Farmers State Bank

This Internet Banking Agreement and Disclosure ("the Agreement") explains the terms and conditions governing the basic Internet banking services and bill pay services offered by FARMERS STATE BANK ("the Bank"). All Internet banking services of any kind whatsoever offered or afforded by the Bank will be referred to collectively as "Internet Banking Services" in this Agreement. The term "Business day" means all days except Saturday, Sunday, and all banking holidays.

The Internet web site for Your Bank ONLINE Personal Internet Banking is located at http://www.FSBanking.com. By using Your Bank ONLINE Personal Internet Banking, you will have access to your account information 24 hours a day, 7 days a week. You can check your deposit and loan account balances and activity, make transfers of funds, make loan payments, and arrange bill payments through our Bill Payment Service.

Agreement
All Internet Banking Services are governed by this Agreement, all applicable federal regulatory disclosures, and the Deposit Account Terms and Conditions. By using any of the Internet Banking Services and conducting transactions, you agree to abide by the terms and conditions of this Agreement, and any subsequent amendments. You authorize the Bank to use any of your accounts to execute and settle transactions and/or fees initiated by using the Internet Banking Services. We have the right to change this Agreement and the terms and conditions governing the Internet Banking Services offered.

Acceptance of Agreement
Your initial use of any Internet Banking Services in connection with your account at the Bank constitutes your acceptance and agreement to be bound by all of the terms and conditions of this Agreement and of the Deposit Account Terms and Conditions. Please read this agreement carefully. You will be asked to acknowledge your receipt and acceptance of this Agreement. You may want to print a copy for future reference. If you would like a current copy of our Deposit Account Terms and Conditions, please contact us by e-mail or telephone.

The Bank may, from time to time, introduce new Internet Banking Services. By using those services when they become available, you agree to be bound by the terms contained in this Agreement, and its subsequent amendments.

Information Security
We are strongly committed to protecting the security and confidentiality of our customer accounts information. We use several techniques to help secure our Internet Banking Services, including the following:

System Requirements
To access the FARMERS STATE BANK ONLINE Personal Internet Banking, you must have a personal computer equipped with a modem and a compatible web browser software and 128-bit data encryption capability. Compatible browser software includes, but is not limited to Netscape Navigator and Communicator and Microsoft Internet Explorer, most recent versions. In addition to a compatible software browser, you must have been issued an Internet Banking User ID, a security Password, and maintain at least one (1) checking or one (1) savings account at the Bank.

Fees and Charges
All applicable Fee Schedules published by the Bank from time to time will apply to Internet Banking Services. Please contact us for a current FEE SCHEDULE with a complete list of fees and charges that may affect your deposit account. You are responsible for the payment of any fees incurred by you on any account, for any service, at any time. You authorize us to debit a designated payment account each month to pay all such fees assessed by the Bank.

The following fees and charges may apply:

Schedule of Fees:

The following fees apply to the Service transactions:

The fees for other services, such as copies of statements, copies of check deposits, or account research, will depend upon the time involved, please consult with the bank regarding the fees involved.

In the event your payment account has insufficient funds to cover any fees, The Bank may deduct the fees from any other account you have at The Bank in any order it chooses. You are solely responsible for any telephone or Internet service provider charges incurred by you in accessing our Internet Banking Services.

User ID and Password
Your Internet Banking User ID and Password will give you access to your accounts at the Bank via FARMERS STATE BANK ONLINE Internet Banking. You will receive your User ID and Password by separate correspondences.

After your initial logon, you are required to change your Password. You can change your Password at any time. Your access to FARMERS STATE BANK ONLINE Personal Internet Banking will be blocked in the event your User ID or Password is entered incorrectly on three consecutive access attempts. If this occurs, please contact FARMERS STATE BANK at 1-888-480-2408 or 574-269-2408.

The Bank is entitled to act upon instructions received through any Internet Banking Service using your User ID and Password without inquiring into the identity of the person using the User ID and Password. You should not, under any circumstances, disclose your User ID and Password by telephone or any other means to any person you do not trust. You acknowledge that no person from the Bank will ever ask for your User ID and Password, that Bank employees do not need and should not ask for your User ID and Password. You should never provide your User ID and Password to anyone, including anyone claiming to represent the Bank. You are liable for all transactions made or authorized using your User ID and Password. The Bank has no responsibility for establishing the identity of any person or determining the validity of any transaction.

Protecting your User ID and Password
You agree that if you give your User ID and Password to anyone or fail to safeguard its secrecy, you do so at your own risk since anyone with your User ID and Password will have access to your accounts. You agree to notify the Bank immediately in the event your User ID and Password is stolen or is otherwise compromised. At any time, you may ask the Bank to disable your User ID and Password.

For joint accounts, each person may have a separate User ID and Password, or each may use a joint User ID and Password. Each person on a joint account will be liable for all transaction that are made on that account. Each person on a joint account authorizes all transactions made by any other person on the account. Each person on a joint account agrees to be liable for the action of the other person(s) on the account.

Indemnity to the Bank
You hereby indemnify and release the Bank from any and all liability. You further agree not to make any claim against the Bank or bring any action against the Bank for honoring or allowing any actions or transactions where you have authorized the person performing the action or transaction to use your account or when you have provided your User ID and Password to that person. You agree to reimburse the Bank for any losses it suffers or any damages, injuries, costs or expenses it incurs (including attorney's fees) as a result of the Bank's honoring or allowing transactions on the account where your User ID or Password was used.

Accessibility
The Internet web site for FARMERS STATE BANK ONLINE Personal Internet Banking is located at http://www.FSBanking.com. You can normally access FARMERS STATE BANK ONLINE Personal Internet Banking seven (7) days a week, twenty-four (24) hours a day. However, at certain times, some or all of the FARMERS STATE BANK ONLINE Personal Internet Banking may not be available due to system maintenance or reasons beyond the Bank's control. The Bank does not warrant that FARMERS STATE BANK ONLINE Personal Internet Banking will be available at all times. When unavailable, you may use our telephone banking system, an automated teller machine ("ATM"), or any Bank branch office to conduct your transactions.

Funds Availability and Transfers
For determining the availability of funds in your Deposit Accounts, every day is a business day, except Saturdays, Sundays, and federal holidays. A transfer initiated through FARMERS STATE BANK ONLINE Personal Internet Banking on or before 3:00 PM Eastern Time on a business day is normally posted on the same business day. However, a FARMERS STATE BANK ONLINE Personal Internet Banking transfer initiated after 3:00 PM Eastern Time on a business day would be posted on the next business day. Transferred funds will be available for withdrawal on the business day the FARMERS STATE BANK ONLINE Personal Internet Banking transfer was posted.

Payments, Transfers, and Account Activity
Using FARMERS STATE BANK ONLINE Personal Internet Banking, you can initiate the following:

By subscribing to our Bill Payment service, you can schedule bill payments through FARMERS STATE BANK ONLINE Personal Internet Banking. Refer to the information in our Electronic Bill Payment section.

Transactions initiated on FARMERS STATE BANK ONLINE Personal Internet Banking are Electronic Fund Transfers. Please refer to our "Understanding Your Deposit Account" brochure for details on Electronic Fund Transfer Rights and Responsibilities. Please contact us by e-mail or telephone to request a current copy of our "Understanding Your Deposit Account" brochure with the details on Electronic Fund Transfer Rights and Responsibilities.

Transaction Limitations
Your ability to initiate transactions between Deposit Accounts may be limited by federal law or by the terms of your deposit agreement with us. Bank transfers from Deposit Accounts that are savings or money market deposit account are limited by federal regulations as follows:

Transfers from a Savings Accounts or Money Market Deposit Account to another account or to third parties by preauthorized, automatic, or telephone transfer are limited to six (6) per monthly statement cycle with no more three by check, draft, or similar order to third parties.

Any account that requires two or more signatures to make withdrawals, transfers or other transactions is not eligible for Online Financial Services.

Bill Payment Service
The Bill Payment service allows you to schedule bill payments through FARMERS STATE BANK ONLINE Personal Internet Banking. You must complete a separate Enrollment Form to subscribe to this service. The Bank does not provide the service directly. Instead, the Bank entered into an agreement with a bill payment provider to provide the bill payment services directly to you. A bill payment account ("Bill Payment Account"), separate from any account you hold at the Bank, is established at the Bill Payment provider.

The Bank and its Bill Payment provider reserve the right, at their discretion, to implement security features to reduce the risk of loss. These may include requiring pre-authorized drafts, verifying funds through an ATM network, and separating debits from credits so that payments are not sent until after good funds are received. The Bank and its Bill Payment provider also reserve the right to terminate your use of Bill Payment Services at any time.

Unauthorized or Erroneous Transactions
You have certain rights and liabilities in instances where you believe 1) your User ID and Password have been stolen; 2) that someone has transferred or may transfer money from your accounts without your permission; 3) your statement reflects transfers that you did not make; or 4) there is an error on your account. In all of these instances, to ensure timely notice to the Bank and expedite resolution of any problems or questions, please contact us by writing or calling:

You may also contact us by sending an electronic mail message to us through Your Bank ONLINE Personal Internet Banking or by sending an e-mail to us via the Internet at Kristen.Beverly@fsbanking.com.

Information about your rights and responsibilities are defined in our "Understanding Your Deposit Account" brochure under the Electronic Fund Transfers Your Rights and Responsibilities section. Please contact us by e-mail or telephone to request a current copy of "Understanding Your Deposit Account" brochure with the details on Electronic Fund Transfer rights and responsibilities.

Responsibility
Neither the Bank nor its suppliers will be liable for any transaction if (i) you do not have enough money in your account to complete the transaction; (ii) a legal order prohibits withdrawals from your account; (iii) your account is closed or has been frozen; (iv) the transaction would cause your balance to go over the credit limit for any credit arrangement set up to cover overdrafts; (v) you, or anyone you allow, commits fraud or violates any law or regulation in connection with Internet Banking; (vi) any electronic terminal, telecommunication device or part of the electronic fund transfer system is not working properly; (vii) you did not provide us with complete and correct payment or transfer information; (viii) you did not properly follow the instructions for use of Internet Banking; (ix) you knew that FARMERS STATE BANK ONLINE was not operating properly at the time you initiated the transaction or payment; (xi) there is postal delay; or (XI) circumstances beyond our control (such as fire, flood or improper transmission or handling by a third party) that prevent, hinder or delay the transaction.

Electronic Mail (E-mail)
Sending E-mail is a very good way to communicate with the Bank regarding your accounts. However, your e-mail is normally sent via your own software and, as a result, is not secure. Because of this, you should not include confidential information, such as account numbers and balances in any unsecured e-mail to the Bank.

You cannot use e-mail to initiate FARMERS STATE BANK ONLINE Personal Internet Banking transactions. All such transactions must be initiated using the appropriate functions within the FARMERS STATE BANK ONLINE Personal Internet Banking site. The Bank will not be liable for any errors, omissions, claims, or problems of any kind involving your e-mail.

Inactivity
We reserve the right to discontinue your use of Your Bank ONLINE Personal Internet Banking if you have not accessed it in the last 90 days. Your User ID and Password will be disabled.

Virus Protection
The Bank is not responsible for any electronic virus that you may encounter using FARMERS STATE BANK ONLINE PERSONAL INTERNET BANKING. We encourage you to routinely scan your computer and diskettes using a reliable virus protection product to detect and remove viruses. If undetected and unrepaired, a virus can corrupt and destroy your programs, files, and hardware.

Restrictions
You may not appropriate any information or material that violates any copyright, trademark, or other proprietary or intellectual property rights of any person or entity while using FARMERS STATE BANK ONLINE Personal Internet Banking. You may not gain, or attempt to gain, access to any FARMERS STATE BANK ONLINE server, network, or data specifically permitted to you by the Bank or its suppliers, and you must not include any obscene, libelous, scandalous, or defamatory content in any communications with the Bank or its suppliers.

Agreement Modification and Termination
The Bank has the right to modify or terminate this Agreement or the Deposit Account Terms and Conditions at any time, for any reason without prior notice. When making any changes, the Bank will comply with all legal notice requirements. If this Agreement is modified, your continued used of the Internet Banking Services will represent your acceptance of the changes.

You may terminate your use of FARMERS STATE BANK ONLINE Personal Internet Banking at any time by doing the following:

Once this Agreement is terminated, the Bank will not allow any additional transactions on the account(s), nor will additional Internet Banking Services be permitted.

If all of your accounts accessible through FARMERS STATE BANK ONLINE Personal Internet Banking are closed, access to FARMERS STATE BANK ONLINE Personal Internet Banking will be terminated automatically.

Termination of this agreement will not affect your liability or obligation for transfers processed by the bank on your behalf.