Nantahala Bank & Trust Company Privacy Statement

YOUR PRIVACY IS IMPORTANT TO US
You provide important information about yourself to a variety of businesses and organizations. The same is true when you do business with our financial institution. You're asked to provide us with certain personal information that helps us give you better service and complete your transactions more effectively.

We work diligently to safeguard the information you give to us. In fact, we developed the following policies to ensure you confidentiality and maintain your confidence in our institution. These policies detail the strict standards we have in place. For this reason we ask that you
please read the following information carefully.

NOTICE OF YOUR FINANCIAL PRIVACY RIGHTS
We, our, and us, when used in this notice, mean Nantahala Bank & Trust Company.
This is our privacy notice for our customers. When we use the words "you" and "your" we
mean the following types of customers:

• Our consumer customers who have a
  continuing relationship by purchasing or
  holding financial products or services such
  as a(n):
• Deposit account
• Loan account
• Safe deposit box
• Insurance policies issued by or through us.

We will tell you the sources of the information we collect about you. We will tell you what measures we take to secure that information. We first define some terms.
Nonpublic personal information means information about you that we collect in connection with providing a financial product or service to you. Nonpublic personal information does not include information that is available from public sources, such as telephone directories or government records.

Hereafter, we will use the term "information" to mean nonpublic personal information as
defined in this section.

An affiliate is a company we own or control, a company that owns or controls us, or a
company that is owned or controlled by the same company that owns or controls us.
Ownership does not mean complete ownership, but means owning enough to have control.

A nonaffiliated third party is a person we do not employ or a company that is not an
affiliate of ours. This is also known as nonaffiliated third party, or simply, an "other
party."

THE INFORMATION WE COLLECT
We collect information about you from the following sources:

• Information you give us on applications or
  other forms
• Information about your transactions with us
• Information about your transactions with
  other parties
• Information from a consumer reporting
  agency
• Information we receive as a result of
  verifying customer information

INFORMATION WE DISCLOSE ABOUT YOU
We do NOT disclose any information about you to anyone, except as permitted by law. Examples of this might include disclosures necessary to service your account or prevent
unauthorized transactions.

THE CONFIDENTIALITY, SECURITY, AND INTEGRITY OF YOUR INFORMATION
We restrict access to information about you to those employees who need to know that
information to provide products or services to you. We maintain physical, electronic, and
procedural safeguards to protect this information.

INFORMATION ABOUT FORMER CUSTOMERS
We do not disclose information about former customers, except as permitted by law.