Beyond PaymentsPeople-Centered Payments. It’s the TSYS Merchant SolutionsTM tagline, and one of the reasons BBOK has recently welcomed TSYS as a strategic partner.

TSYS products deliver valuable non-interest income for banks of all sizes, says Mike Norris, BBOK vice president.

“Electronic pay solutions are vital to businesses. A robust merchant solution is one more tentacle to strengthen the commercial customer relationship with the bank.”

TSYS can be viewed like any other merchant processing solution – offering traditional credit card terminals, alternate POS systems, online merchant services, mobile credit card processing and alternate transaction methods like ApplyPayTM and Samsung PayTM.

But that is where the similarities end. The TSYS simplified pricing option streamlines the billing process. Merchant monitoring tools aid online management. Like its tagline promotes, TSYS places priority on customer service. Its active calling program ensures that BBOK banks, and most importantly your merchants, have a personal connection with someone who’s accessible.

“BBOK is partnering with TSYS because the company shares our model of serving as an extension to banks, not in competition with them,” says Norris. “The TSYS advocates can be available as your bank desires, even going alongside your officers to sell your larger commercial customers on the services they provide.” He adds that TSYS merchant advocates Darin Bugbee and Shane Schott are intimately familiar with the Kansas bank landscape. Darin, and sales director Jamie Carr, hail from Kansas banking families.

Active selling increases non-interest income, says Carr. “Even smaller banks with smaller customers are able to make a good income due to the TSYS revenue sharing model.” Marketing is key. TSYS offers several free tools such as customized sales materials, and an easy-to-use website for lead sharing with the TSYS merchant advocates.

We invite you to contact Mike Norris or Terry Puett at 800.999.5725 to learn more about the benefits of the TSYS solution.

t H e K a n s a s

CORRESPONDENTt H e K a n s a s

CORRESPONDENT

T H I R D Q u a R T e R 2 0 1 5

PLeaSe NOTe: if you are a BBOK

customer currently under contract with Worldpay/Century

Payments, your contract will continue

with Worldpay as negotiated.

a L e T T e R f R O m B B O K P R e S I D e N T/C e O C a Lv I N C O a Dy

The third quarter exhibited challenges laced with optimism. Net income was weak, at little more than $100,000, as profits were drug down by continued legal expenses from the lawsuit we have been in since 2011. The upside is core earnings are stronger than ever, driven by core growth resulting in higher net interest income and quality non-interest income. The financial statement on page two states that net income through the third quarter was $603,059.11. When we eliminate the legal expenses, our after tax profit to date would exceed $1.5 million. While the cost of the litigation has escalated, the officers and staff have not let it be a distraction. We’ve stayed focused on delivering our core competencies at a level of service that continues to attract new customers.

The board and management spent time focused on our five-year strategic plan to help set a clear direction for BBOK as we look to the future. Some key elements from the board to management are: 1. Focus on quality loan growth. 2. Develop succession plans beyond the CEO. 3. Develop or seek additional sources of non-interest income. 4. Develop strategies to serve more banks over $125,000,000 in assets. 5. BBOK is dedicated to serving Kansas banks.

The message in its simplest form is clear: continue to find ways to help all Kansas banks be more successful and we will all succeed. BBOK managers have been meeting with their teams and drafting plans to accomplish this directive. We are eager to execute in 2016 and beyond.

Without compromising our legal case, I intentionally started this letter by presenting the straightforward take on our financials for you, our shareholders and customers. I hope you can see, as we do, the light at the end of the tunnel, and the unwavering commitment of your BBOK board, officers and employees to the success of Kansas banks.

I welcome your questions or comments.

Bankers united for long drives and short putts on oct. 5. 103 golfers gathered on the links at the Wichita country cluB

for the annual BBok tournament. it Was Wonderful to see all those Who attended! to vieW the photo gallery, visit BBok.com.

Bankers united for long drives and short putts on oct. 5. 103 golfers gathered on the links at the Wichita country cluB

for the annual BBok tournament. it Was Wonderful to see all those Who attended! to vieW the photo gallery, visit BBok.com.

Bankers united for long drives and short putts on oct. 5. 103 golfers gathered on the links at the Wichita country cluB

for the annual BBok tournament. it Was Wonderful to see all those Who attended! to vieW the photo gallery, visit BBok.com.

ASSETS Due from Banks 23,710,220.85 Securities & Time Deposits 8,373,286.21 Net Loans 108,404,260.04 Federal Funds Sold 22,217,000.00 FRB/FHLB Bank Stock 305,350.00 Net Fixed Assets 1,359,420.20 Other Assets 8,283,283.96

TOTAL ASSETS 172,652,821.26

LIABILITIES Total Deposits 145,600,925.17 Federal Funds Purchased 0.00 FHLB Advances 1,500,000.00 Other Liabilities 3,510,334.80

TOTAL LIABILITIES 150,611,259.97 EQUITY CAPITAL Common Stock 750,000.00 Surplus 3,478,000.00 Undivided Profits 17,720,969.95 Net Unrealized Gain (Loss) 92,591.34 on Securities

TOTAL EQUITY CAPITAL 22,041,561.29

TOTAL LIABILITIES & EQUITY CAPITAL 172,652,821.26

Securities in Safekeeping 6,329,787,380.73 Agent Federal Funds/ 358,832,000.00 EBA Balances Loans Sold 113,275,315.41

TOTAL FUNDS UNDER MANAGEMENT 6,974,547,517.40

YTD STATEMENT OF INCOME SEPT 2015 SEPT 2014Net Interest Income 3,826,139.35 3,461,382.72 Other Income 5,972,555.69 6,098,039.63 Other Expense 8,899,702.82 8,067,119.81 Net Operating Income 898,992.22 1,492,302.54

Provision For Loan Losses 0.00 75,000.00 Provision For Taxes 295,933.11 513,252.89 Net Income After Provisions 603,059.11 904,049.65

CAPITAL RATIOS BBOK MINIMUM FOR WELL CAPITALIZEDTotal Risk-Based Capital Ratio 17.78% 10.00% Tier 1 Risk-Based Capital Ratio 16.52% 8.00% Common Equity Tier 1 Ratio 16.52% 6.50% Leverage Ratio 12.71% 5.00% Past Due & Non-Accrual Loans to Total Loans 1.36%

CONDeNSeD STaTemeNT Of CONDITION

S E P T E M B E R 3 0, 2015

The employees of BBOK wish you a holiday season filled with love.

Please accept our donation to emberHope and The Wichita

Children’s Home on your behalf and share in the joy of showing love to children less fortunate

this holiday season.

Merry Christmas from all of us at BBOK.

What can a bank learn about business from a fish market and an online shoe store? Organizational culture matters. There is a direct link between culture and daily performance. In 2003, BBOK began integrating the FISH! Philosophy, modeled after the Pike Place Fish Market, into the workplace. What ensued was a shift from delivering banking services to delivering customer happiness. And everyone, from the customer to the employee, benefitted.

Be PReSeNT On any given day, BBOK fields a call every 45 seconds. Each call is answered by an employee who sincerely works to connect the caller with the appropriate resource. When the caller is unclear with whom they need to speak, questions are asked to clarify the caller’s request. Jennifer Edens and Amanda Williams spend time getting to know the voice on the line, and make a conscientious effort to avoid distractions and simply be present with that exchange. It is understood that the first interaction sets the tone for the rest of the experience.

fIND THe RIGHT Team memBeRS On the rare occasion when a position opens, BBOK may take months to find the right person to fill it. Not because of lack of interest, but because a new employee must meet a set of standards that fits the culture of the organization. Preserving culture starts with hiring the right people. Your employees need to believe in what you do. BBOK employees believe in the mission of supporting Kansas community banks. Couple a great cause with 50 people who have chosen the right attitude. Add camaraderie, and the result is an environment where a lot gets accomplished, and people enjoy working together to help Kansas community banks.

emPOWeR PeOPLe Treat customers with respect. Train employees well and empower them to make beneficial decisions. From the time a bank joins BBOK or adds a new service, Sharla Cook focuses on delivering a smooth transition. Create product specialists. Candice Jackson and Tracy Stewart are ACH/check experts. Ashley Smith is adept in cash letter adjustments, and Linda Miller is an account expert. Krystal Midkiff can assist in all areas of operation and is highly skilled in handling international transactions. By creating an open dialogue and backing words with knowledge, expertise and responsiveness, the customer can relax knowing that their business is in good hands.

maKe SOmeONe’S Day Like online shoe store, Zappos, the majority of BBOK’s employees will never meet their customers face-to-face. Personality must come through in every interaction via phone or email. Happy employees make happy customers. Each day BBOK employees work to make someone’s day – a customer or a fellow employee. Having fun while working hard is an important part of building a business that delivers happiness.

Let Me ConneCt You. Let Me ConneCt You. Let Me ConneCt You.

TIPS fROm THe fRONT LINe The first person who talks to a customer plays a critical role. If a customer is frustrated or overwhelmed, a friendly receiving voice may be all it takes to turn the day around. Try incorporating these tips to create a great first impression. 1. Stop what you are doing before you answer the phone. 2. Greet the caller with your company name and your name. 3. When a caller asks for a specific person, find out who is calling. Greet the person back with their name: “Good morning Sara.” Let the caller know which person or department you are connecting them with: “I would be happy to connect you with Chris.” 4. Use positive words such as connect, certainly, absolutely, and of course. 5. Take the time to find the right person to answer the caller’s question. It may take time to ask more pointed questions of the caller before transferring. To be effective, you must understand the roles of the employees within your company so you can appropriately transfer the customer. 6. When you transfer, it is just as important to let the employee know who is on the line so they can be prepared to take the call. 7. Be genuine, pleasant, happy and helpful. Regardless of the type of day you are having, adjust your attitude before picking up the phone. You’ll be glad you did!

T H I R D Q u a R T e R 2 0 1 5

Fixed-Rate CommeRCial loans now availaBle

Banks desiring a long-term fixed-rate commercial loan offering now have a solution with BBOK’s newest strategic partner, CenterState Bank.

CenterState has years of experience in interest rate risk management, and has created a solution for floating-to-fixed rate commercial loan conversions. Through the Assumable Rate Conversion (ARC) program, BBOK banks can originate a fixed-rate commercial loan without shouldering the resulting additional interest rate risk. CenterState assumes that risk on its balance sheet.

Craig Ellis, BBOK executive vice president, says as the general outlook for interest rates is on the rise, some customers are looking for solutions to keep their payments stable. “The ARC program gives BBOK banks an opportunity to compete with national and larger regional lenders on loans currently in their portfolio and potential loans.”

CenterState’s turnkey approach allows community banks to directly preserve the customer/bank relationship. The ARC program comes with legal, analytical and marketing support. It’s uniquely structured so interest rate protection can be separated from the loan itself to be easily transferred and assumed. This allows borrower flexibility while strengthening the lender relationship.

The hedge specialists at CenterState have a good understanding of the Bankers’ Bank model, as most are former officers from other Bankers’ Banks. Their extensive hedging backgrounds provide strategic insight for lenders and borrowers.

ARC program should be considered when a borrower:1. Believes that interest rates will rise over the contractual life of the loan.2. Expects to hold the loan for a substantial portion of the contractual loan term.3. Expects to have future financing needs on alternative or additive projects/properties, and would like to maintain the economic value of the fixed-rate established on this loan for those instances.

Find out if your bank should consider adding the ARC program to your commercial loan solutions by calling Mike Norris, Terry Puett or the Bankers’ Bank of Kansas lending department, at 800.999.5725.

Minimizing fraud risk, debit processing trends and eMV implementation dominated conversation at the First Data regional meeting in Wichita this fall. Banks discovered advanced detection tools available through the First Data Risk Identification Service (FRIS) to minimize fraud loss. After the formal workshops, BBoK debit user banks gathered for a knowledge share session.

First Data hosts regional meetings yearly. With rapid industry changes, we believe it is a day well spent, and highly encourage our banks to attend.

first data regional meeting

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