Regulatory Risk Issue(s)

The privacy provisions of the Gramm-Leach Bliley Act will require every bank to disclose its policies for sharing non public, personal information about customers with both affiliated and non affiliated third parties. The act also generally permits consumers to prohibit disclosure of such information to non-affiliated third parties, except what is allowed by the law.

Major Policy Elements:

• Customer Expectations
• Customer Benefits of Information Management Practices
• Maintenance of Accurate Information
• Limitations on Employee Access to Information
• Protection of Information
• Restrictions on the Disclosure of Account Information
• Providing Privacy Information to customers and responding to Inquiries

Introduction:

At First State Bank, our mission is to meet the desires of our customers. As financial services professionals entrusted with sensitive information, we respect the privacy of our customers and are committed to treating customer's information responsibly. Our Customer Information Privacy Principles serve as standards for all First State Bank employees for collection, use, retention and security of individual customer information.

Customer Expectations:

At First State Bank, we believe the confidentiality and protection of customer's information is one of our fundamental responsibilities. And while information is critical to providing quality service, we recognize that one of the most important assets is our customer's trust. Thus, the safekeeping of customer information is a priority of First State Bank.

Customer Benefits of Information Management Practices:

Information about consumers is accumulated from a variety of sources. Some information is provided to First State Bank directly by the customers themselves. Other data is developed by First State Bank as a function of providing a product or service to a customer. We limit the use and/or collection of information about our customers to that which is necessary to administer our business, provide superior customer service and service customer's account(s). We will use information to help identify and mitigate risk or loss to First State Bank. We do not disclose any non-public information about our customers to anyone, except as permitted by law.

Maintenance of Accurate Information:

We continually strive to maintain complete and accurate information about our customers and their accounts. Should a customer ever believe that our records contain inaccurate or incomplete information, they are to notify us. We will investigate and correct any inaccuracies.

Limitations on Employee Access to Information:

Each First State Bank employee is required to follow our Code of Conduct, which states that all customer information is considered private and privileged, and it to be used solely for the purpose of providing the customer with the finest service available.

Protection of Information:

First State Bank is committed to the security of our customer's financial and personal information. All of our operational and data processing systems are in a secure environment that protects account information from being accessed by third parties. We maintain and grant access to customer's information only in accordance with our internal security standards.

Restrictions on the Disclosure of Account Information:

It is the Bank's policy not to reveal specific information about customer's accounts or disclose non-public personal information about our customers to third parties except as permitted by law. We may disclose non-public personal information about our customers to assist us in servicing the customer's account, the customer has permitted us to share the information, to government entities in response to subpoenas and to credit bureaus.

Providing Privacy Information to Customers and Responding to Inquires:

At First State Bank, we value our customer relationships. We want our customers to understand how we use the information they provide us and our commitment to ensuring their privacy. We will notify our customers at least once annually of our Privacy Policy through either a statement insert or an individual letter.