Pub. 17-2022-2023-Issue 2

JULY/AUGUST 2022 SHARING A PRO-BANKING MESSAGE WITH ALL AGES PAGE 8 PRESIDENT'S MESSAGE

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CONTENTS 16 JULY/AUGUST 2022 EDITORIAL: Nebraska Banker seeks toprovide news and information relevant toNebraska and other news and information of direct interest to members of the Nebraska Bankers Association. Statement of fact and opinion aremade on the responsibility of the authors alone and do not represent the opinion or endorsement of the NBA. Articles may be reproduced with written permission only. ADVERTISEMENTS: The publication of advertisements does not necessarily represent endorsement of those products or services by the NBA. The editor reserves the right to refuse any advertisement. SUBSCRIPTION: Subscription to the magazine, which began bimonthly publication in May 2006, is included in membership fees to the NBA. ©2022 NBA| The newsLINKGroup, LLC. All rights reserved. Nebraska Banker is published six times each year by The newsLINKGroup, LLC for theNBAand is the official publication for this association. The information contained in this publication is intended to provide general information for review, consideration and education. The contents do not constitute legal advice and should not be relied on as such. If you need legal advice or assistance, it is strongly recommended that you contact an attorney as to your circumstances. The statements and opinions expressed in this publication are those of the individual authors and do not necessarily represent the views of the NBA, its board of directors, or the publisher. Likewise, the appearance of advertisements within this publication does not constitute an endorsement or recommendation of any product or service advertised. Nebraska Banker is a collective work, and as such, some articles are submitted by authors who are independent of the NBA. While Nebraska Banker encourages a first-print policy, in cases where this is not possible, every effort has been made to comply with any known reprint guidelines or restrictions. Content may not be reproduced or reprinted without prior written permission. For further information, please contact the publisher at 855.747.4003. 8 PRESIDENT’S MESSAGE SHARING A PRO-BANKING MESSAGE WITH ALL AGES One of the most rewarding activities that is part of my role at the NBA is visiting with K-12 and college students and educators. Richard Baier, President and CEO, Nebraska Bankers Association 12 WASHINGTON UPDATE NO DEAL: STATES SLAM ON BRAKES FOR CU ACQUISITIONS OF COMMUNITY BANKS It would have been the largest acquisition of a community bank by a credit union — but word came in mid-June that the deal was off between VyStar Credit Union and Heritage Southeast Bancorporation after a failure to receive regulatory approvals. Rob Nichols, American Bankers Association 13 EDUCATION CALENDAR 16 COUNSELOR’S CORNER DOES YOUR FINANCIAL INSTITUTION HAVE AFFIRMATIVE ACTION OBLIGATIONS? LIKELY YES! ARE YOU COMPLIANT? LIKELY NO! The Office of Federal Contract Compliance Programs (“OFCCP”), a division of the U.S. Department of Labor (“DOL”), has long been tasked with enforcing laws promoting equal employment opportunity and affirmative action, specifically as they affect federal contractors and subcontractors, and very likely financial institutions. Kelli P. Lieurance, Baird Holm, LLP 20 TECH TALK CHANGING YOUR VIEW OF CYBERSECURITY We often hear that technology, and especially information security, is regarded solely as an expense to your institution’s bottom line, but it’s high time we change that perspective. Jon Waldman, CISA, CRISC Executive Vice President, Information Security 22 THE IMPORTANCE OF ASSET PRICING AND ALM STRATEGY As if navigating the 2008 Housing Crisis and the 2020 Global Pandemic weren’t enough, banks now face the most feared economic monster of all — inflation. Andrew Okolski, The Baker Group 24 FORVIS BEGINS SERVING CLIENTS AS NEWEST TOP 10 PROFESSIONAL SERVICES FIRM FORVIS formally takes its place among the nation’s top 10 professional services firms today, offering comprehensive assurance, tax, advisory and wealth management services. FORVIS 26 SWOT-ING AT THE CRISSCROSSING CRYPTO CRACKDOWN In the 14 years since blockchain technology’s invention, banks have been left to compete with emerging business models and new stores of value, while operating in an uncertain vacuum of regulatory guidance. Theo Kelly, Associate General Counsel, Compliance Alliance NEBANKERS.ORG 4

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233 South 13th Street, Suite 700 Lincoln, NE 68508 Phone: (402) 474-1555 • Fax: (402) 474-2946 nebankers.org RICHARD BAIER NBA President and CEO richard.baier@nebankers.org KARA HEIDEMAN Director of Communications and Marketing kara.heideman@nebankers.org NBA EDITORIAL STAFF NBA BOARD OF DIRECTORS NEBankers.org/Health An independent licensee of the Blue Cross and Blue Shield Association. for Here you STEPHEN STULL NBA Chair (402) 792-2500 Nebraska Bank Dodge LYDELL WOODBURY NBA Chair-Elect (402) 359-2281 First Nebraska Bank Valley KATHRYN BARKER (402) 333-9100 Core Bank Omaha NICHOLAS BAXTER (402) 341-0500 First National Bank of Omaha Omaha CORY BERGT (402) 434-4321 Wells Fargo Bank, N.A. Lincoln JOHN BOTHOF (402) 334-0300 Northwest Bank Omaha JOHN DAUBERT (402) 323-8008 Security First Bank Lincoln DANIEL FULLNER (402) 454-1000 Madison County Bank Madison KIM HAMMES (402) 918-2332 Bank of the West Omaha CURTIS HEAPY (308) 367-4155 Western Nebraska Bank Curtis KRISTA HEISS (308) 534-2877 NebraskaLand Bank North Platte ZACHARY HOLOCH (402) 363-7411 Cornerstone Bank York DONALD JIVIDEN (402) 759-8113 Heartland Bank Geneva ZAC KARPF (308) 632-7004 Platte Valley Bank Scottsbluff JOHN KOTOUC (402) 399-5088 American National Bank Omaha MARK LINVILLE (402) 337-0323 First State Bank Randolph KRISTEN MARSHALL-MASER (308) 384-5681 Five Points Bank Grand Island JEREMY MCHUGH (402) 867-2141 Corn Growers State Bank Murdock KAYE MONIE (308) 368-5555 Hershey State Bank Hershey JAY PRESTIPINO (402) 392-2616 First Interstate Bank Omaha LUKE RICKERTSEN (308) 537-7181 Flatwater Bank Gothenburg KIRK RILEY NBA Past Chair (308) 784-2515 Waypoint Bank Cozad RYNE SEAMAN (402) 643-3636 Cattle Bank & Trust Seward TRAVIS SEARS (402) 323-1828 Union Bank & Trust Co. Lincoln JOSEPH SULLIVAN III (402) 348-6000 U.S. Bank, N.A. Omaha KELLY TRAMBLY (402) 756-8601 South Central State Bank Campbell LINCOLN BRUNING endacotttimmer.com 402-817-1000 Legal advice. Community banking experience. NEBANKERS.ORG 6

B A NK E R S ’ B A NK • OF THE WEST • WHERE COMMUNITY BANKS BANK TRACI OLIVER TARA KOESTER KELLY MALONE WE CHAMPION COMMUNITY BANKING YOUR ADVOCATES: Nebraska’s correspondent team BBWEST.COM 411 South 13th Sreet | Lincoln, Nebraska | 402-476-0400 Since 1857, Cline Williams has devoted attention to the unique needs of the banking and nancial services industries. Since then, we have provided our clients with the resources they need in the areas that are most important to them – from lending and collections, to regulatory compliance, to mergers and acquisitions, and so much more. We’re more than a law rm. We’re a partner for your bank. LINCOLN I OMAHA I AURORA I FORT COLLINS I HOLYOKE NEBRASKA BANKERS ASSOCIATION 7

PRESIDENT’S MESSAGE Sharing a Pro-Banking Message With All Ages Richard J. Baier, President and CEO, Nebraska Bankers Association One of the most rewarding activities that is part of my role at the NBA is visiting with K-12 and college students and educators. These interactions often include a presentation highlighting the size and scope of the Nebraska banking industry, an overview of NBA priorities and industry advocacy and, finally, touching on issues that keep bankers awake at night. Discussions about the current issues confronting the industry always seem to garner the most student and educator attention, specifically, the issue of non-bank competition. Bankers recognize that non-bank competition comes in many forms, ranging from the tax-subsidized Farm Credit System (FCS) and credit unions (CUs) to online and privateequity lenders. New digital asset or cryptocurrency companies could also be included in this mix. During our discussions, it is clear that students and educators have little or no understanding of the capital and regulatory disadvantages between Nebraska banks and non-bank competitors. “That’s not fair,” is the typical reaction to these conversations. We clearly agree! The reoccurring pro-banking message I try to communicate to students and educators is that Nebraska banks operate in almost every community in the state, unlike many non-bank competitors, FCS in particular. Many are increasingly moving to large, regional lending offices and a virtual presence and abandoning a local footprint or representation. Nebraska banks are community and customer-driven and partners in local communities. This was exemplified by the banking industry’s efforts during the Paycheck Protection Program. Conversations about the tax-subsidized FCS and CUs are often the favorite part of my interactions with students and educators. Outside of the occasional college student, very few in the audience understand that FCS and CUs do not pay their fair share of the tax burden. This conversation is even more fun to have with educators who are discussing the lack of tax support for their local districts yet conduct their financial services through an educator/educational credit union. At the college level, I frequently discuss how the state of Nebraska uses state tax dollars to offset approximately 50% of the tuition costs for students enrolled in a public college or university. Nebraska banks contribute to higher education support via payment of NEBANKERS.ORG 8

the financial institution tax. FCS and federally chartered CUs obviously do not do their fair share to support important public services like education and safety. These arguments seem to really resonate with both students and educators. Unfortunately, students and educators often reference and believe the misguided marketing suggesting that online lenders deliver financial products faster and at a lower cost. Nebraska banks routinely demonstrate that those marketing campaigns by online lenders are simply that, marketing, not actual performance. Educators who have experienced a hail claim during this summer’s storms, for example, know firsthand the importance of having a Nebraska bank at the center of getting their insurance claim finalized! Or, how about those recent college graduates trying to buy their first home without a strong credit score or a consistent income stream? Nebraska banks will work diligently with these young people to make their dreams a reality! Discussions with students about the role of cryptocurrency and digital assets in the financial system are also very enlightening. A show of hands by students during a recent University of Nebraska Omaha College of Business presentation showed that every student in the class owned some level of cryptocurrency. I always work to bring our discussions back to the importance of how Nebraska bank deposits provide safety and security not offered in the crypto space. After the recent cryptocurrency price decline, I suspect future conversations about this topic will change drastically. We know COVID impacts and new technologies will continue to foster the emergence and evolution of our nonbank competitors. Therefore, it is paramount that each bank and banker take every opportunity to educate and inform customers of all ages and elected officials about the strength, stability and commitment of Nebraska’s banks to the future success of our customers, communities and state. We need to keep beating the drum!  A show of hands by students during a recent University of Nebraska Omaha College of Business presentation showed that every student in the class owned some level of cryptocurrency. NEBRASKA BANKERS ASSOCIATION 9

COMMUNITY BANKING CONFERENCE OCTOBER 18-19 OMAHA, NE TOGETHER... WE MOVE FORWARD Ben Pankonin Social Assurance The Currency of Trust Chris Kuehl Armada CI Economic Update Amber Farley Financial Marketing Solutions Power of Internal Branding Go to our website for all the details and REGISTER today! Featured Speakers MEMBER FDIC mibanc.com ACH Audit BSA Audit Lending Compliance Audit Deposit Compliance Audit Directors’ Examination Interest Rate Risk Review Home Mortgage Disclosure Act (HMDA) Review Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act Audit Loan Review Internal/External Penetration Test Internal/External Vulnerability Assessment Social Engineering Assessment IT Security Audit Business Continuity Management Audit AUDIT SERVICES mibanc.com/audit Our Team is ready to help. Contact John Hay or Jake Wolfe at 888-818-7206 Jake Wolfe jwolfe@mibanc.com John Hay jhay@mibanc.com Need help with Loan Reviews? Dave DeFazio StrategyCorps Payments, What’s Next WWW.MIBANC.COM/EVENTS

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WASHINGTON UPDATE No Deal: States Slam on Brakes for CU Acquisitions of Community Banks Rob Nichols, American Bankers Association It would have been the largest acquisition of a community bank by a credit union — but word came in mid-June that the deal was off between VyStar Credit Union and Heritage Southeast Bancorporation after a failure to receive regulatory approvals. If completed, the deal would have made Jacksonville, Florida-based VyStar the 13th largest credit union in the nation. The deal was just one of a growing list of mergers announced between tax-exempt credit unions and taxpaying banks in recent months — but states are starting to sour on the idea. Earlier this year, the Minnesota Department of Commerce blocked the acquisition of state-chartered Lake Area Bank by Royal Credit Union, officially clarifying that state law does not permit the acquisitions of state-chartered banks by credit unions. Similar actions have taken place in Colorado, Iowa, Tennessee, and Nebraska. Meanwhile, the Mississippi state legislature succeeded in passing a law stipulating that only FDIC-insured banks can acquire or merge with Mississippichartered state banks. The law, which goes into effect this July, puts a halt to any deals in progress that don’t comply with the new requirement. These are encouraging developments. The decision to merge is, of course, a business decision that must be made at the individual level. But states are increasingly acknowledging that allowing tax-exempt credit unions to gobble up taxpaying banks — taking them off the tax rolls for good — is poor public policy that imposes costs on consumers and taxpayers, and they’re taking sensible steps to prevent it from happening in the future. The fact that states are beginning to take action is due in no small part to banker advocacy — and it’s a good reminder of the importance of speaking up whenever we see the credit union industry pushing the boundaries of the statutory limits imposed on it by Congress. Unfortunately, those attempts are only becoming more brazen. Recently, the industry lobbied to create a new loophole designed to enable credit unions to greatly expand their fields of membership and business lending capacity. The House bill, which we don’t expect to advance in the Senate, was included as part of a broader package of financial inclusion measures, despite the fact that the bill contained no language to ensure that these expanded powers would be used by credit unions to serve underserved communities. If credit unions were serious about promoting financial inclusion, they should welcome the opportunity to demonstrate their commitment to serving low- to moderate-income communities by meeting the same Community Reinvestment Act NEBANKERS.ORG 12

The deal was just one of a growing list of mergers announced between taxexempt credit unions and taxpaying banks in recent months — but states are starting to sour on the idea. requirements banks must meet. But it’s become clear that credit unions aren’t interested in that mission — in fact, recent data has shown a general pattern of credit unions opening more branches on net in upper- and middle-income census tracts and closing more branches on net in low- to moderate-income census tracts. It’s wrong for credit unions to try and shoehorn self-serving pieces of legislation through Congress under the guise of promoting financial inclusion — just as it’s wrong for them to exploit their tax-advantaged status to subsidize acquisitions of taxpaying banks, pay for stadium naming rights or private jets, or open multi-million dollar headquarters. It’s encouraging that states are starting to scrutinize the credit union industry more closely. Now Congress must do the same.  Email Rob at nichols@aba.com. EDUCATION CALENDAR For more information about these live and online education events and training tools, contact the NBA Education Center at (402) 474-1555 or nbaeducation@nebankers.org. You also may visit the NBA website at https://www.nebankers.org/education.html. AUGUST 2022 Real Estate Compliance Lending Conference August 16-17 Lincoln, NE Bank Compliance School August 22-26 Kearney, NE Women in Banking Conference October 19-20 Omaha, NE Commercial Lending School October 24-28 Manhattan, KS Summit on Regulatory Issues October 28 Lincoln, NE Advanced IRA Workshop September 21-22 Virtual Advanced School of Banking, Year 1 September 26-30 Kearney, NE OCTOBER 2022 Essential Teller Issues Seminar October 4 Virtual SEPTEMBER 2022 Fall Agri-business Conference September 1-2 Lincoln, NE IRA Essentials Workshop September 19-20 Virtual NEBRASKA BANKERS ASSOCIATION 13

1. Data Backup and Recovery Backing up your data is crucial but not all backups are the same. It is critical that you have an offsite data backup solution, keeping your data protected and stored outside your network. 2. Endpoint Detection Response (EDR) Traditional antivirus software is not sufficient protection for your financial institution. Antivirus requires regular database updates of the current virus signatures to be effective. The protection afforded by AV software is only as good as the vendor’s updates. Often, threats are discovered only after the damage is done. EDR uses artificial intelligence to detect threats without having to rely on virus signatures. 3. Multi-Factor Authentication (MFA) Two of the best methods for establishing extra lines of defense for your online accounts are using strong passwords and setting up 2-factor or multi-factor authentication (also known as 2FA or MFA). Using different passwords for each of your accounts is another best practice to hinder an attacker and keep your data, accounts and network safe. Your business is exposed to a variety of risks every day. Improving your cybersecurity can feel like a daunting task, but there are a few ways you can get started quickly. If you are unsure where to start, our security experts offer six low-cost, easy solutions that you and your team can implement to boost your security right now. For more information: Scan to contact us today OR: Call: 308.381.1000 Email: hisinfo@hamiltonisbusiness.com Visit: HamiltonIsBusiness.com 6 Low-Cost Ways to Improve Your Cybersecurity ADVERTISEMENT © 2022 Nedelco, Inc. Hamilton is a registered trademark of Nedelco, Inc. dba Hamilton Telecommunications. Third party trademarks mentioned are the property of their respective owners. 4. Third Party Patching Keeping your devices, browsers and other tech up to date is one of the best, first lines of defense against cyberattacks. Security patches and updates fix any technical bugs and essentially “lock” your software and devices before bad actors can make a copy of the “key.” 5. Avoid Suspicious Emails With phishing, hackers attempt to gain access to your information or credentials through your email inbox. Phishing scams may seem like a relic of the past but have become one of the main culprits behind countless cyberattacks. Here are a few quick tips. If the email address, link or contents look suspicious: • Do not engage with the message or sender. • Do not open the email, click on links or provide information. • Contact your IT support immediately. 6. Book a Free Consultation Hamilton is here to help mitigate and eliminate cybersecurity threats to your financial institution. We offer services from training, to network penetration tests and vulnerability assessments. Contact us today to book a free consultation and learn how our cybersecurity solutions can help minimize vulnerabilities and protect your business data.

» Call Rick Gerber or Ryan Gerber at 1-866-282-3501 or email rickg@chippewavalleybank.com ryang@chippewavalleybank.com 1. Calling us is the first step. 2. You email us the appropriate documents of information. 3. CVB preparing the loan documents generally within 5 to10 days. 4. Meeting the customer. We will come to you to sign loan documents. 5. CVB wires the funds. 6. Wow that was easy. IS YOUR BANK SUFFERING UNREALIZED SECURITY PORTFOLIO LOSSES? ARE YOU IN NEED OF A CAPITAL INJECTION? Bank Stock and Bank Holding Company Stock Loans up to $50 Million Done the Simple Way

COUNSELOR’S CORNER Does Your Financial Institution Have Affirmative Action Obligations? Likely Yes! Are You Compliant? Likely No! Kelli P. Lieurance, Baird Holm, LLP The Office of Federal Contract Compliance Programs (“OFCCP”), a division of the U.S. Department of Labor (“DOL”), has long been tasked with enforcing laws promoting equal employment opportunity and affirmative action, specifically as they affect federal contractors and subcontractors, and very likely financial institutions. While the Trump Administration’s OFCCP tempered the more aggressive stance of prior administrations, the Biden Administration’s OFCCP has signaled a return to more targeted compliance enforcement, particularly by introducing a new requirement for covered contractors to certify their compliance (or non-compliance) with affirmative action obligations on an annual basis. Before we go further, you may find yourself thinking, “Affirmative action? Federal contractors? I’ve never heard of this, so surely this doesn’t apply to my financial institution.” Unfortunately, that conclusion is likely incorrect. Even though financial institutions are accustomed to government regulations, many are simply unaware of their affirmative action obligations. On the other hand, even financial institutions aware of their obligations have grown complacent because it was unlikely that the OFCCP would select them for a compliance review (i.e., audit). Instead, those financial institutions focused on other “higher priority” regulatory obligations and hoped the OFCCP would not notice their noncompliance. That strategy is now obsolete. Jurisdiction The OFCCP administers and enforces three legal authorities that require equal employment opportunity and affirmative action — Executive Order 11246 (“EO 11246”) (covering gender/race), as amended; Section 503 of the Rehabilitation Act of 1973 (“Section 503”) (covering individuals with disabilities), as amended; and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974 (“VEVRAA”) (covering protected veterans), as amended, 38 U.S.C. § 4212. These laws prohibit federal contractors and subcontractors from discriminating based on race, color, religion, sex, national origin, disability, sexual orientation, gender identity, and protected veteran status, and require affirmative action if certain jurisdictional thresholds are met. NEBANKERS.ORG 16

Counselor's Corner — continued on page 18 Notably, the affirmative action obligations apply only to federal contractors and subcontractors with 50 or more employees and meet one of the criteria below. Assuming the employee threshold is met, a financial institution is covered if it: 1. Has a federal contract or subcontract in excess of $50,000 (EO 11246/Section 503) and $150,000 (VEVRAA); OR 2. Serves as a depository of government funds: a. In any amount (EO 11246), b. For $50,000 or more (Section 503), or c. For $150,000 or more (VEVRAA). OR 3. Serves as an issuing and paying agent for U.S. savings bonds and saving notes: a. In any amount (EO 11246), b. For $50,000 or more (Section 503), or c. For $150,000 or more (VEVRAA). Additionally, the OFCCP takes the position that financial institutions with federal share and deposit insurance (i.e., that participate in FDIC or NCUA programs) are also federal contractors and therefore subject to its jurisdiction. Consequently, most financial institutions have affirmative action obligations because they either serve as a depository of government funds, participate in FDIC or NCUA programs, or hold other federal contracts in excess of $50,000. If the above criteria applies, the financial institution must prepare and implement Affirmative Action Programs (AAPs) under the three affirmative action laws. As part of these AAPs, covered contractors must track the gender, race, disability, and veteran status of each individual who applies for a particular job, as well as analyzes other employment practices, such as transfers, promotions, and terminations, to ensure their practices reflect race- and gender-neutral employment processes. Covered contractors must also aim to meet certain disability utilization goals, and veteran hiring benchmarks. In other words, this is not just a written policy, but workforcespecific statistical analyses which must be prepared every year. The OFCCP has focused intently on these analyses, and held that ignorance of the requirement to maintain and/or analyze the data is not an excuse for non-compliance. The OFCCP has also recently focused on employer compensation practices that have a disparate impact on women and minorities. Covered contractors, therefore, must annually evaluate their compensation practices to determine the existence of any current or potential disparate compensation concerns. Indeed, the OFCCP now conducts detailed evaluations of employer compensation practices during all compliance reviews. Annual Certification via the OFCCP Contractor Portal Unfortunately, a financial institution can no longer hope to avoid OFCCP scrutiny. Beginning in 2022, the OFCCP now requires covered contractors to annually certify, on an annual basis, that they have compliant AAPs in place. Specifically, contractors must attest to one of the following options: 1. It has developed and maintained affirmative action programs at each establishment, as applicable, and/or for each functional or business unit. See 41 CFR Chapter 60. 2. It has been party to a qualifying federal contract or subcontract for 120 days or more and has not developed and maintained affirmative action programs at each establishment, as applicable. See 41 CFR Chapter 60. 3. It became a covered federal contractor or subcontractor within the past 120 days and has not yet developed applicable affirmative action programs. See 41 CFR Chapter 60. Contractors must also sign the following declaration: I attest that this Affirmative Action Program (AAP) certification is true and correct to the best of my knowledge. I understand that the penalty for making false Even though financial institutions are accustomed to government regulations, many are simply unaware of their affirmative action obligations. NEBRASKA BANKERS ASSOCIATION 17

Counselor's Corner — continued from page 17 statements with respect to this certification is prescribed in 18 U.S.C. 1001. □ I affirm this declaration. The annual certification deadline was June 30. While this 2022 deadline has expired before the publication date of this article, financial institutions should take steps now to ensure compliance with their affirmative action obligations moving forward. This means gathering the employment data necessary to prepare AAPs and setting up processes to comply with any other required affirmative action obligations. Risks of Noncompliance The OFCCP will use contractors’ responses in the certification (or their failure to certify) to prioritize contractor establishments for audit. With that in mind, an entity that selects Option 2 (see previous page), or fails to certify at all, is more likely to be selected for audit. The flip side, however, is not true, as the OFCCP makes clear that selecting Option 1 will not exempt a contractor from an audit. In any case, “flying under the radar” regarding affirmative action compliance will be more difficult moving forward. Indeed, even before this certification requirement was enacted, several banks have been subject to OFCCP scrutiny with negative outcomes. It can happen to you! In 2010, an Administrative Law Judge (“ALJ”) ruled that Bank of America discriminated against African-American job applicants for entry-level positions in Charlotte, North Carolina, in 1993 and from 2002 to 2005. In 2013 (after decades of legal battle), the ALJ ordered the bank to pay 1,147 African-American job applicants $2,181,593 in back wages and interest. The ruling further ordered the bank to extend job offers, with appropriate seniority, to 10 class members as positions become available. In another case, the OFCCP alleged that Simmons First National Bank discriminated against Black applicants for entrylevel positions from 2004 to 2005, and against Black applicants for skilled clerical positions in 2005. The bank entered into a Consent Decree to settle the claims. In doing so, the bank agreed to pay $360,187 plus interest to all Black class members who responded to certain notices. Any remaining uncashed funds, if less than $20 per person, were to be used to train current employees about their rights and responsibilities under nondiscrimination statutes. Additionally, if any of the entrylevel or skilled clerical positions at issue in the review became available, the bank was required to offer those positions to interested class members until it hired 30 class members or the interested list was exhausted. Finally, the bank had to provide the OFCCP with semi-annual progress reports for two years. Finally, a 2012 OFCCP compliance evaluation of JPMorgan Chase (JPMorgan) resulted in a civil enforcement action alleging gender-based pay discrimination. In 2020, JPMorgan’s motion of summary judgment was denied, and JPMorgan eventually entered into an Early Resolution Conciliation Agreement to pay at least $9.8 million ($800,000 in back pay and interest; $9 million in pay equity adjustments) across its workforce. As you can see, organizations who fail to maintain adequate AAPs, and/or those who fail to remedy possible indicators of discrimination face stringent penalties from the OFCCP, including monetary penalties, back pay awards, mandated hiring, and even debarment. Next Steps Unfortunately, preparing AAPs and compensation analyses are only part of a covered contractor’s compliance obligations. Other responsibilities, such as posting open jobs with the local workforce development office, including specific nondiscrimination clauses in subcontracts, and making outreach to underrepresented groups, are also required. Financial institutions should take these obligations seriously, and consult with legal counsel promptly to discuss their path toward compliance.  Kelli P. Lieurance is a partner at Baird Holm LLP. She focuses on labor and employment law compliance, assisting employers with proactive, rather than just defensive, compliance efforts. Her practical approach not only offers clients a realistic view of their legal obligations, but also assists clients in implementing such obligations in a way that best suits their business needs. Unfortunately, preparing AAPs and compensation analyses are only part of a covered contractor’s compliance obligations. NEBANKERS.ORG 18

800.228.2581 MHM.INC Now more than ever people want self-service options. With our core integrated ITMs we can make this a reality both in the lobby and in the drive-up of your branch. SELF-SERVICE BANKING NEBRASKA BANKERS ASSOCIATION 19

TECH TALK We often hear that technology, and especially information security, is regarded solely as an expense to your institution’s bottom line, but it’s high time we change that perspective. The reality of today’s business world is that nearly all organizations of any scale in every industry rely so heavily on technology that without it, they’d largely be unable to do business long-term. If you rely on technology and the internet to perform your day-to-day operations and serve your customers, consider yourself a technology company. Here are three ways that tech companies think differently about their organization and security: 1. They understand the risk. 2. They test their people, processes, and technology. 3. Their cybersecurity program starts at the top. Understand the Risk Being able to truly mitigate your risk starts with how well you can understand and quantify risk. If you perform a risk assessment and your results only state that you have “low” risk, how do you know that’s right? How do you know what you need to do next? The primary job of a risk assessment is to help you make decisions. When it comes to IT or cybersecurity risk assessment, the output should provide you with a clear understanding of what you have and how important that stuff is, how risky your stuff is, and where you should spend your next information security dollar to mitigate additional risk. Don’t just perform a risk assessment Jon Waldman, CISA, CRISC Executive Vice President, Information Security — SBS CyberSecurity Changing Your View of Cybersecurity those controls so that you are confident they are in place and working correctly. Testing your people involves social engineering assessments (phishing emails, physical impersonation, phone impersonation, dumpster diving, etc.). Testing your processes involves an external IT audit. And testing your technology typically involves technical scans around the inside (vulnerability assessment) and outside (penetration test) of your network. to check the box; really know and understand your risk so you can secure your organization more effectively. Test People, Process, and Technology There are three ways to protect your information: people, processes, and technology. Your organization must implement risk-mitigating controls to protect your networks and customer information from those three categories. In turn, you must test the effectiveness of NEBANKERS.ORG 20

Finally, out of those three processes, people are the weakest link. It’s much easier to convince a human being to provide the information they’ve been trained (or asked) not to share than it is to convince a firewall, whose only job is to follow a programmed set of instructions, to break the rules it has been built to follow. Knowing that your people are your greatest weakness means you should test this area of your organization MOST frequently, not least frequently. Start at the Top To truly ensure your organization is on-board in changing your view of cybersecurity to align more with a technology company, the message must be consistently portrayed from the top down. Cybersecurity conversations between employees, the steering committee, and the Board of Directors need to happen regularly, not just once yearly. The integrity and availability of technology and data pose a much greater risk to your organization than nearly anything else, including a bad loan. A data breach, loss of customer data, or significant electronic banking downtime could cause irreparable damage to a community bank whose reputation is its most important asset. Starting at the top means sharing the technology-focused message and vision with the whole organization, then backing up the message with appropriate investment into the technology and resources needed, including the roles and responsibilities of the staff. A shift from treating technology as an expense to a critical business function means aligning your actions with your message. For more information, contact Robb Nielsen at 605-251-7375 or robb.nielsen@sbscyber.com. SBS helps business leaders identify and understand cybersecurity risks to make more informed and proactive business decisions. Learn more at sbscyber.com. Training and education of not only your employees but also your customers is another critical component to building a cybersecurity culture. It shows everyone that you mean what you say and that you’re committed to doing what’s best for your employees and customers. On top of training, holding your people accountable for their actions is also essential. If you are testing your people’s cybersecurity awareness with regular phishing email tests, accountability must be built into the process for it to be effective. Phishing is the #1 attack vector used to compromise your network and steal customer information. Allowing employees to fail phishing assessments by clicking on links repeatedly sends a very loud message to the organization that cybersecurity doesn’t matter. The same goes for testing your employees but not your senior management or Directors. Everyone should be on an even playing field when it comes to testing. Attackers don’t discriminate between employees and Directors. Changing Your View By thinking of your organization as a technology company and acting accordingly, you will change your perspective on how you protect your networks and customer information and set yourself up for success in the future. Realizing that your organization’s very existence depends on the technology you deploy via the internet to serve your customers, your focus will shift from “it’s a necessary evil and an expense” to “we need to do our best to protect our networks and customer information because our very existence depends on it.” Once you make that shift and invest in cybersecurity, you dramatically reduce the likelihood of a cybersecurity attack that could close your business. Change your mentality today!  When it comes to IT or cybersecurity risk assessment, the output should provide you with a clear understanding of what you have and how important that stuff is, how risky your stuff is, and where you should spend your next information security dollar to mitigate additional risk. NEBRASKA BANKERS ASSOCIATION 21

Andrew Okolski, The Baker Group As if navigating the 2008 Housing Crisis and the 2020 Global Pandemic weren’t enough, banks now face the most feared economic monster of all — inflation. CPI YOY jumped by 8.6% in May 2022, backed by broad price increases across many sectors. Obviously, this is well above the Fed’s average target of 2% and increases the chances of more severe economic headwinds. If the Fed aggressively fights inflation through higher rates and balance sheet reduction, it will add significant downward pressure on consumers and the overall economy. If they are not aggressive enough, inflation can remain elevated for a longer period, also adding significant downward pressure. I think everyone was hoping for a bit of a breather coming into 2022; however, we instead find ourselves in an equally challenging situation where asset pricing and ALM strategy are of the utmost importance. For most of the past two-plus years, income and capital pressures kept many up at night. The good news is that today’s higher yields offer quick relief in those categories. Unfortunately, we now have some new pressures coming from falling asset market values. While every institution is unique, managing interest rate risk (specifically market risk) can almost always be improved by including EVE and Income Simulation results. Doing so is key when discussing overall asset pricing and the difference between ALM results and executed strategy. It’s important to note that the rate of change is just as important as the overall amount of change when it comes to asset/liability management. This is why asset pricing becomes so important in this volatile interest rate environment. The faster interest rates rise, the greater the negative impact on our EVE in particular. The main reason is that quick rate movements give depository institutions little time to react and adjust their asset yields. We can only add higher-yielding investments and write higher-yielding loans so fast. Often this means that the first few quarters during a rising rate trend can magnify and even potentially overstate our IRR risk as measured through EVE. So, what can we do to combat this? The Importance of Asset Pricing and ALM Strategy NEBANKERS.ORG 22

Andrew Okolski is a Senior Financial Strategist at The Baker Group. He works directly with clients in a broad range of areas, including ALM, education, portfolio management, interest rate risk management, strategic planning, regulatory issues, and wholesale market strategies for financial institutions. Contact: 800-937-2257, andyo@GoBaker.com. on the deposit side of things. So, our ALCO decisions and ALM assumptions must be kept in line to ensure consistent accuracy of future strategic planning. This is why we must always be looking to define, measure, and manage our risks. Hopefully, many of you will already have this management process and find yourselves well prepared to handle this environment’s new challenges. For those who do not, there is still time to align your internal systems and improve your institution’s ability to react quickly and correctly. However, that window of opportunity is closing and now is the time to start having those conversations.  *CPI Data & Chart from Bloomberg Headline CPI – YOY% Change 02/10/2017 – 05/31/2022 Well, at least part of the answer is that we need to quicken the pace of asset repricing on our balance sheets. By no means am I implying that this is an easy task. However, it is extremely necessary and should be top management and ALCOs priority. Increased loan demand is a very welcome sight, especially after what we have experienced over the past two years. The tricky part is that those new loans must be at or above current market levels to begin softening our EVE risk. It doesn’t help our IRR position to be adding loans at 2021 levels. The market currently expects Fed Funds to reach 2.50% to 3.00% by the end of this year, and short investments (without credit risk) can easily earn us a 3% yield or more. All these factors must be taken into account when discussing and adjusting asset pricing strategies right now. This is one of the reasons that including ALM results in every strategic decision is so critical. It greatly shortens our reaction time and reduces how far off the path we can find ourselves in volatile environments. 2022, and likely 2023, will require more frequent/active ALCO and strategic planning sessions. At the same time, we need to ensure that our decisions in those meetings align with the assumptions we use in our ALM documents. Otherwise, we are basing our strategic movements on outdated directions. For example, what if our ALM assumes that new loan volume will keep up with market rates (in a rising rate environment) to increase yield and limit EVE risk? However, during our next ALCO/board meeting, the temptation to continue generating additional loan volume by not raising loan rates is too strong for the board to pass up. We could end up with a significantly higher level of IRR than our ALM results originally showed. The same can certainly be said The faster interest rates rise, the greater the negative impact on our EVE in particular. NEBRASKA BANKERS ASSOCIATION 23

FORVIS formally takes its place among the nation’s top 10 professional services firms today, offering comprehensive assurance, tax, advisory and wealth management services. “Today is a monumental day as BKD and DHG officially join forces and become FORVIS,” said Tom Watson, FORVIS CEO and former CEO of BKD. “This firm will be truly committed to the meaningful growth of our employees’ careers and ultimate success of our clients. Together, our combined teams will be significantly stronger, empowered by an enhanced focus on the future.” The FORVIS name represents the forward vision of the more than 5,400 partners and team members who have come together, forming a firm with a combined $1.4 billion in revenue with offices across the United States and internationally. The firm will be ranked among the top 10 nationally by fiscal year 2021 revenue and will be poised for further growth as it focuses on offering expanded advisory services and highly specialized industry intelligence that supplements the firm’s tax and assurance services. “We’ve always believed there’s a real opportunity for a different kind of professional services firm on the national stage – one that is defined by a high-touch approach to the client experience but is backed by robust resources that fuel a commitment to innovation and problem solving,” said Matt Snow, FORVIS chair and former CEO of DHG. Snow said the FORVIS team will be laser-focused on maintaining the high Net Promoter® Scores that characterized both legacy firms’ client-centered cultures. One key to doing so will be ensuring FORVIS teams remain nimble as they respond to client needs and market changes. “At every step of our integration process, we’re asking ourselves two questions: ‘Will this drive client service?’ and ‘Will this enable us to maintain our nimbleness?’,” Watson said. “We believe if we can do those two things, then we will be able to truly succeed and differentiate ourselves from the rest of the top 10.” Expansion into new geographic markets, finding even more ways to serve clients’ global needs, launching new service offerings and innovative solutions for clients, and creating a highly attractive employee value proposition are also high priorities. The results in each area will be driven by a commitment to being bold and embracing change. Snow points to the decision to create an entirely new name for the new firm as just the first example. “No other firm in the top 20 has done that,” said Snow. “With each step we take, we will strive to stand out in this profession.” Local Leadership Changes Announced As integrated operations begin, the firm has announced key leadership changes at the market level, demonstrating its commitment to unmatched client experiences by ensuring real-time resources are delivered quickly and effectively. These markets include Atlanta, Nashville, Tenn., Jacksonville, Fla., Winston-Salem, N.C., Fort Worth, Texas, and more.  For a complete list, visit https://www.forvis.com/news-releases/forvis-begins-servingclients-newest-top-10-professional-services-firm . For more on the FORVIS brand story, visit https://www.forvis.com. FORVIS, LLP ranks among the nation’s top-10 professional services firms. Created by the merger of equals of BKD, LLP and Dixon Hughes Goodman, LLP (DHG), FORVIS is driven by the commitment to use our forward vision to deliver unmatched client experiences. FORVIS is built upon the strong legacies of BKD and DHG, which is reflected in a name comprised of partner initials that represent our unique focus on preparing our clients for what is next. With more than 5,400 dedicated professionals who serve clients in all 50 states, as well as across the globe, FORVIS offers comprehensive assurance, tax, advisory and wealth management services. Visit FORVIS.com for additional information. Merger of equals BKD and DHG is effective today FORVIS Begins Serving Clients as Newest Top 10 Professional Services Firm NEBANKERS.ORG 24

Baker’s Software Solutions Service Package Includes: Asset/Liability Analysis – Interest Rate Risk Monitor (IRRM®) Your management team will find that The Baker Group’s quarterly review of the loan and deposit information outlined in the Interest Rate Risk Monitor and Asset Liability Analysis is an effective tool in managing your risk and performance. Bond Accounting – Baker Bond Accounting® (BBA) The Baker Group will provide you with accurate, easy-toread reports delivered electronically to you each month. Investment Analysis – Advanced Portfolio Monitor (APM®) The Advanced Portfolio Monitor is a key monthly report that we utilize to help you measure, monitor, and manage the overall risk and performance of your investments. Member: FINRA and SIPC www.GoBaker.com | 800.937.2257 Oklahoma City, OK | Austin, TX | Dallas, TX | Houston, TX Indianapolis, IN | Long Island, NY | Salt Lake City, UT | Springfield, IL *The Baker Group LP is the sole authorized distributor for the products and services developed and provided by The Baker Group Software Solutions, Inc. Six-Month Free Trial To obtain the resources you need to maximize the performance of your financial institution, contact Ryan Hayhurst with our Financial Strategies Group at 800.937.2257, or Ryan@GoBaker.com. Sample Municipal Summary 03/31/2017 Page 1 of 2 635,461 GO+REV 9,896,680 GO 4,752,978 REV GO 64.7% REV 31.1% GO+REV 4.2% Total : 100.0% Municipal Type 689,324 TX PSF 10,199,393 AA 4,180,764 A 215,638 NR TX PSF 4.5% AA 66.7% A 27.4% NR 1.4% Total : 100.0% Moody/S&P Composite Rating AL CA CO IA IL IN KY NM OH OK TX WA WI AL 1.9% CA 2.3% CO 1.4% IA 3.9% IL 10.8% IN 10.2% KY 2.4% NM 1.7% OH 8.0% OK 9.9% TX 33.2% WA 4.7% WI 9.6% Total: 100.0% State of Issue Individual Municipal Ratings are as of 3/19/2017, unless recently purchased. weighting based on Book Value of 15,285,119 Insd-AGM Insd-BAM Insd-PSFG Insd-PSFG, Pre-ReFunded Insd-State Aid Not Insured Not Insured, Pre-ReFunded Insd-AGM 12.0% Insd-BAM 3.4% Insd-PSFG 3.1% Insd-PSFG, Pre-ReFunded 1.4% Insd-State Aid 11.9% Not Insured 58.2% Not Insured, Pre-ReFunded 10.0% Total: 100.0% Insurance 4/13/2017 6:43:55AM - FSG / SAMP The Baker Group Software Solutions, Inc. - APMTM Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed. ADVANCED PORTFOLIO MONITORTM 18 18 Sample Cusip Par Cpn Book Price Market Price Gn/(Ls) *Acctg Eff Dur Eff Cnvx Underlying Municipal Credit Detail 03/31/2017 Yield Description Page 6 of 7 Muni Insurer Muni Type Moody S&P Call Date Maturity ASC 320 Gn/(Ls)% State Underlying Ratings GO | REV *DA% | DC *Per Cap | Covnt Issue Date Tax Status Overlapping D/A - Debt/Pop Net Asset Ending Beginning Cnty Jobless Security Fiscal Year Report Date *Proj 944431BL8 220,000 5.500 103.90 105.18 2,816 4.34 4.39 (0.98) WAYNE SD #112-B-BABS IL 26 Not Insured N/A N/A GO N/A A+ 12/01/20 12/01/26 AFS 1.23 IL 5.58 | -- 507 | -- 12/08/10 Taxable 8.29 - 754 WAYNE - 8% 2016 Report AD VAL TAXES 2015 4.34 3 Items 4.19 4.19 3.91 (0.30) (458) 103.36 103.40 5.311 1,160,000 Taxable Municipal Totals 39 Items Portfolio Totals 3.25 3.25 3.91 (0.26) 3.392 104.59 101.78 (409,651) 14,615,000 6,385K AA 6,918K A 1,981K NR AA 41.8% A 45.3% NR 13.0% Total: 100.0% Moody/S&P Composite Underlying Rating 1,471K Aa2 213K Aa3 1,533K A1 768K A3 11,299K N/A Aa2 9.6% Aa3 1.4% A1 10.0% A3 5.0% N/A 73.9% Total: 100.0% Moody's Underlying Rating 695K A+ 635K A 232K A13,723K N/A A+ 4.5% A 4.2% A- 1.5% N/A 89.8% Total: 100.0% S&P Underlying Rating 689K AAA 10,415K AA 4,181K A AAA 4.5% AA 68.1% A 27.4% Total: 100.0% Moody/S&P Composite Rating weighting based on Book Value of 15,285,118 * Denotes Tax Equivalent Yield (TEY) where applicable. Individual Municipal Ratings are as of 2/28/2017, unless recently purchased. * D/A% = Debt to Assesed Ratio; DC = Debt Coverage | Per Cap = Per Captia Debt; Covnt = Rate Covenant 4/13/2017 6:43:56AM - FSG / SAMP The Baker Group Software Solutions, Inc. - APMTM Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed. ADVANCED PORTFOLIO MONITORTM 26 26 Balances ($000's) Page 1 of 1 12/31/2019 Book Value % of Book TA **Rate Sensitive < 1 Year *Book Yield/ Rate *Reinv. Rate *12 Mo. Proj. Yield/Rate Avg. Life Effective Duration Effective Convexity Full Indx. Rate / Total is % of Segment Fixed Var. Non Int. Summary ALCO - Asset/Liability Mix Sample $20,414 4.16 46.55 53.45 46.55 0.97 0.04 0.01 0.00 Cash & Due 0.97 0.97 / 0.97 $172,210 35.10 100.65 (0.65) 14.56 2.81 4.60 3.55 (0.51) Investments j 2.81 2.64 / 0.00 (Includes MTM) $4,500 0.92 100.00 100.00 1.63 0.04 0.04 0.00 Funds Sold 2.13 2.13 / 2.13 $276,700 56.39 56.28 45.26 (1.53) 53.28 5.20 2.59 1.96 (0.22) Loans 5.37 5.47 / 5.76 $6,511 1.33 100.00 2.49 12.63 0.00 0.00 Other Earning 2.49 2.49 / 0.00 $10,358 2.11 100.00 Non-Earning $490,693 3.24 Total 68.38 28.37 100.00 38.01 4.17 3.27 2.36 (0.31) Assets 4.28 4.28 / 5.31 $276,064 56.26 66.70 33.30 12.02 0.53 7.66 4.48 0.54 Non-Maturing Deposits 0.53 0.53 / 0.53 $92,498 18.85 99.44 0.56 0.00 82.54 0.84 0.70 0.65 (0.04) Certificates of Deposit 0.84 0.81 / 0.70 $37,721 7.69 100.00 68.68 1.09 0.97 0.93 (0.02) Jumbo CDs 1.08 1.05 / 0.00 $28,250 5.76 95.58 4.42 46.90 2.06 1.95 1.89 0.03 Borrowed Funds 2.04 1.86 / 1.88 Other Paying $6,724 1.37 100.00 Non-Paying $441,257 22.36 Total 35.51 42.13 89.93 33.70 0.80 5.15 3.14 0.33 Liabilities 0.80 0.77 / 0.54 10.07 $49,436 (0.60) (0.46) Total Equity Capital 100.00 $490,693 Total Liab & Capital Liability Mix Asset Mix Liquidity Ratios Constant Benchmark ALCO Dependency Ratio Liquid Assets / TA Ratio is outside benchmark. P < 750.00% < 100.00% < 50.00% < 20.00% > 10.00% < 35.00% < 300.00% 42.39 68.11 559.71 48.04 6.31 10.19 7.69 Loans / Assets 56.39 Investments / Deposits Loans / Deposits Loans / Capital Net Borrowed Funds / Capital < 75.00% Available Line of Credit $90,500 56.39 Loan 35.10 Inv 4.16 Cash 2.11 Non-Earn 1.33 Other Earn 0.92 Others 56.26 NMD 18.85 CDs 10.07 Equity 7.69 J CDs 5.76 Borrow 1.37 Others Reliance on Wholesale Funding 9.14 < 30.00% The smallest 2% of all categories will be grouped into an 'Others' category. Jumbo CDs / TA Note: Values are rounded before printing, but full precision values are used in all calculations. * Yields/Rates are reported on EA & PL. Investments using Accounting yield. j (Ver 4.0 R7) Copyrighted 1994 - 2020 1/29/2020 3:39:46PM - SAMPLE / SMB1218 The Baker Group Software Solutions, Inc. - IRRMTM Although the information in this report has been obtained from sources believed to be reliable, its accuracy cannot be guaranteed. Interest Rate Risk Monitor ** Percentages based on maturing, repricing, and paydown balances. As American financial institutions—along with the rest of the world—face unprecedented times, The Baker Group is ready with tools and services to help maximize the performance of your institution. That’s why we’re offering new clients our Software Solutions* service package for a six-month free trial. Not only will you have access to our latest market research and insight from our Financial Strategies Group, you’ll be included in all of our webinars. There you’ll hear the latest Information on the economy and how it could impact your institution and its investment portfolio.

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