Pub 4 2023 Issue 3

CONVENTION 45th Annual TRADESHOW CONNECT. COLLABORATE. ommunity . C JULY 19-21, 2023 OVERLAND PARK MARRIOTT OVERLAND PARK, KS ISSUE 3 2023 Official Publication of the Community Bankers Association of Kansas

CONTENTS Issue 3 | cbak.com © 2023 Community Bankers Association of Kansas | The newsLINK Group, LLC. All rights reserved. In Touch is published six times each year by The newsLINK Group, LLC for the Community Bankers Association of Kansas and is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the Community Bankers Association of Kansas, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. The Community Bankers Association of Kansas is a collective work, and as such, some articles are submitted by authors who are independent of the Community Bankers Association of Kansas. While In Touch encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. 4 FLOURISH By Rebeca Romero Rainey, President and CEO, ICBA 6 WORLD-WIDE DEMAND: BUYERS OF U.S. DEBT COME IN MANY SHAPES AND SIZES By Jim Reber, President and CEO, ICBA Securities 8 WINDOWS 11 VS. WINDOWS 10: SHOULD YOU MAKE THE SWITCH? By Mike Gilmore, Chief Compliance Officer, RESULTS Technology 10 LOAN REVIEW BEST PRACTICES: KEY TO COMBATTING CREDIT RISK IN STRESSFUL TIMES By David Ruffin, Principal, IntelliCredit/QwickRate 12 SLIP, TRIP AND FALL PREVENTION By Travelers 14 45TH ANNUAL CONVENTION & TRADESHOW 16 COMPLIANCE Q&A By Bill Showalter, Senior Consultant, Young & Associates, Inc. 18 SECURE 2.0 OFFERS NEW TYPE OF EMERGENCY SAVINGS ACCOUNT By Lisa Haberman, Ed.D., ChFC®, CLU®, Ascensus 20 THE TRUST COMPANY OF KANSAS (TCK) IS PLEASED TO ANNOUNCE THE ADDITION OF FOUR INDIVIDUALS TO ITS TEAM IN EVERY ISSUE: 22 ANNIVERSARIES 23 BANK TRAINING WEBINARS 24 OFFICERS AND DIRECTORS 24 PRODUCTS AND SERVICES REFERENCE LIST 8 18 14 Cover Photo Courtesy: City of Overland Park 3 In Touch

FLOURISH Community bankers know the people and needs behind [small businesses], and that personal connection creates a recipe for mutual success. I f there’s one universal truth about small businesses, it’s this: No two are the same. Whether it’s an agricultural entity, a business consultancy, a retail establishment or a host of other options, you’d be hard-pressed to find a replicated set of financial needs. Fortunately, community banks operate in the same fashion. Though you share common values in relationship-first banking, your models are based on the needs of the communities you support. That’s what makes you so uniquely poised to serve small businesses: You are small businesses yourselves. Your ability to look at each organization independently allows you to underwrite not based on a one-size-fits-all approach, but on the individual needs of the business and the local community. Yet the small business relationship extends beyond any transaction. Community bankers are there for their small business customers as lenders, financial advisors and overall business supporters. For instance, I recently visited my local dry cleaner, who always greets me by name, and he apologized that services had been delayed a week because his boiler went out and he had to close. Then, without knowing what I do for a living, he went on to tell me how thankful he was for his community bank, which was able to lend him the money he needed to get back up and running. He shared that without this bank, he would have been out of operation. This is but one example of the significant impact you have on the nation’s small businesses. Think about walking down Main Street of any community and how small businesses are the embodiment of that community. Whether the business is a large employer, a local gift shop or a hotel that’s growing, community bankers know the people and needs behind the business, and that personal connection creates a recipe for mutual success. So, as you consider how to celebrate May’s Small Business Month, I invite you to take a look at the resources unveiled as part of our national campaign and those in the Tell Your Story toolkit. Both provide turnkey materials to help you share your stories and the work you do in supporting small businesses in your communities. Telling this story matters, particularly as we continue to differentiate community banks from megabanks and credit unions. The impact you have on the small businesses you serve speaks volumes about where your priorities lie and what it means to be a community bank. And that’s a story worth shouting from the rooftops throughout Main Street America and beyond.  Where I’ll Be This Month I’m looking forward to welcoming community bankers to D.C. for our Capital Summit, May 14–17, and supporting them in sharing their stories with legislators. Connect with Rebeca on Twitter @romerorainey. BY REBECA ROMERO RAINEY, PRESIDENT AND CEO, ICBA 4 In Touch

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I think we can all agree that there has been plenty to be concerned about in the last, say, five years. Some are environmental issues, some are social and, for community bankers, plenty are economical. What gets a lot of play in the business, and even mainstream media, is our growing national debt. There’s no doubt that the mountain of borrowings that keeps our federal government liquid and solvent is greater than ever before. It’s not surprising to me that there’s spirited debate about debt limits, or if Congress will ever in our lifetimes find a way to slow our dependence on deficit spending. Related to this conversation is the concern that, to paraphrase Blanche DuBois, we have always depended on the kindness of strangers. It seems selfevident that foreign central banks have propped up our debt market for decades, buying dollar-denominated securities by the trillions, thereby keeping our borrowing costs manageable, and potentially even encouraging our bad behavior by going ever deeper in debt. But is any of this true? Walked, Then Ran First, let’s try to get our minds around the situation. The Federal government first borrowed money before there was a Federal government, when the Dutch and the French loaned money to the Continental Congress to help finance the Revolutionary War. Treasury borrowings, as we know them today, sort of date back to World War I, with the issuance of “Liberty Bonds,” which was just after the creation of the Federal Reserve Bank. As we have seen, the Treasury and the Fed have a long history of collaboration. Even at the start of the 21st century, total Treasury debt was “only” $3 trillion at a very manageable 30% of GDP. Just four years ago, our borrowings were about $17 trillion at 77% of GDP. Today? We’re over $24 trillion, nearly 100% of GDP. While it would be tempting to blame a lot of the more recent growth on COVID and the fiscal response to that, the reality is each administration of the last quarter century has contributed to the current debt stockpile. And, now that rates are at a 15-year high, our interest payments alone are now over $900 billion per quarter. As Craig Dismuke, Market Strategist for Stifel, is fond of saying, “Interest is an expenditure that doesn’t create jobs.” Bedrock Option Now, for some hopeful commentary. The owners of our Treasuries are a diverse lot, with diverse objectives. Investors include the savings bond/retail buyers, institutional money managers who run mutual funds, depositories, our central bank, and yes, other sovereign central banks. What’s interesting to note is that the percentage of our debt owned by China, Japan, Germany and the rest of the foreign investors has declined substantially in the last decade, from about 42% to less than 30%. The Federal Reserve, meanwhile, has picked up the pace and has essentially absorbed the pro-rata share of the pie in the last decade. So it would be wrong to conclude we’re hostage to foreign governments’ largesse. Still, that leaves around half of our total debt in the hands of private investors. Who are these people? Most are names you’ve heard of, and maybe even invested your personal or retirement money with. Large mutual fund families, state-sponsored retirement funds and life insurance companies are examples. In aggregate, they have owned nearly half of the total debt pie for most of this century, so their collective appetite for full faith and credit investments has mirrored Uncle Sam’s appetite for more borrowing. A lot of this can be attributed to the aging of the population and the advent of “targeted date” funds. Keeps the Wheels Turning If you’re of a certain vintage, you may already be invested in these vehicles. Targeted date funds are built for individuals who have an eye on a retirement date, whether it’s five or fifteen years from now. Each fund will gradually reallocate its assets out of riskier sectors (e.g., equities) and into debt securities (including Treasuries) as the target date approaches. Collectively, retirement funds (and individuals acting on their own) that gradually, systematically, add more Treasuries to their portfolios may continue to keep up demand to absorb the everincreasing supply. So how does this rubber hit the road for Main Street? For starters, demand for U.S. debt helps keep a lid on our Federal deficit by subsidizing interest costs. It probably also keeps community banks’ net interest margins a bit lower than otherwise, even if most banks’ portfolios contain no Treasuries at all. Still, the global need for Treasury bills, notes and bonds may just possibly sync up with our growing deficit, and ultimately be supportive, long-term, of commerce as we know it. Unlike DuBois, the U.S. Treasury doesn’t depend on the kindness of strangers; rather, the global need for safe, liquid debt securities.  BY JIM REBER, PRESIDENT AND CEO, ICBA SECURITIES WORLD-WIDE DEMAND Buyers of U.S. Debt Come in Many Shapes and Sizes Endorsed Partner ICBA Securities/Stifel Virtual Bond School ICBA Securities’ exclusive broker Stifel will teach bond management fundamentals from the convenience of your office on a complimentary basis. The Virtual Bond School takes place on the afternoons of June 13–15. Participants can earn up to nine hours of CPE credit. To register, contact your Stifel rep or Jim Reber. Jim Reber (jreber@icbasecurities.com) is President and CEO of ICBA Securities, ICBA’s institutional, fixedincome broker-dealer for community banks. 6 In Touch

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BY MIKE GILMORE, CHIEF COMPLIANCE OFFICER, RESULTS TECHNOLOGY WINDOWS 11 VS. WINDOWS 10 Should You Make the Switch? RESULTS TECH TALK Endorsed Partner Windows 11 is here, and while it may seem like an enticing upgrade, it is important to consider whether or not your business should make the switch. The new Windows operating system has many similarities to Windows 10, but there have also been some significant changes with this release that could impact your workflow. Here is what you need to know about Windows 11 vs. Windows 10 so that you can make a well-informed decision about whether to switch to Windows 11 or stick with the previous system. What Features Are Included in Windows 10? Released in 2015, Windows 10 is a stable and secure operating system with many features to make computing easier. It includes a virtual assistant, Cortana, that can help you with tasks like searching for files or setting reminders. It also features the Microsoft Edge web browser and integration with cloud storage services such as OneDrive and DropBox. Other major Windows 10 features include: • A Start menu with customizable live tiles • An updated taskbar • A revamped Notification Center • Picture passwords and Windows Hello facial recognition What’s New with Windows 11? Windows 11, released in 2021, is the latest version of the Microsoft operating system. In this system update, Microsoft has made a few changes that could impact how you use the system. 8 In Touch

The interface updates in Windows 11 include: • The Start menu’s Mac-like redesigned look • Widgets for faster access to applications • Better Xbox gaming technology • Teams and Android apps integration The Benefits of Windows 11 vs. Windows 10 Windows 11 includes a number of performance improvements that aim to make this software update faster and more reliable than Windows 10. It also has improved security features and better compatibility with third-party applications. Many like this update because it's a cleaner design overall and includes strong video updates. It also has better integration with mobile devices, so if your business works on multiple platforms, upgrading could be a great move. The Downsides of Upgrading to Windows 11 However, the main issue with upgrading to the newer software version is its incompatibility with older PCs. Some Windows 11 upgrades may not be supported by older hardware, complicating the upgrade process. It can cause applications to crash, slow down the system, and prevent access to certain features. Additionally, some existing applications may not work properly on the new operating system, which could create unexpected problems and require further customization or professional assistance to solve. Many users have reported more issues and bugs using Windows 11 vs. Windows 10. For example, some users have encountered problems with their printers and other hardware not being recognized on the system. Other users are upset that some of their favorite Windows 10 features have been removed in Windows 11. Removed Windows 10 Features In upgrading to Windows 11, some features from the previous version have been removed. For those who rely on these features, this could be a major setback. These removed features include: • Desktop wallpaper sync • Internet Explorer panel • Missing events in Calendar Flyout • Apps like 3D Viewer and OneNote for Windows 10 • Folders of apps and named groups Windows 11 vs. Windows 10: Which Update Is Better? As you consider Windows 11 vs. Windows 10, it's important to understand the implications of making the switch. If your company uses older PCs, you could actually experience more problems than benefits. Additionally, the removal of certain features could require you to change how you use the system and also require you to restructure your workflow. The best way to decide whether or not Windows 11 is the right fit for your business is to consult with a professional who knows the ins and outs of both versions. They can help you evaluate which update makes the most sense for your company's needs and what steps you should take if you choose to switch. Consult RESULTS Technology For Your IT Needs At RESULTS Technology, we can evaluate your current system and help you decide between Windows 11 vs. Windows 10. We have extensive experience working with both versions of the Microsoft operating system and understand the implications of making an upgrade. Our expert IT consultants strive to bridge the gap between business and technology and deliver the best results for our clients. Contact us today at (913) 347-6497 or scan the QR code to fill out the form to learn more about how we can help you make the right choice for your business.  https://www.resultstechnology.com/get-in-touch/ Mike Gilmore is the Chief Compliance Officer of RESULTS Technology and a Certified Information Systems Auditor (CISA) with more than 30 years of experience in the banking industry. RESULTS Technology provides IT services to community banks across the Midwest. In his role as CCO, Mike provides compliance and risk assessments, audit and exam support and policy documentation. He can be reached at mgilmore@resultstechnology.com. Are you ready for growth? Advertise in this magazine and watch your revenue soar. A place where your company gets wings! Contact us today to get your spot. 801.676.9722 | 855.747.4003 sales@thenewslinkgroup.com 9 In Touch

BY DAVID RUFFIN, PRINCIPAL, INTELLICREDIT/QWICKRATE LOAN REVIEW BEST PRACTICES Key to Combatting Credit Risk in Stressful Times Uncertainty seems to be the only constant on the economic horizon these days. Despite benign risk metrics across the country’s credit portfolios, there is an almost industry-wide sentiment that credit stress looms ahead. According to the Risk Management Association (RMA) Annual Community Bank Survey, 84% of community bankers indicated that credit risk was a top concern. One thing we do know is that effective and efficient loan reviews can help you understand your portfolio and identify potential risk exposures. And — more importantly — risk that’s already emerging. It’s this early detection that helps institutions minimize losses. Also encouraging is that automated technology is making it possible to achieve these goals with amazing agility. Now is the time for community banks to move from a sluggish, decades-old loan review process to an approach that will help you proactively identify potential credit weaknesses, gain deep knowledge about the subsegments of your portfolio, learn where the vulnerabilities exist, and act to mitigate risk at the earliest opportunity. It's time to consider credit review approaches that facilitate an expansive range of best practices like the ones outlined below. 1. Trust your reviews to professionals with deep credit experience — not just junior CPAs. Your reviewers should be seasoned experts, skilled in the qualitative and quantitative axioms of credit, with hands-on experience in lending and risk management. Because their experience will drive better reviews and deliverables, it’s a good idea to ask for bios of people assigned to your institution. 2. Confirm your review includes paralegal professionals to conduct separate documentation reviews. With growing evidence of degradation in back-shop support, it is essential that your loan reviews include specialists with technical expertise in regulatory/legal compliance, lending policy adherence, policies, collateral conveyances, servicing rules, etc. — working in tandem with seasoned credit professionals. 3. Insist on smart, informed sampling. Relying solely on random samples and reviewing only the largest credits is insufficient today. To uncover vulnerabilities in specific segments of your portfolio, rely on a selection process that helps you choose very informed samples indicating possible emerging risk. 4. Segregate and differentiate exceptions in documentation, credits and policy. These exception types all have diverse characteristics, and they need to be quantified separately in order to correct the various deviations effectively. 5. Quantify both pre- and cleared exceptions. In the best of times, many loan reviews show almost no bottom-line degradation in loan quality for the portfolio as a whole. But on close examination, you may find significant numbers of technical and credit exceptions indicating that the quality of your lending process itself may need to be tweaked. 6. Understand your own bank’s DNA. In this complex economic environment, it is imperative for institutions to analyze their own idiosyncratic loan data. Arm your loan review team with the ability to automatically drill down into your portfolio and easily examine trends and borrower types — to inform risk gradings, assess industry and concentration risk, etc. Seasoned reviewers will be incredibly valuable in this area. 7. Observe pricing based on risk grades, collateral valuations and loan vintages. Common risk characteristics are shared by loans originating around the same time and credits that tend to migrate as a group. Isolating and analyzing those can answer the important question, “Are you being paid for the risk you’re taking?” 8. Pair loan reviews with companion stress testing. Lately, regulators are encouraging stress tests as a way to learn where risk may be embedded. Companioning the tests with loan reviews is a productive way to gain this knowledge. Start at the portfolio level and do loan-level tests where indicated. 9. Transparently report and clear exceptions in real-time. Benefit from using fintech efficiency to remove huge amounts of time, team meetings and staff intrusions from the traditional approach to reviewing loans. Using an online loan review solution, teams can see exception activities and clearances as they happen. Endorsed Partner 10 In Touch

David Ruffin is Principal of IntelliCredit, a division of QwickRate. He has extensive experience in the financial industry including a long and pronounced emphasis on credit risk in a variety of roles that range from bank lender and senior credit officer to the co-founder of IntelliCredit and its technology that is revolutionizing a decades-old loan review process. For more information, visit intellicredit.com or email info@intellicredit.com. 10. Ensure that reviewers interpret risk grade parameters according to your institution’s definitions. Measures used to qualify credits in the “pass” risk-grade category are specific to your institution. Reviewers should use only this touchstone to interpret pass grade requirements for any credit — without interjecting personal biases. 11. Comply with workout plan requirements prescribed by interagency regulators. Workout plans are typically designed to rehabilitate a troubled credit or to maximize the repayment collected. Regulators now require institutions to examine these plans independently as a standard loan review procedure that reflects a healthy degree of objectivity. 12. Deliver comprehensive management reports and appropriate high-level board reports with public/ peer data. Management should receive prompt and thorough loan review reports and board members should be provided high-level reports with appropriate, but less detailed, information. Public data or analyses of your institution’s performance as compared to peers should accompany reporting. 13. Conduct loan reviews as a highly collaborative and consultative exercise — counter to “just another audit.” An effective loan review is not an internal audit experience. It’s an advisory process, and this approach is extremely important to its ultimate success. Substantive dialogue among participants with differences of opinion is key to favorable outcomes for the institution. 14. Take advantage of a technology platform to automate every possible aspect of the loan review process. Best practices call for the efficiency that comes with automating the loan review process to the maximum extent possible, without sacrificing substance or quality. Today, technology drives the race against loan risk, making early detection of vulnerabilities faster, easier and more complete. In Summary Loan reviews that adhere to industry best practices are critical to an institution’s risk-management strategy and should be regarded as such. It’s a one-two punch: (1) deeply qualified reviewers and (2) automated technology that, when combined, deliver a more efficient, less intrusive loan review process that will help combat the looming credit stress ahead.  11 In Touch

BY TRAVELERS According to the National Safety Council, slips, trips and falls are the third leading cause of injury in the workplace. Some of these incidents occur at banks with employees or customers. While these mishaps might be commonplace, there is a proactive approach banks can take to help reduce the risk of their employees and customers being injured in a slip, trip and fall. A smart place to start: analyze both the physical conditions of the premises and usage and traffic flow patterns, which can often identify potential hazards that should be addressed. Some of the accident causes are well known: wet spots on floors, uneven walking surfaces, and dirty doormats. Other factors, such as poor lighting, might not be as noticeable but can be equally dangerous. “Banks should be aware of the potential for people falling and getting injured and should take steps to ensure the premises are as safe as possible,” said Laura Lundin, Vice President of Financial Institutions P&C at Travelers. “There are many ways to do this — maintain clean floor surfaces, ensure the space is well lit, schedule regular maintenance during low traffic times and conduct periodic walkthroughs to confirm everything looks safe. A little attention can go a long way.” Working with an insurance carrier is also recommended. Insurance providers can work with banks to: • Help identify and assess exposures; • Develop loss control strategies and improvements to minimize the frequency and severity of slip, trip and fall incidents; and • Provide training to help with slip, trip and fall prevention efforts. If an accident does take place, be sure that it is documented and reported. This information can help prevent future incidents and may be essential if a claim is filed against the bank. A standard, printed incident report is helpful in ensuring that all details are recorded. Documenting the details of the incident, collecting the names and a brief statement from the injured party and any witnesses, and even taking photographs of the incident site can help. Slips, trips and falls rarely “just happen.” Implementing effective slip, trip and fall improvements requires the right tools, people and communications. The right insurance carrier can help your slip, trip and fall prevention team define and document the policies, procedures, roles and responsibilities needed to effectively reduce these incidents. They also can help your team develop the tools and communication materials needed to implement this process.  Travelers is committed to managing and mitigating risks and exposures and does so backed by financial stability and a dedicated team — from underwriters to claim professionals — whose mission is to insure and protect a company’s assets. For more information, visit www.travelers.com. Endorsed Partner SLIP, TRIP AND FALL PREVENTION While these mishaps might be commonplace, there is a proactive approach banks can take to help reduce the risk of their employees and customers being injured in a slip, trip and fall. 12 In Touch

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The Community Bankers Association of Kansas is gearing up for its 45th Annual Convention & Tradeshow which will be held July 19–21, 2023. The convention will be at the Overland Park Marriott in Overland Park. You won’t want to miss our entertaining emcee, Patrick Dix. The Education and Convention Committee and CBA Staff have lined up a wide variety of outstanding and inspiring speakers, some of whom include ICBA Chairman-Elect Lucas White and the highly anticipated Traci Brown. CONVENTION 45th Annual TRADESHOW CONNECT. COLLABORATE. ommunity . C JULY 19-21, 2023 OVERLAND PARK MARRIOTT OVERLAND PARK, KS Photo Courtesy: City of Overland Park 14 In Touch

Explore fresh, innovative ideas and discuss challenging topics with our guest speakers: • Mark Mayfield • Mike Gilmore • Jim Reber • Ed Sullivan • David Herndon • Manish Nathwani • Traci Brown • Pat Reeder • Lucas White Traci Brown — Fraud-Busting Body Language Expert “Liar Liar Pants on Fire” Traci is the Fraud-Busting Body Language Expert. She’s spent the last 20 years reading people and uncovering secrets hidden in plain sight. She’s trusted by the media to reveal the truth in crimes, politics and billion-dollar business deals. Protect your hard-earned profits and catch would-be fraudsters before they can take away everything you’ve worked for. Would you win a game of Two Truths and a Lie? In this fast-paced keynote, you’ll learn how to use Traci’s fraud prevention system to find the liars in today’s headline … and in your own life. You will learn how to use Traci’s 9-Point Fraud Spotting System to separate the lies from the truth, so you don’t innocently step into a business, life, or reputation-destroying event. You’ll walk out knowing how to read fraudsters like a book and keep yourself and your company off the front page for the wrong reasons. Save yourself from financial ruin, defamation, and even jail time. Chairman’s Reception Join us at Topgolf! CBA Chairman Irv Mitchell will host the annual welcome reception for a swingin’ good time! CBA has reserved the Rooftop Terrace for attendees and family to enjoy the informal get-together. Comfortable, exciting … and a little competitive in the most fun sense of the word. Don’t miss the view, the food, the refreshments and the laughs. Desserts and beverages will be available. Start the convention off right with a casual gathering of old friends and new friends you have yet to meet. Sponsored by Bank Compensation Consulting (BCC). Entertainment Night Bring the whole family to this year’s night of good food, good friends and great fun. Join us at Chicken N Pickle, an indoor/outdoor entertainment complex, for a casual, chef-driven restaurant and sports bar that boasts pickleball courts, a variety of yard games, cornhole, ping pong, battleship, bocce and Jenga with enough space to kick back and relax with your favorite people. Gear is provided, but you need to bring your “get up and go” at whatever level you choose! CBA has a reserved section and a pickleball court. Sponsored by SHAZAM, Inc.  15 In Touch

Associate Member BY BILL SHOWALTER, SENIOR CONSULTANT, YOUNG & ASSOCIATES, INC. TISA. Q: We have recently made a change that our online banking logins will expire after 18 months if a customer has not logged in. This may trigger them to begin being assessed paper statement fees, if they sign up for e-statements (there is no cost), as the paper statement fee is determined by an online account being established and maintained. The $3.00 paper statement fee is listed as one of our fees on our fee chart; however, customers don't know that they have to log in every 18 months to keep their online account from expiring and therefore start incurring the paper statement fee. I feel that this should be disclosed in some way, but I'm not sure how best to do it. We can push a message to all online account holders. Would that be acceptable? A: Yes, the bank should have been disclosing this all along on its TISA account disclosures for the account affected because Regulation DD requires the financial institution to disclose both the amount of any fee that may be imposed in connection with the account (or an explanation of how the fee will be determined) and the conditions under which the fee may be imposed. Failing to log in at least every 18 months, in this case, is the condition under which the fee may be imposed. So, the conservative approach would be to send a corrective disclosure to your existing customers disclosing both the fee and the condition (logging on, etc.). Also, you need to make sure the TISA account disclosures for affected accounts include this information for future customers. ECOA. Q: My understanding of when providing an appraisal to an applicant is that if there is an application that has multiple first-lien dwellings, then the appraisal disclosure and appraisals would not need to be given to the customer. This is because Regulation B provides that this requirement applies to an “Application for credit that is to be secured by a first lien on a dwelling.” Am I correct on this issue? A: No, you are not. I find no exception to this requirement for transactions secured by more than one dwelling. As long as there is at least one dwelling with a first lien (mortgage or deed of trust), the requirement to provide a copy of any appraisal/valuation would apply. FCRA/Privacy Q: We recently made several minor changes to our Privacy Notice, but one more significant change under the section "Reasons we can share your personal information." In that section, we changed from stating that “we do NOT share information with our affiliates for their everyday business purposes" to "Yes, we do share." The bank owns 50% of a title agency that we share information with. My question is, do we need to mail the revised privacy notice out to our customers or could we include a statement message letting our customers know where to locate the most recent privacy notice on our website? A: Your question hits on an intersection of two regulations — Regulation V (Fair Credit Reporting) and Regulation P (Privacy). Regulation V lays out the requirements for sharing consumer information among affiliated entities, while Regulation P does the same for sharing consumer information with nonaffiliated entities. They are joined to an extent because Regulation V (and the FCRA itself) allow its opt-out notice to be “coordinated and consolidated” with another similar notice — such as the Regulation P privacy notice. Regulation P explicitly provides for including the Regulation V/FCRA notice as an integral part of its model privacy notice. With that said, Regulation V requires that a bank give a consumer appropriate notice — either in writing or, if the consumer has agreed, electronically — before sharing the consumer’s information with an affiliate so that the affiliate may market to the consumer and give the consumer a reasonable opportunity to opt out of this sharing before the sharing occurs. All of this argues against merely using something like a statement message. There would not be room for the required language — and there is nothing in the rules that explicitly allow merely providing a web address (where the full notice may be accessed) as a substitute for the required notice. The best route would be to send revised privacy notices to affected consumers and provide them with the required opportunity to opt out of the sharing before the sharing with any affiliate commences. Follow-up Q: If there is no option to optout, could we just post the revised privacy notice on our website? Follow-up A: No, the rules require providing it in a manner that ensures that the consumer/customer actually receives it. Generally, it is not considered reasonable to presume that all customers regularly access the bank’s website. TISA. Q: We are going to migrate customers from their current accounts to our new accounts. In the change letter, do we need to state all the negatives such as maintenance fees increasing, a new paper statement fee, no free checks, and no free cashier’s checks? We will be sending the TISA account disclosure with the letter. A: The bank cannot simply rely on customers reading the account disclosures. Regulation DD provides that if a financial institution provides notice Q&A COMPLIANCE 16 In Touch

through revised account disclosures, the changed term must be highlighted in some manner. For example, financial institutions may note that a particular fee has been changed (also specifying the new amount) or use an accompanying letter that refers to the changed term. So, your cover letter will need to point customers to the changes that increase their costs (or reduce their earnings — interest rates). RESPA/TILA/Privacy. Q: We are purchasing a small number of residential loans from another financial institution. We have confirmed that the selling bank will be sending out a Notice of Servicing Transfer Letter. Do we have to send out our own Notice of Servicing Transfer Letter as well? In addition, are there any other required notices that have to be sent to the borrowers — for example, our privacy notice, first payment coupons, etc.? A: Either separate mortgage servicing transfer notices, or one combined notice, may be sent — as long as the proper notice is given in the proper time, as required by Regulation X (RESPA). If the seller is not including your bank’s notice information in its notice, then your bank will have to send its own buyer’s notice. There is also a mortgage transfer notice required by Regulation Z since the bank is acquiring the loan itself, as well as the servicing of those loans. The bank’s privacy notice should also be sent since this is the beginning of these borrowers’ customer relationship with a new-to-them bank. Other notices or documents might be required by your state’s laws, but you need to check with your legal counsel on that issue. CRA/Interstate Branching Q: We have one branch in a neighboring state and the loan-to-deposit ratio for that branch was 33% at the end of 2022. The Section 109 Host State Loan to Deposit Ratio for that state, as of June 30, 2021, is 69%. We are supposed to be lending there at a level that is at least one-half of the Host State Loan to Deposit Ratio for that state. Since we failed this first Section 109 test, we have to show the bank is reasonably trying to help meet the credit needs of the communities served by our interstate branches. First off, is this that big of a deal? Second, should the bank be doing additional advertising, outreach, etc. to try and generate more loans? A: Yes, it is a big deal. The regulators could require the bank to close the interstate branch if both tests are failed: LTD ratio is below the threshold (which you say it is) and the branch is not adequately meeting local credit needs. Determining and documenting the latter is what you need to concentrate on. The FDIC’s examination manual has a section on these requirements (as do the examination manuals from the other regulators). TILA. Q: With rates increasing, our adjustable-rate mortgages (ARM) are coming back into play. Is there a rule regarding how to calculate the annual percentage rate (APR) for ARM loans to use for advertising? We want to advertise our 5/1 ARM, with a fixed rate period APR (for five years). We notice that other banks’ APRs seem to be lower than ours. We want to be sure we are advertising correctly but not scaring folks away with a too-high APR number. A: How to compute the APR for an ARM depends on what type of ARM it is. For a plain vanilla ARM (no initial discount/premium), the lender is required to assume that the initial rate will remain in effect for the loan term (since future changes are not known). This is the method to be used for an ARM with an initial fixed-rate period only if that initial rate is computed using the same formula (e.g., index plus margin) that will be used for future rate changes. For an ARM with an initial discounted/ premium rate, the lender is required to compute a composite APR based on the initial rate for the time it is to be in effect and the rate for the remaining loan term once the discount/premium goes away (which might take more than one rate change to accomplish depending on the magnitude of the initial discount/premium amount compared to any periodic rate change caps).  Young & Associates provides banks and thrifts with support for their compliance programs, independent reviews, and inbank training, as well as a full menu of management consulting, loan review, IT consulting, and policy systems. 17 In Touch

SECURE 2.0 OFFERS NEW TYPE OF EMERGENCY SAVINGS ACCOUNT BY LISA HABERMAN, ED.D., CHFC®, CLU®, ASCENSUS The recent passage of SECURE 2.0 has generated dozens of new provisions that affect virtually all types of retirement plans, with the intent of helping employees increase their retirement savings. Many new provisions also provide opportunities to access retirement nest eggs to offset unexpected expenses — including pension-linked emergency savings accounts (PLESAs). Effective for 2024 and later plan years, employers may permit participants who are considered non-highly compensated employees to contribute up to $2,500 (indexed), or less if dictated by the plan, to a PLESA as part of their 401(k), 403(b), or governmental 457(b) plan. Requirements Congress outlines specific requirements for PLESAs in Section 127 of SECURE 2.0. First, a PLESA cannot have a minimum contribution or account balance requirement. In addition, assets must be held in cash, an interest-bearing account, or in an investment offered by a state or federally-regulated financial organization that is designed to maintain the value of the contributions and provide a reasonable rate of return consistent with the liquidity needs of the account. PLESAs may also be subject to reasonable restrictions. Participants must be allowed to take distributions from their PLESA at least once each calendar month and processed as soon as practicable at no cost to the participant for the first four withdrawals during any plan year. However, a participant may be charged a reasonable fee for any subsequent withdrawals. Contributions Participants will either affirmatively elect or be automatically enrolled to make designated Roth contributions to a PLESA. The automatic enrollment feature will be capped at a maximum of 3%. The plan sponsor may also elect an automatic increase feature, with increases occurring no more frequently than annually. If a participant contributes to a PLESA and the employer makes matching contributions to the plan, the employer must match the participant’s contribution to the PLESA at the same rate as if the participant were making an elective pretax or Roth deferral; but the employer matching contribution will be made to the participant’s account in the plan that is not a PLESA. For purposes of matching contribution limits under the plan, matching contributions will first be attributable to elective deferrals rather than PLESA deferrals. Matching contributions on PLESA deferrals are limited to the maximum account PLESA account balance of $2,500 (or a lesser amount permitted under the plan). Once a participant has reached the limit, an employer may need to stop matching on the participant’s PLESA deferrals but continue to match on the participant’s non-PLESA deferrals. Excess PLESA Contributions Employers have three options to manage excess PLESA contributions: • Have participants elect to increase contributions to their designated Roth accounts; • Use a “deemed election” to increase contributions to participants’ designated Roth accounts; or • Do not accept the excess contribution. Distributions All PLESA distributions are considered “qualified” distributions for purposes of the Roth basis recovery rules and the PLESA is considered a separate 18 In Touch

account for these rules. If a participant separates from service or a PLESA feature is terminated, distributions will be considered eligible rollover distributions but are not subject to mandatory 20% withholding. In addition, no direct rollover option needs to be given and the participant is not required to receive a 402(f) statement. An employer may terminate the PLESA feature and, upon termination, allow participants to transfer amounts in the PLESA to their designated Roth account within the plan or receive the amounts personally. If the latter, payment must be made to participants within a reasonable period of time. If a participant has excess deferrals that are distributed from the plan, the employer must distribute PLESA deferrals first and apply those to the correction of the excess. Disclosures Similar to other retirement plan features, employers that allow PLESAs will be required to provide a notice to participants describing the PLESA rules 30–90 days before the first contribution or the date of any change in contribution rates and at least annually in future years. The notice must include the participant’s balance and the amount or percentage contributed to the account. The PLESA notice may generally be combined with other notices (e.g., safe harbor notices). IRS Guidance As part of the SECURE 2.0 legislation, the IRS is required to issue regulations by the end of 2023 to address remedies employers have to prevent abuse by participants. For example, a participant may make PLESA contributions only to receive a matching contribution before withdrawing the account balance and repeating the cycle to receive a free matching contribution. This issue and others will be monitored by the government before issuing a summary report after seven years.  Lisa Haberman is an analyst with the ERISA Department at Ascensus. She brings 30 years of experience within the insurance and financial industries to her role at Ascensus. Her previous experience includes a variety of roles with a national insurance provider, regional financial advisory firm, and community banking institutions. Ascensus helps people save for what matters — retirement, education, and healthcare. With more than 40 years of experience, it offers tailored solutions that meet the needs of financial institutions, state governments, financial advisors, employers, and individuals. Ascensus supports more than 157,000 retirement plans, more than 6.5 million 529 education savings accounts, and a growing number of ABLE savings accounts. As of Dec. 31, 2022, Ascensus had more than $700 billion in total assets under administration. For more information about Ascensus, visit www.ascensus.com. 19 In Touch

THE TRUST COMPANY OF KANSAS (TCK) IS PLEASED TO ANNOUNCE the Addition of Four Individuals to its Team 1 2 3 4 1 2 3 4 Rebecca Burch — Trust Administrator. Her background includes administrative experience in both RIA and bankruptcy trustee/attorney offices. She will be a great addition to our team as a receptionist and ongoing administrative support to all TCK account officers. Ricky Jacques — Trust Operations Specialist. He will assist with recurring tax-related projects and take on a variety of responsibilities focused on the execution of our clients’ financial goals. Ashley Spaar — Trust Administrator. She has served as an administrative assistant for an estate planning attorney. Ashley will assist Vice President and Trust Officers Teresa Akers and Jennifer Moore on the day-to-day administration of their client relationships in our Lawrence market. Erin Williams — Trust Administrator. She has a background in the pharmaceutical industry and is looking forward to helping clients in a different capacity. She will work closely with Senior Vice President and Trust Officer Daniel Brogren on the day-to-day administration of his client relationships in the Topeka area.  20 In Touch

FMSI www.fmsiconsulting.com 913.955.3355 FMSI is a small business founded and located in Kansas, specializing in assisting community banks to succeed, a mission consistent with core CBA values. We have partnered with community banks for nearly 25-years providing core advisory services including asset/ liability, investment, and liquidity management. FMSI advisors actively assess market conditions and bank balance sheets of different size, mix, and capital levels. Market conditions are constantly changing presenting opportunities and challenges for CBA member banks. Interest rates are increasing for the first time in nearly a decade and now is a perfect time to partner with a trusted, industry leader. Establishing an FMSI relationship provides confidence your bank is optimizing the balance sheet, deploying necessary strategies, maximizing profitability, and managing balance sheet risks. FMSI is a Kansas CBA Endorsed Provider 21 In Touch

ANNIVERSARIES Congratulations to the banks celebrating May and June anniversaries as chartered institutions! May 147 years, est. 1876 First National Bank of Hutchinson — Hutchinson 137 years, est. 1886 Citizens Bank of Kansas — Kingman 134 years, est. 1889 State Bank of Bern — Bern 128 years, est. 1895 State Bank of Canton — Canton 123 years, est. 1900 Citizens State Bank & Trust Co. — Ellsworth 122 years, est. 1901 Bison State Bank — Bison 122 years, est. 1901 Union State Bank — Uniontown 118 years, est. 1905 Kanza Bank — Kingman 100 years, est. 1923 First National Bank — Hope 33 years, est. 1990 The Trust Company of Kansas — Wichita June 126 years, est. 1897 Outdoor Bank — Manhattan 122 years, est. 1901 Union State Bank — Clay Center 121 years, est. 1902 KansasLand Bank — Quinter 114 years, est. 1909 Farmers State Bank — McPherson 112 years, est. 1911 Astra Bank — Scandia Mortgage Investment Services Corporation 22316 Midland Drive • Shawnee, KS • 66226 • 913-390-1010 NMLS# 194708 • A Kansas licensed mortgage company #MC 0001182 Missouri Residential Mortgage Loan Broker Licence # 10-1912 Oklahome Mortgage Broker #MB001953 Colorado License #100044344 Nebraska Licensed Mortgage Company NMLS#194708 20+ Years! Depend On Us! For 20 years, community banks in the Midwest have depended on MISC’s expert mortgage services for their customers. • Free Loan Officer Training & Webinars •Offer all secondary market loan programs: VA, FHA, USDA/RD, Conventional & Jumbo •Earn more fee income with less risk Call or email today. Let’s discuss how MISC can help you! Joan Emas, Account Executive Andrew Holtgraves, Sr. Vice President Cell: 816-810-8878 Cell: 913-558-2555 Email: Joan@MISCHomeLoans.com Email: Andrew@MISCHomeLoans.com NMLS: #276932 22 In Touch

BANK TRAINING WEBINARS x www.fin-ed.info/cbak www.fin-ed.info/cbak 6- J un 7 - J un 8- J un 12- J un 13- J un 15- J un 20- J un 21 - J un 22- J un 26- J un 27 - J un 28- J un 29- J un Compliance Management Systems Branch Managers & Head Tellers: Managing the Critical Aspects Creating a Seamless Accountholder Experience: Culture, Service, Retention Section 1071: Developing a Data Collection Process Under the Final Rules Top 10 Hot Spots on Compliance Exams Advertising Compliance: Web, Text, Print, TV & Radio Intermediate Collector: Refining Collections Skills FFIEC Cybersecurity Assessments: Recent Findings & Recommendations Nonperforming Employees: Managing & Documenting Recent Overdraft Cases Before the CFPB Consumer Real Estate Appraisal Reviews Reg CC Update, Review, RDC & Reg D Handling Consumer Complaints & Disputes Fairly & Accurately 6- J u l 6- J u l 11 - J u l 12- J u l 13- Ju l 13- J u l 18- J u l 18- J u l 20- J u l 20- J u l 25- J u l 26- J u l 27 - J u l 31 - J u l Powers of Attorney & Deposit Accounts: Variations, Permissions, Red Flags, Multiple Signers Accounting Foundations for Lenders Strategic Planning for Community Banks Handling Trusts & Other Fiduciary Accounts Website Compliance: Best Practices & Common Issues Successful Skip Tracing Techniques for Locating Borrowers & Recovering Collateral Call Report Preparation: Avoiding Common Errors Unpacking Adverse Action Requirements BSA Overview for Non-Transactional & Support Staff Treasury Management: A Powerful Tool to Increase Deposits & Fee Income Proven Steps to Successful Business Development: Prospects, Scripts, Overcoming Objections & Measuring Performance New Rules Impacting 7a Lending & SBA Update OFAC & Reg E Compliance with FedNow & RTP Payments Opening Nonprofit Accounts Compliantly 23 In Touch

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