Return to flip book view

Service Specialist Manual

i Table of Contents Introduction ............................................................................................................................... 1 Statement of Agreement .......................................................................................................... 2 1 - CUSTOMER SERVICE RESPONSIBILITIES ............................................................................ 3 Guidelines for Excellent Customer Service ................................................................................................... 3 Four C’s of Customer Service ............................................................................................................................ 4 2 - OPERATIONAL RESPONSIBILITIES ...................................................................................... 5 Terminology ............................................................................................................................................................. 5 Account Statuses ................................................................................................................................................. 5 Account Styles ...................................................................................................................................................... 6 Accrue ...................................................................................................................................................................... 9 ACH (Automated Clearing House) ................................................................................................................ 9 Authorized Signer ............................................................................................................................................... 9 Cash item ................................................................................................................................................................ 9 Charge back ....................................................................................................................................................... 10 Check truncation .............................................................................................................................................. 10 Collection item .................................................................................................................................................. 10 Contaminated Currency ................................................................................................................................. 10 Counterfeit Currency ....................................................................................................................................... 11 Demand Deposit Account (DDA) ............................................................................................................... 11 Depositary Bank ................................................................................................................................................ 11 Direct Deposit .................................................................................................................................................... 11 Dormant Accounts ........................................................................................................................................... 11 Drawee Bank ...................................................................................................................................................... 11 Electronic Funds Transfer (EFT) ................................................................................................................... 11 Endorsement ...................................................................................................................................................... 11 Types of Endorsements .......................................................................................................................... 12 Endorsement Rules & Policies ............................................................................................................. 13 Holds (Regulation CC) .................................................................................................................................... 14

Revised 6/18/2024 - ii - No Hold (Next-Day Availability) .......................................................................................................... 14 Case by Case Holds (Delayed Availability) ...................................................................................... 15 Exception Holds (Delayed Availability) ............................................................................................. 15 Hold Procedures........................................................................................................................................ 16 Truechecks Verification .................................................................................................................................. 17 Alliance Bank uses a tool called Truechecks verification for guidance of how to proceed with checks over 1000.00 not drawn on Alliance Bank. When a check over 1000.00 is ran through the teller system, Alert Center appears on the bottom right side of the screen with recommendations of whether to place the item on hold, deny, or approve. ........................... 17 Truechecks can also be ran outside of teller from a quick link in AB Connect. A link to the full Truechecks procedures can be found here: TrueChecks Verification.pdf ........................... 17 Identification ...................................................................................................................................................... 17 In-clearings ......................................................................................................................................................... 18 Magnetic Ink Character Recognition (MICR) ......................................................................................... 18 Messages - Alerts ............................................................................................................................................. 18 Messages – Banner .......................................................................................................................................... 21 Messages – Special .......................................................................................................................................... 21 Money Market Deposit Account (MMDA) .............................................................................................. 22 Mutilated Currency (Federal Reserve definition) .................................................................................. 22 Negotiable instrument ................................................................................................................................... 22 Dates .............................................................................................................................................................. 22 Amounts ....................................................................................................................................................... 22 Maker/Drawer ............................................................................................................................................ 23 Maker’s/Drawer’s Signature .................................................................................................................. 23 Drawee Bank Name ................................................................................................................................. 23 Payee ............................................................................................................................................................. 23 Non-negotiable item ...................................................................................................................................... 25 Non-sufficient funds (NSF) ........................................................................................................................... 25 Outstanding Check .......................................................................................................................................... 25 Overdraft Privilege ........................................................................................................................................... 25 Overdraft Protection ....................................................................................................................................... 25 Overdrawn .......................................................................................................................................................... 26

Revised 6/18/2024 - iii - Point-of-Sale (POS) transaction .................................................................................................................. 26 Preauthorized debit ......................................................................................................................................... 26 Restrictions/Legends....................................................................................................................................... 26 Routing Number (ABA Number) ................................................................................................................ 26 Sight Draft ........................................................................................................................................................... 26 Stop payment .................................................................................................................................................... 27 Substitute check ............................................................................................................................................... 27 Teller Cash Recycler (TCR) ............................................................................................................................. 27 Teller System ...................................................................................................................................................... 27 Silverlake Teller .......................................................................................................................................... 27 Role ................................................................................................................................................................ 27 Allowance..................................................................................................................................................... 27 Limit ............................................................................................................................................................... 27 Service Specialist Override .................................................................................................................... 27 Supervisor Override ................................................................................................................................. 27 Remote Override ....................................................................................................................................... 27 Time Deposit/Certificate of Deposit (CD) Account ............................................................................. 28 Uncollected Funds ........................................................................................................................................... 28 Unfit Currency ................................................................................................................................................... 28

1 INTRODUCTION Putting the customer first is what Alliance Bank is all about! In your career you will have the opportunity to serve a wide variety of customers; the polite, the not-so polite, familiar faces and new accountholders you have not had the opportunity to meet yet. You will also have the responsibility and opportunity to serve your fellow employees, whether they are other Service Specialists or an accounting clerk in another county. Indeed, as a Service Specialist you walk into a great responsibility; you must serve your external and internal customers with tact, kindness and confidence. But an even greater responsibility is yours: to be the face of Alliance Bank to the customers you serve on a daily basis. Many accountholders may never visit with their banking officer or develop a relationship with a representative from New Accounts or Operations. To those people, you represent all they know of Alliance Bank, and your service to them will influence their feelings towards our bank and the commitment we make to put our customers first. The way you treat your customers will reflect upon Alliance Bank and can certainly affect whether customers will seek additional services from our bank or look elsewhere for the help they need. Of course, our goal at Alliance Bank is to always strive to treat our customers the way we want to be treated – with respect, courtesy, and a positive approach that makes us feel important and appreciated. All of Alliance Bank functions together as a team, and you represent the front line of customer contact and service. In addition to your customer service duties, you perform operational tasks and undertake responsibilities for security, all of which are discussed in greater detail later in this manual. With your dedication to Alliance Bank and its commitment to putting the customer first, you will serve your community as well as contribute to a successful and profitable company. Please familiarize yourself with this teller manual. When used in conjunction with assistance from your supervisor, you will find that you can handle any situation that comes up during your day. Enjoy your employment at Alliance Bank and be mindful of your responsibilities and opportunities as a frontline representative to our customers, because at Alliance Bank, we want to be…

Revised 6/18/2024 - 2 - STATEMENT OF AGREEMENT I have read the contents of this teller manual. I understand the importance of consistency among the branches of Alliance Bank, so that customers receive the same service no matter where they visit. By signing below, I agree with Alliance Bank to adhere to the policies and procedures contained therein. I also understand and agree that my willful violation of any of the policies and procedures outlined in this teller manual may result in disciplinary action, up to and including termination. Signature of Service Specialist Date

Revised 6/18/2024 - 3 - 1 - CUSTOMER SERVICE RESPONSIBILITIES The most important responsibility you have as a Service Specialist is giving excellent customer service to those people that come to your station each day. For the same reasons that you return to your favorite restaurant or retail store repeatedly, customers of Alliance Bank will keep coming back to our branches when we provide that same experience. Remember, each person you serve is an existing customer of the bank or a potential customer. In either case, you have an obligation to deliver top-notch, friendly assistance to ensure their return. The following are guidelines to help you be the best in all you do! Guidelines for Excellent Customer Service • Acknowledge and greet customers, making eye contact. Examples: Hello, Mr. Smith. Good morning, ma’am. Good afternoon, sir; one of us will be with you in a moment. (When busy with another customer) • Find out what their immediate needs are that brought them into our bank. Examples: How can I help you? What brought you into our bank today? • Make appropriate conversation during the transaction. Examples: How are you doing? I haven’t seen you in a while. Are you taking any vacation this summer/winter/spring/fall? Where are you headed? How old are your children? Do any of them play sports (or music)? I have a child/grandchild/sibling playing ball this spring. • Handle their transaction with speed, accuracy and confidentiality. • Offer to handle other business, answer questions, or refer them to the appropriate area. Examples: Is there anything else I can do for you? What else may I help you with? • Always thank or appreciate them for their business. Examples: Thank you for coming in. We appreciate your business.

Revised 6/18/2024 - 4 - As you perform each of these steps, keep in mind the four C’s of Customer Service: Four C’s of Customer Service Courtesy • Showing good manners • Saying “please” and “thank you” • Listening without interrupting • Using a pleasant tone of voice Concern • Maintaining eye contact • Focusing on the customer • Avoiding distractions, like phone calls or other people in the branch, including co-workers and other customers (except for a quick greeting) • Using customer’s name • Listening attentively • Asking questions to confirm customer’s request Confidentiality • Keeping each customer’s business private by using an appropriate volume level to your voice so that others can’t overhear • Writing balance information down rather than quoting it orally • Not discussing it with family members, friends, or even co-workers who do not have a need to know the information • Refraining from gossip Competence • Conveying a professional appearance and manner, which includes dressing and grooming according to established guidelines • Avoiding facial expressions or comments that would imply a lack of knowledge or confidence • Completing transactions accurately and quickly by asking questions when in doubt to avoid errors that would inconvenience the customer • Using non-technical language when discussing the transaction with the customer

Revised 6/18/2024 - 5 - 2 - OPERATIONAL RESPONSIBILITIES Terminology Account Statuses Status Description • Closed • No transactions are allowed. • If the customer wants to reopen the account, he/she must speak with a Relationship Banker. • Charged off • The account has been negative for more than 60 days, and the bank decided to close the account and accept the loss. • Only deposits may be accepted. The Service Specialist should not accept more than what is owed to the bank, i.e. the negative balance of the account. If the customer wants to reopen the account, he/she must speak with a Relationship Banker. • The Service Specialist should only accept cash, certified funds (cashier’s check or money order), or a transfer from another account to pay a charge off balance. • Dormant • Accounts that have had no customer-initiated transactions in more than 1 year. • A supervisor override is required to process any transaction against a dormant account. • To reactivate a dormant account, follow the procedures outlined in the Dormant Accounts section below. • Escheat • Accounts that have had no customer-initiated transactions in more than 3 years and will be sent to the State of Texas as unclaimed property at the appointed time each year. • A supervisor override is required to process any transaction against an escheat account. • To reactivate an escheat account, follow the procedures outlined in the Dormant Accounts section below. • New today • The account was just opened today. • The Service Specialist should be cautious accepting large deposits to a new account. • No Credits • Only debits and force-pay credits will be posted automatically by the system. • The account should have an Alert Message explaining the reason for the status. See Messages – Alerts

Revised 6/18/2024 - 6 - Status Description • No post • Only force-pay transactions will be posted by the system automatically. • The account should have an Alert Message explaining the reason for the status. See Messages – Alerts • Pending Closed • The account has been closed and is waiting for end of day processing to complete the closing process. • No additional transactions should be performed. • Restricted • Only credits and force-pay debits will be posted automatically by the system. • The account should have an Alert Message explaining the reason for the status. See Messages – Alerts Account Styles Style Description • Single Ownership Example: John Doe • The account only has one owner. He/she is the only one authorized to conduct business on the account, unless they have appointed an authorized signer or power of attorney (POA). • Joint Ownership Example: John Doe Jane Doe Sam Doe • The account has multiple owners. Any of the owners is authorized to conduct business on the account without the authorization of the others. All owners may not be visible on the system, and the teller may need to look at the signature card to determine ownership/authorization. In addition, an owner may have appointed an authorized signer or power of attorney (POA). • POD (Payable on Death) Example: John Doe POD John Doe Jane Doe, POD • Only the account owners have the right to withdraw money from this type of account. The person named as the POD beneficiary has no rights to the account until all other account owners are deceased.

Revised 6/18/2024 - 7 - Style Description • Fiduciary/Custodian/Guardian Examples: Bill Doe John Doe, Custodian Susie Doe, Ward John Doe, Guardian • Only the custodian/guardian may withdraw from this type of account even though the other person is the beneficiary of those funds. The beneficiary has no rights to the account. In addition, the fiduciary may not use the account to conduct his/her own personal business. • Trust Examples: The John and Jane Doe Living Trust John and Jane Doe, Trustees John Doe ITF/ATF Susie Doe Bill Doe, A Minor John Doe, Cust under TUTMA • Only the trustees are allowed to withdraw from this type of account. In the case of ITF/ATF accounts, the person’s name that precedes “ITF” is the trustee and the person’s name that follows “ITF” is the beneficiary. Beneficiaries have no rights to these types of account. In addition, the trustee may not use the account to conduct his/her own personal business unless it is a living trust. NOTE: • ITF – In Trust For • ATF – As Trustee For • TUTMA – Texas Uniform Transfers to Minors Act (new) • Debtor in Possession Example: John Doe Debtor in Possession Case #12-34567-A-90 John Doe Jane Doe DIP Case #12-34567-A-90 • Only the names listed on the account are authorized to withdraw from the account. The title, “Debtor in Possession,” means that even though the account holders have filed for bankruptcy, the court has allowed them to remain in possession of their assets rather than turning them over to a trustee to manage. • Estate Example: Estate of John Doe, Deceased Fred Doe, Executor • Only the executor(s) or executrix(ces) may withdraw funds from the account. No one else is entitled to the funds, including the beneficiaries. In addition, the executor may not use the account to conduct his/her own personal business.

Revised 6/18/2024 - 8 - Style Description • Representative Payee Example: Jane Doe John Doe, Representative Payee • Only the person acting as the appointed representative to receive another’s Social Security benefits may withdraw from this account. He/she will be the only signer on the account. In addition, the representative payee may not use the account to conduct his/her own personal business. • DBA (Doing Business As) Example: John Doe DBA Doe’s Equipment Sales XYZ Corporation DBA ABC Company • This type of account is a business account under which the owner operates under an Assumed/Fictitious Name instead of their legal name. The owner could be an individual, a partnership, or corporate entity. • The only individuals authorized to sign on behalf of the business are the ones who have signed the latest signature card or business resolution on file. • General Partnerships (unincorporated) Example: Doe and Doe, Partners ABC Partnership John Doe and Jim Smith, Partners • A business where two or more people who have pooled their financial resources and share all the obligations of the business. • The only individuals authorized to sign on behalf of the business are the ones who have signed the latest signature card or business resolution on file. • Incorporated partnerships/ companies/organizations Example: ABC Trucking, Inc. XYZ Plumbing, LLC Doe and Doe, LP/LLP • These are businesses that have incorporated to limit their personal liability should the business be sued or fall into bankruptcy. • The only individuals authorized to sign on behalf of the business are the ones who have signed the latest signature card or business resolution on file.

Revised 6/18/2024 - 9 - Style Description • Unincorporated associations Example: SSHS Band Boosters Girl Scout Troop 303 The City Garden Club • These organizations are typically formed for a nonprofit purpose and are not registered with the state. • The only individuals authorized to sign on behalf of the business are the ones who have signed the latest signature card or business resolution on file. Accrue To increase or accumulate. In banking, this term is most often used in conjunction with the term “interest.” Interest on deposits and loans accumulates each day and is either paid by the bank to the depositor at the end of a predetermined term (deposits) or paid by the customer on a predetermined, regular basis for an extension of credit. ACH (Automated Clearing House) An organization formed by financial institutions in a certain geographic area that use electronic means to settle deposit and payment transactions between financial institutions across the United States. Preauthorized debits, direct deposit, and electronic bill payments are all examples of ACH transactions. These transactions are also known as a type of electronic funds transfers (EFTs). Authorized Signer A person who the owner of an account has appointed to conduct banking transactions on his/her behalf. An authorized signer: • has no ownership rights to the account • should not conduct his/her own personal business through the account on which they have been authorized • may be appointed on a personal or business account • is also known as a convenience signer on a personal account (this is a term that was once used in the State of Texas but has been since removed from the Texas Statutes) • Effective 07/01/2020, a CIF is created for all Authorized Signers and CIP procedures are performed on each. Cash item A check or draft that is payable on demand with no papers, documents, or special instructions attached and can be immediately cashed or credited to the customer’s account. In addition, these items should have the MICR information encoded on the bottom of the check and must be payable through any United States bank through the Federal Reserve clearing system. If the item does not fit the definition of a cash item, then it is considered a collection item.

Revised 6/18/2024 - 10 - Examples of cash items include: • US Currency • Personal and business checks drawn on a US bank (with or without MICR line) • Cashier’s checks, money orders, and traveler’s checks • Some foreign checks and drafts payable through a US bank Charge back A check that a customer has previously deposited or cashed that has been returned by the drawee’s bank for some reason and subsequently “charged back,” or withdrawn, from the depositor’s account. Check truncation The process of imaging a customer’s paid checks or drafts in which the image becomes the official record of the transaction. The official record is retained by the customer’s bank and cancelled checks are not returned. Collection item A check or draft that may be payable on demand or at a future date with documents, papers, or special instructions attached which can affect their value or final payment and are not credited to the customer’s account until the bank has collected payment for them. In addition, they may or may not have the MICR information encoded on the bottom of the check, and they may or may not be payable through a United States bank. If the item does not fit the definition of a collection item, then it is considered a cash item. Examples of collections items include: • Sight drafts • Automobile drafts • Drafts with attachments, such as some insurance drafts requiring a car title to be attached • Foreign checks, drafts, and currency not drawn on a US bank. • Promissory Notes • Coupon Bonds/Bearer Bonds • NSF checks that have already been presented twice Contaminated Currency Currency that has been damaged by or exposed to a contaminant or impurity that poses a health hazard or safety risk. Currency may become contaminated due to: • Prolonged exposure to water or other liquids that results in the existence of mold. • Exposure to blood, urine, feces or any other bodily fluids, including removal from any body cavity, corpse or animal. • Exposure to sewage.

Revised 6/18/2024 - 11 - • Exposure to any chemical, liquid or foreign substance that may pose a health hazard or safety risk. • Exposure to tear gas used in most dye packs. Note: The dye used in dye packs is not considered a contaminant. Notes stained from the dye alone should be deposited normally. Follow the guidelines below for handling contaminated currency. Counterfeit Currency Unlawfully altered or printed U.S. currency or coin. Follow the guidelines below for handling counterfeit currency. Demand Deposit Account (DDA) According to Regulation D, a transaction account where deposits made into it are payable on demand and do not require a written notice for an intended withdrawal and from which the depositor can make transfers or withdrawals by any available negotiable or transferable means. Depositary Bank The bank that accepts the deposit of checks from its customer and forwards them through the check clearing process to the drawee bank. Direct Deposit An electronic funds transfer (EFT) whereby an employer or payer of benefits (e.g. US Treasury) electronically deposits payroll checks or benefits checks into the account of the recipient. Dormant Accounts An account where there has not been a debit or credit to the account by the depositor or an agent of the depositor, and the depositor has not communicated with the depository for more than one year. Drawee Bank The bank on which a check is drawn. Electronic Funds Transfer (EFT) An electronic transaction that may be initiated internally by the bank or externally through the ACH that transfers funds between two parties. Examples of EFTs are preauthorized debits, direct deposits, automatic bill payments to vendors, ATM/POS transactions, account transfers made using Internet banking or telephone banking services, and internal automatic funds transfers between accounts at the same bank. Endorsement The legal manner by which a negotiable instrument is transferred from one person or entity to another. Each endorsement on the back of the check guarantees to the subsequent party to

Revised 6/18/2024 - 12 - whom they are transferring the check that all prior endorsements are authorized and genuine and that the item is free of defects. Types of Endorsements Types of Endorsements Type Examples Acceptance Blank An endorsement of one or more parties without any other instructions. This is the most common type of endorsement. John Doe John Doe Jane Doe For cash or deposit (Holds may apply based on amounts or other issues.) Special An endorsement that transfers a check to a specific person named in the endorsement. Pay to John Doe John Doe must first endorse the check before it can be transferred to anyone else. For cash or deposit (Holds may apply based on amounts or other issues.) A Service Specialist must ensure that the special endorsement has been obtained before cashing or depositing. Restrictive An endorsement that restricts further use or endorsement of the check. The word “only” is a common indicator of a restrictive endorsement. For Deposit Only John Doe For Mobile Deposit Only At Alliance Bank John Doe Pay to John Doe only For cash or deposit depending on the type of restriction. Conditional An endorsement that specifies certain conditions must be met before the item can be transferred to another party. Pay to John Doe when he completes the roof work Do not accept Qualified An endorsement that modifies or limits the liability of the endorser. Without Recourse Refer to a supervisor

Revised 6/18/2024 - 13 - Endorsement Rules & Policies Endorsement Rules & Policies 1. The payee must always be the first endorser. 2. The last endorser does not have to be the payee, but only the last endorser may negotiate the check. 3. The last endorsement should always be written in your presence by the person presenting it, unless the endorser is a customer known to you. 4. The payee(s) should endorse the check exactly as his/her name appears on the face of the check. 5. Stamped or typed endorsements are acceptable for deposit only. 6. Endorsements should be written in ink so that they cannot be altered. 7. Checks with missing or incomplete endorsements should not be cashed. 8. Checks made payable to “Cash” or “Bearer” do not legally require an endorsement. However, Alliance Bank does require an endorsement on these checks for recourse, if necessary. 9. A check endorsed “For Deposit Only” cannot be cashed. This would include giving cash back on a deposit containing checks endorsed in this manner. 10. Checks payable to the bank should be accepted for payments only. Refer to your supervisor for any exceptions to this rule. 11. If a check is jointly payable, then all parties must endorse the check. NOTE: Jointly payable checks are indicated by use of the word “and” between the payees’ names. The word “or”, the slash symbol (/), and the absence of any qualifiers, such as one name printed on top of another name, indicate the check is individually payable and only requires the endorsement of one of the payees. NOTE: Insurance checks are often jointly payable between our customer and the bank that holds their mortgage or auto loan. A Service Specialist should ensure that an officer of the other bank has endorsed the check over to our customer. NOTE: A name appearing after the notation “C/O” is NOT a payee, and therefore, an endorsement of that person is not necessary nor appropriate. “C/O” is a mailing address instruction which stands for “in care of”. 12. Checks, such as insurance claim checks, where Alliance Bank is listed as a joint payee must be endorsed by an officer of the Bank before they can be negotiated. 13. Checks endorsed with an “X”—often by elderly people—require two additional endorsements as witnesses before it can be cashed.

Revised 6/18/2024 - 14 - Endorsement Rules & Policies 14. Generally, checks without endorsements can be accepted for deposit only as long as they are being deposited into an account on which all payees are owners. However, certain items may require personal endorsements, such as US Treasury checks, insurance claim checks, cashier’s checks, and some large dollar checks. Each bank has the right to require a personal endorsement under the UCC. Because of the volume of checks processed by banks daily, each bank sets a limit and reviews all checks over that limit for signatures and endorsements (for example, Alliance Bank reviews all items over $10,000). If an endorsement is found to be missing, the bank may return the check to us. Holds (Regulation CC) Regulation CC defines items for which a bank must give immediate credit in a depositor’s DDA account and those for which it may delay the availability of funds by putting a “hold” on a check(s) in the deposit. Reg CC does not apply to savings or money market accounts, since they are non-transaction accounts. No Hold (Next-Day Availability) Reg CC requires next-day availability (immediate credit) for the items below, which is the first business day following the banking day of deposit. For next-day availability, the deposit must be made in person to an employee of the bank and into an account of a payee of the check. On the other hand, a case-by-case or exception hold may be applied on checks deposited in an ATM or night depository or when they are payable to someone other the account owner and endorsed over to them. However, on-us checks, cash, and US Treasury checks also require next-day availability when deposited in an ATM or night depository. Next-Day Availability Items • Cash • US Treasury checks • Electronic payments (ACH/Wires) • US Postal Service money orders • On-us checks • Federal Reserve Bank checks • Cashier’s, official, certified, or teller’s checks • Federal Home Loan Bank checks • Travelers checks • State or local government checks

Revised 6/18/2024 - 15 - Case by Case Holds (Delayed Availability) If the checks in a deposit do not fall under the next-day availability guidelines, then the availability of those funds may be delayed by placing a hold on the check(s). When a case-by-case hold is placed on a check, the first $225 of the deposit must be given next day availability. The funds in excess of $225 will be available the second business day after the day of the deposit. If the bank delays availability, it must deliver a written notice to the customer, either in person at the time of deposit or by the first banking day following the day of deposit, advising them of the delay and outlining the reason(s) for the decision. Exception Holds (Delayed Availability) Under certain circumstances, the bank may further delay availability of funds for an extended period to ensure that the bank is able to collect on the check(s) in a deposit. The six reasons why a bank may delay the availability of funds are listed in the table below. If the bank delays availability, it must deliver a written notice to the customer, either in person at the time of deposit or by the first banking day following the day of deposit, advising them of the delay and outlining the reason(s) for the decision. Exception Hold Reasons • Large deposits (over $5,525) The first $225 must be made available the next business day; the next $5300 the 2nd business day after the day of deposit; and the remainder in excess of $5,525 must be made available by 7th business day after the day of deposit. • New customers (accounts open 30 days or less) Next-day availability only applies to cash, electronic payments, and the first $5525 of any other next-day items; the remaining amount from next-day items must be available by the 9th business day. Funds from all other check deposits will be available the 9th business day after the day of deposit.

Revised 6/18/2024 - 16 - Exception Hold Reasons • Deposits to accounts that are repeatedly overdrawn “Repeatedly overdrawn” is defined as overdrawn on six or more banking days during the previous six months or overdrawn more than $5,000 on two or more banking days in the last six months. The funds must be made available by 7th business day after the day of deposit. • Reasonable cause to doubt the collectability of the check Doubtful collectability includes those checks that are post-dated or stale-dated or that the drawee bank has said it will not honor. The reason must be indicated on the customer’s notice. The funds must be made available by 7th business day after the day of deposit. • Emergency conditions Examples of emergency conditions are natural disasters, communications malfunctions, and other situations that prevent the bank from processing checks as it normally does. The funds must be made available by 7th business day after the day of deposit. • Re-deposited Checks If a check was returned previously unpaid for any reason, other than for a missing endorsement or a post-date that has been corrected, the total check amount may be held. The funds must be made available by 7th business day after the day of deposit. Hold Procedures Hold Procedures • The Service Specialist and Relationship Bankers will process the hold in Teller. The hold can be placed, and the notice generated during the transaction. • If a hold is placed on a savings or money market deposit, the hold is placed directly on the account in Silverlake, and no notice is generated. • The following is gathered to approve the hold and sent to supervisor o a copy of the notice generated o a copy of the front and back of the check(s) being held o a copy of the deposit slip or virtual deposit slip o a screen printout of the stops and holds screen after the hold was placed o Copy of True Check finding (if applicable)

Revised 6/18/2024 - 17 - Hold Procedures • The supervisor should: o Review the notice and accompanying documentation o Determine if the hold was applied accurately o Initial or sign the form confirming the hold was reviewed and found to be accurate. o Image holds throughout the day. The imaged hold will begin a workflow for Quality and Control to review. o Quality and Control will either approve or deny the hold. o If the hold is denied, please correct and resubmit to be imaged. The workflow will image the documents to Synergy if it is approved. o Any corrections to the hold are to be made asap, or by the following business day at 10 am o Branches are responsible for mailing notices after they have been approved by next business day. Truechecks Verification Alliance Bank uses a tool called Truechecks verification for guidance of how to proceed with checks over 1000.00 not drawn on Alliance Bank. When a check over 1000.00 is ran through the teller system, Alert Center appears on the bottom right side of the screen with recommendations of whether to place the item on hold, deny, or approve. Truechecks can also be ran outside of teller from a quick link in AB Connect. A link to the full Truechecks procedures can be found here: TrueChecks Verification.pdf Identification Identification Guidelines • A Service Specialist may accept any identification listed as acceptable without supervisory approval in the table below for transactions with a Service Specialist. All others must be approved by a supervisor (Refer to the table below.) • The issuer, type, and the number of the identification document must be entered in the teller system for any transaction requiring identification to be presented. (Example: TX DL 12345678). • In addition, a visual comparison between the identification and the physical person must be made. If there is any concern about the presenter’s identity, consult your supervisor for assistance.

Revised 6/18/2024 - 18 - Acceptable Unacceptable Without Supervisory Approval: • Employer ID or badge • Texas Driver’s License • Credit Cards • Texas Identification Card • Club membership cards • Military Identification • Acceptable identification that has expired (except in the case of the elderly and disabled) • Alien Registration Card • College ID • School ID for minor children • TX License to Carry (LTC) a Handgun • Other state’s driver’s licenses or identification cards • Matricula Consular Card With Supervisory Approval Only: • Passport • Other Government issued identification bearing a photograph and evidence of nationality In-clearings Checks that are presented to the bank for payment by the Federal Reserve or correspondent bank. These are the large quantities of checks that are presented at night and either paid out of customers’ accounts or returned for some reason. Magnetic Ink Character Recognition (MICR) The process by which machines can recognize special characters printed in magnetic ink at high speeds. This process is used most in banking. The bottom of checks, deposit/withdrawal slips, and other internal bank tickets and forms usually have a MICR line, which normally contains some of the following information, depending on the item: transit routing number, account number, serial number, item amount, or posting code. Messages - Alerts Alert messages are messages of an urgent nature that require close and immediate attention/action. These are usually temporary and have a maximum expiration of 90 days and

Revised 6/18/2024 - 19 - can exist at the customer level (applying to all accounts) or at the account level (specific to that one account). Message Explanation “…fraud…” • If a customer has been a victim of fraud or may become a victim, a message is placed to prevent any further activity from occurring and to give instructions how to handle legitimate, authorized transactions. Please follow all instructions completely. “…bad address…” “…need updated information…” • If a customer has a bad mailing address or other inaccurate contact information, an alert may be used to prompt a teller to collect the updated information. The proper form should be completed with the information, and the customer should sign it. The form should be promptly forwarded to a Relationship Banker who will update the system and remove the alert, preventing the customer from being asked repeatedly for the same information. “…do not reopen…” • At times, the bank will permanently terminate a customer relationship. A message containing such information and instructions not open/reopen an account should be heeded. This applies to a Service Specialist who may accept deposits to repay the negative balance on a charged off account. “…levy…” • If a taxpayer owes delinquent taxes to the Federal government, the IRS may levy upon certain property owned by the taxpayer, including deposits in a financial institution, in order to satisfy a debt. Generally, any party in possession of property, or the rights to property, i.e. deposits, must surrender the property or rights to the IRS. • A levy attaches to all funds in a customer’s bank account at the time of receipt of a levy. It does not attach to deposits made after the date of the levy. • Ask your supervisor for assistance before making any withdrawal on an account with a levy.

Revised 6/18/2024 - 20 - Message Explanation “…freeze…” • The Texas Comptroller’s Office or the Texas Workforce Commission has the authority to levy against any person who possesses or controls the assets of another party, i.e. deposits in an account, who is delinquent in the payment of state taxes (Comptroller) or unpaid wages or unpaid unemployment taxes (TWC). • The process begins by sending a notice of freeze, which requires funds on deposit in the customer’s account up to the amount on the notice to be frozen for 60 days. During that time, the bank will report to the appropriate agency the balance in the account. If the agency decides to collect, they will send a notice of levy, which demands the funds be sent to them. • Credits should be accepted, but no withdrawals from the account or cash back on a deposit should be given unless other instructions exist. • Ask your supervisor for assistance before making any withdrawal from an account which is frozen. “…lien…” • The Texas Attorney General’s office has the authority to attach a lien to a customer’s account to collect delinquent or back child support. • Ask a supervisor before making any withdrawal from an account which is restricted because of a lien. “…garnishment…” • A writ of garnishment is issued by a court of law to collect funds in a customer’s account to satisfy an indebtedness to a creditor. • This garnishment includes all funds on deposit as well as any funds presented to a Service Specialist, including those for deposit, the purchase of negotiable instruments or payment on a loan.; therefore, do not accept any funds from a customer whose account is garnished. • Ask a supervisor before making any withdrawal from an account which is frozen because of a writ of garnishment. “…account restricted…” • Other types of situations may occur whereby an account is restricted, and transactions are not allowed. For example, the death of the owner of a single owner account or the last surviving owner of a joint account requires restriction until a representative for the estate has been appointed. • Be sure to follow all instructions carefully and ask your supervisor for assistance if needed.

Revised 6/18/2024 - 21 - Messages – Banner Very brief notes that give a bank employee pertinent information about the customer. Examples include “Messages”, “Bankruptcy”, “Credit Line”, and “RDC”. Messages – Special A special message gives you more information about the customer or account but is not of an urgent nature. These may or may not have expiration dates and can exist at the customer level (applying to all accounts) or at the account level (specific to that one account). The notation “Messages” will appear in the banner at the top of the inquiry screen to let you know that special messages exist for the customer/account. Message Explanation “…deceased” • If one of the joint owners on an account has passed away, then Customer’s CIF will be flagged as a deceased customer. (Messages may have been placed in the past) • Be extremely careful when cashing checks reportedly signed by a deceased person. • Ask your supervisor for assistance. • If you become aware of a deceased owner and account is not flagged as deceased, please notify a Relationship Banker. “…Jane Doe is authorized to receive…” • At times, some customers may want another individual, such as a CPA, to assist them with their bookkeeping. They often submit written authorization to the bank, granting these individuals the authority to receive account information and statements but have no authority to withdraw funds from the account. “…John Doe has been granted POA for Jane Doe…” • POA stands for Power of Attorney. • An individual can grant another individual the power to perform financial transactions among other things on their behalf. The person who has been given the power is sometimes referred to as the agent- or attorney-in-fact. • Ask your supervisor for assistance with transactions involving a POA.

Revised 6/18/2024 - 22 - Money Market Deposit Account (MMDA) See the definition for Savings Account. In addition, this type of account typically offers a higher rate of interest on deposits than a regular savings account and typically the rate is tiered based on a range of balances. Mutilated Currency (Federal Reserve definition) A note that has been damaged to the extent that one-half or less of the note remains, or its value is questionable and special examination by trained experts at the Department of the Treasury or the Bureau of Engraving and Printing (BEP) is required before any exchange is made. Refer to the guidelines below for handling mutilated currency. Negotiable instrument A check or similar draft that is transferable from one party to another by means of endorsement. According to the UCC, a check is negotiable if it is “a written order, signed by the maker or drawer, containing unconditional instructions to the drawee bank, to pay to bearer or someone’s order, a certain sum of money, out of the maker’s checking account, on demand, on or after a certain date and not contain any other promise or obligation.” In short, the instrument must bear 5 items on its face—the date, amount, maker’s/drawer’s signature, drawee bank name, and payee—and those items must meet certain conditions. Dates Stale-dated check Post-dated check A check with a date more than 6 months old. Generally, we don’t accept stale-dated checks for deposit or cash. Exceptions may be made by the supervisor, and a Reg CC reasonable cause exception hold may be applied. A check with date sometime in the future. Generally, we do not accept postdated checks. A check dated one or two business days in advance is acceptable. Amounts Legal amount Courtesy amount The amount written or printed in words on most checks. Some business checks may have the legal amount stamped on it by a machine called a check protector. The amount written or printed in numerals, usually in a box or on a line on the right side of the check. NOTE: If there is a discrepancy between the courtesy amount and the legal amount, the check should be negotiated for the legal amount. In this circumstance, you should write that amount in numerals above the courtesy amount to call the encoder’s attention to the negotiated amount.

Revised 6/18/2024 - 23 - Maker/Drawer The person on whose account the check or draft is drawn and who signs the front of the check. Maker’s/Drawer’s Signature One Signature Required Two Signatures Required Facsimile Signature Only one of the authorized signers on the account must sign the check. This is usually indicated by the appearance of only one signature line on the check. Two of the authorized signers on the account must sign the check. This is usually indicated by the appearance of two lines on the check along with a check legend above the signature lines that reads “Two Signatures Required.” A rubber-stamped or machine-printed signature used in place of a handwritten signature. NOTE: You can easily determine if a signature is authorized on checks drawn on Alliance Bank by looking at the signature card. You should not depend on the styling of the account and the lack of account messages to determine authorization as they may not accurately reflect the signature card. NOTE: For checks drawn on other banks, you must depend on the preprinted name and address information on the check along with any check legends and the number of signature lines. For this reason, we do not generally accept temporary checks drawn on other banks. Please consult your supervisor if you are presented with one of these. Drawee Bank Name On-Us Checks Transit Checks Checks that are drawn on Alliance Bank and bear our bank name on the front of the check. The bank’s address, including city and state, is not required to be printed on the check although it is usually customary to do so. Checks that are drawn on other banks and bear their bank name on the front of the check. Also referred to as “not on-us” checks. Payee The person(s) and/or entity(s) to whose order a check is made payable; in other words, the person(s) and/or entity(s) whose name(s) follow(s) the words “Pay to the order of” on the face of the check.

Revised 6/18/2024 - 24 - NOTE: A name appearing after the notation “C/O” is NOT a payee. “C/O” is a mailing address instruction which stands for “in care of”. Payee Types Type Description Single Only one name appears as the payee on the face of the check. Multiple More than one name appears as payees on the face of the check, whether payable individually or jointly. Business or Other Entity The name of a business or other entity appears on the face of the check, either individually or jointly with other persons or entities. Cash or Bearer The word “Cash” or “Bearer” appears as the payee on the face of the check. Representative Payee A title that is used by the US government on the payee line to indicate a person that has been appointed by them to serve as a representative for the other person named on the check, usually a minor or incapacitated adult. This person receives the government benefits for the other individual and manages those funds on their behalf. NOTE: Only the representative payee may endorse the check. The other person named on the check has no right to receive the funds of the check, even though the funds are for their benefit. These types of checks should be deposited only. Custodial (IRA) Examples: • Alliance Bank as Custodian for John Doe • Alliance Bank for the benefit of John Doe • Alliance Bank FBO John Doe These indicate that they may be IRA funds which cannot be processed by a Service Specialist. Look for any account number noted on the check and look the number up on the system to determine what type of account it is. Forward all IRA deposits to a Relationship Banker.

Revised 6/18/2024 - 25 - Payee Types Type Description Fiduciary Checks made payable to • John Doe as Custodian/Guardian/Fiduciary for Susie Doe • Susie Doe John Doe, Custodian/Guardian/Fiduciary NOTE: Only the custodian may endorse the check. The other person named on the check has no right to receive the funds of the check, even though the funds are for their benefit. These types of checks should be deposited only. Non-negotiable item An item that may resemble a negotiable instrument but is missing one or more of the 5 required pieces that make it truly negotiable. Examples could include: • A check with no MICR (in some cases) • A paycheck stub • Any item that is marked “Non-Negotiable” somewhere on the face of the item Non-sufficient funds (NSF) A condition when the customer’s account balance is not “sufficient” to pay checks that are being presented for payment, either with a Service Specialist by an individual or through in-clearings. These items are returned to the presenting party with the designation “NSF” when overdraft protection does not exist. Outstanding Check A check written by a customer that has not yet been paid on his/her account. Overdraft Privilege An arrangement that the bank makes with its customer whereby the bank strives to pay checks over and above the balance in his/her account up to a predetermined limit, and the customer agrees to pay back the overdraft with a future deposit. Overdraft privilege is offered as a safety net for the customer and not as a payday loan, and at its discretion, the bank may revoke the privilege at any time without prior notice to the customer. Overdraft Protection An agreement between the bank and its customer whereby the bank pays any customer’s check presented for payment over and above the balance in his/her account up to the limit of a pre-approved line of credit and the customer agrees to repay the balance of this line of credit plus interest, either in lump sum or in monthly payments. (Alliance Bank’s overdraft protection service is known as Check Plus.)

Revised 6/18/2024 - 26 - Overdrawn A condition that exists when a customer’s account has negative balance due to items that were paid over and above the balance in the account, either by prior arrangement/agreement (see “overdraft privilege” and “overdraft protection”) or by obligation of the bank. Point-of-Sale (POS) transaction An electronic transaction, usually withdrawing funds from a customer’s account, using an access device (ATM/Debit Card) and accompanying personal identification number (PIN) at an electronic terminal. Preauthorized debit An electronic withdrawal transaction where a bank customer has “previously authorized” a vendor to withdraw a predetermined amount out of his/her account and transfer it to the vendor’s bank account (Example: an electronic draft initiated by an insurance company to collect the customer’s monthly premium.) Restrictions/Legends Restriction/Legend Description “Void after 90 days, 1 year, etc.” This restriction limits the negotiability of the check and if not followed, may result in a loss. The Service Specialist must take note of these restrictions and look at the date on the check to make sure that the check is still negotiable. “Two Signatures Required” Two signatures must be present on the face of the check to be negotiated. “Title must be attached” Indicates that this is a collection item. Routing Number (ABA Number) A number assigned to each bank by the Federal Reserve Bank to be used to properly “route” checks through the clearing system to the drawee bank. The number can be broken down in four parts: The first two numbers indicate the Federal Reserve District in which the bank is located; the next two, the processing region; the next four, the bank’s identifying number; and the last, a check digit that verifies the accuracy of the first eight numbers. NOTE: Alliance Bank’s routing number is 111901975. Sight Draft A draft, such as those used to close savings accounts at other financial institutions, that is payable on demand (on “sight”) if certain conditions, such as authorized and genuine signatures, have been met.

Revised 6/18/2024 - 27 - Stop payment An order by the customer instructing the bank to refuse payment on a specific draft or check or series of checks or drafts. Substitute check A paper reproduction of an original check that contains an image of the front and back of the original check, bears a MICR line, conforms with generally applicable industry standards for substitute checks and is suitable for automated processing. This check, also known as an Image Replacement Document (IRD), is a legal equivalent of the original check. Teller Cash Recycler (TCR) Bank equipment at a workstation that accepts, stores, and dispenses cash. Teller System Silverlake Teller The computer software used to process transactions. Role The level of authority a user has within the teller system assigned based on experience. Allowance The maximum amount a Service Specialist can process before a warning message is displayed and a Service Specialist override is required. Limit The maximum amount a Service Specialist can process before a warning message is displayed and a supervisor override is required. Service Specialists may still process transactions in excess of their limits with a supervisor override. Service Specialist Override The action required by a Service Specialist in the teller system when a transaction exceeds his/her allowance but does not exceed his/her limit. A warning message will be displayed. Supervisor Override The action required by a supervisor for a Service Specialist to complete a transaction when it exceeds his/her limit. A warning message will be displayed along with a box for the supervisor to enter his/her code. Remote Override The action required when a supervisor is not available to give an override. A request is sent to one or all of the supervisors who are logged into Silverlake and have the authority

Revised 6/18/2024 - 28 - level to give the override requested. Detailed notes or a telephone call is required to give the remote supervisor enough information to grant the request. Time Deposit/Certificate of Deposit (CD) Account According to Regulation D, a non-transaction account where the depositor must leave his/her deposit in the bank for a specified period of time. He/she does is not permitted to make withdrawals from the account without paying an early withdrawal penalty. Uncollected Funds Funds in an account from a transit check(s) in a deposit that have not yet been paid by the drawee bank; in other words, these are funds from a deposited check that have been made available to the account owner, but Alliance Bank has not yet recouped or “collected” its funds from the bank on which the check is drawn. Unfit Currency Currency that does not meet the Fitness Guidelines for Federal Reserve Notes and has been deemed not suitable for further circulation. The Federal Reserve identifies and destroys notes that are soiled, worn or have defects such as graffiti, holes, tears and folded or missing corners. Refer to the guidelines below for handling unfit currency. To be exchanged at face value with a Service Specialist, more than 50% of the note identifiable as US Currency must be present.