York Traditions Bank Notes to Financial Statements 1.  Summary of Significant Accounting Policies Nature of Operations The accounting policies discussed below are followed consistently by York Traditions Bank ( the Bank).  These policies are in accordance with accounting principles generally accepted in the United States of America and conform to common practices in the banking industry.  The Bank is a Pennsylvania- chartered commercial bank, regulated by the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation, that was incorporated on March 14,  2002 and commenced operations on October 28, 2002.  The Bank operates as a traditional community bank serving the Central Pennsylvania market with an emphasis on commercial and consumer banking.  The Bank has evaluated events and transactions occurring subsequent to the balance sheet date of December 31, 2013, for items that should potentially be recognized or disclosed in these financial statements. The evaluation was conducted through February 19, 2014, the date these financial statements were available to be issued.  For comparative purposes, the prior years’ financial statements may be reclassified to conform to report classifications of the current year. These reclassifications, if any, had no impact on net income or shareholders’ equity.  Subsequent Events Reclassifications Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.  Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of deferred tax assets, and the determination of other - than - temporary impairment on investment securities.  Most of the Bank’ s activities are with businesses and individuals located in Central Pennsylvania.  Note 2 discusses the types of securities in the Bank’ s investment portfolio. Note 3 discusses the types of loans the Bank makes to its customers.  The Bank does not have any significant concentrations to any one industry or customer.  Significant Group Concentrations of Credit Risk 11