April 2005 Revision

It is the policy of State Bank of Park Rapids to protect the privacy of confidential customer information. State Bank has internal controls, ongoing training, and a strict adherence standard to ensure customer privacy.

It is the policy of State Bank of Park Rapids to comply with federal and state laws and regulations affecting consumer privacy, including the Fair Credit Reporting Act, the Right to Financial Privacy Act, the Gramm-Leach-Bliley Act, and Federal and State laws. In that respect, bank employees will use, collect, and retain information on consumers only when there is an appropriate business purpose to do so.

Collection and Use of Information
State Bank of Park Rapids collects, retains and uses customer information to serve and administer customer relationships. This information may be collected from a variety of sources, such as the following:
Information provided to us on applications or forms
Information about customer transactions with us
Information we receive from third parties, such as customer reporting agencies
Information about transactions or experiences with other parties

We will limit the use and collection of information about our customers to that which is necessary to administer their needs, provide them with superior service, create and/or offer opportunities that we think will be of interest to them, and to protect our customers. The information we maintain about customer relationships helps us identify with customers to help us prevent unauthorized persons from accessing customer information and accounts.

Sharing Information
We do not disclose nonpublic personal information about customers or former customers to anyone except as lawfully necessary or required for us to conduct business and service our customers. For example, we may share information such as the following:
Certigy, if a customer orders or has a State Bank of Park Rapids credit card
Check printing companies, when a customer orders checks through our bank
ATM networks, when a customer orders an ATM or Debit Card through our bank
Credit reporting agencies, when a customer applies for a loan through our bank
Sungard, when we test our Emergency Backup procedures

Customers cannot opt out of all information sharing. Some information sharing is necessary to process and service a consumer’s transaction and to facilitate other normal business transactions. State Bank of Park Rapids follows strict privacy procedures in regard to protection of customer information. Except as otherwise stated, the Bank will not sell or share customer information with unaffiliated third parties.

In some cases it may be necessary to share information with third party business partners. Sharing may be necessary to provide customers with requested products and/or services. If the Bank uses a third party business partner, service company, or other business partner to prepare account documentation, service accounts, or for other purposes, we will make reasonable efforts to verify the business partner treats customer information in a manner no less stringent than the Bank.

Restrictions on Disclosures of Account Information
The Bank will disclose information to third parties about customer credit, accounts, and transactions only under the following conditions:
When the information is necessary to complete a transaction a customer initiated
To verify the existence and conditions of a customers account or loan for reputable information reporting agencies
In order to comply with a government agency directive, court order, or regulatory examination
When a customer gives us permission to disclose information
When it is consistent with an agreement or contract with the Bank
In order to protect a customer, his/her/their interests, the interests of the Bank, or if we suspect fraud or illegal activity
In connection with acquisitions and/or sale
To provide information to attorneys, collection agencies, etc., for the purposes of collecting debt
We may provide references (verification) on accounts without account holders signature provided we believe the request is to fulfill a legitimate business purpose

Your Right to Opt-Out of Certain Information Sharing
Unless a customer opts out, we may disclose nonpublic personal information about him/her to the following nonaffiliated third parties: Insurance and/or Marketing Agents such as Progeny.

Through nonaffiliated third party providers, we are able to provide financial services that would otherwise not be available. We only disclose nonpublic personal information we receive on an application or other forms, such as name and address. If a customer does not want us to share nonpublic personal information, such as name and address, with nonaffiliated third parties, he/she can block the release of certain nonpublic personal information. This is known as a customer’s right to “opt out”. Privacy information and opt out forms are presented to all new bank customers when the customer relationship is established and are delivered to every bank customer annually. New customers are given a minimum of 30 days to activate the opt-out feature prior to any information sharing. The Bank will comply with a customer’s request to opt out as soon as reasonably practical when the direction is received after the initial opt out period elapses. This Bank will comply with a customer’s opt out request until revoked in writing by the customer.

A single privacy and opt out notice is provided to joint account holders. Any of the joint account holders may exercise the right to opt out. An exercised opt out on a joint account will effectively opt out all joint account holders on that particular account.

State Bank of Park Rapids does not collect or share information about consumers who are not customers, therefore, non-customer consumers will not receive opt out notices unless they specifically request them from the bank. Privacy information and opt out forms are available to the public upon request. We do not disclose nonpublic personal information about former customers. We do not sell customer information. We do not disclose account numbers or access codes for credit cards, debit cards, or transaction accounts to any nonaffiliated third party for use in marketing.

Maintenance of Accurate Information
Keeping account information accurate and up to date is very important. If you ever find that account information is incomplete or inaccurate, please contact us:
call: 218-732-3366 or toll free at 888-560-3366
write to us at: State Bank of Park Rapids
200 East First Street
Park Rapids, MN 56470
email us at: bookkeeping@statebankofparkrapids.com

Limitations of Employee Access to Information and Enforcement
State Bank of Park Rapids is committed to the security of its customers financial and personal information. Employee access to personally identifiable customer information is limited to those with a business reason to know such information. Employees are required to maintain the confidentiality of customer information and to uphold privacy principles. We maintain physical, electronic and procedural safeguards that comply with Federal, State, and FDIC standards to protect nonpublic personal information.

Safeguarding the Security of Customer Information
State Bank of Park Rapids is committed to preventing others from unauthorized access to customer financial and personal information. Operational and data processing systems are in a secure environment that protects information from being accessed by third parties. Internal procedures that limit access to customer information, such as procedures that require an employee to have a business need to access customer information, and an access tracking system, are in place. Auditor’s monitor employee access to customer information. Management will take appropriate disciplinary measures to ensure adherence to this policy.

In order to protect customer information, State Bank of Park Rapids may limit information provided to customers by phone and the circumstances under which that information will be provided. Callers must positively identify themselves before they can be provided any information pertaining to their accounts. Employees are instructed how to quickly detect whether or not the caller is actually entitled to request and receive account information.

Computer databases that are accessible by phone or Internet are separate from the Bank’s internal mainframe system and are protected by firewalls and virus protection systems. Appropriate steps are taken to ensure all printed confidential customer information is disposed of in a manner that will maintain confidentiality of that information. Information contained in computers is destroyed before the computers are disposed of.

Access controls on customer information systems, including controls to authenticate and permit access only to authorized individuals and controls to prevent employees from providing customer information to unauthorized individuals who may seek to obtain customer information through fraudulent means are utilized.

Disclosure of Privacy Principles to Customers
We value customer relationships. Customers are entitled to information that details how we use information they provide and our commitment to ensuring their personal and financial privacy is not violated by Bank employees, third parties, or unauthorized persons. If you believe a customer’s confidentiality has been breached, please inform your Supervisor or a member of the Compliance Committee immediately so management becomes aware of the situation and can handle it appropriately. If a customer has a privacy question you cannot confidently answer, please refer him/her to any Bank Officer.

We will periodically review the methods available for communicating the Bank’s privacy policy and determine whether the Bank’s current practices are meeting the needs of the Bank and our customers.


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