A S S U R A N C E / T A X / A D V I S O R Y Moving FORward requires VISion FORVIS is a forward-thinking professional services firm committed to unmatched client experiences. We anticipate our client’s needs and outcomes, preparing them for what’s next by offering innovative solutions. Created by the merger of BKD and DHG—a merger of equals—FORVIS has the enhanced capabilities of an expanded national platform and deepened industry intelligence. With greater resources and robust advisory services, FORVIS is prepared to help you better navigate the current and future dynamic organizational landscape. We are FORVIS. Forward vision drives our unmatched client experiences. Introducing FORVIS, forward vision from the merger of BKD and DHG FORVIS is a trademark of FORVIS, LLP, registration of which is pending with the U.S. Patent and Trademark Office.

4 Executive DougWareham, President andCEO Kathy Taylor, EVP, General Counsel Terri D. Thomas, EVP, COO Administration AlexOrel, SVP, Government Relations Eric Stofer, SVP, Chief Financial Officer Mary Taylor, SVP, Communications andMarketing Julie Taylor, VP, Computer and Information Systems Sara Blubaugh, VP, ExecutiveAssistant to the President andCEO BreeMagee, Communications &MarketingCoordinator LynneMills, Receptionist/Special Projects Education and Conferences Brenda L. Unruh, SVP, Director, Education & Conferences/Member Services BeckyMilne, VP, Assistant Director Education&Conferences LeAnnMott, AVP, Education&Conferences NatalieWareham, Event Coordinator Insurance AlexGreig, President, KBA Insurance, Inc. Kent Owens, SVP, KBA Insurance, Inc. Elizabeth Roche, SVP, Employee Benefits Administration Jenny Figge, VP, Operations Cari Charter, AVP, KBA Insurance, Inc. Legal/Compliance Jackie Kuhn, JD, VP, Staff Attorney GwenHill, JD, VP, Staff Attorney AllisonCarpenter, JD, VP, Legal Dept.Manager Dylan Serrault, JD, VP, CFBSManager Bobby Young, JD, VP, Staff Attorney Adeel Syed, JD, AVP, Staff Attorney Neal Barclay, AVP, Compliance Specialist/Auditor Jeff Narron, AVP, Compliance Specialist/Auditor Kelly VanZwoll, JD, AVP, Staff Attorney&Gov’t Relations KerryClark, JD, Staff Attorney&Publications Editor LewisWalton, JD, Compliance Specialist/Auditor Erica Friedt, ComplianceOperations Specialist Nathan Stumme, ComplianceOperations Specialist MeridithDeForest, Administrative Legal Assistant Sarah Lynch-Chaput, Legal Intern GabeWalker, Legal Intern MiaedaHutchinson, Legal Intern © 2022 Kansas Bankers Association | The newsLINK Group, LLC. All rights reserved. The Kansas Banker is published six times each year by The newsLINK Group, LLC for the Kansas Banker and 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 Kansas Bankers Association, 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. The Kansas Banker is a collective work, and as such, some articles are submitted by authors who are independent of the Kansas Bankers Association. While the The Kansas 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. 6 16 20 6 KBA’s Incoming Chair Shan Hanes 12 President’s Message: Will the ESG Pendulum Become a Wrecking Ball? Doug Wareham, President & CEO, Kansas Bankers Association 13 ABA & State Bankers Letter 15 KBA Leadership on the Road Again … 2022 No-Ties Tour 16 Washington Update: No Deal: States Slam on Brakes for CU Acquisitions of Community Banks Rob Nichols, President & CEO, American Bankers Association 18 Current Compliance Chatter From the KBA Legal Department 20 2022 BLOK Session II 2022 BLOK Training Travels to Wichita 22 Lender Sees Kansas Homeowner Assistance Fund Help Its Customers: “A Blessing” For Low-Income Homeowners 24 FORVIS Begins Serving Clients as Newest Top10 Professional Services Firm; Merger of Equals BKD and DHG Is Effective 26 Push For Certified Affirmative Action Plans May Require Changes For Kansas Banks Josh Heck, Syndeo 28 The Importance of Asset Pricing and ALM Strategy Andrew Okolski , The Baker Group 30 Briefly in Kansas Banking 31 In Memory Jennifer Michelle (Koster) Wangerin 33 Education Calendar

Member: FINRA and SIPC | 800.937.2257 Oklahoma City, OK | Austin, TX | Dallas, TX | Houston, TX Indianapolis, IN | Long Island, NY | Salt Lake City, UT | Springfield, IL Interest Rate Risk and Investment Strategies Seminar October 19-21, 2022 | Oklahoma City, OK The Skirvin Hotel The Skirvin Hotel One Park Avenue Oklahoma City, OK 73102 405.272.3040 WHO SHOULD ATTEND Financial institutions’ CEOs, CFOs, investment officers, board members, and those who are directly or indirectly responsible for financial management functions will benefit from this seminar. There is no cost for this seminar. ACCOMMODATIONS A block of rooms is available at The Skirvin Hotel. Identify yourself as a Baker Seminar attendee (or group code TBG3) when calling +1 (800) HILTONS. The special room rate will be available until the room block is sold out. AGENDA Wednesday, 19th Twin Hills Golf 1:00 pm Thursday, 20th Breakfast 7:30 am Seminar 8:30 am Lunch 12:00 pm Adjourn 4:00 pm Dinner 7:00 pm Friday, 21st Breakfast 7:30 am Seminar 8:30 am Conclusion 12:00 pm For your convenience, register for the seminar online at Call Skoshi Heron at 888.990.0010 for more information. Two years after the pandemic left financial institutions drowning in excess liquidity at historically low interest rates, the industry faces a new challenge… rising interest rates. The Fed has quickly pivoted from supporting the economy to fighting inflation and institutions are now facing the first rising rate environment in years. Regulators have watched with concern as loan and investment durations extended to record highs in a search for yield and will have a renewed focus on the Investment Portfolio and Interest Rate Risk Management. Portfolio managers can no longer be reactive, but must be proactive in managing their investment portfolio and balance sheet in the face of rising rates and a flattening yield curve. This seminar will examine all of these concerns and present actionable strategies to better prepare your institution for the uncertainty ahead. Join us for an in-depth discussion of the following topics: • Economic and Market Update — Review of current economic conditions and the outlook for growth, inflation, and interest rates • The Powell Pivot — Update on rate hikes, tapering, and the outlook for Federal Reserve monetary policy • Interest Rate Risk — How to ensure you are prepared for the heightened regulatory focus coming in the years ahead • Liquidity Risk Management — Best practices for managing liquidity risk as rates rise • Investment Portfolio Strategies — Adapting your strategy and finding the best relative value for rising rates and a flattening yield curve • MBS/CMOMarket — Balancing prepayment and extension risk in an uncertain mortgage rate environment • Municipal Market Update — The latest on managing municipal credit risk and finding the best relative value OCT FEATURED SPEAKER David Rosenberg — President/Chief Economist & Strategist Rosenberg Research & Associates Inc. 11 hours of Economics and Finance CPE credits will be earned for your attendance.

6 Shan Hanes, KBA’s incoming board chairman, is the president and CEO of Heartland Tri-State Bank, which has branches in Elkhart, Attica, Arlington and Rolla. Shan earned a bachelor’s degree in agri-business with a minor in economics from Northwestern Oklahoma State University in 1993 and graduated from a three-year program at the Graduate School of Banking in Boulder, CO., in 2002. He has been a banker since 1993. Tell us about growing up and your family. I grew up on a family farm in the Oklahoma Panhandle, spending many hours driving a tractor in the same field with my sister. I loved growing up there, was very active in 4-H as a youth and played any school sports offered. My father still lives on the farm but is mainly retired now. My mother passed away five years ago after a battle with cancer. Both were very involved with their grandkids’ activities and attended more of their events than I could count. My father has since remarried, and his wife, Ruth, shares the “farm life” with my father. I have a bachelor’s degree from Northwestern Oklahoma State University in Alva, Oklahoma, in Ag Business and Economics and graduated from the Graduate School of Banking in Boulder, CO. I’ve also spoken at several conferences at the state and national levels. I’ve been married to my college sweetheart, Michelle, for 29 years. We met in a college English class at NWOSU. We have three daughters: Shayden, a senior at Washburn University majoring in business and marketing; Shaybree, a sophomore at Cowley County Community College majoring in graphic design and Shaylynn, a senior at Elkhart High School. How did you become a banker? Did you always aspire to be part of the financial industry? I was fortunate to grow up on a family farm where we grew wheat, milo and some barley. We also had a cow/calf and stocker operation. I decided to major in ag business and economics in college without having a real plan for what I would do after graduation. After several interviews with different companies, I was most intrigued by the idea of becoming an ag banker. That career would allow me to stay involved with production agriculture, return to a rural town to raise a family, and live close enough to the family farm to help out when necessary. Describe your educational background. What motivated your educational choices? I didn’t really know where my classes at school would lead me or what my future held. I pursued a degree in agriculture but enjoyed finance and marketing classes in college. I also saw commodity marketing as an essential aspect of agriculture that many producers were missing. During college, I met with a local commodity broker to better understand the business and worked as an intern learning commodity futures. KBA’s Incoming Chairman Shan Hanes Testifying to US House Sub-Committee for Rural Business and Credit-May 2016 Shan and Michelle on the Balcony of Speaker of the House’s Office overlooking DC

Pub. 11 2022 Issue 4 7 Are there any specific individuals who had a major impact on your career? How? Mike Peacock was an ag banker who banked my dad for most of his farming career. Mike and Dad truly trusted each other. I grew up during the 1980s, when farming and interest rates were very challenging. I’m sure there were difficult conversations throughout the years, but I respected how Mike treated my father and how they worked together to grow our family farm. After many years of working together and many annual renewals, Dad’s farm is debt-free, and Mike has retired from banking. The two have remained close friends ever since. I want to develop and grow similar relationships with my customers. Some have been with me for almost 30 years as well. Dan Smith is the senior Ag Lender and Head of Lending at Heartland Tri-State Bank. Just out of college, when I came to work at the bank, Dan was the senior lender. He has mentored me every day ever since. We developed our own ag lending software for farm renewals and have worked next to each other for many years. During that time, we’ve had many conversations about banking. More importantly, we’ve also talked about life and family. I owe my career and present position to Dan. What is the most rewarding part of your career? The best part is working with family farms and watching those families achieve their individual goals. Over almost 30 years, I’ve watched many customers enjoy many successes. Some went very smoothly; some took several attempts. It doesn’t matter if the customer is a large commercial customer who we can assist in growing their business or a high school student Continued on page 8 purchasing and paying off his first vehicle. The satisfaction and personal pride customers feel when they achieve their goals is also my satisfaction because together, we made the correct choices to accomplish those goals. How has retail banking changed in the last five years? A colleague, Jim Edwards, past chair of ABA, made the following comment about a year ago: “Things have never moved this fast, and they will never move this slow again.” That insightful realization has changed how I look at banking and finance. There will always be challenges and opportunities. We’ve seen the growth and collapse of some digital currencies in the last five years. They could continue to be a game-changer for banks and customers. Even for a small community bank in a very rural area of Kansas, digital currency was a major discussion at our annual strategic planning session. The expectations and demands of customers will require bankers to be alert continually. However, we are responsible for the safety and soundness of our industry. We are required to be vigilant about protecting our customers and their data. The best part is working with family farms and watching those families achieve their individual goals. Shan, Shaylynn, and Darus Hanes (My Dad)-Rotunda room of Capital Shan Hanes, Swim Team Ref at Local Meet

8 What ideas would you like to share about the future of the financial industry? As Midwest bankers, we are humble creatures who rarely “tell our story” because we fear it will come off as “boasting.” We need to improve our willingness to “tell our story” to everyone – our customers, communities, legislators and media sources. Banks and bankers play a pivotal role in our communities, regardless of the size of the bank or community. We are the financial leaders within our communities at a time when leadership is needed. We must be willing to step up and take on that responsibility. Are there any leadership books you enjoyed? • The Bible • Lincoln on Leadership by Donald T. Phillips • The Five Dysfunctions of a Team by Patrick M. Lencioni • 24 Hours Inside the President’s Bunker by Lt. Col. Robert J. Darling, U.S. Marine Corps (Retired) What have been some major challenges in creating a balance between customer branch and digital-based transactions? We care passionately about our customers and data security, so meeting customers’ demands with safe and sound banking alternatives has been challenging. One would think that digital adoption would be much slower due to our rural customer base. While this may sometimes be the case to some extent, we have customers moving in that direction who expect their local bank to provide them with options. If we cannot, they will find a provider someplace else. What is the secret to creating a culture within a banking organization where customer satisfaction is the focal point? I’m not sure there’s one secret to success for everyone. For us, we have made it a focal point to greet customers by name before they are inside the bank’s door. We realize our customers have multiple options to bank. We want our customers to feel that we are genuinely glad they chose to bank with us, come to the branch that day, or communicate with us in another fashion. We stress this attitude and engagement at staff meetings and reward employees who go above and beyond with customer service. To develop an atmosphere of customer service, I feel it must be exemplified by management, stressed to employees, and rewarded when exceptional customer service is displayed. What is the biggest impact of being a KBA member? What makes it beneficial? Engagement on every level. At times, a bank simply needs a question answered regarding an account. KBA is there to provide that professional expertise to quickly and accurately answer the question so the banker can take care of the customer. Sometimes, a bank has an issue with a state law or regulation limiting its ability to serve customers or the community. Still, it doesn’t have the knowledge or resources to produce change. KBA will gladly take that issue and discuss it with other banks to determine commonality; KBA has the expertise, knowledge, and resources to effectuate the change if needed. Lastly, banks across the country deal with matters at the federal level, both regulatory and legislative. KBA can join other state associations and ABA to engage nationally. We must engage in “telling our story” and become proficient at it if we expect to survive. Are you involved in any civic or charitable organizations? I am a member of Elkhart Church of Christ, the USD 218 School Board, Elkhart’s Lion’s Club, the Morton County Economic Development Board, the Morton County Chamber of Commerce and the Elkart Youth Center Board. I chair the Morton County Business Growth and Retention Committee and am the president of High Plains Health Foundation and Western Kansas Swim Club. Also, I help coach the Tri-State Triton Swim Team. If you look back at your career and life, what would be three things you have learned that you would share with a younger person within the banking industry? A young person who chooses to become a banker has chosen a great career with unlimited possibilities and options. Banks and finance will continue to fuel the dreams of both Continued from page 7 A young person who chooses to become a banker has chosen a great career with unlimited possibilities and options.

Pub. 11 2022 Issue 4 9 individuals and businesses. Both will continue to look for financing options. As bankers, we must have worked to gain their respect and confidence that we are the best option to help them achieve their goals and dreams. First, take ownership of your responsibility to look after the best interest of both the bank and the customer. Second, be dedicated to learning all options available to the bank and customer to offer a solution that will be successful. Last, be prepared to make changes and alter course. Life has a way of throwing curves to the best-laid plans. Have a backup plan to help you regroup, alter course and proceed forward. What are some professional moments that make you the proudest? There are many. On top of testifying at the Kansas Statehouse multiple times, I’ve had the opportunity to testify to the U.S. House of Representatives twice, the U.S. Senate once, and once to the U.S. Treasury. I’ve served on the CFPB Community Bank Advisory Council. I’ve served on and been the KBA Educational Committee Chair, KBA Ag Division President, served on and been the ABA Ag and Rural Banker’s Chair, and served on ABA’s board of directors. Was there an “aha” moment in your career that defined you? When I was presented with the opportunity to create a bank holding company, formulate a group of shareholders, and purchase the bank from its previous holding company. It was the most challenging and uncertain time of my professional career. I learned many things during that process. I was blessed to have the confidence of an existing bank board director that we could purchase and successfully run the bank. After raising 100% of the necessary capital in short order, I realized that a community would come together behind a central goal if they believed in the leadership and understood the business is essential to their community. That event took place a decade ago. We have since acquired other institutions and more than doubled the size of the bank. The success is 100% the result of having high-quality employees, officers, directors, and shareholders who believe in a vision. I would have never asked for money from family and friends to purchase shares of a community bank if I didn’t believe 100% in the potential of the bank and its employees and my responsibility to deliver on that promise. What is your favorite way to spend your free time? Do you have any unusual hobbies? I’ve had the opportunity to be involved with my children as they have grown. I’ve coached many rec teams and viewed all those children as my own. The one sport that seems to have stuck with my family is competitive summer swimming. All three of our girls enjoyed great levels of success for a seasonal swim club. My wife and I are the Meet Referee and Administrative Official in charge of running the meets each weekend throughout the summer. We volunteered as timers at the first meet our oldest daughter attended, and we’ve been intimately involved ever since, for 15 years. I coached all three of my daughters for several years and now enjoy even greater satisfaction watching my daughter coach a team that includes her youngest sister. My daughters also own a summer lawn-mowing business to earn money to purchase their first cars. Over the years, we have spent countless hours in the evenings and weekends mowing yards and working together. I will never forget the experiences we’ve had together simply mowing yards which Continued on page 10 Left to Right: Rosa Molina, Shan Hanes, Minn.Li oewen, Traci Overpeck, Shaylynn Hanes, Lisa Sauls, Grace Sparkman, Jason McQueen, Shaybree Hanes, Trae Watson, Jackie Finn, Mandy Burton, Martha Meraz, Karen Castillo, Dan Smith, Desarae Aranda, Jessica Hurn, Sonia Kelly, Gayla Lawrence Shan Hanes, Presidentand CEO of Heartland Tri-State Bank, Incoming Chairman of KBA

10 knowledge to help grow our local community. I’m proud to be a community banker and am looking forward to serving as KBA chair next year. Kansas enjoys a wide variety of banks and bankers who have always been willing to donate their time, knowledge, and expertise to further banking in Kansas. I look forward to working with and learning from these individuals over the next year. takes me back to the many hours I spent with my father, mother, and sister growing up on the family farm. The bonds I enjoyed as a child were passed down to my daughters because we found a way to work together. While not helping on the farm as much as I should, I still enjoy it. My other hobby is woodworking. Each of my daughters built their own desks as middle school students. It was great father/daughter time and taught them to run tools. Most of the furniture in our house was built in my shop, and I built the desk I sat at while buying the bank. Do you have any last words for anyone reading this article? What would you like them to remember? One of the benefits of being a teacher, as is my wife, is the ability to touch the future by educating the next generation. As bankers, we can touch the future of the next generation of business leaders. Mike (Peacock) became a valued voice to my father during the 1980s, and we can do the same now. We can engage with high school and college kids to encourage them to consider becoming business owners. We can use our Continued from page 9 Mortgage Investment Services Corporation 22316 Midland Drive • Shawnee, KS • 66226 • 913-390-1010 NMLS# 194708 • A Kansas licensed mortgage company #MC 0001182 Missouri Residential Mortgage Loan Broker Licence # 10-1912 Oklahome Mortgage Broker #MB001953 Colorado License #100044344 Nebraska Licensed Mortgage Company NMLS#194708 20+ Years! Depend On Us! For 20 years, community banks in the Midwest have depended on MISC’s expert mortgage services for their customers. • Free Loan Officer Training & Webinars • Offer all secondary market loan programs: VA, FHA, USDA/RD, Conventional & Jumbo • Earn more fee income with less risk Call or email today. Let’s discuss how MISC can help you! Joan Emas, Account Executive Andrew Holtgraves, Vice President Cell: 816-810-8878 Cell: 913-558-2555 Email: Email: NMLS: #276932 Associate Member Michelle, Shaybree, Shaylynn, Shayden, Shan Hanes—Shaybree’s High School Senior Award’s night-2021

Your employees are great. We want to help you retain and reward them. EXECUTIVE BENEFITS NETWORK For a customized proposal for your bank, please contact: Executive Benefits Network 4601 W 6th Street, Ste A | Lawrence, KS 66049 | (785) 838-9800 | The only Kansas-based BOLI firm, serving Kansas banks for over 25 years. Come see what BOLI can do for your bank.

12 Will the ESG Pendulum Become a Wrecking Ball? Banks should also be free not to lend, invest or otherwise engage so long as they do not violate fair lending or other antidiscrimination laws. By Doug Wareham, KBA President & CEO PRESIDENT’S MESSAGE In less than two years, the priority of the White House has shifted dramatically from the Trump Administration striving for energy independence through domestic production to the Biden Administration striving to mitigate climate change by issuing executive orders designed to aggressively transition our nation away from fossil fuels. The shift of the political pendulum on energy policy has led federal regulatory agencies that directly govern or impact the banking industry to draft guidance documents, propose reporting requirements and initiate disclosure standards that are clearly intended to limit and/or shift capital flowing to energy producers and energy users that produce greenhouse gas emissions. Like it or not, our industry has been pulled into the climate change debate. The reality is climate change mitigation is only one of many objectives of a broader Environmental, Social and Governance (ESG) movement that is now being embraced by federal regulatory agencies, including the Treasury Department, Federal Reserve, FDIC, OCC, CFTC, and the SEC. ESG implementation by these federal agencies is being aggressively pursued despite the lack of direction from Congress, which begs an important question: If Republicans succeed in retaking control of the U.S. Senate and/or U.S. House of Representatives, what will they do in response to the ESG movement? The answer to that question will likely come next January, but it’s safe to assume a Republican-led House and/ or Senate will push back hard on the ESG movement, which will likely create an unfortunate wrecking ball scenario with the banking industry caught in the middle. In Kansas, we are already keenly aware that some policymakers opposed to the ESG agenda are willing to retaliate against banks that withdraw access to credit in the name of adhering to the objectives of ESG. Legislation was introduced in several state legislatures this past spring, including Kansas, which would have essentially mandated lending and imposed penalties on any bank that restricts or limits capital to “any” legal business and industry. For our industry, these proposals to mandate lending are as damaging and misguided as the progressive ESG requirements they are designed to counter. KBA recently joined a formal statement sent to the aforementioned federal agencies encouraging them to refrain from enforcing ESG guidance and requirements that would negatively impact the banking industry’s ability to provide critical financial services to the customers and communities they serve. The basic fundamental principle outlined in the letter stated: Banks should be free to lend to, invest in, and generally do business with any entity or activity that is legal, without government interference. Banks should also be free not to lend, invest or otherwise engage so long as they do not violate fair lending or other antidiscrimination laws. It’s unfortunate a letter was required to remind policymakers from both sides of the ESG debate that the free market approach to the distribution of capital has provided us with the strongest and most resilient financial system and economy in the world. Hopefully, the ESG pendulum will stop swinging from the left to the right before it becomes a wrecking ball that damages the reputation of our industry and our ability to serve the diverse financial needs of the individuals, businesses, and communities that depend on us. Please view the ESG State Alliance Letter to Federal Regulators on the opposite page.

Pub. 11 2022 Issue 4 13 The Honorable Jerome H. Powell Chairman Board of Governors of the Federal Reserve System 20th Street and Constitution Avenue, NWWashington, DC 20551 Mr. Michael Hsu Acting Comptroller Office of the Comptroller of the Currency 400 7th Street, SW Washington, DC 20219 The Honorable Sandra Thompson Director Federal Housing Finance Agency 400 7th Street, SW Washington, DC 20219 The Honorable Rostin Behnam Chairman Commodity Futures Trading Commission Three Lafayette Centre 1155 21st Street, NW Washington, DC 20581 The Honorable Janet Yellen Secretary of the Treasury U.S. Department of the Treasury 1500 Pennsylvania Avenue, NWWashington, DC 20220 The Honorable Martin Gruenberg Acting Chairman Federal Deposit Insurance Corporation 550 17th Street, NW Washington, DC 20429 The Honorable Gary Gensler Chairman U.S. Securities and Exchange Commission 100 F Street, NE Washington, DC 20549 Continued on page 14 RE: The impact of Environmental, Social and Governance guidance and regulatory proposals on banking The undersigned bankers associations write to reinforce our longstanding view that bank supervision, and other purportedly neutral government requirements like disclosures, must not become a means of allocating capital or implementing unrelated policy preferences. As Environmental, Social and Governance (ESG) guidance and regulatory proposals proliferate, they are often cast as flexible, non- binding, or targeted to certain segments of the market, while allowing for long transitions. In reality, the individual and cumulative effects of these agency actions have the potential to be acute, widespread and anything but neutral. There is growing concern from our member banks about the impact those efforts may have on their continued ability to provide critical financial services to the customers and the communities they currently serve. Our basic principle is simple: Banks should be free to lend to, invest in and generally do business with any entity or activity that is legal, without government interference. Banks should also be free not to lend, invest or otherwise engage so long as they do not violate fair lending or other anti-discrimination laws. This free-market approach has given this nation the strongest and most resilient financial system in the world, and the increasing efforts by policymakers from all sides of the political spectrum to intervene in the intermediation of capital risks undermining that system. The banking industry plays a key role in providing credit and other necessary financial services to individuals, companies and communities, and they do that by taking and carefully managing risk. Regulators should make every effort to ensure banks can serve their communities and to recognize the unique challenges facing smaller banks, particularly those where the local economy relies on industries and related suppliers that have become subject to polarized views or are otherwise undergoing transition, such as the energy sector. It is essential to understand that regulatory initiatives and disclosure requirements directed at any segment of financial institutions have implications for all others, including community banks, their counterparties and the communities they serve. Banks must be able to make legal business decisions that are appropriate for their customers and communities as market and consumer preferences evolve. Policymakers play an important role in addressing national and global challenges, but banks should not be used as proxies to effectuate environmental or other social policy goals. ABA & State Bankers Letter

14 We urge policy makers at all levels of government to be guided by the following key principles: • To ensure that communities have the financing needed to remain vibrant and transition where needed in an orderly fashion, banks must be free to lend to, invest in and generally do business with any entity or activity that is legal without government interference, and that banks should also be able to choose not to engage in lending, investing or other engagement so long as they do not violate fair lending or other anti- discrimination laws. • Environmental, social and governance risks should not be considered separate categories of risk, as they are already embedded in the risks banks currently assess, monitor and mitigate. • Disclosure requirements should not be decoupled from longstanding concepts of materiality or imposed on banks unnecessarily. Disclosures are costly, especially for community banks and they must remain focused on what is necessary to inform business and risk management decisions, not used to allocate capital or otherwise effectuate broader policy goals. • Regulatory efforts to ensure safety and soundness must be appropriately applied and not used intentionally or unintentionally to reallocate credit or carry out extra prudential goals. • Regulators should work together closely to ensure that they do not exceed their mandate and stray into capital allocation; use consistent definitions; and avoid unintended consequences. Thank you for considering our views. We stand ready to work with you on these issues of vital importance to our economy. Sincerely, Continued from page 13 American Bankers Association Alabama Bankers Association Alaska Bankers Association Arizona Bankers Association Arkansas Bankers Association California Bankers Association Colorado Bankers Association Connecticut Bankers Association Delaware Bankers Association Florida Bankers Association Georgia Bankers Association Hawaii Bankers Association Idaho Bankers Association Illinois Bankers Association Indiana Bankers Association Iowa Bankers Association Kansas Bankers Association Kentucky Bankers Association Louisiana Bankers Association Maine Bankers Association Maryland Bankers Association Massachusetts Bankers Association Michigan Bankers Association Minnesota Bankers Association Mississippi Bankers Association Missouri Bankers Association Montana Bankers Association Nebraska Bankers Association Nevada Bankers Association New Hampshire Bankers Association New Jersey Bankers Association New Mexico Bankers Association New York Bankers Association North Carolina Bankers Association North Dakota Bankers Association Ohio Bankers League Oklahoma Bankers Association Oregon Bankers Association Pennsylvania Bankers Association Puerto Rico Bankers Association Rhode Island Bankers Association South Carolina Bankers Association South Dakota Bankers Association Tennessee Bankers Association Texas Bankers Association Utah Bankers Association Vermont Bankers Association Virginia Bankers Association Washington Bankers Association West Virginia Bankers Association Wisconsin Bankers Association Wyoming Bankers Association

Pub. 11 2022 Issue 4 15 KBA Leadership on the Road Again … 2022 No-Ties Tour KBA’s No Ties Tour catching up with Kurt Knutson – Founder, Chairman and CEO of Freedom Bank in Overland Park. Thank you, Mike Maddox, CEO of CrossFirst Bank, for sharing your insights on banking and the Kansas economy! Great visit on banking and fintechs with Mike Bartkoski, President of nbkc bank in Kansas City! KBA staff learned a great deal about serving the needs of urban and rural Kansas from Tim Barron, President of Kendall Bank headquartered in Overland Park. President/CEO John Doull, EVP Michelle Guthrie and CFO Bob Titus at Cornerstone Bank in Overland Park. KBA President & CEO Doug Wareham along with Kathy Taylor, EVP-General Counsel hit the road this summer visiting banks as part of the annual summer “No Ties Tour.” Thank you, Kansas bankers, for taking the time to visit with us! We truly value these conversations! Our journeys are not yet complete so stay tuned for more in the next issue of The Kansas Banker. KBA No Ties Tour kicked off with a great visit with Roger McWherter, President & CEO at Argentine Federal Savings.

16 No Deal: States Slam on Brakes for CU Acquisitions of Community Banks WASHINGTON UPDATE By Rob Nichols, President & CEO, 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, Floridabased VyStar the 13th largest credit union in the nation. The deal was just one of a growing list of mergers that have been 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 Mississippi-chartered 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.

Pub. 11 2022 Issue 4 17 Email Rob Nichols at 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 moderateincome communities by meeting the same Community Reinvestment Act 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 2022 KBA TRUST CONFERENCE OCTOBER 20 & 21 - MANHATTAN 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 multimillion dollar headquarters. It’s encouraging that states are starting to scrutinize the credit union industry more closely. Now Congress must do the same.

18 Current Compliance Chatter From the KBA Legal Department As a bank compliance officer, do you wonder if you are overlooking issues? You’re not alone. Below is a summary of the national topics on the minds of compliance and other bank officers. Please reach out to the KBA Legal Department with specific questions. UDAAP and Fair Banking CFPB released an updated Unfair, Deceptive, or Abusive Acts or Practices (UDAAPs) Examination Manual that expects banks to include measures preventing discrimination in every aspect of UDAAP prevention. Bankers at CFPB-regulated institutions are trying to determine what that looks like, particularly if they need to do comparative file reviews, exception tracking, etc. on the deposit and operations side of the bank. Remember, regardless of the bank’s regulator, banks are prohibited by law from discriminating in any part of their operations. 1071 – Small Business Lending Data Collection Final regulations amending Regulation B (ECOA) have yet to be published, but the proposed regulation’s almost 1,000 pages have bankers wondering what the impact will be on banks. While you may not have time to look at the entire proposed regulation, the CFPB’s 35-page Discussion Guide for Small Entity Representatives is helpful. Available at: CRA Modernization Although this is in a proposed state, bankers are discussing the potential effect of the joint proposal that modernizes assessment areas and sets new thresholds for small and intermediate banks. The comment period closed on Aug. 5, 2022. Evaluating Your Overdraft Program The KBA previously alerted its bankers to the issue of multiple insufficient funds fees being charged on represented items and the possibility that a bank could be cited for a UDAAP violation (with up to five years “lookback” period) even if the bank previously clarified its disclosures and practices. This continues to be an area reviewed by examiners. It is essential banks update their disclosures as soon as possible if they have not already done so.

Pub. 11 2022 Issue 4 19 Revised Interagency Flood Q&As The May 2022 Revised Interagency Flood Q&As replaced the original Q&As published in 2009 and 2011 and consolidated the 2020 and 2021 proposals. The revised Q&As reflect significant changes to the flood insurance requirements made by federal law in recent years and cover a broad range of technical flood insurance topics. Further, the Q&As were reorganized by topic to make it easier to find and review information. P2P Mobile Payment App Disputes With an increase in consumers using payment apps like Zelle and Venmo, banks are taking greater losses with disputed EFT transactions. Some banks have even taken the approach of blocking certain payment apps. While the CFPB issued additional FAQs to provide guidance, having a strong regulatory foundation and understanding of payment systems can avoid unnecessary monetary losses and lower compliance risk. The KBA released an on-demand webinar on EFT disputes that goes in-depth into this topic. Fair Lending A new Fair Lending focus is racial and ethnic bias by a property appraiser or evaluator, whether it be an individual bias against the home occupants or against the neighborhood. The Department of Justice stated in an amicus brief that a bank could be liable for such bias. If a bank detects bias, it should consider obtaining a second appraisal (any additional fees imposed on the buyer/applicant would be considered unfair). Additionally, the bank should consider removing that appraiser from its list of approved appraisers and possibly submitting a complaint to the state appraisal board. Vendor and FinTech Compliance Management The regulatory agencies provided banks with guidance on what is expected when entering business arrangements with third-party vendors, including creating policies and procedures outlining initial due diligence standards, continued monitoring, and contractual provisions that clearly delineate each party’s responsibilities. FinTechs fall within the requirements relating to third-party vendors but present a higher risk of causing customer harm than other types of business relationships. Further, regulators consider any business relationship with a FinTech to be a critical partnership requiring a heightened risk management process. Specific areas of concern include UDAAP risks, reputation risks, and the FinTech’s lack of compliance expertise. FinTechs generally move quickly with new products and ideas, but a bank must consider regulatory expectations and be prepared to offer education and support. When considering a relationship with a FinTech, a bank should consider its own risk appetite. The bank should construct an effective contract to allow the bank to monitor the FinTech for compliance, provide the bank with access to the FinTech’s records and processes, and require the FinTech to report all investigations, complaints, or problems to the bank. Environmental, Social, and Governance (ESG); and Diversity, Equity, and Inclusion (DEI) The increased focus on climate risk has prompted some banks (and their regulators) to review their environmental exposures, including how rising sea levels and changing weather patterns might affect their existing loan portfolios. Some banks are even reconsidering their support of companies and projects that generate substantial carbon emissions. However, the KBA is actively fighting against ESG mandates since a bank should have the right to choose who it wants to do business with. Additionally, banks are focusing initiatives on their stated social values, including diversity, equity, and inclusion in hiring and promotion, equitable pay scales, and providing greater access to capital in long-underserved communities. The regulatory agencies provided banks with guidance on what is expected when entering business arrangements with third-party vendors, including creating policies and procedures outlining initial due diligence standards, continued monitoring, and contractual provisions that clearly delineate each party’s responsibilities.

20 The 2022 KBA Bank Leaders of Kansas (BLOK) Class reconvened their training with a successful third session in Wichita on July 1315. The 21-member class kicked off their time together with an interactive discussion with 2010 KBA Chairman Jeannette Richardson (Vice Chairman, Prairie Bank of Kansas, Hutchinson). She shared insights on leadership in her bank and community, what led her to serve on the KBA Board of Directors and she graciously took questions from the class looking to tap into her experience as a Kansas banker. That evening, the class members were treated to a hospitality reception, sponsored by UMB Bank, offering the chance to reconnect since their second session in April. The following day was filled with an engaging leadership training session facilitated by Ted Garnett, President of PS Culture Matters. Garnett encouraged participants to evaluate their respective bank’s mission statement and core values. He 2022 BLOK Session II 2022 BLOK Training Travels to Wichita stressed that all banks should value their customers and that each bank needs to identify and communicate what really differentiates them in the marketplace. Garnett also gave compelling, personal examples of the power of setting lofty goals. To gain practical experience, he challenged BLOK class members to establish a personal vision, or leadership brand, for which to be known. The key is to ask others about the reality of what he or she is known for and then close the gap between reality and the desired outcome through the execution of the leadership principles that Garnett stressed. Garnett also taught participants conceptual tools to improve their leadership skills within their bank teams to get results. Hands-on group exercises had the class learning that the number one leadership skill is listening, and the number one group skill is consensus. The class was assigned a book report project based on Leadership and Self-Deception written by The Arbinger Institute. After reading the book, each individual implemented BLOK Class members, including Francis Scheuerman (UMB Bank, Kansas City), read the book Leadership & Self Deception and reported back their takeaways. Deron O’Connor (Astra Bank, Hays) and Kimberly Wallace (Equity Bank, Wichita) learn the importance of attention to detail and listening carefully. Julie Huber (Equity Bank, Wichita), Clark Bastian (Fidelity Bank, Wichita), Dr. Larisa Genin (W. Frank Barton School of Business at Wichita State University), and Shawn Lancelot (Bank of America, Wichita) participate in a Workforce Development Panel Discussion. Ted Garnett, PS Culture Matters, leads the BLOK Class through dynamic leadership training. Ted Garnett leads the class in an exercise focusing on the teamwork cycle: forming, storming, norming and performing.

Pub. 11 2022 Issue 4 21 a tool taught in the reading and reported back the lesson learned and the effect on his or her personal and professional relationships. Many impactful stories were shared! Goodwill Industries of Kansas was the host of Friday morning’s training, which began with a Workforce Development panel discussion featuring Clark Bastian (Chairman of Fidelity Bank, Wichita), Dr. Larisa Genin (Dean of W. Frank Barton School of Business and Professor of Marketing at Wichita State University), Julie Huber (Executive Vice President/ Strategic Initiatives for Equity Bank, Wichita), and Shawn Lancelot (Market President for Bank of America, Wichita). The distinguished panelists discussed their strategies for identifying new bank talent and retaining great employees. The class was also able to pick their brains on issues such as offering maternity/paternity leave and managing remote workers. The session concluded with an eye-opening tour and overview of Goodwill, whose mission is to provide opportunities to people with disabilities and barriers to employment seeking independent and productive lives. The BLOK Class will reconvene at their fourth and final session in Washington DC in September, where they will join KBA Federal Affairs Committee members for a March on Capitol Hill. Members of the 2022 BLOK class are: Brandi Archer, First National Bank and Trust, Phillipsburg; Jennifer Caughron, Bankers’ Bank of Kansas, Wichita; Nick Gideon, Silver Lake Bank, Lawrence; Alex Greig, Kansas Bankers Association, Topeka; James Hagedorn, United Bank & Trust, Seneca; Sam Jackson, First State Bank, Plainville; Jordan Lauer, Farmers State Bank, Westmoreland; Kyle Murrow, Denison State Bank, Holton; Deron O’Connor, Astra Bank, Hays; Francis Scheuerman, UMB Bank, N.A., Kansas City; Garrett Sharp, Community National Bank & Trust, Chanute; Clint Shoemaker, Guaranty State Bank and Trust Co., Beloit; Lindsey Snider, Central National Bank, Junction City; Brock Stuhlsatz, Citizens Bank of Kansas, Derby; Greg Thiessen, First Bank of Beloit, Beloit; Cole Thompson, BOK Financial, Overland Park; Kimberly Wallace, Equity Bank, Wichita; Lewis Walton, Kansas Bankers Association, Topeka; Trae Watson, Heartland Tri-State Bank, Elkhart; Evan Whetzal, First Heritage Bank, Seneca; and Joe White, INTRUST Bank®, N.A., Wichita. Thank you to our 2022 BLOK Grand Sponsors: Bankers’ Bank of Kansas FHLBank Topeka INTRUST Bank®, N.A. KBA Insurance, Inc. Professional Bank Consultants, LLC Jeannette Richardson, Vice Chairman of Prairie Bank of Kansas, Hutchinson, shares her wealth of knowledge from being an effective KBA leader for over a decade. Teams must overcome communication barriers to achieve successful project management. Pictured left to right are: James Hagedorn (United Bank & Trust, Seneca), Deron O’Connor (Astra Bank, Hays), Garrett Sharp (Community National Bank & Trust, Chanute), and Clint Shoemaker (Guaranty State Bank and Trust Co., Beloit). Learning to trust is a key element in becoming a leader.