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paBanker Magazine 2019 Q2

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QUARTER 2 VOLUME 21 2 The William S Latoff Advocacy Award Winner David C Hostetter PA Bankers Proud PA Banks Bring Home National Titles PA Bankers 2019 CONVENTION Recap PA Bankers Association PA BANKERS 2019 50 YEAR CLUB INDUCTEES INSIDE Quarter 2 2019 1

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thisISSUE BRINGING TIMELY NEWS AND INFORMATION TO THE MEMBERSHIP OF THE PA BANKERS IN EVERY ISSUE 6 Chairman s Insights 8 From the CEO to the CEO 44 10 Ten on Page 10 12 Community Corner 24 PA Bankers Proud 26 Government Relations 32 A Look Ahead 36 From Your Peers 40 Vendor Articles FEATURES 18 on the cover 22 PA BANKERS 2019 CONVENTION RECAP 18 PA Bankers 2019 Convention Recap 20 Congratulations to PA Bankers 2019 50 Year Club Inductees 22 Teach Children to Save PA Bankers Association Quarter 2 2019 3

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PA Bankers STAFF DIRECTORY magazineSTAFF General Phone Switchboard 717 255 6900 Managing Sara Hocker Editor Editorial J Duncan Campbell III Advisors Jacqueline A Catalano Daniel J Reisteter Louise A Rynd Michelle L Staton Cynthia L Wallett Wayne Whipple PA Bankers Services Corporation Board of Directors and Officers President Steven G Fisher Secretary David P Ruddock Treasurer J Duncan Campbell III Officers Maureen H Bellman John D Blecher Gerard A Champi Trudy K Everhart Richard L Greslick David E Raven Jennifer A Roxbury SPJHR CSP SHRM Daniel J Schaffer M Theresa Schwartzer Jeffrey A Stopko Address Correspondence to President Chief Executive Officer J Duncan Campbell III dcampbell pabanker com 717 255 6916 External Relations Amy L Doyle External Relations Administrative Assistant adoyle pabanker com 717 255 6937 Erin L Kanter Director Advocacy Government Relations ekanter pabanker com 717 255 6910 Daniel J Reisteter Vice President Government Relations dreisteter pabanker com 717 255 6933 Federal Government Relations General Counsel Lisa R Brandt Legal Assistant lbrandt pabanker com 717 255 6936 Louise A Rynd Esq General Counsel lrynd pabanker com 717 255 6935 Finance Operations Jill A Ametrano Registrar and Records Coordinator jillametrano pabanker com 717 255 6927 Michelle Bosch Receptionist and Administrative Assistant mbosch pabanker com 717 255 6900 Connie A Ferraro Director Information Technology cferraro pabanker com 717 255 6921 Sara E Hocker Director of Marketing Communications shocker pabanker com 717 255 6912 Annette M Moshgat Director Finance amoshgat pabanker com 717 255 6938 Michelle L Staton Senior Vice President Finance Operations mstaton pabanker com 717 255 6923 Member Relations Professional Development PA Bankers Services Corporation Jacqueline A Catalano Vice President Professional Development jcatalano pabanker com 717 255 6939 Tiffani A Chambers Director PA Bankers Services Corporation tchambers pabanker com 717 255 6928 Donna L Price ABA Training Administrative Assistant dprice pabanker com 717 255 6926 Linda A Scott Member Relations Administrative Assistant lscott pabanker com 717 255 6903 Cynthia L Wallett Senior Vice President Member Relations and Professional Development and Managing Director PA Bankers Services Corporation cwallett pabanker com 717 255 6913 Wayne R Whipple Vice President Business Development wwhipple pabanker com 717 255 6925 Marilyn M Wisniewski Director Residential Schools Meeting Operations mwisniewski pabanker com 717 255 6934 paBanker Magazine c o Pennsylvania Bankers Association 3897 N Front St Harrisburg PA 17110 Tel 717 255 6915 Fax 717 233 1477 E mail shocker pabanker com paBanker Magazine is published four times a year by the PA Bankers Services Corporation Services Corporation a subsidiary of the Pennsylvania Bankers Association PA Bankers The Association serves Pennsylvania banks and financial institutions with educational programs member services and represents members on the state and federal level Since 1895 PA Bankers continuously worked to be the premier financial services organizaion supporting a diversified membership through volunteer participation a knowledgeable staff state of the art technology and a commitment to excellence paBanker Magazine is the official publication of PA Bankers Subscriptions are free to all member institutions and PA Bankers volunteers Additional copies are available to members at a rate of 40 per year Non member subscriptions are available for 60 per year Editorial The opinions expressed in articles by authors other than Association staff and officers are the responsibility of the authors only and not necessarily those of the PA Bankers the Services Corporation or its members All articles unless otherwise notied have been written by paBanker Magazine staff Questions and comments should be addressed to the Managing Editor PA Bankers members may reproduce any non commercial part of this publication with verbal permission from the editor All others must receive written permission from the editor prior to reproduction of any part of this publication Copyright 2003 PA Bankers Services Corporation All Rights Reserved Postmaster send all address changes to paBanker Magazine 3897 N Front St Harrisburg PA 17110 Printed by HAAS Printing Co Sponsored by PA Bankers Association Quarter 2 2019 5

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chairman sINSIGHTS JAMES V DIONISE President CEO Mars Bank Reflecting on My Time as Chair Critically Important Initiatives Adapted from his PA Bankers 2019 Convention Remarks A s I wrap up my time as chair of the PA Bankers Board of Directors I have spent some time reflecting on all that we have accomplished over the last year I have thoroughly enjoyed getting to know and serve you and our industry Each of you has contributed to the successes of the association and I would like to specifically thank several of you that have made an immense impact on my time as chair management team at Mars Bank As I undertook advocacy and memberfocused work for PA Bankers statewide and in Washington they stepped up time and again to make sure that business at Mars Bank not only continued but continued well Finally thank you to my family my wife Karen and our children for helping and supporting me as we have together invested in this idea of community banking that is so important to me THANK YOU First I d like to acknowledge the fine work of the leaders and volunteers who have gone before us The importance of this association to our industry and our individual institutions is obvious We would not be reaping the benefits of the association without the hard work accomplished by these leaders To my fellow PA Bankers board members I have been a more effective chair because of your commitment to this association You serve on committees that drive the initiatives that will keep Pennsylvania s banks relevant and thriving and you offer strategic guidance that makes the path forward much clearer to anyone sitting in the chair s seat Thank you for your invaluable assistance and insight over the last year I also want to thank the board of directors and commend the INTRODUCTION During the past year as chair I ve traveled across the commonwealth and met with you and so many others at conferences and group functions Those interactions were invaluable in helping me understand the complexity of your institutions and barriers you encounter in delivering quality products and services to your customers The board and I with Duncan Campbell and the association team have listened evaluated and responded in both innovative and supportive ways I would like to share a few of these with you 6 PA Bankers Association ENGAGE MAXIMIZE THE VALUE OF YOUR MEMBERSHIP Last summer we launched the PA Bankers Champions program to raise awareness of what this association can do for YOU its members I was pleased to steer this initiative to fruition Today we have 121 PA Bankers Champions who share with you and your employees the breadth of offerings available through the association education advocacy access to resources communications profitability enhancements and more All told more than 65 member banks have identified PA Bankers Champions but we clearly have more work to do in order to engage our remaining member banks in this program If you have not already done so I encourage you to designate PA Bankers Champions within your organization who will help you to recognize and maximize the value of your membership TALENT AQUISITION THE NEXT GREAT CHALLENGE The financial and business services industries will be hit hard by a labor shortage in the coming decade These jobs require a high level of knowledge based skills According to a recent study talent shortages are expected to significantly hinder growth in our industry Clearly we are in fierce competition to attract the best and brightest workers from the most diverse applicant pool possible PA Bankers is moving aggressively to help our banks compete for that talent That is why a key component of the association s plan is the Strategic Workforce Next Generation Banker Initiatives pabanker com

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As I mentioned in the last edition of paBanker our involvement in the Conference of State Bank Supervisors CSBS Case Study Competition Next Generation Bankers Academy and BankWork program has already garnered interest from the next generation of bankers We will be continuing these programs and expect participation within the programs to grow over the next year FIND YOUR PASSION GET INVOLVED IN ADVOCACY We all know that burdensome unnecessary over regulation and its corollary the lack of legislative action where it is needed pose some of the greatest risks to our industry I am pleased that we were able to realize the broadest legislative review of our banking laws in a decade and passed much needed bipartisan regulatory relief That was a vital first step in emerging from regulators over reaction to the financial collapse of 2008 However we still face so many challenges and are working diligently to overcome them as we forge ahead to serve our customers and communities from over regulation unfair credit union taxation policies an uneven playing field with regard to fin techs and credit unions conflicting state and federal regulations regarding cannabis activities lack of national data protection standards the need for CRA modernization and BSA AML reform just to mention a few Right now in our nation s banking history it is more critical than ever that each of us plays a part in determining the future of American banking We need you and your employees to step up for your shareholders your customers and your communities We are stewards of a sacred trust a fiduciary responsibility and a moral imperative to ensure the dollars invested and secured in our banks are used for good purposes We mold the reputation of the American banking system and we are called upon right now to exemplify the highest standards of ethical conduct We have recently weathered difficult times that cast the banking industry in a harsh light but we can write a brighter future PA Bankers is at the forefront of this effort Will you help us to change the future Advocacy must become our mantra It is not just the role of the members of the PA Bankers Government Relations Committee or GR staff We ALL must engage in public education campaigns and grassroots efforts to advance and sustain the banking industry I implore you to introduce and motivate employees at every level of your institutions to support advocacy that highlights the fundamental importance of banking to Americans way of life We elevated the importance of advocacy late last year by creating an Advocacy Committee that reports directly to the board represented by leaders from across the association s various committees The 2018 election changed the composition of Pennsylvania s delegation in Congress and in the state legislature It is vitally important that these new members understand exactly where bankers stand on tax regulatory and a host of other issues It is up to us to promote our institutions and industry If we don t fight for ourselves in Harrisburg and Washington then someone else is going to have the say in legislation and regulatory matters Please join us and make advocacy a priority within your bank FLOURISHING DESPITE OBSTACLES Despite all of the challenges we face and all that our industry and association ask us to do we bankers work so very hard to still do the right things for our customers and communities We bring people together and help people realize dreams I hope we never lose the connectivity or the personal relationships that are at the heart of some of the best banking transactions and decisions In both small and profound ways bankers change lives Every week the association highlights some of the good works of our members who go above and beyond the job requirements in our Community Corner feature on social media and quarterly in the paBanker magazine Even though I should not be surprised I still am pleased by the philanthropic and communityempowering work offered by our Pennsylvania banks and bankers These magnanimous deeds show the HEART and SOUL of our bankers Giving back is core to our mission and we are always there to lend a hand to Pennsylvanians and others in need CONCLUSION When people ask me what s the secret to my banking success I tell them Love what you do Bring enthusiasm and passion to your job every day and watch it self perpetuate Hire people of integrity and character and Be civil and treat one another with respect I want you all to know that I have thoroughly enjoyed the opportunity to work along side you and other members and partners of the association Working hard and giving back to our industry is so critical for our industry s future longevity and success Our customers employees and communities are counting on us I also understand we cannot do this alone Your chair board and association play a critical role in helping us maneuver through many roadblocks and challenges ahead So please actively participate in and utilize the many opportunities your association provides as we lock arms and work together to expand broaden and deepen member engagement across our local communities state and country I wish you all the best for the continued success of our great industry and strong association in the year ahead PA Bankers Association Quarter 2 2019 7

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from the CEO to the CEO DUNCAN CAMPBELL President CEO PA Bankers Association The Strength of Our Association Adapted from his PA Bankers 2019 Convention Remarks T he state of our association is strong thanks to the support of all of you I appreciated the opportunity to connect with so many of you in Palm Desert Calif for PA Bankers 2019 Convention Thank you for making the journey with us The strength of our association is drawn from our collective efforts to advocate at the grassroots level and in person with lawmakers in Harrisburg and members of Congress in Washington our commitment to delivering the highest quality professional development and training to our bank employees our efforts to recruit promote and retain the most diverse workforce in banking history and our daily attention to PA Bankers mission statement as we commit to providing the membership with value through excellence in advocacy education leadership and member relations The successes and strength of our association would not be possible without the guidance of the 23 members on our Board of Directors however I want to specifically commend our chair Jim Dionise for leading this association so effectively and graciously over the last year I have had the privilege of spending many hours with Jim throughout the year at various PA Bankers events and meetings across the state He is an incredibly committed advocate for our industry and member banks and we are so much stronger because of his service Thank you Jim I would also like to acknowledge 8 PA Bankers Association the efforts of our other officers 1st Vice Chair T Michael Price First Commonwealth Financial Corporation 2nd Vice Chair J Bradley Scovill Citizens Northern Bank and Immediate Past Chair Joseph W Major The Victory Bank Under their strategic leadership our association has had a phenomenal year and made great strides with regards to our strategic plan As July 1 approaches I would be remiss if I did not also thank our four outgoing board members for their commitment and leadership Joseph W Major The Victory Bank Michael A Mooney WesBanco Bank Inc Thomas J Sposito II S T Bank and James R Hoehn PNC Bank National Association On behalf of the association I would like to thank all four of you for your service and knowledge that you brought to PA Bankers during your tenure on the PA Bankers Board of Directors While these individuals oversee the operations of the association our activities are also driven by two other boards the PA Bankers Services Corporation Services Corp and PaBPAC Boards of Directors In March we celebrated the 20th anniversary of our for profit subsidiary Services Corp Led by Steven G Fisher of Northwest Bank the Services Corp Board drives that success by helping us to select and maintain quality products and services that benefit and provide value to the entire membership The PA Bankers Public Affairs Committee Board governs the activities of our public affairs committee PaBPAC which helps us to support banking and businessfriendly candidates for public office As the association recommits to the importance of advocacy political advocacy is a significant facet of that effort At convention PaBPAC Chair Denny Doll of Reliance Bank unveiled a new video that explains the importance of contributing to PaBPAC through the eyes of several of our members Tammy Gunsallus The Muncy Bank and Trust Company Greg Hayes Kish Bank Dave Reed First Commonwealth Bank Brad Scovill Citizens Northern Bank along with Denny himself I want to extend my thanks to all of them for their participation in this important video If you would like to see this video and share it with your staff please contact Amy Doyle adoyle pabanker com For the past year the board and our staff have endeavored to meet the goals laid out in our strategic plan ensuring that our members are deriving value from your membership dues The PA Bankers Champions program was developed for this very purpose to ensure your teams take pabanker com

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full advantage of your PA Bankers membership Recently we embarked on a broadbased review of our association s programming beginning with our annual Group events The board authorized the creation of a task force to study and consider modifications to these events based on your feedback Many of your bank team members attended our newly formatted Spring Socials and we plan to listen to their input on these events and use that information to bring a fresh approach to more of our member programming Separately in coordination with our PA Bankers Champions and your HR training directors we sought your counsel about how to better engage with and deliver valuable training to your employees Your recommendations will drive positive changes in the coming months We want to ensure that we provide the training that our members want in the formats and locations they prefer You will see more regional programming throughout the coming year starting with our Emerging Leaders Conference which will take place in Pittsburgh in September We will work to accommodate the best delivery options to our members And finally we know that effective communication delivering messages to the right people at the right time in the right format is critical to our success in reaching our members In coordination with your PA Bankers Champions we will ask for feedback in a communications audit that will assess how best to share all that PA Bankers has to offer with your institutions All of us struggle to manage the daily deluge of emails from multiple sources We need to be efficient and strategic in marketing Your Preferred Partner for Sustainable Growth AN DE R SON G R O U P to our members We have already begun to streamline and tailor our communications by funneling appropriate information from our subscription center to your employees based on their functional job titles Delivering value to you our members is key to our success We recognize that imperative and we will constantly review and improve what we offer so that we are meeting your needs as a member of this association Together Pennsylvania banks are building a more prosperous commonwealth that enables our communities and businesses to thrive and all Pennsylvanians to fulfill their dreams And this association stands ready to assist you in that effort Together we are making a difference Thank you STRATEGIC MARKETING BUSINESS INTELLIGENCE RAY MELCHER EVP FINANCIAL STRATEGY 610 678 1506 rmelcher thinkanderson com thinkanderson com Select Vendor ORGANIZATIONAL CULTURE PA Bankers Association Quarter 2 2019 9

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tenONpageTEN 10 Most Current Issues Related to CECL BY IVAN CILIK PARTNER BAKER TILLY As banks continue to evaluate CECL standard the CECL implementation and completion spectrum is quite wide for community banks and ranges anywhere from running parallel CECL models and having the models validated to some smaller privately held banks that have not yet started the CECL process at all 1 CECL UPDATE POTENTIAL DELAY In late May 2019 Sen Thom Tillis R NC introduced a bill that would require federal regulators to conduct a quantitative study of the potential impacts of the FASB s new Current Expected Credit Loss CECL standard on credit availability and small financial institutions The bill comes after bipartisan groups of lawmakers from both the House and Senate wrote to the heads of several federal regulatory agencies raising concerns about CECL 2 MODEL VALIDATION Best practices to ensure CECL models are properly calculated and implemented will most likely result in independent third party validations which should be performed prior to scheduled CECL adoption dates All model components including input processing and reporting should be validated This applies equally to models developed in house and to those purchased from or developed by vendors or consultants The rigor and sophistication of validation should correspond to the bank s overall use of models the complexity and materiality of its models and the size and complexity of the bank s operations 10 PA Bankers Association 3 SAMPLE OF REGULATORY EXPECTATIONS FOR CECL CECL calculations and assumptions need to be well documented with clear explanations of the supporting analyses and rationale Enhanced written policies and procedures documenting quantitative and qualitative factors should be developed Consider independent third party validation of CECL models similar to BSA or ALM model validations Expect updates to supervisory guidance on the allowance for credit losses ACL 4 IMPLEMENTATION DATES CECL implementation dates have been recently updated for nonpublic business entities Here is a brief recap of implementation dates by entity types Public Business Entities Annual periods beginning after Dec 15 2019 i e Q1 2020 Public Business Entities Annual periods beginning after Dec 15 2020 i e Q1 2021 5 LOANS WITH CREDIT DETERIORATION UNDER CECL The accounting for these loans under CECL will make the allowance for credit losses ACL more comparable between originated assets and purchased financial assets as well as reduce complexity with accounting for interest income Purchased financial assets with credit deterioration PCD will now be recognized through the allowance for credit losses This is a significant change from the current definition of purchase credit impaired PCI loans The CECL standard does not change accounting principles for the identification of a troubled debt restructuring TDR but there is a difference in timing Under CECL banks should recognize the credit losses including the concession given to the borrower upon a TDR by recording an allowance account rather than by reducing the basis of the impaired loan directly TDRs already included in historical losses remain in the historical loss experience All other entities Annual periods beginning after Dec 15 2021 i e Q1 2022 updated pabanker com

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6 FORECAST CONSIDERATIONS When financial institutions use historical quantitative loss information consideration should be given to whether to adjust historical loss information to reflect the extent to which the bank expects current conditions and reasonable and supportable forecasts to be different versus credit conditions that existed for the period over which historical loss information was considered Management s assumptions when evaluating and calculating an estimate of expected credit losses on a financial asset i e loan should consider available information relevant to assessing the collectability of cash flows Considering available information does not require an exhaustive search as banks may find that using their internal information is sufficient in determining collectability 7 IS CECL REALLY THAT DIFFICULT Complexity of CECL implementation largely depends on a variety of factors such as a loan portfolio complexity b availability of historical loan information such as charge off history and LTV values c specific loan data within each loan class or segment and d the CECL method used From early implementation observations it is clear that certain CECL models may not be practical because loan data is limited 8 REGULATORY FAQ UPDATE The Board of Governors of the Federal Reserve System FRB the Federal Deposit Insurance Corporation FDIC the National Credit Union Administration NCUA and the Office of the Comptroller of the Currency OCC regulatory agencies have developed frequently asked questions FAQ to assist banking institutions and examiners with CECL implementation efforts The focus of the FAQs is on the application of CECL and related supervisory expectations Each question identifies the date the FAQ was recently updated https www occ gov news issuances bulletins 2019 bulletin 2019 17 html utm_source dlvr it utm_ medium linkedin 9 REGULATORY AGENCY RESOURCES WEBINARS The federal bank regulatory agencies issued a final rule that modified their regulatory capital rules and provided an option to phase in over a period of three years the day one regulatory capital effects of the new accounting standard https www federalregister gov documents 2019 02 14 2018 28281 regulatory capital ruleimplementation and transition of thecurrent expected credit losses The federal bank regulatory agencies under the auspices of Federal Financial Institutions Examination Council FFIEC have revised the Call Reports and other FFIEC regulatory reports to address the change in accounting for credit losses under the new accounting standard The revisions took effect March 31 2019 for reports with quarterly report dates and Dec 31 2019 for reports with an annual report date with later effective dates for certain institutions https www ffiec gov ffiec_report_ forms htm Webinars These archived webinars included a discussion of loss rate methods that smaller less complex community banks can use to implement CECL and answers to various CECL questions received from community bankers Ask the Regulators CECL Webinar for Bankers Practical Examples of How Smaller Less Complex Community Banks Can Implement CECL Feb 27 2018 https www webcaster4 com Webcast Page 583 24368 Community Institutions July 30 2018 https www fdic gov news conferences otherevents 2018 07 30 cecl transcript pdf FASB Resources The FASB formed the transition resource group for credit losses TRG to discuss potential issues arising from implementation of the credit losses standard Issues may be submitted by stakeholders based on the TRG s submission guidelines https www fasb org cs American Institute of Certified Public Accountants AICPA Depository and Lending Institutions Expert Panel DIEP CECL Issues Tracker The DIEP brings together knowledgeable parties in the banking and credit union industries to deliberate and agree on key issues Credit loss implementation issues identified by the DIEP will be posted on its issues tracker https www aicpa org interestareas frc industryinsights credit loss standardissues html 10 LAST WORD There are some positives Examples are More consistent approach to performing CECL calculations including quantifying historical data Re thinking loan risk rating methodology Providing more supportable assumptions for the CECL models Consistency among various models i e ALM IRR used by community banks and Internal controls improvements including enhanced documentation of historical loan data and assumptions Ask the Regulators CECL Questions and Answers for PA Bankers Association Quarter 2 2019 11

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communityCORNER WELLS FARGO DONATED ALMOST 9 4 MILLION TO SUPPORT PENNSYLVANIA NONPROFITS IN 2018 W Originally published on Businesswire com ells Fargo donated almost 9 4 million through 598 grants to local nonprofits schools and community organizations in 2018 to help the communities and people of Pennsylvania Wells Fargo s philanthropic contributions build on a long history of collaboration with local nonprofits and community leaders to make a positive impact by addressing urgent community issues such as affordable housing small business growth access to education and sustainability When combined with the 986 688 donated by the company s Pennsylvania team members nonprofits in the state received a total of 10 4 million from Wells Fargo and its team members in 2018 That amounts to an average daily donation of 28 478 Beyond philanthropy Wells Fargo team members in Pennsylvania volunteered more than 45 000 hours in 2018 to support nonprofits and causes important to them MAKING AN IMPACT IN PENNSYLVANIA Wells Fargo concentrated its local philanthropic contributions on addressing urgent community issues such as Affordable housing To help increase affordable stable housing and homeownership in low and moderate income neighborhoods Wells Fargo collaborated with dozens of grantees such as Habitat for Humanity and the Affordable Housing Center of Pennsylvania to provide homebuyer education down payment assistance and other affordable housing solutions across Pennsylvania in cities such as Philadelphia Bethlehem Wilkes Barre and many others Small business growth Small businesses are critical to job creation and a vibrant community Many diverse owned small businesses especially those in rural and low and moderate income communities face unique challenges and often lack access to the full spectrum of resources necessary for growth and success Nonprofits serving small businesses including The Enterprise Center Entrepreneur Works and many others received grants to provide access to capital and training for entrepreneurs in rural and urban markets Economic equity and inclusion Support included grants to nonprofits that directly serve diverse and historically underserved groups including initiatives focused on the development of women and diverse talent education and vocational training and other solutions for communities with limited access to traditional financial services For example Wells Fargo collaborated with First Step Staffing to support the training and development of military veterans individuals who have experienced homelessness and individuals who have been previously incarcerated Access to education Support included grants for local K 12 schools scholarships for post secondary or vocational training and financial education including grants to the Allentown and Bethlehem Area School District Foundations CityYear and many others 12 PA Bankers Association THE DIME BANK DONATES TO GREATER PIKE COMMUNITY FOUNDATION FOR STEM AND AMERICAN READERS THEATRE Originally published in The Pike County Courier The Dime Bank recently donated 5 000 to the Greater Pike Community Foundation for STEM education and another 4 000 to American Readers Theatre to bring reading and history together for students of all ages The donations were made through the Pennsylvania Department of Community and Economic Development s EITC program An innovative STEM program Through the Greater Pike Community Foundation the tax credit program provides funding for innovative educational programs in science technology engineering and math STEM at the Delaware Valley School District The money will help faculty further equip the MakerSpace laboratory which teaches robotics coding math engineering physics and many other disciplines in a creative shared space Promoting literacy The American Readers Theatre ART collaborates with the Delaware Valley School District on meaningful considerations of the life and works of one chosen author This year the school and theater selected the life and works of Helen Keller for the Writer s Project The Dime Bank says it is dedicated to supporting education in local school districts and to bringing the arts to our communities through the sponsorship of many different programs and venues The bank has been participating in the EITC program since 2001 pabanker com

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THE FARMERS NATIONAL BANK OF EMLENTON DONATES 144 000 TO LOCAL EDUCATION ORGANIZATIONS T he Farmers National Bank of Emlenton recently donated 144 000 to local educational organizations through the Pennsylvania EITC program Since 2002 Farmers has donated more than 1 6 million through this program For the 2018 2019 academic year Farmers donated to the following organizations Boy Scouts of America Moraine Trails Brockway Center for Arts and Technology Brockway Schools and Community Education Foundation Brookville Area Raider Scholastic Foundation BC3 Education Foundation Children s Scholarship Fund of PA Christian Life Academy Clarion Limestone Area Scholastic Foundation Inc Clarion University Foundation DuBois Area Schools Educational Foundation Elk County Community Foundation Karns City Scholastic Foundation Keystone Elk County Alliance Keystone School District Education Foundation Keystone SMILES The Neighborhood Academy Neighborhood Housing Services Inc Penn State University Philanthropic Fund Phase 4 Learning Center Scholastic Opportunity Scholarship Fund Seneca Valley Foundation STAR Foundation Union Enhancement Foundation and WPA K 12 Education Scholarship Fund WAYNE BANK SUPPORTS THE AMERICAN READERS THEATRE W ayne Bank supported the American Readers Theatre with a donation of 10 000 through the Educational Improvement Organization Program earlier this year In 2008 the American Readers Theatre and the Delaware Valley School District embarked on a collaboration to develop literacy skills including reading writing speaking and listening through the arts for Delaware Valley School District students The resulting product of this partnership was named The Writer s Project and is an original educational program designed to nurture an interest in classic literature among Delaware Valley students by exploring the historical and cultural contest of great books and the writers who authored them including John Steinbeck William Shakespeare E B White Ray Bradbury Maya Angelou and George M Cohan Students learn about the life and times of each featured author and integrate art technology and even science into their curriculum to give them a deep appreciation of each author and his or her work BACK LEFT TO RIGHT James Mitchell director of secondary education Delaware Valley School District DVSD Jeffrey Stocker artistic director American Readers Theatre Lewis J Critelli president and chief executive officer Wayne Bank and Robert Curtis engineering faculty DVSD FRONT LEFT TO RIGHT Bernadine Salak faculty DVSD Rachel Lejeune student DVSD Erica Curtaia student DVSD Molly Schopp student DVSD and Madeline Portugal Milford Community office manager Wayne Bank F M TRUST COMMITS 15 000 TO SPIRITRUST LUTHERAN In a continuation of its ongoing philanthropic initiatives F M Trust recently committed 15 000 to SpiriTrust Lutheran The Village at Luther Ridge a nonprofit senior living provider in Chambersburg F M Trust donated the money to support the construction of the organization s new 40 bed skilled care center which provides resident centered care for longterm and short term rehabilitation patients F M Trust provides hundreds of thousands of dollars annually to support organizations across South Central Pennsylvania PA Bankers Association Quarter 2 2019 13

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communityCORNER PEOPLESBANK CONTRIBUTES 800 000 TO SUPPORT EDUCATION WITHIN THE COMMUNITY P PeoplesBank recently gathered representatives of 63 organizations throughout South Central Pennsylvania at the Belmont Theatre to present them with checks totaling 800 000 These funds represent contributions made by PeoplesBank through Pennsylvania s Educational Improvement Tax Credit program The 63 organizations who received funding are listed below Big Brothers Big Sisters of York County Boy Scouts of America New Birth of Freedom Boys Girls Club of Lancaster Byrnes Health Education Center Childrens Home of York Christian School of York Creative York Crispus Attucks Association Inc Cultural Alliance of York County Donegal School District Education Foundation DreamWrights Youth Family Theatre Eagle Foundation Elizabethtown Area Education Foundation Fredrickson Library Association Hanover Foundation for Excellence in Education Inc Harrisburg Academy Hempfield Foundation House of Hope York PA Joseph T Simpson Public Library Junior Achievement of South Central PA Keystone Christian Academy Lancaster Education Foundation Lancaster Science Factory Leg Up Farm Inc Logos Academy Manheim Central Foundation for Educational Enrichment Manheim Township Educational Foundation Penn Manor School District Education Foundation Pennsylvania State University Philanthropic Fund Polar Bear Foundation 14 PA Bankers Association Schreiber Pediatric Rehab Center South Eastern Community Education Foundation South Western Education Foundation Southern York County School District Foundation Spanish American Civic Association St John the Baptist School Saint Joseph School Mechanicsburg St Patrick Catholic School Steam Into History Inc Susquehanna Waldorff School The Appell Center for the Performing Arts The Arc of York County The Belmont Theatre The Columbia Education Foundation The Foundation for the West York Area School District Inc The Janus School The Lion Foundation Camp Hill School District The Salvation Army York PA The Wildcat Foundation Water Street Ministries West Shore Foundation WITF YMCA of York and York County York Academy Foundation York Catholic High School York Country Day School York County History Center York County Library System York Suburban Education Foundation York Symphony Orchestra YWCA of Hanover YWCA of Lancaster YWCA York ORRSTOWN BANK FIFTH WAVE OF CONTRIBUTIONS TOTALING 100 000 IN RECOGNITION OF ITS 100TH ANNIVERSARY Orrstown Bank which is currently celebrating the 100th anniversary of its founding announced a fifth wave of contributions totaling 100 000 to area organizations that provide valuable support to those who live within the communities the bank serves Those organizations receiving a portion of the 100 000 in funding include Shippensburg Area School District Perry County Heritage Stars Burst Over Carlisle City of Lancaster Schreiber Pediatric Hospice of Central Pennsylvania United Way of Carlisle and Cumberland County Four Diamonds Fund Girls on the Run Capitol Theatre Chambersburg Area School District Coyle Free Library Shippensburg Library Greencastle Antrim Old Home Week Association Wounded Warriors Venture Lititz Shippensburg Community Fair Furry Friends Network Radiant Hope Borough of Mechanicsburg Domestic Violence of Cumberland and Perry Counties Maranatha The Wildcat Foundation CREDC Family Design Resources and the UCP Foundation of Central Pennsylvania The bank previously announced 300 000 in contributions in three 100 000 increments to more than 60 organizations through Pennsylvania s EITC program as well as a 100 000 commitment to Menno Haven in Chambersburg bringing the bank s announced total of community support to more than 500 000 so far this year pabanker com

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P YWCA HONORS TWO PENN COMMUNITY BANK TEAM MEMBERS AS WOMEN WHO MAKE A DIFFERENCE enn Community Bank is proud to announce that two of its team members have been recognized by the YWCA of Bucks County as Women Who Make a Difference Kirsten Palmieri and Jessica Sweeney were recognized in the category of Corporate Social Responsibility for their leadership of the bank s annual campaign for United Way of Bucks County The awards were presented during the YWCA s 28th annual Salute to Women Who Make a Difference awards gala on May 16 at Spring Mill Manor Ivyland They were among 16 women from across Bucks County who were honored for achievements in a variety of categories from Advocacy and Civic Engagement to Women s Empowerment As United Way Campaign Coordinators for Penn Community Bank Palmieri and Sweeney led more than 325 bank team members in 2018 to raise 58 855 50 for United Way of Bucks County The Penn Community Bank Foundation then matched 25 000 worth of contributions bringing the final donation to 83 855 50 the largest sum raised in the bank s United Way campaigns to date and an almost 10 percent increase over the previous year The donated funds support United Way s programs and those of its community partners including Big Brothers Big Sisters of Bucks County NOVA and Welcoming the Stranger In addition to fundraising Palmieri and Sweeney organize volunteers for United Way programs Penn Community Bank serves as the presenting sponsor for United Way s annual hunger prevention effort Bucks Knocks Out Hunger In 2018 bank team members joined hundreds Penn Community Bank executives Diane Brown far left and Todd Hurley far right join YWCA of Bucks County as Women Who Make a Difference honorees Kirsten Palmieri and Jessica Sweeney center during the YWCA s 28th annual Salute to Women Who Make a Difference awards gala on May 16 in Ivyland Pa of other volunteers to pack 125 000 meals during the event and money raised provided 32 000 pounds of fresh products such as vegetables and dairy to food pantries Do you have hometown happenings that you d like to share Send your bank s community news to Sara Hocker PA Bankers director of marketing communications shocker pabanker com for a chance to be featured in paBanker magazine or on PA Bankers social media channels and website PA Bankers Association Quarter 2 2019 15

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communityCORNER MID PENN BANK AND THE PEYTON WALKER FOUNDATION ANNOUNCE TRAINING INVESTMENT TO FIGHT SUDDEN CARDIAC ARREST AND ADDRESS OTHER MEDICAL EMERGENCIES M id Penn Bank and The Peyton Walker Foundation recently announced the creation of a new life saving initiative to combat Sudden Cardiac Arrest SCA one of the leading causes of death among Americans Through the Foundation Mid Penn will invest in training and certification of its employees in Cardiopulmonary Resuscitation CPR the use of Automated External Defibrillators AEDs and First Aid The program will launch in June SCA has claimed the lives of three teenage students and another young athlete s life right here in Central Pennsylvania in just the last four months In February National Heart Month Mid Penn employees designated the Foundation as the beneficiary of its charitable Dress Down Day fundraiser President and CEO Rori Ritrievi and his executive team presented Walker with a check for 10 000 to be used to further the Foundation s mission of detecting preventing and responding swiftly and effectively to Sudden Cardiac Arrest The donation also included the bank s sponsorship of historic PSFCA Big 33 Heart Screenings For the first time in The Big 33 Classic s 62 year history Mid Penn s sponsorship allowed the Foundation to provide free comprehensive screenings to the premier Pennsylvania student athletes NEW TO PA Bankers Affiliate Members Arnold Porter Certes Networks Janney Montgomery Scott LLC John M Floyd Associates Inc Law Office of James Clark Moody s Analytics 16 PA Bankers Association Financial Institution LINKBANK e m o c l e W pabanker com

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The Stability You Want should come with the service you deserve Addressing Your Bank s Needs FOS SERVICES Internal Audit Co sourcing Asset Liability and Liquidity Management Exams Bank Secrecy Act Anti Money Laundering Exams Information Technology Risk Management Exams Fraud Exams Compliance Exams Sarbanes Oxley Testing Trust Department Exams Transactional Asset Allocation Analysis HERBEIN SERVICES Business Valuations Litigation Support Services Asset Based Field Exams Mergers and Acquisitions Audit of Financial Statements Tax CONTACTS James A Michalak CPA CITP Thomas R Strause CIA CFE CBA CFSA CISA CICA Debbi S Fetter CFIRS CISA CFSA CRMA CRCM CCSA 1 888 212 8799 Succeed With Confidence www fosaudit com www herbein com A subsidiary of Herbein Company Inc PA Bankers Association Quarter 2 2019 17

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PA Bankers TAKES THE WEST COAST M ore than 500 bankers Affiliate Members sponsors and guests traveled to the JW Marriott Desert Springs Resort Spa in Palm Desert Calif for PA Bankers 2019 Convention on May 15 18 Throughout the week attendees had the opportunity to network and gain industry insights from professionals specializing in effective digital strategy balance sheet strategy cybersecurity crisis leadership among many other topics On Thursday May 16 the association held its annual meeting and confirmed its 23 board members for the 2019 20 year The meeting included a speech from 2018 19 Chair James Jim V Dionise president CEO of Mars Bank and the ceremonial pinning of chair elect for 2019 20 T Michael Price president CEO of First Commonwealth Bank Joining as a special guest on Thursday was Sean O Brien CEO of Select Vendor RISK Technologies Inc who spoke on what executives should know about current cyber threats And on Friday special 18 PA Bankers Association guests in the general session included Rob Nichols president CEO of the American Bankers Association who provided an update from Washington Lindsey Piegza Ph D managing director chief economist of Stifel Nicolaus Company Incorporated who gave an update on the economy in Pennsylvania and combined session speaker Lieutenant Colonel Robert J Darling United States Marine Corp Ret who used his past experiences in the White House Military Office s Airlift Operations Department Department of the Navy Flying Hour Program and Marine Helicopter Squadron One to give attendees a presentation on crisis leadership and decision making PA Bankers would like to thank all of its convention guests and sponsors for making the journey with us especially our Diamond sponsors PNC and PA Bankers Services Corporation and our Platinum sponsors Griffin Financial Group LLC Stevens Lee Benecon The Baker Group L R Webber FHLBank Pittsburgh Citizens Northern Bank The Victory Bank First Commonwealth Bank and Mars Bank pabanker com

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PA Bankers Association Quarter 2 2019 19

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s on i at l u at r g Con to PA Bankers 2019 50 Year Club Inductees Thank you Bruce Kenworthy R Scott Smith Jr Janet Purcell Paul W Wenger AVP Business Development Officer QNB Bank 51 years Fulton Financial Corporation Board Director Fulton Financial Corporation 50 years for your dedicated service to the banking industry 20 PA Bankers Association Office Manager The Gratz Bank 50 years Bank Director Retired Bank Employee Ephrata National Bank 52 years pabanker com

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Help Fight Elder Financial Abuse Safe Banking for Seniors Ten thousand Baby Boomers turn 65 every day and elder financial exploitation A campaign to educate seniors and their caregivers is on the rise Banks can do their part to combat the abuse by joining ABA on the risks of financial fraud Foundation s Safe Banking for Seniors campaign Financial abuse against older Americans can take many forms from illegal debits to third party scams Free and open to all banks the program s turnkey materials from presentations and even unauthorized withdrawals by an approved caregiver And with the share of the U S population handouts communication more are designed to help bankers 60to years and over projected to reach 30tools percentand by 2025 the opportunities to take advantage of these at risk bank customers become more the minute educate their customers andprevalent by communities on ways to protect themselves Join us in our pledge to empower customers and communities with the facts tools and best practices they need to bank more securely by participating in the ABA Foundation s Safe Banking for Seniors GET INVOLVED TODAY campaign In January 2016 resources like event materials lesson plans and media outreach tools will be available to banks that sign up online Together we can help eliminate the almost 2 9 billion lost annually to fraud against older Americans Join the fight at aba com Seniors2 aba com SafeBanking

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Teach Children to Save Duncan Campbell president CEO PA Bankers Association and Luke Bernstein executive vice president chief retail communications officer Orrstown Bank participated in Teach Children to Save Day at Harrisburg Academy In honor of Teach Children to Save Day Univest Bank and Trust Co visited eight local schools to teach students about financial literacy and help them develop lifelong savings habits 22 PA Bankers Association P A Bankers President CEO Duncan Campbell joined Orrstown Bank Executive Vice President Chief Retail Communications Officer Luke Bernstein at Harrisburg Academy on April 12 to celebrate Teach Children to Save Day a national campaign to strengthen Americans financial literacy Throughout April National Financial Literacy Month and Financial Capability Month in Pennsylvania more than 443 member bankers present savings lessons to more than 11 200 students in grades K 8 across the commonwealth Established by the ABA Foundation in 1997 Teach Children to Save Day and the foundation s other financial education initiatives have helped to reach 9 1 million young people through the commitment of more than 225 000 banker volunteers Thank you all for your participation pabanker com

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High Performing Clients Have High Performing Partners Our Forty Years of Experience Will Guide Your Institution to the Next Level Investment Portfolio Services Balance Sheet Management Successful financial institution managers know the importance of achieving a high performance plan Establishing such a plan requires not only sound data and accurate information Education but also an insightful partner The Baker Group is that partner Public Finance Leaders in innovation The Baker Group remains the industry Strategic Planning shop that never outsources our customizable reporting services leader when it comes to innovation We are truly a one stop Funding To find out how The Baker Group can assist your institution in Bond Accounting and Analytics representative or Ryan Hayhurst at 800 937 2257 Member FINRA and SIPC defining and meeting its financial objectives call your Baker www GoBaker com 800 937 2257 Oklahoma City OK Atlanta GA Austin TX Indianapolis IN Long Island NY Salt Lake City UT Springfield IL The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions Inc

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PABankersPROUD Lights Camera Save Featured PA Bankers President CEO Duncan Campbell Taylor Brown Central Dauphin High School student and Leslie Meck SVP chief retail officer at Centric Bank We are so proud that two of the top five national students in the American Bankers Association s Lights Camera Save video competition are from our home state of Pennsylvania To add to our excitement Taylor Brown of Central Dauphin High School paired with Centric Bank won third place in the national competition Congrats to Taylor and to Jessie Morgan a top five finisher from Line Mountain Jr Sr High School paired with Citizen s Northern Bank CSBS Case Study Competition Congratulations to Kish Bank and Juniata College for winning first place in the national 2019 CSBS Case Study Competition for their case study on the impact of regulatory reform on community banking The future of our industry is bright We are PABankersProud of all PA participants photography by Candice Hersh 24 PA Bankers Association pabanker com

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PA Bankers Services Corporation Career Center Join Us Online Connecting Banking Professionals Many employers are discovering the advantages of searching online for qualified candidates to fill their specific industry jobs But when it comes to finding qualified banking professionals the mass market approach of the mega job boards may not be the best way to find exactly what you re looking for The PA Bankers Services Corporation Career Center linked to the Financial Job Exchange Network gives employers and job seeking professionals a better way to find one another and make that perfect career fit Targeted Advertising Exposure reach a focused audience of industry professionals Easy Online Job Listing Management Resume Search Included with Job Posting Automatic e mail notification when job seekers match your criteria Exposure to multiple websites at no additional cost Build Company Awareness list company information and link to your website and Competitive Pricing package and high use member discounts available If you have any questions about the PA Bankers Services Corporation Career Center please contact Wayne Whipple Vice President Business Development at 717 255 6925 or wwhipple pabanker com http careers pbasc com PA Bankers Association 20 Volume 21 1 Quarter 1

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govermentRELATIONS Solving the Banking Industry s Cannabis Conundrum Rob Nichols President and CEO American Bankers Association W hile there is still a healthy and appropriate debate on whether cannabis should be legalized at the federal level there is growing consensus that something must be done to address the cannabis conundrum affecting banks The need for a solution is growing increasingly urgent With marijuana now legal in 33 states and the District of Columbia in some form a number that is likely to grow more banks are having to choose between serving the banking needs of their customers and community and following federal law Even banks that have no desire to bank a marijuana grower or dispensary are at risk of violating anti money laundering laws if an existing customer is found to have a tangential connection to a cannabis business In fact a recent ABA survey found that three in four ABA members have had to close an existing account terminate a banking relationship or turn away a potential customer because of a connection to cannabis These include a bank that ended its relationship with a retail strip mall after it leased space to a medical marijuana shop and another that turned down a loan to a fencing company that was hired to build a fence around a marijuana growing facility Some banks have even had to end long time customer relationships with law firms because those firms took on marijuana businesses as clients Leaving the cannabis industry whose sales are estimated to reach 24 billion by 2025 unbanked has troubling implications Such businesses have resorted to dealing entirely in cash which can make them lucrative targets for criminals and create potential public safety risks for local communities They are also harder to monitor for compliance with tax laws or irregular financial activity These facts likely explain why an overwhelming majority of the banks 99 percent in our survey want Congress to resolve the conflict between state and federal law The good news is that legislation is moving The House Financial Services Committee held its first ever hearing on this topic earlier this year and soon after passed the ABA backed Secure and Fair Enforcement Banking Act an important step toward providing regulatory and legal clarity with a strong bipartisan 45 15 vote The measure which could be voted on in the House in the coming weeks and which has also been introduced in the Senate specifies that proceeds from cannabis related legitimate businesses would not be 26 PA Bankers Association considered unlawful under federal money laundering rules or other laws and would direct regulators to issue guidance and exam procedures for banks that serve cannabis related legitimate businesses Another bill called the STATES Act takes a different approach to solving the cannabis banking conundrum and has also been introduced in both chambers Our goal now is to train the Senate s attention on this issue which is why ABA and the state bankers associations recently wrote to the Senate Banking Committee urging it to schedule hearings While the path forward in the Senate will take more work we are hopeful that a bill can pass there as well To be clear ABA is not taking a position on the legalization of marijuana But we believe that allowing cannabis businesses access to the regulated banking system in states where they have been legalized would make them safer bring more transparency and accountability to the industry and better protect communities These are worthy goals Successful enactment of cannabis banking legislation this year would serve another worthy goal Demonstrating that bipartisan solutions to societal problems are still within reach even with a divided Congress Our experience with S 2155 last year s landmark regulatory reform law proved that Washington can work and that banking is bipartisan We look forward to replicating that success this year on this important policy issue and others E mail Rob Nichols at nichols aba com pabanker com

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The William S Latoff Advocacy Award P A Bankers was proud to present David C Hostetter with the third annual William S Latoff Advocacy Award Nominated by his peers David C Hostetter director of governmental affairs Fulton Financial Corporation effectuates change with his advocacy efforts and furthermore encourages his team to participate in advocacy Congratulations Dave from all of us at PA Bankers Blair Rush left Covenant Bank presents David C Hostetter right Fulton Financial Corporation with the 2019 William S Latoff Advocacy Award Legal Solutions for Pennsylvania Bankers Nicholas Varischetti Esq Commercial class action and complex litigation Business transactions and real estate deals Loan facilities Bankruptcy and creditors rights claims Lyle Washowich Esq Co Chair Banking Financial Services Practice Group DELAWARE NEW JERSEY OHIO PENNSYLVANIA WEST VIRGINIA BURNSWHITE COM PA Bankers Association Quarter 2 2019 27

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govermentRELATIONS M 2019 ABA Washington Summit ore than 50 Pennsylvania bankers gathered in Washington D C for the ABA Washington Summit in April The bankers participated in Capitol Hill visits and heard from experts including Senate Banking Committee Chairman Mike Crapo R Idaho House Financial Services Committee Chairwoman Maxine Waters D Calif Kevin Hassett chairman of the Council of Economic Advisers at the White House presidents of the Federal Reserve Banks of Atlanta Kansas City and Richmond and political commentators Donna Brazile and Mike Murphy Each year ABA provides PA Bankers with three scholarships to attend the ABA Emerging Leaders Forum which is the day before the ABA Government Relations Summit and then requests those same individuals to attend the summit as well This year s scholarship recipients were Kelly Carter The Gratz Bank Bernard Tynes Penn Community Bank and Melanie Clabaugh Northwest Bank Additionally Ephrata National Bank held an annual essay contest for participants in its LEAD Program to apply for a chance to attend the Washington Summit This year s winning essay came from Juliana Ferrara financial sales associate nonlender teller Juliana joined us in D C and wrote an essay about her experience LEFT TO RIGHT Kelly Carter The Gratz Bank Bernard Tynes Penn Community Bank and Melanie Clabaugh Northwest Bank JULIANA FERRARA Washington Summit 2019 I am very grateful for the opportunity awarded to me to attend the Washington Summit Attending the Summit was an excellent learning experience for me I feel as though by attending the Summit I was able to build upon my leadership development skills as well as become aware of different challenges facing the industry Before going to Washington I knew very little about the advocacy aspect of the banking industry After participating in the various sessions to prepare for the visits to Capitol Hill I truly believe that it is imperative that all members of the banking community have an understanding of the issues we face as an industry These are issues that could ultimately affect the communities in which we serve As an employee of Ephrata National Bank I know the important role we play in the community we call home If we are unable to operate successfully due to unclear regulations or other regulations that may hurt us even if unintentionally it will impede our ability to service our communities in a way in which they can prosper The Emerging Leaders Forum as well as the Women s Leadership Forum helped me to gain valuable insight as to what a good leader should be doing not only for their teams but also for themselves I feel that these two forums gave me great motivation as well as confidence to continue my journey as an emerging leader at Ephrata National Bank I have already been able to apply some of what I learned to my everyday operations For example Betsy Hubbard s session on writing emails that drive action was helpful in seeing that being clear and concise in the message you are trying to convey will always be more effective than lengthy emails Kathy Pearson s session on Perceptive Leadership Strategic Ability also taught me that it is important to always be looking for the early indicators of change In addition to looking for those early indicators we need to plan for change and be flexible enough to adapt to those changes Susan MacKenty Brady s session Lead with your Best Self also had very valuable lessons for me The idea of always returning to center before reacting to a situation is a great reminder that we do not have to act on something immediately We need to take a step back and not let our inner critic make decisions for us and put the control back in our hands I look forward to reading Susan s book Mastering Your Inner Critic and continuing to learn from her Captain Florent Groberg s story of heroism reinforced the importance of leadership and teamwork It was an honor to meet Captain Groberg and have the opportunity to hear his inspirational story of the challenges he faced both prior to and during his tenure in the army These are just a few examples of the many lessons I was able to take away from all of great speakers I had the chance to listen to Attending the Washington Summit I was able to network with bankers from across the country and learn about challenges they face and how they are able to overcome them I am especially grateful for the opportunity to spend time with other the Pennsylvania bankers that attended the Summit that took the time to not only speak with me but to encourage me in my professional development The greatest lesson I learned from those I met spoke with was to always take advantage of any opportunity to further my banking education continue to actively participate in community events look for opportunities to advocate for the banking industry and not be afraid to take the next step whatever that may be 28 PA Bankers Association pabanker com

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2019 PA Bankers Day at the State Capitol O ur flagship advocacy event PA Bankers Day at the State Capitol offers bankers from across the commonwealth the opportunity to engage with their local elected officials in their Capitol offices Nearly 90 bankers from throughout the state attended this event on April 29 In addition to meetings with more than 65 legislators attendees received an update from the House Majority Whip The Honorable Kerry Benninghoff R Centre and also heard from the Majority Chairman of the Senate Finance Committee Senator Scott Hutchinson R Venango Senator Hutchinson is also the prime sponsor of the PA Bankers supported sales and use tax legislation to clarify the treatment of canned and custom software in the Senate PA Bankers Day at the State Capitol makes a difference Two days after attendees met with their local senators explaining the importance of our sales and use tax issue and its impact on banks the Senate Finance Committee considered SB 568 and the vote was bipartisan Bankers with Senator Vogel Bankers with Senator Yaw FINANCIAL INSTITUTIONS SERVICES GROUP HELPING BANKS STAY COMPLIANT AHEAD OF THE CURVE BY PROVIDING RESPONSIVE FORWARD THINKING INNOVATIVE SOLUTIONS Internal Audit Model Validation Staff Augmentation BSA AML Consulting Regulatory Compliance SOX FDICIA Consulting Enterprise Risk Management Information Technology Audits Salvatore Zerilli CPA CAMS Managing Director Chair Financial Institutions Services szerilli mercadien com Princeton NJ 609 689 9700 Philadelphia PA 215 854 4059 Mercadien com PA Bankers Association Quarter 2 2019 29

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govermentRELATIONS Updates on PA Bankers State Legislative Priorities The Government Relations Policy Committee chaired by Blair Rush met earlier this year to establish the association s initial state legislative priorities for the 2019 20 legislative session Issues that were determined to be high or high moderate priorities are the following ELDER FINANCIAL ABUSE PREVENTION PA Bankers will continue to advocate for enactment of amendments to the Older Adult Protective Services Act that will provide financial institutions with additional means to address situations where elder financial abuse appears to be occurring This includes providing financial institutions with the authority to suspend a transaction for a period of time in order to provide a local Area Agency on Aging the time needed to undertake an investigation and to seek standing in a local court to receive the court s direction on how to proceed in a potentially egregious and time sensitive instance of suspected elder financial abuse This legislation has not yet been re introduced in the House or Senate The PA Department of Aging has expressed concerns regarding the standing provisions PA DEPARTMENT OF REVENUE DOR SALES AND USE TAX SUT AUDITS OF CORE PROCESSOR INVOICES LITIGATION REGARDING FINANCIAL INSTITUTION SECURITY EQUIPMENT AND THE SUT PA Bankers is seeking enactment of amendments to the PA Tax Code to clarify the tax treatment of custom 30 PA Bankers Association and canned software as well as financial institution security equipment Legislation has been introduced in both the House and the Senate House Bill 1163 by Representative Tommy Sankey R Clearfield and Senate Bill 568 by Senator Scott Hutchinson R Venango who chairs the Senate Finance Committee On May 1 the Senate Finance Committee voted Senate Bill 568 out of the Committee by a vote of 9 2 DATA BREACH LEGISLATION PA Bankers will oppose legislation to the Breach of Personal Information Act that would provide a private right of action to individuals when a security breach has occurred A number of data breach bills have been introduced thus far in the current legislative session DIRECTED TRUSTEESHIP TRUST TERMINATION PROPOSALS PA Bankers is working with representatives of the Joint State Government Commission s JSGC Decedents Estates Advisory Committee DEAC which developed directed trusteeship legislation which differs from the Uniform Laws Commission s version Directed trusteeship allows certain activities to be assigned to a person other than the trustee s and relieves the trustee s of liability for the actions of the trust director Most states have bare bones authority so specific legislation would provide better authority PA Bankers is also seeking enactment of trust termination provisions UNCLAIMED PROPERTY ADMINISTRATION The association is seeking changes to PA s Unclaimed Property Law to clarify treatment of tax deferred accounts and modernize the statute Our requested amendments would clarify seek the following IRAs will not be presumed abandoned before their mandatory distribution date Securities and other securities entitlements are not abandoned unless mail to their owners is returned undelivered The rule peculiar to PA and its financial institutions which allows parties to claim escheated property from the institution which then must seek reimbursement from Treasury would be repealed Securities distributions paid into an active account are not presumed abandoned and An exemption from the law for rewards programs pabanker com

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Results of Special Election Legislative Races In addition to the normal off year municipal and judicial primary elections held on May 21 there were a few special elections held for both congressional and state legislative seats where vacancies had occurred due to recent resignations and retirements U S CONGRESS State Representative Fred Keller received 68 percent of the vote in PA 12 He will replace Tom Marino PaBPAC Federal supported Congressman elect Keller STATE SENATE Joe Pittman R former Sen Don White s chief of staff won the special election for the 41st Senatorial District which represents Indiana County PaBPAC was supportive of Joe Pittman s campaign efforts Doug Mastriano R a retired Army colonel won the 33rd Senatorial District replacing former state Sen Rich Alloway STATE HOUSE Marci Mustello R a staffer for Cong Mike Kelly won the 11th state House District in Butler County This seat was vacated by former Rep Brian Ellis PA Bankers Association Quarter 2 2019 31

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alookahead As you plan your training and development for 2019 2020 we hope you ll consider learning with us Here s a sneak peek at some of the opportunities to learn with PA Bankers this coming year Please note all dates locations and prices are subject to change 2019 Compliance Regulatory Risk Management OCT 30 BANK SECRECY ACT SEMINAR 2019 Government Relations SEPT 26 27 PA Bankers Training Room Harrisburg Member 325 Affiliate Member 385 Non Member 457 50 2019 WASHINGTON VISIT Washington D C 2019 General Association OCT 8 OCT 9 OCT 10 GROUP 3 FALL GROUP MEETING GROUP 2 FALL GROUP MEETING GROUP 5 FALL GROUP MEETING Radisson Lackawanna Station Scranton PineCrest Country Club Phoenixville Sheraton Harrisburg Hershey Hotel Harrisburg OCT 22 OCT 23 OCT 10 GROUP 4 FALL GROUP MEETING GROUP 6 FALL GROUP MEETING GROUP 1 FALL GROUP MEETING Williamsport Country Club Williamsport Blair County Convention Center Altoona Pittsburgh Marriott North Cranberry Township 32 PA Bankers Association pabanker com

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alookahead 2019 Lending Credit SEPT 9 13 TRID Essentials Seminar PA Bankers Training Room Harrisburg Member 3 000 Affiliate Member 4 000 Non Member 3 500 AUG 21 22 AUG 5 6 ADVANCED SCHOOL OF COMMERCIAL LENDING REAL ESTATE LENDING COMPLIANCE SEMINAR PA Bankers Training Room Harrisburg PA Bankers Training Room Harrisburg Member 675 Affiliate Member 775 Non Member 1 012 50 Member 675 Affiliate Member 775 Non Member 1 012 50 NOV 4 5 NOV 21 22 DEC 10 ANALYZING PERSONAL FINANCIAL STATEMENTS TAX RETURNS SEMINAR ESSENTIALS OF COMMERCIAL LENDING SEMINAR LENDING CONFERENCE PA Bankers Training Room Harrisburg The Hotel Hershey Hershey PA Bankers Training Room Harrisburg Member 675 Affiliate Member 775 Non Member 1 012 50 Member 475 Affiliate Member 650 Non Member 712 50 Member 325 Affiliate Member 385 Non Member 457 50 2019 Networks EMERGING LEADERS SEPT CONFERENCE 22 23 Renaissance Pittsburgh Hotel Pittsburgh Member 325 Affiliate Member 385 Non Member 457 50 PA Bankers Association Quarter 2 2019 33

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alookahead 2019 Technology 2019 Wealth Management Trust Investments NOV 13 NOV 6 8 DIGITAL BANKING CONFERENCE WEALTH MANAGEMENT TRUST CONFERENCE EXHIBITION Best Western Premier The Central Hotel Conference Center Harrisburg Hershey Lodge Convention Center Hershey Member 325 Affiliate Member 385 Non Member 457 50 Member 475 Affiliate Member 650 Non Member 712 50 2019 Training Employee Development JULY 21 26 ADVANCED SCHOOL OF BANKING AUG 1 SEPT 11 BANKING BASEBALL BANKING INSTITUTE Penn Stater Conference Center State College Co sponsored by Crowe Member 3 500 Affiliate Member 4 000 Non Member 4 500 Citizens Bank Park Philadelphia Co sponsored by Stevens Lee Griffin Financial Group Harrisburg Hilton Harrisburg 150 150 SEPT 19 TREASURY MANAGEMENT SEMINAR PA Bankers Training Room Harrisburg Member 325 Affiliate Member 385 Non Member 457 50 34 PA Bankers Association NOV 14 FDIC DIRECTORS COLLEGE Hershey Country Club Hershey 325 pabanker com

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alookahead 2020 Networks WOMEN IN BANKING CONFERENCE MARCH 11 12 Hershey Lodge Convention Center Hershey Member 325 Affiliate Member 385 Non Member 457 50 2020 Lending Credit APRIL 22 AGRICULTURAL BANKERS CONFERENCE Nittany Lion Inn State College TBD More than 100 attorneys providing Accessible Efficient Solutions for Your Bank www BARLEY com LANCASTER YORK READING HARRISBURG GETTYSBURG MALVERN HANOVER HUNT VALLEY MD COLUMBIA MD PA Bankers Association Quarter 2 2019 35

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from yourPEERS Emerging Leaders Update Introducing PA Bankers HYPE Awards Highlighting Young Professionals Excellence PA Bankers and the Emerging Leaders Advisory Committee are looking for leaders who are influential in their financial institutions the banking industry and their communities to be nominated for the PA Bankers HYPE Awards One statewide award will be offered in each of the following six categories and one affiliate member will be selected from the pool of nominations to represent one category 1 ACHIEVER Nominees are smart and talented high achievers in their current roles The ideal candidates consistently produce work more effectively than their peers are considered subject matter experts and know how to attain results by their own accord and through others 2 CHANGE AGENT Nominees are often agents of change in their organizations The ideal candidates are likely to initiate new ways of doing things and are proponents of taking risks to further the organization Nominees share ideas aren t afraid to embark on new projects and opportunities and may challenge the status quo 3 DEVELOPER Nominees do not only show an interest in developing themselves and their own capabilities but also have the ability and interest in training developing mentoring and coaching other employees The ideal candidates have a natural knack for building talent and want to see others succeed and grow to their fullest potential 4 TEAM PLAYER Nominees are collaborative great teammates and good communicators They seek others input and opinions use it to shape their ideas and generate consensus The ideal candidates have strong soft skills and emotional intelligence when it comes to dealing with others They are well liked and well respected by their peers 5 STRATEGIC THINKER Nominees are strategic thinkers The ideal candidates are forward thinkers show business acumen and have a good understanding of the market and industry in which your organization operates 6 COMMUNITY AMBASSADOR Nominees have a passion for their industry their institution and the communities they live in This is evidenced in their desire to serve when where necessary on local civic boards and committees The ideal candidates are interwoven and involved in their community through nonprofit and philanthropic initiatives Know someone who fits into one of these categories Nominate them before July 15 by visiting pabanker com 36 PA Bankers Association pabanker com

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Women in Banking Update Lori Maley Appointed to the FDIC Advisory Committee on Community Banking Congratulations to Lori A Maley CPA president and chief executive officer of Bank of Bird in Hand and chair of PA Bankers Women Advisory Committee for her appointment to the FDIC Advisory Committee on Community Banking in Washington D C This Committee reports to the chairman of the board of directors at the FDIC This committee provides the FDIC with advice and guidance on a broad range of important policy issues impacting small community banks throughout the country as well as the local communities they serve with a focus on rural areas WHICH CAME FIRST IS ALL A MATTER OF PERSPECTIVE No matter which side of the argument Pillar Aught knows how to consider all perspectives to best protect and advance your interests Keen insight extreme responsiveness and deep expertise explain how Pillar Aught has raised the bar Learn how we can impact your business and how we ve transformed the legal services experience pillaraught com PA Bankers Association Quarter 2 2019 37

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from yourPEERS PA Bankers Champions Update T he PA Bankers Champions Program is nearing its one year anniversary Launched in the summer of 2018 the program now has 121 PA Bankers Champions and participation from more than 65 PA Bankers members With half of our membership represented in the program there is still room for growth We are proud of the value that the Pennsylvania Bankers Association provides to its members through education and training networking advocacy leadership development and products and services to help your bankers succeed The association looks forward to welcoming new PA Bankers Champions as we enter year two of the program WHAT S A PA BANKERS CHAMPION LEARN MORE IN THE VOLUNTEER DESCRIPTION BELOW POSITION OVERVIEW PA Bankers Champions are actively involved in the activities of the Pennsylvania Bankers Association They are deeply passionate about the banking industry and the work that the association does to further their fellow employees involvement in the industry professional development and advocacy A PA Bankers Champion is ideally a cultural icon within the institution has deep seeded connections among his her peers and has the authority to both disseminate information to all levels of the organization from the association and act as a spokesperson for the institution to the association to ensure regular two way communication between the two entities The program s goal is to connect resources and people so that each member institution can maximize the value of its membership An institution may designate more than one PA Bankers Champion EXPERIENCE This position does not require a certain level of experience Anyone from the CEO to a mid level manager may fill this role depending on the needs of and scope required by the member institution An institution may also choose to designate a lead PA Bankers Champion and a younger member of the organization as co champion to ensure all levels of the organization and career stages are represented from the institution EXPERTISE A PA Bankers Champion may come from any line of business within the bank i e HR training marketing communications executive team OVERVIEW PA Bankers Champions agree to receive communications from the association and or provide feedback to the association at least once a month and at times on an as needed basis PA Bankers Champions will serve a minimum two year term with the option for the member institution to replace the Champion at any time and or renew the Champion for another term PA Bankers will convene the PA Bankers Champions at least twice a year during the group meetings to conduct trainings and provide updates on the association s activities The role may look different in each bank but it s important that we identify the best individual s to ensure each institution gets the most out of its membership QUESTIONS PLEASE CONTACT Tiffani Chambers 717 255 6928 tchambers pabanker com 38 PA Bankers Association pabanker com

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Advocacy Committee Update BY J BRADLEY SCOVILL PRESIDENT CEO C N T hroughout my career I have witnessed the strength of our voices Together we have fought for fairness and a level playing field to enable our banks to serve our customers and communities and support the economic health of Pennsylvania and the nation We have influenced highly visible issues such as insurance powers and bank shares tax as well as specific technical issues that impact our ability to deliver lending depository and payment services But I have also seen the impact of our silence which perhaps is even more consequential Dodd Frank was passed when we were silent We cannot afford to be silent In fall of 2018 Duncan Campbell shared with you the vision for advocacy moving forward at the association and adjustments to the committee structure at PA Bankers The restructure elevated advocacy within the association structure and placed added emphasis on integrating advocacy throughout the association The Advocacy Committee is populated with the chairs of the association s policy and advisory committees with the 2nd vice chair serving as the chair Consistent with this approach Blair Rush the chair of the Government Relations Policy Committee and I had the pleasure of leading this committee for the first six months Our new committee has started conversations to change the way we think about advocacy and is committed to the belief that advocacy can no longer just be a c suite conversation Legislation and regulation impact every single employee J Bradley Scovill President CEO C N This committee is focused on educating every banker on why they should advocate and how they should advocate I am excited to see how our advocacy network grows and to see how much we can accomplish for the industry as we enhance our collective engagement and raise our united voice to another level ADVOCACY Supporting the banking industry within the political and economic systems through public engagement as defined by PA Bankers Advocacy Committee PA Bankers Association Quarter 2 2019 39

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vendorARTICLES American Bankers Mutual Insurance Ltd Declares 2 Million Distribution to ABA Member Banks 86 3 Million Has Been Declared in Total Distributions Since 1991 BERMUDA AMERICAN BANKERS Mutual Insurance Ltd the reinsurer for the directors and officers D O bond and cyber insurance program endorsed by American Bankers Association ABA and Pennsylvania Bankers Association declared a 2 million distribution to be shared by qualified ABA member banks insured through ABA Insurance Services Forty six Pennsylvania banks will share nearly 126 000 from this program and are current ABA members are eligible to receive a distribution ABA works tirelessly to provide the greatest possible value for our member banks said Rob Nichols ABA president and CEO We are proud that we can continue to offer this stable reliable and innovative source of insurance to our members that also provides meaningful distributions year after year Nearly three decades of annual distributions speaks to the program s continued strength and consistency Jeff Plagge chairman of American Bankers Mutual Insurance Ltd and president and CEO of Northwest Financial Corp in Arnolds Park Iowa This is the 29th consecutive year that the industry s leading professional liability and bond insurance provider has declared distributions to eligible ABA member banks bringing the total to 86 3 million since the program s inception Over 5 45 million of that has been shared with Pennsylvania banks Banks that purchase their D O bond cyber and related insurance 40 PA Bankers Association This is a one of a kind program designed specifically for the unique needs of banks said Jeff Plagge chairman of American Bankers Mutual Insurance Ltd and president and CEO of Northwest Financial Corp in Arnolds Park Iowa Nearly three decades of annual distributions speaks to the program s continued strength and consistency About American Bankers Mutual Insurance Ltd American Bankers Mutual Insurance Ltd is a bank owned mutual insurance company that reinsures policies written for the ABAendorsed insurance program About ABA Insurance Services ABA Insurance Services a Member of Great American Insurance Group serves the banking industry by offering D O bond cyber P C and related insurance to financial institutions across the country Endorsed by the American Bankers Association and Pennsylvania Bankers Association this unique insurance program has been a market leader since 1987 and is recognized by insurance and banking professionals as a secure stable and affordable source of coverage For more information about ABA Insurance Services call 800 274 5222 or visit www abais com About American Bankers Association The American Bankers Association is the voice of the nation s 17 5 trillion banking industry which is composed of small midsize regional and large banks that together employ more than 2 million people safeguard 13 5 trillion in deposits and extend more than 10 trillion in loans pabanker com

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How Business Intelligence Transforms Financial Institutions BY RAY MELCHER A s a former bank CEO I would have loved the sophistication of today s data analytics In just the last decade data analytics has evolved from a helpful tool to a predominant force guiding every business decision Today s most progressive proactive and high performing banks have all weaved data analytics and business intelligence BI into the fabric of their decision making processes In fact big data is driving the modern enterprise to the point where no financial institution can afford to ignore its power With companies of all types and sizes developing BI plans Gartner estimates that investments in BI and analytics software will eclipse 22 8 million by the end of 2020 Not only do banks need BI they need to use it to its full potential There is enormous potential for BI to transform banking delivery systems to adapt to how customers and prospects want to do their banking To make the data work in meaningful deliberate ways banks need BI to put otherwise separate data points into perspective by analyzing them against their key performance indicators KPIs Without the full picture banks use incomplete and inaccurate information resulting in ineffective decision making Banks that collect customer product and service performance data and then use that data to accommodate to current needs and predict future needs can groom loyal profitable customers When Financial Institutions Need Business Intelligence Three major indicators that your financial institution needs a BI plan are 1 You collect data but don t know what to do with it 2 You don t know where to find your data because information is siloed in different locations such as multiple operating systems like Fiserv lead generation platforms like SalesForce and loan origination software like FIS and 3 You have lots of data from sales marketing and IT but no integration among systems In fact one banking executive is currently integrating seven operations systems into one central data warehouse A BI plan removes these uncertainties by improving the quality and efficiency of data gathering sorting and analysis processes You can see a clear comprehensive picture of your KPIs in real time providing an accurate financial snapshot you can use to make educated decisions As a result you can positively impact your marketing operations and profitability How Financial Institutions Benefit from Business Intelligence Once a real time dashboard is implemented executives have unparalleled access and visibility to data points relative to KPIs Information that would normally take days or weeks to compile from multiple departments and software systems within the bank will literally display on one screen together Decision makers can filter information with the click of a mouse allowing them to identify and analyze trends easily BI helps financial institutions Reduce costs Improve productivity Innovate new products services Attract new customers and Deepen existing relationships Reduce Costs Improve Productivity Data gives financial institutions an opportunity to see how factors in their business affect their profitability In turn those insights can inform executives on how to improve their processes ultimately resulting in reduced operational costs and improved profitability CONTINUED ON PAGE 49 ABOUT THE AUTHOR RAY MELCHER Ray Melcher is executive vice president of Financial Strategy with Anderson Group and leads the relationship with PA Bankers Services Corporation as a Select Vendor He has consulted for banks insurance agencies securities firms as well as other companies and has been involved in more than 100 business brokerage deals and merger acquisition transactions During his tenure as president CEO of Leesport Financial Corp it grew from 200 million of assets to more than 900 million Ray presided over 11 acquisitions divestitures and joint ventures He has also served as interim part time CEO and COO for several other companies Email raymelcher thinkanderson com call 610 678 1506 or learn more about the team at www thinkanderson com PA Bankers Association Quarter 2 2019 41

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vendorARTICLES Marijuana Banking in 2019 BY SILVIA GARCIA MAGGIO DEPUTY GENERAL COUNSEL L ast year the most frequently asked topic over at Compliance Alliance was without a doubt beneficial ownership With the effective date for that rule well behind us today the top BSA question we are getting is about how the heck to deal with marijuana banking Now the issue with marijuana banking is that there are no set definitions and conflict between state and federal laws Therefore it s important to discuss both the definitions that do exist and strategies for the bank to make their own interpretations First the 2018 Farm Bill clarified from a federal perspective that hemp cultivation is legal and not just restricted to pilot programs for research purposes which it was before Importantly the Act also allows interstate transfer of hemp products Also the passage of the law allows for the sale and possession of hemp based products as long as those products are consistent with the parameters of that rule So what are the 42 PA Bankers Association parameters There are still tight restrictions on this type of product Hemp under this rule is limited to less than 0 3 THC Second the Bill asks state departments of agriculture to create a regulatory framework that would be collaboration between the state s governor law enforcement and the United States Department of Agriculture in order to license and regulate hemp That plan will have to be approved by the USDA so we re not free and clear yet Farmers in states that choose not to have a USDA approved program will still have the opportunity to grow hemp and produce hempbased product but they will be regulated at the federal government level As can be expected from those last two parameters hemp producers will have to be licensed and regulated which will mean some level of enhanced due diligence for institutions that choose to bank those customers How does any of this help us It helps us because hemp is derived of the same plant as marijuana the cannabis plant However hemp does not have the same effects as marijuana simply because it does not contain as much of the chemical compound known as THC This creates a category of product that is legal and not classified as marijuana under the Controlled Substance Act Products that are derived of the same plant but have more THC than allowed would no longer be considered hemp and instead would be considered marijuana As marijuana is still an illegal controlled substance at the federal level under the Controlled Substance Act this makes a critical difference to banks that are not banking marijuana related businesses but will bank legal hemp businesses As the prevalence of marijuana businesses continues to increase banks have to make risk based decisions as to whether to bank them and how to determine whether their customer actually is an MRB That distinction should include an intimate understanding of state laws and definitions and also a conclusive pabanker com

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policy statement as to whether the bank does business with MRBs and what the bank s definition of an MRB is Is it only a dispensary or grower Is it a customer who rents retail space to a dispensary This process should also include a discussion with the bank s regulator to understand expectations beyond FinCEN s stated guidance as there is no other federal regulator that has made any official guidance and state regulatory guidance is varied The number one BSA topic thus far in 2019 is how to develop Marijuana Related Business policies and more importantly how to even define Marijuana Related Businesses At the moment there approach Without a set industry standard banks are working from scratch via member groups like C A huddles and relying on industry resources like ACAMS to make those interpretations about products that are legal within their own states A zero tolerance approach on the interpreting what is a marijuanarelated business has generally included not doing any business with companies who have any relation to marijuana business directly or indirectly Direct marijuana business under this approach includes businesses that grow distribute sell or produce items that do not fall under the definition of As the prevalence of marijuana businesses continues to increase banks have to make risk based decisions as to whether to bank them and how to determine whether their customer actually is an Marijuana Related Businesses MRB really isn t federal guidance so banks are having to make those interpretations themselves There are a variety of methods to go about that from the three tier approach to the zero tolerance approach to the we are choosing not to make an interpretation in our policy hemp under a state licensed or federal program Indirect businesses would include businesses that provide services to those businesses like landlords and business supply companies While this is the most conservative approach it is easy to see the downside This definition interpretation includes businesses that perhaps did not provide services in the past but do now like office supply businesses or gardening supply companies If in the middle of a long term business relationship like a closed end loan it will be up to the bank to determine how to wrap up the relationship in order to comply with their own policy Another approach being taken is the three tiered risk approach as discussed by ACAMS back in 2016 This approach puts businesses into three different tiers based on risk The bank then makes a risk based interpretation of what the definition of marijuana related business means by deciding whether to bank customers who are Tier 1 Tier 2 and or Tier 3 It is important to note that regardless of which approach regardless of how they interpret or choose not to interpret what an MRB is they must do so with an understanding of what the legal and compliance risk is to the bank and within the scope of the bank s acceptable risk As with any change that is not explicitly addressed by banking regulators it is a best practice to work with the bank s regulators the bank s attorneys to determine state specific laws and the state department of banking prior to beginning new products Compliance Alliance does have Marijuana Banking tools on the website under the Marijuana Banking Toolkit which includes helpful things like an updated manual to help banks sort out how to build a marijuana banking policy ABOUT THE AUTHOR SILVIA GARCIA MAGGIO CRCM Associate General Counsel Silvia Garcia Maggio serves as an associate general counsel for Compliance Alliance After graduating from The University of Texas School of Law in 2011 Silvia began her career in real property and foreclosure law Employed by a national mortgage servicer since 2012 Silvia worked on the OCC independent foreclosure audit and in compliance for Enterprise Risk Management gaining a multitude of experience dealing with multi state and federal banking regulations Silvia started with Compliance Alliance in March of 2014 Silvia is part of our team of attorneys who assist CA members with a wide range of regulatory and compliance inquiries Over the past year Silvia has developed and implemented the C A Minute videos a series of short compliance training and refresher videos that leverage the frequently asked questions from the Compliance Alliance hotline In addition Silvia regularly presents on a number of compliance topics at regulatory schools and conferences nationwide PA Bankers Association Quarter 2 2019 43

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vendorARTICLES Why Fewer Women are Applying for Business Loans and What to Do About It BY MARIE SHIRES A s a banker you re well aware that there s no shortage of female small business owners While it would be ideal to see far more women owned businesses currently make up 39 percent of the 28 million small businesses operating across the United States according to the 2018 Women s Entrepreneurship Report from SCORE And 61 percent of the clients that SCORE served last year were women In addition the Kauffman Foundation reports that the number of women owned businesses is growing at double the rate of male owned businesses The problem is that as few as one in four female entrepreneurs apply for business financing and when they do they ask for substantially less than male business owners This plus the anecdotal experiences we can all share about working with excellent 44 PA Bankers Association women entrepreneurs prompts the question Why do fewer women apply for financing to grow their businesses SELF RELIANCE While the World War II poster of Rosie the Riveter saying We Can Do It may seem outdated perhaps it s not when it comes to women and business financing A survey by the National Association of Women Business Owners NAWBO shows women appear to be relying on themselves rather than lenders and they are likely to turn to personal sources of income About half say they have relied on credit cards to better their businesses Others site personal loans personal collateral and personal guarantees In addition a substantial portion of women surveyed were unfamiliar with Small Business Association SBA loans as a popular avenue for growing a small business An astounding 65 percent said they were unfamiliar with SBA 504 loan programs as well as a suite of other SBA offerings according to the NAWBO survey RELUCTANCE TO ASK In a widely reported study conducted by Merrill Lynch 61 percent of women said they would rather discuss the details of their own death than money This may add to the evidence that many women were brought up to avoid talking about money even inside their own homes They may not feel comfortable or confident articulating their monetary needs to a stranger sitting across from them at the lending table And for women who finally do decide to take the leap and make the ask a study by Fundera reveals that female entrepreneurs request roughly 35 000 less than men do pabanker com

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YOU DON T KNOW WHAT YOU DON T KNOW As a commercial lender that works with banks to help small to mid sized businesses obtain government loans Seedcopa is working with a woman right now who is reluctant to ask for financial skill Many don t have a full understanding of equity or the difference between cost of goods sold and an expense on their income statement They may rely heavily on a QuickBooks program or friends to guide them A survey by the National Association of Women Business Owners NAWBO shows women appear to be relying on themselves rather than lenders and they are likely to turn to personal sources of income the amount of money that she really needs to take her business to the next level She is already a resounding success In fact the demand for her services is so great that she has outgrown the leased office space she occupies and can t meet demand or hire new employees to help her unless she gets funding to purchase a larger space So why did she hesitate to apply for financing After much discussion it was discovered she did not have a complete understanding of what she can afford This is not uncommon There are many small business owners men and women who have little to no exposure to this type of But it appears the financial literacy gap is wider for women A George Washington University study found that female college students are less enthusiastic about financial topics less confident and less willing to acquire financial skills than male students These differences have also been observed in high school students WHAT WE CAN DO While it may take time for the gender gap to close as more and more women pursue careers in business there are some essential strategies that both business women and lending partners can leverage now Easy to Share Financial Tools When a banker encounters a business owner who could use support in financial skills there s not always enough time staffing or bandwidth to fully assist However just taking the time to walk a borrower through their balance sheet can make an astounding difference and provide the support they ve been seeking For further assistance a referral to a government loan specialist the local SCORE or Small Business Development Center SBDC can benefit everyone involved and make the borrower feel secure in the value of their banking relationship with you When you are a valuable resource you are also a valuable lender Loans That Lead to Sound Business Plans While bankers may view the government loan process as far more arduous than other options to a borrower the process can provide all of the right financial tools they ve been seeking but haven t found from competing financial institutions When was the last time the borrower updated or prepared a business plan mission statement or company vision Do they have financial projections Do they have enough working capital to take on a downturn or grow sales faster These are financial essentials that can be tackled together and with support from a government loan specialist they become valued benefits instead of insurmountable obstacles CONTINUED ON PAGE 49 ABOUT THE AUTHOR MARIE SHIRES Seedcopa Vice President Relationship Manager Marie Shires is vice president and relationship manager for Seedcopa a private nonprofit that works with lenders to help small to mid sized businesses in Pennsylvania obtain government loans Together with economic development partners throughout the state Seedcopa helps businesses grow create and retain jobs while stimulating growth within their communities Marie can be reached at mshires seedcopa or 610 321 8245 PA Bankers Association Quarter 2 2019 45

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PA Bankers Services Corporation PA Bankers Services Corporation Select Vendors Provide Provide PA Bankers Members Select Vendors PA Bankers Savings Service and Quality Members Savings Service and Quality RISK TECHNOLOGIES Automated CAT Tool Digital Forensic Investigation Network Consensus Cybersecurity Allen Mitchell 215 485 7315 armitchell atrisktech com ABA INSURANCE SERVICES Bond D O Cyber Insurance and Employment Practices Liability Patricia Williams 216 220 1280 pwilliams abais com ACCUME PARTNERS Outsourced Internal Auditing and Risk Management Services Nicole Lloyd 717 903 3142 nlloyd accumepartners com AFFILIATED POWER PURCHASERS INT L Electricity and Natural Gas Procurement Services Utilities Management Platform Jane Seagraves Sidebottom 800 520 6685 jseagraves appienergy com 46 PA Bankers Association ANDERSON GROUP Integrated Marketing and Communications and Business Intelligence Ray Melcher 610 678 1506 rmelcher thinkanderson com APPROVAL PAYMENT SOLUTIONS Merchant Processing Search Engine Optimization Website Design and Social Media Management Megan Noe 888 311 7248 ext 5011 mnoe apsolutions net THE BAKER GROUP Asset Liability Management Software and Services Charles Amis 405 415 7231 Charlie gobaker com BANK HEALTH CARE CONSORTIUM OF PA 34 banks received credits in surplus of over 8 9 million in 2018 with an average net funding increase in single digits Wayne Whipple 717 255 6925 wwhipple pabanker com BITS Managed Service Provider for Voice and Data Communication Christian Ericson 973 474 1828 Christian ericson bitsnetwork com COMMONWEALTH CHARITABLE MANAGEMENT Cristine Clayton 570 278 3800 cclayton commonwealthcharitable org COMPLIANCE ALLIANCE Quality Compliance Services That Complement and Assist Internal Compliance Personnel Wayne Whipple 717 255 6925 wwhipple pabanker com CORNERSTONE ADVISORS Core Debit EFT Card Program Loan Origination Bill Pay Mobile Banking ATM Contract Negotiation Jennifer Wagner 480 425 5204 JWagner crnrstone com SENIOR HOUSING CRIME PREVENTION FOUNDATION Receive High Yielding CRA Credit Sue Shaffer 901 529 4787 sue shaffer SHCPFoundation org As 6 24 19 Asof of 4 12 19 pabanker com

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DEALERTRACK COLLATERAL MANAGEMENT SERVICES INC Electronic Lien and Title Program Wayne Whipple 717 255 6925 wwhipple pabanker com DELUXE Check Program Todd Wroblewski 724 625 5599 todd wroblewski deluxe com GLOBALVISION SYSTEMS INC Anti Money Laundering Catherine Lew 818 998 7851 x128 clew gv systems com INVESTORS TITLE INSURANCE COMPANY Multi Bank Owned Title Insurance Program Karen Brittain Barnett 419 577 5900 kbarnett invtitle com L R WEBBER Multiple Medical Drug Dental Vision Options and EB Solutions Brad Webber 814 695 8066 bwebber lrwebber com OPTIMUM SYSTEM PLUS Outsourced Internal Purchasing Office Supplies Inventory Control and IP Address Marketing Sales Pat McMahon 570 207 5107 pmcmahon opoffice com EQUIAS ALLIANCE AN NFP COMPANY BOLI Executive Compensation and Long Term Care David Shoemaker CPA PFS CFP 901 754 4924 dshoemaker equiasalliance com EVERFI Financial Education Technology Platform Matt McDonald 415 672 7586 mmcdonald everfi com PA BANKERS SERVICES CORPORATION CAREER CENTER THE KAFAFIAN GROUP Performance Measurement Robert E Kafafian 973 299 0300 x106 rkafafian kafafiangroup com Connecting Professionals www pbasc com Icon Bridge Icon Marble CMYK CMYK CMYK CMYK CMYK CMYK CMYK CMYK B 90 PWC FONT Handwriting draft_free version B Screen Black 80 Campbell FONT Century Gothic _ Regular PMS485 BUILDING CONFIDENCE FONT Handwriting draft_free version Black 80 THE FULCRUM GROUP INTERNATIONAL INC Reviewing Re negotiating and Bidding Check Printing Relationship Ted Amon 770 736 5787 ted thefulcrumgroupintl com KEYSTATE CAPTIVE MANAGEMENT Brian Amend Managing Director VP Sales Eastern Region 302 425 5158 bamend key state com PWCAMPBELL Planning Design Coordination and Construction Management Erin Campbell 800 253 7430 Erin campbell pwcampbell com Vendor selections and recommendations are made in accordance with PA Bankers Services Corporation s stated mission It is believed that the promoted products and services merit strong consideration by PA Bankers member banks PA Bankers Services Corporation due diligence and selection criteria should not be construed as a guarantee as the ultimate appropriateness may vary from bank to bank In addition member banks are encouraged to conduct their own due diligence reviews of recommended vendors Remuneration received by PA Bankers Services Corporation is utilized in part to support the PA Bankers Association through contracted agreements corporate sponsorships and overhead coverage This financial support expands resources and strengthens the services and programs of the PA Bankers Association As of 4 12 19 PA Bankers Association Quarter 2 2019 47

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How Business Intelligence Transforms Financial Institutions Why Fewer Women are Applying for Business Loans and What to Do About It CONTINUED FROM PAGE 45 CONTINUED FROM PAGE 41 BY RAY MELCHER Attract New Customers Today using data analytics and programmatic marketing to examine each step of the buyer s journey creates a personalized highly targeted prospect engagement Deepen Existing Relationships BI combines data from multiple systems that do not typically interact creating a more complete picture of the customer buying cycle and their behavior For example BI can layer customer behavioral data over website analytics to gauge the effectiveness of your company s web presence from the user experience to design and content Banks equipped with BI will be well positioned to make data driven decisions that improve how they relate to customers build efficiencies into their operations and maintain profitable sustainable relationships Choosing a government loan specialist who both supports and eases your lending process is of course key Here s our insight A good government loan specialist supports the project and moves it toward approval A really good one detects any issues or concerns right off the top of the project drawing from decades of government lending experience to know exactly what those red flags will be and working to resolve them immediately Growth the Banker s Perspective According to the 2018 State of Women Owned Businesses report by American Express there is a significant gap between the number of women who start businesses and those who commit to growing them As a banker you ve encountered many business owners who are forced to learn the hard way that growing a business is key to the success of the business And growth can come on unexpectedly and quickly For instance a smaller client gets an influx of cash and suddenly needs a massive amount of services a product is suddenly in high demand due to changing market trends and a valuable referral results in a lot more work and potential profits You have seen these situations firsthand and know that a credit card or personal funds are a risky quick fix for what should be a long term loan solution and commitment to the success of the business Never forget the value of this perspective and the reassuring service you provide when you reinforce it When you actively share this insight drawn from the breadth of experience your borrower doesn t have but certainly seeks it can change the course of people s businesses and their lives Questions We Must Ask Ourselves to Uncover Solutions Do women perceive financial help as a sign of weakness when it comes to running a business Are they trying to balance so much that there seems to be no time to go through the detailed process of obtaining a government loan Is financial literacy a contributing issue Is there a cultural as well as emotional component that s influencing decisions It only takes one of these factors to get off track By recognizing them we as loan partners can course correct our current and younger generations of savvy business women on the path to entrepreneurial success We can also tap into a market for economic growth that has been overlooked for far too long PA Bankers Association Quarter 2 2019 49

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SOMEONE 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 pro ts 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 PA Bankers Association 50 Volume 21 1 Quarter 1

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NO OTHER FIRM No other accounting or consulting firm offers more knowledge of community banks challenges and opportunities than S R Snodgrass www srsnodgrass com banking 833 404 0344 Unlike other accounting or consulting firms that work in banking S R Snodgrass works only in banking every day every week of every month for more than 70 years In fact no other accounting and consulting firm has greater knowledge of the needs challenges and opportunities of today s community banks than S R Snodgrass If you think our unique blend of unrivaled banking expertise and personalized service could benefit your bank please allow us to introduce ourselves We d be delighted to meet you