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ANK OF B T S’ H R E

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• • B AN C CORP, IN ANNUAL REPORT 2018 inside front cover fold

The Independent State of opened in October 1980 – the second bankers’ bank established in the United States. Its name was changed to Bankers’ Bank of the West in 1993 as documented in this revised charter. fold

TABLE OF CONTENTS LETTER FROM THE PRESIDENT...... 2 EXECUTIVE TEAM...... 4 CONSOLIDATED BALANCE SHEETS...... 6 CONSOLIDATED INCOME STATEMENTS...... 7 ASSETS UNDER MANAGEMENT...... 8 OTHER FINANCIAL HIGHLIGHTS...... 9 YEAR IN REVIEW...... 11 ROADMAP FOR THE YEAR AHEAD...... 12 ADVISORY TEAM...... 12 BOARD OF DIRECTORS...... 13

MISSION STATEMENT To champion community banking.

CORE VALUES PEOPLE The well-being and success of our team and the people we serve. INTEGRITY Our rule of conduct: Do the right thing. PROGRESS Change that drives success.

2018 ANNUAL REPORT 1 fold

LETTER FROM THE PRESIDENT

o our shareholders, customers, partners, and friends: include some opportunity for recovery. Even with these extraordinary items, core earnings in 2018 were solid. For Bankers’ Bank of the West Bancorp, Inc. (“Company”) and its primary subsidiary, Bankers’ On average, cash or cash equivalents were 17.0% of the BankT of the West (“BBW” or “Bank”), 2018 was a Bank’s assets in 2018 while liquid investments accounted historically strong year as reflected in continued record for 8.0% of assets, a reflection of the Bank’s conservative earnings, with asset quality and capital ratios remaining approach to liquidity management. strong. Capital levels at BBW remained strong in 2018, which is The Company reported earnings of $5,759,000 in 2018 noteworthy as dividends were paid from the Bank to the following earnings of $3,014,000 in 2017. Company to pay common and preferred dividends. Total Risk-Based Capital at BBW ended the year at 17.9% despite The 2018 earnings translate to $27.21 per common a 7.2% increase in risk-weighted assets. At the same time, share, with the Company paying a dividend of $2.75 per Tier I Leverage Capital increased to 13.7% compared to common share in January 2018—the fifth consecutive 12.2% for the prior year-end due to earnings growth in 2018 annual dividend paid to common shareholders—and a sixth against lower average assets. declared and paid in January 2019. The book value per share of common stock increased by 11.8% in 2018, ending the The Bank carefully manages CRE concentration levels well year at $187.31, and the Company reported a return on below the regulatory guidelines of 100% for CRE I and average equity of 12.5%. 300% for CRE II. As of December 31, 2018, BBW’s CRE I and II levels were 71.1% and 242.0%, respectively. Loans In 2018, there was no redemption of the Series B Preferred increased by 9.7% in 2018, ending the year at $253,796,000. shares. It is anticipated the Company will redeem shares in In addition, BBW was servicing another $54,887,000 in 2019, although a specific amount has not been identified. sub-participations as of 2018 year-end. For the year, preferred dividends of $636,000 were paid. At BBW, non-performing loans ended 2018 at $764,000 BBW reported earnings of $5,760,000 in 2018, resulting or 0.3% of total loans—a decrease from $4,757,000 at the in a return on average assets of 1.57%, versus earnings of end of 2017, principally the result a partial paydown, then a $2,977,000, or a return on average assets of 0.88%, in 2017. charge-off previously noted for one loan. Non-performing Earnings included a gain on sale of Visa Class B common loans remain very manageable, much lower than the stock of $3,557,000, offset in part by a loan loss provision historical high of $26,369,000, or 12.8% of total loans, as of of $1,957,000 related to a single problem loan that may December 31, 2010.

2 BANKERS’ BANK OF THE WEST BANCORP, INC. fold

Owned real estate at year-end was $20,000, reflecting a 96.2% decrease from the 2017 level of $521,000. The remaining balance is expected to be resolved in 2019 with additional lot sales being recognized as gains to the Bank during the year. BBW’s Texas Ratio was 1.5% as of December 31, 2018. The ratio is down from 10.7% at the end of 2017. These ratios are significantly below the recession high of 85.2% as well. In early 2018, the BBW mission statement was simplified and distilled to emphasize the bank’s purpose as a driving force and advocate for community banking. This commitment is expressed in four words: To champion community banking. We then adopted three core values central to the mission—people, integrity and progress. Finally, to stay motivated and unified in pursuit of the mission, we fixed our sights on a desired outcome, which is captured in our vision statement: a future in which community enable people, local economies and communities to flourish. Noting these intentions is one thing. Acting on them is quite another. Taking the next step forward, late in the year BBW created a 2019- 2021 strategic plan to serve as a roadmap for meeting the needs of community banks into the future. Clearly, the number of community banks has declined over the past decade. But the needs of people, municipalities, agriculture, and many business sectors continue to grow. For today’s community banks, these conditions represent opportunities to flourish—with the help of a trusted, responsive partner. Bankers’ Bank of the West is that partner for you.

William A. Mitchell Jr. President & Chief Executive Officer

2018 ANNUAL REPORT 3 fold

EXECUTIVE TEAM

BILL MITCHELL PRESIDENT & CHIEF EXECUTIVE OFFICER Bill has been the president and chief executive officer of BBW since 2007. Earlier in his four-decade banking career, he was the president of two other community banks and a branch manager for a national financial services firm. Bill served on the governor-appointed Colorado State Banking Board for 16 years, including two years as chairman. He is a current member of the Pacific Bankers Management Institute and the Western States Director Education Foundation boards. In addition, he serves as an advisor to the Colorado Bankers Association and the Independent Bankers of Colorado boards. Bill earned his bachelor’s and master’s degrees from the Universities of Texas and Colorado, respectively.

JEFF BENSON SVP & CHIEF OPERATING OFFICER Hired by BBW in 2001 as a credit analyst, Jeff moved into the role of lender and correspondent services officer for several years. Today his focus is on the management of calling officers, marketing strategy, product development, and strategic initiatives; in addition, he maintains a few customer accounts and a small loan portfolio. Jeff currently serves on the advisory board of the Graduate School of Banking at Colorado, from which he graduated in 2007. He earned his bachelor’s degree from Montana State University.

PAUL HARRISON SVP & CHIEF CREDIT OFFICER Paul has played a vital role in credit administration, special assets, and loan underwriting for BBW since 2009. A longtime banker with a strong lending background, Paul holds the position of chief credit officer at BBW as well as the correspondent services officer for -based banks. He serves on the board of directors of the Bankers Foundation of Colorado, a charitable organization. Paul has a bachelor’s degree in finance from the University of Northern Colorado.

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CHRIS HILL SVP & CHIEF FINANCIAL OFFICER Chris oversees financial reporting, liquidity and funding, and information security and technology. His background includes credit and lending as well as bank information technology. Chris graduated from Colorado State University in the mid-90s with a bachelor’s degree in finance before launching his career in community banking. He later received a master’s degree in business administration from the University of Colorado at Boulder and graduated from the Graduate School of Banking at Colorado.

JIM SWANSON SVP—BANK STRATEGIES In 2018, Jim’s successful bank consulting firm, Bank Strategies LLC, became a division of BBW by mutual agreement—part of an effort to meet the growing need among independent banks for specific skills and outside expertise. His prior roles include community bank chief credit officer, director of compliance and manager of loan services for an accounting and consulting firm, and commissioned bank examiner with the Federal Reserve Bank of City. Jim holds a master’s degree in business administration from the University of and a bachelor’s degree in accounting from the University of .

DEBBIE WENDT SVP—OPERATIONS Debbie has been with BBW since 2000; today she oversees the bank’s safekeeping, federal funds, and operational functions. She is the BSA and security officer as well as a member of its information technology and business continuity committees. Debbie served on the Faster Payments Task Force, and she is currently on the WesPay payments association board of directors. A graduate of the Graduate School of Banking at Colorado, she maintains Accredited ACH Professional status.

SCOTT WINTENBURG SVP—BANK CARD With a ten-year background in small business services, financial consulting and account management, Scott began working for BBW in 2006 as a credit analyst. He was later promoted to correspondent services officer, also serving as a mentor for the bank’s calling officer team. Most recently, he assumed leadership of BBW’s Bank Card department upon the retirement of Mary Ann Supples from full-time duties. Scott holds a bachelor’s degree in business administration from Regis University; he graduated with honors from the Graduate School of Banking at Colorado.

2018 ANNUAL REPORT 5 fold

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, BANKERS’ BANK OF THE WEST BANCORP, INC. AND SUBSIDIARY 2018 2017 (in thousands)

ASSETS Cash and due from banks $ 16,939 $ 16,526 Interest-bearing deposits 45,029 47,249 Federal funds sold 5,940 17,452 Cash and cash equivalents 67,908 81,227 Securities available for sale 28,869 30,226 Securities held to maturity 379 527 Nonmarketable equity securities 877 849 Loans and leases 253,796 231,396 Less allowance for loan and lease losses 4,527 4,680 Net loans and leases 249,269 226,716 Leasehold improvements and equipment, net 1,879 1,599 Accrued interest receivable 1,507 1,306 Company owned life insurance 11,544 11,304 Other real estate owned 20 521 Other assets 2,757 3,019 TOTAL ASSETS $ 365,009 $ 357,294

LIABILITIES Noninterest-bearing deposits $ 116,707 $ 118,406 Interest-bearing deposits 130,641 144,301 Total deposits 247,348 262,707 Federal funds purchased 59,367 37,400 Accrued interest payable 124 96 Other liabilities 8,642 11,712 TOTAL LIABILITIES 315,481 311,915

STOCKHOLDERS’ EQUITY

Preferred stock - $20 par value, 5% cumulative 250,000 shares authorized, 9,875 shares issued and outstanding in 2018 and 2017, aggregate liquidation preference $1,000 per share 9,875 9,875 Common stock - $10 par value, 750,000 shares authorized, 211,696 and 211,819 shares issued and outstanding in 2018 and 2017, respectively 2,117 2,119 Capital surplus 13,800 13,823 Retained earnings 24,171 19,627 Accumulated other comprehensive income (loss) (435) (65) TOTAL STOCKHOLDERS’ EQUITY 49,528 45,379 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 365,009 $ 357,294

6 BANKERS’ BANK OF THE WEST BANCORP, INC. fold

CONSOLIDATED BALANCE SHEETS CONSOLIDATED INCOME STATEMENTS

DECEMBER 31, BANKERS’ BANK OF THE WEST BANCORP, INC. AND SUBSIDIARY 2018 2017 (in thousands)

INTEREST INCOME Interest and fees on loans and leases $ 12,784 $ 11,488 Interest on taxable investment securities 803 578 Interest on deposits and federal funds sold 1,520 767 Total interest income 15,107 12,833

INTEREST EXPENSE Deposits and federal funds sold 3,041 2,252 Total interest expense 3,041 2,252

NET INTEREST INCOME 12,066 10,581 Provision for loan and lease losses 1,957 0 Net interest income after provision for loan and lease losses 10,109 10,581

NONINTEREST INCOME Service charges on deposit accounts 1,256 1,421 Commissions and fees 10,911 8,569 Gain on sale of equity securities 3,557 0 Gain on disposition of loans 64 15 Total noninterest income 15,788 10,005

NONINTEREST EXPENSES Salaries and employee benefits 6,281 5,644 Occupancy expense of premises 744 728 Furniture and equipment expense 631 481 Service charges 1,878 1,622 Other expenses 8,774 7,390 Total noninterest expenses 18,308 15,865

INCOME BEFORE INCOME TAXES 7,589 4,721 Income tax expense 1,830 1,706

NET INCOME 5,759 $ 3,015

2018 ANNUAL REPORT 7 fold

ASSETS UNDER MANAGEMENT AND TRANSACTION VOLUME

BANKERS’ BANK OF THE WEST 2018 2017 ASSETS UNDER MANAGEMENT Total assets of Bankers’ Bank of the West $ 364,805,000 $ 357,089,000 Balance of loan participations sold to respondent banks 54,887,000 62,494,000 Safekeeping (par value) 4,561,672,000 4,734,288,000 Agent federal funds (YTD daily average) 484,306,000 412,394,000

TOTAL ASSETS UNDER MANAGEMENT $ 5,465,670,000 $ 5,566,265,000

YTD TRANSACTIONAL VOLUME Domestic and international wires sent and received $ 463.5 Billion $ 416.8 Billion Principal federal funds sold $ 3.4 Billion $ 4.8 Billion Direct partner merchant volume $ 279.9 Million $ 224.7 Million Partner credit card program $ 23.7 Million $ 20.5 Million ATM / debit network–transactions processed 14.1 Million 14.0 Million

8 BANKERS’ BANK OF THE WEST BANCORP, INC. fold Bankers' Bank of the West Bancorp, Inc. Book Value (per Common Share) $250 Book Value Book Value per Common Share The Company's book value has steadily increased 187.31 Bankers'OTHER Bank of $200 theFINANCIAL West Bancorp, HIGHLIGHTS Inc. following the recession. During this time, the Company 167.61 serviced required dividends on preferred stock, in 2014 Book Value (per Common Share) 159.36 Bankers'150.12 Bank152.64 of the West Bancorp, Inc. $250 Book Value resumed dividends on common stock, and redeemed Book$150 ValueBook per Common Value Share (per Common Share) Book Value Theper CommonCompany's Share book value has steadily increased nearly $2.5 million in preferred stock over the last three $250 $250 Book Value BOOK VALUE 187.31 Book Valuefollowing per Common the Share recession. During this time, the Company $200 The Company'syears. book value has steadily increased (per Common Share) 167.61 serviced required dividends on187.31 preferred stock, in 2014 $100 159.36 $200 following the recession. During this time, the Company 150.12 152.64 $200 resumed dividends on common stock, and redeemed The Company’s book value has steadily 167.61 serviced required dividends on preferred stock, in 2014 $150 159.36 increased following the recession. During 150.12 152.64 nearly $2.5 million in preferred stock over theresumed last three dividends on common stock, and redeemed $150 $150 this time, the Company serviced required $50 years. nearly $2.5 million in preferred stock over the last three $100 dividends on preferred stock, resumed Dec-14 Dec-15 Dec-16 Dec-17 Dec-18years. dividends on common stock in 2014, $100 $100 and $50 redeemed nearly $2.5 million in preferred stockDec-14 over the lastDec-15 four years. Dec-16 $50$50 Dec-17 Dec-18 Dec-14Dec-14 TKDec-15Dec-15 Dec-16Dec-16 Dec-17Dec-17 Dec-18Dec-18 Bankers' Bank of the West Bankers' BankCapital of theBankers' Ratios West Bank of the West Capital Ratios 22.50% Leverage Ratio Tier 1 Risk-based Ratio Risk Based Capital Ratio Capital Ratios 22.50%22.5% Leverage Ratio Tier 1 Risk-basedCapital Ratio RatiosRisk Based Capital Ratio Capital Ratios 20.32%22.50% The reduction in the risk-based capital ratios is a direct 20.32% Leverage19.22% Ratio Tier 1 Risk-basedThe reduction Ratio in theRisk risk-based Based Capital capital Ratio ratiosCapital is a direct Ratios 19.22% 20.00% 20.00%20.0% 20.32% result of the improving marketplace and BBW'sThe purchasereductionresult in the risk-basedof the improving capital ratios marketplace is a direct and BBW's purchase 20.00% 19.22% 17.43% 17.44% 17.86% 17.43% 17.44% 17.86%result of the improving marketplace and BBW's purchase 19.07% of loanCAPITAL participations RATIOS from customer banks, which in turnof loan participations from customer banks, which in turn 19.07% 17.43% 17.44% 17.86% 17.50%17.5% 17.50% 19.07% The reduction in the risk-based capital of loan participations from customer banks, which in turn 17.96% 17.50% supports their community-level lending efforts. supports their community-level lending efforts. 17.96%17.96% 16.60% ratios is a direct result of the improving supports their community-level lending efforts. 16.17% 16.18% 16.60% 16.60% 15.00%15.0% 16.17%16.17% 16.18%16.18% 15.00% 15.00% marketplace and BBW’s purchase of loan participations from customer 12.50% 12.5% 13.05% 13.66% 12.50% banks, which in turn supports13.66% their 12.16% 13.05% 11.74% 12.50% community-level lending efforts. 10.00% 11.57% 11.74% 13.05% 12.16% 13.66% 10.0% 10.00% 11.57% Dec-14 Dec-15 Dec-1611.74% Dec-17 Dec-18 12.16% Dec-14 Dec-15 10.00% Dec-16 Dec-14Dec-1711.57% Dec-15 Dec-18 Dec-16 Dec-17 Dec-18 Leverage Ratio Tier 1Dec-14 Risk-Based Capital Dec-15 Risk Based CapitalDec-16 Ratio Dec-17 Dec-18 Asset Mix ($) Asset Mix ($) Asset Mix Cash & Balances Due Federal Funds Sold CashSecurities & Balances Due Federal Funds Sold Securities Asset Mix The core of BBW's balance sheet today reflectsThe whatcore ofit BBW's balance sheet today reflects what it Net Loans & Leases Other Real Estate Owned NetAll Loans Other & LeasesAssets Other Real Estate Owned All Other Assets Asset Mix ($) All Other was founded for in 1980; to help communitywas banks founded serve for in 1980; to help community banks serve theirCash largest & Balances and best customers and managetheir on-balance largest and best customers and manage on-balance Cash & BalancesNet Loans Due AssetsFederal Funds Sold Securities Asset Mix ASSET MIX sheet riskDue through loan participations. We also maintain & Leases sheet risk throughThe coreloan participations. of BBW's balance We also maintain sheet today reflects what it (000’S) Net Loans & Leases Other Realliquidity Estate to Owned assist thoseAll Federalbanks Other with FundsAssets their ownliquidity funding to assist those banks with their own funding was founded for in 1980; to help community banks serve The core of BBW’s balance sheet today needs. Sold needs. reflects what it was founded for in 1980—to their largest and best customers and manage on-balance help community banks serve their largest Securities sheet risk through loan participations. We also maintain and best customers and manage on-balance liquidity to assist those banks with their own funding sheet risk through loan participations. We needs. also maintain liquidity to assist those banks with their own funding needs. Loan Mix Loan Mix $350,000 Construction & Development Farmland Loan Portfolio Mix $350,000 Construction & Development Farmland Loan Portfolio Mix 1-4 Family Residential Real Estate Commercial & Multi-Family Real Estate 1-4 Family Residential Real Estate $300,000Commercial & Multi-Family Real Estate Coming out of the recession, the markets served by the $300,000 Agricultural Production ComingCommercial out of the & Industrial recession, the markets served by the Agricultural Production Commercial &Non Industrial Depository Financial Institutions All Other Loans Bank have experienced solid growth and performance, Non Depository Financial Institutions $250,000All Other Loans Bank have experienced solid growth and performance, $250,000 with real estate continuing to be a foundational source of with real estate continuing to be a foundational source of $200,000 loans for community banks. Our underwriting practices $200,000 loans for community banks. Our underwriting practices 2018 ANNUAL REPORT 9 and management of concentrations are informed by $150,000 and management of concentrations are informed by $150,000 regulatory guidelines and lessons learned from the $100,000 regulatory guidelines and lessons learned from the Loan Mix recession. $100,000 $350,000 $50,000Construction & Development recession.Farmland Loan Portfolio Mix $50,000 1-4 Family Residential Real Estate Commercial & Multi-Family Real Estate $300,000 $0 Coming out of the recession, the markets served by the $0 Agricultural Production Commercial & Industrial Non DepositoryDec-14 FinancialDec-15 Institutions Dec-16 All OtherDec-17 Loans Dec-18 Bank have experienced solid growth and performance, Dec-14 Dec-15 $250,000 Dec-16 Dec-17 Dec-18 with real estate continuing to be a foundational source of $200,000 loans for community banks. Our underwriting practices $150,000 and management of concentrations are informed by regulatory guidelines and lessons learned from the $100,000 recession. $50,000 $0 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Bankers' Bank of the West Bancorp, Inc. Book Value (per Common Share) $250 Book Value Book Value per Common Share The Company's book value has steadily increased 187.31 $200 following the recession. During this time, the Company 167.61 serviced required dividends on preferred stock, in 2014 159.36 150.12 152.64 resumed dividends on common stock, and redeemed $150 nearly $2.5 million in preferred stock over the last three years. $100

$50 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

Bankers' Bank of the West Capital Ratios 22.50% Leverage Ratio Tier 1 Risk-based Ratio Risk Based Capital Ratio Capital Ratios 20.32% The reduction in the risk-based capital ratios is a direct 19.22% 20.00% result of the improving marketplace and BBW's purchase 17.43% 17.44% 17.86% 19.07% of loan participations from customer banks, which in turn 17.50% 17.96% supports their community-level lending efforts. 16.60% 16.18% 15.00% 16.17%

12.50% 13.05% 13.66% 11.74% 12.16% 10.00% 11.57% Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

Asset Mix ($) Cash & Balances Due Federal Funds Sold Securities Asset Mix The core of BBW's balance sheet today reflects what it Net Loans & Leases Other Real Estate Owned All Other Assets was founded for in 1980; to help community banks serve their largest and best customers and manage on-balance sheet risk through loan participations. We also maintain liquidity to assist those banks with their own funding needs. fold

LOAN PORTFOLIO MIX Coming out of the recession, the markets served by BBW have experienced solid growth and performance, with real estate continuing to be a foundational source of loans for community banks. Our underwriting practices and management Loanof concentrations Mix are informed by regulatory guidelines and lessons learned from the recession. $350,000 Construction & Development Farmland Loan Portfolio Mix 1-4 Family Residential Real Estate Commercial & Multi-Family Real Estate Coming out of the recession, the markets served by the $300,000$300,000 Agricultural Production Commercial & Industrial Non Depository Financial Institutions All Other Loans Bank have experienced solid growth and performance, $250,000 $250,000 with real estate continuing to be a foundational source of $200,000$200,000 loans for community banks. Our underwriting practices

$150,000$150,000 and management of concentrations are informed by regulatory guidelines and lessons learned from the $100,000 $100,000 recession. $50,000$50,000

$0$0 Dec-14Dec-14 Dec-15 Dec-16 Dec-17 Dec-18Dec-18

Construction & Development Farmland 1-4 Family Residential Real Estate Commercial & Multi-Family Real Estate Agriculture Production Commercial & Industrial Non Depository Financial Institutions All Other Loans

Funding Mix $350,000$350,000 Demand Deposits Network and Customer CDs Funding Mix Brokered CDs Federal Funds Purchased As the demand for loans has grown, community bank FUNDING MIX $300,000$300,000 deposit balances have diminished, so we have sought to FundingAs the Mix demand for loans has $250,000 $250,000 diversify funding sources to remain a source of liquidity $350,000grown, communityDemand Deposits bank deposit Network and Customer CDs Funding Mix Brokered CDs $200,000$200,000Federal Funds Purchased $300,000balances have diminished, so As the demand for loans has grown, community bank while managing interest rate risk and expense. $150,000 deposit balances have diminished, so we have sought to $250,000we have sought to diversity our $150,000 funding to remain a source of diversify funding sources to remain a source of liquidity $200,000 $100,000$100,000 while managing interest rate risk and expense. liquidity while managing interest $150,000rate risk and expense. $50,000$50,000 $100,000 $0 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 $50,000 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

$0 Demand Deposits Network & Customer CDs Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Banks with deposit Brokered CDs accounts by Federal asset Funds size Purchased $250 million to < $100 million $100 million to $250 million to $500 million to > $1 billion Banks by Asset Size $100 million $500 million $250 million $500 million $1 billion Banks withto $250deposit million accounts by asset size BBW works with more than half the community banks in < $100 million $100 million to $250 million to $500 million$500 to million> $1 billion Banks by Asset Size our core market area--institutions ranging in size from $11 $250 million $500 million $1 billion < $100 to $1 billion BBW works with more than half the community banks in million to $9.7 billion. million our core market area--institutions ranging in size from $11 million to $9.7 billion. BANKS WITH DEPOSIT ACCOUNTS BY ASSET SIZE BBW works with more than half the community banks in our core market area—institutions ranging in size from $9 million to $12.1 billion.

> $1 billion

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YEAR IN REVIEW

Guided by a newly streamlined mission—to champion community banking—BBW took on an ambitious agenda in 2018. Following is a summary of results: • Acquired Bank Strategies, now a subsidiary of BBW, which, under the leadership of Jim Swanson, provides essential consulting services including loan review and strategic planning. • Helped community banks with cybersecurity and information technology-related projects ranging from hardware support to equipment purchasing to hiring. • Under the education category, linked 113 teams of bankers to 7 payments webinars; presented 2 major conferences (on cybersecurity and payments); organized 10 peer discussions for operations professionals in 3 states; hosted an interactive seminar for commercial lenders; and sponsored a fourth-quarter ag lending webinar by Dr. David Kohl. • Supported 14 state banking associations and the Western States Directors Education Foundation through event participation, financial backing, and presentations. • Disseminated updates on faster payments progress and shared BBW’s comment letter—to which 71 community bank cosigners appended their signatures—to the Federal Reserve with the aim of keeping community banks educated and engaged in creating a U.S.-based real-time payments system that will give them equal footing. • Ensured uninterrupted excellence in loan underwriting for banks with the assignment of longtime lender Karen Maydick to the territory formerly covered by Dallas Kiburz. • Afforded bankers in , , and portions of Colorado the perspective and experience of a former community bank CEO with the hiring of Tom Chinnock as a correspondent services officer. • Provided accurate settlement and processing for a sizable number of banks in the region. Despite fewer bank entities, transaction volume from the community bank base is climbing—a sign of market health. • Assisted community banks with more than $80 million in new loans. • Paid more than 600 visits to community banks. • Met increasing demand for international wire transactions; supported and guided banks daily in the normal course of business with an emphasis on fraud prevention.

2018 ANNUAL REPORT 11 fold

ROADMAP FOR THE YEAR AHEAD

The banking industry must adapt in the digital age of business. Change is afoot on multiple fronts—payments, loans, deposits, branches, and core systems. In the fourth quarter, the BBW senior management team formulated a strategic plan for moving forward in this dynamic and often unsettled environment. The first initiative laid out in the plan is to research what community banks need to succeed in the digital environment. The second is to develop solutions and guidance based on those findings. BBW aims to modernize and increase internal flexibility. We intend to hire programmers to improve delivery of current products and expedite delivery of next-generation products. Specifically, Canadian image item processing is coming, and improvements to our international wire platform are under way. Apart from technical advances, we see opportunity in the federal funds market for banks to realize yields above what the Federal Reserve is paying on excess reserves. Further, we are making headway on offering a money market that achieves strong yields for community banks and improves BBW’s deposit base. These efforts, if successful, would provide our community bank partners more diverse options for deploying excess funds and generating a higher return—and make more liquidity available through BBW to meet stakeholders’ funding needs as well.

ADVISORY TEAM

The ability to attract and retain good talent at all levels has been central to BBW’s success since 1980. Following the Bank’s planned transition of leadership due to retirement, three former executives with deep industry experience are being retained in advisory roles. The value of their experience, their institutional knowledge, and the perspectives they continue to provide is incalculable.

Mary Ann Elliott-Supples Dallas Kiburz Alice Voss Former SVP–Bank Card Former EVP & Chief Credit Officer Former EVP & Chief Financial Officer Current Bank Card Advisor Current Advisory Director Current Advisory Director and Board Secretary

12 BANKERS’ BANK OF THE WEST BANCORP, INC. fold inside back cover

BOARD OF DIRECTORS ANK OF B T S’ H R E

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David A. Ochsner Kristin W. Godfrey, Esq. N S

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Chairman & President Jones & Keller, P.C. • • Commercial Bank Denver, Colorado B A C Nelson, Nebraska N IN Zac Karpf CORP, Gary Crum Chief Operating Officer President & CEO Platte Valley Financial Companies, Inc. Western States Bank Scottsbluff, Nebraska Laramie, Wyoming Quentin D. Leighty Mark Daigle CFO & President of Monument Office Dawn M. Thompson Executive Vice President First National Bank of Las Animas Former Chief Credit Officer TBK Bank Monument, Colorado Denver, Colorado Durango, Colorado Debbie L. Meyers Max T. Wake John ( JV) Evans III Partner President & CEO Executive Vice President DunamikosGroup Jones Bank D.L. Evans Bank Meyers Bank Consulting Seward, Nebraska Boise, Idaho Denver, Colorado John (PJ) Wharton Copper W. France William A. Mitchell Jr. President & CEO President President & CEO Yampa Valley Bank Bank of Commerce Bankers’ Bank of the West Steamboat Springs, Colorado Rawlins, Wyoming Denver, Colorado back cover

NK O A F T ’ B H S E R th 1099 18 Street, Suite 2700 | Denver, Colorado 80202 E W

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E 303-291-3700 | 800-873-4722 | fax 303-291-3714

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• • B th A C 411 South 13 Street, Suite 100 | Lincoln, Nebraska 68508 N N CORP, I 402-476-0400 | 888-467-5544 | fax 402-476-4533 www.bbwest.com