our Financial Strategies Group at 800.937.2257, or FreeTrial@GoBaker.com.SampleMunicipal Summary03/31/2017Page 1 of 2635,461GO+REV9,896,680GO4,752,978REVGO 64.7%REV 31.1%GO+REV 4.2%Total: 100.0%Municipal Type689,324TX PSF10,199,393AA4,180,764A215,638NRTX PSF 4.5%AA 66.7%A 27.4%NR 1.4%Total: 100.0%Moody/S&P Composite RatingALCACOIAILINKYNMOHOKTXWAWIAL 1.9%CA 2.3%CO 1.4%IA 3.9%IL 10.8%IN 10.2%KY 2.4%NM 1.7%OH 8.0%OK 9.9%TX 33.2%WA 4.7%WI 9.6%Total: 100.0%State of IssueIndividual Municipal Ratings are as of 3/19/2017, unless recently purchased.weighting based on Book Value of 15,285,119Insd-AGMInsd-BAMInsd-PSFGInsd-PSFG, Pre-ReFundedInsd-State AidNot InsuredNot Insured, Pre-ReFundedInsd-AGM 12.0%Insd-BAM 3.4%Insd-PSFG 3.1%Insd-PSFG, Pre-ReFunded 1.4%Insd-State Aid 11.9%Not Insured 58.2%Not Insured, Pre-ReFunded 10.0%Total: 100.0%Insurance4/13/2017 6:43:55AM - FSG / SAMPThe Baker Group Software Solutions, Inc. - APMTMAlthough the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.ADVANCED PORTFOLIO MONITORTM1818SampleCusip ParCpn BookPriceMarketPriceGn/(Ls)*AcctgEffDurEffCnvxUnderlying Municipal Credit Detail03/31/2017YieldDescriptionPage 6 of 7Muni InsurerMuni Type Moody S&P Call DateMaturityASC 320 Gn/(Ls)%StateUnderlyingRatingsGO | REV*DA% | DC*Per Cap | CovntIssue DateTax StatusOverlapping D/A - Debt/PopNet AssetEndingBeginningCnty JoblessSecurityFiscal YearReport Date *Proj944431BL8 220,000 5.500 103.90 105.18 2,816 4.34 4.39 (0.98)WAYNE SD #112-B-BABS IL 26Not InsuredN/A N/AGO N/A A+12/01/2012/01/26AFS 1.23 IL5.58 | --507 | --12/08/10Taxable 8.29 - 754WAYNE - 8%2016 ReportAD VAL TAXES2015 4.34 3 Items 4.19 4.19 3.91 (0.30)(458) 103.36 103.40 5.311 1,160,000Taxable Municipal Totals39 Items Portfolio Totals 3.25 3.25 3.91 (0.26) 3.392 104.59 101.78 (409,651) 14,615,0006,385KAA6,918KA1,981KNRAA 41.8%A 45.3%NR 13.0%Total: 100.0%Moody/S&P CompositeUnderlying Rating1,471KAa2213KAa31,533KA1768KA311,299KN/AAa2 9.6%Aa3 1.4%A1 10.0%A3 5.0%N/A 73.9%Total: 100.0%Moody's Underlying Rating695KA+635KA232KA-13,723KN/AA+ 4.5%A 4.2%A- 1.5%N/A 89.8%Total: 100.0%S&P Underlying Rating689KAAA10,415KAA4,181KAAAA 4.5%AA 68.1%A 27.4%Total: 100.0%Moody/S&P CompositeRatingweighting based on Book Value of 15,285,118* Denotes Tax Equivalent Yield (TEY) where applicable.Individual Municipal Ratings are as of 2/28/2017, unless recently purchased.* D/A% = Debt to Assesed Ratio; DC = Debt Coverage | Per Cap = Per Captia Debt; Covnt = Rate Covenant4/13/2017 6:43:56AM - FSG / SAMPThe Baker Group Software Solutions, Inc. - APMTMAlthough the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.ADVANCED PORTFOLIO MONITORTM2626Balances ($000's)Page 1 of 112/31/2019BookValue% of Book TA**RateSensitive< 1 Year*Book Yield/Rate*Reinv.Rate*12 Mo. Proj.Yield/RateAvg.LifeEffectiveDurationEffectiveConvexityFull Indx. Rate/Total is % of SegmentFixed Var. NonInt.Summary ALCO - Asset/Liability MixSample$20,414 4.16 46.55 53.45 46.55 0.97 0.04 0.01 0.00 Cash & Due 0.97 0.97 / 0.97$172,210 35.10 100.65 (0.65) 14.56 2.81 4.60 3.55 (0.51)Investmentsj 2.81 2.64 / 0.00(Includes MTM)$4,500 0.92 100.00 100.00 1.63 0.04 0.04 0.00 Funds Sold 2.13 2.13 / 2.13$276,700 56.39 56.28 45.26 (1.53) 53.28 5.20 2.59 1.96 (0.22)Loans 5.37 5.47 / 5.76$6,511 1.33 100.00 2.49 12.63 0.00 0.00 Other Earning 2.49 2.49 / 0.00$10,358 2.11 100.00 Non-Earning$490,693 3.24 Total 68.38 28.37 100.00 38.01 4.17 3.27 2.36 (0.31)Assets 4.28 4.28 / 5.31$276,064 56.26 66.70 33.30 12.02 0.53 7.66 4.48 0.54 Non-Maturing Deposits 0.53 0.53 / 0.53$92,498 18.85 99.44 0.56 0.00 82.54 0.84 0.70 0.65 (0.04)Certificates of Deposit 0.84 0.81 / 0.70$37,721 7.69 100.00 68.68 1.09 0.97 0.93 (0.02)Jumbo CDs 1.08 1.05 / 0.00$28,250 5.76 95.58 4.42 46.90 2.06 1.95 1.89 0.03 Borrowed Funds 2.04 1.86 / 1.88Other Paying$6,724 1.37 100.00 Non-Paying$441,257 22.36 Total 35.51 42.13 89.93 33.70 0.80 5.15 3.14 0.33 Liabilities 0.80 0.77 / 0.54 10.07 $49,436 (0.60)(0.46)Total Equity Capital 100.00 $490,693 Total Liab & CapitalLiability MixAsset MixLiquidity RatiosConstant BenchmarkALCODependency RatioLiquid Assets / TARatio is outside benchmark.P< 750.00%< 100.00%< 50.00%< 20.00%> 10.00%< 35.00%< 300.00% 42.39 68.11 559.71 48.04 6.31 10.19 7.69 Loans / Assets 56.39 Investments / DepositsLoans / DepositsLoans / CapitalNet Borrowed Funds / Capital< 75.00%Available Line of Credit$90,500 56.39Loan35.10Inv4.16Cash2.11Non-Earn1.33Other Earn0.92Others56.26NMD18.85CDs10.07Equity7.69J CDs5.76Borrow1.37OthersReliance on Wholesale Funding 9.14 < 30.00%The smallest 2% of all categories will be grouped into an 'Others' category.Jumbo CDs / TANote: Values are rounded before printing, but full precision values are used in all calculations. * Yields/Rates are reported on EA & PL.Investments using Accounting yield.j(Ver 4.0 R7) Copyrighted 1994 - 2020 1/29/2020 3:39:46PM - SAMPLE / SMB1218The Baker Group Software Solutions, Inc. - IRRMTM Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.Interest Rate Risk Monitor** Percentages based on maturing, repricing, and paydown balances.As financial institutions face unprecedented times, The Baker Group is ready with tools and services to help maximize the performance of your institution.That’s why we’re oering new clients our Software Solutions* service package for a six-month free trial. Not only will you have access to our latest market research and insight from our Financial Strategies Group, you’ll be included in all of our webinars. There you’ll hear the latest Information on the economy and how it could impact your institution and its investment portfolio.www.GoBaker.comFREETRIALOklahoma City, OK | Austin, TX | Long Island, NY | Salt Lake City, UT | Springfield, IL | Member: FINRA & SIPCSix-Month

PA Bankers Association » Winter 2023 5PA Bankers STAFF DIRECTORYGeneral Number (717) 255-6900PA Bankers Association Registrar and Records Coordinator jillametrano@pabankers.com | (717) 255-6927 Legal and Policy Coordinator lbrandt@pabankers.com | (717) 255-6936President & Chief Executive Ocer dcampbell@pabankers.com | (717) 255-6916 Vice President, Professional Development jcatalano@pabankers.com | (717) 255-6939Communications and Government Aairs Coordinator adoyle@pabankers.com | (717) 255-6937 Director, Information Technology cferraro@pabankers.com | (717) 255-6921 Administrative Assistant, Member Engagement & Development mhenry@pabankers.com | (717) 255-6900 Director of Marketing and Communications shocker@pabankers.com | (717) 255-6912 Vice President, Government Relations jhumma@pabankers.com, (717) 255-6933 Director, Finance amoshgat@pabankers.com | (717) 255-6938General Counsel lrynd@pabankers.com | (717) 255-6935 Chief Operating Ocer mstaton@pabankers.com | (717) 255-6923 Professional Development Assistant mwisniewski@pabankers.com | (717) 255-6934 PA Bankers Services Corporation Director, PA Bankers Services Corporation tchambers@pabankers.com | (717) 255-6928 President, PA Bankers Services Corporation cwallett@pabankers.com | (717) 255-6913 Vice President, Business Development wwhipple@pabankers.com | (717) 255-6925magazineSTAFF  Sara E. Hocker     J. Duncan Campbell III   Jacqueline A. Catalano Tiani A. Chambers Jonathan D. Humma Louise A. Rynd Michelle L. Staton Cynthia L. Wallett PA Bankers Services Corporation Board of Directors and Ocers   M. Theresa Fosko, SPHR  Tracy E. Watkins, SPHR Treasurer J. Duncan Campbell III  Mary G. Cummings, Esq. Eugene J. Draganosky Philip L. Freeman, Jr. Scott E. Fritz John C. Gill Ginger G. Kunkel Andrew Linn Brendan J. McGill John H. Montgomery Michael D. Peduzzi Joseph R. Toth Address Correspondence to: paBanker Magazine c/o Pennsylvania Bankers Association 3897 N. Front St., Harrisburg, PA 17110 Tel. (717) 255-6912 Email: shocker@pabankers.compaBanker Magazine is published four times a year by the PA Bankers Services Corporation (Services Corporation), a subsidiary of the Pennsylvania Bankers Association (PA Bankers). The Association serves Pennsylvania banks and nancial institutions with educational programs, member services and represents members on the state and federal level. Since 1895, PA Bankers continuously worked to be the premier nancial services organization supporting a diversied membership through volunteer participation, a knowledgeable sta, state of the art technology and a commitment to excellence.paBanker Magazine is the ocial publication of PA Bankers.EditorialThe opinions expressed in articles by authors other than Association sta and ocers are the responsibility of the authors only and not necessarily those of the PA Bankers, the Services Corporation or its members. All articles, unless otherwise notied, have been written by paBanker Magazine sta. Questions and comments should be addressed to the Managing Editor. PA Bankers members may reproduce any non-commercial part of this publication with verbal permission from the editor. All others must receive written permission from the editor prior to reproduction of any part of this publication. Copyright ©2003 PA Bankers Services Corporation. All Rights Reserved.Printed by: HAAS Printing CoSponsored by: Baker’s Software Solutions Service Package Includes:Asset/Liability Analysis – Interest Rate Risk Monitor (IRRM®)Your management team will find that The Baker Group’s quarterly review of the loan and deposit information outlined in the Interest Rate Risk Monitor and Asset Liability Analysis is an eective tool in managing your risk and performance.Bond Accounting – Baker Bond Accounting® (BBA)The Baker Group will provide you with accurate, easy-to-read reports delivered electronically to you each month.Investment Analysis – Advanced Portfolio Monitor (APM®)The Advanced Portfolio Monitor is a key monthly report that we utilize to help you measure, monitor, and manage the overall risk and performance of your investments.Balance Sheet Liquidity – Dynamic Liquidity Monitor (DLM)The Dynamic Liquidity Monitor allows users to simulate multiple “what if” scenarios to assess impacts on balance sheet liquidity. It is eectively a dynamic “sources and uses” model that enables you to adjust assumptions on a variety of things.*The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc.To obtain the resources you need to maximize the performance of your financial institution, contact our Financial Strategies Group at 800.937.2257, or FreeTrial@GoBaker.com.SampleMunicipal Summary03/31/2017Page 1 of 2635,461GO+REV9,896,680GO4,752,978REVGO 64.7%REV 31.1%GO+REV 4.2%Total: 100.0%Municipal Type689,324TX PSF10,199,393AA4,180,764A215,638NRTX PSF 4.5%AA 66.7%A 27.4%NR 1.4%Total: 100.0%Moody/S&P Composite RatingALCACOIAILINKYNMOHOKTXWAWIAL 1.9%CA 2.3%CO 1.4%IA 3.9%IL 10.8%IN 10.2%KY 2.4%NM 1.7%OH 8.0%OK 9.9%TX 33.2%WA 4.7%WI 9.6%Total: 100.0%State of IssueIndividual Municipal Ratings are as of 3/19/2017, unless recently purchased.weighting based on Book Value of 15,285,119Insd-AGMInsd-BAMInsd-PSFGInsd-PSFG, Pre-ReFundedInsd-State AidNot InsuredNot Insured, Pre-ReFundedInsd-AGM 12.0%Insd-BAM 3.4%Insd-PSFG 3.1%Insd-PSFG, Pre-ReFunded 1.4%Insd-State Aid 11.9%Not Insured 58.2%Not Insured, Pre-ReFunded 10.0%Total: 100.0%Insurance4/13/2017 6:43:55AM - FSG / SAMPThe Baker Group Software Solutions, Inc. - APMTMAlthough the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.ADVANCED PORTFOLIO MONITORTM1818SampleCusip ParCpn BookPriceMarketPriceGn/(Ls)*AcctgEffDurEffCnvxUnderlying Municipal Credit Detail03/31/2017YieldDescriptionPage 6 of 7Muni InsurerMuni Type Moody S&P Call DateMaturityASC 320 Gn/(Ls)%StateUnderlyingRatingsGO | REV*DA% | DC*Per Cap | CovntIssue DateTax StatusOverlapping D/A - Debt/PopNet AssetEndingBeginningCnty JoblessSecurityFiscal YearReport Date *Proj944431BL8 220,000 5.500 103.90 105.18 2,816 4.34 4.39 (0.98)WAYNE SD #112-B-BABS IL 26Not InsuredN/A N/AGO N/A A+12/01/2012/01/26AFS 1.23 IL5.58 | --507 | --12/08/10Taxable 8.29 - 754WAYNE - 8%2016 ReportAD VAL TAXES2015 4.34 3 Items 4.19 4.19 3.91 (0.30)(458) 103.36 103.40 5.311 1,160,000Taxable Municipal Totals39 Items Portfolio Totals 3.25 3.25 3.91 (0.26) 3.392 104.59 101.78 (409,651) 14,615,0006,385KAA6,918KA1,981KNRAA 41.8%A 45.3%NR 13.0%Total: 100.0%Moody/S&P CompositeUnderlying Rating1,471KAa2213KAa31,533KA1768KA311,299KN/AAa2 9.6%Aa3 1.4%A1 10.0%A3 5.0%N/A 73.9%Total: 100.0%Moody's Underlying Rating695KA+635KA232KA-13,723KN/AA+ 4.5%A 4.2%A- 1.5%N/A 89.8%Total: 100.0%S&P Underlying Rating689KAAA10,415KAA4,181KAAAA 4.5%AA 68.1%A 27.4%Total: 100.0%Moody/S&P CompositeRatingweighting based on Book Value of 15,285,118* Denotes Tax Equivalent Yield (TEY) where applicable.Individual Municipal Ratings are as of 2/28/2017, unless recently purchased.* D/A% = Debt to Assesed Ratio; DC = Debt Coverage | Per Cap = Per Captia Debt; Covnt = Rate Covenant4/13/2017 6:43:56AM - FSG / SAMPThe Baker Group Software Solutions, Inc. - APMTMAlthough the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.ADVANCED PORTFOLIO MONITORTM2626Balances ($000's)Page 1 of 112/31/2019BookValue% of Book TA**RateSensitive< 1 Year*Book Yield/Rate*Reinv.Rate*12 Mo. Proj.Yield/RateAvg.LifeEffectiveDurationEffectiveConvexityFull Indx. Rate/Total is % of SegmentFixed Var. NonInt.Summary ALCO - Asset/Liability MixSample$20,414 4.16 46.55 53.45 46.55 0.97 0.04 0.01 0.00 Cash & Due 0.97 0.97 / 0.97$172,210 35.10 100.65 (0.65) 14.56 2.81 4.60 3.55 (0.51)Investmentsj 2.81 2.64 / 0.00(Includes MTM)$4,500 0.92 100.00 100.00 1.63 0.04 0.04 0.00 Funds Sold 2.13 2.13 / 2.13$276,700 56.39 56.28 45.26 (1.53) 53.28 5.20 2.59 1.96 (0.22)Loans 5.37 5.47 / 5.76$6,511 1.33 100.00 2.49 12.63 0.00 0.00 Other Earning 2.49 2.49 / 0.00$10,358 2.11 100.00 Non-Earning$490,693 3.24 Total 68.38 28.37 100.00 38.01 4.17 3.27 2.36 (0.31)Assets 4.28 4.28 / 5.31$276,064 56.26 66.70 33.30 12.02 0.53 7.66 4.48 0.54 Non-Maturing Deposits 0.53 0.53 / 0.53$92,498 18.85 99.44 0.56 0.00 82.54 0.84 0.70 0.65 (0.04)Certificates of Deposit 0.84 0.81 / 0.70$37,721 7.69 100.00 68.68 1.09 0.97 0.93 (0.02)Jumbo CDs 1.08 1.05 / 0.00$28,250 5.76 95.58 4.42 46.90 2.06 1.95 1.89 0.03 Borrowed Funds 2.04 1.86 / 1.88Other Paying$6,724 1.37 100.00 Non-Paying$441,257 22.36 Total 35.51 42.13 89.93 33.70 0.80 5.15 3.14 0.33 Liabilities 0.80 0.77 / 0.54 10.07 $49,436 (0.60)(0.46)Total Equity Capital 100.00 $490,693 Total Liab & CapitalLiability MixAsset MixLiquidity RatiosConstant BenchmarkALCODependency RatioLiquid Assets / TARatio is outside benchmark.P< 750.00%< 100.00%< 50.00%< 20.00%> 10.00%< 35.00%< 300.00% 42.39 68.11 559.71 48.04 6.31 10.19 7.69 Loans / Assets 56.39 Investments / DepositsLoans / DepositsLoans / CapitalNet Borrowed Funds / Capital< 75.00%Available Line of Credit$90,500 56.39Loan35.10Inv4.16Cash2.11Non-Earn1.33Other Earn0.92Others56.26NMD18.85CDs10.07Equity7.69J CDs5.76Borrow1.37OthersReliance on Wholesale Funding 9.14 < 30.00%The smallest 2% of all categories will be grouped into an 'Others' category.Jumbo CDs / TANote: Values are rounded before printing, but full precision values are used in all calculations. * Yields/Rates are reported on EA & PL.Investments using Accounting yield.j(Ver 4.0 R7) Copyrighted 1994 - 2020 1/29/2020 3:39:46PM - SAMPLE / SMB1218The Baker Group Software Solutions, Inc. - IRRMTM Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed.Interest Rate Risk Monitor** Percentages based on maturing, repricing, and paydown balances.As financial institutions face unprecedented times, The Baker Group is ready with tools and services to help maximize the performance of your institution.That’s why we’re oering new clients our Software Solutions* service package for a six-month free trial. Not only will you have access to our latest market research and insight from our Financial Strategies Group, you’ll be included in all of our webinars. There you’ll hear the latest Information on the economy and how it could impact your institution and its investment portfolio.www.GoBaker.comFREETRIALOklahoma City, OK | Austin, TX | Long Island, NY | Salt Lake City, UT | Springfield, IL | Member: FINRA & SIPCSix-Month

6 » PA Bankers Association pabankers.coms we enter a new year, I find myself thinking back on my 30+ years in the banking industry. It certainly has not always been an easy ride, as we have faced multiple crises, including those of our banks, our country and our economy - not to mention a rapidly changing technological environment for our employees and our customers. Although it wasn’t easy at times, it has certainly been rewarding. There is a reason I have spent my whole career in this industry; the people and the mission truly make banking one of the best professions in the world. Banks exist to serve their communities, and it is no secret that we make dreams come true. From financing someone’s first home to giving loans for college or a new small business venture, we are there for our customers and our collective communities every step of the way. Our economy truly could not function without us. While this is the case, the perception of our industry, whether founded or unfounded, still has its challenges with the news of an impending recession and increased housing costs, interest rates, and cost of living. So, what can we do to change this? Most, if not all, of the commonwealth’s banks are regularly supporting their communities through donations, sponsorships, and volunteering opportunities. Some of you may even partner with local organizations as members of their boards or AANGIE SARGENTSenior Executive Vice President, Chief Information OfficerFulton Bankcommittees. And while this is fantastic and incredibly necessary for Pennsylvania’s economy to continue to thrive, support at the individual bank level will not unleash the full potential of the industry. Thus, at times we need to come together as one unit. To quote Aristotle, “the whole is greater than the sum of its parts” – just as the Pennsylvania banking industry is stronger when we work together to support the industry and our communities. I am proud and excited to introduce “Stronger Together,” the association’s new campaign aimed at creating a strong voice among all PA bankers to effect change and support our communities. The banking industry is as unique as the communities it serves, and it takes banks of all sizes working together to make the most impact.With the association’s help, banks of all sizes regularly come together in a variety of ways to strengthen the banking industry across the commonwealth, including:•  on behalf of the banking industry at the state and federal levels;•  the next generation of bankers by supporting Bankwork$, the PA Bankers Intern Program, CSBS Community Bank Case Study Competition, etc.;•  through conferences, seminars, schools, and the PA Bankers Leadership Institute;•  to discuss challenges and working collectively as an industry to resolve them;•  through volunteerism and funding for nonprofits and small businesses;•  across the enterprise to include the workforce, customers, and communities; and •  through Bank On certified accounts to increase financial stability across the state. “Stronger Together” essentially brands our engagement with the association and gives us a platform to show the industry and our communities what we do to strengthen the commonwealth by working together. We officially kicked off the initiative in early January, but you can expect to see it rolled out over the next few months on social chair’sINSIGHTSWe Are Stronger Together

PA Bankers Association » Winter 2023 7in Harrisburg to share examples of how we strengthen our small towns by meeting with key legislators and policymakers. More information about the 2024 event will be available soon.In conclusion, it is crucial that we work together to strengthen and advance the standing of our industry. PA Bankers is here to help, and I encourage you to utilize the association’s professional development opportunities and member resources as tools to get us to our common goal.Thank you, and with your help, I know we will be “Stronger Together.”93%of business leaders feel executive benets have helped to retain top talent.** 2023 NFP Executive Benets Compensation Trends StudyWE’VE GOT THE TOOLS. YOU’VE GOT THE TALENT.Retaining top talent is a key issue in this competitive environment. Leaders understand the value of compensation and executive benets and acknowledge their impact in driving retention. Still, there is a constant need to balance oerings with their bottom line.Contact David Shoemaker atdavid.shoemaker@nfp.comexecutivebenets.nfp.comInsurance services provided by Equias Alliance, LLC, a subsidiary of NFP Corp. (NFP). Doing business in California as Equias Alliance Insurance Services, LLC, (License #0H52337). Securities oered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Kestra IS is not aliated with Equias Alliance LLC or NFP. Investor Disclosures: kestranancial.com/disclosuresmedia, in paBanker Magazine and at the association’s conferences and Convention. I encourage you to use the initiative’s hashtag (#PABankersStrongerTogether) when you are supporting your community or attending a PA Bankers event. Be sure to have fun with it! To find out how you can get involved, visit www.pabankers.com/strongertogether. As part of this new initiative, PA Bankers will be offering several opportunities to come together next year, including:•  – The association will host its inaugural Senior Management Conference on Sept. 9-10, 2024, which will coincide with the PA Bankers Board Retreat. This conference will provide a unique opportunity for senior management to come together for networking and education. More details will be available this year.•  Peer  – The association will begin hosting regional peer exchanges, which will feature topics specific to various areas within the bank. More information about these peer exchanges will be available this year.• – The association is excited to host PA Bankers Day at the State Capitol in 2024. This event provides a unique opportunity for bankers to gather chair’sINSIGHTS

8 » PA Bankers Association pabankers.coms I enter each new calendar year, I often wonder how the past year went so fast. What’s the old saying: the days are long, but the years are short? As the father of two growing boys, I often feel that way. Just yesterday, it seems, I started my work with the Pennsylvania Bankers Association. James was 5; Brooks was 1. I blinked my eyes on Nov. 12 and 11 years had passed. Time flies. Now James is driving, and Brooks is as tall as my wife, Kristen. Tempus fugit for sure.2023 was an interesting year, to say the least, for our industry. It has been a difficult one, to add a finer point. Economic conditions have been at the center of the story, as the country watches to see if the Fed is going to stick a “soft landing” or if we will ultimately fall into recession – which is still not certain at this point. The swift rise in interest rates has impacted consumers and banks alike. Mortgage rates are the highest we have seen in decades. Unrealized losses have mounted in bank portfolios as traditionally safe, conservative longer-term securities have borne the brunt of this rapid and dramatic increase. Additionally, lending activity has slowed in some parts of the commonwealth; and, while things have settled a bit since the bank failures of the spring, liquidity remains top of mind. I wish the news were better on the regulatory front. It seems like every day we are receiving a new rule from the regulators. Now, in fairness, we have been expecting many of them for years. It just took a while to get to the final product. Two significant Dodd-Frank Act (DFA)-era responses were released in 2023: a final rule implementing Section 1071, which requires small business loan application data collection and a proposal to implement Section 1033 on personal financial data rights. We have raised concerns about the scope and implementation of these DFA Sections directly with CFPB Director Chopra, as well as with his staff, on multiple occasions. Specific to Section 1071, we have grave concerns that the expansion of data field collection, beyond what statute requires, is simply unnecessary and will drive many small business lenders away, similar to what we have seen in the mortgage industry. Fortunately, thanks to the challenges put forth by the American, Texas and Kentucky Bankers Associations, a nationwide stay against the CFPB’s implementing or enforcing its Section 1071 rule has been ordered by a court until the U.S. Supreme Court rules on the constitutionality of the CFPB’s funding, which we expect in late spring/early summer.Late last year, we received the Community Reinvestment Act (CRA) modernization rule that the prudential regulators have been working on for many years, dating back to before the pandemic. CRA modernization is needed—the Community Reinvestment Act was enacted in 1977—but it must be done thoughtfully. The final rule, all 1,500 pages of it, requires significant scrutiny to ensure that its requirements meet its stated goals.Last fall, the Federal Reserve released its proposal to amend the regulatory cap on interchange fees that issuing banks receive from merchants on debit card charges (Regulation II). This comes at a time when we are also strenuously advocating against Senators Durbin and Marshall’s and Representative Gooden’s so-called Credit Card Competition Act in Congress. I encourage all 77,000 bankers in the commonwealth to use the online tool linked here to urge the Fed not to implement its Reg II proposal on debit interchange and the tool linked here to urge their Member of Congress to oppose mandates on credit card routing. Further government mandates on the card payment system could threaten data security and card rewards programs. Polling demonstrates that the vast majority of the American public does not want to lose these programs.I feel like I am only scratching the surface, sadly. I haven’t even delved into the FHFA’s report on A Resilient Industryfrom the CEO to the CEODUNCAN CAMPBELLPresident & CEO PA Bankers AssociationA

PA Bankers Association » Winter 2023 9the state of the Federal Home Loan Banks, which we are monitoring to see how and in what form its provisions may take shape, or the Fed’s proposal to require increased capital at large banks, but you should know that we are carefully watching all of these issues and will engage appropriately to advocate on behalf of Pennsylvania’s banking industry, both in Washington and in Harrisburg. Fed Governor Miki Bowman recently commented that there are nearly 5,000 pages of rules and proposals being implemented or under consideration by the federal banking agencies since last July. We must ask ourselves how thousands of pages of new regulation will lead to more effective service for our customers? That’s a question that I don’t know quite how to answer.One thing is certain, however, and that is the fact that we will get through this period. We always do. One of the hallmarks of the banking industry is our resiliency. We talked about this a few months ago at our board and past chairs’ strategic retreat, and we added language to the association’s strategic plan to emphasize this point. We have always been, and we will always be, a resilient industry--capable of taking on new challenges; capable of adapting and adjusting to new regulations and legislation; and immensely capable of serving our customers and making their dreams come true, under all circumstances.We are all in this together--stronger together, as you will take from Angie’s message on pages 6-7. We need to stay together as we confront the many challenges that have been presented to us and the others that we will undoubtedly face. The days will be long, but the year will be short. All of us at PA Bankers look forward to another year of opportunity to advocate on your behalfSincerely,

10 » PA Bankers Association pabankers.comtenONpageTENRecently, PA Bankers launched its new In-Bank Sales and Prospecting Program, brought to you by FTCTogether and PA Bankers. The In-Bank Sales and Prospecting Program is designed to assist your sales team in enhancing their business and sales development skills through innovative approaches to meeting prospects that work for real people in the real world.10 10 ON  The In-Bank Sales and Prospecting Program is a menu of specifically designed keynotes, workshops and development sessions that are customized to the needs and expectations of the organization versus an off-the-shelf approach to sales and business development. We use the current culture as a foundation to build upon.  Great question. I have been a business owner and sales and business development professional for over 40 years and have been blessed with great success. During my career, I had the opportunity to work with some of the best, high-performance sales professionals in many different industries, including insurance, realtors, CPAs, attorneys, small and mid-size businesses, and, for the last 25 years, community banks. I found that no matter the industry, the principles of success are the same, but the application may adjust slightly to meet the special needs and concerns of the organization. I wanted to take the knowledge and personal experience and design an easy-to-learn, hard-to-forget training that would help students cultivate their mindset as well as the skills that drive high-performance results.   As mentioned earlier, I don’t think one size fits all because each organization has different levels of skill sets, confidence and culture. Each market is slightly different, and confidence to meet the challenges varies. What may work for some may not work for others. Each program takes all this data into consideration. I use proven techniques in success principles, emotional intelligence, practical sales and business development practices.  The positive impact the members experience is a result of blending both personal growth and business development into one curriculum. Simply put, confidence, motivation, a positive mindset, a can-do attitude and recognized progress has had a high impact on each student’s personal growth as well as their career growth and results. If we focused only on skills with very little attention or use of personal success principles, I believe reaching potential would be difficult or impossible to achieve. with Dennis BudinichTo give you some insight into the program, we asked  founder and CEO of FTCTogether, to be our for this edition. See his answers below!

PA Bankers Association » Winter 2023 11  There are more than three, but the three I will share are the most practical and profitable in business.Things don’t get easier; we must get better to achieve our personal potential. That means reading books and self-educating yourself. Everything I have learned about success did not come from any bank I worked for. I took personal responsibility for my growth and business results. Workshops, seminars, classes, book clubs and networking with successful people are the best ways to develop valuable knowledge.This is what I learned along the way in my career: If I don’t work my book, the competition will. How do we work our book? That’s the question asked often. Visit your clients at least once a year (more if they are your A and B clients). Do annual reviews of services used and ways your organization can improve. We can learn a great deal of information from these visits, and it gives us useful insight into what’s important to the client. One thing that I’ve learned is that today we do business based on the clients’ terms, not ours. When we as bankers say we need to deepen our business clients’ relationships, we need to make sure our approach is aligned with theirs. My research shows that one of the most important ways we can bring value to our clients is to help them find ways to grow their business.  The Law of Familiarity plays a role in this. The more our clients and prospects see us or our brand, the more familiar they become, and the more familiar they become, the more likely they are to accept an invitation to a bank event or a meeting with you. Remember, out of sight, out of mind. This is not the time to wait for things to change or get better. While everyone else is waiting, we need to act and make things happen.   I recognize that bottom-line results are one of the main reasons for a business to exist, but in the last couple of years, the heavy focus on short-term success and quarterly results has had a negative impact on building strong relationships in the business community. I believe if we focus and measure the application of practical, proven-to-work activities and be fanatical about prospecting and meeting new people in our communities every week, the results will follow. Most of our people are good or very good salespeople, but that’s NOT good enough to achieve high performance. High performers have varying skills, but they are all good at prospecting.   I believe most people reading this article will know that good-to-great salespeople make the register ring. We as business leaders are held responsible for increasing results and, as a result, pay the bills. But that’s not the only reason sales professionals are crucial. They promote the brand, represent the commitment your organization has made to the community it serves, and are an extension of the bank’s culture. As we can see, it’s more than selling products and solutions. Sales professionals are the ones that make the emotional connection between business and organization. Prospects change banks many times because of the banker and the emotional connection that was made. Our salespeople bring the  to the sales process, which represents 71 percent of the reason people buy. 20232024

12 » PA Bankers Association pabankers.com     Interested in learning more about the program? Click here or contact Jackie Catalano, (717) 255-6939.tenONpageTENAs we consider how many companies promote their brand and business, there is a great amount of attention put on marketing, products and digital services. I am a business owner, and I fortunately (or unfortunately) see all banks as being the same in reference to these points. Give me a reason beyond only rate that would motivate me to move to your organization.Cultivate the ability to emotionally connect with others. People do business with people who are interested in them and not just their money. Nothing beats in-person connections. We can use digital resources to stay connected.Is your story worth sharing? If not, develop one that attracts prospects to your brand. What does the bank stand for and how is it recognized by existing clients? Create a message/brand that people can like and trust.The best place to get those answers is not found in the bank. It is found in the business communities. Talk to your existing, former and future clients (prospects). They will be glad to share their thoughts on this topic.The In-Bank Sales and Prospecting Program teaches easy-to-apply strategies and techniques that help in these areas.• Learn, understand, and practice the principles of success.• Know your products inside and out.• Know your competitors’ products.• Anticipate objections, prepare, and practice your response. High performers don’t wing it.• Prepare your presentations in a logical, easy-to-follow format and make it easy for clients to understand. Studies indicate that what’s hard to understand up front will most likely make it harder to get agreements (presentation skills, don’t complicate the process, etc.). • Learn how to make emotional connections with people and find ways to build familiarity. • Become comfortable and fanatical about prospecting. Build your community of people that can help you while you help them to grow their business.• Share what you learn with people you know and meet. What brings value to your business will also help others (value-added relationships).• Schedule your prospecting activities and annual or semi-annual client review appointments for the month and stick with it. What we do in a 30-day period will have an impact on our results 60-90 days from now. • Most importantly, be likable and kind to everyone you meet. Trust is built on likability, not knowledge. Likeability greatly impacts trust. People find it very difficult to trust those they don’t like.• Be interested, not interesting. Get others to talk about themselves; it is not about us.• Make your interactions with others feel good and memorable. Get their information so that you can send them a “nice-to-meet-you” message. The time it takes going from mediocre to good, from good to great and from great to becoming a consistent high performer is different for everyone. Mindset, personal confidence, skill set, bad habits, self-discipline, time management, organizational support, commitment to the program and peer encouragement all have an impact on quick results. In my experience teaching these principles for 30 years, I find we will always have early adapters, those who learn and apply quickly, and late adapters, usually the larger group that are influenced by the results of the early adapters. We then work with the very late adapters. There are some activities that have quick results. Sales and business development skills and habits are developed over a period of time, but the growth and progress are noticed very quickly. Creating a sales and effective business development culture that meets the challenges and needs of the new marketplace is not a revolution. It’s an evolution.

PA Bankers Association » Winter 2023 13We’re Mobile! The PA Bankers App keeps you connected with PA Bankers like never before. SEE HOW YOU CAN UTILIZE THE APP BELOW:1DOWNLOAD THE FREE APP IN THE GOOGLE PLAY AND APPLE APP STORES TODAY.Register for events at your fingertips.2Update your personal/business information on the go.3Have all event details in one place (i.e., handouts, evaluations, speaker bios, etc.).4Access the updated PA Bankers calendar at all times.5Connect directly to the association’s social channels and stay up-to-date on association news.6Browse for products and services for your institution.Read paBanker magazine on the go.78 Access resources designed for PA Bankers' members. Receive "Instant Alerts" to stay informed.9Advocate for the industry from any location.10

14 » PA Bankers Association pabankers.comcommunityCORNERWith the help of employees, clients, community members and vendors, CNB Bank raised over $42,000 at its 12th annual Charity Golf Tournament, benefitting the American Cancer Society and Clearfield Area United Way. Since kicking off this annual event, CNB Bank has raised nearly $288,000 for local charities.Welcome • FintechOS• NextBranch• InFirst BankNEW TO More than 250 F&M Trust employees spent an afternoon on a Shippensburg farm planting trees and shrubs as part of a conservation effort led by the Chesapeake Bay Foundation. The employees planted over 500 trees and shrubs on three acres of farmland, creating a riparian buffer to increase water quality and reduce pollution in the Chesapeake Bay watershed.

PA Bankers Association » Winter 2023 15communityCORNERRecently, First Commonwealth Bank presented a check to Philabundance in an effort to support its local community. Philabundance feeds more than 135,000 people every week.C&N recently donated $5,000 to the Hanover Public School District Foundation for Excellence, which provides academic initiatives to schools in its community. The donation will help the district to continue to provide quality programs for local students. NexTier Bank team members recently donated to the bank's school supply drive, all in the spirit of giving back to the communities they serve. Employees dropped off the employee-donated school supplies to staff members at Ford City Public Library, St. Wendelin School and Glade Run Lutheran Services. NexTier Bank believes in investing in its community and giving back through employee volunteerism, donations and fundraising.

16 » PA Bankers Association pabankers.com In May, FCCB held its annual Cancer Classic, a golf event dedicated to raising money for cancer research. Because of the great success, FCCB donated $20,000 to the American Cancer Society.The Dime Bank teamed up with Honesdale High School to host an inaugural reality fair aimed at enhancing students' financial and life skills. The fair provided students with an interactive experience for making real-world financial decisions and managing money.Penn Community Bank recently announced a $100,000 contribution to the Urban League of Philadelphia. The partnership will support the Philadelphia-based nonprofit’s first-time homebuyer and financial literacy program and expand access to its Entrepreneurship Center.communityCORNERThe Northumberland National Bank held another successful back-to-school supply drive. Nearly 500 school supplies were donated by the bank's customers, employees and community members, which benefitted students in Midd-West, Selinsgrove Area and Shikellamy School Districts.

PA Bankers Association » Winter 2023 17Do you have  that you'd like to share?Send your bank's community news to Amy Doyle for a chance to be featured in paBanker Magazine or on PA Bankers' social media channels and website.communityCORNERSeveral members of the PA Bankers staff participated in the United Way Day of Caring and volunteered their time at Paxton Ministries. Staff members worked on painting the third floor hallway and learned more about the center's mission.

18 » PA Bankers Association pabankers.comThe 2024 CSBS Community Bank Case Study Competition is Underway!The 2024 CSBS Community Bank Case Study Competition is now open for registration! The nationwide academic competition is an opportunity for undergraduate students to partner with local community banks to conduct original case studies on relevant topics.In addition to providing undergraduate students with an excellent opportunity to engage and gain valuable knowledge of the banking industry, the case study competition serves as a platform for community banks to tell their individual stories. Students will gain a better understanding of how community banks are ensuring that they remain safe and resilient nancial pillars of their respective communities. Teams will be asked to: • Learn about the closures of Silicon Valley Bank, Signature Bank and First Republic Bank by selecting a community bank to study and determining what lessons their chosen institution learned from the afore-mentioned 2023 regional failures;• Determine what makes their selected case study bank dierent from the institutions that failed in 2023;• Identify how their case study bank handles risks through asset and liability management;• Identify their case study bank’s expectations for regulatory and supervisory changes, as well as how their selected institution uses social media in their daily operations; and• Create a 5-minute video highlighting their community bank and their ndings.• Feb. 5, 2024 •  March 4, 2024    COMMUNITY BANK CASE STUDY COMPETITION

NEW STAFF MEMBERJonathan Humma We are pleased to announce that Jonathan Humma joined the association as Vice President, Government Relations in late October. Jonathan most recently served as the Executive Director of the PA Senate Banking & Insurance Committee. He brings strong policy, legislative and political understanding to this position and is excited to put his experience to work on behalf of the membership. Welcome,staff UPDATESPROMOTIONSWe are excited to announce the following promotions: has been promoted to serve as Legal and Policy Coordinator. Lisa previously served as Legal Assistant and has worked at the association for over 33 years. has been promoted to serve as Communications and Government Aairs Coordinator. Amy previously served as Administrative Assistant, Communications and Government Aairs and has worked at the association for six years. PA Bankers Association » Winter 2023 19   Cgrulis,

20 » PA Bankers Association pabankers.comworkforceINITIATIVESDon’t forget about the banking intern website created just for PA Bankers members to use for their talent acquisition and retention needs! The website has intern program development resources, if you don’t already have a program, and provides a direct link to the Handshake website for you to post your open intern positions. Need one-on-one assistance? You will find that on the website as well.Getting Ready for College Interns in 2024? Jobs with good pay and healthbenefitsJob advancement with clearcareer path Global opportunitiesOn-the-job-trainingFuture focused industry growth Banks are highly regulated, whichhelps provide stability andreassurance to employees intimes of economic uncertainty.Why Banking? CAREER OUTLOOK: BANKING INDUSTRYThe future of thebanking industry is you!OverviewIn today's ever-evolving financiallandscape, bankingjobs continue to playa crucial role indriving economicgrowth andsupporting theglobal financialsystem. In partnership withthe PennsylvaniaBankers Association,ShippensburgUniversity’s CareerCenter presents keyindustry insights andfacts about careerpathways in banking. Data & Insights Provided by: Lightcast Q3 2023 Data Set - lightcast.iofinancial services and analysis risk assessmentproblem-solvingcommunicationteamwork + leadershipadaptabilityproduct knowledge sales and marketingTop Quality Skills The banking industry encompasses variousroles, including:Pennsylvania continues to show better thanaverage job growth with 57,485 employeesin PA, compared to the national average foran area this size of 53,246 employees.*GRP is the total value of the goods and servicesproduced in a regional economy that measures theeconomies of counties, metropolitan statistical areas,and some other local areas.$ 1 5 . 6 B I N D U S T R Y T O T A L E A R N I N G S ( 2 0 2 2 ) GRP* Economic ImpactFView the Website TodayPasscode to access the site is PBA2023!

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

22 » PA Bankers Association pabankers.comgovernmentRELATIONShenever a new election cycle comes along, it’s not uncommon to hear pundits make mention of “red waves” or “blue waves,” denoting potential power swings in Congress. But as bankers contemplate the future of our country and the policy environment that will shape the future of our industry, there’s another wave that we need to talk about: a tsunami of complex regulation that’s hitting the banking sector as we speak. To be sure, the tide turned quickly: last year’s turbulent spring ignited a rulemaking frenzy at the banking agencies. Suddenly, new proposals sprang up to increase bank capital levels, impose a new long-term debt requirement and make the resolution planning process more complex. Simultaneously, the CFPB imposed long-awaited small business reporting requirements under Section 1071 of the Dodd-Frank Act—which went far above and beyond what was outlined in the statute. The Federal Reserve issued a proposal to cap interchange fees under Regulation II, and the FDIC is now pursuing significant changes to its corporate governance guidelines. Against all that, the agencies finalized a long-awaited update to the Community Reinvestment Act framework—a staggeringly complex, 1,500-page final rule that creates significant new requirements that have the potential to fundamentally alter banks’ business strategies. Meanwhile, in Congress, banks are facing the resurgent threat of the so-called “Credit Card Competition Act,” which would apply Durbin Amendment-like provisions to credit cards—the equivalent of lawmakers taking money from banks and putting it into the cash registers of mega retailers. Taken together, these policies place a tremendous cost and compliance burden on banks of all sizes—at a time when they are already facing a tough operating environment due to a protracted period of high interest rates and ongoing geopolitical tensions. These policies will also have devastating effects for consumers. Banking is, after all, a business—and in order for banks to offer the full range of financial products and services to meet the needs of communities, they need to be profitable, and have an operating environment that supports growth. The current regulatory landscape will do the opposite. Banks that are already considered well-capitalized by regulators’ own admission will be forced to hold even more capital in reserve—which means less capital will be available to lend to the local small business looking to expand, or to the young family looking to buy their first home. Simultaneously, changes to the fee income streams upon which banks have long depended could spell the end of free or low-cost checking products, and popular rewards programs that consumers value. What’s perhaps most concerning, however, is the fact that regulators don’t seem to understand the full impact of their actions. As we observed with the Reg II rulemaking and the so-called “Basel III endgame” proposal, regulators are failing to adequately assess the potential costs of the individual regulations on banks and consumers—let alone contemplate what the cumulative impact of all these rules would be. ABA is sounding the alarm. We need to make sure policymakers in Washington—from members of the administration to lawmakers in Congress to the regulators holding the rule-writing pens—understand that regulatory burden has a real-world cost, not just for banks, but for consumers, small businesses and the American economy. If you’re reading this, I urge you to help us tell that story. Join our Bank Ambassador program to rekindle relationships with your congressional delegation and help educate policymakers about banking. Stay informed and send a letter about an issue that will affect your bank through ABA’s grassroots platform, SecureAmericanOpportunity.com. Make a plan to come to the nation’s capital in March for the ABA Washington Summit, and tap a colleague or two to come along. The sobering reality for banks right now is that rougher seas are likely ahead—but our best hope is to row together. WABOUT THE AUTHOR: Email Rob at nichols@aba.com. To learn more about the Bank Ambassador program, email ABA’s Laura Lily at llily@aba.com. Against a Rising Tide of Regulation, Banks Must Row Together

PA BANKERS SERVICES CORPORATIONWayne WhippleVice President, Business Development(717) 255-6925wwhipple@pabankers.comCONTACT INFORMATIONWEBBER ADVISORSBrad WebberMarketing/Sales Manager(814) 695-8066 x4186bwebber@webberadvisors.comTHE BENECON GROUPClaudia Burchstead, CSFSRegional VP of Sales(888) 400-4647cburchstead@benecon.com20232024

24 » PA Bankers Association pabankers.comThrough the Women in Banking Recognition of Excellence Program, we wish to acknowledge rising stars and leaders throughout our industry going the extra mile to promote and inspire women in the workplace to reach their full potential. Each year, the program honors four individual leaders during the annual Women in Banking Conference in the three categories. Anyone (member or non-member) can nominate a candidate, and prior nominees may be re-nominated. recognitionROUND-UPNominations are currently open, and the deadline to nominate your peers is Jan. 31, 2024.WOMEN IN BANKING NETWORKCelebrating a woman who has achieved success within a leadership role and displays courage, values and ethics, as well as undeniable enthusiasm for the industry, her institution and the community. Celebrating a woman up to the age of 35 who is making a significant impact in her industry and community, making her ‘one to watch.’ (2 awards): Celebrating a seasoned male or female professional at a PA Bankers financial and/or Affiliate Member who continuously promotes and inspires women in the workplace to reach their full potential.

PA Bankers Association » Winter 2023 25recognitionROUND-UPThe William S. Latoff Advocacy Award recognizes a banker who displays excellence in advocacy as an active policymaker for PA Bankers, an outspoken and successful advocate for the industry and a committed supporter of PaBPAC.Throughout his tenure as a PA Bankers volunteer, Dionise served as chair of the PA Bankers Board of Directors and Member Relations Policy Committee as well as a member of the PaBPAC Board of Directors. At the national level, Jim represented Pennsylvania as a member of the American Bankers Association’s (ABA) Government Relations Council. He currently chairs the PA Bankers Federal Government Relations Committee and regularly engages with the association through its advocacy events and initiatives.The award honors the late William S. Latoff, former chairman and CEO of DNB First, National Association in Downingtown. Latoff was the chair of the PaBPAC Board of Directors from 2007-10, a PA Bankers Government Relations Policy Committee member, the chairman of the Nominating Advisory Committee of the Federal Reserve Bank of Philadelphia and a representative to the American Bankers Association’s BankPAC Committee. TO THE 2023 WINNER!James V. DionisePresident & CEOMars BankWilliam S. Latoff Advocacy Award HONORING EXCELLENCE IN ADVOCACYCgrulis,

Regulatory Compliance Monitoring + TrainingVulnerability Testing (Internal + external)BSA/AML Model ValidationsBSA/AML ExaminationsRisk Assessment + Gap AnalysisInternal Audit Plans + TestingTrust Department ExamsFraud ExamsInformation Technology ExamsSocial Engineering TestingSOX Documentation/TestingFDICIA Documentation/TestingDebbi S. Fetter, CFIRS, CISA, CFSA, CRCM, CCSA, CERPJeffrey J. Johns, CISA, CRISC, CDPSEThomas R. Strause, CIA, CFE, CBA, CFSA, CISA, CICAHR Consultingwww.herbein.com I 1.855.HC.TodayRisk ManagementRecruitment/Retention HR AuditsHR OutsourcingInterim HRSuccession PlanningExecutive SearchExecutive CompensationAffirmative Action Plan PreparationLeadership Coaching and DevelopmentCompensation StudiesA GREAT TEAM SERVINGEXTRAORDINARY BANKSLaurel E. Cline Karen H. DiGioiaLori L. GlivaScott G. Smith

PA Bankers Association » Winter 2023 27WHAT OUR CLIENTSARE SAYING...Your Trusted Source for Electricity andNatural Gas ProcurementEXPLORE THE BENEFITS OF WORKING WITHAPPI ENERGY TODAY:805.698.1548pchaconas@appienergy.comContact your dedicated energy consultant, Peter Chaconas, for more information:As a large regional bank with locations spanning three states, wewere quite pleased to have APPI Energy step in to manage ourenergy needs. In addition to significant cost savings, they providedour team with a utility bill management system that continues tomake our energy management seamless. APPI Energy’s history anddata-driven insights are what initially impressed us, but wecontinue to be impressed by their commitment to on-goingcustomer service. We are looking forward to what they present usnext.Jeffrey BlakeleyAssistant Vice President, Northwest BankPennsylvania Bankers Association MemberAPPIENERGY.COM

28 » PA Bankers Association pabankers.coma aheadlook Please note: all dates and locations are subject to change. This includes changing in-person events to virtual oerings. The Hotel Hershey, Hershey, Pa.april 17-18DIVERSITY, EQUITY AND INCLUSION Omni Nashville Hotel, Nashville, Tenn.may 15-19 Penn Stater Conference Center, State College, Pa.june 9-13 Penn Stater Conference Center, State College, Pa.july 21-26GENERAL ASSOCIATIONADVOCACY Washington, D.C.march 18-20 PA Bankers State Capitol Building, Harrisburg, Pa.april 29

PA Bankers Association » Winter 2023 29a aheadlook Penn Stater Conference Center, State College, Pa.april 25 Penn Stater Conference Center, State College, Pa.june 9-13 The Hotel Hershey, Hershey, Pa.nov. 21-22TECHNOLOGY PA Bankers Training Room, Harrisburg, Pa.march 12LENDING & CREDIT Hershey Lodge & Convention Center, Hershey, Pa.sept. 25-26YOUNG PROFESSIONALS Hershey Lodge & Convention Center, Hershey, Pa.march 3-4WOMEN IN BANKINGIs your bank celebrating a charter anniversary? Have your employees been in the banking industry for 30+ years? RECOGNITION 

30 » PA Bankers Association pabankers.comvendorARTICLESith cooler weather upon us and the winter season looming on the horizon, it is the ideal time to consider the volatility that winter storms and cold weather can bring to your energy bill. For businesses, heating your facilities could be one of your largest expenses, so it is never too early to consider ways to prepare and methods to prevent these unexpected energy costs. Let’s dive into the current energy market and projected 2023-2024 winter weather forecast to prepare you for what to expect this winter season.Natural gas and electricity prices were relatively flat for much of the summer, after falling dramatically from 2022 levels brought on in part by the war in Ukraine. Above-average summer temperatures, particularly in the South, reduced natural gas storage levels to within 6% of the five-year average, causing natural gas and electricity prices to increase as we approach the winter heating season. Internationally, demand for relatively inexpensive U.S. liquefied natural gas remains strong as Europe continues to replace natural gas previously bought from Russia.The National Oceanic and Atmospheric Administration (NOAA) is predicting a strengthening El Niño to play a significant role in weather across the United States this winter. A strengthening El Niño weather pattern generally brings warmer-than-average winter temperatures and below-average precipitation to the northern tier of the country and increased precipitation to the South and Southeast. While anticipating a drier season in the northern tier of the US, this does not mean a complete scarcity of winter storms and cold weather. Increased precipitation in the southern tier does mean a stronger chance of tumultuous weather patterns and severe weather outbreaks in the south. Demand for electricity and natural gas in the winter months is generally second only to the summer months. Fierce winter storms can stress the electricity grid with both high demand along with the potential for some power generating plants to go offline, as we saw with Winter Storm Uri in 2021 and Winter Storm Elliott in late 2022. A spike in heating demand generally means pricing would rise coincidingly. Although it’s important to understand the strain winter weather can cause on your energy costs, that doesn’t mean you can’t soften the blow. For starters, look at your current energy contracts in place to ensure they are not expiring during the height of the winter season, when pricing could be at its peak. By looking ahead of time, you can avoid renewing during peak demand season and have access to more ideal pricing. Participating in a demand response W2023-2024 Winter Energy Outlook

PA Bankers Association » Winter 2023 31program can reduce your business’s energy usage during pivotal times of high stress on the electric grid and can be financially rewarding as a result. If you can, take it a step further and run any energy intensive machines during off peak hours such as the evening or early morning hours. Additionally, have a professional perform an energy audit for your facility. This professional would examine all aspects of energy your facility uses such as your current lighting, heating system, or potential air duct leaks. By identifying these areas, you can either upgrade to more efficient systems or set a baseline for energy reduction. When examining the effects of the upcoming winter season, the best advice is to start early. While weather is unpredictable and brings unexpected energy costs, you have time to prepare and educate yourself on areas to reduce your energy usage. If you want to discuss energy management techniques, contact an APPI Energy consultant to schedule a no-cost, no-obligation complimentary assessment at 800.520.6685 or email info@appienergy.com.CRA Credit For Protecting Local SeniorsOur foundation partners with community banks on programs that promote safety in senior housing facilities. Join the hundreds of banks that already participate. Join our Peer Group to exchange ideas on current CRA topics______________________________thecracollaborative.comTHE To get involved contact: info@shcpfoundation.org20232024ABOUT THE AUTHOR: 20232024

32 » PA Bankers Association pabankers.comvendorARTICLEShe day-to-day functions of a financial institutions would be impossible without the ability to outsource. Recently, existing guidance applicable to each specific regulatory agency, the Federal Reserve (Board of Governors of the Federal Reserve System), the FDIC (Federal Deposit Insurance Corporation), and the OCC (Office of the Comptroller of the Currency), was replaced with a single rule, the Interagency Guidance on Third-Party Relationships: Risk Management. The Interagency Guidance, aligns the regulatory requirements and risk management expectations of third-party relationships among the “agencies” (Federal Reserve, FDIC, and OCC).Financial institutions routinely rely on third party relationships for their day-to-day functions and existence. In today’s ever-growing world of speed and technology, it would be nearly impossible to be successful and competitive without outsourcing to third party vendors. Financial institutions may rely on outsourcing for a range of products, services, and other activities. Outsourcing allows financial institutions a number of significant benefits including faster and more efficient access to technologies, human capital, delivery channels, products and services, and markets. It can also mean a more cost-effective operational existence overall. Despite the option to outsource certain functions and activities, financial institutions must still adhere to the risk management and compliance expectations. The use of third-party relationships does not alleviate the need for sound risk management within an organization. In fact, it’s quite the opposite when it comes to third party relationships. Third party relationships, especially those involving new technologies, could present an even higher or more elevated risks for financial institutions. A phrase we commonly use in the compliance industry is “you can contract away the function, but you can’t contract away the compliance responsibility”. Financial institutions must understand their responsibilities to ensure safe and sound third party relationship and practices in conjunction with the compliance of all applicable laws and regulations, including those which are intended to protect consumers. On June 6, 2023, the federal banking agencies issued Interagency Guidance on Third-Party Relationships: Risk Management. Much of what is outlined in the new Interagency Guidance is already somewhat familiar to the agencies. The core concepts of the Interagency Guidance remain consistent with the individual agency guidance that existed prior. The new interagency guidance provides consistency and an interagency approach at managing third party risk This is especially important for those relationships which involve critical third parties and relationships that are customer-facing or may otherwise be impactful to consumers.The new Interagency Guidance was developed to align with the expectations and best practices in other areas of risk management. It creates a vendor management lifecycle which includes six steps:1. Planning for a relationship2. Due Diligence and third-party selection3. Contract negation4. Oversight and accountability5. Ongoing monitoring6. Termination It’s worth noting that the guidance is broadly applicable and applies to all business arrangements. It doesn’t specifically address the various categories or the types of third parties, such as artificial intelligence or fintech firms. But the principles within the guidance will apply to all third parties and third-party relationships. That being said, financial institutions must manage all third-party relationships, but not necessarily to the same extent as the principles within the guidance can be tailored to the relationship. The interagency guidance provides a number of examples, which should not be interpreted as exhaustive, that financial institutions may consider for their due diligence processes. But, the agencies do note that the guidance does not impose any new regulatory requirements. The new Interagency Guidance may not create any new regulatory requirements for financial institutions, but it is focused on managing various risks associated with outsourcing certain products, services, and activities, especially those impacting consumers. The guidance is a reminder to financial institutions that consumer protections and compliance remain a priority among the regulatory agencies. The guidance emphasizes compliance and consumer protections, as those phrases, and similar phrases, are mentioned numerous times throughout the guidance. Financial institutions must be particularly TOne Rule for All: Interagency Guidance for the Risk Management of Third-Party Relationships

PA Bankers Association » Winter 2023 33diligent in ensuring they, and their third-party service providers, abide by and comply with all applicable laws and regulations. This includes ensuring that their financial institution, and any of third-party services providers, do no engage in any unfair and deceptive acts or practices. The new Interagency guidance provides clarification regarding the oversight of a third-party’s subcontractors indicating that financial institutions should focus on the selection and oversight processes of their third-party. Financial institutions are not expected to oversee the subcontractors directly. The guidance also clarifies and distinguishes the roles of the board of directors and senior management when it comes to third-party oversight. The guidance provides various factors that the board of directors may consider for carrying out their responsibilities and it also identifies activities and responsibilities in which management may perform. Many see this new Interagency Guidance as a signal to financial institutions that enhanced risk management practices are an area of focus for regulators and are critical to the safety and soundness of an institution. This guidance, along with other recent consent orders, may be foreshadowing the supervisory focus on vendor management relationships and the bank’s risk management practices for maintaining such relationships. However your institution interprets the new guidance, it is essential that a review of its current policy/procedures and risk management practices is conducted to ensure it aligns with the new interagency guidance. Since much of guidance seems to highlight due diligence, contracts, and the management of third-party risk and relationships, banks should consider integrating or at least addressing their third-party relationship risk management program with their overall ERM (enterprise risk management program). Learn how budgeng for top-er support andguidance can save your program money.That’s Bankers Alliance.info@bankersalliance.org or (833) 683-0701.Holding Company of Compliance Allianceand Review AllianceWhat if outsourcing for guidance, research, tools, annual training, special projects, staffing, even complete CMS oversight is really the answer for your compliance budget issues?CMYCMMYCYCMYK2023202420232024ABOUT THE AUTHOR: 

34 » PA Bankers Association pabankers.comvendorARTICLESental health continues to top the list of hot topics in the employee benefits world. At Benecon, questions from consultants and employers about increasing access to mental health providers is an important part of the conversations we have around plan design and network access. Through the Bank Health Care Consortium of PA, member groups are included in the conversations about developing appropriate plan designs that meet the needs of their employees, especially with increasing needs for better access to mental health treatment.KFF's 2023 Annual Employee Benefit Survey found, “Among large employers (with at least 200 workers) that offer health benefits to at least some workers, the vast majority (88%) say their plan has enough primary care doctors to provide timely access for enrollees. Substantially fewer say the same about their mental health (59%) and substance use condition (58%) networks. Nearly one in five (18%) of large offering firms say that they took steps in the past year to increase the number of mental health providers in their largest plan’s network. This includes 44% of the largest employers (with at least 5,000 workers). On the other hand, one in five (21%) of large offering employers say their plan has limits on the number of covered mental health services, potentially restricting access for enrollees with long-term needs.”With the increased demand for mental health resources, what can benefit consultants and employers do to help their clients and employees?•  Does the employer offer an EAP? If so, employees may have access to a network of therapists through the EAP. Many times EAP services are included free of charge as an added benefit to the health plan.•  Does the medical insurance carrier offer telehealth? Many insurance companies are now offering full access to telemedicine that includes medical, psychiatry, and counseling providers. Telehealth appointments can be less time consuming and easier to fit into a busy schedule. The following online resources are also great places to find providers: www.psychologytoday.com www.goodtherapy.org www.aamft.org www.networktherapy.com•  Another trusted resource for learning more about mental health is the National Alliance on Mental Illness (NAMI). According to NAMI, “knowing warning signs can help let you know if you need to speak to a professional. For many people, getting an accurate diagnosis is the first step in a treatment plan. Unlike diabetes or cancer, there is no medical test that can accurately diagnose mental illness. A mental Employers, Mental Health Providers & Access to CareM

PA Bankers Association » Winter 2023 35health professional will use the Diagnostic and Statistical Manual of Mental Disorders, published by the American Psychiatric Association, to assess symptoms and make a diagnosis. The manual lists criteria including feelings, behaviors, and time limits in order to be officially classified as a mental health condition. After diagnosis, a health care provider can help develop a treatment plan that could include medication, therapy or other lifestyle changes. Getting a diagnosis is just the first step; knowing your own preferences and goals is also important. Treatments for mental illness vary by diagnosis and by person. There is no “one size fits all” treatment. Treatment options can include medication, counseling (therapy), social support and education.•  SAMHSA’s National Helpline is a free, confidential, 24/7, 365-day-a-year treatment referral and information service for individuals and families facing mental and/or substance use disorders. For more information, visit their website: www.samhsa.gov/.• Call 911 • Contact the National Suicide Prevention Lifeline by Calling 988 • Use the Crisis Text Line at https://www.crisistextline.org/ or Text HOME to 741741888.311.7248 ext 3009nschlachter@poweredbyevolv.comwww.poweredbyevolv.comStop LosingCommercialDepositorsto SquareIncrease Non-Interest IncomeRetain & attract commercial depositorsProvide solutions for startups, growing& established businessesAccess to four processing platformsOffer revenue-driving ancillary productsPartnership BenefitsSquare is aggressively pursuing--and winning--accounts that are typically the domain ofcommercial banks. In addition to giving you toolsto win these accounts, Evolv will increase yournon-interest income! Nellie SchlachterEvolv, Inc, doing business as Evolv is a registered Independent SalesOrganization of Wells Fargo Bank N.A., Concord, CA and Fifth ThirdBank, N.A., Cincinnati, OHSchedule A DiscoveryCall to Learn More2023202420232024ABOUT THE AUTHOR:  

36 » PA Bankers Association pabankers.comvendorARTICLEShe in-branch banking system is undergoing a significant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of financial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mortar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.The way people bank has changed dramatically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.WHYWhile online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex financial transactions, personalized advice, and financial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand.Modernized interiors, comfortable seating, and state-of-the-art technology create a welcoming environment. Fresh paint, new flooring and consistent branding reinforces your commitment to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform Tfor community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.e refresh of retail bank branches is a strategic and cost-eective response to the evolving landscape of the banking industry. While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain rele-vant and valuable in an increasingly digital world.to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.DIGITAL INTEGRATION Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform tasks quickly and efciently, creating transparency between digital and in-branch services. James G. Caliendo is a former bank executive and now President & CEO at our over 100 year old design-build and retail services rm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 nancial institutions inuencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.The in-branch banking system is under-going a signicant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of nancial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mor-tar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.e Changing Landscape of BankingThe way people bank has changed dramat-ically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.Why Refresh Bank Branches?While online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex nancial transactions, personalized advice, and nancial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand. AN ENHANCED EXPERIENCE Modernized interiors, comfortable seating, and state-of-the-art technology create a welcom-ing environment. Fresh paint, new ooring and consistent branding reinforces your commitment By Jim Caliendo, President & CEO, PWCampbellINCREASED PROFITABILITY AND PERFORMANCEDynamic digital displays are a versatile and engaging way to communicate with customers . They allow the dissemination of information, promotions, and personalized messages to happen in real time.By leveraging in-branch digital technology, banks can enhance the in-branch experi-ence, increase brand awareness, and cross-sell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benet is the savings created by eliminating printing and distribution costs.BYPASS PERMITTINGOne of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures. Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process. This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer pref-erences more rapidly. COMMUNITY ENGAGEMENTMany bank branches serve as community hubs by hosting nancial literacy workshops, sponsoring local events, and providing meeting spaces A Cost-Effective Way to Adapt to Modern Customer Needs.OF THE BANKBRANCHTHEA Cost-Effective Way to Adapt to Modern Customer Needsfor community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.e refresh of retail bank branches is a strategic and cost-eective response to the evolving landscape of the banking industry. While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain rele-vant and valuable in an increasingly digital world.to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.DIGITAL INTEGRATION Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform tasks quickly and efciently, creating transparency between digital and in-branch services. James G. Caliendo is a former bank executive and now President & CEO at our over 100 year old design-build and retail services rm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 nancial institutions inuencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.The in-branch banking system is under-going a signicant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of nancial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mor-tar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.e Changing Landscape of BankingThe way people bank has changed dramat-ically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.Why Refresh Bank Branches?While online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex nancial transactions, personalized advice, and nancial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand. AN ENHANCED EXPERIENCE Modernized interiors, comfortable seating, and state-of-the-art technology create a welcom-ing environment. Fresh paint, new ooring and consistent branding reinforces your commitment By Jim Caliendo, President & CEO, PWCampbellINCREASED PROFITABILITY AND PERFORMANCEDynamic digital displays are a versatile and engaging way to communicate with customers . They allow the dissemination of information, promotions, and personalized messages to happen in real time.By leveraging in-branch digital technology, banks can enhance the in-branch experi-ence, increase brand awareness, and cross-sell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benet is the savings created by eliminating printing and distribution costs.BYPASS PERMITTINGOne of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures. Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process. This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer pref-erences more rapidly. COMMUNITY ENGAGEMENTMany bank branches serve as community hubs by hosting nancial literacy workshops, sponsoring local events, and providing meeting spaces A Cost-Effective Way to Adapt to Modern Customer Needs.OF THE BANKBRANCHTHE

PA Bankers Association » Winter 2023 37for community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.e refresh of retail bank branches is a strategic and cost-eective response to the evolving landscape of the banking industry. While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain rele-vant and valuable in an increasingly digital world.to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.DIGITAL INTEGRATION Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform tasks quickly and efciently, creating transparency between digital and in-branch services. James G. Caliendo is a former bank executive and now President & CEO at our over 100 year old design-build and retail services rm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 nancial institutions inuencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.The in-branch banking system is under-going a signicant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of nancial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mor-tar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.e Changing Landscape of BankingThe way people bank has changed dramat-ically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.Why Refresh Bank Branches?While online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex nancial transactions, personalized advice, and nancial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand. AN ENHANCED EXPERIENCE Modernized interiors, comfortable seating, and state-of-the-art technology create a welcom-ing environment. Fresh paint, new ooring and consistent branding reinforces your commitment By Jim Caliendo, President & CEO, PWCampbellINCREASED PROFITABILITY AND PERFORMANCEDynamic digital displays are a versatile and engaging way to communicate with customers . They allow the dissemination of information, promotions, and personalized messages to happen in real time.By leveraging in-branch digital technology, banks can enhance the in-branch experi-ence, increase brand awareness, and cross-sell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benet is the savings created by eliminating printing and distribution costs.BYPASS PERMITTINGOne of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures. Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process. This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer pref-erences more rapidly. COMMUNITY ENGAGEMENTMany bank branches serve as community hubs by hosting nancial literacy workshops, sponsoring local events, and providing meeting spaces A Cost-Effective Way to Adapt to Modern Customer Needs.OF THE BANKBRANCHTHEABOUT THE AUTHOR:  is a former bank executive and now  at the over 100 year old design-build and retail services firm. In the past 20 years alone, under Jim’s direction, has worked with over 500 financial institutions influencing millions of square feet of retail and operational space to create engaging, impactful and scalable solutions for every sized facility project.tasks quickly and efficiently, creating transparency between digital and in-branch services.Dynamic digital displays are a versatile and engaging way to communicate with customers. They allow the dissemination of information, promotions, and personalized messages to happen in real time. By leveraging in-branch digital technology, banks can enhance the in-branch experience, increase brand awareness, and crosssell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benefit is the savings created by eliminating printing and distribution costs.One of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures.Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process.This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer preferences more rapidly.for community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.e refresh of retail bank branches is a strategic and cost-eective response to the evolving landscape of the banking industry. While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain rele-vant and valuable in an increasingly digital world.to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.DIGITAL INTEGRATION Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform tasks quickly and efciently, creating transparency between digital and in-branch services. James G. Caliendo is a former bank executive and now President & CEO at our over 100 year old design-build and retail services rm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 nancial institutions inuencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.The in-branch banking system is under-going a signicant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of nancial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mor-tar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.e Changing Landscape of BankingThe way people bank has changed dramat-ically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.Why Refresh Bank Branches?While online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex nancial transactions, personalized advice, and nancial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand. AN ENHANCED EXPERIENCE Modernized interiors, comfortable seating, and state-of-the-art technology create a welcom-ing environment. Fresh paint, new ooring and consistent branding reinforces your commitment By Jim Caliendo, President & CEO, PWCampbellINCREASED PROFITABILITY AND PERFORMANCEDynamic digital displays are a versatile and engaging way to communicate with customers . They allow the dissemination of information, promotions, and personalized messages to happen in real time.By leveraging in-branch digital technology, banks can enhance the in-branch experi-ence, increase brand awareness, and cross-sell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benet is the savings created by eliminating printing and distribution costs.BYPASS PERMITTINGOne of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures. Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process. This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer pref-erences more rapidly. COMMUNITY ENGAGEMENTMany bank branches serve as community hubs by hosting nancial literacy workshops, sponsoring local events, and providing meeting spaces A Cost-Effective Way to Adapt to Modern Customer Needs.OF THE BANKBRANCHTHEfor community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.e refresh of retail bank branches is a strategic and cost-eective response to the evolving landscape of the banking industry. While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain rele-vant and valuable in an increasingly digital world.to the community and shows stability. Properly branded branches portray a stronger sense of trust and strengthen customer relationships across the board and, especially, with younger generations.DIGITAL INTEGRATION Interactive touchscreens, digital kiosks, and self-service options allow customers to access information and perform tasks quickly and efciently, creating transparency between digital and in-branch services. James G. Caliendo is a former bank executive and now President & CEO at our over 100 year old design-build and retail services rm. In the past 20 years alone, under Jim’s direction, PWCampbell has worked with over 500 nancial institutions inuencing millions of square feet of retail and operational space to create engaging, impactful, and scalable solutions for every sized facility project.The in-branch banking system is under-going a signicant transformation. With the continued rise of online and mobile services, traditional branches are no longer the bustling hubs of nancial activity they once were. While this is undoubtedly driving the future of banking, it does not mean that brick-and-mor-tar branches are becoming obsolete. Instead, banks must recognize the value of providing an in-branch experience that is cohesive with the online and mobile experience, and adapt the retail network to better meet the needs of their multi-generational customer base.e Changing Landscape of BankingThe way people bank has changed dramat-ically over the past decade. Customers are now able to perform most banking tasks from the comfort of their homes, using their smartphones or computers. From monitoring account balances to transferring funds and even applying for loans and opening new accounts, digital services have made banking more convenient than ever before. As a result, the traditional role of the branch has shifted.Why Refresh Bank Branches?While online and mobile banking are convenient, there is still a need for in-person interactions. Customers rely on branches for complex nancial transactions, personalized advice, and nancial education or simply, for the sense of security and trust that comes with face-to-face banking. To effectively meet these needs, the branch environment must be conducive to the best level of service, and in line with the overall brand. AN ENHANCED EXPERIENCE Modernized interiors, comfortable seating, and state-of-the-art technology create a welcom-ing environment. Fresh paint, new ooring and consistent branding reinforces your commitment By Jim Caliendo, President & CEO, PWCampbellINCREASED PROFITABILITY AND PERFORMANCEDynamic digital displays are a versatile and engaging way to communicate with customers . They allow the dissemination of information, promotions, and personalized messages to happen in real time.By leveraging in-branch digital technology, banks can enhance the in-branch experi-ence, increase brand awareness, and cross-sell products and services more effectively. Plus, the ability to update content remotely ensures that marketing messaging can quickly be adapted based on changing market conditions and compliance requirements. A key added benet is the savings created by eliminating printing and distribution costs.BYPASS PERMITTINGOne of the biggest advantages of a branch refresh is the reduced need for permitting costs. Unlike new construction projects that often require complex permits and regulatory approvals, a refresh typically involves updating and renovating existing infrastructures. Since the core structure of the branch remains unchanged, there is generally no need for a costly and time-consuming permitting process. This streamlined approach not only saves banks a substantial amount of money but also allows for a quicker turnaround, enabling them to adapt to market trends and customer pref-erences more rapidly. COMMUNITY ENGAGEMENTMany bank branches serve as community hubs by hosting nancial literacy workshops, sponsoring local events, and providing meeting spaces A Cost-Effective Way to Adapt to Modern Customer Needs.OF THE BANKBRANCHTHEMany bank branches serve as community hubs by hosting financial literacy workshops, sponsoring local events, and providing meeting spaces for community groups. Refreshing your branches provides an opportunity to promote your brand while revitalizing your role and strengthening your ties to the communities you serve.While the use of digital banking continues to grow, the importance of physical branches should not be underestimated. By modernizing your retail branch network, you will be better positioned to provide a superior customer experience, leverage in-branch technology, and strengthen your tie within the community - ensuring you remain relevant and valuable in an increasingly digital world.

38 » PA Bankers Association pabankers.comvendorARTICLESThroughout 2023, regulatory bodies have advised community financial institutions to undertake more extensive interest rate risk (IRR) management procedures. One important aspect which is often misunderstood in the process is backtesting. While the term can be defined as evaluating a strategy, theory, or model by applying it to historical data, it is interpreted on a broader basis regarding asset/liability management. Below are some basic procedures to implement when reviewing your institution’s ALM model to ensure it is producing meaningful results. Model Validation: Today, all model vendors provide a third-party validation letter. The letter is usually found within the reports themselves or is available upon request. The model validation not only increases the reliability and confidence in the model but can also illustrate the significant strengths and drawbacks for users. Steps should be taken periodically to confirm that the letter is on file and a new report is obtained whenever new versions are released. Although this certification eliminates concerns for the calculations and structure of the model itself, the inputs and assumptions used are much more important factors in the model outputs and backtesting results. Input Review: When working with any type of model, the adage goes “garbage in, garbage out.” This pertains to interest rate risk models, as they are only as good as the data which is fed into them. Input review involves the review and inspection of all imported or entered data. If the model your institution utilizes performs a file import from the processor for loans, non-maturing, and time deposits, it is necessary to verify these inputs are accurate on a consistent basis. Some of the questions to ask when reviewing the input data include:• Do the imported balances match what is presented on the core system? • Are time deposits separated by term or jumbo status? • Are loan floors, caps, and margins being captured properly? • Are the yields or rates being imported the same as what the processor reports? • Is the model producing dynamic cash flows for the loans and bonds such as mortgage-backed securities?Assumption Review: All models rely on a set of starting points or default assumptions. Many times, financial institutions use these defaults not knowing if they are applicable to their institution or not. The assumption review process involves checking all assumptions used by the model and confirming they are appropriate and reasonable. Shift sensitivities (betas), time lags, asset pre-payment speeds, and non-maturing demand decay rates are all items that should be reviewed at minimum on an annual basis. The assumptions within the model play an important role when assessing interest rate risk exposure and should be monitored closely.• An example of assumption review would be comparing historic treasury and federal funds rates against the financial institution’s core deposit rates (NOW, money market, savings) to test rate sensitivities. • On the asset side, comparing the loan prepayments speeds (CPRs) being used in the model against what has occurred historically can be helpful when adjusting those speeds for various rate scenarios.Comparing Projected Interest Income & Expense: Once the model methodology, inputs, and assumptions have been Back to the Future: Understanding theBenefits of ALM Backtesting

PA Bankers Association » Winter 2023 39verified, the next step is comparing the model projections to what happened given the specified review period (most models use 12 to 24 months). This process is what is typically thought of when discussing backtesting. Because unknown future events will inevitably affect the financial institution’s balance sheet, efforts to normalize these unplanned events in the model are necessary. For instance, if the institution’s asset size rose significantly during the review period, it would be inappropriate to compare the interest income unless you were able subtract that portion of interest income coming from the additional earning assets. Because many externalities can occur at the financial institution over a 12-month horizon, this process can be considered difficult to perform when there are drastic changes at the bank. • Is the interest rate simulation being reviewed similar vs actual rate changes?• Was there growth/shrinkage to the balance sheet? • Did the balance sheet mix change (ex. reduction of loans, increase in securities)? • Did the institution undertake any deposit strategies such as CD specials?Backtesting is a critical component of asset/liability management as it often results in adjustments or changes to the inputs and assumptions to improve the process going forward. Keep in mind that models are attempts to recreate real-life situations with many variables to account for, especially ALM models. Because of this, your IRR reporting will inevitably have some degree of variance from what occurs. Prudent risk managers know this, and that being able to identify those variances and adjusting the model for better performance is crucial for successful asset/liability management.ABOUT THE AUTHORS: is  at  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.20232024 ...............................................................................................................................................................................................................27 ..........................................................................................................................................23 ................................................................................................................................................................................................... ............................................................................................................................................................................................21  ..............................................................................................................................................................................................33 ..........................................................................................................................................................................................................31 .......................................................................................................................................................................................................  ................................................................................................................................................................................................... 11EVOLV ...............................................................................................................................................................................................................................35 ..................................................................................................................................................................................................................... 26 ............................................................................................................................................................................................................................... 9........................................................................................................................................................................................................................................ 7 .........................................................................................................................................................................................  .................................................................................................................................................................................................. 4...........................................................................................................................................43adINDEX

40 » PA Bankers Association pabankers.comIn today’s banking sector, the concept of compliance has transcended its traditional role as a regulatory checkbox. Instead, it has evolved into a fundamental component that underpins the stability of the nancial system. The events of the 2008 nancial crisis served as a stark reminder of the consequences of inadequate compliance. Regulatory bodies worldwide responded by fortifying their frameworks, ushering in an era of heightened scrutiny for banks. These regulations touch nearly every facet of banking, from capital adequacy and liquidity requirements to risk management and reporting standards.Non-compliance has become a grave concern for banks. The nancial penalties for non-compliance can be staggering, often running into the billions of dollars. Beyond the immediate nancial impact, non-compliance can tarnish a bank’s reputation, erode customer trust, and result in legal repercussions for executives and the institution itself. In essence, compliance is not merely an obligation but a critical pillar that sustains the integrity of the banking industry.II. Understanding Articial Intelligence (AI):At the heart of AI lies the concept of machine learning. It’s a subset of AI that enables computers to learn from data, discern patterns, and make informed decisions. Machine learning algorithms, ranging from decision trees to neural networks, excel at tasks involving large datasets and complex patterns. Natural language processing (NLP), another AI subeld, enables machines to understand and interact with human language, making it an invaluable tool for dealing with the text-heavy regulatory environment.In essence, AI empowers machines to replicate certain aspects of human intelligence, particularly the ability to analyze data at scale, identify hidden correlations, and draw insights from vast amounts of information. This unique capacity is what makes AI exceptionally well-suited to address the multifaceted challenges of compliance in the banking industry.III. AI Applications in Banking Compliance:a) Risk Assessment and Due Diligence:AI-driven risk assessment is a quantum leap from traditional methods. These algorithms can analyze vast volumes of historical data, market indicators, and even news sentiment to gauge risk with unparalleled precision. By identifying subtle and evolving patterns, AI enhances the accuracy The Growing Importance of Compliance in BankingBy Glenn Bolstad, CEO & Founder of VikarvendorARTICLESIn today’s banking sector, the concept of compliance has transcended its traditional role as a regulatory checkbox. Instead, it has evolved into a fundamental component that underpins the stability of the financial system. The events of the 2008 financial crisis served as a stark reminder of the consequences of inadequate compliance. Regulatory bodies worldwide responded by fortifying their frameworks, ushering in an era of heightened scrutiny for banks. These regulations touch nearly every facet of banking, from capital adequacy and liquidity requirements to risk management and reporting standards.Non-compliance has become a grave concern for banks. The financial penalties for noncompliance can be staggering, often running into the billions of dollars. Beyond the immediate financial impact, non-compliance can tarnish a bank’s reputation, erode customer trust, and result in legal repercussions for executives and the institution itself. In essence, compliance is not merely an obligation but a critical pillar that sustains the integrity of the banking industry.At the heart of AI lies the concept of machine learning. It’s a subset of AI that enables computers to learn from data, discern patterns, and make informed decisions. Machine learning algorithms, ranging from decision trees to neural networks, excel at tasks involving large datasets and complex patterns. Natural language processing (NLP), another AI subfield, enables machines to understand and interact with human language, making it an invaluable tool for dealing with the text-heavy regulatory environment.In essence, AI empowers machines to replicate certain aspects of human intelligence, particularly the ability to analyze data at scale, identify hidden correlations, and draw insights from vast amounts of information. This unique capacity is what makes AI exceptionally well-suited to address the multifaceted challenges of compliance in the banking industry.a) Risk Assessment and Due Diligence: AI-driven risk assessment is a quantum leap from traditional methods. These algorithms can analyze vast volumes of historical data, market indicators, and even news sentiment to gauge risk with unparalleled precision. By identifying subtle and evolving patterns, AI enhances the accuracy of risk assessment. Moreover, it’s a time-saver, processing data in seconds that would take humans hours or even days.Consider the due diligence process when evaluating a business loan application. AI can not only assess creditworthiness more thoroughly but also analyze a broader range of variables, leading to more informed decisions. This level of accuracy and efficiency minimizes the risk of extending loans to high-risk clients while accelerating the loan approval process.b) Anti-Money Laundering (AML) and Know Your Customer (KYC) Processes:AI has revolutionized AML and KYC processes, making them more robust and efficient. By harnessing AI, banks can verify the identities of their customers more effectively. AI systems can crossreference databases, government records, and even social media profiles to create a comprehensive The Growing Importance of Compliance in Banking

PA Bankers Association » Winter 2023 41picture of a customer’s identity. Furthermore, these systems can continuously monitor customer profiles for changes or suspicious activities, ensuring ongoing compliance with regulatory requirements.This level of automation not only enhances the speed of on-boarding but also dramatically reduces the risk of fraudulent or non-compliant accounts slipping through the cracks.c) Regulatory Reporting:Regulatory reporting is a critical but arduous task for banks due to the intricacies of the data involved and evolving reporting standards. AI streamlines this process by extracting, collating, and analyzing data from various sources such as transaction records, financial statements, and customer interactions. This automation not only accelerates the reporting process but also minimizes the possibility of human error.Additionally, AI’s adaptability ensures that banks remain compliant as regulations evolve. By swiftly adjusting algorithms and data analysis to adhere to changing standards, banks can avoid costly fines and maintain the highest level of compliance.d) Fraud Detection and Prevention:AI’s real-time data analysis capabilities make it an indispensable tool for fraud detection and prevention. By continuously monitoring transactions and customer behaviors, AI algorithms can flag unusual patterns that might indicate fraudulent activities. This proactive approach helps banks prevent financial losses due to fraud and safeguard their customers’ assets.Consider a scenario where AI identifies an unusual pattern of transactions, such as multiple large withdrawals from an account followed by international wire transfers to a high-risk jurisdiction. Such patterns would be challenging for human analysts to spot in real-time, but AI can raise alerts, enabling timely intervention.e) Monitoring and Surveillance:AI-driven monitoring and surveillance tools have transformed the way banks oversee their operations and ensure regulatory compliance. These systems analyze vast datasets, including emails, messages, and transaction records, to detect potential compliance breaches. For instance, they can identify insider trading by monitoring employee communications or flag unauthorized access to sensitive information.The real-time nature of AI surveillance ensures that compliance breaches are detected promptly, allowing banks to take immediate action to rectify issues and maintain their adherence to regulations.a) Enhanced Efficiency:AI’s automation of routine compliance tasks significantly boosts efficiency. In risk assessment, for instance, AI processes massive datasets with lightning speed, freeing up human resources to focus on strategic decision-making. This shift enhances productivity across the compliance workflow, ultimately leading to quicker and more informed decisions.b) Improved Accuracy:The data analysis capabilities of AI translate into more accurate compliance processes. In AML, for instance, AI can identify suspicious transactions with a precision that reduces the likelihood of false positives, where legitimate transactions are flagged as suspicious, and false negatives, where illicit activities go undetected. This heightened accuracy not only improves compliance but also enhances customer satisfaction by reducing the inconvenience of false alarms.c) Cost Savings:AI-driven automation significantly reduces the need for extensive human resources dedicated to compliance tasks. This leads to substantial cost savings for banks, especially when considering the reduced need for manual data entry, verification, and reporting. Additionally, AI systems operate around the clock, ensuring that compliance monitoring is continuous without the need for additional staffing.d) Regulatory Adherence:AI’s real-time monitoring and adaptability are crucial for banks to remain in compliance with everevolving regulations. As regulatory requirements change or new standards emerge, AI systems can swiftly adjust their algorithms and data analysis to ensure adherence. This dynamic approach ensures that banks avoid regulatory fines and penalties while maintaining their reputation for compliance excellence.While the benefits of AI in banking compliance are substantial, there are several challenges and considerations that banks must address: The use of AI often involves accessing and analyzing sensitive customer data. Banks must rigorously adhere to data privacy regulations, such as GDPR and CCPA, to protect customer information and maintain compliance.

42 » PA Bankers Association pabankers.comvendorARTICLESABOUT THE AUTHOR: 20232024 Ensuring that AI models are transparent and explainable is crucial, particularly in scenarios where AI-driven decisions impact regulatory compliance. Banks must be able to justify the decisions made by AI systems to regulators and auditors. Banks must implement AI systems responsibly and ethically. This includes addressing bias in AI algorithms, ensuring fairness in lending practices, and upholding ethical standards in customer interactions. While AI offers automation and efficiency, it should not replace human judgment entirely. Human oversight is necessary to monitor AI systems and intervene when necessary, especially in cases of ambiguous or complex compliance scenarios.To better illustrate the tangible benefits of AI in banking compliance, consider the following real-world examples:JPMorgan employs machine learning algorithms to review commercial loan agreements. This AI-powered system has dramatically reduced the time required for contract analysis, from hours to mere seconds. By automating this compliance task, JPMorgan has achieved substantial time and cost savings.HSBC uses AI to monitor employee communications, such as emails and messages. By analyzing these communications in real-time, AI systems can identify potential compliance breaches, ensuring that employees adhere to regulatory guidelines. This proactive approach has significantly enhanced compliance within the organization.These case studies underscore the concrete benefits that AI brings to banking compliance, from efficiency gains to improved risk management and enhanced regulatory adherence.The future of AI in banking compliance is one of ongoing evolution and expansion. Several key trends are likely to shape this future:AI algorithms will become more sophisticated, capable of handling increasingly complex regulatory requirements and large volumes of data.As blockchain technology gains prominence in banking, AI will play a crucial role in monitoring and ensuring compliance within decentralized systems.Model transparency and explainability will be paramount to meet regulatory requirements and maintain trust with customers and regulators.: AI systems will need to seamlessly integrate with existing banking systems and regulatory reporting frameworks, ensuring smooth adoption.Banks will establish dedicated teams and frameworks for AI governance to ensure responsible and ethical AI use across their compliance processes.In essence, AI will continue to be at the forefront of innovation in banking compliance, providing banks with a competitive edge in navigating the complex and everevolving regulatory landscape.In conclusion, the integration of AI into banking compliance represents a profound transformation in how banks ensure adherence to regulatory requirements. The benefits are manifold: enhanced efficiency, improved accuracy, cost savings, and robust regulatory compliance. However, these advantages must be balanced with careful consideration of data privacy, model transparency, ethical use, and the need for human oversight. Banks that embrace AI in compliance are better positioned to thrive in an industry where regulatory demands are increasingly complex and dynamic. AI is not merely a technological evolution; it’s a strategic imperative for banks seeking to excel in the compliance landscape.

PA Bankers Association 50 Volume 21.1 | Quarter 1SOMEONE IS MAKING MONEY ON TITLE INSURANCE. IT SHOULD BE YOU.It’s like owning your own title insurance company, only better. PA Bankers Services Corporation – along with Investors Title Insurance Company – will help you become part of a multi-bank owned title insurance agency and share in the profits every time title insurance is written. To learn more, simply give us a call at (717) 255-6925 and we’ll show you how your bank can earn non-interest income from title insurance.

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

PA Bankers Association » Winter 2023 45GLOBALVISION SYSTEMS, INC.Anti-Money LaunderingCatherine Lew, (818) 998-7851 x128clew@gv-systems.comINNOVATIVE FINANCING SOLUTIONS, LLC.Your Trusted SBA/USDA ExpertsMichael D. Ryan, (610) 733-9955mryan@innovfs.netEVOLV*Merchant Processing, Search EngineOptimization, Website Design and SocialMedia ManagementNellie Schlachter, (888) 311-7248x3009nschlachter@poweredbyevolv.comPAYLOCITY*HCM Solutions andEngagement SoftwareLisa DeJoy, (717) 303-7663ldejoy@paylocity.comDEALERTRACK COLLATERALMANAGEMENT SERVICES, INC.Electronic Lien and Title ProgramWayne Whipple, (717) 255-6925wwhipple@pabankers.comMARKETSCANImmediate Financial Impact Through NegotiationsWayne Whipple, (717) 255-6925wwhipple@pabankers.comDELUXE CORPORATION*Check ProgramTodd Wroblewski, (724) 625-5599todd.wroblewski@deluxe.comINVESTORS TITLEINSURANCE COMPANYMulti-Bank Owned TitleInsurance ProgramKaren Barnett, (419) 577-5900kbarnett@invtitle.comKEYSTATE CAPTIVE MANAGEMENTCaptive Management andInvestment Portfolio ServicesDavid G. Guerino, (802) 233-262dguerino@key-state.comKLARIVIS*Data Analytics Solution Designed by Bankers for BankersAmber Robinson, (603) 860-3162amberrobinson@klarivis.comWEBBER ADVISORS*Multiple Medical, Drug, Dental &Vision Options and EB SolutionsBrad Webber, (814) 695-8066bwebber@lrwebber.comTHE KAFAFIAN GROUPPerformance & Profitability ManagementRobert E. Kafafian, (973) 299-0300 x106rkafafian@kafafiangroup.comNCONTRACTS*Integrated Compliance, Vendor and Risk Management, Board Encouragement PlatformJason McFarlane. (917) 504-6491jason.mcfarlane@ncontracts.comNFP EXECUTIVE BENEFITS*BOLI, Executive Compensationand Long-Term CareDavid Shoemaker, CPA/PFS, CFP®(901) 754-4924david.shoemaker@nfp.comPNC FIRSTPreferred Derivatives ProgramAmber L. Evanco, (724) 689-2178amber.evanco@pnc.comPWCAMPBELL*Design-build, Branch Experience and Consulting ServicesErin Campbell, (800) 253-7430erin.campbell@pwcampbell.comVIKAR TECHNOLOGIES, INC.Smarter Modern Banking: One View, One Vendor, One VikarNancy Schneier, (973) 495-4835nancy@vikartech.comNEW ERA TECHNOLOGY*Managed Service Provider for Voiceand Data CommunicationMichael Foglia, (973) 503-5809michael.foglia@neweratech.comVendor selections and recommendations are made in accordance with PA Bankers Services Corporation’s stated mission. It is believed that the promoted products and services merit strong consideration by PA Bankers member banks. PA Bankers Services Corporation due diligence and selection criteria should not be construed as a guarantee, as the ultimate appropriateness may vary from bank to bank. In addition, member banks are encouraged to conduct their own due diligence reviews of recommended vendors. Remuneration received by PA Bankers Services Corporation is utilized in-part to support the PA Bankers Association through contracted agreements, corporate sponsorships and overhead coverage. This financial support expands resources and strengthens the services and programs of the PA Bankers Association.

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                   