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					Bankers’ Bank of Kansas

BBOK Bancshares, Inc.

Annual Report 2006

Paper

Scissors
Rock

Dear investors, customers and friends, The momentum continued in 2006! Your BBOK posted all-time high earnings and increased total assets under management and participation loans sold to our shareholders. We continued as the market leader in correspondent services to Kansas banks. BBOK came to life through the collaboration of a core group of visionary bankers almost 20 years ago. It has evolved as a real success story as a result of the firm commitment of a dedicated board of directors willing to contribute their time and talent to the BBOK project. Since its inception BBOK has been fortunate to have 48 different Kansas bankers serve on its board.

We’re Primed for Success.

Behind the scenes we have a talented batch of officers and employees who bring professionalism, dedication and talent to focus on the needs of our customers and owners. The thing that impresses me most about our staff is that they are never reluctant to take on a project if it will benefit BBOK and our stakeholders. We have successfully “taken on the big guys” with products such as ABIL Web, several large loan syndications and, most recently, our decision to get into the image-exchange market through the development of our KIX network. All of these undertakings would have been easy to defer in another direction; by tackling them with our own talent we are able to control our destiny for the benefit of Kansas banks. The year 2007 will be no different. In fact, in many aspects it may be our most challenging yet. Issues are becoming more complex and the successful execution of solutions takes talent, vision, focus, patience and capital. We believe, however, that we are primed for success. That said, it won’t be the same in 2007 as three directors complete their terms on the board. Tim Kohart, Dean Mann and Steve Jay have been rock-solid contributors, boosters and stewards of BBOK for the past six years. We all feel that time flies but it seems like only a year ago that they came on the scene. Thank you, gentlemen, on behalf of our 177 shareholders. If you’ll permit the pun and the youthful euphemism, you rock.

Bruce Schriefer President/CEO

The Strategy of Progress.
Growth can happen by accident. Unforeseen windfall. Emerging opportunity. Being in the right place at the right time. Since our inception in 1988, we have grown to exceed $100 million in assets. That level of progress, however, has not happened by chance. We have employed people and processes to ensure that our growth is largely calculated, the byproduct of pressing strategy.

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Paper-Scissors-Rock
“Paper-Scissors-Rock,” also known as rochambeau, originated 200 BC in Japan where it was and is called “Jan-Ken.” Referred to as the “ultimate decision-making tool,” the game has been played across ages and continents to decide small and large matters. A study of side-blotched lizards at the University of California, Santa Cruz, for example, revealed that the throat color of the species is the result of a sort of paper-scissors-rock game in nature. The strategy of the game is simple: paper covers rock, scissors cut paper, rock breaks scissors. Players count together to three counts—a sort of one-two-three Ro! Sham! Bo! priming position. At the end of the third count players simultaneously change their fists into any of three objects, which they then “throw” towards their opponent. Each of the three basic hand-signs beats one of the other two.

Paper Scissors Rock
While the officers and staff of BBOK certainly don’t assemble and assume the priming stance to settle issues on your behalf, we do employ our own strategic methodology. And at a high level it’s about as simple as a game of paper-scissorsrock. Our ideas for solutions to better serve Kansas community banks start out on a piece of paper. These ideas are circulated, closely scrutinized, discussed and filtered. On the basis of solid review, some end up on the cutting-room floor.

Regularly, however, ideas are brought to the table with the strategic and operational sensibility to improve the way Kansas banks do business. The best of these ideas translate into new products and solutions that become the solid rock of our enterprise. Through all of this, your successes—including the positive financial outcomes and greater ease of doing business you tell us you enjoy—pipe inspiration into our strategic processes and lead us to take the priming position on your behalf again and again. We return to paper to build on the foundation of existing products and solutions. Paper covers rock. We continue to test the merit of emerging solutions. Scissors cut paper. Annually, we deliver a competitive, progressive lineup of financial solutions to ensure you continue to operate efficiently and win market share. Rock breaks scissors.

Paper Scissors Rock:

BBOK Strategerie.

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Paper

Paper Trivia

}

On the subject of pushing the envelope: While today it is considered a novel, War and Peace broke so many novelistic conventions of its day that many critics of Tolstoy’s time did not consider it as such. —from Wikipedia The Free Encyclopedia

The Evolution of an Idea.
Ideas, practices or solutions with the potential to positively impact or improve Kansas banking and benefit Kansas banks begin their journey on a piece of paper—the physical or virtual memorandums that create a trail of calculated thought and synthesis. Our team brought a half ream of new ideas to the table in 2006. The concept of a Kansas image exchange network had moved from discussion to proposal by midyear.

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Following is an excerpt from a BBOK Cash Letter Processing Situation Analysis presented by Lisa Valentine, vice president, to the board in July 2006:

Conditions
Bankers’ Bank of Kansas currently acts as a settlement agent in the cash letter clearing process. BBOK customers send nightly cash letters (Forward Items) to either the Federal Reserve Bank in Kansas City or to a Fiserv itemprocessing center, both of which settle with BBOK the following morning. These settlement dollars are then passed to the depositing bank’s BBOK account. In addition to settling the Forward Credits, BBOK also settles the Payor Bank items by passing the applicable debit entries as instructed by the processor. Since the Check 21 Act became effective in October 2004 the move to electronification has been slow. Many Kansas banks, however, have begun to incorporate check imaging at some level. As a result, the volume of checks being remitted electronically is on the rise. The Federal Reserve Bank has been the most aggressive electronic processor in the state with a focus on gaining initial acceptance with the Forward Items and then creating incentives for banks to accept their Payor Bank items electronically. The FRB recently announced it would close the Kansas City checks operation in 2007 and move that center to St. Louis. This closing will result in earlier nightly deadlines to allow the FRB to accommodate the additional transportation time needed to send cash letters to St. Louis. Kansas banks that continue to send their checks to the FRB will need to evaluate their current procedures and determine how the earlier deadlines will affect their backroom operations.

Impact of Check 21
The introduction of Check 21 has created many new opportunities and many new challenges. Electronification of checks means that geography no longer limits a bank’s processing options. Checks can now be processed, exchanged and settled anywhere in the country, driving the demand for lower costs and better service. With this proposition, BBOK must position itself in a more active role in the delivery, clearing and settlement processes. By taking on a greater role with item processing, BBOK can add value by improving deadlines and availability and offering better pricing.

will create additional staffing needs. As the On-We network grows, the cash letter settlement implications grow as well. Due to the nature of the On-We network, BBOK will see a direct impact to its balance sheet. As items are electronically sorted, some items will not be able to clear within the On-We Network. BBOK will “buy” these items so that they can be forwarded for processing under one routing number. The depositing bank will remain the “bank of first deposit,” but adjustments and returns will be routed through BBOK. As a result, these totals will be carried on the BBOK balance sheet, creating new financial and operational responsibilities. BBOK will also offer technical assistance for customers looking for imaging solutions. Through a relationship with Lending Tools, BBOK can provide customers with the hardware and software necessary for creating and transmitting image files for processing. These services would include a remote capture functionality that could be deployed to a branch office or commercial customer and incorporated into the depositing bank’s daily electronic deposits. While the long-term goal is to build the electronic environment, the processing of paper will not become obsolete overnight and continued support and monitoring of existing service providers will be necessary. Both Fiserv and the FRB will eventually make the processing of paper a very cost-prohibitive process. In the meantime, BBOK will need to continue to support the existing business and be flexible enough to adapt as these check processors change their models.

Proposal
To address the changing needs of our customers, BBOK should expand its operations into check services. This means continuing to foster existing relationships for the processing of paper where it makes sense, while at the same time establishing a BBOK clearing network, Kansas Image eXchange (KIX)* for electronic items. BBOK will , need to employ the services of a third party technology company to provide the technical infrastructure. The long-term goal should be to create the BBOK “On-We” network, clearing items among BBOK customers and creating exchanges with other local networks.

Considerations
Incorporating item processing into the BBOK core product line will have significant operational implications. Establishing a new department

*Powered by the On-We Network. ™ 6

Scissors Trivia

}

Cutting to the idea of less is more or the respective genius of an edited work: Johnny Depp said only 169 words in the film Edward Scissorhands.—from IMDb (Earth’s Biggest Movie database™),Trivia for Edward Scissorhands

Scissors

Our People are Sharp.
It’s hard to describe a typical week at BBOK but it starts every Monday morning with an 8 a.m. officer meeting. In this setting, we take the time to plan our week and bring each other up to date on timely issues and activities. It’s our way of getting everyone on the same page.

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It could be the status of a loan participation syndication that Jay Olsen and his team are putting together, information about the new Platinum Visa card that Peg Baldwin and her group have designed, feedback from Calvin Coady and his team about customer issues from the field, or what the next step is in our Kansas Image eXchange project that Lisa Valentine and Shari Bevan are spearheading. It could be the seed of an idea that has germinated on the basis of a team member’s industry watch or a prevalently stated need. With 441 years of

financial experience creating the fulcrum and/or the tipping point it all gets filtered, discussed and plotted as the moving parts come together. Some of our most promising ideas don’t make it to the boardroom table. Our scissors cut paper. But those that pass the critical test of reasonableness and suggest strong benefit for our banks will enter the due diligence and testing phase of a carefully managed process.

BBOK Officers

Left to Right: Cathy Gaines, Assistant Vice President/Credit Administration; Chris Gilbert, Vice President/Technology Officer; Michael Ray, Chief Financial Officer; Linda Watson, Assistant Vice President/ Money Desk Manager; Brent Beckman, Vice President/Regional Lending & Correspondent Services.

Left to Right: Terry Puett, Vice President/ Correspondent Services; Carol Elkins, Safekeeping/ Investment Officer; Shari Bevan, Senior Vice President/Operations Manager; Jenny Davenport, Assistant Vice President/Assistant Bank Card Manager; Todd Schoenhofer, Manager/Credit Review Services.

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Left to Right: Swede Malm, Vice President/Bankers’ Bank of Kansas Financial Services; Craig Ellis, Vice President/ Loan Officer; Vern Wasinger, Business Development; Lisa Isham, Loan Review Services; Stacy Thomison, Vice President/Loan Analyst.

Left to Right: Bruce Schriefer, President/CEO; Jay Olsen, Senior Vice President; Peg Baldwin, Vice President/Bank Card Manager; Calvin Coady, Executive Vice President; Lisa Valentine, Vice President/Systems Development.

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BBOK Board of Directors

Left to Right: Tim Kohart, 2006-2007 BBOK Board Chairman, President, Valley State Bank, Syracuse; Bruce Schriefer, President/CEO, Bankers’ Bank of Kansas; James Arnold, President, Security State Bank, Scott City; Frank Suellentrop, President, Legacy Bank, Wichita; Jim Birkbeck, Chairman, Denison State Bank, Holton; Jeff Berkley, President, Alliance Bank, Topeka; Dean Mann, Chairman, Citizens Bank, N.A., Fort Scott; Mike Ewy, President, Community State Bank, Coffeyville; Steve Jay, Executive Vice President, Union State Bank, Arkansas City; C. Michael Elliott, President, First National Bank, Anthony; Joe Kennedy, Chairman/President, First National Bank, Frankfort; Ed Martin, President, Kaw Valley State Bank and Trust, Wamego. Not pictured: Chris Costello, President, Tampa State Bank, Tampa.

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BBOK Shareholders
Alden State Bank; Alden Alta Vista State Bank; Alta Vista Andover State Bank; Andover Equity Bank; Andover First National Bank; Anthony Farmers & Merchants State Bank; Argonia Home National Bank; Arkansas City Union State Bank; Arkansas City Citizens National Bank; Arlington Citizens State Bank; Ashland Stockgrowers State Bank; Ashland Farmers Bank & Trust; Atwood Farmers State Bank; Atwood* Baldwin State Bank; Baldwin* Valley State Bank; Belle Plaine First National Bank; Belleville New Century Bank; Belleville Peoples Exchange Bank; Belleville First National Bank; Beloit Bendena State Bank; Bendena State Bank of Bern; Bern Bison State Bank; Bison State Bank of Blue Rapids; Blue Rapids Farmers State Bank; Bucklin Emerald Bank; Burden First State Bank; Burlingame State Bank of Burrton; Burrton Caldwell State Bank; Caldwell Cottonwood Valley State Bank; Cedar Point Community National Bank; Chanute Union State Bank; Clay Center First National Bank; Clifton Elk State Bank; Clyde Community State Bank; Coffeyville Condon National Bank; Coffeyville Coldwater Native Bank; Coldwater Peoples Bank; Coldwater State Bank of Conway Springs; Conway Springs Exchange National Bank; Cottonwood Falls First National Bank; Cunningham State Bank of Delphos; Delphos Downs National Bank; Downs First Community Bank; Emporia Union State Bank; Everest Citizens Bank, N.A.; Fort Scott First National Bank; Frankfort The State Bank of Kansas; Fredonia Farmers State Bank; Galva Garden Plain State Bank; Garden Plain Gardner National Bank; Gardner* First National Bank of Girard; Girard Girard National Bank; Girard Southeast Kansas Bancshares, Inc.; Girard First National Bank; Goodland

Gorham State Bank; Gorham Community Bank of the Midwest; Great Bend Farmers Bank & Trust, N.A.; Great Bend The Halstead Bank; Halstead Freeport State Bank; Harper BankHaven; Haven First National Bank; Hays First State Bank; Healy Farmers & Merchants Bank of Hill City; Hill City Hillsboro State Bank; Hillsboro Hoisington National Bank; Hoisington Denison State Bank; Holton Farmers State Bank; Holton First National Bank; Hope Howard State Bank; Howard Citizens State Bank; Hugoton Central Bank & Trust; Hutchinson Johnson State Bancshares, Inc.; Johnson First National Bank & Trust; Junction City First Kansas Holding Company; Junction City First State Bank of Kansas City; Kansas City* Citizens Bank of Kansas, N.A.; Kingman First State Bank; Kiowa Nekoma State Bank; LaCrosse First National Bank & Trust Company of Larned; Larned Lawrence Bank; Lawrence Peoples Bank; Lawrence Gold Bank; Leawood Heartland Bank; Leawood Town & Country Bank; Leawood* State Bank of Lebo; Lebo Western National Bank; Lenexa State Bank of Leon; Leon The Community Bank; Liberal* First National Bank; Liberal Pilsen State Bank; Lincolnville Lyndon State Bank; Lyndon Kansas State Bank; 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; Marysville First Commerce Bank, N.A.; Marysville United Bank & Trust; Marysville Peoples State Bank; McDonald Peoples Bank & Trust; McPherson Citizens State Bank; Miltonvale Montezuma State Bank; Montezuma Citizens State Bank; Moundridge First National Bank of Southern Kansas; Mount Hope Mulvane State Bank; Mulvane First Neodesha Bank; Neodesha Midland National Bank; Newton
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First Security Bank & Trust Co; Norton First State Bank; Norton Farmers State Bank; Oakley The Bank; Oberlin The Olpe State Bank; Olpe First Option Bank; Osawatomie Farmers National Bank; Osborne Cornerstone Bank; Overland Park SolutionsBank; Overland Park Bank of Palmer; Palmer TeamBank, N.A.; Paola Farmers National Bank; Phillipsburg Farmers State Bank; Phillipsburg First National Bank; Phillipsburg Plains State Bank; Plains Midwest Community Bank; Plainville* Country Club Bank; Prairie Village Bank of Protection; Protection KansasLand Bank; Quinter* First State Bank; Ransom Valley State Bank; Roeland Park St. Marys State Bank; St. Marys Bank VI; Salina Sunflower Bank, N.A.; Salina The Bennington State Bank; Salina First National Bank; Scott City Security State Bank; Scott City First National Bank; Sedan* Alliant Bank; Sedgwick Baileyville State Bank; Seneca Community National Bank; Seneca* TriCentury Bank; Simpson First National Bank; Smith Center Bank of Kansas; South Hutchinson First National Bank; Spearville Farmers National Bank; Stafford First Bank; Sterling Stockton National Bank; Stockton Thunder Bank; Sylvan Grove First National Bank; Syracuse Valley State Bank; Syracuse Tampa State Bank; Tampa The Bank of Tescott; Tescott Alliance Bank; Topeka Community National Bank; Topeka Silver Lake Bank; Topeka Towanda State Bank; Towanda First Bank of Troy; Troy Troy State Bank; Troy Grant County Bank; Ulysses Union State Bank; Uniontown Kendall State Bank; Valley Falls Vermillion State Bank; Vermillion Farmers & Merchants State Bank; Wakefield The Walton State Bank; Walton Farmers State Bank; Wathena

Bank of Commerce & Trust Co.; Wellington First National Bank; Wellington Security State Bank; Wellington Wellsville Bank; Wellsville United Bank of Kansas; Whiting Chisholm Trail State Bank; Wichita Community Bank of Wichita; Wichita Emprise Bank; Wichita Legacy Bank; Wichita Wilson State Bank; Wilson CornerBank, N.A.; Winfield Citizens State Bank & Trust; Woodbine
*New shareholders in 2006.

BBOK Staff and Department Managers
ADMINISTRATION Jill Clark, Julie Lyman, Cheryl Warashina CREDIT CARD TEAM (Peg Baldwin, VP) Sherry Beard, Jenny Davenport (AVP), Maggie Favela, Joy Holden, Jolanda James, Shasta Jenkins, Michelle Lucas, Betty Nguyen, Paula Snider INDEPENDENT LOAN REVIEW & ADMINISTRATION CONSULTING SERVICES (Todd Schoenhofer) Lisa Isham IT TEAM (Chris Gilbert, VP) Steve Hansen, Grant Paitz, Diane Sanchez LOAN ADMINISTRATION (Jay Olsen, SVP) Craig Ellis (VP), Cathy Gaines (AVP), Stacy Thomison (VP), Dennis Willey MARKETING (Calvin Coady, EVP) Brent Beckman (VP), Jill Clark, Terry Puett (VP), Vern Wasinger OPERATIONS (Shari Bevan, SVP) Sharla Cook, Candice Jackson, Angie Nelson, Michelle Rosas, Ann Sathngam, Tracy Stewart, Leota Terrill, Lisa Valentine (VP) SAFEKEEPING & INVESTMENTS (Mike Ray, CFO) Karen Beatty, Carol Elkins (Safekeeping & Investment Officer), Tonya Rolo, Linda Watson (AVP)

Rock

Rock Trivia

}

The Rolling Stones celebrated show number 100 of their “A Bigger Bang Tour” in Wichita Oct. 1, 2006, performing a special chorus of “Wichita Lineman.” It was a hot night with a great warm crowd.—from IORR—The Rolling Stones News

Our Foundation for the Future is Rock Solid.
In 2006, a number of new initiatives were inked. The solutions outlined on the following pages have moved successfully through the development stage to become part of our 2007 solutions platform, or are in a final process of refinement.

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BB-KIX.net Kansas Image eXchange
BBOK developed KIX as a next step in check image file processing. A boulder in our solutions lineup, it is a leading-edge response to the need for low cost, regional check image exchange. • KIX exchanges images among our customer banks at a much lower cost to you. Items within the KIX network (BBOK banks) will be cleared among our banks. KIX clears items outside our bank network through the Fed and other major image exchange networks to further reduce costs. • KIX interacts with ABIL Web, making it easy to support. • KIX reduces per item processing cost and float expense. KIX extends your hours of operation and enhances customer service. • Cost savings will increase incrementally as more BBOK customer banks enter the KIX environment. • Value-added option: BBOK offers cost-effective solutions for both retail and branch remote capture.
For more information about Kansas Image eXchange or an analysis and recommendation on next steps for your bank, call Lisa Valentine or Calvin Coady at 316.681.2265 or 1.800.999.5725.

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Kansas Bankers’ Mortgage Services
It takes specialized knowledge and expertise to navigate the mortgage banking opportunities that exist today for consumers served by our customer banks. With Kansas Bankers’ Mortgage, our banks can access the secondary mortgage market, offer the full range of mortgage products, generate fee income and satisfy customer needs with first-class service. • Because KBM is a correspondent of the top wholesale investors in the nation, BBOK customer banks gain access to the most competitive pricing available for every product every day. KBM’s volume is leveraged on behalf of our banks. MISC minimizes the effort and responsibility required from participating BBOK banks. But because our banks are in control of information they remain completely responsive to their customers at all times. Accountability is easy. KBM provides product knowledge and process and sales training for bank staff and meets with and educates realtors upon request.

• • Kansas Bankers’ Mortgage Services is exclusively sponsored by BBOK and operated by Mortgage Investment Services in Olathe, Kan. MISC is an independent, Kansas-based, mortgage banking company that serves only community banks and their customers. It is licensed in Oklahoma, Missouri, Colorado and Kansas. • • Owned and operated by veteran mortgage bankers with traditional banking backgrounds, Kansas Bankers’ Mortgage is committed to service and a relationship orientation in an industry that is now driven by technology. • KBM assumes the burden of remaining current in a complex, risky business and keeps it simple for BBOK customer banks. • KBM works with multiple investors to offer Kansas community banks a full spectrum of the best mortgage loan products and solutions, including products not offered by other Kansas mortgage providers.

If your bank would like to do business on the rock of Kansas Bankers’ Mortgage, contact your BBOK calling officer at 316.681.2265 or 1.800.999.5725. You can reach Jim Holtgraves, president of MISC, or Bill Cole, MISC account executive, at 913.390.1010.

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of

Bankers’ Bank kansas, n.a.

1-800-999-5725 316-681-2265 Fax 316-681-0127
www.BBOK.cOm

P.O. Box 20810 Wichita, KS 67208-6810 555 N. Woodlawn, Bldg .5 Wichita, KS 67208

Member FDIC

Credit Card Portfolio Development
Today, BBOK’s credit card department serves more than 30,000 consumer and business cardholders across all participating customer banks. In 2006 American Banker ranked the BBOK credit card portfolio 10th largest in the nation among banks under $1 billion in assets. To support significant growth due to acquisitions and new banks joining BBOK’s custom and universal agent card programs, we added portfolio development to our infrastructure last year. Our new credit card marketing support staff helps our customer banks grow their credit card programs by leveraging the most current product information and education and wholesale marketing ideas. Our portfolio development team also regularly evaluates credit card products for consumer appeal.
For more information, call Peg Baldwin at 316.681.9201 or Jolanda James at 316.681.9276.

December 26, 2006 Dear Kansas Bank CEO: I’m pleased to announce that BBOK Bancshares, Inc. has joined forces wit banks in Oklahoma, Misso h the bankers’ uri and Illinois to purcha se First St. Louis Securit ies, Inc. A 32-year-old company, First St. Louis Securities specializes in financial pro portfolio management for ducts and community banks. All key management and employee stay with the firm. At clo s will sing First St. Louis Securit ies, Inc. will change its nam Bankers’ Banc Investment e to Services LLC. The Overland Park office of First St. Louis Securit ies is headed by Tom Ste veteran of many years in ffens, a the investment area. Gre g Bernard and Jay Womb key members of the Overla olt are also nd Park team. This is a significant, stra tegic entry for BBOK Ban cshares, Inc. and Banker Kansas. This important s’ Bank of service, like all our other services, will in essence owned,” meaning “banke be “bankerr input” and “banker pro fit” as we are mutually suc Between the four acquiri cessful. ng bankers’ banks we rep resent more than 1,500 ban Our strong expectation is k customers. that all will benefit from this transaction. More will be announced in the weeks ahead but I wanted to share the new was available. s as soon as it Very Truly Yours,

Bankers’ Banc Investment Services, Inc.
The following letter announced a major, new, bedrock solution for BBOK customer banks. The name of our new solution is pending at this date. For more information, call Thomas Steffens, senior vice president, at First St. Louis Securities, Inc. in Overland Park at 913.469.5400 or 866.530.2846.

Bruce A. Schriefer President

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ACH Risk Management
Mid-2006 a document was published by the Comptroller of the Currency instructing banks to closely monitor their ACH risk. The document outlined specific pieces of data a bank needs to closely watch and periodically report to its board. Discussions began around the need for a BBOK ABIL Web enhancement, programmed with specific new reports and features designed to help our customer banks manage their ACH risk. In October, we broadcast a message over ABIL Web asking for customer suggestions for ACH risk management reports we would design and make available over the system. We took the comprehensive feedback we received, determined what was systematically possible and most needed, and then developed a prototype ACH Risk Management module. That prototype was sent to eight customer banks for their review and suggested modifications.

In this first quarter of 2007, BBOK is in the final stages of completing the protocol and reporting functionality of our new ACH risk management module: Customer Reports #1: listing of all international ACH transactions submitted through ABIL Web to Mexico for user-defined time periods #2: listing of originators with ACH items returned over a predefined percentage #3: listing of received ACH returns by reason code #4: listing of originated ACH returns by reason code #5: listing of originated ACH returns by standard entry class code #6: listing of received ACH returns by standard entry class code #7: originated dollars and volume by standard entry class code #8: dollars, volume and return-item percentages by originator Future Enhancements • New function to generate an ACH originator profile (allowing batch control limits, dates of financial statements, collateral used, etc.) • New function with OFAC scanning on domestic ACH transactions
For more information about BBOK’s new ACH risk management program, contact Chris Gilbert at 316.681.2265.

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Loans-decision ongoing. The goal is to create a naturally evolving and improving system.
When Jay Olsen joined BBOK in February 1996 loan volume was $17.4 million. At the close of business in 2006, loan volume exceeded $211 million—$127 million plus in loans sold to customer banks and $84 million on our books. BBOK paid more in interest to participating banks in 2006— $7.1 million—than it had loans sold a decade ago. But as Jay Olsen pointed out in the second quarter 2006 issue of The Kansas Correspondent, “BBOK is looking for the loans under $500K that represent 51 percent of our volume by number. “We’re absolutely in business to serve our banks. If it’s (a loan) important to our banks, it’s important to us. “Any loan is fair game! With the big deals comes a big spotlight and big responsibility. Our banks watch these high-profile deals and consequently think we’re in the market for big loans…In fact, we are just as responsive to the $50,000 participation opportunity as the $500,000 or $5-million deal.”

Prairie Horizon Agri-Energy plant in Phillipsburg, Kan.— a multimillion-dollar loan deal for BBOK and 51 participating shareholders.

BBOK managed two of the largest participation loans in its history in 2006.

Park Place, a $250 million, urban-style, mixed-use project at 117th Street and Nall Avenue in Leawood, Kan.— a $45 million loan. BBOK, in partnership with Bankers’ Bank Syndication Services, Inc., has $22.5 million participated to 30 stockholder banks.

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We’re Always in the Priming Position.
As a partner to Kansas community banks, BBOK is charged with continual exploration of and investment in new ideas and paradigms. We can’t rest on our laurels. As the face of banking changes, we remain committed to change the way we do business. This requires that we return to paper over and over again, ultimately creating the trail to new or better ways of doing business so that you remain competitive. Progressiveness, we believe, is a precursor to success. Facilitating your success is our #1 core value.

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“Having served as a director for the past six years and chairman of the board for the past year, I can testify that BBOK has and will continue to be ambitious in its delivery of new products and services to its customer correspondent. A recent example, of course, is KIX, which will allow BBOK customers to exchange image items among themselves efficiently and cost-effectively. “Further, BBOK provides a valuable resource to correspondent banks to enhance and diversify their portfolios. Loan participations in the past six years have grown more than 500 percent to over $125,000,000. “Never satisfied with doing business as usual, BBOK continually strives to be innovative and progressive, yet strong and secure in its role as your main correspondent bank.” —Tim Kohart, president, Valley State Bank, Syracuse, and 2006-2007 BBOK board chairman
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BBOK BANCSHARES, INC.

Five-year summary of selected financial data for the years ended December 31,

2006
OperatiOns Data interest income interest expense Net Interest Income provision for loan losses Other income Other expenses income before taxes taxes on income Net Income DiviDenDs DeclareD common stock ratio of total dividends declared to net income per share Data common shares outstanding Basic earnings per common share common stock cash dividends Book value per common share

2005

2004

2003

2002

$ $ $

6,723,382 $ 2,241,058 4,482,324 $ 480,000 $ 6,961,862 8,746,139 2,218,047 $ 805,919 1,412,128 $

4,795,073 $ 934,634 3,860,439 $ 480,000 $ 5,540,043 7,043,161 1,877,321 $ 698,783 1,178,538 $

3,607,536 $ 226,713 3,380,823 $ 480,000 $ 4,141,088 5,737,110 1,304,801 $ 454,656 850,145 $

3,281,783 $ 111,876 3,169,907 $ 440,000 $ 3,520,536 5,078,052 1,172,391 $ 350,131 822,260 $

3,145,920 212,816 2,933,104 615,000 2,873,560 4,349,944 841,720 294,745 546,975

$ $

$

207,030 $ 14.66%

139,461 $ 11.83%

93,490 $ 11.00%

70,432 $ 8.57%

89,190 16.31%

$ $ $

20,768 68.00 $ 9.97 $ 532.51 $

19,998 58.93 $ 6.97 $ 471.80 $

18,768 45.30 $ 4.98 $ 419.11 $

18,193 45.20 $ 3.87 $ 368.84 $

17,140 31.91 5.20 328.79

Continued on next page.

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BBOK BANCSHARES, INC. (cont’d)

Five-year summary of selected financial data for the years ended December 31,

2006
Financial cOnDitiOn Data Due from banks and federal funds sold investment securities loans property and equipment Other investments Other assets Total Assets Deposits Federal funds purchased Other liabilities stockholders’ equity Total Liabilities and Stockholders’ Equity participations sold selecteD ratiOs return on average assets return on average equity net interest margin

2005

2004

2003

2002

11,910,516 $ 20,014,543 $ 2,674,154 2,665,523 82,560,402 72,698,893 1,797,057 1,737,009 973,305 504,853 3,989,956 3,221,526 $ 103,905,390 $ 100,842,347 $ 51,306,252 $ 46,233,820 $ 40,612,000 44,461,000 928,015 712,451 11,059,123 9,435,076 $ 103,905,390 $ 100,842,347 $ $ 127,269,917 $62,907,495 $ $

$

9,049,795 $ 2,732,952 60,168,914 1,670,908 401,937 2,291,964 76,316,470 $ 58,328,060 $ 9,548,000 574,537 7,865,873 76,316,470 $ 48,601,115 $

23,115,693 $ 3,276,780 55,033,979 1,616,180 2,298,951 2,045,145 87,386,728 $ 78,567,706 $ 2,108,691 6,710,331 87,386,728 $ 93,383,680 $

13,256,886 11,322,490 48,993,726 1,487,754 971,850 1,936,680 77,969,386 68,619,802 1,656,000 2,058,182 5,635,402 77,969,386 52,386,078

1.46% 14.91% 4.63%

1.40% 14.41% 4.60%

1.01% 11.85% 4.02%

0.99% 13.39% 3.80%

0.79% 10.77% 4.23%

For the complete audit, please visit our website at BBOK.com.

23

BANKERS’ BANK OF KANSAS, N.A.
555 N. Woodlawn, Building 5 | Wichita, KS 67208 316.681.2265 | fax 316.681.0127 | www.BBOK.com


				
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