I. Introduction

At The Hondo National Bank, our mission is to meet the desires of our customers. As financial services professionals entrusted with sensitive financial information, we respect the privacy of our customers and are committed to treating customer information responsibly. Our Customer Information Privacy Policy serves as the standard for all bank employees for the collection, use, retention, and security of individual customer information.

II. Recognition of a Customer’s Expectations of Privacy

At The Hondo National Bank, we believe the confidentiality and protection of customer information is one of our fundamental responsibilities. While information is critical to providing quality service, we recognize that one of our most important assets is our customers’ trust. Thus, the safekeeping of customer information is a priority for the bank.

III. Customer Benefits of the Bank’s Information Management Practices

Financial institutions should collect and use information about individual customers only when they reasonably believe it would be useful (and allowed by law) in administering that organization’s business and in providing products, services and other opportunities to their customers. Following this principle is critical to maintaining customers’ trust. Information about consumers is accumulated from a variety of sources. Some information is provided to the bank directly by customers themselves. Other data is developed by the bank as a function of providing a product or service to a customer. Still other information is obtained from outside sources. The bank will limit the use and collection of information about its customers to that which is necessary to administer the bank’s business, provide superior service, and offer opportunities that are thought to be of interest to customers. This means that we will use information to help us identify and mitigate potential risks or loss to the bank. We will use information to help identify additional products or services which we believe customers might want to know about. We will use this information only in accordance with the principles set out in this Policy.

IV. Maintenance of Accurate Information

Accuracy of information is a major concern for customers. The Hondo National Bank has established procedures to ensure that our customers’ financial information is accurate, current and complete, in keeping with reasonable commercial standards. We also pledge to respond to requests to correct inaccurate information in a timely manner.

V. Limitations on Employee Access to Information

Financial institutions should craft policies and procedures that limit employee access to personally identifiable information. At The Hondo National Bank, employee access to personally identifiable customer information is limited to those with a business reason to know such information. Employees are educated on the importance of maintaining the confidentiality of customer information and on these privacy principles. Because of the importance of these issues, all bank employees are responsible for maintaining the confidentiality of customer information and employees who violate these privacy principles will be subject to disciplinary measures.

VI. Protection of Information Utilizing Established Security Procedures

Privacy policy disclosures should include information about the security standards and procedures an institution maintains to prevent unauthorized access to customer information. We safeguard information according to established security standards and procedures, and we continually assess new technology for protecting information. Our employees are trained to understand and comply with these information principles.

VII. Restrictions on the Disclosures of Account Information

Banks should inform their customers of their policy about revealing specific information about customer accounts or other personally identifiable data to unaffiliated third parties. The new financial modernization law, effective November 13, 2000, bars financial institutions in some cases from sharing "nonpublic" personal information with third parties for the marketing of non-financial products, unless customers are given the opportunity to "opt out." It is the bank’s policy not to reveal specific information about customer accounts or other personally identifiable data to unaffiliated third parties for their independent use, except for the exchange of information with reputable information reporting agencies to maximize the accuracy and security of such information or in the performance of bona fide corporate due diligence or business matters, unless 1) the information is provided to help complete a customer initiated transaction; 2) the customer requests or permits it; 3) the disclosure is required by or allowed by law (e.g., subpoena, investigation of fraudulent activity, requests by regulators, etc.); or 4) the customer has been informed about the possibility of disclosure for marketing or similar purposes through a prior communication and given the opportunity to decline (i.e., "opt out")

VIII. Maintaining Customer Privacy in Business Relationships with Third Parties

One of the major areas of concern for customers is how banks handle privacy issues with third party vendors engaged in a business relationship with the institution. It is noteworthy that the new financial modernization law prevents "reuse" of information by third parties. When the bank conducts business with third parties, it requires its vendors and suppliers to maintain similar standards of conduct regarding the privacy of personally identifiable customer information provided to them

IX. Providing Privacy Information to Customers and Responding to Inquiries

The Hondo National Bank recognizes and respects the privacy expectations of our customers. The bank will provide notices to customers about its privacy policies and practices, including whether it discloses customer information to non-affiliated third parties and affiliates. The bank will issue initial privacy notices prior to the time the customer relationship is established and annually thereafter. All notices will be given either by hand delivery or mail. We want our customers to understand our commitment to privacy in our use of customer information. As a result of our commitment, we have developed these privacy principles which are made readily available to our customers. Customers who have questions about these privacy principles or have a question about the privacy of their customer information should call The Hondo National Bank at 830-426-3355 (Hondo), 830-796-3333 (Bandera),  830-278-8765 (Uvalde), or 830-232-4553 (Leakey) .

Policy approved by the Board of Directors on May 19, 2008.