This page contains rules which govern your account(s) with us. Please read this notice carefully; if you sign your signature card or continue to maintain your account you agree to these rules, you agree to pay the fees we charge and you give us the right to collect the fees, as earned, directly from the account balance. You will receive a separate schedule of interest rates, qualifying balances, and fees if they are not included elsewhere in this notice. If you have any questions, please call us. Much of our relationship with our depositors is governed by state and federal law (which may change from time to time). This body of law is too large and complex to be reproduced here. The purpose of this notice is to: 1) summarize the existing rules applicable to the more common transactions; 2) establish rules to govern transactions or events which the law does not regulate; 3) establish rules for certain events or transactions which the law already regulates but permits variation by agreement, and 4) give you our funds availability, electronic funds transfer and/or truth-in-savings policy disclosures. We may permit some variations from this standard agreement, but any such variations must be agreed to in writing either on our signature card for the account or in some other written form. As used in this notice the words “we”, “our” and “us” mean the financial institution and the words “you” and “your” mean the account holder(s) and any authorized signer on your account. “Party” means a person who, by the terms of the account, has a great present right, subject to request, to payment from the account other than as a beneficiary or agent.

Liability
Each of you agrees, for yourself (and the person or entity you represent if you sign as a representative of another) to the terms of this account and the schedule of charges that may be imposed. You authorize us to deduct these charges as accrued directly from the account balance. You also agree to pay additional reasonable charges we may impose for services you request which are not contemplated by this agreement. Each of you also agrees to be jointly and severally liable for any account deficit resulting from charges or overdrafts, whether caused by you or another authorized to withdraw from this account, and the costs we incur to collect the deficit including, to the extent permitted by law, our reasonable attorneys’ fees.

Deposits
Any items, other than cash, accepted for deposit (including items drawn “on us”) will be given provisional credit only until collection is final (and actual credit for deposits of, or payable in , foreign currency will be at the exchange rate in effect on final collection in U.S. dollars). We are not responsible for transactions initiated by mail or outside depository until we actually record them. All transactions received after our “daily cut-off time” on a business day we are open, or received on a day in which we are not open for business, will be treated and recorded as if initiated on the next following business day that we are open.

Withdrawals
Unless otherwise clearly indicted to the contrary, any one of you who signs in the space designated for signatures on the signature card, including authorized signer, may withdraw or transfer all or any part of the account balance at any time on forms approved by us. Each of you (until we receive written notice to the contrary) authorizes each other person signing this form to endorse any item payable to you or your order for deposit to this account or any other transaction with us. The fact that we may honor withdrawal requests which overdraw the finally collected account balance does not obligate us to do so, unless required by law. Withdrawals will first be made from collected funds, and we may, unless prohibited by law or our written policy, refuse any withdrawal request against uncollected funds, even if our general practice is to the contrary. We reserve the right to refuse any withdrawal or transfer request which is attempted by any method not specifically permitted, which is for an amount less than any minimum withdrawal requirement, or which exceeds any frequency limitation. Even if we honor a non-conforming request, repeated abuse of the stated limitations (if any) may eventually force us to close this account. We will use the date a transaction is completed by us (as opposed to the day you initiate it) to apply the frequency limitations. On interest-bearing accounts other than time deposits, we reserve the right to require at least seven days’ written notice before any withdrawal or transfer. Withdrawals from a time deposit prior to maturity or prior to the expiration of any notice period may be restricted and may be subject to penalty. See your notice of penalties for early withdrawal.

Ownership of Account and Beneficiary Designation
These rules apply to this account depending on the form of ownership and beneficiary designation, if any, specified on the account records. Single-Party Account - is owned by one person. At death of party, ownership passes as part of party’s estate. Multiple-Party Account Without Right of Survivorship (as tenants in common) - At death of party, deceased party’s ownership passes as part of deceased party’s estate. None of you intend (merely by opening this account) to create any right of survivorship in any other party. We encourage you to agree and tell us in writing the percentage of the deposit contributed by each of you. This information will not, however, affect the “number of signatures” necessary for withdrawal. Multiple-Party Account With Right of Survivorship (joint, and not as tenants in common) - At death of party, ownership passes to surviving parties. If two or more of you survive the deceased party, you will own the balance in the account as joint tenants with the right of survivorship and not as tenants in common. Multiple-Party Account Without Right of Survivorship (Community Property Funds) - Such an account is issued in the name of a husband and wife who intend and agree that any separate property in the account be transmuted (changed) into community property and that all the property in the account, including earnings, be held as community property without right of survivorship. Multiple-Party Account With Right of Survivorship (Community Property Funds) - Such an account is issued in the name of a husband and wife who intend and agree to fund the account with community property and hold the property with the right of survivorship. At death of either spouse, ownership will vest in and belong to the surviving spouse. Pay-On-Death or Revocable Trust Designation - If the account is owned by one person, at death of party, ownership passed to POD (or trust) beneficiaries and is not part of party’s estate. If two or more of you create such an account, you own the account jointly with survivorship. Beneficiaries acquire the right to withdraw only if: (1) all persons creating the account die, and (2) the beneficiary is then living. If two or more beneficiaries are named and survive the death of all persons creating the account, such beneficiaries will own the account in equal shares, without right of survivorship. The person(s) creating either of these account types reserves the right to: (1) change beneficiaries, (2) change account types, and (3) withdraw all or part of the deposit at any time. Organizational Accounts - We will usually require a separate authorization form designating the person permitted and conditions required for withdrawal from any account in the name of a legal entity such as an organization. We will honor such authorization according to its terms until it is amended or terminated in writing by the governing body of such organization. Convenience Accounts - This is a multiple-party account established in the names of the party and a co-signer. The designation of an authorized signer if for your convenience. An authorized signer is someone to whom you give all rights you have now or in the future to make withdrawals and deposits. Merely by designating an authorized signer you do not intend to give any ownership rights to the account.

Stop-Payments
A stop-payment order must be given in the manner required by law, must be received in time to give us a reasonable opportunity to act on it, and must precisely identify the number, date and amount of the item, and the payee. We will honor a stop-payment request by the person who signed the particular item, and, by any other person, even though such other person did not sign the item, if such person has an equal or greater right to withdraw from this account than the person who signed the item in question. A release of the stop-payment request may be made only by the person who initiated the stop-payment.

Amendments and Termination
We may change any term of this agreement. Rules governing changes in interest rates have been provided separately. For other changes we will give you reasonable notice in writing or by any other method permitted by law. We may also close this account at any time upon reasonable notice to you and tender of the account balance personally or by mail. Notice from us to any one of you is notice to all of you.

Statements
If you do not notify us of an unauthorized signature or alteration within a reasonable time (not to exceed 14 days) after we send or make available to you your statement and items: (1) you cannot assert the unauthorized signature or alteration against us, even if we are unable to show a loss due to your failure, and (2) you cannot assert any unauthorized signatures or alterations by the same wrongdoer on items paid by us after the reasonable time mentioned above elapses, but before we receive your notice. We lose these protections if we fail to exercise ordinary care in paying an item with an unauthorized signature or alteration, unless you do not notify us the problem within 60 days of when we send or make available to you the statement and items. You must report any other problem (e.g., erroneous statement or passbook entry, missing signature, unauthorized endorsement, etc.) within this 60-day period or lose your right to assert the problem against us.

Account Transfer
This account may not be transferred or assigned without our prior written consent.

Direct Deposits
If, in connection with a direct deposit plan, we deposit any amount in this account which should have been returned to the Federal Government for any reason, you authorize us to deduct the amount of our liability to the Federal Government from this account or from any other account you have with us, without prior notice and at any time, except as prohibited by law. We may also use any other legal remedy to recover the amount of our liability.

Temporary Account Agreement
If this option is selected, this is a temporary account agreement. Each person who signs in the space designated for signatures on the signature card (except as indicated to the contrary) may transact business on this account. However, we may at some time in the future restrict or prohibit further use of this account if you fail to comply with the requirements we have imposed within a reasonable time.

Set-Off 
You each agree that we may (without prior notice and when permitted by law) set off the funds in this account against any due and payable debt owed to us now or in the future, by any of you having the right of withdrawal. The amount subject to set off is that proportion to which you are, or immediately prior to your death were, beneficially entitled, and in the absence of proof of net contributions, to an equal share with all parties having present rights of withdrawal. If the debt arises from a note, “any due and payable debt” includes the total amount of which we are entitled to demand payment under the terms of the note at the time we set off, including any balance the due date for which we properly accelerate under the note. This right of set-off does not apply to this account if: (a) it is an Individual Retirement Account or other tax-deferred retirement account, or (b) the debt is created by a consumer credit transaction under a credit card plan, or (c) the debtor’s right of withdrawal arises only in a representative capacity. We will not be liable for the dishonor of any check when the dishonor occurs because we set off a debt against this account. You agree to hold us harmless from any claim arising as a result of our exercise of our right of set-off.

Restrictive Legends
We are not required to honor any restrictive legend on checks you write unless we have agreed to the restriction in a writing signed by an officer of the financial institution. Examples of restrictive legends are “must be presented within 90 days” or “not valid for more than $1,000.00”. We do not assume liability for the premature payment of post dated checks.


Electronic Fund Transfers
Your Rights and Responsibilities

The Electronic Fund Transfers we are capable of handling are indicated below, some of which may not apply to your account. Please read this disclosure carefully because it tells you your rights and obligations for these transactions. You should keep this notice for future reference.
Direct Deposits - You may make arrangements for certain direct deposits (such as U.S. Treasury (Social Security), Government payroll) to be accepted into your Checking or Savings account.
Preauthorized Withdrawals - You may make arrangements to pay certain recurring bills from your Checking or Savings accounts.
ATM Transfers - types of transfers, dollar limitations, and charges - You may access your account(s) by ATM using your ATM card and your personal identification number to:
· make deposits to checking account(s) with an ATM card
· make deposits to savings account(s) with an ATM card
· get cash withdrawals from checking account(s) with an ATM card - you may withdraw no more than $300.00 per business day, there is no charge at ATMs we own or operate, there is a charge of $1.00 from Farmers State Bank at ATMs we do not own or operate
· get cash withdrawals from savings account(s) with an ATM card - you may withdraw no more than $300.00 per business day, there is no charge at ATMs we own or operate, there is a charge of $1.00 from Farmers State Bank at ATMs we do not own or operate
· transfer funds from savings to checking account(s) with an ATM card
· transfer funds from a checking to savings account(s) with an ATM card
· get information about - the account balance of your checking and/or savings account(s) with an ATM card
Some of these services may not be available at all terminals.

Notice Regarding ATM Fees by Others  
If you use an automated teller machine that is not operated by us, you may be charged a fee by the operator of the machine and/or by an automated transfer network.

Charges for Electronic Fund Transfers 
We do not charge for direct deposits to any type of account. We do not charge for preauthorized withdrawals from any type of account. Except as indicated elsewhere, we do not charge for electronic fund transfers.

Right to Documentation 
Terminal Transfers - You can get a receipt at the time you make any transfer to or from your account using one of automated teller machines.
Periodic Statements - You will get a monthly account statement from us for your checking accounts. You will get a monthly account statement from us for your savings accounts, unless there are no transfers in a particular month. In any case, you will get a statement at least quarterly.

Stop Payment Procedures  and  Notice of Varying Amounts 
Right to Stop Payment and Procedure for Doing So. If you have told us in advance to make regular payments out of your account, you can stop any of these payments. Here is how: Call or write us at the telephone number or address listed in this notice in time for us to receive your request three business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call.
We will charge you $20.00 for each stop payment order you give.
Notice of Varying Amounts. If these regular payments may vary in amount, the person you are going to pay will tell you, 10 days before each payment, when it will be made and how much it will be. (You may choose instead to get this notice only when the payment, or when the amount would fall outside certain limits that you set.)
Liability for Failure to Stop Payment of Preauthorized Transfer. If you order us to stop one of these payments three business days or more before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages.

Our Liability
Liability for Failure to Make Transfers. If we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will NOT be liable, for instance: (1) If, through no fault of ours, you do not have enough money in your account to make the transfer. (2) If the transfer would go over the credit limit on your overdraft line. (3) If the automated teller machine where you are making the transfer does not have enough cash. (4) If the terminal or system was not working properly and you knew about the breakdown when you started the transfer. (5) If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions we have taken. (6) There may be other exceptions stated in our agreement with you.

Disclosure of Account Information to Third Parties
We will disclose information to third parties about your account or the transfers you make: (1) where it is necessary for completing transfers; (2) in order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant; (3) in order to comply with government agency or court orders; or (4) if you give us written permission.

Unauthorized Transfers 
Tell us AT ONCE if you believe your ATM card and/or PIN has been lost or stolen. Telephoning is the best way of keeping your possible losses down. You could lose all of the money in your account (plus your maximum overdraft line of credit). If you tell us within two business days, you can lose no more than $50.00 if someone used your card without your permission. If you do not tell us within two business days after you learn of the loss or theft of your card and/or code, and we can prove we could have stopped someone from using your card and/or code without your permission if you had told us, you can lose as much as $500.00.
Also, if your statement shows transfers that you did not make, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had told us in time. If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the time period. If you believe your card and/or code has been lost or stolen or that someone has transferred or may transfer money from your account without your permission, call or write us at the telephone number or address listed in this notice.

Error Resolution
In case of errors or questions about your electronic transfers, call or write us at the telephone number or address listed in this notice, as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. (1) Tell us your name and account number (if any). (2) Describe the error on the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days. We will tell you the results of our investigation within 10 business days (20 business days if the transfer involved a point-of-sale transaction or a foreign initiated transfer) after we receive noticehear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days (90 days if the transfer involved a point-of-sale transaction or a foreign initiated transfer) to investigate your complaint or question. If we decide to do this we will recredit your account within 10 business days (20 business days if the transfer involved a point-of-sale transaction or a foreign initiated transfer) ffor the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. For new accounts (an account is new for 30 days after the first deposit into the account is made per Reg CC), we will recredit your account within 20 business days however, we may take up to 90 days to investigate your complaint or question. If we ask you to put your complaint or questions in writing and we do not receive it within 10 business days, we may not recredit your account. If we decide that there was no error, we will send you a written explanation within three business days after we finish our investigation. You may ask for copies of the documents that we used in our investigation.


FARMERS STATE BANK
CUSTOMER SERVICE DEPARTMENT
100 W. MAIN ST.
MOUNTAIN CITY, TN  37683
Phone (423) 727-8121
Business days: Monday through Saturday excluding Wednesday and Federal Holidays
MORE DETAILED INFORMATION IS AVAILABLE ON REQUEST

Funds Availability Disclosure
Your Ability to Withdraw Funds

This policy statement applies to “transaction” accounts and savings accounts. Transaction accounts, in general, are accounts which permit an unlimited number of payments to third persons and an unlimited number of telephone and preauthorized transfers to other accounts of yours with us. Checking accounts are the most common transaction accounts. Feel free to ask us whether any of your other accounts might also be under this policy.
Our policy is to make funds from your deposits available to you on the first business day after the day we receive your deposit. Please remember that even after we have made funds available to you, and you have withdrawn the funds, you are still responsible for checks you deposit that are returned to us unpaid and for any other problems involving your deposit.
For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit on a day that we are open, we will consider that business day to be the day of your deposit. However, if you make a deposit on a day we are not open, we will consider that the deposit was made on the next business day we are open.
Electronic direct deposits will be available on the day we receive the deposit. Once they are available, you can withdraw the funds in cash and we will use the funds to pay checks that you have written.

Longer Delays May Apply
In some cases, we will not make all of the funds that you deposit by check available to you on the first business day after the day of your deposit. Depending on the type of check that you deposit, funds may not be available until the fifth business day after the day of your deposit. Depending on the type of check that you deposit, funds may not be available until the fifth business day after the day of your deposit. However, the first $100.00 of your deposits will be available on the first business day.
If we are not going to make all of the funds from your deposit available on the first business day, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. If your deposit is not made directly to one of our employees, or if we decide to take this action after you have left the premises, we will mail you the notice by the day after we receive your deposit. If you should need the funds from a deposit right away, you should ask us when the funds will be available.
In addition, funds you deposit by check may be delayed for a longer period under the following circumstances:
We believe a check you deposit will not be paid.
You deposit checks totaling more than $5,000.00 on any one day.
You have overdrawn your account repeatedly in the last six months.
There is an emergency, such as failure of communications or computer equipment.
You re-deposit a check that has been returned unpaid.
We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the eleventh business day after the day of your deposit.

Special Rules for New Accounts 
If you are a new customer, the following special rules will apply during the first 30 days your account is open. Funds from electronic direct deposits to your account will be available on the day we receive the deposit. Funds from deposits of cash, wire transfers, and the first $5,000.00 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s, and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you (and you may have to use a special deposit slip). The excess over $5,000.00 will be available on the ninth business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000.00 will not be available until the second business day after the day of your deposit. Funds from all other deposits will be available on the ninth business day after the day of your deposit.