Free Credit Reports Are Now Available Directly from the Major Credit Bureaus

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1 ADAMS BANK & TRUST Your Financial Services Center 2 nd Quarter 2005 Free Credit Reports Are Now Available Directly from the Major Credit Bureaus Nebraska Brule Chappell Grant Imperial Indianola Lodgepole Madrid North Platte Ogallala Sutherland Colorado Berthoud Colorado Springs Corporate Toll-Free Telebanc Toll-Free in Ogallala info@abtbank.com World Wide Web As a result of the Fair and Accurate Credit Transactions Act, commonly called FACT, each of the three major credit bureaus operating in the United States are now required to make available directly to consumers one free credit report per year. This new credit report program is being implemented in phases throughout the country, starting with the western states last December and finally incorporating the eastern states this coming September. The states of Colorado and Nebraska are now fully implemented in the program so you can now request your free credit reports. Participating credit bureaus The three major credit bureaus that are required to participate in this free program are: Equifax Experian TransUnion Benefits to the consumer Should you order a free credit report? We think it is a good idea for every household to know what its credit status is. Your credit rating can affect many aspects of your life, including applications for consumer loans, home loans, car loans, credit cards, insurance, services where you are billed after the service is rendered, and even employment. It can also affect the interest rate you are charged on the loans that you do receive. By ordering your free credit reports, you can check the accuracy of the information in your credit files. If you find that you have a lowered credit rating due to incorrect information, you can then initiate a process to have the information investigated and corrected. How to order your credit reports The three major credit bureaus have cooperated to develop a convenient internet website for the ordering of the free reports. You can go to: and follow the instructions for obtaining your free reports. Caution: This website is the only valid website we are aware of. Don t use any other website because it could be an imposter. Also, do not link to any sites mentioned in an you may receive. Use a web browser and actually type in the web address above to properly access this valid and secure site. Stagger your requests Now before you rush out and order all three of your free credit reports at once, let me suggest that you stagger your requests, ordering one free credit report from a different credit bureau every four months or so. Why? Because you are allowed only one free credit report per year from each credit bureau and staggering your requests will allow you to monitor any changes that occur in your credit rating during the year. Most major lenders report to all three of the major credit bureaus so your credit files at the three bureaus should contain largely the same information. True, some lenders may report to just one credit bureau, but those are the exception and we think it is more helpful if you are able to check your credit rating three times a year instead of just once. You can find additional information on the free reports and how to dispute errors at: Mel Adams Chairman

2 Is Your Estate Plan about More than Money? by Todd Adams President of Adams Bank & Trust When we think of estate planning, many of us tend to think mostly in financial terms. We think about the monetary value of our assets our wealth and how we can preserve it, how we should divide it, how we can give portions of it away in the most effective manner. That s all good. Estate plans are, first and foremost, about the preservation and distribution of accumulated wealth. But there is more. Family harmony One of the objectives of a good estate plan is family harmony. A lot of estate plans try very hard to distribute the valuable assets of an estate in fair and equitable ways. But many estate plans stop there, thinking that family harmony hinges only on the fair distribution things that have a market value. Truly good estate plans, however, also pay attention to the effective distribution of the accumulated stuff of life that doesn t have much market value. Stuff like military medals, children s artwork, photo albums, knickknacks of all sorts, ugly heirlooms with sentimental value, old correspondence, broken gadgets that played a part in family life, and anything and everything else that might have some measure of meaning to someone in the family. Karen Brady, an attorney in the Denver area who specializes in estate planning with seniors, writes in the CSA Journal (published by the Society of Certified Senior Advisors) that she strongly advises her clients to openly discuss the distribution of all personal property with family members. Many of her clients, she notes, are surprised by what various family members care about. While the client may have been considering who should get the family silver, the children are more concerned about who receives the special hat every child got to wear on his birthday. Things with little or no market value can have great sentimental value to one or more family members. And how these special items are distributed can have a big impact on family harmony. This is not to say that an estate plan should overtly list every little knick and knack in the house and specify who is to receive it. That s not practical, nor necessary. Instead, the estate plan could specify the process that is to be used distribute the personal property. For example, an estate plan could specify that family members will take turns in choosing one item at a time. That way each family member can always choose his or her most cherished item from all the items that have not yet been chosen. There is, of course, the question of who goes first, but that could be decided by age, proximity to the parent before death, most significant provider of care, or any other objective criteria. Another process might be a family auction where all family members start out with a set number of credits or points or poker chips. The highest bidder on an item gets to keep that item, but his or her purchasing power on future items is correspondingly reduced. Whatever process is specified, the simple fact that a process is specified is usually more important than the exact process itself. As Ms. Brady notes, The very existence of direction from the parents will cause family members to perceive the distribution as fair. Money is a quantifiable concept. Family harmony is not. A good estate plan needs to take account of both. Inexact Address Can Cause Debit Card Denial Many credit/debit card purchases made by phone or internet involve some degree of address verification in addition to name and card number verification to authenticate the card. This sometimes causes problems for legitimate card holders because different merchants use different levels of precision in determining whether or not the information provided at the time of purchase matches the information in our account record. When a merchant requests address verification, Adams Bank & Trust transmits the exact information in our records. If you have provided the merchant with information that is close to but not an exact match of that address, the merchant may or may not accept the card, depending on the rules of precision that the merchant s software is using. For example, if our records show an address of 2448 Cedar Avenue, but you tell the merchant that the card address is 2448 Cedar, the merchant s verification software may or may not consider that a match. Adams Bank and Trust has no control over the matching of the information. It is all up to the merchant s computer software. How to get a positive match Most merchants do not require an absolutely exact match, but the only way you can be completely sure that the merchant will accept your card is by giving the merchant an address that is exactly the same (even down to the number of digits in the zip code) as the address that shows on your monthly checking account statement. 2

3 We d Like You To Meet: Mike Knaub Network Manager Ogallala 3 Smart things to do now to make your financial life easier or more rewarding Visit the website and order your free credit report. Start, or continue, contributing to an Individual Retirement Arrangement. For most of Adams Bank & Trust s history, we never had, nor needed, a person in Mike Knaub s position. His job is strictly a product of the computer era. As network manager, Mike looks after the local and wide area networks that connect all our computer devices in all of our offices. He is responsible for all server-based hardware and their operating systems and he is also in charge of network security. The toughest part of the job, Mike says, is keeping the network safe from viruses and malicious hackers. Mike, 39, is a native of Ogallala. After graduating from Ogallala High School, he majored in accounting at the University of Northern Colorado in Greeley. He later transferred to Metro State College in Denver where he graduated with a bachelor of science in accounting. In 1985, shortly after Mike started working in an accounting job at the Denver office of Aetna Life and Casualty, the company needed someone to install personal computers and begin establishing a network. He volunteered and discovered that computer work was a lot more interesting than accounting. Over the next dozen years Mike had a Make sure your estate plan adequately provides for the distribution of your personal property. Services Available at Adams Bank & Trust Transaction Accounts Basic Checking Regular Checking Bonus Checking SuperNOW Checking Student Checking Club 50 and Club 50 Gold Premier Checking Transaction Services Direct Deposit Wire Transfer of Funds Visa Check Card Bank-by-Mail Loan Services Overdraft Protection Business/Agricultural Loans Consumer Loans (home, auto, etc.) Student Loans Home Improvement Loans Mortgage Loans Second Mortgages Construction Loans Trusts and more Complete Trust Services Safe Deposit Boxes U.S. Savings Bonds Notary/Signature Guarantee Leasing Foreign Exchange Insurance (all types) Insured Savings & CDs Regular Savings Money-Market Savings Certificates of Deposit for any term from 1 60 months Tax-Deferred Retirement Plans, including IRA and Roth IRA (Individual Retirement Accounts), SEP (Simplified Employee Pension) Information and Convenience Services Automatic teller machines Internet Banking Internet Web Site Telebanc 24-hour banking Continued on back page. 3

4 Mike Knaub Continued from page 3. variety of computer-related jobs from building networks to running a help desk to equipment sales for several different companies. In 1997, when he was contacted by the Ogallala superintendent of schools about becoming technology coordinator, Mike had become tired of the Denver hubbub and was ready to move back and be with family. That move was a fortunate event because it allowed Mike and his father to spend a lot of time together before his father died and it also allowed him to meet and marry his wife, Lisa. Mike shifted from the school system to Adams Banik six years ago, and he has been our network manager ever since. The best part about this job, Mike says, is that I get to work with a lot of cool stuff. And no two days are the same. There is no routine. But, he adds, it s a thrill to know that everything is running properly that everything is safe. One of the things Mike is particularly proud of is the new 11,000 square-foot operations center. I drew up some preliminary plans for the data center portion of the building, Mike explained, and people liked it so much they asked me to help design the whole building and oversee the construction process. Away from work Mike enjoys family activities including jet skiing with their three kids, who range in age from two to nine and various forms of community service. He likes youthrelated activities, having coached soccer and baseball, and he is a newly-elected member of the Ogallala Board of Education. I received a good education here, Mike notes, and I want to do what I can to insure that my kids have the same opportunity. Mike is Past Exalted Ruler and current treasurer of the Ogallala Elks Lodge. He and his family attend the United Methodist Church. Adams Bank & Trust Balance Sheet as of March 31, 2005 Cash On Hand And Due From Banks $7,205,602 Money on hand in our bank and money to our credit in other banks. Government and Agency Bonds 42,638,688 Marketable investments in bonds and other securities of the U.S. Government and its agencies. Federal Funds Sold 0 Excess funds loaned to other banks on a day-to-day basis. Loans 287,239,509 The total of all customer loans, including farm, business, auto, home, student, consumer, and personal loans, etc. Buildings, Furniture and Fixtures 10,309,282 The current book value, after depreciation, of our buildings, computers, equipment, etc. Other Assets 6,562,646 Includes interest on loans that has been earned but not yet collected, expenses that have been prepaid, etc. Total Assets $353,955,727 Deposits $265,105,011 Includes all customer funds held on deposit. Other Liabilities 53,884,074 Includes borrowings by the bank, interest on deposits and other expenses accrued but not yet paid, deferred taxes, etc. Capital 3,000,000 The amount paid by initial stockholders for bank stock. Surplus 12,863,288 Additional money contributed by stockholders for added strength. Undivided Profits and Reserves 19,103,354 provide added strength to meet possible future loan losses and to replace buildings and equipment as they wear out. Total Capital Accounts 34,966,642 The total capital available for the safe operation of Adams Bank & Trust. Total Liabilities & Capital Accounts $353,955,727 PRSRT STD U.S. Postage P A I D Lincoln, NE Permit No. 592 Return Service Requested P.O. Box 720 Ogallala, NE Member FDIC ADAMS BANK & TRUST EQUAL HOUSING LENDER World Wide Web: info@abtbank.com Adams Bank & Trust Internet addresses:

5 2 nd Quarter 2005 Which Is the Best Age to Start Taking Social Security Benefits: 62, 65+ or 70? Raymond James Investment Executives By Jim Prange and Chad Adams This article is about Social Security, but don t worry it is not about the solvency of Social Security or the various proposals for funding the program s future. This article is about a more immediate concern for people who are approaching the age of 62: Which is the best age to start receiving Social Security benefits? The calculation of any individual s actual Social Security benefit amount is a very complex affair. We won t be going into all the rules and exceptions here. Our purpose is just to cover, in broad strokes, the three basic options you have as you approach retirement age: Option A: Early retirement with permanently reduced benefits. Option B: Standard retirement at full benefits. Option C: Delayed retirement with enhanced benefits. Under standard retirement, you receive full Social Security benefits if you start your benefits at your Full Retirement Age. However, you don t have to wait until your Full Retirement Age to begin receiving Social Security Benefits. You can begin receiving benefits as early as age 62. If you elect to begin receiving benefits early, however, the amount of your monthly Social Security benefit will be lower than the full benefit amount you would have received if you had waited until your Full Retirement Age. And the reduction in benefits is permanent. In other words, your benefits remain lower than full retirement benefits for the remainder of your life; they do not increase Continued overleaf. What is Full Retirement Age? For many years the Full Retirement Age was the traditional 65 years. Now, however, the Full Retirement Age is gradually increasing. Here is a partial listing of the new ages: If you were born in: Your Full Retirement Age is: years, 6 months years, 8 months years, 10 months years Securities offered exclusively through Raymond James Financial Services, Inc. (an independent broker/dealer, member NASD/SIPC), are NOT FDIC Insured NOT GUARANTEED by Adams Bank & Trust Subject to risk and may lose value.

6 Which Is the Best Age to Start Social Security? Continued to the full level when you achieve your full retirement age. (They will, however, be increased by any cost of living adjustments that apply to all benefit amounts.) So, here s the trade-off: A full monthly benefit if you wait until your Full Retirement Age versus a reduced monthly benefit if you start earlier. Simplified example To find out what this might mean, lets look at a simplified example based on a full monthly benefit of $1,400 for someone whose Full Retirement Age is 65 years and 10 months. If that individual retires at age 62, his monthly benefit will be reduced by 20%, giving him a monthly benefit of $1120 for life (unadjusted for cost of living). By retiring early, this individual will receive an extra 3 years and 10 months of benefits that he would not have received if he had waited until his Full Retirement Age. At $1,120 per month, that amounts to an extra $51,520 in early benefits. How long will it take a normal retiree, who is starting later but getting more, to make up that difference in benefits? A normal retiree will be getting $280 more each month. At that rate it would take 184 months to make up initial advantage that the early retiree received. That s 15 years and 4 months. In other words, when the normal retiree reaches age 81 years and 2 months, he will have received the same total benefits that the early retiree has received. In a strictly economic sense, then, our hypothetical retiree will come out ahead by waiting for the Full Retirement Age as long as he lives past the age of 81 years and 2 months. If he dies before then, he would have come out ahead by taking early retirement. But that s not anywhere close to the whole story. The real answer is different for different individuals because each answer depends on a variety of individual factors. Here are just some of the extra things to think about: 1. How is your health? If you are in poor health and expect a shortened life span, you will probably come out ahead with early retirement. On the other hand, if you are in good health and longevity runs in your family, there is a good chance you will come out ahead by waiting. 2. If you do start benefits early, will you really retire or will you keep on working? If you keep on working, your Social Security benefits will be reduced if your annual earnings exceed certain limits. These benefit reductions are temporary, ceasing when you attain your Full Retirement Age. However, when combined with the permanently reduced benefits that go with early retirement, these potential reductions can diminish the attractiveness of early retirement. 3. How much do you like working? If you will be happier being retired rather than working a few more years, then early retirement is more attractive. But, if you enjoy your job, there is no reason to retire early. In fact, you may wish to delay your Social Security benefits until age 70, which will have the effect of increasing your monthly benefit once your Social Security benefits do start. Complicated decision We ve just scratched the surface on this complicated issue. You can see that it s not a slam-dunk decision. It takes a lot of thinking and analysis and you may be wise to seek the help of a qualified financial advisor. The information contained in this report does not purport to be a complete description of the securities, markets or developments referred to in this material. The information has been obtained from sources we consider to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Chad Adams and Jim Prange and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Past performance may not be indicative of future results. For assistance in reviewing your investment plan (or in creating one), please call any Adams Bank & Trust office for an appointment with a Raymond James Investment Representative. All Nebraska offices and Berthoud, Colorado are served by Jan Acker, Chad Adams, Brandy Barrett and Jim Prange located at Adams Bank & Trust, 315 N. Spruce, Ogallala, NE or (toll-free). In Colorado Springs, see Stephen A. Zamborelli 8 S. Nevada Avenue Colorado Springs, CO