These are the rules which govern your checking, savings, and/or certificate (certificate of deposit or time deposit) account(s) with Lakestone Bank & Trust. Please read them carefully. Continued use of your account(s) with us after receipt of these rules means you agree to them, you agree to pay any applicable fees, and you give us the right to collect the fees, as accrued, directly from the account balance. If you have any questions, please call us. 

Much of our relationship with our deposit customers is regulated by State and Federal law, especially the law relating to negotiable instruments, the law regulating the methods of transferring property upon death and the rights of surviving spouses and dependents, and the law pertaining to estate and other succession taxes. This body of law is too large and complex to be reproduced here. 

The purpose of this disclosure is to: 

• Summarize the rules applicable to the more common transactions. 
  
• Establish rules to govern transactions or circumstances which the law does not regulate. 
  
• Establish rules for certain events or transactions which the law already regulates but permits variation by agreement.
  

As used here, the word “we” means Lakestone Bank & Trust and the word “you” means the account holder(s): 

Deposits 

Any checks deposited to your savings or certificate account (including drawn “on us”) will be given provisional credit only until collection of the item is final. The Funds Availability Policy, listed separately, explains how we make funds from your checking account deposits available to you. We are not responsible for transactions initiated by mail or placed in a night depository until we actually record them. All transactions received during regular business hours will be recorded on that day. Transactions received on Saturday, or on a day which we are not open for business, will be treated and recorded as if initiated on our next business day. 

Direct Deposits 

If, in connection with a direct deposit plan, we deposit any amount in your 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 your 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. 

Interest 

The checking and savings interest rates are variable. The interest rate and annual percentage yield may change at our discretion at any time. 

Withdrawals (generally) 

Unless clearly indicated to the contrary, any one of you who signs in the space designated for signatures on the signature card may withdraw or transfer all or any part of the account balance at any time. Each of you (until we receive actual notice to the contrary) authorizes each other, by signing the signature card, to endorse any item payable to you or your order for deposit to your account or any other transaction with us. 

We reserve the right to refuse any withdrawal or transfer request which is attempted by any method not specifically permitted, which is greater in number than the frequency permitted, or which is for an amount less than any minimum withdrawal denomination. Even if we honor a nonconforming request, repeated abuse of the stated limitations (if any) may eventually force us to close your account. We will use the date a transaction is completed by us (as opposed to the date you initiate it) to apply the frequency limitations. Withdrawals will first be made from collected funds. We reserve the right to, at any time, require at least seven days notice in writing before each withdrawal from an interest bearing account other than certificates 

If you have a Choice account, your account consists of a transaction sub-account and a savings sub-account. Funds not routinely needed to pay debits may be periodically transferred to the savings sub-account. A transfer from the savings sub-account back to the transaction sub-account will fund items in excess of the balance in the transaction sub-account. The remainder of your balance will be maintained in the savings sub-account. This structure will not affect the available balance, service charge, FDIC insurance, interest calculation and rate, statement or any other feature of your account. The interest calculation will be the same for both the savings sub-account and the transaction sub-account. 

Withdrawals for Savings Accounts 

Federal regulations require us to monitor your compliance with withdrawal limitations. Under Federal law, you may make only six preauthorized, electronic or telephonic transfers or withdrawals from your savings account during each monthly statement cycle, or each month if you do not receive a monthly statement. Transfers subject to these limitations include automatic deductions set up with third parties. We count these transfers as of the date we post them to your account, not as of the date you write or authorize them. 

These limits do not apply to withdrawals made in person, by mail, or by ATM, and do not apply to transfers to pay loans with us. If you continue to violate withdrawal limits after we have contacted you, we may transfer, reclassify or close your savings account at our option. Except for distributions, no preauthorized, electronic, or telephonic transfers or withdrawals may be made from IRA savings accounts. 

Certificate of Deposit 

A certificate may be withdrawn (in full) at its maturity date. If the deposit is not withdrawn within 10 days (3 days for a certificate with a term of 1 month or less) after the first maturity date or within 10 days (3 days for a certificate with a term of 1 month or less) after the maturity date of any succeeding maturity period (and no other arrangements have been entered into by the depositor) the certificate is automatically renewed (unless otherwise stated on the certificate) for a succeeding maturity period of the same length of time as the initial maturity period. 

The interest rate, for the succeeding maturity period, is set by us at the time of renewal. Interest ends at maturity. Withdrawals prior to the first maturity date or prior to the maturity date of any succeeding maturity period will cause a forfeiture of interest, as stated in our Truth In Savings Disclosure. 

We reserve the right to redeem a certificate, change the rate, change the method of computation and/or the method of payment of interest at any maturity date. We will notify you by mail. Notices and payments will be sent by mail to the last known address of any named depositor. Notice from us to any one of you is notice to all of you. 

Liability 

Each of you agree, for yourself (and the person or entity you represent if you sign as a representative of another), to the terms of your account, the Truth In Savings Disclosure and the Most Common Fees, which are incorporated into and made part of these Rules and Regulations. You authorize us to deduct these charges directly from the account balance as accrued. You also agree to pay such 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 severely liable for any account deficit resulting from charges and overdrafts, whether caused by you or another person authorized to withdraw from your account, together with the costs we incur to collect the deficit including, to the extent permitted by law, our reasonable attorneys’ fees. 

Joint Accounts (with Survivorship) 

If such an account is indicated on our signature card, each joint tenant intends and agrees that the account balance upon his death shall be the property of the surviving joint tenant, and if more than one survives, they shall remain as joint tenants with right of survivorship between them. 

Account Transfer 

An account may not be transferred or assigned without prior written consent. Certificates are not transferable. 

Business and Organization Accounts 

We require a separate authorization for designating the person(s) permitted and conditions required for withdrawal from any account in the name of a legal entity such as partnership, corporation, or other 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. 

Night Depository/Night Drop 

If you use the night depository or night drop (depository), please observe the safety instructions described in our ATM Safety flyer. We cannot ensure your safety at the depository. All such deposits are subject to later verification, count and adjustment by us, and will be deemed received by us when they have been removed from the depository and are accessible to us for processing. We do not insure the depository or its contents. We will not be responsible for any loss caused by fire, flood, water damage, vandalism, burglary or acts of God. If you sign a separate Night Depository Contract with us, the terms of that agreement will govern your deposits to the depository in the event of any inconsistency with this contract. 

Stop-Payments 

To be effective, a stop payment order must be received in time to give us a reasonable opportunity to act on it, and must precisely identify the number, the date, the 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 other person has an equal or greater right to withdraw from your 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. Stop payments received by telephone or Online Banking must be confirmed in writing within 14 calendar days. 

Telephone Transfers 

Fund transfers from one account to another by telephone, if otherwise permitted or arranged for, may be made by the same person(s) and under the same conditions generally applicable to withdrawals made in writing. We restrict the number of transfers from a savings account to another account, or third parties, to a maximum of six per month (less the number of certain “preauthorized transfers” during the month). 

Automated Clearing House (ACH) Entries 

The Operating Rules of the National Automated Clearing House Association (NACHA Rules) are applicable to ACH entries involving your account. We may accept on your behalf ACH entries to your account, which have been transmitted through one or more automated clearing houses. Your rights and obligations with respect to each entry, which is not subject to the Electronic Fund Transfer Act, shall be construed in accordance with and governed by the laws of the state. Any electronic payment we credit to your account is provisional until we receive final settlement for the payment through a Federal Reserve Bank. If we do not receive such final settlement, we will reverse the credit we gave you for the amount of the payment. Consistent with the NACHA Rules, we do not give next day notice to you that an ACH electronic payment has been credited to your account. However, we will notify you of the receipt of such payments in the periodic statements we provide to you. 

Statements 

If you do not notify us of an unauthorized signature or alteration within a reasonable time (not to exceed 10 days) after we send or make your statement and items available, you cannot declare an unauthorized signature or alteration against us if we have exercised ordinary care in paying the item. You must also report any other account problem (i.e. erroneous statement entry) within 10 days, or we will not be liable for any payments made and charged to your account or for any other alleged error in the statement. 

Set-Off 

You agree that we may (without prior notice and when permitted by law) set-off the funds in your account against any due and payable debt owed to us now or in the future, by any of you having the right of withdrawal, to the extent of such persons’ or legal entity’s right to withdraw. This right of set-off does not apply to your account if it is an IRA or tax-deferred retirement account. 

Amendments and Termination 

We may amend any term of this agreement, from time to time hereafter, upon giving reasonable notice to you. Reasonable notice of any substantial change(s) may consist of enclosing a notice in the account statement or a separate notice by mail. We may also close your account at any time upon reasonable notice to you and deliver the account balance personally or by mail. Notice from us to any one of you is notice to all of you.