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You may not think that my title goes along with a consistent thought pattern, after all, taxes are one of those normal life headaches that cost us money and typically, savings is something we are doing that provides a long-term benefit. But what if you could save money and reduce your taxes at the same time? Have you considered the tax-deferral available to you by utilizing an IRA? IRA accounts have been around for a long time, and yet, many of us don’t take the opportunity to fund this portion of savings that avoid the taxes that would be imposed upon that income you are setting aside for future use – in retirement. We have a couple of good options for your consideration. Washington State Bank offers these first two options to anyone who wishes to start or continue depositing dollars for retirement planning. Traditional IRA – every taxpayer in the United States has this option, even if you are covered by an employer 401k or other type of retirement program. There are limits to the amount you may contribute, and I would encourage you to speak with your tax preparer about those limits. Roth IRA – this is going to be after-tax dollars, so you don’t receive the immediate benefit, but since you have already paid taxes on these contributions, you will be able to withdraw those funds with very little tax consequences in the future. In most cases, the withdrawals will be tax free. Additionally, we have a partnership with NestEgg that allows you to access investment products that are typically offered in a brokerage with a discounted fee structure. These investments allow you to increase your potential return over the time that you are working toward retirement. Nest Egg is an online brokerage and they offer one on one service as well as the opportunity for you to make investment choices on your own. Let me give you an example of how much you might be saving over a 20-year time frame… For example, you decide that in 2024 you wanted to defer the full amount of $7,000 to an IRA account. And you commit to setting aside this amount each year going forward. $7,000 per year for the next 20 years. I am going to use a conservative 6.0% return on investment over the 20 years. (For this example, I am using the Future Value of Money Calculator at calculator.net) In 2024, you begin and at the end of the first year you have a total of $7,420.00. At year 5 you would have a total of $39,459.00 (while contributing $35,000) By year 10, your $70,000 investment would be worth $92,265.00. In year 20, compounding has almost doubled your investment of $140,000 to a total of 279,949.09. If you are young and can afford this $7,000 annual investment – according to this calculator, you would accumulate $1,000,000 in 39 years. So, if you are in your 30s today, by beginning this simple plan, you would have saved one million dollars by the time you are 70 years old! I think just about everyone would be excited about that number. Start small, finish big. The rules of compound interest are always the same. If you don’t have $7,000 today, start by adding to your IRA on a monthly basis – that would be about $600.00 per month. Maybe the first question is why am I not already doing this? Michael Herzog President

As I was taking some time to reflect upon all that has happened in my life and the world around me during 2024, I thought of these words from Scripture found in Isaiah 9:6 – “For a child is born to us, a son is given to us. The government will rest on his shoulders. And he will be called: Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace.” My wife and I welcomed three new grandchildren into our lives during 2024, two of our sons are now parents and “wow!” what a ride this has been so far! I always thought that I was protective of my own children, and yet, I find myself even more concerned for the well-being of my grandchildren – looking around our current world, I’m guessing you are experiencing some of the same feelings as we turn the page on 2025. One of the biggest things I have found true is the cost of everything from diapers to formula to toys and books has gone up quite a bit over the last number of years; frankly, I was shocked at the cost of a package of diapers! I have always tried to keep a close eye on my personal finances and watch those pennies to avoid over-spending, but once again, it isn’t just about my own spending, it’s also about keeping a close eye on who else might be trying to “spend” my money. Nope, not talking about my wife or others in my home – I’m talking about those fraudsters that are hard at work trying to pad their own financial picture at my expense. As we step into this new year with hope and excitement, it’s also a great time to protect what matters most — our personal information. Identity theft is a growing concern, but by staying vigilant and informed, we can safeguard ourselves. Here are a few simple tips to help prevent identity theft in 2025: Monitor Your Accounts: Regularly check your bank and credit card statements for any suspicious activity. Very important to check the statement if you are needing to prove fraud. Use Strong Passwords: Create unique and strong passwords for each of your online accounts. Passphrases are also helpful and easy to remember – ie. “Fall is my favorite time of year” – the more characters that you can use, the better. Shred Personal Documents: Shred any sensitive papers before discarding them to avoid dumpster divers. Washington State Bank will be hosting another shred day this spring for your larger projects. Enable Two-Factor Authentication: Secure your accounts with an extra layer of protection. This is most commonly established by a text message to your phone or adding an authenticator from Google, Microsoft, etc – that produce a login code for you. Stay Wary of Phishing Scams: Always verify sources before sharing personal or financial information online. When your bank sends you a code and it has the following message: WE WILL NEVER ASK FOR THIS CODE, please take that seriously – no one from a financial institution needs to have access to your online banking. To revisit my opening paragraph. Isaiah was writing about the coming Messiah – the child will establish a new, eternal government – He shall be called Wonderful Counselor, Everlasting Father, and Prince of Peace. Remember that He called us to be wise as serpents and gentle as doves – Part of wisdom is protecting yourself and your home from these various “serpents” looking to steal what you are working for in this life. Protect yourself and reap the benefits of peace in your homes. Don’t be a victim of identity theft in the new year or any year for that matter! Let’s start 2025 with a plan to stay vigilant in our finances and prosperous in our lives! I look forward to sharing more of this new grandparent journey with you over the next year – and more ideas on making the financial parts of your lives work to your benefit! May God bless each of you as we begin the New Year of 2025! Michael Herzog President

When I was much younger, my father used to prepare for a long road trip by starting at our kitchen table and pulling out the current edition of the Rand McNally US Atlas. If you are of a certain age, you will remember this large book that was filled with maps by state to include all of the U.S. highways, state routes and back-country roads located within each of our 50 states. My father would go on to mark up the route in the book so Greetings to all of you who may be reading this short post! I love the changing of seasons in the Midwest, the renewed palette all around us as the trees and shrubs begin to show the Fall’s festival of color. Children are starting to think about the upcoming holidays and the annual gathering of candy from local neighbors willing to share. But, along with all of the positive vibes from the change to cooler weather come the regular emails and phone calls from “helpful” people looking to separate us from our money in less than honest ways. October has often brought a special emphasis on Cyber Crime and awareness to the dangers that our online lives make us susceptible to in the wider world. I was recently reading an email newsletter that I received from BankBeat, and in this article I thought it would be important to lift a couple of sections as additional information. Quoting from the article: “The statistics for individual fraud are staggering. According to the FBI’s 2023 Internet Crime Report , 880,418 complaints of cyber-crime were reported to the FBI by the public, a 10 percent increase from 2022. In 2023, there were more than 3,200 data compromises, up from 1,801 the year prior, according to the Identity Theft Resource Center. A study conducted by the Federal Reserve Bank of Boston indicates that check fraud in 2023 was $20 billion, up from $100 million in 2006.” Data compromises almost doubled from 2022 to 2023! $20 billion in check fraud in 2023! The criminals are very busy indeed. Even so, there are a few things that you can do to keep yourself safe from being a victim. First, NEVER, NEVER, NEVER click on a link in an email that you receive. If you receive a message from a familiar company telling you that you made a purchase or that your payment has been declined – DO NOT CLICK the provided link. Simply go to that familiar website directly, log into your account and check your activity. Let me give you an actual example of what this looks like…I receive at least 5 of these per week. Here is the text… “Thank you for your purchase. You bought $856.72 on October 21, 2024 using your credit card XXXX. If this wasn’t your purchase please click the link and you will be directed to our customer service team. Again, thank you for buying from Apple.com.” When you click the link you are immediately transferred to the scammers who will then look to “assist” with your purchase. They will likely ask you to let them share your computer screen – giving them access to your PC. Then they will obtain your credit card or bank account information in order to confirm that they have the correct information. Meanwhile, you are giving them access to your accounts and banking information. Do NOT make the mistake of thinking you can outsmart them, they are very good and very convincing. Secondly, keep your phone secure by not answering calls that you don’t know the caller. If a call comes to my phone, and the person doesn’t show in caller ID, I don’t answer. So, if by some chance you call my phone, you will likely go to voicemail. Very few scam calls leave a message. That is the easiest way to keep yourself safe while using your phone. Third, and final for this article, obtain a good Identity Theft partner. For many years you have heard advertisements for these companies, and there are many good ones, but be aware of the cost. I find that the companies with advertising budgets are typically, not always, more expensive to utilize. Also, be cautious about the “First Year Free or discounted”, that normally means that the ongoing years will be more expensive. We have a ID Theft program called ID Theftsmart here at the bank that is pretty economical and you don’t even have to be a cyber security. That was my only bank advertisement this month – but if you’re serious about staying safe online consider visiting these pages for more info: 1. Federal Trade Commission 2. CISA 3. National Cyber Alliance Have a wonderful Fall season and take some time to be safe online! Michael Herzog President

When I was much younger, my father used to prepare for a long road trip by starting at our kitchen table and pulling out the current edition of the Rand McNally US Atlas. If you are of a certain age, you will remember this large book that was filled with maps by state to include all of the U.S. highways, state routes and back-country roads located within each of our 50 states. My father would go on to mark up the route in the book so that if things became confusing, he had the plan for us to take in traveling to our destination. This book has since been replaced by our electronic maps and personal guides on our phones, tablets and computers. Gone but not forgotten completely – did you know you can still buy a paper map? Anyway, my point in this little trip down memory lane is this, without a map you are going to travel around and around looking for that final destination – the end of your journey. It is the same way with our finances in today’s world, we need a map to direct us on our journey to that final destination. Depending upon your goals at whichever stage of life you find yourself, there are some signposts along the journey that I want to focus on over the next couple of paragraphs. Let’s take out our maps and start the journey…  First, you need to identify your destination on the journey. There is a famous proverb that goes like this, “The journey of a thousand miles begins with one step.” The first step is identification of the goal – all the rest of the steps follow from this first choice. Some of you may be thinking about a first purchase – a car, a house, that dream vacation – others may be further down the road looking toward retirement, there are so many choices available. Next, there are three steps to take, and often you will accomplish these sitting at the kitchen table and writing out a plan to take you on your journey. Just like my father would mark up the journey, so we need to take some time and write out a plan to reach that destination – in finance terms, we are creating a budget. Budget has such a sterile connotation, but it’s really just a roadmap to help us direct our spending and saving to reach a goal. The budget, in written form, can be a concrete map to assist us in staying with our plan – maintaining our focus. Additionally, there is likely some work to do on credit and our spending. It is a little-known fact that in today’s world, your personal credit score determines much more than whether or not you will qualify for a loan. Credit factors into your cost of insurance on your house and car, it factors into your ability to obtain a rental property, or even the rate that you will pay on some loans (auto, home, credit cards). Building good credit is important on your journey. Finally, how do you handle emergencies? What happens to your planning when something goes sideways? Of course, no one taking the time to read this little article ever has something happen that wasn’t planned for, but just in case…what will you do? I want to encourage you to plan for emergencies in your financial roadmap. My father always had several things in the trunk of our car – jumper cables, a good tire iron, a quart of oil, and a gallon jug of water – our emergency roadside box. On all of our family trips, we never had to use any of those things, but they were always in the trunk of the car – my father wanted to be prepared for possible emergencies on our trip. So it is for us, we may not be able to predict the emergency, but being prepared is the next best option. In closing, I would like to make an offer to all of you that are reading this article, to look for the Banzai! link under the services tab. After you click the link you will be directed to a site full of tools and ideas to help you draw up that map for your future self. Don’t wait…do this today and start setting yourself up for a successful journey! Michael Herzog President

My wife called me at the office the other day, not an unusual occurrence, but this time she was calling me about a To-Do list item. It seems that her license plate sticker was about to expire, and she couldn’t find the renewal notice from the State of Illinois, probably not something that anyone else has ever had happen to them, right? We talked for a moment, and I assured her that not having the renewal form was not a problem at all – we bank at Washington State Bank. One of the services that we provide to our customers and community members here at the bank is license sticker renewals. All we need you to do is bring us your current registration and we will take care of the rest. Of course, you will also need a check, cash or card to pay for that new sticker but let me assure you that your experience here at the bank will be much more efficient than having to visit that other office run by the state. Better still, we can even handle stickers that are, perhaps, a little past their due date and need some special attention. License sticker renewals are one of the many services that we provide within our community. You don’t need to search on your phone for “Sticker Renewal Near Me” any longer – just stop in our local office right here in the heart of Washington. Of course, we have a convenience fee but that, it seems to me, is exactly what it is – a fee to save you time and travel to obtain that vehicle sticker. Additionally, we have staff who can assist you with the private sale or purchase of another vehicle, from new titling, to plates, to handling the transfer of that auto. We are working hard to provide the services that you need, even if infrequently, to keep your life moving along and avoiding the longer wait times at the “local” DMV. As always, there may be specialized title needs that we are unable to handle, but almost everything can be done right at our bank. Finally, if you are looking for a vehicle, we have competitive rates and terms to assist with the purchase of a new or used vehicle – I wouldn’t be doing my job if I failed to point out this information. I’ll close with a throwback to one of my favorite summer songs by Willie Nelson – sing it with me as you read along… On the road again - Just can't wait to get on the road again The life I love is makin' music with my friends - And I can't wait to get on the road again On the road again - Goin' places that I've never been Seein' things that I may never see again - And I can't wait to get on the road again Come see us for your vehicle sticker renewal and keep on rolling down the road! Enjoy your summer months!  Michael Herzog President

Yesterday, I went to the grocery store with my wife and purchased a week’s worth of items for our household of two. We spent $125.00 during our trip to three different stores, looking for the bargain prices offered on some of the items we purchased. Maybe you are experiencing this during your weekly shopping trips. It seems like no matter how much more I make, the costs of everything that I buy keep going up…that cup of coffee on the way to the office, the gas in my tank, the trip to the hair salon (at least for my wife), the weekend movie, and a dinner out at a favorite place – all cost dramatically more than they did a few years ago. My wife and I have also been looking at the spend side of our budget more closely than ever. In the last 5 years we have lived through a huge increase in the rate of inflation and therefore the cost of everything that we purchase. Currently the rate is reported as 3.5% annually, coupled with the dramatic increases of the last several years, that $1.00 in your pocket is worth .79 cents as compared to what you could purchase in 2018. That means we have basically lived through 21% inflation over the last 5 ½ years! Let me advocate for the community banks in our marketplace that are willing to partner with you through these challenging financial times. First of all, your local bank has more flexibility to assist with your finances than some of the large, national banks. When you need to extend a payment or cover a potential overdraft in your account, there is a person at your local bank willing to join you and work with you. Pick up the phone and give them a call. Secondly, many community banks have credit programs that can provide for more flexibility and payment options that fit more easily inside of already stretched budgets. Choices like smaller weekly payments, short-term lending that provides money for repairs, home equity loans that allow for the consolidation of larger debts, and small business lending that can offset business slowdowns on accounts receivables. Third, none of us can afford to be the victim of fraud in our financial world, but we are at risk as we look to save money and can fall victim to internet pricing and sites that are developed to perpetrate scams. Your community bank stands ready to respond and protect you from these types of scams. Many banks offer fraud protection systems to their customers, but we also actively monitor, with your help, for fraud in bank accounts. When you work with your community bank by watching your account activity, we are able to quickly shut off the access that may be obtained by fraudulent transactions or other bad actors. Finally, Washington State Bank has a partnership with Banzai!, a leader in financial education and they have a number of articles/ideas to assist during these challenging financial times. Take a look at some of these articles and helpful tools via the link on our website at https://washingtonstatebank.banzai.org/wellness . It is important to plan and to focus on the spend side of your budget. If we take a few moments to write out our monthly spending, it is often easier to tighten up our budgets and prepare for the future. Inflation makes this tougher, but we can work together to be successful and more resilient for the future. Give your local banker a call and let’s plan together! Michael Herzog President

Ah, Spring! The flowers and trees are beginning to bloom, the birds are singing, more rain than sun, all the joy of a Midwest change of seasons. Another rite of passage that comes with Spring is the search for new homes. In Illinois, like many other parts of the country, people start to think about and explore options related to purchasing a new residence. Unlike a lot of previous Spring buying seasons, 2024 is shaping up to be a challenging year for home buyers due to the increased interest rates and lower inventory of homes for sale. I don’t know much about the inventory issue, but I wanted to take the next few moments to discuss financing that purchase of your new “dream home”. When it comes to mortgage options, our current financial world provides no shortage of choices and those choices come with many more choices and options. Perhaps it is best to discuss some of these options in the hope of simplification and comparing apples to oranges and bananas. There are many government-based programs from FHA to VA to USDA, and I don’t wish to dig into these options as they have their own specific requirements and downpayment processes. For the purposes of this short article, I want to focus on conventional offerings within the mortgage tree – namely Fixed Rates, Adjustable Rates and Balloon Mortgages. Let’s begin with the Fixed Rate options…traditional mortgage offerings come with traditional terms of 15, 20, and 30-year amortizations that have a specific rate that works out into full payment within the specific term. In today’s market, these rates are tiered from the lowest rate at 15 years up to the highest rate at 30 years. As of the time I am writing this blog, the 30-year rate is around 7.30%. While this is “historically” speaking a pretty reasonable rate, most people are dealing with the sticker shock of having a previous mortgage that is half that rate (3.35-3.50%) in that last 5 years. The real positive side of the Fixed Rate is that there are no changes during the loan term. The rate you receive at the start is the rate that you pay until the loan is paid in full or until you refinance the loan at some future date. There is a significant cost certainty for you as a borrower and minimal risk that your mortgage will change on a monthly basis. Another option is the Adjustable-Rate mortgage. Within the world of Adjustable rates there are many options ranging from 5/1 (5 years fixed with adjustments every year after) to 3-year adjustable (fixed term for 3-year increments), to one-year adjustable (changes every single year). These loans are perfect for short-term homeowners, the borrower that is going to be in one location for a short period of time and then look to move to another area. Short-term buyers may be in the market for a starter home today with an eye toward a different home in the near future – think about someone just starting out in a new career, maybe a single person looking at possibly marrying and starting a family in the next 5-7 years, they don’t plan on being in this home forever. The lower starting point on an adjustable mortgage may fit their needs perfectly for this “first” purchase, and may give them the opportunity to balance a new job/income against the learning about living in this first home and the costs associated with ownership. Currently, you can find a 5/1 ARM at about 6.5%, which would be a savings to the budget even with the upside rate risk compared to a 30-year fixed rate loan. Adjustable-rate mortgages are NOT for everyone and should be considered with your eyes wide open – they can go UP. It is wise to have some serious discussions about the risk before you jump into an adjustable-rate loan. It’s a good idea to know how the adjustments work before you sign up for the lower payment. The final option is the Balloon Mortgage , and this loan is a hybrid of sorts. The balloon typically has an initial fixed rate from up to 15 years in length followed by a second period of time in which the loan would be rewritten to complete the term of the loan. A balloon, therefore, has an amortization term that sets the payments along with a final payment at the maturity of the first period. For example, the balloon mortgage would start the term of 15 years at today’s rate of 6.75% and have a fixed rate period that carries the borrower to year 15. At year 15, the loan is subject to being refinanced at whatever the prevailing rate is at that time. You receive the surety of a fixed rate/payment for the first 15 years, without the risk of the adjustable and for a lower rate than the 30-year fixed rate. A couple of final thoughts…first, most people are in their homes for, on average, 9 to 11 years, which means that the balloon mortgage is a pretty reasonable option versus the adjustable and at a lower overall cost than the 30-year fixed rate option. Secondly, the all-in costs that you would expect to pay are typically lower at your local community bank than they are with some of the large national lenders that you see in advertisements. Remember that the costs you pay to obtain your loan will also affect the overall value of the loan type that you select. All in all, I wish you the best as you look for a new home is this current real estate market – patience and a little bit of questioning will insure that you receive the best possible deal for yourself and your future financial pursuits. Michael Herzog President

Imagine that you notice an error on your bank statement when you are viewing your account online. Now you have to call the bank and navigate the following… Thank you for calling insert bank name , in order to better serve you please listen to the following choices. For Personal Banking, press 1, for Business Banking, press 2, for questions about online banking, press 3… Then you enter the next level with more choices and possibly a third level of choices. You reach the point where you are repeatedly pressing the 0 key, all the while hoping that you will finally get the attention of a live person. When you finally find a person will they be local or will they be in a call center ½ way around the world? Now you are calling Washington State Bank… The phone rings and you hear, “Thank you for calling Washington State Bank, this is staff person’s name , how may I help you?” Instantly you are on the way to speaking with a local banker who works to assist you with your questions or concerns. A Community Bank starts with this customer experience and is designed to meet the needs of the local residents. We don’t take deposits from all over the state or the Midwest, we focus our efforts on Washington and the surrounding community. Likewise, we’re not interested in lending those same dollars in areas outside our geography – Washington State Bank is focused on our local market. We work with small businesses right here in Central Illinois. We make loans to young people purchasing their first car. We help young families move into their first homes. We live and work right alongside our residents and you see us in the community. In thinking about this month’s post, I ran across a lot of articles on the benefits of community banks. Let’s look at a few of these items. Lower Fees Community banks often charge lower fees for account services, loan origination, and in general. While larger banks may tout low or no fees, there are often higher access fees to obtain credit and/or maintain your account with that institution. Fees add up over time, and community banks are consistently less expensive than the big, national banks. Flexibility Oftentimes, you will find that community banks have the ability to fit that round peg into a square hole. Not every person has perfect credit or a spotless past, sometimes, you simply need the chance to move beyond the numbers and be considered as a person again. The big banks can be very unforgiving, and not every situation qualifies, but many find credit in community banks that are traditionally dismissed or denied by larger institutions. Personal Attention You may find that a community bank is more customer-facing, in other words, a place where you can develop a relationship with bankers that care about your business. I would like to highlight our staff at WSB, we have many bankers here that have been with the bank for many years – you know who I’m talking about, stop in and say “Hi!”. Community Investment We are members of many local organizations, we place dollars into fund-raising for St. Jude Runners, Easterseals, Susan G. Komen Memorial, MS Walk-a-Thon, our local sports and academic programs along with the Chamber of Commerce. Let me close by revisiting our opening scenario, which experience do you find less frustrating? Which of those two banks values you enough to call you by name when you walk through the front door of the lobby? In the famous words of the theme from the TV show Cheers, “Sometimes you want to go, where everybody knows your name. And they're always glad you came. You want to be where you can see, our troubles are all the same. You want to be where everybody knows your name.” For over two hundred years of American history, that is your local, community bank. Washington State Bank is proud to stand in this long line of community banks, serving in the same location for over 75 years! Michael Herzog President

Welcome to 2024! If you are like me at all, this is the time where we make resolutions… Here are five of the most common New Year’s resolutions that I could find… exercise more lose weight quit smoking, drinking, something else get organized spend more time with family and friends How about your finances as we head into a new year? It is no secret that everything that we spend money on is more expensive today than it was just a couple of years ago. Is your financial house in order? At Washington State Bank, we have tools available for you in setting yourself up for success in a brand-new year. Below are a few examples. Nest Egg – a complete set of tools to help you manage your financial savings program. You’ll have access to an advisor, or you may make investments on your own. Banzai! – a tool that will assist you in thinking about your future financial needs and goals. There are many tools that include budgeting and games that are appropriate for all ages. If you are looking for some additional reading materials on finances, look no further than Banzai! ID TheftSmart – the world is becoming more and more complicated every year, and criminals are after our private information. This product provides you with peace of mind and protection from many threats that exist today. A minimal cost, of $12, provides access to some of the best tools in the marketplace today. At Washington State Bank we have resolutions as well, primarily to be your one-stop source for financial information, education, and products designed to meet your individual needs. We offer many of the same products and services that other banks do, we also answer our phones –without going through a selection list of options. Finally, I want to take a moment to wish you a happy and healthy New Year! May your financial goals come into clear focus and, if I or my team can assist you along the way – we are ready to be a part of your plans! Michael Herzog President