THREE - Bankers' Bank of Kansas

THREELESSONSFROM THREE DECADES

2018 ANNUAL REPORT | 30th Anniversary Issue

2 | 2018 BBOK ANNUAL REPORT

$44.11

$32.09

$51.19

$59.68

$29.43

AMOUNT INCREASE

4.43%

2.83%3.00%

4.65%

5.18%

PERCENTINCREASE

$1039.90 $1069.33$1152.61

$1212.29

VALUEPER SHARE

2014 2015 2016 2017 2018

BBOK BANCSHARES, INC.BOOK VALUE

$1101.42

THE LESSONS:

TRUSTMutual trust builds strong partnerships.

INVESTInvest in staff and officers with the vision and skills to advance community banking.

IMPLEMENTImplement strategic products and innovative technology to maximize impact.

30TH ANNIVERSARY ISSUE | 3

Accuracy, reliability, and integrity are a must in our industry. We trust BBOK and its

knowledgeable staff to provide excellent service because they are community

bankers committed to delivering solutions for our bank’s success.

John Engelbert First State Bank • Norton, KS

BBOK provides years of professional experience and expertise that assists

Community Bank in meeting its customer’s needs. Across all lines of

products and services, Bankers’ Bank of Kansas gives us the sources, means and

confidence to meet our challenges.

Steve Carr Community Bank • Wichita, KS

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Three decades have passed since a group of Kansas bankers decided they wanted to take charge of their correspondent relationships. Through the years Bankers’ Bank of Kansas has learned many lessons. I believe the greatest of which originates from the vision of our founders, that our path is brighter when we walk it together.

BBOK’s mission served us well this year. Financially, we posted the best net income in our 30 year existence while managing the headwinds of margin compression, and maintaining solid loan quality. Our financials were also helped by the reduction in tax rates that took effect this year. Net income continues to be reinvested in products and services to deliver the best customer service possible through our technology and our people. Loan totals continued their moderate growth. A summary of this year’s performance can be found on pages 10 and 11.

Our lenders’ role evolved as part of BBOK’s commitment to cross-functionality. The newly created relationship manager positions align responsibilities to better assist our partner banks through one key point of contact.

In the past year the staff met monthly to dissect our mission statement so we could better define what it means to us and how we can apply it to serve you best. The meetings were not about memorizing a statement verbatim, but instead we encouraged each employee to identify with the mission, determine how it personally applies, and ultimately see how their individual successes and challenges shape BBOK.

The BBOK board of directors continues to be comprised of bankers from a variety of markets and geographies. Brad Oakes, Bruce Schriefer and Pat Walden will retire from the BBOK board this year. Their commitment and wisdom has served BBOK well. We can’t begin to thank them enough!

BBOK’s success for the past 30 years is a reflection of the resilience of the Kansas banking community. I feel incredibly fortunate to have been with the bank almost 21 years, and to now lead a team who actively looks for ways to help Kansas banks prosper, while delivering financial returns to our shareholders. Thank you for continuing to walk the path with us.

Calvin Coady, President/CEO

Board ofDirectors

Brad Oakes Chairman of the Board, BBOK; President/CEO, FirstOak Bank, Independence

Mark Keeny Vice Chairman of the Board, BBOK; CEO, Citizens Bank of Kansas, Kingman

Robert Beymer Chairman/CFO/Senior Trust Officer, The Kearney County Bank, Lakin

Scott Bird President/Chairman, KansasLand Bank, Quinter

Calvin Coady President/CEO, BBOK, Wichita

Dan Coup President/CEO, The First National Bank, Hope

Lloyd Culbertson President, First National Bank and Trust, Phillipsburg

Mark Emley Market President, Academy Bank, Overland Park

Larry Fief President, The Bank of Tescott, Salina

John Lehman President/CEO, The First National Bank of Girard, Girard

Steven Niemack President/CEO, Stockgrowers State Bank, Maple Hill

Michael Scheopner President/CEO, Landmark National Bank, Topeka

Bruce Schriefer Past President, BBOK, Wichita

Patrick Walden President/CEO, Garden Plain State Bank, Wichita

TRUST

Since BBOK’s beginning in 1988, we’ve focused on hiring individuals determined to accelerate community banking. The depth, breadth and experience of our team,

is well-positioned to lead BBOK today and into the future.

SUCCESS STARTS WITH EXCEPTIONAL PEOPLE


Terry Puett, Tim Binns, Mike Sikes and Chris Yohe

Shasta Jenkins, Nicki Gray, Sandy Huxman and Abby Cranmer

Ashley Beck, Jesus Garcia and Carol Koehn

Lucy Hadley, Connor Detlefsen and Ashley Smith

INVEST

EXECUTIVE Calvin Coady, President/CEO

Craig Ellis, Executive Vice President

ADMINISTRATIONMegan Rush

Rachel WalcherCheryl Warashina

BANK CARDKennadie Adams

Sherry Beard Abby Cranmer

Nicki GrayLea Gubitz Joy Holden

Sandy Huxman Shasta Jenkins

Betty Nguyen Christy Simonsen

Paula SniderKaren Schultz

COMPLIANCEPeg Baldwin

ELECTRONIC BANKING/ OPERATIONSSharla Cook

Chris GilbertLucy Hadley

Candice JacksonAshley Smith

Tracy StewartLisa Valentine

FINANCEAshley BeckTara BreaultJesus GarciaCarol KoehnJulie Lyman

Michael RayTonya Rolo

Ann Sathngam

ITConnor Detlefsen

Scott FowlerSteve MadewellCade Snedden

LENDINGTim Binns*

Cathy GainesMike Sikes*

Kyler SteadmanDennis WilleyChris Yohe*

MARKETING Terry Puett*

Amanda Williams

FINANCIAL SERVICESTodd Schoenhofer

Andrew Smarsh*BBOK Relationship Managers

Officers and Staff


Creating a client-focused culture supported by individual empowerment, responsibility and accountability is a priority at BBOK. Individuals have the opportunity to hone their skills through professional development opportunities. In 2018, two staff members became officers and one officer was promoted.

By fostering a friendly, fun and professional workplace, we believe our employees can give their best to partner banks.

Credit is a core competency of Bankers’ Bank of Kansas and it remains strong. Loan origination volume continued to increase. Loan sales totaled $78,224,726 during 2018 – and past dues and non-accrual loans to total loans was at .057% at year-end.

We remain well-capitalized and increased the number of shareholders to support our continued development.

Credit CapitalBBOK’s simple, straightforward business model has performed exceedingly well through the widely varying economic and industry conditions of the past three decades.

Business


Bankers’ Bank of Kansas continues to leverage the economies of scale to increase our bank partners’ ability to: • Manage funding needs • Provide creative loan solutions to bank partners • Wire money to international locales • Increase non-interest income through a customized bank card program

We invested in a new credit card platform; enhanced vendor contracts for additional customer bank income; and improved server technology and security.

Implementing new procedures, products and technology remains core to the success of BBOK for the next 30 years.

IMPLEMENT

2018 Performance Highlights*

BOOK VALUE PER SHARE

5%Increase

EARNINGS PER SHARE

33%Increase

CASH DIVIDEND

62%Increase


*based on comparisons from 2017-2018


Financials


BBOK MISSIONBe a trusted partner and deliver: solid financial strength, superior

products and unwavering customer service.

GROWTH2018

8.27

2014 2015 2016 2017 2018

8.72 8.708.98 9.04

AVERAGE SERVICESPER CUSTOMER

CAPITAL GROWTH (MILLIONS)

2014 2015 2016 2017 2018

$23 $23.5$24.6

$26.4$28


ROE

2014 2015 2016 2017 2018

5.63%

3.53%

5.96%6.26%

7.93%


WHEN WE FOCUS OUR EFFORTS ON HELPING OUR BANK PARTNERS, WE SUCCEED.

492%Steady growth in loan, credit card

and safekeeping portfolios

new banks became BBOK shareholders

customer satisfactionrating

*source: BBOK customer survey March 2018

Through scholarships and summer internship opportunities, BBOK is committed to attracting and training young people who

are passionate about the future of community banking.

Investing in Next Gen Bankers

187 SHAREHOLDERS SPANNING THE ENTIRE SUNFLOWER STATE

Almena State Bank, Almena

Alva State Bank & Trust Co., Alva, OK

Andover State Bank, Andover

Equity Bank, Andover

Union State Bank, Arkansas City

Stockgrowers State Bank, Ashland

Farmers Bank & Trust, Atwood

Baldwin State Bank, Baldwin City

Mid-America Bank, Baldwin City

American Bank of Baxter Springs, Baxter Springs

Valley State Bank, Belle Plaine

New Century Bank, Belleville

First National Bank, Beloit

Bendena State Bank, Bendena

State Bank of Bern, Bern

Farmers State Bank, Bucklin

Emerald Bank, Burden

State Bank of Burrton, Burrton

Stock Exchange Bank, Caldwell

State Bank of Canton, Canton

Cottonwood Valley Bank, Cedar Point

First Heritage Bank, Centralia

Community National Bank & Trust, Chanute

Home Savings Bank, Chanute

Citizens State Bank, Cheney

RCB Bank, Claremore, OK

Union State Bank, Clay Center

Elk State Bank, Clyde

Community State Bank, Coffeyville

Farmers & Merchants Bank of Colby, Colby

Peoples Bank, Coldwater

Conway Bank, Conway Springs

Citizens State Bank and Trust Company, Council Grove

Swedish-American State Bank, Courtland

Ninnescah Valley Bank, Cunningham

Verus Bank, Derby

TriCentury Bank, DeSoto

First National Bank, Dighton

State Bank of Downs, Downs

Heartland Tri-State Bank, Elkhart

Citizens State Bank & Trust Co., Ellsworth

Pony Express Bancorp, Inc., Elwood

ESB Financial, Emporia

Lyon County State Bank, Emporia

Dickinson County Bank, Enterprise

Flint Hills Bank, Eskridge

Kaw Valley State Bank, Eudora

Union State Bank, Everest

Farmers State Bank, Fairview

The City State Bank, Fort Scott

First National Bank, Frankfort

Patriots Bank, Garnett

The First National Bank of Girard, Girard

GNBank, N.A., Girard

Southeast Kansas Bancshares, Inc., Girard

First National Bank, Goodland

Gorham State Bank, Gorham

American State Bank & Trust, Great Bend

Community Bank of the Midwest, Great Bend

Farmers Bank & Trust, Great Bend

Bank of Greeley, Greeley

Citizens State Bank, Gridley

The Halstead Bank, Halstead

The First National Bank of Harveyville, Harveyville

Haviland State Bank, Haviland

Golden Belt Bank, FSA, Hays

First State Bank, Healy

Hillsboro State Bank, Hillsboro

Denison State Bank, Holton

Farmers State Bank, Holton

The First National Bank, Hope

Howard State Bank, Howard

Citizens State Bank, Hugoton

Central Financial Corporation, Hutchinson

First National Bank of Hutchinson, Hutchinson

FirstOak Bank, Independence

Jamestown State Bank, Jamestown

Johnson State Bancshares, Inc., Johnson

Community First Bank, Kansas City

nbkc bank, Kansas City, MO

Citizens Bank of Kansas, Kingman

KANZA Bank, Kingman

Nekoma State Bank, La Crosse

The Kearny County Bank, Lakin

Great American Bank, Lawrence

The University National Bank, Lawrence

Mutual Savings Association, Leavenworth

BMO Harris, Leawood

CrossFirst Bank, Leawood

First Business Bank, Leawood

Central Bank of the Midwest, Lee’s Summit, MO

Shareholders * Banks in orange represent new Shareholders added to BBOK’s holding company, BBOK Bancshares, Inc. in 2018


Small Business Bank, Lenexa

Vintage Bank Kansas, Leon

The Community Bank, Liberal

Arvest Bank, Lowell, AR

Lyndon State Bank, Lyndon

KS StateBank, Manhattan

Landmark National Bank, Manhattan

State Exchange Bank, Mankato

Stockgrowers State Bank, Maple Hill

Marion National Bank, Marion

Marquette Farmers State Bank, Marquette

Citizens State Bank of Marysville, Marysville

First Commerce Bank, Marysville

United Bank & Trust, Marysville

Farmers State Bank, McPherson

Peoples Bank & Trust Co., McPherson

Morrill & Janes Bank & Trust Co., Merriam

Bank of Minden, Mindenmines, MO

The Mission Bank, Mission

The Citizens State Bank, Moundridge

Carson Bank, Mulvane

Southwind Bank, Natoma

First Neodesha Bank, Neodesha

Midland National Bank, Newton

First State Bank, Norton

Farmers State Bank, Oakley

The Bank, Oberlin

Bank of the Prairie, Olathe

First Federal of Olathe Bancorp, Olathe

The Olpe State Bank, Olpe

First Option Bank, Osawatomie

The Farmers Bank of Osborne, Osborne

First Security Bank, Overbrook

Kansas State Bank, Overbrook

Academy Bank, Overland Park

Blue Valley Ban Corp, Overland Park

Cornerstone Bank, Overland Park

Bank of Palmer, Palmer

Farmers National Bank, Phillipsburg

Farmers State Bank, Phillipsburg

First National Bank and Trust, Phillipsburg

Simmons Bank, Pine Bluff, AR

Plains State Bank, Plains

Bank of Prairie Village, Prairie Village

The Bank of Protection, Protection

KansasLand Bank, Quinter

First State Bank, Ransom

The Riley State Bank of Riley, Riley

The Bennington State Bank, Salina

First Bank Kansas, Salina

Sunflower Bank, N.A., Salina

Astra Bank, Scandia

First National Bank, Scott City

Security State Bank, Scott City

First National Bank, Sedan

Community National Bank, Seneca

Smith Center Bancshares, Inc., Smith Center

First National Bank, Spearville

Great Southern Bank, Springfield, MO

SJN Bank of Kansas, St. John

Prairie Bank of Kansas, Stafford

Alden State Bank, Sterling

First Bank, Sterling

Solutions North Bank, Stockton

First National Bank, Syracuse

Valley State Bank, Syracuse

Tampa State Bank, Tampa

The Bank of Tescott, Tescott

First State Bank & Trust, Tonganoxie

Alliance Bank, Topeka

Capital City Bank, Topeka

Community Bank, Topeka

CoreFirst Bank and Trust, Topeka

Silver Lake Bank, Topeka

VisionBank, Topeka

Towanda State Bank, Towanda

Grant County Bank, Ulysses

Union State Bank, Uniontown

Kendall State Bank, Valley Falls

Bank of the Flint Hills, Wamego

Kaw Valley State Bank & Trust Co., Wamego

FNB Washington, Washington

Farmers State Bank, Wathena

First National Bank of Kansas, Waverly

CBW Bank, Weir

The Bank of Commerce & Trust Co., Wellington

Impact Bank, Wellington

Security State Bank, Wellington

Farmers State Bank, Westmoreland

Chisholm Trail State Bank, Wichita

Community Bank of Wichita Inc., Wichita

Emprise Bank, Wichita

Garden Plain State Bank, Wichita

Legacy Bank, Wichita

Southwest National Bank, Wichita

Wilson State Bank, Wilson


555 N. Woodlawn, Bldg. 5Wichita, Kansas 67208

800.999.5725 | 316.681.2265BBOK.COM

MEMBER FDIC

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THREE - Bankers' Bank of Kansas