Correspondent Banking Products & Services

SERVICE BEYOND COMPARISON

Correspondent Banking Products & Services

One of the strongest capitalized bankers banks in the nation, FNBB offers solutions for success.

SERVICE BEYOND COMPARISONbankers-bank.com

800.421.6182MEMBER FDIC

| 1 |

First National Bankers Bankshares, Inc. (FNBB, Inc.) was founded in 1983 to offer financial

services to community banks. The following year correspondent services were offered with

the opening of First National Bankers Bank (FNBB). Today, FNBB, Inc. and its subsidiaries,

FNBB, FNBB Capital Markets, LLC, FNBB Insurance Agency, LLC and FNBB Services Corp.

serve community banks throughout the Eastern United States.

Traditional and Specialized ServicesFNBB offers an array of traditional and specialized correspondent banking services

that help banks reduce costs and streamline back-office processes. Specialized services

include audit and compliance, loan review, bank-owned life insurance, retirement

benefit plans and insurance products. Our banking professionals are empowered

to make decisions, using first-hand knowledge and experience to deliver the right

solutions critical to the success of the community banks we serve.

Investing in Technology, Adapting to ChangeFNBB provides value to community banks through our continuous investments in

technology and programs that deliver an ever expanding range of services. Continually

adapting to changes in the banking industry, FNBB helps community banks maximize

opportunities, minimize risk and comply with regulations.

Strength, Stability, ServiceBy carrying out its mission, FNBB strengthens its customers’ capabilities and helps

them to remain the financial cornerstones of their communities. Our customers know

FNBB as a stable ally that is in the correspondent banking business for the long term.

With service beyond comparison, we are committed partners, never competing for the

business that is so vital to your growth and success. We invite you to learn more about

our products and services and see how we can help your bank achieve its goals.

A trusted partner,

FNBB provides

effective tools to help

community banks build

efficiencies, maintain

competitiveness and

offer their customers

a broader range of

services and products.

| 2 | SERVICE BEYOND COMPARISON

Always your ally.Never your competition.

First National Bankers Bank

FNBB Capital Markets ...................................................................................................................................................................... 4

Asset Liability Management....................................................................................................................................................... 6

Lending Services ................................................................................................................................................................................ 7

Operations Services ......................................................................................................................................................................... 8

NetLink Exchange/WIN ............................................................................................................................................................... 10

International Services .................................................................................................................................................................. 11

Compliance Services .................................................................................................................................................................... 12

Loan Review ........................................................................................................................................................................................ 14

FNBB Capital Markets, LLC

Corporate Retirement Plans .................................................................................................................................................... 16

Bank-owned Life Insurance ..................................................................................................................................................... 17

FNBB Insurance Agency, LLC

Insurance Products & Services ............................................................................................................................................... 18

FNBB Services Corp.

Audit Services .................................................................................................................................................................................... 19

FNBB Partners

Strategic Alliances .......................................................................................................................................................................... 20

| 3 |


FNBB offers a full suite of investment services designed especially for community banks.

With proven experience, commitment to service and the latest technology FNBB brings

large efficiencies to portfolios of all sizes and provides the tools needed to manage

investments and streamline processes.

FNBB Capital Markets

Investment Services

Investment SalesFNBB Capital Markets offers a fixed income bank/dealer desk equipped to meet all of your investment needs. Our experienced registered representatives have access to all of the major markets and primary dealers ensuring the best execution on all of your trades. We work exclusively for you and offer unbiased pricing, information and recommendations. Our services in this area include, but are not limited to, portfolio strategies and analysis, CD placement and purchasing.

Portfolio AccountingFNBB is committed to quality customer service and provides cost-effective portfolio accounting using the latest technology. Our comprehensive service provides rapid and accurate information regarding your bank’s portfolio accounting along with:

• Secure online access

• Personal attention

• Independent pricing valuation

• Data extracts to spreadsheets and other programs

• The latest business intelligence dashboard that provides visual portfolio management tools to enhance the value of the accounting data

SafekeepingFNBB is an approved custodian for most of the states in our market area as well as many other municipal depositors. Our comprehensive safekeeping service provides rapid and accurate information related to your bank’s securities with:

• Data extract to spreadsheets and other programs

• Secure custody of securities

• Smooth on-boarding processes

• Timely, accurate payment and reporting

FNBB offers

unparalleled

personal attention

to help you achieve

your short-term

and long-term

investment goals.

| 5 |

Cash SweepYour customers with high DDA balances are looking for interest on their excess balances. Our Cash Sweep solution, through Invesco Money Market Mutual Funds, offers multiple investment options giving your customers competitive money market rates, safety and liquidity. You retain the customer relationship.

DIVER AnalyticsUnder the Dodd-Frank Wall Street Reform Act, Section 939A, banks are required to analyze risks associated with the securities they currently possess and may purchase going forward. Banks must also meet due diligence requirements and conduct periodic and ongoing reviews of the quality and creditworthiness of the municipal bond investments held in their portfolio.

DIVER Analytics is a cost efficient analytics tool for municipal bond evaluation providing a thorough research and robust screening platform for municipal bond management. A continuous disclosure management service is available through DIVER, which provides email notification of any regulatory or financial filings by the issuer (EMMA Alerts).

• Accesses, screens and consolidates data from multiple sources

• Compares data sets for six significant drivers to establish thresholds

• Generates timely financial data on all CUSIPS in a clear and concise format

• Highlights areas or issues of concern and supplies supplementary information for further review and analysis


Asset Liability Management

ALM allows you to:

• Measure risk from both accounting and economic perspectives

• Project cash flows, earnings, re-investments and present values based on assumptions you provide

• Produce a budget database using detail-level data

• Store historical data to allow for various trend analyses

• Model embedded options such as principal payments, decay rates, caps, floors and reset frequencies

ALM offers:

• Instrument level forecasting

• Monthly or quarterly reporting

• Annual Statement of Certification on its model and processes

• Annual back-testing

• Custom reporting and what-if scenarios

• ALM education through seminars and workshops either on-site or via WebEx

• Parallel and non-parallel shocks

• Static and dynamic balance sheet modeling

• Assistance in providing reasonable new-business assumptions

• Integration with Microsoft© Excel as well as Portfolio Accounting

FNBB emphasizes

ALM education

through seminars,

workshops and

consultations with

individuals, ALCOs and

Boards of Directors.

FNBB delivers the power of the FIS Ambit Asset Liability Management (ALM) platform

to provide complete multi-dimensional analysis of the balance sheet, incorporating

interest rate risk, income simulation and market valuation using deterministic modeling.

Using this flexible, scalable component-based architecture and an object-oriented

modeling environment, our ALM team helps financial institutions effectively measure

and manage risk, forecast balance sheet performance, meet regulatory requirements

and make critical business decisions.

| 7 |

Lending Services

Loan ParticipationsWe help banks with lending limit constraints, liquidity needs and portfolio diversification through our loan participation services. FNBB can assist you with any legal or in-house lending limit concerns you may face with your customers. Our goal is to help you retain your depositor relationships and make you more competitive through our timely response to every participation request.

Bank Stock FinancingFNBB offers stock financing options to assist banks with their financing for capital needs, growth strategies and mergers or acquisitions. We provide stock financing to individuals or holding companies for refinancing of existing debit, ESOP and KSOP loans, purchasing control or minority stock in financial institutions and capitalization of de novo institutions.

Loans to Executive Officers and DirectorsAs a special courtesy we offer loans to Executive Officers and the Boards of Directors of our shareholder banks and customers. Regulation O considerations make our secure lending service a valuable option.

Federal Funds Lines of CreditFNBB assists in managing overnight liquidity needs by providing federal funds lines of credit on a secured or unsecured basis. Line amounts are determined through our analysis of bank performance and financial condition as of the most recent call report period. We annually review our approved fed funds line amounts for each customer bank. Each line is renewed or adjusted based on an approved percentage of the bank’s unencumbered capital.

As our customer,

shareholder and

colleague, we are

here to assist you

with all of your

lending needs.

FNBB is a strong partner in providing assistance with loan participations, direct loans

and holding company financing. Our Loan Division is composed of seasoned credit

and lending professionals with years of experience in a variety of industries. We provide

secondary reviews to credit requests, applying independent, sound credit principles in

our underwriting process to ensure solid credit quality, flexible and competitive pricing,

personalized attention and answers in a timely manner. Our business model assures

that we will never call on your customers or compete with you for their business.


FNBB’s Cash Management services streamline back-office processes saving time, reducing

expenses and maximizing earnings. NetLink, our web-based banking platform, helps manage

cash flow and features real-time access to account information throughout the day. FNBB’s

NetLink Exchange/WIN facilitates a cost-effective image cash letter clearing and settlement

service for community banks.

Operations Services

Cash ManagementWith FNBB’s Cash Management services you can efficiently manage back-office operations, simplify overnight fed funds investments and better meet the liquidity needs of your bank.

Services include:

• Automated settlement

• Daily and monthly account statements

• End-of-Day Sweep program

• Federal Funds reports and settlement

• Agency Fed Funds

• Principal Fed Funds

• Excess balance account

• Online account access

Experienced,

knowledgeable FNBB

professionals are

always available to

answer questions

to help you grow

your business.

| 9 |

NetLinkThe NetLink portal offers secure and instant access to account information, transactions and reports in a real-time environment. Using reliable, efficient technologies, NetLink allows your bank to control users’ access and responsibilities within the system.

NetLink offers:

• ACH services

• File receipt

• Origination

• Returns and notifications of change

• Audit tracking and reporting

• Check adjustments

• Coin and currency transactions

• FRB transactions

• Large dollar return notifications

• MoneyGram settlement wires

• Statements and reports

• Wire transfers


FNBB’s image cash letter clearing and settlement service provides community banks with

clearing efficiencies while reducing operational costs. Our investments in technology and

partner bank relationships provide access to local, regional and national bank items.

Through the least cost routing method, participants have preferred pricing on designated

endpoints and can exchange WIN (Within Network) items drawn on other community

banks in our network at no cost.

NetLink Exchange/WIN

Features include:

• Secure network access through the NetLink portal

• Processor independence allowing all banks to participate in the exchange

• 100% availability

• Efficient reconcilement process

• Implementation and training provided by dedicated Electronic Products Specialists

• After hours support

• ECCHO membership providing rules for settlement, adjustments and additional check warranties

Education and Training

• On-site and online education seminars and workshops

• Check adjustment training

• NCP exam preparation

• Current industry topics

• Monthly newsletter

• NCP and AAP certified staff

Investments in

technology allow

FNBB to deliver an

ever-expanding range

of services giving

you a competitive

advantage.

| 11 |

International Services

Foreign currency drafts are issued in all major currencies, payable to the entity provided by you or your customer.

Foreign currency purchases and sales can be made for your customers quickly and conveniently in all major currencies. To expedite the process delivery can be made to your specified branch location.

Foreign item collection ensures final payment of foreign checks in either U.S. dollars or foreign currency in a timely manner.

Foreign cash letters are processed for checks in either U.S. dollars or foreign currency and made payable to you or your customers with provisional credit provided after the check has been received and processed by FNBB.

International wire transfers can be sent in either U.S. dollars or foreign currency. The system provides an audit trail by allowing you to view previously sent wires. It also saves wires as templates for recurring transactions.

In today’s

expanding global

market FNBB

provides secure,

efficient, cost-

effective solutions

that allow you to

manage all forms

of international

payments.

FNBB provides a cost-effective payment solution that allows community banks to stay

competitive and compliant. Our systems offer multi-user access and approval, customized

reporting and online notifications. FNBB is a SWIFT member offering a secure, fast and

efficient method for receiving international wire transfers. Incoming wire advices are

delivered online with same-day credit. Below are just some of the ways these services

provide a competitive advantage.


The professionals in the FNBB Compliance Services Division have both regulatory and industry

experience in compliance management, consulting, audit, lending and examinations.

They hold the highest levels of compliance credentials as Certified Regulatory Compliance

Managers and Certified Anti-Money Laundering Specialists. Our auditors provide objective,

independent evaluations to determine the adequacy and effectiveness of internal BSA/AML

programs, fair lending programs and overall consumer regulatory compliance.

Compliance Services

Compliance AuditsComprehensive compliance audit engagements include:

• Evaluation of your existing program

• Help in understanding issues, with corrective options and on-site, one-on-one training when deficiencies are identified

• Reports for management and board with detailed scope, findings, recommendations and work papers

• Best-practice advice and recommendations shared during the course of work and in an exit meeting with your Compliance Management team

The work includes:

• Review of random file samples based on the compliance audit areas

• Inspection of internal documents related to regulatory requirements

• Evaluation of policies, procedures and bank documents

• Consultation in areas of concern based on interpretation of rules, best-practices and regulatory requirements

• Written reports including recommendations to achieve compliance with laws and regulations

• A documentation file for review by management or examiners

FNBB experts

help your bank’s

compliance and

Bank Secrecy Act/

Anti-Money Laundering

programs hold up to

today’s regulatory

scrutiny.

| 13 |

Compliance Training and MentoringFNBB compliance meetings bring together compliance and BSA staff from throughout the region quarterly or semi-annually, to provide training and share information on a variety of compliance subjects and hot topics. In addition, we offer training on most regulatory topics. Customized, on-site, one-on-one mentoring for new compliance or BSA officers helps them identify and prioritize daily activities, provides them tools to be effective and gets them off to a good start.

Compliance CenterThe subscription service from FNBB’s Compliance Division helps community banks stay up-to-date on current issues and regulations and offers input by regulatory and legal experts as needed.

Included with the subscription are:

• Online bulletin board forums

• Priority responses by telephone regarding compliance questions

• Free monthly teleconference meetings regarding regulations

• Discounts on all of our compliance seminars and meetings


Implemented from a lender’s perspective and by bankers knowledgeable in credit practices

and risk management, FNBB performs independent analysis of loan portfolios. This includes

reviews of financial, collateral and other relevant credit file documentation, assessment of

the underwriting and performance of loans, and determination of the effectiveness of credit

risk management practices relative to a bank’s risk profile. The primary goal of our review

is to keep management and boards informed about the quality of and risks inherent to the

portfolio. In addition, we assess the effectiveness of credit risk management processes.

Loan Review

We deliver:

• Comprehensive written loan reviews along with detailed relationship reports and work papers

• Post-review meetings with management and, if requested, with your board audit committee

You set the scope:The scope of loan relationships to be reviewed is set by you and determines the number of credits in the loan sample. We offer a review of this customized sample to meet your specific needs and expectations, to include:

• Relationships above a minimum dollar amount set by you

• A smaller loan sample, which you determine, made by individual loan officers

• Classified, past-due and restructured loans

• Any other specific credits

Executive reports include:

• Scope and major findings of the review and our recommendations

• Purpose and methods used, including assignment of credit risk ratings and determination of collateral values

• Loan portfolio quality based on strengths and weaknesses in documentation, underwriting, lending practices and performance of the portfolio

• CRE and other credit concentrations based on Call Report data

• Historical data and peer group comparisons

FNBB experts

customize loan

reviews to meet your

specific needs and

expectations.

| 15 |

Numerical reports include:

• Summary data on internal loan classifications, loan types, watch lists and classified credits

• Loan loss and watch list reserve estimates based on risk codes and loan types

• Exception reports for credit and collateral documentation and credit policy

Work papers include detailed relationship reports:

• Note and collateral information

• Loan risk ratings

• Financial data on guarantors

• Comments regarding specific credit strengths and weaknesses

• Comments supporting the assigned risk rating


FNBB Capital Markets, LLC provides retirement plans and Bank-owned Life Insurance (BOLI)

products to community banks. Our experienced investment and insurance professionals

assess your current benefits plan and offer structure and investment alternatives to counter

rising human resource expenses while assuring employee benefits options and diversified

portfolio holdings.

Corporate Retirement Plans

Retirement Benefit PlansFNBB Capital Markets, LLC can help maximize your return on investments by tailoring a plan that addresses the specific needs of your organization. We assist in making the right choice of retirement plans, investment options and administrative options. Along with your key personnel, we assess current plan conditions and determine the future direction of the plan based on fiduciary risk and liability mitigation.

At eligibility and on an ongoing basis we thoroughly educate employees regarding plan provisions, investment diversification, investment offerings and technology tools.

Our TeamThe FNBB Capital Markets, LLC support team is composed of experienced professionals in the investment, retirement and ERISA compliance arenas. Our representatives are registered Series 7 and Series 63 officers who provide professional, personalized service.

Staying SafeFNBB Capital Markets, LLC works closely with 401(k) committees or executive management to protect them from liability by providing:

• Ongoing participant education

• Fund research and due diligence

• Recordkeeping and administration

Our expertise

and support

combined with

the highest

quality service

is a winning

solution for you,

your staff and

organization.

Investment Services

| 17 |

Bank-owned Life Insurance

Bank-owned Life InsuranceBank-owned Life Insurance (BOLI) is a long-term asset that when properly implemented and administered offers a highly rated investment option. BOLI is used as a tax-efficient method for offsetting the cost of employee benefits programs.

Why do banks purchase BOLI?

• Tax-favored returns may exceed after-tax returns of more traditional bank investments

• Cash values grow tax-deferred (tax-free if held until death)

• Gains can be efficiently generated to offset costs associated with employee benefits programs

• Insurance protects the bank from unexpected loss of valuable executives

• Products are institutionally priced and designed specifically for financial buyers

• Products are generally accretive to earnings immediately

• Risks are within standard business risks in the bank’s investment portfolio

• Guidance by regulatory authorities on permissible usage is well-defined

• There are no surrender charges

• Investment portfolios are diversified

• ROE and ROA are able to increase immediately

The interagency Statement on the Purchase and Risk Management of Life Insurance (OCC 2004-56) provides general guidance for banks and savings associations regarding supervisory expectations for the purchase and risk management for entering into a BOLI contract. FNBB Capital Markets, LLC is an experienced BOLI provider and has the tools and capabilities to help you meet these requirements.

FNBB Capital Markets, LLC is a Member of FINRA and SIPC. Not FDIC insured and not guaranteed by this bank.

FNBB Insurance Agency, LLC assists in making sound insurance and risk-management

buying decisions that address today’s threats including fraud, forgery, embezzlement,

employee dishonesty, high-tech crimes and more, reducing potential financial losses

for community banks and their shareholders. As a member of Community Financial

Insurance Center, LLC (CFIC) we have access to carriers specializing in insurance and

bonding products for financial institutions worldwide. We review current policies,

assess risks and exposures, and determine what coverage is necessary to meet each

bank’s individual needs.

Insurance Products &

Services


FNBB Insurance Agency, LLC

Coverage includes:

• Property and casualty

• Fidelity

• D&O and professional liability

• Cyber

• Specialty

Insurance ReviewsWe review and help you understand your current insurance policies purchased through any agent. We then prepare a report of our findings, including a summary of your existing program, peer comparison and recommended improvements.

ConsultingTo protect the assets of your institution we offer a comprehensive review of your basic operating procedures in the areas where property and casualty, fidelity, management liability and other insurance coverage may assist in reducing or transferring the burden of financial harm.

Risk EngineeringInnovative, practical and cost-effective solutions to loss control problems are prepared in conjunction with your insurance center.

Education Seminars, Workshops and WebinarsWe offer opportunities to stay informed and exchange ideas and experiences that help everyone.

ClaimsOur client service representatives offer complete care so every detail is addressed and all of your questions are answered. We help you work with the carrier if additional information is required.

Our expertise at

providing insurance

solutions for the

exposures and risks

associated with

your business is

unmatched.

Note: Insurance products are not insured by any federal government agency. Not a deposit. Not FDIC insured and not guaranteed by this bank.

| 19 |

Audit Services

Audit Services

FNBB Services Corp.

Internal AuditWe provide assistance conducting internal audits, evaluating internal control systems and meeting internal audit regulatory requirements in agreed upon procedures engagements. We can either manage or supplement your internal audit function.

Information Systems AuditWe offer the latest assessment methodologies and technology tools to identify problem areas, better understand and thoroughly manage risks to your bank.

Specialized AuditsSpecialized services include asset liability management reviews, retail non-deposit investment sales audits, Regulation 9 trust audits and more.

Financial and Internal Control Audits

• Deposits • Item processing and RDC • Loan operations

• Wire transfers • Due from bank • ACH (NACHA rules compliance)

• Investments

IT Audits

• Information technology reviews

• Vulnerability scanning

Services include:

• Review of current policies and procedures

• Testing of key internal controls

• Coordination with independent CPAs and regulatory authorities

• Reports to management and board of findings and recommendations

• Risk-based audits

FNBB helps you

maintain a strong

internal control

system by providing

an independent and

effective internal

audit function.

Note: FNBB Services Corp. employs CPAs, but the corporation is not a CPA firm and does not engage in the practice of public accountancy. The company provides agreed upon internal audit procedures and IT audit procedures.

FNBB Services Corp. offers a comprehensive selection of internal and information

systems audit services designed specifically for community banks. Our experienced,

certified auditors specialize exclusively in financial institution audits and can

design customized plans to fit specific needs and risk tolerance. In today’s regulatory

environment, authorities encourage independent audits to determine the adequacy

and effectiveness of an organization’s system of internal controls and the quality of

its performance. FNBB is an invaluable resource in helping financial institutions

meet and exceed expectations.


Through a network of reliable, strategic alliances FNBB offers an extended menu of

products and services including credit cards, merchant processing, data processing,

flood determination, official checks, money orders and more. Our experienced partners

understand the unique needs of community bank shareholders and customers. They

have earned our confidence and proven their commitment to community banking

through superior service and cost-effective products.

Strategic Alliances

Credit CardsInnovative credit card programs designed specifically for community bank consumer and business customers are available. To meet a variety of customer credit requirements and rewards preferences, variations of Platinum credit cards along with World MasterCard® options are offered. These competitive options focus on exceptional customer service, generous revenue sharing, online services and reports and marketing programs.

Data Processing and Information ServicesUsing the latest technology and designed specifically for the strategic environment of community banks these services include data processing, check imaging, document imaging, Internet banking, networking and bookkeeping.

Flood Zone Determination ServicesQuality flood zone determination services are offered to community bank lenders at a reduced cost. Credit reporting, title services and property tax services are also available.

For more detailed

information on

these products and

services, please

contact your Business

Development Officer.

Learn more & experience:


800.421.6182


800.421.6182MEMBER FDIC

Correspondent Banking Products & Services

Correspondent Banking Products & Services

Documents

Transcript of Correspondent Banking Products & Services