Common use of Demand Drafts and Remotely Created Checks Clause in Contracts

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. You may deliver deposits to us through various methods; banking centers, ATMs, night depositories, mail and other automated depositories. Night depositories are intended primarily for non-personal deposits. We may use the method and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit slip or otherwise specified by you, the credit is subject to subsequent verification by us and our determination of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state law or banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your account. We may treat the contents of the deposit container, bag, or envelope as not accepted by us for deposit until we have verified the contents. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. When we accept your deposits, we may provisionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure the amount declared on the deposit slip is correct even if you did not prepare the deposit slip. If later we determine the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statement. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may not adjust the deposit unless you notify us of the error within 60 days of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. This section applies to items you deposit or we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid check, we may send you a notice. You agree you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third party checks may be accepted for deposit only and are subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify in- demnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. You may deliver Deposit Preparation and Acceptance When you make deposits to us through various methods; banking centersour branch- es, ATMs, including ATMs and night depositories, mail and other automated depositories. Night depositories are intended primarily for non-personal deposits. We or by mail, we may use the method and time of delivery delivery‌‌‌ to determine when we accept the deposit, when you receive credit for the deposit, and whether deposit fees apply. If we credit your account for a deposit and provide you with a receipt, we may use the amount shown on the deposit slip or otherwise oth- erwise specified by you, . The amount of the credit is subject to subsequent verification by us and, after review, we may adjust your account for any errors. Any of our employees or authorized agents may open and our determination count any deposit that a teller did not count in front of you, including coin deposits, cash deposits, and each deposit made through the mail, a night depository, or other automated depository. You agree not to dispute that employee or agent’s determi- nation of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state law or banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your accountdelivered. We may treat the contents of the deposit container, bag, or envelope these funds as not accepted by us for deposit until we have verified the contentsamount. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. When we accept your deposits, we may provisionally pro- visionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure that the amount declared on the deposit slip is correct cor- rect even if you did not prepare the deposit slip. If later we determine that the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statementstate- ment. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may will not adjust the deposit unless you notify us of the error within 60 days one year of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. This section applies to items you deposit or we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid check, we may send you a notice. You agree you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third party checks may be accepted for deposit only and are subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. You may deliver deposits to us through various methods; methods including our banking centers, ATMs, night depositories, mail and other automated depositories. Night depositories are intended primarily for non-personal deposits. We may use the method and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit slip or otherwise specified by you, the credit is subject to subsequent verification by us and our determination of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state Texas law or and banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your account. We may treat the contents of the deposit container, bag, or envelope as not accepted by us for deposit until we have verified the contents. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational business/organization customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. When we accept receive your deposits, we may provisionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure that the amount declared on the deposit slip is correct even if you did not prepare the deposit slip. If later we determine that the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statement. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may not adjust the deposit unless you notify us of the error within 60 days one year of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. This section applies to items you deposit or we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid check, we may send you a notice. You agree you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third party checks may be accepted for deposit only and are subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. You may deliver deposits to us through various methods; methods including our banking centers, ATMs, night depositories, mail and other automated depositories. Night depositories are intended primarily for non-personal deposits. We may use the method and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit slip or otherwise specified by you, the credit is subject to subsequent verification by us and our determination of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state law or banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your account. We may treat the contents of the deposit container, bag, or envelope as not accepted by us for deposit until we have verified the contents. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. When we accept your deposits, we may provisionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure that the amount declared on the deposit slip is correct even if you did not prepare the deposit slip. If later we determine that the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statement. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may not adjust the deposit unless you notify us of the error within 60 days one year of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks that you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. This section applies to items that you deposit or that we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree that we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid a check, we may send you a notice. You agree that you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third party checks may be accepted for deposit only and are is subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds that you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date when the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This meansmeans that, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, mind that even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. Deposit Preparation and Acceptance‌ You may deliver deposits to us through various methods; banking centers, ATMs, night depositories, mail and other automated depositories. Night depositories are intended primarily for non-personal deposits. We may use the method and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit slip or otherwise specified by you, the credit is subject to subsequent verification by us and our determination of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state law or banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your account. We may treat the contents of the deposit container, bag, or envelope as not accepted by us for deposit until we have verified the contents. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. containers.‌ When we accept your deposits, we may provisionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure the amount declared on the deposit slip is correct even if you did not prepare the deposit slip. If later we determine the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statement. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may not adjust the deposit unless you notify us of the error within 60 days of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. Encoding Deposits‌ If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. Endorsing Checks‌ We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. Identifying the Account for Your Deposit‌ You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. made.‌ If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. Returned Items‌ This section applies to items you deposit or we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid check, we may send you a notice. Substitute Checks‌ You agree you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third-Party Endorsements‌ Third party checks may be accepted for deposit only and are subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. When Funds are Available for Withdrawal and Deposit Holds‌ This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.

Demand Drafts and Remotely Created Checks. If you deposit a demand draft or remotely created check (an unsigned draft or a preauthorized draft) into your account, you warrant and guarantee that the draft or remotely created check is authorized according to the terms on its face by the person identified as drawer. You agree to indemnify us from all loss, expense and liability related to a claim that such draft or check was not authorized by the persons on whose accounts it was drawn. You may deliver deposits to us through various methods; banking centers, ATMs, night depositories, mail and other automated depositories. Night depositories are intended primarily for non-non- personal deposits. We may use the method and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit slip or otherwise specified by you, the credit is subject to subsequent verification by us and our determination of the amount of your deposit is final and binding as long as we follow our customary practices. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to any standards set by federal and / or state law or banking industry practice. If we authorize you to use a deposit container, bag, or envelope, you authorize us to open the deposit container, bag, or envelope in your absence and credit the contents to your account. We may treat the contents of the deposit container, bag, or envelope as not accepted by us for deposit until we have verified the contents. If you make your deposit through a mechanical or automated depository such as an ATM or night depository, you agree to exercise due care in opening, closing and properly securing the depository. If your deposit includes items that we do not accept for deposit, we may hold those items until claimed by you. For organizational customers using our night depository safekeeping service, deposits will not be processed until the customer returns to the banking center during business hours, as the Bank keeps no keys to open these containers. When we accept your deposits, we may provisionally credit your account for the amount declared on the deposit slip, subject to later verification by us. You must ensure the amount declared on the deposit slip is correct even if you did not prepare the deposit slip. If later we determine the amounts declared on the deposit slip are incorrect, we may adjust (debit or credit) your account. We report adjustments on your account statement. However, if the error in completing the deposit slip was inadvertent and is less than our standard adjustment amount, we may not adjust the deposit unless you notify us of the error within 60 days one year of the date of your periodic statement that shows the deposit. After this notice period has passed without your bringing an error to our attention, the deposit amount indicated on the statement will be considered finally settled. That is, if the actual amount deposited was less than the amount declared on the deposit slip, the difference will become your property and if the actual amount deposited was more than the amount declared on the deposit slip, the difference will become our property. We may change our standard adjustment amount from time to time without notice to you. If you are an organizational client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we permit this, you agree to follow the instructions we give you for preparing and encoding your deposits. If you make an encoding mistake that results in costs, losses or damages to us, you agree to reimburse us for our costs, losses and damages, including attorneys’ fees. We may charge them to your account. We are not liable for any claims, costs, losses, or damages you may incur when you encode your own items. If our equipment is unable to read what we consider a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. We are not liable to you if you are unable to do so. We may endorse and/or collect items deposited to your account without your endorsement but may, at our option, require your personal endorsement prior to accepting an item for deposit. If you deposit items which bear the endorsement of more than one person or of persons who are not signers on the account, we may refuse the item or may require you to have their endorsement guaranteed before we accept an item. We may accept for deposit checks payable to any signer on your account when endorsed by any other signer. When you endorse checks you ask us to cash or deposit, you must endorse checks in the area that extends 1 1/2 inches from the trailing edge of the back of the check. You must also confine information that you place or have preprinted on the back of your checks to the same area. Otherwise, it may overlap into the area reserved for the banks’ endorsements. The trailing edge is the left side of the check when you look at it from the front. If you endorse a check outside of that area, mark or otherwise obscure the other area or a prior endorsement or make an endorsement that is illegible or incomplete, we may refuse the item or we may accept such non-conforming endorsement and you agree to hold us harmless from any loss, delay, liability, claim or damage which may arise as a result. If it becomes necessary for us to return one of your checks, your endorsement or information placed on the back of the check may interfere with the bank endorsements and cause delays in returning the item. You are liable for and agree to reimburse us for all claims, costs, losses and damages that result from late return of a check due to material entered on the back of the check that obscured or interfered with the depository or another bank’s endorsement. You must correctly identify the account to which you want funds deposited. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any claim, cost, loss or damage caused by your failure to properly identify the account to which a deposit is made or intended to be made. If funds to which you are not entitled are deposited to your account by mistake or otherwise, we may deduct these funds from your account, even if this causes your account to become overdrawn. If the funds were transferred from your account, we may reverse the transfer. We can do this without giving you any prior notice or demand. This section applies to items you deposit or we cash for you (a “cashed or deposited item”) and includes items drawn on us as well as items drawn on other financial institutions. You are responsible for returned items. If a cashed or deposited item is returned to us at any time for any reason by the bank on which it is drawn or any collecting bank, we may accept that return, pay the claiming party, and charge the item to your account without regard to whether we or the other bank finally paid the item or returned the item in accordance with any applicable midnight deadline or clearinghouse rule. We may also deduct from your account any interest you may have provisionally earned on the item. We may charge you a fee for each returned item. Different fees may apply to domestic and foreign items. We may debit your account for a returned item at any time on or after the day it is returned to us by electronic, automated clearinghouse (“ACH”) or other means or on the day we receive notice that the item is being returned to us - whichever is earlier. As an example: if an item deposited in your account has been paid by the bank on which it is drawn (including on us) and that item is later returned to us with a claim that the item was altered, forged, unauthorized, bears a forged or missing endorsement or should not have been paid for any reason, we may at our discretion charge the item against your account or place a hold on the amount of that item against your account until the claim is finally resolved. We may take these actions without prior notice to you and regardless of whether settlement with respect to such item is considered final. We are not obligated to question the truth of the facts that are asserted, to assess the timeliness of the claim, to take any action to recover payment of a returned item, or to assert any defense. We do not need to notify you in advance of our actions related to the claim. If you do not have sufficient available funds to cover a returned item, we may overdraw your account. We are not liable to you if there are insufficient funds to pay your items because we withdraw funds from your account or in any way restrict your access to funds due to a hold or debit to your account in connection with a returned item. You agree to repay immediately an overdraft caused by a return of a cashed or deposited item. In some cases, the financial institution on which the returned check or other item is drawn may send us an electronic notice of return, an indemnified copy of the original, an image replacement document (“IRD”) or an image, instead of returning the item. We may act on, and you agree to be bound by, the electronic notice of return, or indemnified copy or IRD just as if the original item had been returned. We may send the unpaid item back for collection a second time before notifying you, but we are not obligated to do so. You waive notice of dishonor and protest. You agree we will have no obligation to notify you of any item that is being returned. However, if we receive advance notice from another financial institution that it is returning to us an unpaid check, we may send you a notice. You agree you will not cash or deposit “substitute checks” as defined by federal law or Image Replacement Documents (“IRD”) that purport to be substitute checks and have not been previously endorsed by a bank. If you cash or deposit such an item, you give us the same warranties and indemnities that we, as a reconverting bank, would give under applicable law or regulation and you agree to reimburse us for claims, losses, costs and damages we may incur. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all claims, losses, costs and damages we incur because the substitute check resulting from the electronic representation does not meet applicable substitute check standards or causes duplicate payments. Third party checks may be accepted for deposit only and are subject to the timeframe as stipulated in the hold policy. Third party checks are only accepted from accountholders. We may require that checks and other items you want to deposit be endorsed by all parties to whom the items are payable. We may require verification of any endorsement through either an endorsement guarantee or personal identification. This section will help you understand when funds you deposit will be available for withdrawal in most cases. Once your funds are available, you can withdraw them in cash and we will use them to pay checks and other items you initiate. We generally follow the availability policy described below. However, due to the worldwide scope of Community Bank operations and related challenges in processing checks and other items, and the fact that U.S. funds availability laws do not apply overseas, we will not be liable to you if for any reason we do not follow the terms of this policy in any given instance. Our general policy is to make funds from your cash and check deposits available to you no later than the first business day after the day of your deposit. However, in some cases we place a hold on funds you deposit by check. A hold results in a delay in the availability of these funds. When we place a hold, you will have to wait a few days before being able to use the funds. When we decide to place a hold at the time you make your deposit, the teller will give you a notice that lets you know funds are on hold. For ATM and Bank by Mail deposits, the hold notice is usually mailed to you once the deposit is processed. The hold notice will let you know the date the funds will be available for you to use. In some cases, you will not get the hold notice from the teller at the time of the transaction, but later by mail. You can avoid holds by using direct deposit or wire transfer. In many cases, we make funds from your deposited checks available to you sooner than we are able to collect the checks. This means, from time to time, a deposited check may be returned unpaid after we made the funds available to you. Please keep in mind, even though we make funds from a deposited check available to you and you withdraw the funds, you are still responsible for problems with the deposit. If a check you deposited is returned to us unpaid for any reason, you will have to repay us and we may charge your account for the amount of the check, even if doing so overdraws your account.