10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

þ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission file number: 001-15933

BLUE VALLEY BAN CORP.

(Exact name of registrant as specified in its charter)

Kansas	48-1070996
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
11935 Riley	66225-6128
Overland Park, Kansas
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (913) 338-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Guarantee with respect to the Trust Preferred	American Stock Exchange
Securities, $8.00 par value, of BVBC Capital Trust I (None of which are currently outstanding)

Securities registered pursuant to Section 12(g) of the Act: None

     Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act Yes o No þ

     Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act Yes þ No o

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See the definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer o   Accelerated filer o   Non-accelerated filer þ

     Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Securities Act Yes o No þ

     As of February 28, 2007 1,221,270 shares of the Registrant’s common stock were held by non-affiliates. The aggregate market value of these common shares, computed based on the June 30, 2006 closing price of the stock, was approximately $34.4 million. As of February 28, 2007 the registrant had 2,433,298 shares of Common Stock ($1.00 par value) outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

     1. Part III – Proxy Statement for the 2007 Annual Meeting of Stockholders

BLUE VALLEY BAN CORP.

FORM 10-K INDEX

	Page No.
PART I.
Item 1. Business		2
Item 1A. Risk Factors		15
Item 1B. Unresolved Staff Comments		16
Item 2. Properties		16
Item 3. Legal Proceedings		17
Item 4. Submission of Matters to a Vote of Security Holders		17
PART II.
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18
Item 6. Selected Financial Data		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		38
Item 8. Financial Statements and Supplementary Data		40
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		40
Item 9A. Controls and Procedures		40
Item 9B. Other Information		40
PART III.
Item 10. Directors, Executive Officers and Corporate Governance		41
Item 11. Executive Compensation		41
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		41
Item 13. Certain Relationships, Related Transactions, and Director Independence		41
Item 14. Principal Accountant Fees and Services		42
PART IV.
Item 15. Exhibits, Financial Statement Schedules		42
Agreement and Plan of Merger
Acquisition Agreement and Plan of Merger
Purchase and Assumption Agreement
Subsidiaries of Blue Valley Ban Corp.
Consent of BKD, LLP
Certification of Chief Executive Officer
Certification of Chief Financial Officer
Section 906 Certifications of CEO and CFO

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Part I

Item 1: Business

The Company and Subsidiaries

     Blue Valley Ban Corp. (“Blue Valley” or the “Company”) is a financial holding company organized in 1989. The Company’s primary wholly-owned subsidiary, Bank of Blue Valley (the “Bank”), was also organized in 1989 to provide banking services to closely-held businesses and their owners, professionals and residents in Johnson County, Kansas, a high growth, demographically attractive area within the Kansas City, Missouri — Kansas Metropolitan Statistical Area (the “Kansas City MSA”). The focus of Blue Valley has been to take advantage of the current and anticipated growth in our market area as well as to serve the needs of small and mid-sized commercial borrowers – customers that we believe currently are underserved as a result of banking consolidation in the industry generally and within our market specifically. In addition, Blue Valley has established a national presence by originating residential mortgages nationwide through the Bank’s InternetMortgage.com website.

     We have experienced significant internal growth since our inception. As of December 31, 2006, we had five banking center locations in Johnson County, Kansas, including our main office and a mortgage operations office in Overland Park, both of which include lobby banking centers, and full-service offices in Leawood, Olathe and Shawnee, Kansas. In addition, subsequent to year-end we acquired a bank in Lenexa, Kansas which provides us with our sixth banking center location in Johnson County.

     Our lending activities focus on commercial lending, and to a lesser extent, consumer lending, residential mortgage origination services and leasing. We strive to identify, develop and maintain diversified lines of business which provide acceptable risk-adjusted returns. Our primary lines of business consist of commercial lending, commercial real estate lending, construction lending, lease financing, residential real estate lending, consumer lending, and home equity loans.

     We also seek to develop lines of business which diversify our revenue sources, increase our non-interest income and offer additional value-added services to our customers. We develop these new or existing lines of business while monitoring related risk factors. In addition to fees generated in conjunction with our lending activities, we derive non-interest income by providing mortgage origination services, deposit and cash management services, investment brokerage services and trust services.

     In addition to the Bank, as of December 31, 2006, we had five wholly-owned subsidiaries: Blue Valley Building Corp., which owns the buildings and real property that comprise our headquarters, mortgage operations facility and the Leawood banking center; Blue Valley Insurance Services, Inc., an insurance agency created to offer insurance products to our customers; and BVBC Capital Trust II and BVBC Capital Trust III, which were created to offer the Company’s trust preferred securities and to purchase our junior subordinated debentures, and BVBC Acquisition I, Inc. which was created in October 2006 to handle the bank acquisition referred to above. On December 31, 2004, Blue Valley Insurance Services, Inc. ceased operations as we decided not to further pursue this line of business at that time.

     We also have a 49% ownership in Homeland Title, LLC. Homeland Title, LLC was established in June 2005 and provides title and settlement services.

     Consolidated financial information, including a measure of profit and loss and total assets can be found in Part IV of this report.

Our Market Area

     We operate primarily as a community bank, serving the banking needs of small- and medium-sized companies and individuals in the Kansas City MSA. Specifically, our trade area consists of Johnson County, Kansas. We believe that coupling our strategy of providing exceptional customer service and local decision making

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with attractive market demographics has led to a rate of growth which exceeds the national total asset and deposit historic growth rates of the banking industry as well as the growth experienced locally by many of our competitors.

     The income levels and growth rate of Johnson County, Kansas compare favorably to national averages. Johnson County’s population growth rate ranks in the top 11% of counties nationally, and its per capita income ranks in the top 3% of counties nationally. Johnson County is also a significant banking market in the State of Kansas and in the Kansas City MSA. According to available industry data, as of June 30, 2006, total deposits in Johnson County, including those of banks, thrifts and credit unions, were approximately $12.7 billion, which represented 25.02% of total deposits in the state of Kansas and 36.48% of total deposits in the Kansas City MSA.

     As our founders anticipated, the trade area surrounding our main banking facility in Overland Park, Kansas has become one of the most highly developed retail areas in the Kansas City MSA. Our Olathe, Kansas facility is located approximately 10 miles west of our main office. We opened our Olathe facility in 1994 when we acquired the deposits of a branch of a failed savings and loan association. We made this acquisition because it was located in a contiguous market area and we believed that it represented a stable deposit base. The Shawnee, Kansas banking facility is approximately 20 miles northwest of our headquarters location. We entered into the Shawnee market in 1999 with the opening of a grocery store branch. During the first quarter of 2001, construction of our freestanding banking facility in Shawnee was completed and operations commenced, and then in 2004, we merged our Shawnee grocery store branch into our Shawnee freestanding facility. The Leawood, Kansas banking facility is approximately 5 miles southeast of our headquarters location. We entered into the Leawood market in 2002 with the opening of a grocery store branch. During the second quarter of 2004, we completed construction of our freestanding banking facility in Leawood and operations commenced. In 2005, we merged our Leawood grocery store branch into our Leawood freestanding facility. During 2003 we acquired an office building in Overland Park, Kansas approximately 1 mile northwest of our headquarters location. At this location, we consolidated our mortgage operations, bank operations, and opened a banking facility.

     On November 2, 2006, we signed a Definitive Agreement and Plan of Merger for the acquisition of Unison Bancorp, Inc., the holding company for Western National Bank of Lenexa, Kansas. The effective close date for this transaction was February 16, 2007. This acquisition continues our expansion in Johnson County and represents our first presence in Lenexa. The Lenexa banking facility is approximately 7 miles northwest of our headquarters location. We intend to consolidate the business, assets, and liabilities of Western National Bank with and into the Bank of Blue Valley during the first half of 2007, pending regulatory approval.

Lending Activities

     Overview. Our principal loan categories include commercial, commercial real estate, construction, leasing and residential mortgages. We also offer a variety of consumer loans and home equity loans. Our primary source of interest income is interest earned on our loan portfolio. As of December 31, 2006, our loans represented approximately 76.35% of our total assets, our legal lending limit to any one borrower was $18.3 million, and our largest single borrower as of that date had outstanding loans of $9.5 million.

     We have been successful in expanding our loan portfolio because of the commitment of our staff and the economic growth in our area of operation. Our staff has significant experience in lending and has been successful in offering our products to both potential and existing customers. We believe that we have been successful in maintaining our customers because of our staff’s attentiveness to their financial needs and the development of professional relationships with them. We strive to become a strategic business partner with our customers, not just a source of funds.

     We conduct our lending activities pursuant to the loan policies adopted by our board of directors. These policies currently require the approval of our loan committee of all commercial credits in excess of $1.25 million and all real estate credits in excess of $2.0 million. Credits up to $1.25 million on commercial loans and $2.0 million on real estate loans can be approved by the Bank’s President and a combination of two senior loan management officers. Our management information systems and loan review policies are designed to monitor lending sufficiently to ensure adherence to our loan policies. The following table shows the composition of our loan portfolio at December 31, 2006.

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LOAN PORTFOLIO

	As of December 31, 2006
	Amount		Percent
	(Dollars in thousands)
Commercial	$	110,849		20.97	%
Commercial real estate		126,952		24.02
Construction		171,709		32.49
Lease financing		18,512		3.50
Residential real estate		34,988		6.63
Consumer		33,097		6.26
Home equity		32,408		6.13
Total loans and leases		528,515		100.00	%
Less allowance for loan losses		6,106
Loans receivable, net	$	522,409

     Commercial loans. As of December 31, 2006, approximately $110.8 million, or 20.97%, of our loan portfolio represented commercial loans. The Bank has developed a strong reputation in providing and servicing small business and commercial loans. We have expanded this portfolio through the addition of commercial lending staff, their business development efforts and our reputation. Commercial loans have historically been a significant portion of our loan portfolio and we expect to continue our emphasis on this loan category.

     The Bank’s commercial lending activities historically have been directed to small and medium-sized companies in or near Johnson County, Kansas, with annual sales generally between $100,000 and $20 million. The Bank’s commercial customers are primarily firms engaged in manufacturing, service, retail, construction, distribution and sales with significant operations in our market areas. The Bank’s commercial loans are primarily secured by real estate, accounts receivable, inventory and equipment, and the Bank may seek to obtain personal guarantees for its commercial loans. The Bank primarily underwrites its commercial loans on the basis of the borrowers’ cash flow and ability to service the debt, as well as the value of any underlying collateral and the financial strength of any guarantors.

     Approximately $5.1 million, or 4.60%, of our commercial loans are Small Business Administration (SBA) loans, of which $3.7 million is government guaranteed. The SBA guarantees the repayment of a portion of the principal on these loans, plus accrued interest on the guaranteed portion of the loan. Under the federal Small Business Act, the SBA may guarantee up to 85% of qualified loans of $150,000 or less and up to 75% of qualified loans in excess of $150,000, up to a maximum guarantee of $1.0 million. We are an active SBA lender in our market area and have been approved to participate in the SBA Certified Lender Program.

     Commercial lending is subject to risks specific to the business of each borrower. In order to address these risks, we seek to understand the business of each borrower, place appropriate value on any personal guarantee or collateral pledged to secure the loan, and structure the loan amortization to maintain the value of any collateral during the term of the loan.

     Commercial real estate loans. The Bank also makes loans to provide permanent financing for retail and office buildings, multi-family properties and churches. As of December 31, 2006, approximately $127.0 million, or 24.02%, of our loan portfolio represented commercial real estate loans. Our commercial real estate loans are underwritten on the basis of the appraised value of the property, the cash flow of the underlying property, and the financial strength of any guarantors.

     Risks inherent in commercial real estate lending are related to the market value of the property taken as collateral, the underlying cash flows and documentation. Commercial real estate lending involves more risk than residential real estate lending because loan balances may be greater and repayment is dependent on the borrower’s operations. We attempt to mitigate these risks by carefully assessing property values, investigating the source of cash flow servicing the loan on the property and adhering to our lending and underwriting policies and procedures.

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     Construction loans. Our construction loans include loans to developers, home building contractors and other companies and consumers for the construction of single-family homes, land development, and commercial buildings, such as retail and office buildings and multi-family properties. As of December 31, 2006, approximately $171.7 million, or 32.49%, of our loan portfolio represented real estate construction loans. The builder and developer loan portfolio has been a consistent and profitable component of our loan portfolio over our history. We attribute this success to our expertise, availability and prompt service. The Bank’s experience and reputation in this area have grown, thereby enabling the Bank to focus on relationships with a smaller number of larger builders and increasing the total value of the Bank’s real estate construction portfolio. Construction loans are made to qualified builders to build houses to be sold following construction, pre-sold houses and model houses. These loans are generally underwritten based upon several factors, including the experience and current financial condition of the borrowing entity, amount of the loan to appraised value, and general conditions of the housing market with respect to the subdivision and surrounding area, which the bank receives from a third party reporting entity. Construction loans are also made to individuals for whom houses are being constructed by builders with whom the Bank has an existing relationship. Such loans are made on the basis of the individual’s financial condition, the loan to value ratio, the reputation of the builder, and whether the individual will be pre-qualified for permanent financing.

     Risks related to construction lending include assessment of the market for the finished product, reasonableness of the construction budget, ability of the borrower to fund cost overruns, and the borrower’s ability to liquidate and repay the loan at a point when the loan-to-value ratio is the greatest. We seek to manage these risks by, among other things, ensuring that the collateral value of the property throughout the construction process does not fall below acceptable levels, ensuring that funds disbursed are within parameters set by the original construction budget, and properly documenting each construction draw.

     Lease financing. Our lease portfolio includes capital leases that we have originated and leases that we have acquired from brokers or third parties. As of December 31, 2006, our lease portfolio totaled $18.5 million, or 3.50% of our total loan portfolio, consisting of $12.3 million principal amount of leases originated by us and $6.2 million principal amount of leases that we purchased. We provide lease financing for a variety of equipment and machinery, including office equipment, heavy equipment, telephone systems, tractor trailers and computers. Lease terms are generally from three to five years. Management believes this area is attractive because of its ability to provide a source of both interest and fee income. Our leases are generally underwritten based upon several factors, including the overall credit worthiness, experience and current financial condition of the lessee, the amount of the financing to collateral value, and general conditions of the market.

     The primary risks related to our lease portfolio are the value of the underlying collateral and specific risks related to the business of each borrower. To address these risks, we attempt to understand the business of each borrower, value the underlying collateral appropriately and structure the loan amortization to ensure that the value of the collateral exceeds the lease balance during the term of the lease.

     Residential real estate loans. Our residential real estate loan portfolio consists primarily of first and second mortgage loans on residential properties. As of December 31, 2006, $35.0 million, or 6.63%, of our loan portfolio represented residential mortgage loans. The terms of these loans typically include 2-5 year balloon payments based on a 15 to 30 year amortization, and accrue interest at a fixed or variable rate. By offering these products, we can offer credit to individuals who are self-employed or have significant income from partnerships or investments. These individuals are often unable to satisfy the underwriting criteria permitting the sale of their mortgages into the secondary market.

     In addition, we also originate residential mortgage loans with the intention of selling these loans in the secondary market. During 2006, we originated approximately $336.3 million of residential mortgage loans, and we sold approximately $328.4 million in the secondary market. We originate conventional first mortgage loans through our internet website as well as through referrals from real estate brokers, builders, developers, prior customers and media advertising. We have offered customers the ability to apply for mortgage loans and to pre-qualify for mortgage loans over the Internet since 1999. In 2001, we expanded our internet mortgage application capacity with the acquisition of the internet domain name InternetMortgage.com and created a separate National Mortgage division. The timing of this expansion allowed us to establish this division in a relatively low-rate environment, and reap the benefits of a significant increase in mortgage originations and refinancing experienced from 2001 through 2003. While the volume of mortgage originations and refinancing has declined since 2004, we continue to take

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advantage of the national presence established in previous years and originate residential mortgage loans through our InternetMortgage.com website. The origination of a mortgage loan from the date of initial application through closing normally takes 15 to 60 days. We acquire forward commitments from investors on mortgage loans that we intend to sell into the secondary market to reduce interest rate risk on mortgage loans to be sold in the secondary market.

     Our mortgage loan credit review process is consistent with the standards set by traditional secondary market sources. We review appraised value and debt service ratios, and we gather data during the underwriting process in accordance with various laws and regulations governing real estate lending. Loans originated by the Bank are sold with servicing released to increase current income and reduce the costs associated with retaining servicing rights. Commitments are obtained from the purchasing investor on a loan-by-loan basis on a 30, 45 or 60-day delivery commitment. Interest rates are committed to the borrower when a rate commitment is obtained from the investor. Loans are funded by the Bank and purchased by the investor within 30 days following closing pursuant to commitments obtained at the time of origination. We sell conventional conforming loans and all loans that are non-conforming as to credit quality to secondary market investors for cash on a limited recourse basis. Consequently, foreclosure losses on all sold loans are primarily the responsibility of the investor and not that of the Bank.

     As with other loans to individuals, the risks related to residential mortgage loans include primarily the value of the underlying property and the financial strength and employment stability of the borrower. We attempt to manage these risks by performing a pre-funding underwriting that consists of the verification of employment and utilizes a detailed checklist of loan qualification requirements, including the source and amount of down payments, bank accounts, existing debt and overall credit.

     Consumer loans. As of December 31, 2006, our consumer loans totaled $33.1 million, or 6.26% of our total loan portfolio. A substantial part of this amount consisted of installment loans to individuals in our market area. Installment lending offered directly by the Bank in our market area includes automobile loans, recreational vehicle loans, home improvement loans, unsecured lines of credit and other loans to professionals, people employed in education, industry and government, as well as retired individuals and others. A significant portion of our consumer loan portfolio consists of indirect automobile loans offered through automobile dealerships located primarily in our trade area. As of December 31, 2006, approximately $21.2 million, or 4.00%, of our loan portfolio represented indirect automobile loans. Our loans made through this program generally represent loans to purchase new or late model automobiles. There are currently 14 dealerships participating in this program. Our consumer and other loans are underwritten based on the borrower’s income, current debt, past credit history, collateral, and the reputation of the originating dealership with respect to indirect automobile loans.

     Consumer loans are subject to the same risks as other loans to individuals, including the financial strength and employment stability of the borrower. In addition, some consumer loans are subject to the additional risk that the loan is not secured by collateral. For some of the loans that are secured, the underlying collateral may be rapidly depreciating and not provide an adequate source of repayment if we are required to repossess the collateral. We attempt to mitigate these risks by requiring a down payment and carefully verifying and documenting the borrower’s credit quality, employment stability, monthly income, and with respect to indirect automobile loans, understanding and documenting the value of the collateral and the reputation of the originating dealership.

     Home equity loans. As of December 31, 2006, our home equity loans totaled $32.4 million, or 6.13% of our total loan portfolio. Home equity loans are generally secured by second liens on residential real estate and are underwritten in a similar manner as our consumer loans.

Investment Activities

     The objectives of our investment policies are to:

• secure the safety of principal;

• provide adequate liquidity;

• provide securities for use in pledging for public funds or repurchase agreements; and

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• maximize after-tax income.

     We invest primarily in obligations of agencies of the United States and bank-qualified obligations of state and local political subdivisions. Although direct obligations of the United States and obligations guaranteed as to principal and interest by the United States are permitted by our investment policy, we currently do not hold any in our portfolio. In order to ensure the safety of principal, we typically do not invest in mortgage-backed securities, corporate debt, or other securities even though they are permitted by our investment policy. In addition, we enter into federal funds transactions with our principal correspondent banks, and depending on our liquidity position, act as a net seller or purchaser of these funds. The sale of federal funds is effectively a short-term loan from us to another bank; while conversely, the purchase of federal funds is effectively a short-term loan from another bank to us.

Deposit Services

     The principal sources of funds for the Bank are core deposits from the local market areas surrounding the Bank’s offices, including demand deposits, interest-bearing transaction accounts, money market accounts, savings deposits and time deposits. Transaction accounts include interest-bearing and non-interest-bearing accounts, which provide the Bank with a source of fee income and cross-marketing opportunities as well as a low-cost source of funds. Since 2001, the Bank has realized a significant level of deposit growth from commercial checking accounts. While these accounts do not earn interest, many of them receive an earnings credit on their average balance to offset the cost of other services provided by the Bank. The Bank’s money market account is a daily access account that bears a higher rate than a personal interest-bearing checking account and allows for limited check-writing ability. This account pays a tiered rate of interest. We believe money market accounts have proven to be attractive products in our market areas and provide us with a more attractive source of funds than other alternatives such as Federal Home Loan Bank borrowings, as it provides us with the potential to cross-sell additional services to these account holders. Time and savings accounts also provide a relatively stable customer base and source of funding. Because of the nature and behavior of these deposit products, management reviews and analyzes our pricing strategy in comparison not only to competitor rates, but also as compared to other alternative funding sources to determine the most advantageous source. The Bank has also joined the Certificate of Deposit Account Registry Service (“CDARS”) which effectively lets depositors receive FDIC insurance on amounts larger than $100,000. CDARS allows the Bank to break large deposits into smaller amounts and place them in a network of other CDARS banks to ensure that full FDIC insurance coverage is gained on the entire deposit. The Bank’s Funds Management policy also allows for acceptance of brokered deposits which can be utilized to support the growth of the Bank. As of December 31, 2006, the Bank had $31.8 million in brokered deposits. The Bank does not anticipate brokered deposits becoming a significant percentage of its deposit base; however, we continue to evaluate their potential role in the Bank’s overall funding and liquidity strategies. In pricing deposit rates, management considers profitability, the matching of term lengths with assets, the attractiveness to customers and rates offered by our competitors.

Investment Brokerage Services

     In 1999, the Bank began offering investment brokerage services through an unrelated broker-dealer. These services are currently offered at all of our locations. Three individuals responsible for providing these services are joint employees of the Bank and the registered broker-dealer. Investment brokerage services provide a source of fee income for the Bank. In 2006, the amount of our fee income generated from investment brokerage services was $329,000.

Trust Services

     We began offering trust services in 1996. Until 1999, the Bank’s trust services were offered exclusively through the employees of an unaffiliated trust company. The Bank hired a full-time officer in 1999 to develop the Bank’s trust business and the trust department now has three full-time officers. Trust services are marketed to both existing Bank customers and new customers. We believe that the ability to offer trust services as a part of our financial services to new customers of the Bank presents a significant cross-marketing opportunity. The services currently offered by the Bank’s trust department include the administration of personal trusts, investment management agency accounts, self-directed individual retirement accounts, qualified retirement plans, corporate trust accounts and custodial and directed trust accounts. As of December 31, 2006, the Bank’s trust department

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administered 263 accounts, with assets under administration of approximately $104.4 million. Trust services provide the Bank with a source of fee income and additional deposits. In 2006, the amount of our fee income from trust services was $438,000.

Competition

     We encounter competition primarily in seeking deposits and in obtaining loan customers. The level of competition for deposits in our market area is high. Our principal competitors for deposits are other financial institutions within a few miles of our locations including other banks, savings institutions and credit unions. Competition among these institutions is based primarily on interest rates offered, the quality of service provided, and the convenience of banking facilities. Additional competition for depositors’ funds comes from U.S. government securities, private issuers of debt obligations and other providers of investment alternatives for depositors.

     We compete in our lending, investment brokerage and trust activities with other financial institutions, such as banks and thrift institutions, credit unions, automobile financing companies, mortgage companies, securities firms, investment companies and other finance companies. Many of our competitors are not subject to the same extensive federal regulations that govern bank holding companies and federally-insured banks and state regulations governing state-chartered banks. As a result, these non-bank competitors have some advantages over us in providing certain products and services. Many of the financial institutions with which we compete are larger and possess greater financial resources, name recognition and market presence.

Employees

     At December 31, 2006, the Bank had approximately 224 full-time employees. The Company and its other subsidiaries did not have any employees. None of the Bank’s employees are subject to a collective bargaining agreement. We consider the Bank’s relationship with its employees to be excellent.

Directors and Executive Officers of the Registrant

     For each of our directors and our executive officers, we have set forth below their ages as of December 31, 2006, and their principal positions.

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Name	Age		Positions
Directors
Robert D. Regnier		58	President, Chief Executive Officer and Chairman of the Board of Directors of Blue Valley; President, Chief Executive Officer and Chairman of the Board of Directors of the Bank
Donald H. Alexander		68	Director of Blue Valley and the Bank
Michael J. Brown		50	Director of Blue Valley
Wayne A. Henry, Jr.		54	Director of Blue Valley
Thomas A. McDonnell		61	Director of Blue Valley
Robert D. Taylor		59	Director of Blue Valley
Additional Directors of the Bank
Harvey S. Bodker		71	Director of the Bank
Suzanne E. Dotson		60	Director of the Bank
Charles H. Hunter		64	Director of the Bank
Executive Officers who are not Directors
Mark A. Fortino		40	Senior Vice President and Chief Financial Officer of the Bank; Chief Financial Officer of Blue Valley
Ralph J. Schramp		57	Senior Vice President — Commercial Lending and Business Development for the Bank
Sheila C. Stokes		45	Senior Vice President — Retail Division of the Bank

Regulation and Supervision

     Blue Valley and its subsidiaries are extensively regulated under both federal and state laws. Laws and regulations to which Blue Valley and the Bank are subject govern, among other things, the scope of business, investments, reserve levels, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, mergers and consolidations and the payment of dividends. These laws and regulations are intended primarily to protect depositors, not stockholders. Any change in applicable laws or regulations may have a material effect on Blue Valley’s business and prospects, and legislative and policy changes may affect Blue Valley’s operations. Blue Valley cannot predict the nature or the extent of the effects on its business and earnings that fiscal or monetary policies, economic controls or new federal or state legislation may have in the future.

     The following references to statutes and regulations affecting Blue Valley and the Bank are brief summaries only and do not purport to be complete and are qualified in their entirety by reference to the statutes and regulations.

Applicable Legislation

     The enactment of legislation described below has significantly affected the banking industry generally and will have an on-going effect on Blue Valley and its subsidiaries.

     USA PATRIOT Act. The USA PATRIOT Act of 2001 was signed into law on October 26, 2001. This legislation enhances the powers of domestic law enforcement organizations and makes numerous other changes aimed at countering the international terrorist threat to the security of the United States. Title III of the legislation most directly affects the financial services industry. It is intended to enhance the federal government’s ability to fight money laundering by monitoring currency transactions and suspicious financial activities. The USA PATRIOT Act has significant implications for depository institutions involved in the transfer of money. Under the

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USA PATRIOT Act, a financial institution must establish due diligence policies, procedures, and controls reasonably designed to detect and report money laundering through correspondent accounts and private banking accounts. Financial institutions must follow regulations adopted by the Treasury Department to encourage financial institutions, their regulatory authorities, and law enforcement authorities to share information about individuals, entities, and organizations engaged in or suspected of engaging in terrorist acts or money laundering activities. Financial institutions must follow regulations setting forth minimum standards regarding customer identification. These regulations require financial institutions to implement reasonable procedures for verifying the identity of any person seeking to open an account, maintain records of the information used to verify the person’s identity, and consult lists of known or suspected terrorists and terrorist organizations provided to the financial institution by government agencies. Every financial institution must establish anti-money laundering programs, including the development of internal policies and procedures, designation of a compliance officer, employee training, and an independent audit function.

     Gramm-Leach-Bliley Act. The Gramm-Leach-Bliley Act was signed into law on November 12, 1999. This major banking legislation expands the permissible activities of bank holding companies such as Blue Valley by permitting them to engage in activities, or affiliate with entities that engage in activities, that are “financial in nature.” Activities that the Act expressly deems to be financial in nature include, among other things, securities and insurance underwriting and agency, investment management and merchant banking. The Federal Reserve and the Treasury Department, in cooperation with one another, determine what additional activities are “financial in nature.” With certain exceptions, the Gramm-Leach-Bliley Act similarly expands the authorized activities of subsidiaries of national banks. The provisions of the Gramm-Leach-Bliley Act authorizing the expanded powers became effective March 11, 2000.

     Bank holding companies that intend to engage in activities that are “financial in nature” must elect to become “financial holding companies.” Financial holding company status is only available to a bank holding company if all of its affiliated depository institutions are “well capitalized” and “well managed,” based on applicable banking regulations, and have a Community Reinvestment Act rating of at least “a satisfactory record of meeting community credit needs.” Financial holding companies and banks may continue to engage in activities that are financial in nature only if they continue to satisfy the well capitalized and well managed requirements. Bank holding companies that do not elect to be financial holding companies or that do not qualify for financial holding company status may engage only in non-banking activities deemed “closely related to banking” prior to adoption of the Gramm-Leach-Bliley Act.

     The Act also calls for “functional regulation” of financial services businesses in which functionally regulated subsidiaries of bank holding companies will continue to be regulated by the regulator that ordinarily has supervised their activities. As a result, state insurance regulators will continue to oversee the activities of insurance companies and agencies, and the Securities and Exchange Commission will continue to regulate the activities of broker-dealers and investment advisers, even where the companies or agencies are affiliated with a bank holding company. Federal Reserve authority to examine and adopt rules regarding functionally regulated subsidiaries is limited.

     The Gramm-Leach-Bliley Act imposed an “affirmative and continuing” obligation on all financial service providers (not just banks and their affiliates) to safeguard consumer privacy and requires federal and state regulators, including the Federal Reserve and the FDIC, to establish standards to implement this privacy obligation. With certain exceptions, the Act prohibits banks from disclosing to non-affiliated parties any non-public personal information about customers unless the bank has provided the customer with certain information and the customer has had the opportunity to prohibit the bank from sharing the information with non-affiliates. The new privacy obligations became effective July 1, 2001.

     The Gramm-Leach-Bliley Act has been and may continue to be the subject of extensive rule making by federal banking regulators and others.

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Bank Holding Company Regulation

     Blue Valley is a registered bank holding company subject to periodic examination by the Federal Reserve and required to file periodic reports of its operations and such additional information as the Federal Reserve may require.

     Investments and Activities. A bank holding company must obtain approval from the Federal Reserve before:

• Acquiring, directly or indirectly, ownership or control of any voting shares of another bank or bank holding company if, after the acquisition, it would own or control more than 5% of the shares of the bank or bank holding company (unless it already owns or controls the majority of the shares);

• Acquiring all or substantially all of the assets of another bank or bank holding company; or

• Merging or consolidating with another bank holding company.

     The Federal Reserve will not approve any acquisition, merger or consolidation that would have a substantially anticompetitive result unless the anticompetitive effects of the proposed transaction are clearly outweighed by a greater public interest in meeting the convenience and needs of the community to be served. The Federal Reserve also considers capital adequacy and other financial and managerial factors in reviewing acquisitions or mergers.

     With certain exceptions, a bank holding company is also prohibited from:

• Acquiring or retaining direct or indirect ownership or control of more than 5% of the voting shares of any company that is not a bank or bank holding company; and

• Engaging, directly or indirectly, in any business other than that of banking, managing and controlling banks or furnishing services to banks and their subsidiaries.

     Bank holding companies may, however, engage in businesses found by the Federal Reserve to be “financial in nature,” as described above. As a financial holding company, Blue Valley is authorized to engage in the expanded activities permitted under the Gramm-Leach-Bliley Act as long as it continues to qualify for financial holding company status.

     Finally, subject to certain exceptions, the Bank Holding Company Act and the Change in Bank Control Act, and the Federal Reserve’s implementing regulations, require Federal Reserve approval prior to any acquisition of “control” of a bank holding company, such as Blue Valley. In general, a person or company is presumed to have acquired control if it acquires 10% of the outstanding shares of a bank or bank holding company and is conclusively determined to have acquired control if it acquires 25% or more of the outstanding shares of a bank or bank holding company.

     Source of Strength. The Federal Reserve expects Blue Valley to act as a source of financial strength and support for the Bank and to take measures to preserve and protect the Bank in situations where additional investments in the Bank may not otherwise be warranted. The Federal Reserve may require a bank holding company to terminate any activity or relinquish control of a non-bank subsidiary (other than a non-bank subsidiary of a bank) upon the Federal Reserve’s determination that the activity or control constitutes a serious risk to the financial soundness or stability of any subsidiary depository institution of the bank holding company. Further, federal bank regulatory authorities have additional discretion to require a bank holding company to divest itself of any bank or non-bank subsidiary if the agency determines that divestiture may aid the depository institution’s financial condition. As of December 31, 2006, Blue Valley Building Corp., BVBC Capital Trust II, BVBC Capital Trust III, BVBC Acquisition I, Inc. and Homeland Title, LLC are Blue Valley’s only active direct subsidiaries that are not banks.

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     Capital Requirements. The Federal Reserve uses capital adequacy guidelines in its examination and regulation of bank holding companies and banks. If the capital falls below minimum guideline levels, a bank holding company, among other things, may be denied approval to acquire or establish additional banks or non-bank businesses. The Federal Reserve’s capital guidelines establish a risk-based requirement expressed as a percentage of total risk-weighted assets and a leverage requirement expressed as a percentage of total average assets. The risk-based requirement consists of a minimum ratio of total capital to total risk-weighted assets of 8%, of which at least one-half must be Tier 1 capital (which consists principally of stockholders’ equity). The leverage requirement consists of a minimum ratio of Tier 1 capital to total average assets of 3%.

     The risk-based and leverage standards presently used by the Federal Reserve are minimum requirements, and higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual banking organizations. Further, any banking organization experiencing or anticipating significant growth would be expected to maintain capital ratios, including tangible capital positions, which is Tier 1 capital less all intangible assets, well above the minimum levels.

     Dividends. The Federal Reserve has issued a policy statement concerning the payment of cash dividends by bank holding companies. The policy statement provides that a bank holding company experiencing earnings weaknesses should not pay cash dividends exceeding its net income or which could only be funded in ways that weakened the bank holding company’s financial health, such as by borrowing. Also, the Federal Reserve possesses enforcement powers over bank holding companies and their non-bank subsidiaries to prevent or remedy actions that represent unsafe or unsound practices or violations of applicable statutes and regulations. Among these powers is the ability to proscribe the payment of dividends by banks and bank holding companies.

Bank Regulations

     The Bank operates under a Kansas state bank charter and is subject to regulation by the Office of the State Bank Commissioner and the Federal Reserve Bank. The Office of the State Bank Commissioner and the Federal Reserve Bank regulate or monitor all areas of the Bank’s operations, including capital requirements, issuance of stock, declaration of dividends, interest rates, deposits, record keeping, establishment of branches, acquisitions, mergers, loans, investments, borrowing, security devices and procedures and employee responsibility and conduct. The Office of the State Bank Commissioner places limitations on activities of the Bank including the issuance of capital notes or debentures and the holding of real estate and personal property and requires the Bank to maintain a certain ratio of reserves against deposits. The Office of the State Bank Commissioner requires the Bank to file a report annually showing receipts and disbursements of the Bank, in addition to any periodic report requested.

     Deposit Insurance. The FDIC, through its Deposit Insurance Fund, insures the Bank’s deposit accounts to a maximum of $100,000 for each insured depositor, with the exception of self-directed retirement accounts which are insured to a maximum of $250,000. The FDIC bases deposit insurance premiums on the perceived risk each bank presents to its Deposit Insurance Fund. In addition to deposit insurance premiums, institutions also pay an assessment based on insured deposits to service debt issued by the Financing Corporation, a federal agency established to finance the recapitalization of the former Federal Savings and Loan Insurance Corporation. The FDIC may terminate the deposit insurance of any insured depository institution if the FDIC determines, after a hearing, that the institution has engaged or is engaging in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order, or any condition imposed in writing by, or written agreement with, the FDIC. The FDIC may also suspend deposit insurance temporarily during the hearing process for a permanent termination of insurance if the institution has no tangible capital. Management is not aware of any activity or condition that could result in termination of the deposit insurance of the Bank.

     Capital Requirements. The FDIC has established the following minimum capital standards for state-chartered, insured non-member banks, such as the Bank: (1) a leverage requirement consisting of a minimum ratio of Tier 1 capital to total average assets of 3%; and (2) a risk-based capital requirement consisting of a minimum ratio of total capital to total risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital. These capital requirements are minimum requirements, and higher capital levels may be required if warranted by the particular circumstances or risk profiles of individual institutions.

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     The federal banking regulators also have broad power to take “prompt corrective action” to resolve the problems of undercapitalized institutions. The extent of the regulators’ powers depends upon whether the institution in question is “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” or “critically undercapitalized.” Under the prompt corrective action rules, an institution is:

• “Well-capitalized” if the institution has a total risk-based capital ratio of 10% or greater, a Tier 1 risk-based capital ratio of 6% or greater, and a leverage ratio of 5% or greater, and the institution is not subject to an order, written agreement, capital directive, or prompt corrective action directive to meet and maintain a specific capital level for any capital measure;

• “Adequately capitalized” if the institution has a total risk-based capital ratio of 8% or greater, a Tier 1 risk-based capital ratio of 4% or greater, and a leverage ratio of 4% or greater;

• “Undercapitalized” if the institution has a total risk-based capital ratio that is less than 8%, a Tier 1 risk-based capital ratio that is less than 4%, or a leverage ratio that is less than 4%;

• “Significantly undercapitalized” if the institution has a total risk-based capital ratio that is less than 6%, a Tier 1 risk-based capital ratio that is less than 3%, or a leverage ratio that is less than 3%; and

• “Critically undercapitalized” if the institution has a ratio of tangible equity to total assets that is equal to or less than 2%.

     The federal banking regulators must take prompt corrective action with respect to capital deficient institutions. Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include:

• Placing limits on asset growth and restrictions on activities, including the establishing of new branches;

• Requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired;

• Restricting transactions with affiliates;

• Restricting the interest rate the institution may pay on deposits;

• Requiring that senior executive officers or directors be dismissed;

• Requiring the institution to divest subsidiaries;

• Prohibiting the payment of principal or interest on subordinated debt; and

• Appointing a receiver for the institution.

     Companies controlling an undercapitalized institution are also required to guarantee the subsidiary institution’s compliance with the capital restoration plan subject to an aggregate limitation of the lesser of 5% of the institution’s assets at the time it received notice that it was undercapitalized or the amount of the capital deficiency when the institution first failed to meet the plan. The Federal Deposit Insurance Act generally requires the appointment of a conservator or receiver within 90 days after an institution becomes critically undercapitalized.

     As of December 31, 2006, the Bank had capital in excess of the requirements for a “well-capitalized” institution.

     Federal Deposit Insurance Corporation Improvement Act. The Bank, having over $500 million in total assets, is subject to requirements of Section 112 of the Federal Deposit Insurance Corporation Act (FDICIA 112).

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The primary purpose of FDICIA 112 is to provide a framework for early risk identification in financial management through an effective system of internal controls.

     Insider Transactions. The Bank is subject to restrictions on extensions of credit to executive officers, directors, principal stockholders or any related interest of these persons. Extensions of credit must be made on substantially the same terms, including interest rates and collateral as the terms available for third parties and must not involve more than the normal risk of repayment or present other unfavorable features. The Bank is also subject to lending limits and restrictions on overdrafts to these persons.

     Community Reinvestment Act Requirements. The Community Reinvestment Act (CRA) of 1977 requires that, in connection with examinations of financial institutions within their jurisdiction, the federal banking regulators must evaluate the record of the financial institutions in meeting the credit needs of their local communities, including low and moderate income neighborhoods, consistent with the safe and sound operation of those banks. These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or facility. In its most recent CRA examination dated June 5, 2006, the Bank received a rating of “Satisfactory.”

     State Bank Activities. With limited exceptions, FDIC-insured state banks, like the Bank, may not make or retain equity investments of a rate or in an amount that are not permissible for national banks and also may not engage as a principal in any activity that is not permitted for a national bank or its subsidiary, respectively, unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines that the activity would not pose a significant risk to the deposit insurance fund of which the bank is a member.

     Regulations Governing Extensions of Credit. The Bank is subject to restrictions on extensions of credit to Blue Valley and on investments in Blue Valley’s securities and using those securities as collateral for loans. These regulations and restrictions may limit Blue Valley’s ability to obtain funds from the Bank for its cash needs, including funds for acquisitions and for payment of dividends, interest and operating expenses. Further, the Bank Holding Company Act and Federal Reserve regulations prohibit a bank holding company and its subsidiaries from engaging in various tie-in arrangements in connection with extensions of credit, leases or sales of property or furnishing of services.

     Reserve Requirements. The Federal Reserve requires all depository institutions to maintain reserves against their transaction accounts. Reserves of 3% must be maintained against net transaction accounts of $7.8 million to $48.3 million plus 10% must be maintained against that portion of net transaction accounts in excess $48.3 million (subject to adjustment by the Federal Reserve). The balances maintained to meet the reserve requirements imposed by the Federal Reserve may be used to satisfy liquidity requirements.

Other Regulations

     Interest and various other charges collected or contracted for by the Bank are subject to state usury laws and other federal laws concerning interest rates. The Bank’s loan operations are also subject to federal laws applicable to credit transactions. The federal Truth in Lending Act governs disclosures of credit terms to consumer borrowers. The Home Mortgage Disclosure Act of 1975 requires financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves. The Equal Credit Opportunity Act prohibits discrimination on the basis of race, creed or other prohibited factors in extending credit. The Fair Credit Reporting Act of 1978 governs the use and provision of information to credit reporting agencies. The Fair Debt Collection Act governs the manner in which consumer debts may be collected by collection agencies. The various federal agencies charged with the responsibility of implementing these federal laws have adopted various rules and regulations. The deposit operations of the Bank are also subject to the Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records, and the Electronic Funds Transfer Act, and Regulation E issued by the Federal Reserve to implement that Act, which govern automatic deposits to and withdrawals from the use of ATMs and other electronic banking services.

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Item 1A: Risk Factors

Our operations may be adversely affected if we are unable to maintain and increase our deposit base and secure adequate funding.

     We fund our banking and lending activities primarily through demand, savings and time deposits and, to a lesser extent, lines of credit, sale/repurchase facilities from various financial institutions, and Federal Home Loan Bank borrowings. The success of our business depends in part on our ability to maintain and increase our deposit base and our ability to maintain access to other funding sources. Our inability to obtain funding on favorable terms, on a timely basis, or at all, would adversely affect our operations and financial condition.

The loss of our key personnel could adversely affect our operations.

     We are a relatively small organization and depend on the services of all of our employees. Our growth and development to date has depended in a large part on a few key employees who have primary responsibility for maintaining personal relationships with our largest customers. The unexpected loss of services of one or more of these key employees could have a material adverse effect on our operations. Our key employees are Robert D. Regnier, Mark A. Fortino, Ralph J. Schramp, and Sheila C. Stokes. Each of these persons is an officer of the Bank. We do not have written employment or non-compete agreements with any of these key employees. We carry a $1 million “key person” life insurance policy on the life of Mr. Regnier.

Changes in interest rates may adversely affect our earnings and cost of funds.

     Changes in interest rates affect our operating performance and financial condition in diverse ways. A substantial part of our profitability depends on the difference between the rates we receive on loans and investments and the rates we pay for deposits and other sources of funds. Our net interest spread will depend on many factors that are partly or entirely outside our control, including competition, federal monetary and fiscal policies, and economic conditions generally. Historically, net interest spreads for many financial institutions have widened and narrowed in response to these and other factors, which are often collectively referred to as “interest rate risk.” We try to minimize our exposure to interest rate risk, but are unable to eliminate it.

Because our business is concentrated in the Kansas City MSA, a downturn in the economy of the Kansas City MSA may adversely affect our business.

     Our success is dependent to a significant extent upon the general economic conditions in the Kansas City MSA, including Johnson County, Kansas, and, in particular, the conditions for the medium- and small-sized businesses that are the focus of our customer base. Although currently the economy in these areas is favorable, we do not know whether these conditions will continue. Adverse changes in economic conditions in the Kansas City MSA, including Johnson County, Kansas, could impair our ability to collect loans, reduce our growth rate and have a negative effect on our overall financial condition.

If our allowance for loan losses is insufficient to absorb losses in our loan portfolio, it will adversely affect our financial condition and results of operations.

     Some borrowers may not repay loans that we make to them. This risk is inherent in the banking business. Like all financial institutions, we maintain an allowance for loan losses to absorb probable loan losses in our loan portfolio. However, we cannot predict loan losses with certainty, and we cannot assure you that our allowance will be sufficient. Loan losses in excess of our reserves would have an adverse effect on our financial condition and results of operations.

     In addition, various regulatory agencies, as an integral part of the examination process, periodically review our loan portfolio. These agencies may require us to add to the allowance for loan losses based on their judgments and interpretations of information available to them at the time of their examinations. If these agencies require us to increase our allowance for loan losses, our earnings will be adversely affected in the period in which the increase occurs.

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We may incur significant costs if we foreclose on environmentally contaminated real estate.

     If we foreclose on a defaulted real estate loan to recover our investment, we may be subject to environmental liabilities in connection with the underlying real property. It is also possible that hazardous substances or wastes may be discovered on these properties during our ownership or after they are sold to a third party. If they are discovered on a property that we have acquired through foreclosure or otherwise, we may be required to remove those substances and clean up the property. We may have to pay for the entire cost of any removal and clean-up without the contribution of any other third parties. We may also be liable to tenants and other users of neighboring properties. These costs or liabilities may exceed the fair value of the property. In addition, we may find it difficult or impossible to sell the property prior to or following any environmental clean-up.

If we are not able to compete effectively in the highly competitive banking industry, our business will be adversely affected.

     Our business is extremely competitive. Many of our competitors are, or are affiliates of, enterprises that have greater resources, name recognition and market presence than we do. Some of our competitors are not regulated as extensively as we are and, therefore, may have greater flexibility in competing for business. Some of these competitors are subject to similar regulation but have the advantages of established customer bases, higher lending limits, extensive branch networks, numerous ATMs, and more ability to absorb the costs of maintaining technology or other factors.

Item 1B: Unresolved Staff Comments

     No items are reportable.

Item 2: Properties

     The Company’s principal office is located at 11935 Riley on the corner of 119^th and Riley streets in Overland Park, Kansas. In addition to the principal office, as of December 31, 2006, the Bank also had three banking center locations and one mortgage and banking center location.

			Mortgage Indebtedness
Location	Year Occupied		as of December 31, 2006	Occupancy
Overland Park Banking Center 11935 Riley Overland Park, Kansas		1994	$2.4 Million	78% One sublease occupying 22%
Olathe Banking Center 1235 E. Santa Fe Olathe, Kansas		2001	None		100	%
Shawnee Banking Center 5520 Hedge Lane Terrace Shawnee, Kansas		2001	None		100	%
Mortgage and Banking Center 7900 College Boulevard Overland Park, Kansas		2003	$4.1 Million	97% One sublease occupying 3%
Leawood Banking Center 13401 Mission Road Leawood, Kansas		2004	None	49% Five subleases occupying 51%

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Item 3: Legal Proceedings

     We are periodically involved in routine litigation incidental to our business. We are not a party to any pending litigation that is likely to have a material adverse effect on our consolidated financial condition, results of operations or cash flows.

Item 4: Submission of Matters to a Vote of Security Holders

     No matters were submitted to a vote of our stockholders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report.

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Part II

Item 5: Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for Common Stock

     We are a reporting company under the Securities Exchange Act as a result of a trust preferred securities offering we completed during July 2000. Shares of our common stock have traded on the Over-The-Counter Bulletin Board since July 2002 under the symbol “BVBC.” As of February 28, 2007, there were approximately 192 stockholders of record of our common stock. The following table sets forth the high and low prices of the Company’s common stock based on closing stock price quotations provided by Yahoo.com. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission.

	2006				2005
Fiscal Quarter	High		Low		High		Low
First	$	32.00	$	29.75	$	24.05	$	23.00
Second		31.00		28.15		27.00		26.00
Third		33.00		28.15		27.75		26.50
Fourth		35.00		33.00		30.00		26.50

Dividends

     Our board of directors declared cash dividends on our common stock as follows:

Declaration Date	Amount Per Share		Record Date	Pay Date
December 16, 2002	$	0.10	December 31, 2002	January 15, 2003
December 15, 2003	$	0.15	December 31, 2003	January 30, 2004
December 17, 2004	$	0.20	December 31, 2004	January 31, 2005
December 15, 2005	$	0.25	December 30, 2005	January 31, 2006
December 21, 2006	$	0.30	December 29, 2006	January 29, 2007

     Because our consolidated net income consists largely of the net income of the Bank, our ability to pay dividends on our common stock is subject to our receipt of dividends from the Bank. The ability of the Bank to pay dividends to us, and our ability to pay dividends to our stockholders, is regulated by federal banking laws. In addition, if we elect to defer interest payments on our outstanding junior subordinated debentures, we will be prohibited from paying dividends on our common stock during such deferral. At December 31, 2006, approximately $11,985,000 of retained earnings were available for dividend declaration without prior regulatory approval.

     Our board of directors intends to declare future dividends, subject to limitations imposed by regulatory capital guidelines in addition to consideration of the Company’s profitability and liquidity.

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Item 6: Selected Financial Data

     The following table presents our consolidated financial data as of and for the five years ended December 31, 2006, and should be read in conjunction with the consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” each of which is included elsewhere in this Form 10-K. The selected statements of condition and statements of income data, insofar as they relate to the five years in the five-year period ended December 31, 2006, have been derived from our audited consolidated financial statements.

	As of and for the
	Year Ended December 31,
	2006			2005			2004			2003			2002
	(Dollars in thousands, except share and per share data)
Selected Statement of Income Data
Interest income:
Loans, including fees	$	44,537		$	37,492		$	29,245		$	28,293		$	26,857
Federal funds sold and interest-bearing deposits		256			580			157			49			297
Securities		4,039			2,317			2,301			2,070			3,405
Total interest income		48,832			40,389			31,703			30,412			30,559
Interest expense:
Interest-bearing demand deposits		97			94			169			165			388
Savings and money market deposit accounts		4,356			3,861			2,932			2,204			2,711
Other time deposits		11,254			9,171			7,297			6,935			7,759
Funds borrowed		5,255			4,867			4,115			4,245			3,368
Total interest expense		20,962			17,993			14,513			13,549			14,226
Net interest income		27,870			22,396			17,190			16,863			16,333
Provision for loan losses		1,255			230			1,965			1,350			2,920
Net interest income after provision for loan losses		26,615			22,166			15,225			15,513			13,413
Non-interest income:
Loans held for sale fee income		5,046			7,408			10,358			19,866			16,690
NSF charges & service fees		1,244			1,129			1,326			1,283			1,026
Other service charges		1,247			1,037			1,115			924			821
Realized gain on available-for-sale securities		—			—			524			—			193
Other income		1,344			1,727			617			463			281
Total non-interest income		8,881			11,301			13,940			22,536			19,011
Non-interest expense:
Salaries and employee benefits		14,737			15,986			16,670			19,670			16,437
Occupancy		3,059			3,307			3,433			3,137			2,101
General & administrative		6,578			6,841			6,467			6,478			5,578
Total non-interest expense		24,374			26,134			26,570			29,285			24,116
Income before income taxes		11,122			7,333			2,595			8,764			8,308
Income tax provision		4,199			2,764			665			3,130			2,912
Net income	$	6,923		$	4,569		$	1,930		$	5,634		$	5,396
Per Share Data
Basic earnings	$	2.93		$	1.95		$	0.84		$	2.51		$	2.48
Diluted earnings		2.88			1.91			0.82			2.43			2.40
Dividends		0.30			0.25			0.20			0.15			0.10
Book value basic (at end of period)		22.45			19.42			17.78			17.64			15.47
Weighted average common shares outstanding:
Basic		2,365,932			2,348,805			2,302,564			2,244,930			2,178,803
Diluted		2,407,802			2,388,531			2,360,061			2,320,840			2,252,929
Dividend payout ratio		10.23	%		12.82	%		23.80	%		5.98	%		4.04	%

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	As of and for the
	Year Ended December 31,
	2006			2005			2003			2003			2002
	(Dollars in thousands)
Selected Financial Condition Data (at end of period):
Total securities	$	87,206		$	99,987		$	66,350		$	106,036		$	61,720
Total mortgage loans held for sale		21,805			13,906			44,144			18,297			119,272
Total loans		528,515			503,143			507,170			424,620			380,082
Total assets		692,219			689,589			672,717			627,073			605,539
Total deposits		535,864			529,341			522,646			470,495			423,787
Funds borrowed		96,577			104,394			102,469			111,741			141,737
Total stockholders’ equity		53,820			46,255			41,384			40,198			34,344
Trust assets under administration		104,445			93,988			118,074			90,389			44,245
Selected Financial Ratios and Other Data:
Performance Ratios:
Net interest margin (1)		4.34	%		3.50	%		2.91	%		3.01	%		3.35	%
Non-interest income to average assets		1.29			1.63			2.16			3.62			3.55
Non-interest expense to average assets		3.54			3.77			4.11			4.71			4.51
Net overhead ratio (2)		2.25			2.14			1.96			1.08			0.95
Efficiency ratio (3)		66.32			77.56			85.35			74.33			68.23
Return on average assets (4)		1.00			0.66			0.30			0.91			1.01
Return on average equity (5)		13.81			10.44			4.69			14.85			17.34
Asset Quality Ratios:
Non-performing loans to total loans		1.31	%		0.87	%		0.86	%		0.72	%		0.29	%
Allowance for possible loan losses to:
Total loans		1.16			1.33			1.45			1.66			1.82
Non-performing loans		88.16			153.27			168.60			230.79			618.29
Net charge-offs to average total loans		0.35			0.17			0.36			0.30			0.36
Non-performing loans to total assets		1.00			0.63			0.65			0.50			0.18
Balance Sheet Ratios:
Loans to deposits		98.63	%		95.05	%		97.04	%		90.25	%		89.69	%
Average interest-earning assets to average interest-bearing liabilities		119.12			116.78			114.38			114.61			115.64
Capital Ratios:
Total equity to total assets		7.77	%		6.71	%		6.15	%		6.42	%		5.67	%
Total capital to risk-weighted assets ratio		12.47			12.04			11.15			12.41			10.13
Tier 1 capital to risk-weighted assets ratio		11.33			10.25			9.00			10.04			8.82
Tier 1 capital to average assets ratio		10.29			8.86			8.45			8.31			7.74
Average equity to average assets ratio		7.27			6.31			6.37			6.10			5.82

(1)	Net interest income, on a full tax-equivalent basis, divided by average interest-earning assets.
(2)	Non-interest expense less non-interest income divided by average total assets.
(3)	Non-interest expense divided by the sum of net interest income plus non-interest income.
(4)	Net income divided by average total assets.
(5)	Net income divided by average common equity.

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Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following presents management’s discussion and analysis of our financial condition and results of operations as of the dates and for the periods indicated. You should read this discussion in conjunction with our “Selected Consolidated Financial Data,” our consolidated financial statements and the accompanying notes, and the other financial data contained elsewhere in this report.

     This report contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and is including this statement for purposes of those safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe future plans, strategies and expectations of the Company, can generally be identified by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions. The Company is unable to predict the actual results of its future plans or strategies with certainty. Factors which could have a material adverse effect on the operations and future prospects of the Company include, but are not limited to, fluctuations in market rates of interest and loan and deposit pricing; a deterioration of general economic conditions or the demand for housing in the Company’s market areas; a deterioration in the demand for mortgage financing; legislative or regulatory changes; adverse developments in the Company’s loan or investment portfolio; any inability to obtain funding on favorable terms; the loss of key personnel; significant increases in competition; potential unfavorable results of litigation to which the Company may become a party, and the possible dilutive effect of potential acquisitions or expansions. These risks and uncertainties should be considered in evaluating forward-looking statements and undue reliance should not be placed on such statements.

Critical Accounting Policies

     Please refer to Note 1 of our consolidated financial statements where we present a listing and discussion of our most significant accounting policies. After a review of these policies, we determined that accounting for the allowance for loan losses is deemed a critical accounting policy because of the valuation techniques used, and the sensitivity of certain financial statement amounts to the methods, as well as the assumptions and estimates, underlying that policy. Accounting for this critical area requires the most subjective and complex judgments that could be subject to revision as new information becomes available.

     As presented in Note 1 and Note 3 to the consolidated financial statements, the allowance for loan losses represents management’s estimate of probable credit losses inherent in the loan portfolio as of the balance sheet date. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The adequacy of the allowance is analyzed monthly based on internal loan reviews and qualitative measurements of our loan portfolio. Management assesses the adequacy of the allowance for loan losses based upon a number of factors including, among others:

• analytical reviews of loan loss experience in relationship to outstanding loans and commitments;

• problem and non-performing loans and other loans presenting credit concerns;

• trends in loan growth, portfolio composition and quality;

• appraisals of the value of collateral; and

• management’s judgment with respect to current economic conditions and their impact on the existing loan portfolio.

     The Bank computes its allowance by assigning specific reserves to impaired loans, plus a general reserve based on loss factors applied to the rest of the loan portfolio. The specific reserve on impaired loans is computed as the amount of the loan in excess of the present value of the estimated future cash flows discounted at the loan’s effective interest rate, or based on the loan’s observable market value or the fair value of the collateral if the loan is

21

collateral dependent. The general reserve loss factors are determined based on such items as management’s evaluation of risk in the portfolio, local economic conditions, and historical loss experience. The Bank has further refined its risk grading system by developing associated reserve factors for each risk grade.

Overview

     2006 was a year of strong earnings for the Company. Interest income from commercial lending continued the significant expansion which began in 2005. During 2005 we saw our net interest margin expand significantly as eight 25 basis point increases in the prime lending rate had a positive effect on our net interest income. During 2006 we saw an additional four 25 basis point increases in the prime lending rate which further improved our net interest margin. However, longer term interest rates remained stable further reducing mortgage refinancing activity. This had an adverse effect on the mortgage origination side of our business, resulting in lower origination volumes and declining fee income. During 2006 our average loan balances and the average balance of our deposits remained virtually unchanged from 2005. As a result, we used maturities in our investment portfolio and short-term borrowings to fund our modest growth in loans. However, we expect moderate expansion in loans and deposits during 2007 coming from both organic growth and our acquisition of a bank in Lenexa, a market we believe has great potential.

     Net income for 2006 was $6.9 million, a $2.3 million, or 51.52%, increase from the $4.6 million earned in 2005. Diluted earnings per share increased 50.78% to $2.88 for the year ended December 31, 2006 from $1.91 in the previous year. The Company’s returns on average assets and average stockholders’ equity for 2006 were 1.00% and 13.81%, compared to 0.66% and 10.44%, respectively, for 2005.

     Net interest income for 2006 was $27.9 million compared to $22.4 million earned during 2005. The increase of $5.5 million, or 24.44%, was primarily the result of increases in yields earned on average earning assets.

     The provision for loan losses in 2006 was $1.2 million compared to $230,000 in 2005, and $2.0 million in 2004. Net charge-offs for 2005 were significantly below historical levels at 0.17% of average loans compared with 0.35% for 2006 and 0.36% for 2004.

     Non-interest income decreased 21.41% to $8.9 million in 2006 from $11.3 million in 2005. Stable interest rates and other demand factors resulted in a significant industry-wide decline in the volume of residential mortgage loans originated in 2006 compared to 2005, particularly refinancing volume. This trend resulted in lower origination fees during 2006 than during 2005 for our Company. Future interest rate fluctuations and their resultant impact on loans held for sale fee income are difficult to project or quantify; however, it is likely that increases in interest rates will have a detrimental impact on mortgage loan refinancing and loans held for sale fee income.

     Total assets for the Company at December 31, 2006, were $692.2 million, an increase of $2.6 million, or 0.38%, from $689.6 million at December 31, 2005. Deposits and stockholders’ equity at December 31, 2006 were $535.9 million and $53.8 million, compared with $529.3 million and $46.2 million at December 31, 2005, increases of $6.5 million, or 1.23%, and $7.6 million, or 16.35%, respectively.

     Loans at December 31, 2006 totaled $528.5 million, an increase of $25.4 million, or 5.04%, compared to December 31, 2005. The loan to deposit ratio at December 31, 2006 was 98.63% compared to 95.05% at December 31, 2005. The increase in the loan to deposit ratio was due to loan growth which, on a relative basis, outpaced deposit growth. Our funding philosophy for loans not held for sale has been to primarily increase deposits from retail and commercial deposit sources and secondarily use other borrowing sources as necessary to fund loans within the limits of the Bank’s capital base.

     Historically, our ratio of total non-performing assets to total assets reflects the Bank’s conservative underwriting policies and aggressive management of impaired loans and has resulted in low levels of nonaccrual loans. For the five years ended December 31, 2006, our average year-end ratio of non-performing loans to total loans was 0.81%. As of December 31, 2006, our ratio of non-performing loans to total loans was 1.31%, which was above our historical averages primarily due to two large credits which management is aggressively pursuing collection on. Our non-performing credit relationships are regularly reviewed and closely monitored. Our

22

philosophy has been to value non-performing loans at their estimated collectible value and to aggressively manage these situations. Generally, the Bank maintains its allowance for loan losses in excess of its non-performing loans. As of December 31, 2006, our ratio of allowance for loan losses to non-performing loans was 88.16%, compared to 153.27% at December 31, 2005.

     Excluding 2005’s net charge-off ratio of 0.17%, which was significantly below historical average, the average net charge-off ratio for the five years ended December 31, 2006 was 0.34%. Our net charge-off ratio for the year ended December 31, 2006 was 0.35%, which is consistent with our historical average. The Bank continues to aggressively manage defaults in the loan portfolio. Management intends to vigorously pursue collection of all charged-off loans.

Net Interest Income

     A primary component of our net income is our net interest income. Net interest income is determined by the spread between the fully tax equivalent (FTE) yields we earn on our interest-earning assets and the rates we pay on our interest-bearing liabilities, as well as the relative amounts of such assets and liabilities. FTE net interest margin is determined by dividing FTE net interest income by average interest-earning assets. The following discussion should be read along with analysis of the “Average Balances, Yields and Rates” table on the next page.

     Years ended December 31, 2006 and 2005. FTE net interest income for 2006 increased to $27.9 million from $22.4 million in 2005, a $5.5 million, or 24.33%, increase.

     FTE interest income for 2006 was $48.8 million, an increase of $8.4 million, or 20.84%, from $40.4 million in 2005, primarily as a result of an increase in the yield on average earning assets. The yield on average earning assets increased 130 basis points to 7.61% in 2006 compared to 6.31% in 2005. Average interest earning assets increased $1.3 million, or 0.20%, during 2006. Due to the increase in the yield and in earning asset volume, loan interest and fee income increased to $44.5 million in 2006 from $37.5 million in 2005, a $7.0 million, or 18.79%, increase. Interest income on investment securities increased by $1.7 million, or 72.61%, in 2006 compared to the prior year due to higher average balances of investment securities and higher yields on those securities. Interest income earned on Federal Funds Sold decreased $324,000 or 55.87% in 2006 compared to the prior year due primarily to lower levels of those earning assets.

     Interest expense for 2006 was $21.0 million, up $3.0 million, or 16.50%, from $18.0 million in 2005. The increase resulted from an increase in the overall rate paid on our average interest-bearing liabilities. The rate paid on our total average interest bearing liabilities increased to 3.89% in 2006 compared to 3.28% in 2005, an increase of 61 basis points. This increase resulted from increases in rates paid on savings deposits, money market deposits, time deposits, and short- and long-term debt. Total average interest bearing liabilities decreased $9.7 million, or 1.77%, during 2006 primarily due to decreases in money market deposits that exceeded the increases in time deposits.

     Years ended December 31, 2005 and 2004. FTE net interest income for 2005 increased to $22.4 million from $17.4 million in 2004, a $5 million, or 29.00%, increase.

     FTE interest income for 2005 was $40.4 million, an increase of $8.5 million, or 26.72%, from $31.9 million in 2004, primarily as a result of an increase in the yield on average earning assets. The yield on average earning assets increased 95 basis points to 6.31% in 2005 compared to 5.36% in 2004. Average interest earning assets increased $45.8 million, or 7.69%, during 2005. Due to the increase in the yield and in earning asset volume, loan interest and fee income increased to $37.5 million in 2005 from $29.2 million in 2004, an $8.3 million, or 28.19%, increase. Interest income on investment securities decreased by $147,000, or 5.90%, in 2005 compared to the prior year due to lower average balances of investment securities. Interest income earned on Federal Funds Sold increased $423,000, or 269.42%, in 2005 compared to the prior year due primarily to higher yields on those earning assets.

     Interest expense for 2005 was $18.0 million, up $3.5 million, or 23.97%, from $14.5 million in 2004. The increase resulted from an increase in the overall rate paid on our average interest-bearing liabilities as well as an

23

increase in the level of interest bearing liabilities, primarily interest-bearing deposits. The rate paid on our total average interest bearing liabilities increased to 3.28% in 2005 compared to 2.79% in 2004, an increase of 49 basis points. This increase resulted from increases in rates paid on savings deposits, money market deposits, time deposits, and long-term debt. Total average interest bearing liabilities increased $28.5 million, or 5.47%, during 2005 primarily due to increases in time deposits.

     Average Balance Sheets. The following table sets forth for the periods and as of the dates indicated, information regarding our average balances of assets and liabilities as well as the dollar amounts of interest income from interest-earning assets and interest expense on interest-bearing liabilities and the resultant rates or costs. Ratio, yield and rate information are based on average daily balances where available; otherwise, average monthly balances have been used. Nonaccrual loans are included in the calculation of average balances for loans for the periods indicated.

AVERAGE BALANCES, YIELDS AND RATES

	Year Ended December 31,
	2006								2005								2004
						Average								Average								Average
	Average					Yield/			Average					Yield/			Average					Yield/
	Balance			Interest		Rate			Balance			Interest		Rate			Balance			Interest		Rate
	(Dollars in thousands)
Assets
Federal funds sold and other short term investments	$	5,100		$	256		5.01	%	$	16,076		$	580		3.61	%	$	15,077		$	157		1.04	%
Investment securities — taxable		93,043			4,013		4.31			71,695			2,256		3.15			72,830			1,926		2.64
Investment securities — non-taxable (1)		565			40		7.03			1,317			92		6.95			8,206			569		6.93
Mortgage loans held for sale		18,067			1,145		6.34			35,232			1,903		5.40			35,219			1,813		5.15
Loans, net of unearned discount and fees (2)		525,471			43,392		8.26			516,642			35,589		6.89			463,833			27,432		5.91
Total earning assets		642,246			48,846		7.61			640,962			40,420		6.31			595,165			31,897		5.36
Cash and due from banks — non-interest bearing		18,545								22,733								21,152
Allowance for possible loan losses		(6,556	)							(7,067	)							(7,434	)
Premises and equipment, net		18,300								19,304								19,613
Other assets		16,444								18,119								17,366
Total assets	$	688,979							$	694,051							$	645,862
Liabilities and Stockholders’ Equity
Deposits-interest bearing:
Interest-bearing demand accounts	$	24,979		$	97		0.39	%	$	25,104		$	94		0.38	%	$	28,268		$	169		0.60	%
Savings and money market deposits		147,403			4,356		2.95			178,947			3,861		2.16			182,468			2,932		1.61
Time deposits		262,199			11,254		4.29			238,051			9,171		3.85			202,649			7,297		3.60
Total interest-bearing deposits		434,581			15,707		3.61			442,102			13,126		2.97			413,385			10,398		2.52
Short-term borrowings		32,047			1,365		4.26			24,511			557		2.27			26,734			211		0.79
Long-term debt		72,530			3,890		5.36			82,243			4,310		5.24			80,226			3,904		4.87
Total interest-bearing liabilities		539,158			20,962		3.89			548,856			17,993		3.28			520,345			14,513		2.79
Non-interest bearing deposits		93,916								93,447								79,171
Other liabilities		5,770								7,982								5,202
Stockholders’ equity		50,135								43,766								41,144
Total liabilities and stockholders’ equity	$	688,979							$	694,051							$	645,862
FTE net interest income/spread				$	27,884		3.72	%				$	22,427		3.03	%				$	17,384		2.57	%
FTE net interest margin							4.34	%							3.50	%							2.91	%

(1)	Presented on a fully tax-equivalent basis assuming a tax rate of 34%. For the three years ended December 31, 2006, 2005 and 2004, the tax equivalency adjustment amounted to $14,000, $31,000, and $194,000, respectively.
(2)	Includes average balances and income from loans on nonaccrual status

     Analysis of Changes in Net Interest Income Due to Changes in Interest Rates and Volumes. The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. It distinguishes between the increase or decrease related to changes in balances and changes in interest rates. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to:

• changes in rate, reflecting changes in rate multiplied by the prior period volume; and

24

• changes in volume, reflecting changes in volume multiplied by the current period rate.

CHANGES IN INTEREST INCOME AND EXPENSE VOLUME AND RATE VARIANCES

	Year Ended December 31,
	(Dollars in thousands)
	2006 Compared to 2005								2005 Compared to 2004
	Change		Change						Change			Change
	Due to		Due to			Total			Due to			Due to			Total
	Rate		Volume			Change			Rate			Volume			Change
Federal funds sold	$	226	$	(550	)	$	(324	)	$	387		$	36		$	423
Investment securities — taxable		836		921			1,757			366			(36	)		330
Investment securities — non-taxable (1)		1		(53	)		(52	)		2			(479	)		(477	)
Mortgage loans held for sale		330		(1,088	)		(758	)		89			1			90
Loans, net of unearned discount		7,074		729			7,803			4,519			3,638			8,157
Total interest income		8,467		(41	)		8,426			5,363			3,160			8,523
Interest-bearing demand accounts		4		(1	)		3			(63	)		(12	)		(75	)
Savings and money market deposits		1,427		(932	)		495			1,005			(76	)		929
Time deposits		1,047		1,036			2,083			510			1,364			1,874
Short-term borrowings		487		321			808			397			(51	)		346
Long-term debt		101		(521	)		(420	)		300			106			406
Total interest expense		3,066		(97	)		2,969			2,149			1,331			3,480
Net interest income	$	5,401	$	56		$	5,457		$	3,214		$	1,829		$	5,043

(1) Presented on a fully tax-equivalent basis assuming a tax rate of 34%.

Provision for Loan Losses

     We make provisions for loan losses in amounts management deems necessary to maintain the allowance for loan losses at an appropriate level. During the year ended December 31, 2006, we provided $1.2 million for loan losses, as compared to $230,000 for the year ended December 31, 2005, an increase of $1.0 million, or 445.65%. During 2006, our provision for loan losses increased due to an increase in net charge-offs back to normal levels compared with historical averages and to a lesser extent some growth in the loan portfolio. Total impaired loans decreased 7.01% to

     $10.3 million at December 31, 2006, with a related reserve of $719,000, from $11.1 million at December 31, 2005, with a related reserve of $1.2 million. Net charge-offs increased to $1.9 million in 2006 from $859,000 in 2005.

     During 2005, our provision for loan losses decreased due to overall improvement in the credit quality of the loan portfolio as well as a decrease in net charge-offs and impaired loans. In addition, the size of the loan portfolio actually declined during the last few months of 2005 making the existing allowance for loan losses sufficient to cover the inherent losses in the loan portfolio. During the year ended December 31, 2005, we provided $230,000 for loan losses, as compared to $2.0 million for the year ended December 31, 2004, a decrease of $1.7 million, or 88.30%.

     The allowance for loan losses as a percentage of loans was 1.16% at December 31, 2006, compared to 1.33% in 2005 and 1.45% in 2004. The decrease in this percentage from December 31, 2005 was primarily due to net charge-offs as well as modest growth in the loan portfolio during the fourth quarter of 2006.

     Overall, we decreased the total balance of the allowance for loan losses in 2006 and 2005 based upon an analysis of several factors, including an analysis of impaired loans, the general reserve factor analysis referred to in

25

our Critical Accounting Policies, changes in the loan mix, and charge offs that occurred during the year. The allowance for loan losses represents our best estimate of probable losses that have been incurred as of the respective balance sheet dates.

Non-interest Income

     The following table describes the items of our non-interest income for the periods indicated:

NON-INTEREST INCOME

	Year Ended December 31
	2006		2005		2004
	(In thousands)
Loans held for sale fee income	$	5,046	$	7,408	$	10,358
NSF charges and service fees		1,244		1,129		1,326
Other service charges		1,247		1,037		1,115
Realized gains on available for sale securities, net		—		—		524
Other income		1,344		1,727		617
Total non-interest income	$	8,881	$	11,301	$	13,940

     Non-interest income decreased to $8.9 million, or 21.41%, during 2006, from $11.3 million during 2005. This decrease is attributable to a decrease in loans held for sale fee income of $2.4 million. We experienced a decline in our loans held for sale fee income due to a decline in residential mortgage origination and refinancing resulting from a stable interest rate environment. The volume of closed residential mortgages fell to $336.3 million in 2006 from $675.6 million and $883.4 million in 2005 and 2004, respectively. Sustainability of the level of our loans held for sale fee income is primarily dependent upon the interest rate environment, and secondarily dependent on our ability to develop new products and alternative delivery channels. Other income decreased $383,000, or 22.18%, due primarily to gains on the sale of our old Olathe banking facility realized during 2005. Future growth of other non-interest income categories is dependent upon new product development, and growth in our customer base.

     Non-interest income decreased to $11.3 million, or 18.94%, during 2005, from $13.9 million during 2004. This decrease is attributable to a decrease in loans held for sale fee income of $3.0 million. We experienced a decline in our loans held for sale fee income due to a decline in residential mortgage origination and refinancing resulting from higher interest rates. The volume of closed residential mortgages fell to $675.6 million in 2005 from $883.4 million and $1.5 billion in 2004 and 2003, respectively. Sustainability of the level of our loans held for sale fee income is primarily dependent upon the interest rate environment, and secondarily dependent on our ability to develop new products and alternative delivery channels. In 2004, we realized $524,000 of net gains on the sale of available-for-sale securities. We took advantage of opportunities to mitigate the risk of long-term rate volatility in our available-for-sale investment portfolio and also provide a funding source for loan growth by selling some of our longer-term bonds. We sold no securities during 2005. Other income increased $1.1 million, or 179.90%, due primarily to gains on the sale of our old Olathe banking facility and an increase in rental income from subleases in our Leawood facility.

Non-interest Expense

     The following table describes the items of our non-interest expense for the periods indicated.

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NON-INTEREST EXPENSE

	Year Ended December 31
	2006		2005		2004
	(In thousands)
Salaries and employee benefits	$	14,737	$	15,986	$	16,670
Occupancy		3,059		3,307		3,433
General and administrative		6,578		6,841		6,467
Total non-interest expenses	$	24,374	$	26,134	$	26,570

     Non-interest expense decreased 6.73% to $24.4 million during 2006, compared to $26.1 million in the prior year primarily due to a decrease in salaries and employee benefits. Our salaries and employee benefits expense decreased 7.81% to $14.7 million in 2006 from $16.0 million in 2005, mainly due to a decline in compensation costs in our mortgage division. We had 224 full-time employees at December 31, 2006 compared to 265 at December 31, 2005. The decrease in full-time equivalent employees is mainly due to the reduction in force in our mortgage operation due to the decline in mortgage volume. Occupancy expenses decreased $248,000, or 7.50%, due to decreased depreciation and maintenance expenses. General and administrative expenses decreased $263,000, or 3.85%, primarily due to decreased advertising expenses related to mortgage lead generation activities.

     Non-interest expense decreased 1.65% to $26.1 million during 2005, compared to $26.6 million in the prior year primarily due to a decrease in salaries and employee benefits. Our salaries and employee benefits expense decreased 4.11% to $16.0 million in 2005 from $16.7 million in 2004, mainly due to a decline in incentive compensation related to mortgage origination activity. General and administrative expenses increased $373,000 or 5.92% primarily due to increased data processing costs and other miscellaneous expenses.

Income Taxes

     Our income tax expense during 2006 was $4.2 million, compared to $2.8 million during 2005, and $665,000 during 2004. The increase in 2006 reflects our higher earnings for the current fiscal year. In addition, the Company recognized tax reserves provided in prior tax years during 2004. Our consolidated effective income tax rates of 37.75%, 37.69% and 25.63% for the three years ended December 31, 2006, 2005, and 2004, respectively, varies from the statutory rate principally due to the effects of state income taxes and interest income earned on our municipal securities portfolio which is generally tax-exempt for federal income tax purposes.

Financial Condition

     Lending Activities. Our loan portfolio is a key source of income, and since our inception, has been a principal component of our revenue growth. Our loan portfolio reflects an emphasis on commercial and commercial real estate, construction, lease financing, residential real estate, consumer and home equity lending. We emphasize commercial lending to professionals, businesses and their owners. Commercial loans and loans secured by commercial real estate accounted for 44.99%, 45.12% and 48.07% of our total loans at December 31, 2006, 2005 and 2004, respectively.

     Loans were $528.5 million at December 31, 2006, an increase of $25.4 million, or 5.04%, compared to December 31, 2005. Loans were $503.1 million at December 31, 2005, a decrease of $4.1 million, or 0.80%, compared to December 31, 2004. The loan to deposit ratio increased to 98.63%, compared to 95.05% at December 31, 2005, and 97.04% at December 31, 2004.

     We experienced increases in commercial real estate, construction, and lease financing categories during 2006. The growth in these categories is a result of the economic growth and development of our market area, coupled with the efforts and experience of our lending staff. The Company targets consumer lending lines of business in an effort to broadly diversify our risk across multiple lines of business. The following table sets forth the composition of our loan portfolio by loan type as of the dates indicated. The amounts in the following table are shown net of discounts and other deductions.

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	As of December 31,
	2006					2005					2004					2003					2002
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
											(Dollars in thousands)
Commercial	$	110,849		20.97	%	$	112,452		22.35	%	$	117,604		23.19	%	$	109,818		25.86	%	$	93,658		24.64	%
Commercial real estate		126,952		24.02			114,562		22.77			126,205		24.88			87,438		20.59			71,295		18.76
Construction		171,709		32.49			139,662		27.76			130,631		25.76			123,445		29.08			127,071		33.43
Lease financing		18,512		3.50			18,238		3.62			21,203		4.18			22,175		5.22			22,600		5.95
Residential real estate		34,988		6.63			39,371		7.83			30,886		6.09			27,017		6.37			21,581		5.68
Consumer		33,097		6.26			45,221		8.99			48,950		9.65			29,701		6.99			26,750		7.04
Home equity		32,408		6.13			33,637		6.68			31,691		6.25			25,026		5.89			17,127		4.50
Total loans and leases		528,515		100.00	%		503,143		100.00	%		507,170		100.00	%		424,620		100.00	%		380,082		100.00	%
Less allowance for loan losses		6,106					6,704					7,333					7,051					6,914
Loans receivable, net	$	522,409				$	496,439				$	499,837				$	417,569				$	373,168

     Collateral and Concentration. Management monitors concentrations of loans to individuals or businesses involved in a single industry over 5% of total loans. At December 31, 2006, 2005 and 2004, substantially all of our loans were collateralized with real estate, inventory, accounts receivable and/or other assets or were guaranteed by the Small Business Administration. Loans to individuals and businesses in the construction industry totaled $171.7 million, or 32.49%, of total loans, as of December 31, 2006. The Bank does not have any other concentrations of loans to individuals or businesses involved in a single industry exceeding 5% of total loans. The Bank’s lending limit under federal law to any one borrower was $18.3 million at December 31, 2006. The Bank’s largest single borrower, net of participations, at December 31, 2006 had outstanding loans of $9.5 million.

     The following table presents the aggregate maturities of loans in each major category of our loan portfolio as of December 31, 2006, excluding the allowance for loan and valuation losses. Additionally, the table presents the dollar amount of all loans due more than one year after December 31, 2006 which have predetermined interest rates (fixed) or adjustable interest rates (variable). Actual maturities may differ from the contractual maturities shown below as a result of renewals and prepayments or the timing of loan sales.

MATURITIES AND SENSITIVITIES OF LOANS TO
CHANGES IN INTEREST RATES

	As of December 31, 2006
									More than One Year
	Less than		One to		Over five
	one year		five years		years		Total		Fixed		Variable
	(In thousands)
Commercial	$	53,050	$	51,515	$	6,284	$	110,849	$	22,691	$	35,108
Commercial Real Estate		28,534		75,572		22,846		126,952		76,612		21,806
Construction		139,643		29,257		2,809		171,709		11,336		20,730

Non-performing Assets

     Non-performing assets consist primarily of loans past due 90 days or more, nonaccrual loans and foreclosed real estate. The following table sets forth our non-performing assets as of the dates indicated:

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NON-PERFORMING ASSETS

	As of December 31,
	2006			2005			2004			2003			2002
	(Dollars in thousands)
Commercial and all other loans:
Past due 90 days or more	$	802		$	781		$	2,008		$	118		$	1
Nonaccrual		381			769			543			318			234
Commercial real estate loans:
Past due 90 days or more		4,951			598			—			—			—
Nonaccrual		—			—			158			—			175
Construction loans:
Past due 90 days or more		—			585			—			—			—
Nonaccrual		136			452			—			487			—
Lease financing:
Past due 90 days or more		186			5			1			—			3
Nonaccrual		—			119			80			249			223
Residential real estate loans:
Past due 90 days or more		—			—			153			336			—
Nonaccrual		410			1,016			1,315			437			407
Consumer loans:
Past due 90 days or more		13			49			17			42			22
Nonaccrual		47			—			—			—			13
Home equity loans:
Past due 90 days or more		—			—			—			—			—
Nonaccrual		—			—			75			1,068			40
Debt securities and other assets (excluding other real estate owned and other repossessed assets):
Past due 90 days or more		—			—			—			—			—
Nonaccrual		—			—			—			—			—
Total non-performing loans		6,926			4,374			4,350			3,055			1,118
Foreclosed assets held for sale		717			711			2,645			416			614
Total non-performing assets	$	7,643		$	5,085		$	6,995		$	3,471		$	1,732
Total non-performing loans to total loans		1.31	%		0.87	%		0.86	%		0.72	%		0.29	%
Total non-performing loans to total assets		1.00			0.63			0.65			0.49			0.18
Allowance for loan losses to non-performing loans		88.16			153.27			168.60			230.79			618.29
Non-performing assets to loans and foreclosed assets held for sale		1.44			1.01			1.37			0.82			0.46

     Non-performing assets. Non-performing assets increased to $7.6 million at December 31, 2006 from $5.1 million at December 31, 2005. The increase is primarily due to an increase in commercial real estate loans, specifically due to two large credits which became more than 90 days past due during the third quarter which management is aggressively pursuing collection on.

     Impaired Loans. A loan is considered impaired when it is probable that we will not receive all amounts due according to the contractual terms of the loan. This includes loans that are delinquent 90 days or more, nonaccrual loans, and certain other loans identified by management. Accrual of interest is discontinued, and interest accrued and unpaid is removed, at the time the loans are delinquent 90 days or when management believes that full collection of principal and interest under the original loan contract is unlikely to occur. Interest is recognized for nonaccrual loans only upon receipt, and only after all principal amounts are current according to the terms of the contract.

     Impaired loans totaled $10.3 million at December 31, 2006, $11.1 million at December 31, 2005, and $12.8 million at December 31, 2004, with related allowances for loan losses of $719,000, $1.2 million, and $1.8 million, respectively.

     Total interest income of $728,000, $742,000 and $745,000 was recognized on average impaired loans of $12.1 million, $10.4 million and $13.8 million for 2006, 2005 and 2004, respectively. Included in this total is cash

29

basis interest income of $53,000, $15,000 and $46,000 recognized on nonaccrual impaired loans during 2006, 2005 and 2004, respectively.

     Allowance For Loan Losses. The allowance for loan losses is increased by provisions charged to expense and reduced by loans charged off, net of recoveries. The adequacy of the allowance is analyzed monthly based on internal loan reviews and quality measurements of our loan portfolio. The Bank computes its allowance by assigning specific reserves to impaired loans, and then applies general reserves, based on loss factors, to the remainder of the loan portfolio. The loss factors are determined based on such items as management’s evaluation of risk in the portfolio, local economic conditions, and historical loss experience. Specific allowances are accrued on specific loans evaluated for impairment for which the basis of each loan, including accrued interest, exceeds the discounted amount of expected future collections of interest and principal or, alternatively, the fair value of the loan collateral.

     The following table sets forth information regarding changes in our allowance for loan and valuation losses for the periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE
AND RELATED INFORMATION

	As of and for the
	Year Ended December 31,
	2006			2005			2004			2003			2002
	(Dollars in thousands)
Balance at beginning of period	$	6,704		$	7,333		$	7,051		$	6,914		$	5,267
Loans charged-off:
Commercial loans		1,417			949			1,665			802			323
Commercial real estate loans		—			—			—			395			323
Construction loans		100			—			—			—			—
Lease financing		134			86			220			279			870
Residential real estate loans		318			—			18			—			—
Consumer loans		83			77			80			68			66
Home equity loans		8			16			—			10			—
Total loans charged-off		2,060			1,128			1,983			1,554			1,582
Recoveries:
Commercial loans		117			154			41			77			123
Commercial real estate loans		—			3			7			10			1
Construction loans		—			—			—			—			—
Lease financing		32			76			166			219			162
Residential real estate loans		47			1			48			—			—
Consumer loans		11			35			38			35			23
Home equity loans		—			—			—			—			—
Total recoveries		207			269			300			341			309
Net loans charged-off		1,853			859			1,683			1,213			1,273
Provision for loan losses		1,255			230			1,965			1,350			2,920
Balance at end of period	$	6,106		$	6,704		$	7,333		$	7,051		$	6,914
Loans outstanding:
Average	$	525,471		$	516,643		$	463,833		$	410,593		$	349,879
End of period		528,515			503,143			507,170			424,620			380,082
Ratio of allowance for loan losses to loans outstanding:
Average		1.16	%		1.30	%		1.58	%		1.72	%		1.98	%
End of period		1.16			1.33			1.45			1.66			1.82
Ratio of net charge-offs to:
Average loans		0.35			0.17			0.36			0.30			0.36
End of period loans		0.35			0.17			0.33			0.29			0.33

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     The following table shows our allocation of the allowance for loan losses by specific category at the end of each of the periods shown. Management attempts to allocate specific portions of the allowance for loan losses based on specifically identifiable problem loans. However, the allocation of the allowance to each category is not necessarily indicative of future losses and does not restrict the use of the allowance to absorb losses in any category.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

	As of December 31,
	2006					2005					2004					2003					2002
	(Dollars in Thousands)
			% of Total					% of Total					% of Total					% of Total					% of Total
	Amount		Allowance			Amount		Allowance			Amount		Allowance			Amount		Allowance			Amount		Allowance
Commercial	$	1,386		22.70	%	$	1,863		27.79	%	$	3,016		41.13	%	$	2,899		41.12	%	$	3,012		43.56	%
Commercial real estate		1,674		27.42			1,441		21.49			1,432		19.53			1,161		16.47			1,008		14.58
Construction		1,920		31.44			1,776		26.51			1,475		20.11			1,581		22.42			1,405		20.32
Lease financing		355		5.81			582		8.68			583		7.95			690		9.78			813		11.76
Residential real estate		402		6.58			536		7.99			209		2.85			273		3.87			293		4.24
Consumer		172		2.82			294		4.38			404		5.51			288		4.09			256		3.70
Home equity		197		3.23			212		3.16			214		2.92			159		2.25			127		1.84
Total	$	6,106		100.00	%	$	6,704		100.00	%	$	7,333		100.00	%	$	7,051		100.00	%	$	6,914		100.00	%

     Investment securities. The primary objectives of our investment portfolio are to secure the safety of principal, to provide adequate liquidity and to provide securities for use in pledging for public funds or repurchase agreements. Income is a secondary consideration. As a result, we generally do not invest in mortgage-backed securities and other higher yielding investments.

     Total investment securities decreased by $12.8 million, or 12.79%, during 2006, as we utilized maturing investment securities to fund our liquidity needs.

     As of December 31, 2006, all of the securities in our investment portfolio were classified as available-for-sale in order to provide us with an additional source of liquidity when necessary and as pledging requirements permitted.

     The following table presents the composition of our available for sale investment portfolio by major category at the dates indicated.

INVESTMENT SECURITIES PORTFOLIO COMPOSITION

	At December 31,
	2006		2005		2004
	(In thousands)
U.S. government sponsored agency securities	$	86,165	$	98,667	$	63,561
State and municipal obligations		360		674		2,133
Equity and other		681		646		656
Total	$	87,206	$	99,987	$	66,350

     The following table sets forth the maturities, carrying value, and average yields for securities in our investment portfolio at December 31, 2006. Yields are presented on a tax equivalent basis. Expected maturities will differ from contractual maturities due to unscheduled repayments.

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MATURITY OF INVESTMENTS IN AVAILABLE-FOR-SALE SECURITIES

																More Than Ten					Total Investment
	One Year or Less					One to Five Years					Five to Ten Years					Years					Securities
	Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average			Carrying		Average
	Value		Yield			Value		Yield			Value		Yield			Value		Yield			Value		Yield
	(Dollars in thousands)
Available-For-Sale
U.S. government sponsored agency	$	30,805		3.89	%	$	50,317		4.99	%	$	5,043		5.50	%	$	—		—	%	$	86,165		4.79	%
State and municipal Obligations		150		7.20			210		6.44			—		—			—		—			360		6.82
Equity and other securities with no defined maturity		—		—			—		—			—		—			—		—			681		2.92
Total available for sale	$	30,955		3.90	%	$	50,527		4.99	%	$	5,043		5.50	%	$	—		—	%	$	87,206		4.78	%

     Deposits. Deposits grew by $6.5 million, or 1.23%, for the year ended December 31, 2006, compared to 2005 year-end. The primary source of deposit growth in 2006 was in time deposit balances, which increased by $35.3 million. The increase in time deposit balances was primarily due to a promotion offering attractive interest rates and terms for our time deposit products. We have traditionally offered market-competitive rates on our time deposit products and believe they provide us with a more attractive source of funds than other alternatives such as Federal Home Loan Bank borrowings, due to our ability to cross-sell additional services to these account holders. However, we continue to analyze alternative strategies to grow our deposits including opening additional banking centers in markets management considers underserved, offering new products, and obtaining brokered deposits as allowed by our Funds Management policy and as deemed prudent by management and our board of directors.

     The following table sets forth the balances for each major category of our deposit accounts and the weighted-average interest rates paid for interest-bearing deposits for the periods indicated:

Deposits

	Year Ended December 31,
	2006								2005								2004
	(Dollars in thousands)
			Percent			Weighted					Percent			Weighted					Percent			Weighted
			of			Average					of			Average					Of			Average
	Balance		Deposits			Rate			Balance		Deposits			Rate			Balance		Deposits			Rate
Demand	$	94,823		17.69	%		—	%	$	94,452		17.85	%		—	%	$	84,764		16.22	%		—	%
Savings		8,874		1.66			0.49			9,669		1.82			0.49			9,100		1.74			0.49
Interest-bearing demand		26,427		4.93			0.39			26,560		5.01			0.38			36,342		6.95			0.59
Money Market		23,071		4.31			1.13			27,583		5.21			0.57			30,139		5.77			0.42
Money Management		97,697		18.23			3.61			121,422		22.94			2.60			144,523		27.65			1.93
Time Deposits		284,972		53.18			3.97			249,655		47.17			3.85			217,778		41.67			3.60
Total deposits	$	535,864		100.00	%				$	529,341		100.00	%				$	522,646		100.00	%

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     The following table sets forth the amount of our time deposits that are greater than $100,000 by time remaining until maturity as of December 31, 2006:

AMOUNTS AND MATURITIES OF
TIME DEPOSITS OF $100,000 OR MORE

	As of December 31, 2006
			Weighted Average
	Amount		Rate Paid
	(Dollars in thousands)
Three months or less	$	53,329		4.96	%
Over three months through six months		29,511		4.40
Over six months through twelve months		55,959		4.76
Over twelve months		26,479		4.58
Total	$	165,278		4.73	%

Liquidity and Capital Resources

     Liquidity. Liquidity is measured by a financial institution’s ability to raise funds through deposits, borrowed funds, capital, or the sale of marketable assets, such as residential mortgage loans or a portfolio of SBA loans. Other sources of liquidity, including cash flow from the repayment of loans, are also considered in determining whether liquidity is satisfactory. Liquidity is also achieved through growth of core deposits and liquid assets, and accessibility to the money and capital markets. The funds are used to meet deposit withdrawals, maintain reserve requirements, fund loans and operate the organization. Core deposits, defined as demand deposits, interest-bearing transaction accounts, savings deposits and time deposits less than $100,000 (excluding brokered deposits), were 73.40% of our total deposits at December 31, 2006, and 74.26% and 81.56% of total deposits at December 31, 2005 and 2004, respectively. Generally, the Company’s funding strategy is to utilize Federal Home Loan Bank of Topeka (“FHLBank”) borrowings to fund originations of mortgage loans held for sale and fund balances generated by other lines of business with deposits. Advance availability with the FHLBank is determined daily with regards to mortgage loans held for sale and quarterly with regards to overall availability and at December 31, 2006, approximately $78.2 million was available. The Company’s FHLBank advance availability fluctuates depending on levels of available collateral, which includes mortgage loans held for sale. In addition, the Company uses other forms of short-term borrowings for cash management and liquidity management purposes on a limited basis. These forms of borrowings include federal funds purchased and revolving lines of credit (see Note 8 of the Financial Statements). The Company’s Asset-Liability Management Committee utilizes a variety of liquidity monitoring tools, including an asset/liability modeling service, to analyze and manage the Company’s liquidity.

     The Bank is a member of the Federal Home Loan Bank System, which consists of 12 regional Federal Home Loan Banks governed and regulated by the Federal Housing Finance Board. The Federal Home Loan Banks provide a central credit facility for member institutions. The Bank, as a member of the FHLBank of Topeka, is required to acquire and hold shares of capital stock in the FHLBank of Topeka in an amount at least equal to 1.00% of the aggregate principal amount of its unpaid residential mortgage loans or 5.00% of our total outstanding FHLBank advances. The Bank is currently in compliance with this requirement, with a $5.2 million investment in stock of the FHLBank of Topeka as of December 31, 2006. The Bank had $37.5 million and $47.5 million in outstanding long-term advances from the FHLBank of Topeka at December 31, 2006 and 2005, respectively.

     Management has established internal guidelines and analytical tools to measure liquid assets, alternative sources of liquidity, as well as relevant ratios concerning asset levels and purchased funds. These indicators are reported to the board of directors monthly.

     The following table sets forth a summary of our short-term borrowings during and as of the end of each period indicated.

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SHORT-TERM BORROWINGS

			Average				Weighted			Weighted
	Amount		amount		Maximum		average			Average
	outstanding		outstanding		Outstanding		interest rate			interest rate
	at		during the		At any		during the			at period
	period end		period (1)		Month end		period			end
(Dollars in thousands)
At or for the year ended December 31, 2006:
Federal Home Loan Bank borrowings	$	—	$	6,668	$	31,500		5.13	%		—	%
Federal Funds purchased		—		152		—		5.09			—
Repurchase agreements and other interest bearing liabilities		28,574		24,499		34,052		3.27			4.07
Total	$	28,574	$	31,319				3.67			4.07
At or for the year ended December 31, 2005:
Federal Home Loan Bank borrowings	$	—	$	596	$	—		2.90	%		—	%
Federal Funds purchased		—		136		—		3.04			—
Repurchase agreements and other interest bearing liabilities		24,929		23,152		25,252		2.22			2.95
Total	$	24,929	$	23,884				2.25			2.95
At or for the year ended December 31, 2004:
Federal Home Loan Bank borrowings	$	—	$	510	$	6,000		2.26	%		—	%
Federal Funds purchased		—		1,107		—		1.96			—
Repurchase agreements and other interest bearing liabilities		21,118		24,100		25,134		0.65			1.28
Total	$	21,118	$	25,717				0.73			1.28

(1) Calculations are based on daily averages where available and monthly averages otherwise.

     Capital Resources. At December 31, 2006, our total stockholders’ equity was $53.8 million, and our equity to asset ratio was 7.77%. At December 31, 2005, our total stockholders’ equity was $46.2 million, and our equity to asset ratio was 6.71%.

     The Federal Reserve Board’s risk-based guidelines establish a risk-adjusted ratio, relating capital to different categories of assets and off-balance sheet exposures, such as loan commitments and standby letters of credit. These guidelines place a strong emphasis on tangible stockholder’s equity as the core element of the capital base, with appropriate recognition of other components of capital. At December 31, 2006, our Tier 1 capital ratio was 11.33%, while our total risk-based capital ratio was 12.47%, both of which exceed the capital minimums established in the risk-based capital requirements.

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     Our risk-based capital ratios at December 31, 2006, 2005 and 2004 are presented below.

RISK-BASED CAPITAL

	December 31,
	2006			2005			2004
	(Dollars in thousands)
Tier 1 capital
Stockholders’ equity	$	53,820		$	46,255		$	41,384
Intangible assets		(671	)		(823	)		(976	)
Unrealized (appreciation) depreciation on available-for-sale securities and derivative instruments		95			473			257
Trust preferred securities (1)		17,972			15,576			13,880
Total Tier 1 capital		71,216			61,481			54,545
Tier 2 capital
Qualifying allowance for loan losses		6,106			6,704			7,333
Trust preferred securities(1)		1,028			4,012			5,708
Total Tier 2 capital		7,134			10,716			13,041
Total risk-based capital	$	78,350		$	72,197		$	67,586
Risk weighted assets	$	628,521		$	599,880		$	605,886
Ratios at end of period
Total capital to risk-weighted assets ratio		12.47	%		12.04	%		11.15	%
Tier 1 capital to average assets ratio (leverage ratio)		10.29	%		8.86	%		8.45	%
Tier 1 capital to risk-weighted assets ratio		11.33	%		10.25	%		9.00	%
Minimum guidelines
Total capital to risk-weighted assets ratio		8.00	%		8.00	%		8.00	%
Tier 1 capital to average assets (leverage ratio)		4.00	%		4.00	%		4.00	%
Tier 1 capital to risk-weighted assets ratio		4.00	%		4.00	%		4.00	%

(1) Federal Reserve guidelines for calculation of Tier 1 capital limits the amount of cumulative trust preferred securities which can be included in Tier 1 capital to 25% of total Tier 1 capital (Tier 1 capital before reduction of intangibles). Approximately $18.0 million, $15.6 million and $13.9 million of the trust preferred securities have been included as Tier 1 capital as of December 31, 2006, 2005 and 2004, respectively. The balance of the trust preferred securities have been included as Tier 2 capital.

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Contractual Obligations

     Our known contractual obligations outstanding as of December 31, 2006 are presented below.

			Payments due by Period (in thousands)
			Less than 1						More than 5
	Total		year		1-3 years		3-5 years		years
Long-term Debt Obligations	$	67,019	$	1,113	$	12,309	$	9,930	$	43,667

Inflation

     The consolidated financial statements and related data presented in this report have been prepared in accordance with accounting principles generally accepted in the United States of America, which require the measurement of financial position and operating results in terms of historical dollars without considering changes in the relative purchasing power of money over time due to inflation. Unlike most industrial companies, substantially all of our assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates do not necessarily move in the same direction or in the same magnitude as inflation. Additional discussion of the impact of interest rate changes is included in Item 7A: Qualitative and Quantitative Disclosure About Market Risk. In addition, we disclose the estimated fair value of our financial instruments in accordance with Statement of Financial Accounting Standards No. 107. See Note 17 to the consolidated financial statements included in this report.

Off-Balance Sheet Arrangements

     The Company enters into off-balance sheet arrangements in the ordinary course of business. Our off-balance sheet arrangements generally are limited to commitments to extend credit, mortgage loans in the process of origination and forward commitments to sell those mortgage loans, letters of credit and lines of credit.

     Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the agreement. They generally have fixed expiration dates or other termination clauses. The commitments extend over varying periods of time with the majority being disbursed within a one-year period. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. At December 31, 2006, the Company had outstanding commitments to originate loans aggregating approximately $38,025,000.

     Mortgage loans in the process of origination represent amounts that the Company plans to fund within a normal period of 60 to 90 days and which are intended for sale to investors in the secondary market. Forward commitments to sell mortgage loans are obligations to deliver loans at a specified price on or before a specified future date. The Bank acquires such commitments to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. Total mortgage loans in the process of origination amounted to $14,041,000 and mortgage loans held for sale amounted to $21,805,000 at December 31, 2006. As a result, we had combined forward commitments to sell mortgage loans totaling approximately $35,846,000. Mortgage loans in the process of origination represent commitments to originate loans at both fixed and variable rates.

     Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The Company had total outstanding letters of credit amounting to $15,498,000 at December 31, 2006.

36

     Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance sheet instruments. At December 31, 2006 unused lines of credit borrowings aggregated approximately $187,066,000.

Recent and Future Accounting Requirements

     In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB No. 109, Accounting for Income Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact, if any, that FIN 48 may have on the Company’s financial statements.

     In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements, which provides guidance for using fair value to measure assets and liabilities. The statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FASB Statement No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact, if any, that FASB Statement No. 157 may have on the Company’s financial statements.

     In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment to FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in Statement 159 are elective; however, the amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. Some requirements apply differently to entities that do not report net income. The FASB’s stated objective in issuing this standard is as follows: “to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.”

     The fair value option established by Statement 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments.

     Statement 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. The Company is currently evaluating the impact, if any, that FASB Statement No. 159 may have on the Company’s financial statements.

37

Item 7A: Qualitative and Quantitative Disclosure About Market Risk

     As a continuing part of our financial strategy, we attempt to manage the impact of fluctuations in market interest rates on our net interest income. This effort entails providing a reasonable balance between interest rate risk, credit risk, liquidity risk and maintenance of yield. Our funds management policy is established by our Bank Board of Directors and monitored by our Asset/Liability Management Committee. Our funds management policy sets standards within which we are expected to operate. These standards include guidelines for exposure to interest rate fluctuations, liquidity, loan limits as a percentage of funding sources, exposure to correspondent banks and brokers, and reliance on non-core deposits. Our funds management policy also establishes the reporting requirements to our Bank Board of Directors. Our investment policy complements our funds management policy by establishing criteria by which we may purchase securities. These criteria include approved types of securities, brokerage sources, terms of investment, quality standards, and diversification.

     We use an asset/liability modeling system to analyze the Company’s current sensitivity to instantaneous and permanent changes in interest rates. The system simulates the Company’s asset and liability base and projects future net interest income results under several interest rate assumptions. This allows management to view how changes in interest rates will affect the spread between the yield received on assets and the cost of deposits and borrowed funds.

     The asset/liability modeling system is also used to analyze the net economic value of equity at risk under instantaneous shifts in interest rates. The “net economic value of equity at risk” is defined as the market value of assets less the market value of liabilities plus/minus the market value of any off-balance sheet positions. By effectively looking at the present value of all future cash flows on or off the balance sheet, the net economic value of equity modeling takes a longer-term view of interest rate risk.

     We strive to maintain a position such that current changes in interest rates will not affect net interest income or the economic value of equity by more than 5%, per 50 basis points. The following table sets forth the estimated percentage change in the Bank’s net interest income over the next twelve month period and net economic value of equity at risk at December 31, 2006 based on the indicated instantaneous and permanent changes in interest rates.

	Net Interest			Net Economic
	Income			Value of
Changes in Interest Rates	(next 12 months)			Equity at Risk
200 basis point rise		12.52	%		1.71	%
Base Rate Scenario		—			—
200 basis point decline		(17.88	%)		(8.18	%)

     The above table indicates that, at December 31, 2006, in the event of a sudden and sustained increase in prevailing market rates, our net interest income would be expected to increase as our assets would be expected to reprice quicker than our liabilities, while a decrease in rates would indicate just the opposite. Generally, in the decreasing rate scenarios, not only would adjustable rate assets (loans) reprice to lower rates faster than our liabilities, but our liabilities — long-term FHLBank advances and existing time deposits — would not decrease in rate as much as market rates. In addition, fixed rate loans might experience an increase in prepayments, further decreasing yields on earning assets and causing net interest income to decrease. Another consideration with a rising interest rate scenario is the impact on mortgage loan refinancing, which would likely decline, leading to lower loans held for sale fee income, though the impact is difficult to quantify or project.

     The above table also indicates that, at December 31, 2006, in the event of a sudden decrease in prevailing market rates, the economic value of our equity would decrease. Given our current asset/liability position, a 200 basis point decline in interest rates will result in a lower economic value of our equity as the change in estimated loss on liabilities exceeds the change in estimated gain on assets in these interest rate scenarios. Currently, under a falling rate environment, the Company’s estimated market value of loans could increase as a result of fixed rate loans, net of possible prepayments. The estimated market value of investment securities could also rise as our

38

portfolio contains higher yielding securities. However, the estimated market value increase in fixed rate loans and investment securities is offset by time deposits unable to reprice to lower rates immediately and fixed-rate callable advances from FHLB. The likelihood of advances being called in a decreasing rate environment is diminished resulting in the advances existing until final maturity, which has the effect of lowering the economic value of equity.

     The following table summarizes the anticipated maturities or repricing of our interest-earning assets and interest-bearing liabilities as of December 31, 2006, based on the information and assumptions set forth below.

INTEREST-RATE SENSITIVITY ANALYSIS

	Expected Maturity or Repricing Date
	(Dollars in thousands)
	0-90 Days			91-365 Days			1 year			1 to 2 years			2 to 5 years			Thereafter			Total
Interest-Earning Assets:
Fixed Rate Loans	$	27,208		$	25,815		$	53,023		$	31,275		$	111,275		$	25,115		$	220,688
Average Interest Rate		7.06	%		7.75	%		7.39	%		7.17	%		7.61	%		6.78	%		7.39	%
Variable Rate Loans		314,909			4,717			319,626			1,233			7,936			732			329,527
Average Interest Rate		8.69	%		8.09	%		8.68	%		5.64	%		6.34	%		5.84	%		8.61	%
Fixed Rate Investments		2,000			29,150			31,150			9,710			40,981			4,994			86,835
Average Interest Rate		3.50	%		3.82	%		3.80	%		4.83	%		5.03	%		5.50	%		4.59	%
Variable Rate Investments		—			—			—			—			—			—			—
Average Interest Rate		—			—			—			—			—			—			—
Interest Bearing Deposits		356			—			356			—			—			—			356
Average Interest Rate		4.77	%		—			4.77	%		—			—			—			4.77	%
Federal Funds Sold		5,375			—			5,375			—			—			—			5,375
Average Interest Rate		5.25	%		—			5.25	%		—			—			—			5.25	%
Total interest-earning assets	$	349,848		$	59,682		$	409,530		$	42,218		$	160,192		$	30,841		$	642,781
Interest-Bearing Liabilities:
Interest-bearing demand	$	26,427		$	—		$	26,427		$	—		$	—		$	—		$	26,427
Average Interest Rate		0.38	%		—			0.38	%		—			—			—			038	%
Savings and money market		129,642			—			129,642			—			—			—			129,642
Average Interest Rate		3.40	%		—			3.40	%		—			—			—			3.40	%
Time deposits		89,540			139,190			228,730			29,100			25,654			1,488			284,972
Average Interest Rate		4.84	%		4.54	%		4.66	%		4.75	%		4.16	%		4.00	%		4.62	%
Funds borrowed		56,922			10,837			67,759			16,140			8,600			4,078			96,577
Average Interest Rate		5.49	%		4.34	%		5.31	%		4.37	%		4.60	%		5.21	%		5.08	%
Total interest-bearing liabilities	$	302,531		$	150,027		$	452,558		$	45,240		$	34,254		$	5,566		$	537,618
Cumulative:
Rate sensitive assets (RSA)	$	349,848		$	409,530		$	409,530		$	451,748		$	611,940		$	642,781		$	642,781
Rate sensitive liabilities (RSL)		302,531			452,558			452,558			497,798			532,052			537,618			537,618
GAP (GAP = RSA – RSL)		47,317			(43,028	)		(43,028	)		(46,050	)		79,888			105,163			105,163
RSA/RSL		115.64	%		90.49	%		90.49	%		90.75	%		115.02	%		119.56	%
RSA/Total assets		50.54			59.16			59.16			65.26			88.40			92.86
RSL/Total assets		43.70			65.38			65.38			71.91			76.86			77.67
GAP/Total assets		6.84			(6.22	)		(6.22	)		(6.65	)		11.54			15.19
GAP/RSA		13.52			(10.51	)		(10.51	)		(10.19	)		13.05			16.36

     Certain assumptions are contained in the above table which affect the presentation. Although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. The interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types of assets and liabilities lag behind changes in market interest rates.

     Disclosures about fair values of financial instruments, which reflect changes in market prices and rates, can be found in note 17 to the consolidated financial statements included in this report.

39

Item 8: Financial Statements and Supplementary Data

     See index to Blue Valley Ban Corp. financial statements on page F-1.

Item 9: Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

     No items are reportable.

Item 9A: Controls and Procedures

     Management, including the Company’s Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2006. Based upon the evaluation, management concluded that the Company’s disclosure controls and procedures are effective to ensure that all material information requiring disclosure in this annual report was made known to them in a timely manner.

     Management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. During the year, the Company made no significant changes in internal controls over financial reporting or in other factors that could materially affect the Company’s internal control over financial reporting.

Item 9B: Other Information

     No items are reportable.

40

Part III

Item 10: Directors, Executive Officers and Corporate Governance

     Information regarding the Company’s directors and executive officers is included in the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders and is hereby incorporated by reference.

     Information regarding the Bank’s directors and executive officers is included in Part I of this Form 10-K under the caption “Directors and Executive Officers of the Registrant.”

     The Company has adopted a code of conduct that applies to our principal executive, financial, and accounting officers. A copy of our code of conduct can be obtained free of charge by contacting us directly at:

Investor Relations
11935 Riley
Overland Park, KS 66213
913.338.1000
Email: ir@bankbv.com

Item 11: Executive Compensation

     This information is included in the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders and is hereby incorporated by reference.

Item 12: Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

     This information is included in the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders and is hereby incorporated by reference.

Item 13: Certain Relationships, Related Transactions, and Director Independence

     The Bank periodically makes loans to our executive officers and directors, the members of their immediate families and companies that they are affiliated with. As of December 31, 2006, the Bank had aggregate loans outstanding to such persons of approximately $9.6 million, which represented 17.77% of our stockholders’ equity of $53.8 million on that date. These loans:

• were made in the ordinary course of business;

• were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other persons; and

• did not involve more than the normal risk of collectibility or present other unfavorable features.

     Information regarding Director Independence is included in the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders and is hereby incorporated by reference.

41

Item 14: Principal Accounting Fees and Services

     This information is included in the Company’s Proxy Statement for the 2007 Annual Meeting of Stockholders and is hereby incorporated by reference.

Part IV

Item 15: Exhibits, Financial Statement Schedules

(a)	The financial statements and financial statement schedules listed in the accompanying index to consolidated financial statements and financial statement schedules are filed as part of this Form 10-K.
(b)	The exhibits listed in the accompanying exhibit index are filed as part of this Form 10-K.
(c)	None

42

SIGNATURES

     Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 28, 2007	By:	/s/ Robert D. Regnier
			Robert D. Regnier, President, Chief Executive Officer and Director

     Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities listed on the dates indicated

Date: March 28, 2007	By:	/s/ Robert D. Regnier
			Robert D. Regnier, President,
			Chief Executive Officer and Director
			(Principal Executive Officer)
Date: March 28, 2007	By:	/s/ Mark A. Fortino
			Mark A. Fortino, Chief Financial Officer
			(Principal Financial [and Accounting] Officer)
Date: March 28, 2007	By:	/s/ Donald H. Alexander
			Donald H. Alexander, Director
Date: March 28, 2007	By:	/s/ Michael J. Brown
			Michael J. Brown, Director
Date: March 28, 2007	By:	/s/ Wayne A. Henry, Jr.
			Wayne A. Henry, Jr., Director
Date: March 28, 2007	By:	/s/ Thomas A. McDonnell
			Thomas A. McDonnell, Director
Date: March 28, 2007	By:	/s/ Robert D. Taylor
			Robert D. Taylor, Director

43

Exhibits
3.1	Amended and Restated Articles of Incorporation of Blue Valley Ban Corp. *
3.2	Bylaws, as amended, of Blue Valley Ban Corp. *
4.1	1998 Equity Incentive Plan. *
4.2	1994 Stock Option Plan. *
4.3	Form of Agreement as to Expenses and Liabilities. *
4.4	Form of Indenture dated April 10, 2003, between Blue Valley Ban Corp. and Wilmington Trust Company **
4.5	Amended and Restated Declaration of Trust dated April 10, 2003 **
4.6	Guarantee Agreement dated April 10, 2003 **
4.7	Fee Agreement dated April 10, 2003 **
4.8	Specimen of Floating Rate Junior Subordinated Debt Security **
4.9	Form of Indenture dated as of July 29, 2005 between Blue Valley Ban Corp. and Wilmington Trust Company***
4.10	Amended and Restated Declaration of Trust dated July 29, 2005***
4.11	Guarantee Agreement dated July 29, 2005***
10.1	Promissory Note of Blue Valley Building dated July 15, 1994. *
10.2	Mortgage, Assignment of Leases and Rents and Security Agreement between Blue Valley Building and Businessmen’s Assurance Company of America, dated July 15, 1994.*
10.3	Assignment of Leases and Rents between Blue Valley Building and Businessmen’s Assurance Company of America dated July 15, 1994. *
10.4	Line of Credit Note with JP Morgan Chase dated June 15, 2005 ****
10.5	Term Note with JP Morgan Chase dated June 15, 2005 ****
10.6	Agreement and Plan of Merger between Unison Bancorp, Inc., BVBC Acquisition I, Inc. and Blue Valley Ban Corp., dated as of November 2, 2006*****
10.7	Acquisition Agreement and Plan of Merger among Northland National Bank, Blue Valley Ban Corp. and Western National Bank, dated as of March 2, 2007*****
10.8	Purchase and Assumption Agreement among Northland National Bank, Bank of Blue Valley and Blue Valley Ban Corp., dated as of March 2, 2007*****

44

Exhibits
11.1	Statement regarding computation of per share earnings. Please see p. F-12.
21.1	Subsidiaries of Blue Valley Ban Corp.
23.3	Consent of BKD, LLP.
31.1	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a)
31.2	Certification of the Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a)
32.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*	Filed with the Commission on April 10, 2000 as an Exhibit to Blue Valley’s Registration Statement on Form S-1, Amendment No. 1, File No. 333-34328. Exhibit incorporated herein by reference.
**	Filed with the Commission on March 19, 2004 as an Exhibit to Blue Valley’s Annual Report on Form 10-K. Exhibit incorporated herein by reference.
***	Filed with the Commission on July 29, 2005 as an Exhibit to Blue Valley’s Current Report on Form 8-K. Exhibit incorporated herein by reference.
****	Filed with the Commission on March 24, 2005 as an Exhibit to Blue Valley’s Annual Report on Form 10-K. Exhibit incorporated herein by reference.
*****	Filed with the Commission on March 28, 2007 as an Exhibit to Blue Valley’s Annual Report on Form 10-K. Exhibit incorporated herein by reference.

45

BLUE VALLEY BAN CORP.

DECEMBER 31, 2006, 2005 AND 2004

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

	Page
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM		F-2
CONSOLIDATED FINANCIAL STATEMENTS
Balance Sheets		F-3
Statements of Income		F-5
Statements of Stockholders’ Equity		F-6
Statements of Cash Flows		F-7
Notes to Financial Statements		F-8

F-1

Report of Independent Registered Public Accounting Firm

Audit Committee,
Board of Directors and Stockholders
Blue Valley Ban Corp.
Overland Park, Kansas

     We have audited the accompanying consolidated balance sheets of Blue Valley Ban Corp. (the “Company”) as of December 31, 2006 and 2005, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

     We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

     In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Blue Valley Ban Corp. as of December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America.

/s/ BKD, LLP  

Kansas City, Missouri
March 21, 2007

F-2

BLUE VALLEY BAN CORP.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2006 AND 2005
(dollars in thousands, except share data)

ASSETS

	2006		2005
Cash and due from banks	$	21,499	$	16,493
Interest bearing deposits in other financial institutions		356		12,163
Federal funds sold		5,375		11,401
Cash and cash equivalents		27,230		40,057
Available-for-sale securities		87,206		99,987
Mortgage loans held for sale		21,805		13,906
Loans, net of allowance for loan losses of $6,106 and $6,704 in 2006 and 2005, respectively		522,409		496,439
Premises and equipment, net		17,953		18,593
Foreclosed assets held for sale, net		717		711
Interest receivable		4,200		3,372
Deferred income taxes		2,276		2,564
Prepaid expenses and other assets		1,305		4,647
Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities		6,447		8,490
Core deposit intangible asset, at amortized cost		671		823
Total assets	$	692,219	$	689,589

See Notes to Consolidated Financial Statements

F-3

BLUE VALLEY BAN CORP.

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2006 AND 2005
(dollars in thousands, except share data)

LIABILITIES AND STOCKHOLDERS’ EQUITY

	2006			2005
LIABILITIES
Deposits
Demand	$	94,823		$	94,452
Savings, NOW and money market		156,069			185,234
Time		284,972			249,655
Total deposits		535,864			529,341
Other interest-bearing liabilities		29,558			26,288
Long-term debt		67,019			78,106
Interest payable and other liabilities		5,958			9,599
Total liabilities		638,399			643,334
STOCKHOLDERS’ EQUITY
Capital stock
Common stock, par value $1 per share; Authorized 15,000,000 shares; issued and outstanding 2006 – 2,409,490 shares; 2005 – 2,382,046 shares		2,409			2,382
Additional paid-in capital		9,561			9,212
Retained earnings		41,982			35,782
Unearned compensation		—			(648	)
Accumulated other comprehensive loss, net of income tax credits of $(88) in 2006 and $(315) in 2005		(132	)		(473	)
Total stockholders’ equity		53,820			46,255
Total liabilities and stockholders’ equity	$	692,219		$	689,589

See Notes to Consolidated Financial Statements

F-4

\

BLUE VALLEY BAN CORP.

CONSOLIDATED STATEMENTS OF INCOME

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(dollars in thousands, except per share data)

	2006		2005		2004
INTEREST INCOME
Interest and fees on loans	$	44,537	$	37,492	$	29,245
Federal funds sold and other short-term investments		256		580		157
Available-for-sale securities		4,039		2,317		2,301
Total interest income		48,832		40,389		31,703
INTEREST EXPENSE
Interest-bearing demand deposits		97		94		169
Savings and money market deposit accounts		4,356		3,861		2,932
Other time deposits		11,254		9,171		7,297
Federal funds purchased and other interest-bearing liabilities		1,023		540		186
Short-term debt		342		17		25
Long-term debt, net		3,890		4,310		3,904
Total interest expense		20,962		17,993		14,513
NET INTEREST INCOME		27,870		22,396		17,190
PROVISION FOR LOAN LOSSES		1,255		230		1,965
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		26,615		22,166		15,225
NONINTEREST INCOME
Loans held for sale fee income		5,046		7,408		10,358
Service fees		2,491		2,166		2,441
Gains on available for sale securities, net		—		—		524
Other income		1,344		1,727		617
Total noninterest income		8,881		11,301		13,940
NONINTEREST EXPENSE
Salaries and employee benefits		14,737		15,986		16,670
Net occupancy expense		3,059		3,307		3,433
Other operating expense		6,578		6,841		6,467
Total noninterest expense		24,374		26,134		26,570
INCOME BEFORE INCOME TAXES		11,122		7,333		2,595
PROVISION FOR INCOME TAXES		4,199		2,764		665
NET INCOME	$	6,923	$	4,569	$	1,930
BASIC EARNINGS PER SHARE	$	2.93	$	1.95	$	0.84
DILUTED EARNINGS PER SHARE	$	2.88	$	1.91	$	0.82
DIVIDENDS PER SHARE	$	0.30	$	0.25	$	0.20

See Notes to Consolidated Financial Statements

F-5

BLUE VALLEY BAN CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(dollars in thousands, except share data)

															Accumulated
						Additional									Other
	Comprehensive			Common		Paid-In			Retained			Unearned			Comprehensive
	Income			Stock		Capital			Earnings			Compensation			Income (Loss)			Total
BALANCE, DECEMBER 31, 2003				$	2,279	$	7,404		$	30,344		$	(399	)	$	570		$	40,198
Issuance of 47,925 shares of common stock					48		695						(338	)					405
Dividends on common stock ($0.20 per share)										(465	)								(465	)
Net income	$	1,930								1,930									1,930
Restricted stock earned, net of forfeitures													143						143
Change in unrealized depreciation on available-for-sale securities, net of income taxes (credit) of $(552)		(827	)													(827	)		(827	)
	$	1,103
BALANCE, DECEMBER 31, 2004				$	2,327	$	8,099		$	31,809		$	(594	)	$	(257	)	$	41,384
Issuance of 54,960 shares of common stock					55		1,113						(355	)					813
Dividends on common stock ($0.25 per share)										(596	)								(596	)
Net income		4,569								4,569									4,569
Restricted stock earned, net of forfeitures													301						301
Change in unrealized depreciation on available-for-sale securities, net of income taxes (credit) of $(144)		(216	)													(216	)		(216	)
	$	4,353
BALANCE, DECEMBER 31, 2005				$	2,382	$	9,212		$	35,782		$	(648	)	$	(473	)	$	46,255
Issuance of 27,444 shares of common stock					27		512												539
Dividends on common stock ($0.30 per share)										(723	)								(723	)
Net income		6,923								6,923									6,923
Restricted stock earned, net of forfeitures							485												485
Reclassification of unearned compensation in accordance with adoption of SFAS No. 123R					—		(648	)					648						—
Change in derivative financial instrument, net of income taxes of $51		76														76			76
Change in unrealized appreciation on available-for-sale securities, net of income taxes of $177		265														265			265
	$	7,264
BALANCE, DECEMBER 31, 2006				$	2,409	$	9,561		$	41,982		$	—		$	(132	)	$	53,820

See Notes to Consolidated Financial Statements

F-6

BLUE VALLEY BAN CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
(dollars in thousands)

	2006			2005			2004
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	6,923		$	4,569		$	1,930
Adjustments to reconcile net income to net cash flow From operating activities:
Depreciation and amortization		1,471			1,857			1,863
Accretion of premiums on securities		(92	)		(44	)		(28	)
Provision for loan losses		1,255			230			1,965
Provision for other real estate		40			—			—
Deferred income taxes		260			149			(530	)
Stock dividend on FHLB securities		(275	)		(353	)		(240	)
Net gain on available-for-sale securities		—			—			(524	)
Net (gain) loss on sale of foreclosed assets		(12	)		34			104
Net (gain) loss on sale of premises and equipment		6			(344	)		5
Restricted stock earned and forfeited		485			301			143
Compensation expense related to the employee stock purchase plan		19			—			—
Originations of loans held for sale		(336,254	)		(675,636	)		(883,406	)
Proceeds from the sale of loans held for sale		328,355			705,874			857,560
Changes in:
Interest receivable		(828	)		(997	)		(452	)
Prepaid expenses and other assets		3,455			(1,546	)		(305	)
Interest payable and other liabilities		(3,987	)		3,293			1,114
Net cash provided by (used in) operating activities		821			37,387			(20,801	)
CASH FLOWS FROM INVESTING ACTIVITIES
Net originations of loans		(28,689	)		(4,334	)		(90,650	)
Proceeds from sales of loan participations		500			6,400			3,635
Purchase of premises and equipment		(671	)		(707	)		(3,094	)
Proceeds from sale of premises and equipment		—			993			—
Proceeds from the sale of foreclosed assets		930			3,002			448
Proceeds from sales of available-for-sale securities		—			—			21,270
Proceeds from maturities of available-for-sale securities		36,310			26,440			49,564
Purchases of available-for-sale securities		(22,995	)		(60,393	)		(31,974	)
Purchases of Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities		—			(150	)		—
Proceeds from the sale of Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities		2,319			—			95
Net cash used in investing activities		(12,296	)		(28,749	)		(50,706	)
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) increase in demand deposits, money market, NOW and savings accounts		(28,794	)		(25,182	)		39,520
Net increase in time deposits		35,317			31,877			12,631
Repayments of long-term debt		(21,087	)		(23,269	)		(21,706	)
Proceeds from long-term debt		10,000			21,244			13,500
Net proceeds from other financing activities		(58	)		348			405
Net increase (decrease) in federal funds purchased and other interest-bearing liabilities		3,270			3,907			(1,066	)
Net cash provided by (used in) financing activities		(1,352	)		8,925			43,284
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(12,827	)		17,563			(28,223	)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		40,057			22,494			50,717
CASH AND CASH EQUIVALENTS, END OF YEAR	$	27,230		$	40,057		$	22,494
SUPPLEMENTAL CASH FLOWS INFORMATION
Loans transferred to foreclosed assets held for sale	$	964		$	1,102		$	2,781
Restricted stock issued	$	—		$	355		$	338
Cash dividends declared on common stock	$	723		$	596		$	465
Interest paid	$	20,587		$	17,742		$	14,511
Income taxes paid (net of refunds)	$	4,035		$	1,289		$	635

See Notes to Consolidated Financial Statements

F-7

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

     The Company is a holding company for Bank of Blue Valley (the Bank), Blue Valley Building Corp., Blue Valley Insurance Services, Inc., BVBC Capital Trust II, BVBC Capital Trust III, and BVBC Acquisition I, Inc. through 100% ownership of each. In addition, the Company owns 49% of Homeland Title, LLC.

     The Bank is primarily engaged in providing a full range of banking and mortgage services to individual and corporate customers in southern Johnson County, Kansas. The Bank also originates residential mortgages locally and nationwide through its InternetMortgage.com website. The Bank is subject to competition from other financial institutions and also to regulation by certain federal and state agencies that perform periodic examinations.

     Blue Valley Building Corp. is primarily engaged in leasing real property at its facilities in Overland Park and Leawood, Kansas.

     BVBC Capital Trust II and III are Delaware business trusts created in 2003 and 2005, respectively, to offer trust preferred securities and to purchase the Company’s junior subordinated debentures. The Trusts have terms of 30 years, but may dissolve earlier as provided in their trust agreements.

     Blue Valley Insurance Services, Inc. ceased operations on December 31, 2004 as the Company decided not to further pursue this line of business at that time. The Company believes this will have no material impact on future operations.

     Homeland Title, LLC is a company providing title and settlement services.

Operating Segment

     The Company provides community banking services through its subsidiary bank, including such products and services as loans; time deposits, checking and savings accounts; mortgage originations; trust services; and investment services. These activities are reported as a single operating segment.

Use of Estimates

     The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

     Material estimates that are particularly susceptible to significant change include the determination of the allowance for loan losses and the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans. In connection with the determination of the allowance for loan losses and the valuation of foreclosed assets held for sale, management obtains independent appraisals for significant properties.

     Management believes that the allowances for loan losses and the valuation of foreclosed assets held for sale are adequate. While management uses available information to recognize losses on loans and foreclosed assets held for sale, changes in economic conditions may necessitate revision of these estimates in future years. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowances for loan losses and valuation of foreclosed assets held for sale. Such agencies may require the Company to recognize additional losses based on their judgments of information available to them at the time of their examination.

F-8

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Principles of Consolidation

     The consolidated financial statements include the accounts of Blue Valley Ban Corp. and its 100% owned subsidiaries. Significant intercompany accounts and transactions have been eliminated in consolidation.

Cash Equivalents

     The Company considers all liquid investments with original maturities of three months or less to be cash equivalents. At December 31, 2006, cash equivalents consisted of federal funds sold.

     The Bank is required to maintain reserve funds in cash and/or on deposit with the Federal Reserve Bank. The reserve required at December 31, 2006 was $854,000.

Investment in Securities

     Available-for-sale securities, which include any security for which the Company has no immediate plan to sell, but which may be sold in the future, are carried at fair value. Realized gains and losses, based on amortized cost of the specific security, are included in other income. Unrealized gains and losses are recorded, net of related income tax effects, in other comprehensive income. Premiums and discounts are amortized and accreted, respectively, to interest income using a method which approximates the level-yield method over the period to maturity.

     Interest on investments in debt securities is included in income when earned.

Other Investments

     The Company, as a member of the Federal Home Loan Bank (FHLB) and Federal Reserve Bank (FRB) systems, is required to maintain an investment in capital stock of both the FHLB and FRB. No ready market exists for either stock, and the stocks have no quoted market value. Such stock is recorded at cost.

     The Company uses the equity method of accounting for Homeland Title, LLC. As such, the Company’s investment in Homeland Title, LLC is included in Other Assets and its share of Homeland Title, LLC’s net income is included in Other Income.

Mortgage Loans Held for Sale

     Mortgage loans held for sale are carried at the lower of cost or fair value, determined using an aggregate basis. Write-downs to fair value are recognized as a charge to earnings at the time the decline in value occurs. Forward commitments to sell mortgage loans are acquired to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale. Amounts paid to investors to obtain forward commitments, if any, are deferred until such time as the related loans are sold. The fair values of the forward commitments are not recognized in the financial statements if their terms match those of the underlying mortgage. Gains and losses resulting from sales of mortgage loans are recognized when the respective loans are sold to investors. Gains and losses are determined by the difference between the selling price and the carrying amount of the loans sold, net of discounts collected or paid, commitment fees paid and considering a normal servicing rate. Fees received from borrowers to guarantee the funding of mortgage loans held for sale are recognized as income or expense when the loans are sold or when it becomes evident that the commitment will not be used.

F-9

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans

     Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-offs are reported at their outstanding principal balance adjusted for any charge-offs, the allowance for loan losses, and any deferred fees or costs on originated loans and unamortized premiums or discounts on purchased loans.

     Interest income is reported using the interest method and includes amortization of net deferred loan fees over the loan term.

Allowance for Loan Losses

     The allowance is management’s estimate of probable losses which have occurred as of the balance sheet date based on management’s evaluation of risk in the loan portfolio. The allowance for loan losses is increased by provisions charged to expense and reduced by loans charged off when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance.

     The adequacy of the allowance is evaluated on a monthly basis by management based on management’s periodic review of the collectibility of the loans in consideration of historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay, estimated value of underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The Bank computes its allowance by assigning specific reserves to impaired loans, and then applies general reserve factors to the rest of the loan portfolio. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management when determining impairment include payment status, collateral value and probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of delay, the reason for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.

     Impairment is measured on a loan-by-loan basis by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Premises and Equipment

     Depreciable assets are stated at cost less accumulated depreciation. Depreciation is charged to expense using the straight-line method over the estimated useful lives of the assets.

Foreclosed Assets Held for Sale

     Assets acquired by foreclosure or in settlement of debt and held for sale are valued at their estimated fair value as of the date of foreclosure, and a related valuation allowance is provided for estimated costs to sell the assets. Management evaluates the value of foreclosed assets held for sale periodically and increases the valuation allowance for any subsequent declines in fair value. Increases in the valuation allowance and gains/losses on sales of foreclosed assets are included in non-interest expenses, net.

F-10

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Core Deposit Intangible Assets

     Unamortized core deposit intangible assets aggregated $671,000 and $823,000 (originally $2,576,000) at December 31, 2006 and 2005, respectively, and are amortized over a 15-year period using the straight-line method. Such assets are periodically evaluated as to the recoverability of their carrying value. Amortization expense related to core deposit intangible assets was $152,000 for each of the years 2006, 2005 and 2004. Expected amortization for each of the next four years is $152,000 and $63,000 in total thereafter.

Fee Income

     Loan origination fees, net of direct origination costs, are recognized as income using the level-yield method over the term of the loans.

Reclassification

     Certain reclassifications have been made to the 2005 and 2004 financial statements to conform to the 2006 financial statement presentation. These reclassifications had no effect on net income.

Income Taxes

     Deferred tax liabilities and assets are recognized for the tax effect of differences between the financial statement and tax bases of assets and liabilities. A valuation allowance is established to reduce deferred tax assets if it is more likely than not that a deferred tax asset will not be realized. The Company files consolidated income tax returns with its subsidiaries.

Earnings Per Share

     Basic earnings per share is computed based on the weighted average number of shares outstanding during each year. Diluted earnings per share is computed using the weighted average common shares and all potential dilutive common shares outstanding during the year. The computation of per share earnings is as follows:

	2006		2005		2004
	(in thousands, except share and per share data)
Net income, as reported	$	6,923	$	4,569	$	1,930
Average common shares outstanding		2,365,932		2,348,805		2,302,564
Average common share stock options outstanding		41,870		39,726		57,497
Average diluted common shares		2,407,802		2,388,531		2,360,061
Basic earnings per share	$	2.93	$	1.95	$	0.84
Diluted earnings per share	$	2.88	$	1.91	$	0.82

F-11

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Accounting for Stock-Based Compensation

     Effective January 1, 2006, the Company adopted the provisions of SFAS No. 123 (revised 2004). As a result of adopting SFAS No. 123R on January 1, 2006, the Company did not record any additional compensation expense, as no stock options had been granted in recent years and options granted were fully vested prior to adoption. However, on January 1, 2006, the Company reclassified $648,000 of unearned compensation related to previously recognized compensation for restricted share awards that had not been vested as of that date to additional paid-in capital as these awards represent equity awards as defined in SFAS No. 123R.

Recent and Future Accounting Requirements

     In June 2006, the Financial Accounting Standards Board (FASB) issued Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB No. 109, Accounting for Income Taxes. This interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109. This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact, if any, that FIN 48 may have on the Company’s financial statements.

     In September 2006, the FASB issued FASB Statement No. 157, Fair Value Measurements, which provides guidance for using fair value to measure assets and liabilities. The statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. FASB Statement No. 157 applies under other accounting pronouncements that require or permit fair value measurements and does not require any new fair value measurements. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. The Company is currently evaluating the impact, if any, that FASB Statement No. 157 may have on the Company’s financial statements.

     In February 2007, the FASB issued FASB Statement No. 159, The Fair Value Option for Financial Assets and Financial Liabilities-Including an Amendment to FASB Statement No. 115. This standard permits an entity to choose to measure many financial instruments and certain other items at fair value. Most of the provisions in Statement 159 are elective; however, the amendment to FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities, applies to all entities with available-for-sale and trading securities. Some requirements apply differently to entities that do not report net income. The FASB’s stated objective in issuing this standard is as follows: “to improve financial reporting by providing entities with the opportunity to mitigate volatility in reported earnings caused by measuring related assets and liabilities differently without having to apply complex hedge accounting provisions.”

     The fair value option established by Statement 159 permits all entities to choose to measure eligible items at fair value at specified election dates. A business entity will report unrealized gains and losses on items for which the fair value option has been elected in earnings (or another performance indicator if the business entity does not report earnings) at each subsequent reporting date. The fair value option: (a) may be applied instrument by instrument, with a few exceptions, such as investments otherwise accounted for by the equity method; (b) is irrevocable (unless a new election date occurs); and (c) is applied only to entire instruments and not to portions of instruments.

     Statement 159 is effective as of the beginning of an entity’s first fiscal year that begins after November 15, 2007. Early adoption is permitted as of the beginning of the previous fiscal year provided that the entity makes that choice in the first 120 days of that fiscal year and also elects to apply the provisions of FASB Statement No. 157, Fair Value Measurements. The Company is currently evaluating the impact, if any, that FASB Statement No. 159 may have on the Company’s financial statements.

F-12

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 2: AVAILABLE-FOR-SALE SECURITIES

     The amortized cost and estimated fair value of available-for-sale securities are as follows:

	December 31, 2006
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(dollars in thousands)
U.S. Government sponsored agencies	$	86,475	$	65	$	(375	)	$	86,165
State and political subdivisions		360		—		—			360
Equity and other securities		718		—		(37	)		681
	$	87,553	$	65	$	(412	)	$	87,206

	December 31, 2005
			Gross		Gross
	Amortized		Unrealized		Unrealized			Estimated
	Cost		Gains		Losses			Fair Value
	(dollars in thousands)
U.S. Government sponsored agencies	$	99,387	$	40	$	(760	)	$	98,667
State and political subdivisions		670		4		—			674
Equity and other		718		—		(72	)		646
	$	100,775	$	44	$	(832	)	$	99,987

     The amortized cost and estimated fair value of available-for-sale securities at December 31, 2006, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.

	Amortized		Estimated
	Cost		Fair Value
	(dollars in thousands)
Due in one year or less	$	31,150	$	30,955
Due after one through five years		50,691		50,527
Due after five years		4,994		5,043
Total		86,835		86,525
Equity and other securities		718		681
	$	87,553	$	87,206

     The book value and estimated fair value of securities pledged as collateral to secure public deposits amounted to $30,993,000 and $30,916,000 at December 31, 2006 and $20,985,000 and $20,736,000 at December 31, 2005.

     The Company enters into sales of securities under agreements to repurchase. The amounts deposited under these agreements represent short-term borrowings and are reflected as a liability in the consolidated balance sheets. The securities underlying the agreements are book-entry securities. During the period, securities held in safekeeping were pledged to the depositors under a written custodial agreement that explicitly recognizes the depositors’ interest in the securities. At December 31, 2006, or at any month end during the period, no material amount of agreements to repurchase securities sold was outstanding with any individual entity. Information on sales of securities under agreements to repurchase is as follows:

F-13

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 2: AVAILABLE-FOR-SALE SECURITIES (Continued)

	2006		2005
	(dollars in thousands)
Balance as of December 31	$	28,574	$	24,929
Carrying value of securities pledged to secure agreements to repurchases at December 31	$	40,309	$	24,703
Average balance during the year of securities sold under agreements to repurchase	$	24,499	$	23,152
Maximum amount outstanding at any month-end during the year	$	34,052	$	25,252

     Gross gains of $0, $0, and $606,000 were realized in 2006, 2005 and 2004, respectively, and no gross losses were realized in 2006, 2005 and 2004, respectively, from sales of available-for-sale securities. During 2004, the Company recorded an $82,000 loss on an investment security for an impairment which was determined to be other than temporary.

     Certain investments in debt and marketable equity securities are reported in the financial statements at an amount less than their historical cost. These declines in fair value resulted primarily from increases in market interest rates. Based on evaluation of available information and evidence, particularly recent volatility in market yields on debt securities, management believes the declines in fair value for these securities are temporary. Should the impairment of any of these become other than temporary, the cost basis of the investment will be reduced and the resulting loss recognized in net income in the period in which the other-than-temporary impairment is identified.

     Unrealized losses and fair value, aggregated by investment type and length of time that individual securities have been in a continuous unrealized loss position are as follows:

December 31, 2006
(dollars in thousands)

	Less than 12 Months				12 Months or More						Total
Description of			Unrealized				Unrealized		Total		Unrealized
Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Government sponsored agencies	$	37,855	$	134	$	36,251	$	241	$	74,106	$	375
State and political subdivisions		—		—		—		—		—		—
Equity and other securities		—		—		681		37		681		37
Total temporarily impaired securities	$	37,855	$	134	$	36,932	$	278	$	74,787	$	412

December 31, 2005
(dollars in thousands)

	Less than 12 Months				12 Months or More						Total
Description of			Unrealized				Unrealized		Total		Unrealized
Securities	Fair Value		Losses		Fair Value		Losses		Fair Value		Losses
U.S. Government sponsored agencies	$	41,131	$	344	$	34,575	$	416	$	75,706	$	760
State and political subdivisions		—		—		—		—		—		—
Equity and other securities		—		—		646		72		646		72
Total temporarily impaired securities	$	41,131	$	344	$	35,221	$	488	$	76,352	$	832

F-14

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 3: LOANS AND ALLOWANCE FOR LOAN LOSSES

Categories of loans at December 31, 2006 and 2005 include the following:

	2006		2005
	(dollars in thousands)
Commercial loans	$	110,849	$	112,452
Commercial real estate loans		126,952		114,562
Construction loans		171,709		139,662
Lease financing		18,512		18,238
Residential real estate loans		34,988		39,371
Consumer loans		33,097		45,221
Home equity loans		32,408		33,637
Total loans		528,515		503,143
Less: Allowance for loan losses		6,106		6,704
Net loans	$	522,409	$	496,439

     Activity in the allowance for loan losses was as follows:

	2006			2005			2004
	(dollars in thousands)
Balance, beginning of year	$	6,704		$	7,333		$	7,051
Provision charged to expense		1,255			230			1,965
Losses charged off, net of recoveries of $207,000, $269,000 and $300,000 for 2006, 2005 and 2004, respectively		(1,853	)		(859	)		(1,683	)
Balance, end of year	$	6,106		$	6,704		$	7,333

     Impaired loans totaled $10.3 million and $11.1 million at December 31, 2006 and 2005, respectively, with related allowances for loan losses of $719,000 and $1,200,000, respectively. At December 31, 2006 and 2005, accruing loans delinquent 90 days or more totaled $5.9 million and $2.0 million respectively. Non-accrual loans were $973,000 and $2.4 million at December 31, 2006 and 2005, respectively.

     Total interest income of $728,000, $742,000 and $745,000 was recognized on average impaired loans of $12.1 million, $10.4 million and $13.8 million for 2006, 2005 and 2004, respectively. Included in this total is cash-basis interest income of $53,000, $15,000 and $46,000 recognized on impaired loans on nonaccrual during 2006, 2005 and 2004, respectively.

F-15

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 4: PREMISES AND EQUIPMENT

     Major classifications of these assets are as follows:

	2006		2005
	(dollars in thousands)
Land	$	4,185	$	4,185
Building and improvements		14,749		14,511
Furniture and equipment		6,604		6,187
Land improvements, net		285		285
		25,823		25,168
Less accumulated depreciation		7,870		6,575
Total premises and equipment	$	17,953	$	18,593

NOTE 5: INTEREST-BEARING DEPOSITS

     Interest-bearing time deposits in denominations of $100,000 or more were $165,278,000 on December 31, 2006 and $132,143,000 on December 31, 2005. The Company acquires brokered deposits in the normal course of business. At December 31, 2006 and 2005, brokered deposits of $31,771,000 and $27,073,000, respectively, were included in the Company’s time deposit balance.

     At December 31, 2006, the scheduled maturities of time deposits are as follows:

	(dollars in thousands)
2007	$	228,730
2008		29,100
2009		10,432
2010		8,265
2011		6,957
2012 and thereafter		1,488
	$	284,972

NOTE 6: OPERATING LEASES

     Blue Valley Building Corp. leases office space to others under noncancellable operating leases expiring in various years through 2012. Minimum future rent receivable under noncancellable operating leases at December 31, 2006 was as follows:

	(dollars in thousands)
2007	$	425
2008		175
2009		120
2010		88
2011		78
2012		65
	$	951

F-16

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 6: OPERATING LEASES (Continued)

     Effective June 30, 2005, the Company no longer leases space from others under noncancellable operating leases. Consolidated rental and operating lease expenses were $0, $34,000 and $289,000 in 2006, 2005 and 2004, respectively.

NOTE 7: INCOME TAXES

     The provision for income taxes consists of the following:

	2006		2005		2004
	(dollars in thousands)
Taxes currently payable	$	3,939	$	2,615	$	1,195
Deferred income taxes		260		149		(530	)
	$	4,199	$	2,764	$	665

     A reconciliation of income tax expense at the statutory rate to the Company’s actual income tax expense is shown below:

	2006			2005			2004
	(dollars in thousands)
Computed at the statutory rate (34%)	$	3,793		$	2,493		$	882
Increase (decrease) resulting from:
Tax-exempt interest		(32	)		(54	)		(167	)
State income taxes		251			232			103
Other		187			93			(153	)
Actual tax provision	$	4,199		$	2,764		$	665

     The tax effects of temporary differences related to deferred taxes shown on the December 31, 2006 and 2005 consolidated balance sheets are as follows:

F-17

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 7: INCOME TAXES (Continued)

	2006			2005
	(dollars in thousands)
Deferred tax assets:
Allowance for loan losses	$	2,343		$	2,547
Accrued compensated absences		22			22
Accumulated depreciation on available-for- sale securities		139			315
Mark to market – Mortgage loans held for sale		26			39
Uninvested deferred compensation		41			119
Offering costs		241			251
Other		645			143
		3,457			3,436
Deferred tax liabilities:
Accumulated depreciation		(503	)		(600	)
FHLBank stock basis		(380	)		(272	)
Other		(298	)		—
		(1,181	)		(872	)
Net deferred tax asset	$	2,276		$	2,564

NOTE 8: SHORT TERM DEBT

     The Company has a $15 million operating line of credit with a bank bearing a variable interest rate of the Federal Funds rate plus 1.63%. The line of credit is secured by stock in the Company’s subsidiary bank and matures during 2007. As of December 31, 2006 and 2005, the Company had no outstanding balance on this line of credit.

NOTE 9: LONG TERM DEBT

     Long-term debt at December 31, 2006 and 2005 consisted of the following components:

	2006		2005
	(dollars in thousands)
Note payable — Ban Corp (A)	$	3,381	$	3,981
Note payable — Blue Valley Building Corp. (B)		6,550		7,037
Federal Home Loan Bank advances (C)		37,500		47,500
Subordinated Debentures — BVBC Capital Trust II (D)		7,732		7,732
Subordinated Debentures — BVBC Capital Trust III (E)		11,856		11,856
Total long-term debt	$	67,019	$	78,106

F-18

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 9: LONG TERM DEBT (Continued)

(A)	Due in December 2012, payable in quarterly installments of principal plus interest at the Federal Funds Rate plus 1.63%; collateralized by common stock of the Company’s subsidiary bank. The interest rate on this note has been fixed at 5.45% by the use of a swap agreement (see Note 10).
(B)	Two notes due in 2017; payable in monthly installments totaling $70,084 including interest at 5.19%; collateralized by land, buildings, and assignment of future rents. This debt is guaranteed by the Company
(C)	Due in 2008, 2011, 2013, 2015 and 2016; collateralized by various assets including mortgage-backed loans. The interest rates on the advances range from 2.62% to 5.682%. Federal Home Loan Bank advance availability is determined quarterly and at December 31, 2006, approximately $78,205,000 was available.
(D)	Due in 2033; interest only at LIBOR + 3.25% due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. The Company may prepay the subordinated debentures beginning in 2008, in whole or in part, at their face value plus accrued interest.
(E)	Due in 2035; interest only at LIBOR + 1.60% due quarterly; fully and unconditionally guaranteed by the Company on a subordinated basis to the extent that the funds are held by the Trust. Subordinated to the trust preferred securities (D) due in 2033. The Company may prepay the subordinated debentures beginning in 2010, in whole or in part, at their face value plus accrued interest.

     Aggregate annual maturities of long-term debt at December 31, 2006 are as follows:

	(dollars in thousands)
2007	$	1,113
2008		11,140
2009		1,169
2010		1,199
2011		8,731
Thereafter		43,667
	$	67,019

NOTE 10: DERIVATIVE FINANCIAL INSTRUMENTS

     As a strategy to reduce the exposure to the risk of changes in future cash flows due to interest rate fluctuations, the Company entered into an interest rate swap agreement for a portion of its floating rate debt (see Note 9). The agreement provides for the Company to receive interest from the counterparty at an amount which offsets the note’s variable rate and to pay interest to the counterparty at a fixed rate of 5.45% on the notional amount over the term of the note. Under the agreement, the Company pays or receives the net interest amount quarterly, with the quarterly settlements included in interest expense.

     Management has designated the interest rate swap agreement as a cash flow hedging instrument. The hedge was fully effective through December 31, 2006. A $76,000 unrealized gain has been recognized as a component of other comprehensive loss in 2006. The value of the interest rate swap was deemed immaterial during 2005.

F-19

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 11: REGULATORY MATTERS

     The Company and the Bank are subject to various regulatory capital requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

     Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below). Management believes, as of December 31, 2006, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

     As of December 31, 2006, the most recent notification from the FDIC categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

     The Company and the Bank’s actual capital amounts and ratios are also presented in the table.

											To Be Well Capitalized
											Under Prompt
						For Capital					Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(dollars in thousands)
As of December 31, 2006:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	78,350		12.47	%	$	50,194		8.00	%		N/A
Bank Only	$	73,225		11.95	%	$	49,007		8.00	%	$	61,259		10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	71,216		11.33	%	$	25,097		4.00	%		N/A
Bank Only	$	67,119		10.96	%	$	24,503		4.00	%	$	36,755		6.00	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	71,216		10.29	%	$	27,559		4.00	%		N/A
Bank Only	$	67,119		9.91	%	$	27,081		4.00	%	$	33,851		5.00	%

F-20

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 11: REGULATORY MATTERS (Continued)

											To Be Well Capitalized
											Under Prompt
						For Capital					Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
						(dollars in thousands)
As of December 31, 2005:
Total Capital
(to Risk Weighted Assets)
Consolidated	$	72,197		12.04	%	$	47,990		8.00	%		N/A
Bank Only	$	67,637		11.63	%	$	46,511		8.00	%	$	58,138		10.00	%
Tier 1 Capital
(to Risk Weighted Assets)
Consolidated	$	61,481		10.25	%	$	23,995		4.00	%		N/A
Bank Only	$	60,934		10.48	%	$	23,255		4.00	%	$	34,883		6.00	%
Tier 1 Capital
(to Average Assets)
Consolidated	$	61,481		8.86	%	$	27,762		4.00	%		N/A
Bank Only	$	60,934		8.91	%	$	27,358		4.00	%	$	34,198		5.00	%

     The Bank is subject to certain restrictions on the amounts of dividends that it may declare without prior regulatory approval. At December 31, 2006, approximately $11,985,000 of retained earnings were available for dividend declaration without prior regulatory approval.

NOTE 12: TRANSACTIONS WITH RELATED PARTIES

     At December 31, 2006 and 2005, the Company had loans outstanding to executive officers, directors and to companies in which the Bank’s executive officers or directors were principal owners, in the amounts of $9,562,000 and $12,258,000, respectively. Related party transactions for 2006 and 2005 were as follows:

	2006			2005
	(dollars in thousands)
Balance, beginning of year	$	12,258		$	14,195
New loans		2,580			2,416
Repayments and reclassifications		(5,276	)		(4,353	)
Balance, end of year	$	9,562		$	12,258

     In management’s opinion, such loans and other extensions of credit and deposits were made in the ordinary course of business and were made on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons. Further, in management’s opinion, these loans did not involve more than the normal risk of collectibility or present other unfavorable features.

F-21

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 13: PROFIT SHARING AND 401(K) PLANS

     The Company’s profit sharing and 401(k) plans cover substantially all employees. Contributions to the profit sharing plan are determined annually by the Board of Directors, and participant interests are vested over a five-year period. The Company’s 401(k) plan permits participants to make contributions by salary reduction, based on which the Company matches a ratable portion. The Company’s matching contributions to the 401(k) plan are vested immediately. Combined Company contributions charged to expense for 2006, 2005 and 2004 were $743,000, $698,000 and $658,000, respectively.

NOTE 14: EQUITY INCENTIVE COMPENSATION

     The Company has an Equity Incentive Plan (the “Plan”) which allows the Company to issue equity incentive compensation awards to its employees and directors in the forms of stock options, restricted shares or deferred share units.

     Under the fixed option provisions of the Plan, the Company may grant options that vest two years from the date of grant to its employees for shares of common stock. At December 31, 2006, the Company had 230,734 shares available to be granted (options granted prior to 1998 were subject to an earlier plan with similar terms). The exercise price of each option is intended to equal the fair value of the Company’s stock on the date of grant, and maximum terms are 10 years.

     During 2006, 2005 and 2004, the Company granted no stock options, but did grant 0, 12,400 and 14,100 shares of restricted common stock, respectively. Recipients of the restricted stock grant who are employees vest in the stock after three years from the date of the grant. Recipients of the restricted stock grant who are directors vest in the stock after two years for the 2004 grant, and one year for the 2005 grant. The basis of the restricted shares granted, equal to the fair value of the Company’s stock on the date of grant, will be amortized to compensation expense ratably over the applicable vesting period. During 2006, 2005 and 2004, 2,400, 2,925 and 500 shares of restricted stock were forfeited, respectively.

     A summary of the status of option shares under the plan at December 31, 2006, 2005 and 2004, and changes during the years then ended, is presented below:

	2006					2005					2004
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Shares			Price		Shares			Price		Shares			Price
Outstanding, beginning of year		111,400		$	18.38		155,000		$	17.80		188,300		$	16.70
Exercised		(27,100	)		16.12		(41,425	)		16.00		(31,825	)		10.96
Forfeited		—			—		(2,175	)		22.47		(1,475	)		25.00
Outstanding, end of year		84,300		$	19.11		111,400		$	18.38		155,000		$	17.80
Options exercisable, end of year		84,300		$	19.11		111,400		$	18.38		155,000		$	17.80

F-22

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 14: EQUITY INCENTIVE COMPENSATION (Continued)

     The weighted-average remaining contractual life of option shares at December 31, 2006 was 4.52 years. Exercise prices ranged from $7.50 to $25.00. Information about options outstanding and exercisable as of December 31, 2006 is set forth in the following table.

		Options Outstanding and Exercisable
Exercise		Number Outstanding and		Weighted Average	Weighted Average
Prices		Exercisable at 12/31/06		Remaining Contractual Life	Exercise Price
$	7.50		4,000	1 year	$	7.50
	11.25		5,600	2 years		11.25
	14.38		7,700	3 years		14.38
	16.50		15,050	4 years		16.50
	19.50		25,500	5 years		19.50
	25.00		26,450	6 years		25.00
			84,300

NOTE 15: EMPLOYEE STOCK PURCHASE PLAN

     The 2004 Blue Valley Ban Corp. employee stock purchase plan (“ESPP”) provides the right to subscribe to 100,000 shares of common stock to substantially all employees of the Company and subsidiaries, except those who are 5% or greater shareholders of the Company. The purchase price for shares under the plan is determined by the Company’s Board of Directors (or a designated Committee thereof) and was set to 85% of the market price on either the grant date or the offering date, whichever is lower, for the plan year beginning in February, 2004. Expense associated with the plan recognized in 2006 was approximately $19,000. Information about employee stock purchase plan activity as of December 31, 2006 and 2005 is set forth in the following table.

Employee Stock Purchase Plan Activity
Plan year ending January	Shares purchased	Purchase Price
2006	4,073	$19.55
2005	4,060	$19.55

NOTE 16: OTHER INCOME/EXPENSE

     Other income consists of the following:

	2006		2005		2004
	(dollars in thousands)
Rental income	$	425	$	351	$	192
Other income		919		1,376		425
Total	$	1,344	$	1,727	$	617

F-23

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 16: OTHER INCOME/EXPENSE (Continued)

Other operating expenses consist of the following:

	2006		2005		2004
	(dollars in thousands)
Advertising	$	1,080	$	1,413	$	1,315
Loan processing fees		904		232		295
Data processing		889		863		712
Professional fees		631		790		815
Other expense		3,074		3,543		3,330
Total	$	6,578	$	6,841	$	6,467

NOTE 17: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

     The following methods and assumptions were used to estimate the fair value of each class of financial instruments:

Cash and Cash Equivalents

     For these short-term instruments, the carrying amount approximates fair value.

Available-for-Sale Securities

     Fair values for available-for-sale securities, which also are the amounts recognized in the consolidated balance sheets, equal quoted market prices if available. If quoted market prices are not available, fair values are estimated based on quoted market prices of similar securities.

Mortgage Loans Held for Sale

     For homogeneous categories of loans, such as mortgage loans held for sale, fair value is estimated using the quoted market prices for securities backed by similar loans, adjusted for differences in loan characteristics.

Loans

     The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans with similar characteristics were aggregated for purposes of the calculations. The carrying amount of accrued interest approximates its fair value.

Federal Home Loan Bank Stock, Federal Reserve Bank Stock, and other securities

     The carrying amounts for these securities approximate their fair value.

Deposits

     The fair value of demand deposits, savings accounts, NOW accounts and certain money market deposits is the amount payable on demand at the reporting date (i.e., their carrying amount). The fair value of fixed maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities. The carrying amount of accrued interest payable approximates its fair value.

F-24

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 17: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

Securities Sold Under Agreement to Repurchase and Other Interest-Bearing Liabilities

     For these short-term instruments, the carrying amount is a reasonable estimate of fair value.

Short-Term and Long-Term Debt

     Rates currently available to the Company for debt with similar terms and remaining maturities are used to estimate fair value of existing debt.

Commitments to Extend Credit, Letters of Credit and Lines of Credit

     The fair value of commitments is estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. For fixed rate loan commitments, fair value also considers the difference between current levels of interest rates and the committed rates. The fair value of letters of credit and lines of credit is based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations with the counterparties at the reporting date.

     The following table presents estimated fair values of the Company’s financial instruments. The fair values of certain of these instruments were calculated by discounting expected cash flows, which involves significant judgments by management and uncertainties. Fair value is the estimated amount at which financial assets or liabilities could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Because no market exists for certain of these financial instruments, and because management does not intend to sell these financial instruments, the Company does not know whether the fair values shown below represent values at which the respective financial instruments could be sold individually or in the aggregate.

F-25

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 17: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

	2006				2005
	Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value
	(dollars in thousands)
Financial assets:
Cash and cash equivalents	$	27,230	$	27,230	$	40,057	$	40,057
Available-for-sale securities		87,206		87,206		99,987		99,987
Mortgage loans held for sale		21,805		21,805		13,906		13,906
Interest receivable		4,200		4,200		3,372		3,372
Loans, net of allowance for loan losses		522,409		516,011		496,439		492,320
Federal Home Loan Bank stock, Federal Reserve Bank stock, and other securities		6,447		6,447		8,490		8,490
Financial liabilities:
Deposits		535,864		535,643		529,341		530,326
Securities Sold Under Agreement to Repurchase and Other Interest-Bearing Liabilities		29,558		29,558		26,288		26,288
Long-term debt		67,019		64,702		78,106		77,326
Interest payable		2,053		2,053		1,678		1,678
Unrecognized financial instruments (net of amortization):
Commitments to extend credit		—		—		—		—
Letters of credit		—		—		—		—
Lines of credit		—		—		—		—
Forward commitments		—		—		—		—

NOTE 18: COMMITMENTS AND CREDIT RISKS

     The Company extends credit for commercial real estate mortgages, residential mortgages, working capital financing and consumer loans to businesses and residents principally in southern Johnson County. The Bank also purchases indirect leases from various leasing companies throughout Kansas and Missouri.

     Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require a payment of a fee. Since a portion of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate.

     At December 31, 2006 and 2005, the Company had outstanding commitments to originate loans aggregating approximately $38,025,000 and $13,513,000, respectively. The commitments extend over varying periods of time with the majority being disbursed within a one-year period.

     Mortgage loans in the process of origination represent amounts that the Company plans to fund within a normal period of 60 to 90 days and which are intended for sale to investors in the secondary market.

F-26

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 18: COMMITMENTS AND CREDIT RISKS (Continued)

     Forward commitments to sell mortgage loans are obligations to deliver loans at a specified price on or before a specified future date. The Bank acquires such commitments to reduce market risk on mortgage loans in the process of origination and mortgage loans held for sale.

     Total mortgage loans in the process of origination amounted to $14,041,000 and $36,179,000 and mortgage loans held for sale amounted to $21,805,000 and $13,906,000 at December 31, 2006 and 2005, respectively. Related forward commitments to sell mortgage loans amounted to approximately $35,846,000 and $50,085,000 at December 31, 2006 and 2005, respectively. Mortgage loans in the process of origination represent commitments to originate loans at both fixed and variable rates.

     Letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Those guarantees are primarily issued to support public and private borrowing arrangements, including commercial paper, bond financing and similar transactions. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.

     The Company had total outstanding letters of credit amounting to $15,498,000 and $14,679,000 at December 31, 2006 and 2005, respectively.

     Lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Lines of credit generally have fixed expiration dates. Since a portion of the line may expire without being drawn upon, the total unused lines do not necessarily represent future cash requirements. Each customer’s creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary, is based on management’s credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property, plant and equipment, commercial real estate and residential real estate. Management uses the same credit policies in granting lines of credit as it does for on-balance sheet instruments.

     At December 31, 2006 and 2005, unused lines of credit borrowings aggregated approximately $187,066,000 and $182,983,000, respectively.

     Additionally, the Company periodically has excess funds, which are loaned to other banks as federal funds sold. At December 31, 2006 and 2005, federal funds sold totaling $5,375,000 and $11,401,000, respectively, were loaned to various banks, as approved by the Board of Directors, with the largest balance at any one bank being $5,375,000 and $8,401,000 on those dates, respectively.

F-27

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 19: SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

     The following table presents the unaudited results of operations for the past two years by quarter. See discussion on earnings per share in “Note 1: Nature of Operations and Summary of Significant Accounting Policies” in the Company’s Consolidated Financial Statements.

	2006								2005
	Fourth		Third		Second		First		Fourth		Third		Second		First
	Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter		Quarter
	(Dollars in thousands, except per share data)
Interest income	$	12,827	$	12,647	$	12,031	$	11,327	$	10,992	$	10,532	$	9,711	$	9,154
Interest expense		5,660		5,381		5,194		4,727		4,671		4,674		4,489		4,159
Net interest income		7,167		7,266		6,837		6,600		6,321		5,858		5,222		4,995
Provision for loan losses		50		540		590		75		75		—		—		155
Net interest income after provision for loan losses	$	7,117	$	6,726	$	6,247	$	6,525	$	6,246	$	5,858	$	5,222	$	4,840
Noninterest income		2,346		2,364		2,139		2,032		2,497		3,328		2,669		2,807
Noninterest expense		6,094		5,880		5,954		6,446		6,551		6,628		6,594		6,361
Income before income taxes		3,369		3,210		2,432		2,111		2,192		2,558		1,297		1,286
Income taxes		1,270		1,219		916		794		816		964		494		490
Net income	$	2,099	$	1,991	$	1,516	$	1,317	$	1,376	$	1,594	$	803	$	796
Net Income per Share Data
Basic	$	0.89	$	0.84	$	0.64	$	0.56	$	0.58	$	0.68	$	0.34	$	0.34
Diluted	$	0.87	$	0.83	$	0.63	$	0.55	$	0.57	$	0.67	$	0.34	$	0.34
Balance Sheet
Total assets	$	692,219	$	684,935	$	675,186	$	705,682	$	689,589	$	707,188	$	693,858	$	684,643
Total loans, net		522,409		527,864		515,922		522,492		496,439		507,018		505,243		513,616
Stockholders’ equity		53,820		52,195		49,437		47,742		46,255		45,124		43,343		42,179

     The above unaudited financial information reflects all adjustments that are, in the opinion of management, necessary to present a fair statement of the results of operations for the interim periods presented.

NOTE 20: SUBSEQUENT ACQUISITION

     On November 2, 2006, the Company signed a definitive Agreement and Plan of Merger for the acquisition of Unison Bancorp, Inc. (“Unison”), the holding company for Western National Bank of Lenexa, Kansas. The effective close date for this transaction was February 16, 2007. Under the terms of the merger agreement, shareholders of Unison received aggregate consideration of approximately $10.2 million in cash. The transaction was subject to the satisfaction of certain conditions, including regulatory and Unison shareholder approval. Subsequent to the acquisition, the Company intends to merge Western National Bank with and into the Bank of Blue Valley during the first half of 2007, pending regulatory approval. Western National Bank, with assets of approximately $40 million, is located at 95^th and Lackman Road in Lenexa, Kansas.

F-28

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 21: FDIC ONE-TIME ASSESSMENT CREDIT

     Effective November 17, 2006, the FDIC implemented a one-time credit of $4.7 billion to eligible financial institutions. The purpose of the credit is to recognize contributions made by certain institutions to capitalize the Bank Insurance Fund and Savings Association Insurance Fund, which have now been merged into the Deposit Insurance Fund. The Bank is an eligible institution and has received notice from the FDIC that its share of the credit is $192,000. This amount is not reflected in the accompanying financial statements as it represents contingent future credits against future insurance assessment payments. As such, the timing and ultimate recoverability of the one-time credit may change.

     Western National Bank is also an eligible institution and has received notice from the FDIC that its share of the credit is $80,000.

NOTE 22: CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

Condensed Balance Sheets
December 31, 2006 and 2005

	2006			2005
	(In thousands)
ASSETS
Cash and cash equivalents	$	922		$	964
Investments in subsidiaries:
Bank of Blue Valley		67,619			61,284
Blue Valley Building Corp.		8,141			7,918
Blue Valley Insurance Services, Inc.		—			16
BVBC Capital Trust II		232			232
BVBC Capital Trust III		356			356
Other assets		704			3,461
Total Assets	$	77,974		$	74,231
LIABILITIES
Long-term debt	$	3,381		$	3,981
Subordinated debentures		19,588			19,588
Other liabilities		1,185			4,407
Total Liabilities		24,154			27,976
STOCKHOLDERS’ EQUITY
Common stock		2,409			2,382
Additional paid-in capital		9,561			9,212
Retained earnings		41,982			35,782
Unearned compensation		—			(648	)
Accumulated other comprehensive loss, net of income tax credits of $(88) and $(315) at 2006 and 2005, respectively		(132	)		(473	)
Total Stockholders’ Equity		53,820			46,255
Total Liabilities and Stockholders’ Equity	$	77,974		$	74,231

F-29

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 22: CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (Continued)

Condensed Statements of Income
Years Ended December 31, 2006, 2005 and 2004

	2006			2005			2004
	(In thousands)
Income
Dividends from subsidiaries	$	2,104		$	52		$	11,328
Other income		65			64			7
		2,169			116			11,335
Expenses		2,252			2,572			2,514
Income (loss) before income taxes and equity in undistributed net income of subsidiaries		(83	)		(2,456	)		8,821
Credit for income taxes		(729	)		(835	)		(1,086	)
Income (loss) before equity in undistributed net income of subsidiaries		646			(1,621	)		9,907
Equity in undistributed (distributions in excess of) net income of subsidiaries		6,277			6,190			(7,977	)
Net income	$	6,923		$	4,569		$	1,930

F-30

BLUE VALLEY BAN CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2006, 2005 AND 2004

NOTE 22: CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY) (Continued)

Condensed Statements of Cash Flows
Years Ended December 31, 2006, 2005 and 2004

	2006			2005			2004
	(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	6,923		$	4,569		$	1,930
Items not requiring (providing) cash:
Deferred income taxes		(2,982	)		835			836
Equity in undistributed income of subsidiaries		(6,277	)		(6,190	)		7,977
Restricted stock earned		485			301			143
Changes in:
Other assets		5,866			(1,515	)		(1,338	)
Other liabilities		(3,996	)		624			451
Net cash provided by (used in) operating activities		19			(1,376	)		9,999
CASH FLOW FROM INVESTING ACTIVITIES
Capital contributed to subsidiary		—			(12	)		(8,727	)
Net cash used in investing activities		—			(12	)		(8,727	)
CASH FLOWS FROM FINANCING ACTIVITIES
Repayments of long-term debt		(600	)		(12,375	)		(425	)
Proceeds from long-term debt		—			11,856			—
Proceeds from sale of common stock		539			813			405
Net cash provided by (used in) financing activities		(61	)		294			(20	)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(42	)		(1,094	)		1,252
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR		964			2,058			806
CASH AND CASH EQUIVALENTS, END OF YEAR	$	922		$	964		$	2,058

F-31

EX-10.6

Exhibit 10.6

Execution Copy

AGREEMENT AND PLAN OF MERGER

BETWEEN

UNISON BANCORP, INC.,

BVBC ACQUISITION I, INC.

AND

BLUE VALLEY BAN CORP.

Dated as of November 2, 2006

TABLE OF CONTENTS

			Page
ARTICLE I — THE MERGER				1
	1.1	The Merger		1
	1.2	The Closing; Effective Time		1
	1.3	Effect of the Merger		2
	1.4	Articles of Incorporation; By Laws		2
	1.5	Directors and Officers		2
	1.6	Conversion of Securities; Dissenting Shares		2
	1.7	Exchange of Certificates		5
	1.8	Escrow Account		6
ARTICLE II — REPRESENTATIONS AND WARRANTIES OF SELLER				7
	2.1	Organization and Qualification; Subsidiaries		7
	2.2	Articles of Incorporation and By Laws		8
	2.3	Capitalization		8
	2.4	Authority		9
	2.5	No Conflict; Required Filings and Consents		10
	2.6	Compliance; Permits		10
	2.7	Banking Reports; Financial Statements		10
	2.8	Absence of Certain Changes or Events		11
	2.9	Absence of Litigation		13
	2.10	Employee Benefit Plans		14
	2.11	Title to Property		16
	2.12	Environmental Matters		16
	2.13	Absence of Agreements		17
	2.14	Taxes		17
	2.15	Insurance		19
	2.16	Brokers		19
	2.17	Seller Material Adverse Effect		19
	2.18	Material Contracts		19
	2.19	Opinion of Financial Advisor		20
	2.20	Vote Required		20
	2.21	Rights Agreement		20
	2.22	Capital Requirements		20
	2.23	Solvency		20
	2.24	Contracts		21
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE BANK				21
	3.1	Loans		21
	3.2	Reserve Ratio		21
	3.3	Capital Requirements		21

i

			Page
ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY				22
	4.1	Organization and Qualification; Subsidiaries		22
	4.2	Articles of Incorporation and By Laws		23
	4.3	Authority		23
	4.4	No Conflict; Required Filings and Consents		23
	4.5	Absence of Litigation		24
	4.6	Brokers		24
	4.7	Adequate Resources		24
	4.8	Company Material Adverse Effect		24
	4.9	CRA Rating		24
	4.10	Pro Forma Capital Requirements		24
ARTICLE V — COVENANTS OF SELLER				25
	5.1	Affirmative Covenants		25
	5.2	Negative Covenants		25
	5.3	Intentionally Omitted		28
	5.4	No Solicitation of Transactions		28
	5.5	Update Disclosure; Breaches		31
	5.6	Loan and Investment Policies		31
	5.7	Access and Information		32
	5.8	Confidentiality Agreement		32
	5.9	Rights Agreement		32
	5.10	State Takeover Laws		32
	5.11	Notification of Certain Matters		33
ARTICLE VI — COVENANTS OF THE COMPANY				33
	6.1	Affirmative Covenants		33
	6.2	Negative Covenants		33
	6.3	Breaches		33
	6.4	Confidentiality Agreement		33
ARTICLE VII — ADDITIONAL AGREEMENTS				34
	7.1	Meeting of Seller’s Stockholders		34
	7.2	Appropriate Action; Consents; Filings		34
	7.3	Directors’ and Officers’ Indemnification and Insurance		34
	7.4	Notification of Certain Matters		35
	7.5	Public Announcements		35
	7.6	Customer Retention		35
	7.7	Directorships		36
	7.8	Employees		36
ARTICLE VIII — CONDITIONS OF MERGER				37
	8.1	Conditions to Obligation of Each Party to Effect the Merger		37
	8.2	Additional Conditions to Obligations of the Company		37
	8.3	Additional Conditions to Obligations of the Seller		39

ii

			Page
ARTICLE IX — TERMINATION				40
	9.1	Termination		40
	9.2	Notice of Termination; Effect of Termination		42
	9.3	Fees and Expenses		42
ARTICLE X — GENERAL PROVISIONS				43
	10.1	Non Survival of Representations, Warranties and Agreements		43
	10.2	Notices		43
	10.3	Certain Definitions		44
	10.4	Headings		47
	10.5	Severability		47
	10.6	Entire Agreement		48
	10.7	Assignment		48
	10.8	Parties in Interest		48
	10.9	Governing Law		48
	10.10	Counterparts		48
	10.11	Time is of the Essence		48
	10.12	Specific Performance		48
	10.13	Interpretation		48

EXHIBITS

Exhibit 1.1	Plan of Merger
Exhibit 1.6(c)	Projected Merger Consideration
Exhibit 1.8	Escrow Agreement
Exhibit 2. l(d)	Retention and Severance Payments

iii

Index of Defined Terms

Acquisition Proposal	SECTION 5.4(c)(i)
Acquisition Transaction	SECTION 5.4(c)(ii)
Adjustment Statement	SECTION 1.6(f)(i)(bb)
Affiliate	SECTION 10.3
Agreement	PREAMBLE
Bank	SECTION 2.1(a)
BHCA	SECTION 2.1(a)
Business Day	SECTION 10.3
Certificate	SECTION 1.6(d)
Classified Loans	SECTION 10.3
Closing	SECTION 1.2(a)
Closing Date	SECTION 1.2(a)
Code	SECTION 10.3
Company	PREAMBLE
Company Approvals	SECTION 3.1(a)
Company Articles	SECTION 4.2
Company Bank Subsidiary	SECTION 4.1
Company Bylaws	SECTION 4.2
Company Disclosure Schedule	ARTICLE III
Company Material Adverse Effect	SECTION 4.1(c)
Company Reports	SECTION 3.6(a)
Company SEC Reports	SECTION 3.6(a)
Company’s Board of Directors	PREAMBLE
Confidentiality Agreement	SECTION 4.7
Consent	SECTION 10.3
Continuing Employees	SECTION 7.8(a)
Contract	SECTION 10.3
Control	SECTION 10.3
Default	SECTION 10.3
Dispute Notice	SECTION 1.6(f)(iii)
Dissenting Shares	SECTION 1.6(e)
Effect	SECTION 2.1(d)
Effective Time	SECTION 1.2(b)
Environmental Claims	SECTION 2.12(a)
Environmental Laws	SECTION 2.12(a)
ERISA	SECTION 2.10(a)
Exchange Act	SECTION 2.3
Exchange Agent	SECTION 1.7(a)
Exchange Fund	SECTION 1.7(a)
Existing D&O Policy	SECTION 5.l(d)
Escrow Account	SECTION 1.8
Escrow Agreement	SECTION 1.8
Escrow Deposit	SECTION 1.8
Escrow Consideration	SECTION 1.6(a)(ii)
FDIC	SECTION 2.1(b)

iv

Federal Reserve Board	SECTION 2.1(a)
Financial Statements	SECTION 2.7(b)
GAAP	SECTION 2.7(b)
Governmental Authority	SECTION 1.7(e)
Hazardous Materials	SECTION 2.12(a)
Indemnified Losses	SECTION 8.2(m)
Indemnified Parties	SECTION 6.4(d)
Indemnified Person	SECTION 8.2(m)
Insurance Coverage	SECTION 7.3(b)
Intellectual Property	SECTION 10.3
IRS	SECTION 2.10(a)
Kansas Secretary of State	SECTION 1.2(b)
KGCC	PREAMBLE
Knowledge	SECTION 10.3
Law	SECTION 10.3
Laws	SECTION 2.5(a)
Legal Requirements	SECTION 2.8(c)
Liability	SECTION 10.3
Lien	SECTION 10.3
Litigation	SECTION 10.3
Loan Property	SECTION 2.12(a)
Material Contracts	SECTION 2.19
Merger	PREAMBLE
Merger Consideration	SECTION 1.6(b)
Net Book Value	SECTION 10.3
Non Performing Loans	SECTION 10.3
OCC	SECTION 2.l(b)
OCC Agreement	SECTION 2.13
Option Agreement	SECTION 1.6(d)
Option Consideration	SECTION 1.6(b)
Order	SECTION 10.3
OSBC	SECTION 2.1(b)
Participation Facility	SECTION 2.12(a)
Patriot Act	SECTION 2.9(d)
Per Share Consideration	SECTION 1.6(a)
Permit	SECTION 10.3
Person	SECTION 10.3
Permitted Liens	SECTION 10.3
Plans	SECTION 2.10(a)
Proxy Statement	SECTION 6.1
Regulatory Authorities	SECTION 10.3
Rights	SECTION 10.3
Reserve Ratio	SECTION 10.3
Retention and Severance Payments	SECTION 2.1(d)
Rights Agreement	SECTION 2.21
Rights Agreement Amendment	SECTION 2.21

v

SEC	SECTION 3.6(a)
Section 409 A	SECTION 2.10(e)
Securities Act	SECTION 4.4(b)
Seller	PREAMBLE
Seller Approvals	SECTION 2.1(b)
Seller Articles	SECTION 2.2
Seller By Laws	SECTION 2.2
Seller Common Stock	SECTION 1.6(a)
Seller Disclosure Schedule	ARTICLE II
Seller Intellectual Property	SECTION 2.8(c)
Seller Material Adverse Effect	SECTION 2.1(d)
Seller Option	SECTION 1.6(b)
Seller Options	SECTION 1.6(b)
Seller Reports	SECTION 2.7(a)
Seller Subsidiaries	SECTION 2.1(a)
Seller Subsidiary	SECTION 2.1 (a)
Seller’s Board of Directors	PREAMBLE
Seller’s Board of Directors	PREAMBLE
Settlement Balance Sheets	SECTION 1.6(f)(i)(aa)
Sub	PREAMBLE
Sub Articles	SECTION 1.4
Sub By Laws	SECTION 1.4
Sub’s Board of Directors	PREAMBLE
Subsidiaries	SECTION 10.3
Subsidiary	SECTION 10.3
Subsidiary Organizational Documents	SECTION 2.2
Superior Offer	SECTION 5.4(c)(iii)
Surviving Corporation	SECTION 1.1
Tax	SECTION 2.14(a)(ii)
Tax Returns	SECTION 2.14
Taxes	SECTION 2.14(a)(ii)
Terminated Employee	SECTION 7.8(a)
Termination Fee	SECTION 8.3(b)
Tier 1 Ratio	SECTION 10.3
Title IV Plan	SECTION 2.10(b)

vi

AGREEMENT AND PLAN OF MERGER

     AGREEMENT AND PLAN OF MERGER, dated as of November 2, 2006 (the “Agreement”), among Unison Bancorp, Inc., a Kansas corporation (the “Seller”), Blue Valley Ban Corp., a Kansas corporation (the “Company”), and BVBC Acquisition I, Inc., a Kansas corporation (the “Sub”).

     WHEREAS, the Boards of Directors of the Company (the “Company’s Board of Directors”), the Seller (the “Seller’s Board of Directors”), and the Sub (the “Sub’s Board of Directors”) have each determined that it is advisable to and in the best interests of their respective stockholders for the Sub to merge with and into the Seller, with the Seller being the surviving corporation in such merger (the “Merger”), upon the terms and subject to the conditions set forth herein and in accordance with the Kansas General Corporation Code (the “KGCC”);

     WHEREAS, the Company’s Board of Directors, the Seller’s Board of Directors and the Sub’s Board of Directors have each approved the Merger of the Sub with and into the Seller, upon the terms and subject to the conditions set forth herein, and approved and adopted this Agreement; and

     NOW, THEREFORE, in consideration of the foregoing premises and the representations, warranties and agreements contained herein, and subject to the terms and conditions set forth herein, the parties hereto hereby agree as follows:

ARTICLE I — THE MERGER

     1.1 The Merger.

     Upon the terms and subject to the conditions set forth in this Agreement, and in accordance with the KGCC and the Plan of Merger attached hereto as Exhibit 1.1, at the Effective Time the Sub shall be merged with and into the Seller. As a result of the Merger, the separate corporate existence of the Sub shall cease and the Seller shall continue as the surviving corporation of the Merger (the “Surviving Corporation”).

     1.2 The Closing; Effective Time.

          (a) The closing of the Merger and the transactions contemplated hereby (the “Closing”) shall be held at such time, date (the “Closing Date”) and location as may be mutually agreed by the parties. In the absence of such agreement, the Closing shall be held at the offices of Stinson Morrison Hecker LLP, 1201 Walnut, Kansas City, Missouri, commencing at 9:00 a.m., Kansas City time, on a date specified by either party upon five (5) Business Days’ written notice and not later than ten (10) days following the last to occur of the following events: (a) receipt of all consents and approvals of government Regulatory Authorities legally required to consummate the Merger and the expiration of all statutory waiting periods; and (b) approval of this Agreement and the Merger by the Seller’s stockholders. Scheduling or commencing the Closing shall not constitute a waiver of the conditions set forth in ARTICLE VII by either the Company, the Sub or the Seller.

          (b) As promptly as practicable after the Closing, the parties hereto shall cause the Merger to be consummated by filing a certificate of merger and articles of merger, as necessary, and any other required documents, with the Secretary of State of the State of Kansas (the “Kansas Secretary of State”), in such form as required by, and executed in accordance with the relevant provisions of, the KGCC (the date and time of such filing or such date and time as the Company and the Seller shall agree and specify in the certificate of merger and articles of merger are referred to herein as the “Effective Time”).

     1.3 Effect of the Merger. At the Effective Time, the effect of the Merger will be as provided in this Agreement and the applicable provisions of the KGCC. Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, except as otherwise provided herein, all the property, rights, privileges, powers and franchises of the Sub and the Seller shall vest in the Surviving Corporation, and all debts, liabilities and duties of the Sub and the Seller shall become the debts, liabilities and duties of the Surviving Corporation.

     1.4 Articles of Incorporation; By Laws. At the Effective Time, the Sub’s Articles of Incorporation, as amended (the “Sub Articles”), and the Sub’s By Laws, as amended (the “Sub By Laws”), as in effect immediately prior to the Effective Time, shall be the Articles of Incorporation and the By Laws of the Surviving Corporation.

     1.5 Directors and Officers. At the Effective Time, the directors of the Sub immediately prior to the Effective Time shall be the initial directors of the Surviving Corporation, each to hold office in accordance with the Articles of Incorporation and By Laws of the Surviving Corporation. At the Effective Time, the officers of the Sub immediately prior to the Effective Time, shall be the initial officers of the Surviving Corporation, in each case until their respective successors are duly elected or appointed.

     1.6 Conversion of Securities; Dissenting Shares.

          (a) At the Effective Time, by virtue of the Merger and without action on the part of the Company, the Sub or the Seller, each share of the common stock, $1.00 par value, of the Seller (“Seller Common Stock”), issued and outstanding immediately prior to the Effective Time, other than (i) shares of Seller Common Stock held in the treasury of the Seller, and (ii) Dissenting Shares (such shares of Seller Common Stock (excluding those shares described in clause (i) and (ii)) are referred to herein as the “Shares”), will cease to be outstanding and will be converted into the right to receive:

     (i) TWELVE DOLLARS AND 75/100 ($12.75) (the “Per Share Consideration”); and

     (ii) cash in an amount equal to the quotient of (a) the remainder of the Escrow Deposit, if any, and all proceeds thereon distributed upon closing the Escrow Account divided by (b) (i) the sum of 738,287 plus all Seller Options with an exercise price below $13.25 which are outstanding and unexercised at the Effective Time plus any Shares issued pursuant to an exercise of a Seller Option before the Effective Time minus (ii) any Seller Options that lapse prior to the Effective Time (the “Escrow Consideration”). The Escrow Consideration will be

2

payable to the Seller’s shareholders in accordance with the procedures outlined in the Escrow Agreement attached as Exhibit 1.8.

          (b) At the Effective Time, each option granted by the Seller pursuant to certain inducement grants to purchase Seller Common Stock (each, a “Seller Option” and collectively, the “Seller Options”) that is outstanding and unexercised immediately prior to the Effective Time, will, by virtue of the Merger and without any action on the part of the Seller or the holder thereof, be converted into the right to receive an amount of cash equal to the excess, if any, of the Per Share Consideration over the exercise price of each such Seller Option, minus any applicable withholding taxes (the “Option Consideration”). Each unexercised Seller Option with an exercise price below $13.25 will also receive the Escrow Consideration, if any, minus any applicable withholding taxes, to be paid in accordance with the terms of the Escrow Agreement.

          (c) The aggregate Per Share Consideration and the aggregate Option Consideration are referred to collectively herein as the “Merger Consideration.” Each of the Per Share Consideration, the Option Consideration and the Merger Consideration is subject to adjustment as set forth in this Agreement. Exhibit 1.6(c) sets forth the projected Merger Consideration based on the number of Shares and Seller Options.

          (d) At the Effective Time, each share of Seller Common Stock held by the Seller as treasury stock immediately prior to the Effective Time shall be canceled and extinguished without any conversion thereof.

          (e) At the Effective Time, by virtue of the Merger and without any action on the part of the Seller, the Company, the Sub or the holders thereof, all shares of Seller Common Stock and Seller Options shall no longer be outstanding and shall automatically be canceled and shall cease to exist, and each certificate (a “Certificate”) previously representing any Seller Common Stock and each agreement (an “Option Agreement”) previously representing any such Seller Options shall thereafter represent only the right to receive the Per Share Consideration or the Option Consideration, as applicable, and the Escrow Consideration, if any. Payments made in respect of the Seller Options shall be in full satisfaction of all obligations under the Option Agreements.

          (f) Notwithstanding anything in this Agreement to the contrary, shares of Seller Common Stock which are issued and outstanding immediately prior to the Effective Time and which are held by stockholders who have validly exercised appraisal rights available under Section 17 6712 of the KGCC (the “Dissenting Shares”) shall not be converted into or be exchangeable for the right to receive the Per Share Consideration in accordance with this Section 1.6, unless and until such holders shall have failed to perfect or shall have effectively withdrawn or lost their appraisal rights under the KGCC. Dissenting Shares shall be treated in accordance with Section 17 6712 of the KGCC, if and to the extent applicable. If any such holder shall have failed to perfect or shall have effectively withdrawn or lost such appraisal rights, such holder’s shares of Seller Common Stock shall thereupon be converted into and become exchangeable only for the right to receive, as of the Effective Time, the Per Share Consideration in accordance with this Section 1.6. The Seller shall give the Company (a) prompt notice of each and every notice of a stockholder’s intent to exercise appraisal rights for the stockholder’s shares of Seller Common Stock, attempted withdrawals of any such notice, and any

3

other instruments delivered by a stockholder to the Seller in connection with the exercise of that stockholder’s appraisal rights pursuant to the KGCC; and (b) the opportunity to participate in all negotiations and proceedings with respect to demands for appraisal under the KGCC. The Seller shall not, except with the prior written consent of the Company, voluntarily make any payment with respect to, offer to settle or settle, or approve any withdrawal of any demands for “fair value” under Section 17-6712 of the KGCC.

          (g) Adjustment of Merger Consideration.

     (i) At least fifteen (15) days prior to the Closing Date, Seller shall prepare and deliver to the Company, the following items:

(aa)	a consolidated balance sheet of Seller and Seller Subsidiaries, as of the end of the calendar month immediately preceding such delivery date, provided that such calendar month shall not be more than sixty (60) days prior to the Closing Date (the “Settlement Balance Sheets”), such Settlement Balance Sheets to be certified by the chief financial officer of Seller; and
(bb)	a Closing Adjustment Statement (the “Adjustment Statement”) indicating any adjustments to be made to the Merger Consideration pursuant to this Agreement.

     (ii) In the event that such Settlement Balance Sheets reveal that the Net Book Value of the Seller on a consolidated basis is less than $5,100,000, the Merger Consideration shall be decreased by an amount equal to the difference between $5,100,000 and the Net Book Value shown on such Settlement Balance Sheets. Upon adjustment of the Merger Consideration, the Per Share Consideration, and the Option Consideration will be adjusted to reflect such adjustment(s).

     (iii) Seller shall permit the Company and its independent certified public accountant to review (at the Company’s expense) all accounting records and work papers and computations used in the preparation of the Settlement Balance Sheets and the Adjustment Statement. If the Company does not give a dispute notice (a “Dispute Notice”) as to such Settlement Balance Sheets and the Adjustment Statement within ten (10) days after receipt thereof, the Merger Consideration as adjusted and shown in the Adjustment Statement shall be deemed final. If the Company gives the Dispute Notice within the time period indicated above, the parties shall work to resolve any dispute. If the dispute cannot be resolved prior to the Effective Date, the Effective Date shall be extended pending arbitration of the dispute by Rubin, Brown. Costs of such arbitration shall be borne equally by the parties. The parties shall submit the claim to arbitration within ten (10) days after reaching impasse on the dispute. The arbitration decision shall be binding upon the parties and may be submitted

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by either party to the appropriate court in the State of Kansas for enforcement thereof.

     1.7 Exchange of Certificates.

          (a) Exchange Agent. At or prior to the Effective Time, the Company will deposit, or cause to be deposited, with UMB Bank, N.A. (the “Exchange Agent”), for the benefit of the holders of Certificates and Option Agreements the Merger Consideration in cash sufficient for the Exchange Agent to make full payment of the Merger Consideration (the “Exchange Fund”). There shall be a written agreement between the Sub, the Company and the Exchange Agent in which the Exchange Agent expressly undertakes, on reasonably customary terms, the obligation to pay the Merger Consideration, which Exchange Agreement shall be subject to Seller’s reasonable prior review and approval.

          (b) Exchange Procedures. As soon as reasonably practicable after the Effective Time, the Exchange Agent shall mail to each holder of record of Certificates and Option Agreements, as applicable, (i) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to the Certificates (and shares underlying the Seller Options) shall pass, only upon delivery of the Certificates or the Option Agreements to the Exchange Agent and shall be in such form and have such other provisions as the Company may reasonably specify) and (ii) instructions for use in effecting the surrender of the Certificates or the Option Agreements in exchange for the Per Share Consideration or the Option Consideration, as the case may be. Upon surrender of a Certificate for cancellation to the Exchange Agent together with such letter of transmittal, duly executed, the holder of such Certificate shall be entitled to receive in exchange therefor the Per Share Consideration which such holder has the right to receive in respect of the Certificate surrendered pursuant to the provisions of this ARTICLE I (after taking into account all Shares then held by such holder) and the Certificate so surrendered will be canceled (retaining the right to receive any Escrow Consideration paid out upon liquidation of the Escrow Account). Upon surrender of an Option Agreement for cancellation to the Exchange Agent together with such letter of transmittal, duly executed, the holder of such Seller Option shall be entitled to receive in exchange therefor the Option Consideration which such holder has the right to receive in respect of the Option Agreement surrendered (after taking into account all Seller Options then held by such holder), and the Option Agreement so surrendered will be canceled (retaining the right to receive any Escrow Consideration paid out upon liquidation of the Escrow Account). The right of holders of Shares and holders of Seller Options to receive the Escrow Consideration survives the surrender and cancellation of a Certificate or an Option Agreement to receive the Per Share Consideration or the Option Consideration, respectively.

          (c) Unregistered Transfers; Lost, Stolen or Destroyed Certificates. In the event of a transfer of ownership of Shares which is not registered in the transfer records of the Seller, a transferee may exchange the Certificate representing such Shares for the Per Share Consideration as provided in this ARTICLE I if the Certificate representing such Shares is presented to the Exchange Agent, accompanied by all documents required to evidence and effect such transfer, and by evidence that any applicable stock transfer taxes have been paid. In the event any Certificate has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and the posting by

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such person of a bond in such amount as the Company may direct as indemnity against any claim that may be made against it or the Exchange Agent with respect to such Certificate, the Exchange Agent will issue in exchange for such lost, stolen or destroyed Certificate the Per Share Consideration, which such holder would have had the right to receive in respect of such lost, stolen or destroyed Certificate. Until surrendered as contemplated by this Section, each Certificate (other than Certificates representing Shares owned by the Company or any Company subsidiary, and Certificates representing Dissenting Shares) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Per Share Consideration and the Escrow Consideration, if any.

          (d) No Further Rights in the Shares other than Escrow Consideration. The Merger Consideration issued and paid upon conversion of the Shares and the Seller Options in accordance with the terms hereof shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to such Shares and the Seller Options, as applicable, other than the right of the Shares and the Seller Options to receive the Escrow Consideration in accordance with the terms of the Escrow Agreement, which right continues until termination of the Escrow Account and payment of the Escrow Consideration, if any.

          (e) Termination of Exchange Fund. Any portion of the Exchange Fund which remains undistributed to the former stockholders of the Seller for six (6) months after the Effective Time shall be delivered to the Company, upon demand, and any former stockholders of the Seller who have not theretofore complied with this ARTICLE I shall thereafter look only to the Company to claim the Per Share Consideration or the Option Consideration, in each case without interest thereon. Any portion of the Exchange Fund remaining unclaimed by holders of Shares as of a date which is immediately prior to such time as such amounts would otherwise escheat to or become property of any United States federal, state or local or any foreign government, or political subdivision thereof, or any multinational organization or authority or any authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal (or any department, bureau or division thereof), or any arbitrator or arbitral body (each a “Governmental Authority”) shall, to the extent permitted by applicable Law, become the property of the Surviving Corporation free and clear of any claims or interest of any Person previously entitled thereto.

          (f) No Liability. None of the Company, the Sub or the Seller is liable to any former holder of Shares for any such Shares or cash or other payment delivered to a public official pursuant to any abandoned property, escheat or similar laws.

     1.8 Escrow Account. At Closing, the Company, the Sub, and the Seller must enter into an Escrow Agreement with UMB Bank, N.A. (“Escrow Agent”), substantially in the form of Exhibit 1.8 attached hereto (the “Escrow Agreement”), pursuant to which the Company will deposit cash into escrow in an amount equal to the product of (a) $.50 multiplied by (b) the sum of 738,287 plus all Seller Options with an exercise price below $13.25 which are outstanding and unexercised at the Effective Time plus any Shares issued pursuant to an exercise of a Seller Option before the Effective Time minus (ii) any Seller Options that lapse prior to the Effective Time (the “Escrow Deposit”). Such account is the “Escrow Account.” The Seller will provide

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the Company a written notice of the number calculated pursuant to clause (b) above no later than five Business Days before Closing.

ARTICLE II — REPRESENTATIONS AND WARRANTIES OF SELLER

     Except as disclosed in the disclosure schedule (the “Seller Disclosure Schedule”) delivered by Seller to the Company and the Sub prior to the execution of this Agreement (which schedule sets forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the Seller Disclosure Schedule relates); provided, however, that any information set forth in one section or subsection of the Seller Disclosure Schedule will be deemed to apply to each other Section or subsection of this Agreement to which its relevance is reasonably apparent, Seller hereby represents and warrants to the Company as follows:

     2.1 Organization and Qualification; Subsidiaries.

          (a) The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Kansas and a registered bank holding company under the Bank Holding Company Act of 1956, as amended (the “BHCA”). The Seller is also subject to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). Seller’s banking subsidiary, Western National Bank, is a duly organized and validly existing national banking association (the “Bank”). Each other subsidiary of the Seller (a “Seller Subsidiary,” and together with the Bank, the “Seller Subsidiaries”) is a corporation, limited liability company, limited partnership, or trust duly organized, validly existing and in good standing under the laws of the state of its incorporation or organization. Each of the Seller and the Seller Subsidiaries has the requisite corporate power and authority to own, lease and operate the properties it now owns or holds under lease and to carry on its business as it is now being conducted, is duly qualified or licensed as a foreign business entity to do business, and is in good standing, in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its business makes such qualification or licensing necessary, except for such jurisdictions in which the failure to be so qualified or licensed would not, individually or in the aggregate, have a Seller Material Adverse Effect.

          (b) Each of the Seller and the Seller Subsidiaries has all material franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“Seller Approvals”) necessary to own, lease and operate their properties and to carry on its business as it is now being conducted, including all required authorizations from the Federal Reserve Board, the Office of the Comptroller of the Currency (the “OCC”), the Federal Deposit Insurance Corporation (the “FDIC”), and the Office of the Kansas State Bank Commissioner (the “OSBC”), and neither the Seller nor any Seller Subsidiary has received any notice of proceedings relating to the revocation or modification of any Seller Approvals, except in each case where such revocations or modifications, or the failure to have such Seller Approvals would not, individually or in the aggregate, have a Seller Material Adverse Effect.

          (c) A true and complete list of the Seller Subsidiaries, together with the (i) Seller’s percentage ownership of each Seller Subsidiary, (ii) laws under which the Seller Subsidiary is incorporated or organized, and (iii) Seller Subsidiary lines of business, is set forth

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in the Seller Disclosure Schedule. The Seller or one or more of the Seller Subsidiaries owns beneficially and of record all of the outstanding shares of capital stock or other equity interests of each of the Seller Subsidiaries. Except for the Seller Subsidiaries, the Seller does not directly or indirectly own any capital stock or equity interest in, or any interests convertible into or exchangeable or exercisable for any capital stock or equity interest in, any corporation, partnership, joint venture or other business association or entity, other than in the ordinary course of business, and in no event in excess of 5% of the outstanding equity securities of such entity.

          (d) As used in this Agreement, the term “Seller Material Adverse Effect” means, any effect, change, event, fact, condition, occurrence, or development (each an “Effect”), that, individually or in the aggregate with other Effects, (i) is material and adverse to the business, assets, liabilities, results of operations or financial condition of the Seller and Seller Subsidiaries taken as a whole, or (ii) materially impairs the ability of the Seller to consummate the transactions contemplated hereby. The term “Seller Material Adverse Effect” does not include the impact of (a) changes in laws and regulations or interpretations thereof that are generally applicable to the banking industry, (b) changes in generally accepted accounting principles that are generally applicable to the banking industry, (c) expenses reasonably incurred in connection with the transactions contemplated hereby, which include, without limitation, legal counsel fees payable to Stinson Morrison Hecker LLP, investment banking fees to Hovde Financial, Inc., and accounting fees to KPMG, LLP, (d) changes attributable to or resulting from changes in general economic conditions affecting banks or their holding companies generally, (e) any Effect to the extent resulting from the announcement of this Agreement or the transactions contemplated thereby, (f) payments by the Seller to reimburse certain directors and former directors for their legal fees incurred in connection with defense of breach of fiduciary duty claims by the OCC, (g) payment of those expenses related to the transactions contemplated by this Agreement which are listed on the Seller Disclosure Schedule, (h) payment of any amounts due to, or the provision of any other benefits to, any officers or employees under employment contracts, non competition agreements, employee benefit plans, severance agreements or other arrangements in existence as of the date of or contemplated by this Agreement, provided that the payment of any such amounts or the provision of any such benefits shall be made in the ordinary course consistent with past practices, (i) the taking of any action by the Seller approved or consented to in writing by the Company, (j) any action taken or not taken by the Seller or Seller’s Subsidiaries in accordance with the terms and covenants contained in this Agreement or (k) those retention bonus payments and severance payments made to certain employees of the Seller which are listed on Exhibit 2.1(d) hereto (the “Retention and Severance Payments”).

     2.2 Articles of Incorporation and By Laws. The Seller has made available to the Company a complete and correct copy of the Seller’s Articles of Incorporation and the Seller’s By Laws, as amended or restated (“Seller Articles” and “Seller By Laws,” respectively), and the Articles of Incorporation and the By Laws, or other organizational documents, as the case may be, of each Seller Subsidiary (the “Subsidiary Organizational Documents”). The Seller Articles, Seller By Laws and Subsidiary Organizational Documents are in full force and effect. Neither the Seller nor any Seller Subsidiary is in breach of any of the provisions of the Seller Articles, Seller By Laws or Subsidiary Organizational Documents.

     2.3 Capitalization. The authorized capital stock of the Seller consists of 1,250,000 shares of Seller Common Stock. As of August 31, 2006, (i) 738,287 shares of Seller Common

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Stock were issued and outstanding, all of which were duly authorized, validly issued, fully paid and non assessable, and not issued in violation of any preemptive right of any Seller stockholder, and (ii) 143,350 shares of Seller Common Stock were subject to Seller Options. Except as set forth in clause (ii) above and in the Rights Agreement (as defined in Section 2.21 below), there are no outstanding Rights relating to the issued or unissued capital stock or other equity interests of the Seller or any Seller Subsidiary or obligating the Seller or any Seller Subsidiary to issue or sell any shares of capital stock or other equity interests of, or other equity interests in, the Seller or any Seller Subsidiary. No shares of Seller Common Stock are fractional shares. There are no obligations, contingent or otherwise, of the Seller or any Seller Subsidiary to repurchase, redeem or otherwise acquire any shares of Seller Common Stock or the capital stock or other equity interests of any Seller Subsidiary or to provide funds to or make any investment (in the form of a loan, capital contribution or otherwise) in any Seller Subsidiary or any other entity, except for loan commitments and other funding obligations entered into in the ordinary course of business. Each of the outstanding shares of capital stock or other equity interests of each Seller Subsidiary are duly authorized, validly issued, fully paid and non assessable, and not issued in violation of any preemptive rights of any Seller Subsidiary stockholder or other equity holder, and such shares or other equity interests owned by the Seller or another Seller Subsidiary are owned free and clear of all security interests, liens, claims, pledges, agreements, limitations of the Seller’s voting rights, charges or other encumbrances of any nature whatsoever. Seller is not a reporting company, and is not required to be a reporting company under the Securities Exchange Act of 1934 (the “Exchange Act”).

     2.4 Authority. The Seller has the requisite corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby (other than, with respect to the Merger, the approval and adoption of this Agreement by the Seller’s stockholders in accordance with the KGCC and the Seller Articles and Seller By Laws). The execution and delivery of this Agreement by the Seller and the consummation by the Seller of the transactions contemplated hereby have been duly and validly authorized by all necessary corporate action on the part of the Seller, including, without limitation, the Seller’s Board of Directors. As of the date of this Agreement, the Seller’s Board of Directors, at a meeting duly called, constituted and held, has, by the vote of a sufficient number of directors present at the meeting, determined: (a) that this Agreement and the transactions contemplated thereby, including the Merger, are advisable to, fair to, and in the bests interests of the Seller and its stockholders; (b) to submit this Agreement for approval and adoption by the stockholders of the Seller and to declare the advisability of this Agreement; and (c) to recommend that the stockholders of the Seller adopt and approve this Agreement and the transactions contemplated thereby, including the Merger, and direct that this Agreement be submitted for consideration by the stockholders of the Seller at the Seller Stockholders’ Meeting (the “Seller’s Board of Directors Recommendation”). No other corporate proceedings on the part of Seller are necessary to authorize this Agreement or to consummate the transactions contemplated hereby (other than, with respect to the Merger, the approval and adoption of this Agreement by the Seller’s stockholders in accordance with the KGCC and the Seller Articles and Seller By-laws). This Agreement has been duly executed and delivered by, and constitutes a valid and binding obligation of the Seller and assuming due authorization, execution and delivery by the Company and the Sub, enforceable against the Seller in accordance with its terms, except as enforcement may be limited by laws affecting insured depository institutions, general

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principles of equity whether applied in a court of law or a court of equity and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally.

     2.5 No Conflict; Required Filings and Consents.

          (a) The execution and delivery of this Agreement by the Seller do not, and the performance of this Agreement and the transactions contemplated hereby by the Seller will not, (i) conflict with or violate the Seller Articles or Seller By Laws or the Subsidiary Organizational Documents, (ii) conflict with or violate any federal, state or local statute, ordinance, rule, regulation, order, judgment or decree (collectively, “Laws”) applicable to the Seller or any Seller Subsidiary or by which its or any of their respective properties is bound or affected, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Seller or any Seller Subsidiary pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Seller or any Seller Subsidiary is a party or by which the Seller or any Seller Subsidiary or its or any of their respective properties is bound or affected, except in the case of clauses (ii) and (iii), above, for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Seller Material Adverse Effect.

          (b) The execution and delivery of this Agreement by the Seller do not, and the performance of this Agreement by the Seller will not, require any consent, approval, authorization or permit of, or filing with or notification to, any domestic governmental or regulatory authority except (i) for applicable requirements of the BHCA, the banking laws and regulations of the Federal Reserve Board, OCC, the OSBC, the FDIC, and the filing and recordation of appropriate merger or other documents as required by the KGCC and other applicable Laws, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such filings or notifications, would not prevent or delay consummation of the Merger or otherwise prevent the Seller from performing its obligations under this Agreement, and would not have a Seller Material Adverse Effect. Neither the Seller nor any Seller Subsidiary are subject to any foreign Governmental Authority or foreign law.

     2.6 Compliance; Permits. Neither the Seller nor any Seller Subsidiary is in conflict with, or in default or violation of, (i) any Law applicable to the Seller or any Seller Subsidiary or by which its or any of their respective properties is bound or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Seller or any Seller Subsidiary is a party or by which the Seller or any Seller Subsidiary or its or any of their respective properties is bound or affected, except for any such violations, conflicts or defaults which would not, individually or in the aggregate, have a Seller Material Adverse Effect.

     2.7 Banking Reports; Financial Statements.

          (a) The Seller and each Seller Subsidiary have filed all forms, reports and documents required to be filed with the Federal Reserve Board, the FDIC, the OCC, and any

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other applicable federal or state securities or banking authorities (all such reports and statements are collectively referred to as the “Seller Reports”). The Seller Reports were prepared in all material respects in accordance with the requirements of applicable Law and did not at the time they were filed, after giving effect to any amendment thereto filed prior to the date hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, except that information as of a later date (but before the date of this Agreement) will be deemed to modify information as of an earlier date.

          (b) True, correct and complete copies of (i) audited financial statements of the Seller and Seller Subsidiaries for the period ending December 31, 2004, (ii) unaudited financial statements of Seller and Seller Subsidiaries for the period ending December 31, 2005, (iii) call reports for Seller and Seller Subsidiaries for the four quarters of 2005 and the first two quarters of 2006, and (iv) FRY-9 SP reports for Seller for 2005 and the first half of 2006 (collectively, the “Financial Statements”) have been provided and made available to the Sub and the Company. Each of the Financial Statements (including, if applicable, any related notes thereto) have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or required by reason of a concurrent change to GAAP) and each fairly presents in all material respects the consolidated financial position of the Seller and the Seller Subsidiaries as of the respective dates thereof and the consolidated results of its operations and cash flows and changes in financial position for the periods indicated, except that any unaudited interim financial statements provided as part of the Financial Statements do not contain the footnotes required by GAAP, and were or are subject to normal and recurring year end adjustments, which were not or are not expected to be material in amount, either individually or in the aggregate.

          (c) Except for those liabilities that are reflected or fully reserved against on the consolidated balance sheet of the Seller as of December 30, 2005, and for liabilities incurred in the ordinary course of business consistent with past practice since such date, neither the Seller nor any Seller Subsidiary has incurred any liability of any nature whatsoever (whether absolute, accrued, contingent or otherwise due or to become due), that are required to be disclosed on a balance sheet prepared in accordance with GAAP, that, either alone or when combined with all similar liabilities, has had, or would reasonably be expected to have, a Seller Material Adverse Effect.

     2.8 Absence of Certain Changes or Events.

          (a) Since June 30, 2006 to the date of this Agreement, the Seller and the Seller Subsidiaries have conducted their businesses only in the ordinary course and in a manner consistent with past practice and, since June 30, 2006, there has not been (i) any change in the financial condition, results of operations or business of the Seller and any of the Seller Subsidiaries which has had a Seller Material Adverse Effect, (ii) any damage, destruction or loss with respect to any assets of the Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect, (iii) any change by the Seller in its accounting methods, principles or practices, (iv) any revaluation by the Seller of any of its assets in any material respect, (v) any declaration setting aside or payment of any dividends or distributions in respect of shares of

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Seller Common Stock or any redemption, purchase or other acquisition of any of its securities or any of the securities of any Seller Subsidiary, (vi) any increase in the wages, salaries, bonuses, compensation, pension, or other fringe benefits payable to any executive officer, employee, or director or any grant of any severance or termination pay, except in the ordinary course of business consistent with past practices, (vii) any strike, work stoppage, slow down or other labor disturbance, or (viii) the execution of any collective bargaining agreement, contract or other agreement or understanding with a labor union or organization, or (ix) any union organizing activities.

          (b) Neither Seller nor any Seller Subsidiary is a party to any joint marketing or other affinity marketing program with a third party.

          (c) The Seller and Seller Subsidiaries own, or are validly licensed or otherwise have the enforceable right to use, in each case free and clear of all Liens except Permitted Liens, all Intellectual Property used in the conduct of the business of the Seller and Seller Subsidiaries as currently conducted that is material to the business of the Seller and the Seller Subsidiaries taken as a whole (the “Seller Intellectual Property”). Neither the Seller nor any Seller Subsidiary has entered into any agreements granting sole or exclusive right to any material Intellectual Property. Except as would not reasonably be expected to have a Seller Material Adverse Effect, all patents and patent applications, trademark registration and applications for registration and domain named owned by the Seller or Seller Subsidiaries are subsisting and unexpired and, to Seller’s Knowledge, valid. No claims are pending or, to Seller’s Knowledge, threatened, (a) challenging the ownership, enforceability, validity, or use by the Seller or any Seller Subsidiary of any Seller Intellectual Property, or (b) alleging that the Seller or any Seller Subsidiary is violating, misappropriating or infringing or otherwise adversely affecting the rights of any person with regard to any Seller Intellectual Property or the use of any Seller Intellectual Property (including any claim that the Seller or any Seller Subsidiary should license or refrain from using any Intellectual Property of a third party) other than claims that would not be reasonably expect to have a Seller Material Adverse Effect. Except as would not reasonably be expect to have a Seller Material Adverse Effect, to the Knowledge of Seller, (i) no Person is infringing, violating, or misappropriating the rights of the Seller or any Seller Subsidiary with respect to any Seller Intellectual Property, and (ii) the operation of the business of the Seller and the Seller Subsidiaries as currently conducted does not violate, misappropriate, or infringe the Intellectual Property of any other Person. Except as would not reasonably be expected to have a Seller Material Adverse Affect, the Seller and the Seller Subsidiaries take and have taken commercially reasonable actions to maintain and preserve the material Intellectual Property used in the conduct of their business as currently conducted. The Seller and the Seller Subsidiaries are in actual possession of or have necessary control over the source code and object code for all material software that they own or propose to own (the “Owned Software”). None of the Owned Software is subject to any contract or other obligation that has or would require the Seller or a Seller Subsidiary to divulge to any third party any source code or trade secret that is part of Owned Software, to license Owned Software for the purpose of making derivative works, or to redistribute Owned Software to any third party at no or minimal charge. Except as would not be material to the business of the Seller and the Seller Subsidiaries taken as a whole, the Seller and the Seller Subsidiaries maintain policies and procedures regarding data security and privacy that are commercially reasonable and, in any event, in compliance with all their obligations to their customers and under applicable laws, statutes, standards, ordinances, codes,

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rules, and regulations (the “Legal Requirements”). Except as would not be material to the business of the Seller and the Seller Subsidiaries taken as a whole, there have been no security breaches relating to, violations of any security policy regarding or any unauthorized access or unauthorized use of any data used in the business of the Seller and the Seller Subsidiaries. To the Seller’s Knowledge, there have been no events of series of events involving the Seller or Seller Subsidiaries that have or would reasonably be expected to trigger a consumer personal information privacy breach reporting requirement. Except as would not be material to the business of the Seller and the Seller Subsidiaries taken as a whole, the use and dissemination of any and all data and information concerning individuals by their businesses is in compliance with all applicable privacy policies, terms of use, customer agreements, and Legal Requirements. The transactions contemplated to be consummated hereunder as of the Closing Date will not violate any privacy policy, terms of the use, customer agreements or Legal Requirements relating to the use, dissemination or transfer of any such data or information.

     2.9 Absence of Litigation.

          (a) There is no Litigation or other proceedings pending or, to Seller’s Knowledge, threatened, against Seller or any Seller Subsidiary or any of their property or assets or challenging the issuance of any of its capital stock or the transactions contemplated by this Agreement, as to which there is a reasonable probability of an adverse determination and which, if adversely determined, would, individually or in the aggregate, have a Seller Material Adverse Effect.

          (b) There is no Order imposed upon the Seller, any of the Seller Subsidiaries or the assets of the Seller or any of the Seller Subsidiaries which has had a Seller Material Adverse Effect.

          (c) Neither the Seller nor any of the Seller’s Subsidiaries is subject to any written order, decree, agreement (including an agreement under Section 4(m) of the BHCA), memorandum of understanding or similar arrangement with, or a commitment letter or similar submission to, or extraordinary supervisory letter from, or adopted any extraordinary board resolutions at the request of, any Governmental Authority charged with the supervision or regulation of financial institutions or engaged in the insurance of deposits or the supervision or regulation of it or any of its Subsidiaries, nor has any Governmental Authority advised it in writing or, to Seller’s Knowledge, otherwise advised, that it is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding or extraordinary supervisory letter or any such board resolutions, nor, to Seller’s Knowledge, has any Governmental Authority commenced an investigation in connection therewith.

          (d) Neither the Seller nor any Seller Subsidiary has received any order, decree, notice or other communication from any Governmental Authority asserting or claiming that the Seller or any Seller Subsidiary is, and to Seller’s Knowledge, no facts or circumstances exist which would cause it or any of the Seller Subsidiaries to be deemed to be, (i) operating in violation of the Bank Secrecy Act, the USA PATRIOT ACT of 2001 and the regulations promulgated thereunder (the “Patriot Act”), any order issued with respect to anti money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any

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other applicable anti money laundering statute, rule or regulation, except where any such violation would not have a Seller Material Adverse Effect; or (ii) not in satisfactory compliance, with the applicable privacy and customer information requirements contained in any federal and state privacy laws and regulations, including, without limitation, in Title V of the GLB Act, as well as the provisions of the information security program adopted pursuant to 12 C.F.R Part 40, except where the failure to so comply would not have a Seller Material Adverse Effect. The Seller (or where appropriate the Seller Subsidiary) has adopted and implemented an anti money laundering program that contains adequate and appropriate customer identification verification procedures that comply with Section 326 of the Patriot Act and such anti money laundering program meets the requirements in all material respects of Section 352 of the Patriot Act and the regulations thereunder, and it (or such other of the Seller Subsidiaries) has complied in all material respects, except where the failure to comply would not have a Seller Material Adverse Effect, with any requirements to file reports and other necessary documents as required by the Patriot Act and the regulations thereunder.

     2.10 Employee Benefit Plans.

          (a) Current Plans. The Seller Disclosure Schedule lists all employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), and all bonus, stock option, stock purchase, restricted stock, incentive, deferred compensation, retiree medical or life insurance, supplemental retirement, severance or other benefit plans, programs or arrangements, and all material employment, termination, severance or other employment contracts or employment agreements, with respect to which the Seller or any Seller Subsidiary has any obligation (collectively, the “Plans”). The Seller has furnished or made available to the Company a complete and accurate copy of each Plan (or a description of the Plans, if the Plans are not in writing) and a complete and accurate copy of each material document prepared in connection with each such Plan, including, without limitation, and where applicable, a copy of (i) each trust or other funding arrangement, (ii) each summary plan description and summary of material modifications, (iii) the three (3) most recently filed IRS Forms 5500 and related schedules, (iv) the most recently issued determination letter from the United States Internal Revenue Service (the “IRS”) for each such Plan and the materials submitted to obtain that letter and (v) the three (3) most recently prepared actuarial and financial statements with respect to each such Plan.

          (b) Absence of Certain Types of Plans. No member of the Seller’s “controlled group,” within the meaning of Section 4001(a)(14) of ERISA, maintains or contributes to, or within the five years preceding the Effective Time has maintained or contributed to, an employee pension benefit plan subject to Title IV of ERISA (“Title IV Plan”). No Title IV Plan is a “multiemployer pension plan” as defined in Section 3(37) of ERISA. None of the Plans obligates the Seller or any of the Seller Subsidiaries to pay material separation, severance, termination or similar type benefits solely as a result of any transaction contemplated by this Agreement or as a result of a “change in control,” within the meaning of such term under Section 280G of the Code. Except as required by COBRA, none of the Plans provides for or promises medical, disability or life insurance benefits to any former employee, officer or director of the Seller or any of the Seller Subsidiaries following such person’s termination. Each of the Plans is subject only to the laws of the United States or a political subdivision thereof.

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          (c) Compliance with Applicable Law. Each Plan has been operated in all respects in accordance with the requirements of all applicable Law and all persons who participate in the operation of such Plans and all Plan “fiduciaries” (within the meaning of Section 3(21) of ERISA) have acted in accordance with the provisions of all applicable Law, except where such operations or violations of applicable Law would not, individually or in the aggregate, have a Seller Material Adverse Effect. The Seller and the Seller Subsidiaries have performed all obligations required to be performed by any of them under, are not in any respect in default under or in violation of, and the Seller and the Seller Subsidiaries have no Knowledge of any default or violation by any party to, any Plan, except where such failures, defaults or violations would not, individually or in the aggregate, have a Seller Material Adverse Effect. No legal action, suit or claim is pending or, to Seller’s Knowledge, threatened with respect to any Plan (other than claims for benefits in the ordinary course) and, except as disclosed in the Seller Disclosure Schedule, to Seller’s Knowledge, no fact or event exists that could give rise to any such action, suit or claim. Except as disclosed in the Seller Disclosure Schedule, neither the Seller nor any Seller Subsidiary has incurred any material liability under Section 302 of ERISA or Section 412 of the Code that has not been satisfied in full and no condition exists that presents a material risk of incurring any such liability.

          (d) Qualification of Certain Plans. Each Plan that is intended to be qualified under Section 401 (a) of the Code or Section 401(k) of the Code (including each trust established in connection with such a Plan that is intended to be exempt from Federal income taxation under Section 501 (a) of the Code) has received a favorable determination letter from the IRS that it is so qualified or is entitled to rely on a favorable opinion or advisory letter issued to the sponsor of a master and prototype plan, and the Seller is not aware of any fact or event that could adversely affect the qualified status of any such Plan. No trust maintained or contributed to by the Seller or any of the Seller Subsidiaries is intended to be qualified as a voluntary employees’ beneficiary association or is intended to be exempt from federal income taxation under Section 501(c)(9) of the Code.

          (e) Non Qualified Deferred Compensation Plans. Except as set forth in the Seller Disclosure Schedule, no Plan that is a non qualified deferred compensation plan subject to Section 409A of the Code (“Section 409A”) has been modified (as defined under Section 409A) on or after October 3, 2004 and all such non qualified deferred compensation plans have been operated and administered in good faith compliance with Section 409A from the period beginning January 1, 2005 through the date hereof.

          (f) Absence of Certain Liabilities and Events. There has been no non exempt prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to any Plan. The Seller and each of the Seller Subsidiaries has not incurred any liability for any excise tax arising under Sections 4971 through 4980G of the Code that would, individually or in the aggregate, have a Seller Material Adverse Effect, and, to Seller’s Knowledge, no fact or event exists that could give rise to any such liability.

          (g) Plan Contributions. All contributions, premiums or payments required to be made with respect to any Plan have been made on or before their due dates.

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          (h) Employment Contracts. Neither the Seller nor any Seller Subsidiary is a party to any contracts for employment, severance, consulting or other similar contracts with any employees, consultants, officers or directors of the Seller or any of the Seller Subsidiaries. Neither the Seller nor any Seller Subsidiary is a party to any collective bargaining agreements.

          (i) Effect of Agreement. The consummation of the transactions contemplated by this Agreement will not, either alone or in conjunction with another event, entitle any current or former employee of the Seller or any Seller Subsidiary to severance pay, unemployment compensation or any other payment, including payments constituting “excess parachute payments” within the meaning of Section 280G of the Code, except as expressly provided herein, or accelerate the time of payment or vesting or increase the compensation due any such employee or former employee, in each case, except as expressly provided herein.

     2.11 Title to Property. The Seller and each of the Seller Subsidiaries has good and marketable title to all of their respective properties and assets, real and personal, free and clear of all mortgage liens, and free and clear of all other liens, charges and encumbrances except liens for taxes not yet due and payable, pledges to secure deposits and such minor imperfections of title, if any, as do not materially detract from the value of or interfere with the present use of the property affected thereby or which, individually or in the aggregate, would not have a Seller Material Adverse Effect; and all leases pursuant to which Seller or any of the Seller Subsidiaries lease from others material amounts of real or personal property are in good standing, valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default (or event which with notice or lapse of time, or both, would constitute a material default and in respect of which the Seller or such Seller Subsidiary has not taken adequate steps to prevent such a default from occurring). The current use and occupancy of any real property owned by the Seller and the Seller Subsidiaries does not materially violate any easement, covenant, condition, restriction, or similar provision in any instrument of record affecting such property.

     2.12 Environmental Matters.

          (a) To Seller’s Knowledge: (i) each of the Seller, the Seller’s Subsidiaries, and properties owned or operated by the Seller or the Seller’s Subsidiaries are and have been in substantial compliance with, all applicable federal, state and local laws including common law, rules, guidance, regulations and ordinances and with all applicable decrees, orders, judgments, and contractual obligations relating to the environment, health, safety, natural resources, wildlife or “Hazardous Materials” which are hereinafter defined as chemicals, pollutants, contaminants, wastes, toxic substances, compounds, products, solid, liquid, gas, petroleum or other regulated substances or materials which are hazardous, toxic or otherwise harmful to health, safety, natural resources, or the environment (“Environmental Laws”), except for violations which, either individually or in the aggregate, would not have a Seller Material Adverse Effect; (ii) during the period of the Seller’s or any of the Seller’s Subsidiaries’ ownership or operation of any of their respective current properties, Hazardous Materials have not been generated, treated, stored, transported, released or disposed of in, on, under, above, from or affecting any such property, except where such release, generation, treatment, storage, transportation, or disposal would not have, either individually or in the aggregate, a Seller Material Adverse Effect; (iii) there is no asbestos or any material amount of ureaformaldehyde materials in or on any property currently

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or previously owned or operated by Seller or Seller’s Subsidiaries or any Participation Facility, and no electrical transformers or capacitors, other than those owned by public utility companies, on any such properties contain any PCBs; (iv) there are no underground or aboveground storage tanks and there have never been any underground or aboveground storage tanks located on, in or under any properties currently or formerly owned or operated by the Seller or any of Seller’s Subsidiaries; (v) neither Seller nor Seller’s Subsidiaries have received any written notice from any governmental agency or third party notifying the Seller or Seller’s Subsidiaries of any Environmental Claim; and (vi) there are no circumstances with respect to any properties currently owned or operated by the Seller or any of Seller’s Subsidiaries that could reasonably be anticipated to form the basis for an Environmental Claim against Seller or Seller’s Subsidiaries or any properties currently owned or operated by the Seller or any of Seller’s Subsidiaries.

     The following definitions apply for purposes of this Section 2.12: (a) “Participation Facility” means any facility in which the Seller or any of the Seller’s Subsidiaries participates in the management and, where required by the context, said terms means the owner or operator of such property; and (b) “Environmental Claims” means any and all administrative, regulatory, judicial or private actions, suits, demands, demand letters, notices, claims, liens, notices of noncompliance or violation, investigations, allegations, injunctions or proceedings relating in any way to (i) any Environmental Law; (ii) any Hazardous Material including without limitation any abatements, removal, remedial, corrective or other response action in connection with any Hazardous Material, Environmental Law or order of a Governmental Authority; or (iii) any actual or alleged damage, injury, threat or harm to health, safety, natural resources, wildlife, or the environment which individually or in the aggregate would have a Seller Material Adverse Effect.

     2.13 Absence of Agreements. Neither the Seller nor any Seller Subsidiary is a party to any agreement or memorandum of understanding with, commitment letter or similar undertaking to, or is subject to any order or directive by, or is a recipient of any extraordinary supervisory letter with any federal, state or governmental agency which restricts materially the conduct of its business (including any contract containing covenants which limit the ability of the Seller or of any Seller Subsidiary to compete in any line of business or with any person or which involve any restriction of the geographical area in which, or method by which, the Seller or any Seller Subsidiary may carry on its business (other than as may be required by Law or applicable Regulatory Authorities)), or in any manner relates to its capital adequacy, its credit policies or its management, nor has the Seller been advised that any federal, state, or governmental agency is contemplating issuing or requesting (or is considering the appropriateness of issuing or requesting) any such order, decree, agreement, memorandum of understanding, extraordinary supervisory letter, commitment letter or similar submission other than the Agreement by and between the Bank and the OCC dated as of June 24, 2004 (the “OCC Agreement”) and those other agreements set out on the Seller Disclosure Schedule.

     2.14 Taxes.

          (a) The Seller and the Seller Subsidiaries have timely filed all Tax Returns required to be filed by them on or prior to the date of this Agreement (all such returns being accurate and complete in all material respects), and the Seller and the Seller Subsidiaries have timely paid and discharged all Taxes due in connection with or with respect to the filing of such

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Tax Returns, except such as are not yet due or are being contested in good faith by appropriate proceedings and with respect to which the Seller is maintaining reserves adequate for their payment or where the failure to make such filings or pay such taxes would not have a Seller Material Adverse Effect. For purposes of this Agreement:

     (i) “Tax” or “Taxes” means taxes, charges, fees, levies, and other governmental assessments and impositions of any kind, payable to any federal, state, or local governmental entity or taxing authority or agency, including, without limitation, (i) income, franchise, profits, gross receipts, estimated, ad valorem, value added, sales, use, service, real or personal property, capital stock, license, payroll, withholding, disability, employment, social security, workers compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation, premiums, windfall profits, transfer and gains taxes, (ii) customs duties, imposts, charges, levies or other similar assessments of any kind, and (iii) interest, penalties and additions to tax imposed with respect thereto; and

     (ii) “Tax Returns” means returns, reports, and information statements with respect to Taxes required to be filed with the IRS or any other governmental entity or taxing authority or agency, including, without limitation, consolidated, combined and unitary tax returns.

          (b) To Seller’s Knowledge, neither the IRS nor any other governmental entity or taxing authority or agency is now asserting, either through audits, administrative proceedings or court proceedings, any deficiency or claim for additional Taxes. Neither the Seller nor any of the Seller Subsidiaries has granted any waiver of any statute of limitations with respect to, or any extension of a period for the assessment of, any Tax. Except for statutory liens for current taxes not yet due, there are no material tax liens on any assets of the Seller or any of the Seller Subsidiaries. Neither the Seller nor any of the Seller Subsidiaries has received a ruling or entered into an agreement with the IRS or any other taxing authority that would have a Seller Material Adverse Effect after December 31, 2004. No agreements relating to allocating or sharing of Taxes exist among the Seller and the Seller Subsidiaries and no tax indemnities given by the Seller or the Seller Subsidiaries in connection with a sale of stock or assets remain in effect. Neither the Seller nor any of the Seller Subsidiaries is required to include in income either (i) any amount in respect of any adjustment under Section 481 of the Code, or (ii) any installment sale gain. Neither the Seller nor any of the Seller Subsidiaries has made an election under Section 341(f) of the Code. Neither the Seller nor any of the Seller Subsidiaries (i) is a member of an affiliated, consolidated, combined or unitary group, other than one of which the Seller was the common parent, or (ii) has any liability for the Taxes of any Person (other than the Seller and the Seller Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state or local law) as a transferee or successor, by contract or otherwise.

          (c) To the Seller’s Knowledge, neither the Seller nor any of the Seller Subsidiaries is a party to any joint venture, partnership or other arrangement or contract that could be treated as a partnership for federal income tax purposes.

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          (d) To the Seller’s Knowledge, the Seller and the Seller Subsidiaries have filed with the appropriate Governmental Authority all unclaimed property reports required to be filed and has remitted to the appropriate Governmental Authority all unclaimed property required to be remitted.

          (e) None of the assets of Seller or the Seller Subsidiaries directly or indirectly secure any debt the interest of which is tax exempt under Section 103(a) of the Code. Neither Seller nor any Seller Subsidiary is a borrower or the guarantor of any outstanding industrial revenue bonds, and neither Seller nor any Seller Subsidiary is a tenant, principal user or related person to any principal user within the meaning of Section 144(a) of the Code or any property that has been finance or improved with the proceeds of industrial revenue bonds.

          (f) None of the assets of Seller or a Seller Subsidiary is “tax exempt use property” within the meaning of Section 168(h) of the Code.

     There are currently no audits, examinations, judicial or other administrative proceedings currently pending or in progress or, to the Seller’s Knowledge, threatened with respect to any Taxes of the Seller or any Seller Subsidiary, subject to exceptions for any proceedings that if resolved in a manner unfavorable to the Seller or any Seller Subsidiary would not, individually or in the aggregate, reasonably be expected to have a Seller Adverse Material Effect. No Governmental Authority has notified the Seller that it or any Seller Subsidiary is or may be subject to taxation in a jurisdiction where the Seller or Seller Subsidiary does not file Tax Returns.

     For purposes of this Section 2.14, references to the Seller and the Seller Subsidiaries include former subsidiaries of the Seller for the periods during which any such corporations were owned, directly or indirectly, by the Seller.

     2.15 Insurance. The Seller Disclosure Schedule lists all material policies of insurance of the Seller and the Seller Subsidiaries currently in effect. Neither the Seller nor any of the Seller Subsidiaries has any liability for unpaid premiums or premium adjustments not properly reflected on the Seller’s financial statements for the eight months ended August 31, 2006.

     2.16 Brokers. No broker, finder or investment banker (other than Hovde Financial, Inc.) is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Seller. Prior to the date of this Agreement, the Seller has furnished to the Company a complete and correct copy of all agreements between the Seller and Hovde Financial, Inc. pursuant to which such firm would be entitled to any payment relating to the transactions contemplated hereunder.

     2.17 Seller Material Adverse Effect. Since January 1, 2006, there has not been any Effect that has had, individually or in the aggregate, a Seller Material Adverse Effect.

     2.18 Material Contracts. Except for (i) loan, credit or similar agreements entered into by the Seller or any Seller Subsidiary in the ordinary course of business consistent with past practice, or (ii) as disclosed in the Seller Disclosure Schedule, neither Seller nor any Seller Subsidiary is a party to or obligated under any contract, agreement or other instrument or

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understanding which obligates the Seller or any Seller Subsidiary for payments or other consideration with a value in excess of $25,000 (“Material Contracts”).

     2.19 Opinion of Financial Advisor. The Seller has received the written opinion of Hovde Financial, Inc. on the date of this Agreement to the effect that, as of the date of this Agreement, the consideration to be received in the Merger by the Seller’s stockholders is fair to the Seller’s stockholders from a financial point of view, and the Seller will promptly, after the date of this Agreement, deliver a copy of such opinion to the Company and the Sub.

     2.20 Vote Required. The affirmative vote of seventy-five percent (75%) of the holders of the outstanding shares of Seller Common Stock entitled to vote is the only vote of the holders of any class or series of the Seller capital stock necessary to approve the Agreements and the transactions contemplated hereby, including the Merger.

     2.21 Rights Agreement. The Seller and the Seller’s Board of Directors have taken all necessary action to render the Rights Agreement dated as of December 16, 1999 between the Seller and Commerce Bank, N.A. (the “Rights Agreement”) inapplicable to this Agreement and the transactions contemplated hereby, including the Merger, without any further action on the part of the holders of Seller Common Stock or the Seller’s Board of Directors (other than an amendment to the Rights Agreement that would, among other things, clear up certain ambiguities in the Rights Agreement and terminate the Rights Agreement upon consummation of the transactions discussed herein (the “Rights Agreement Amendment”)), and neither the execution nor the delivery of this Agreement will cause the Rights (as defined in the Rights Agreement) to become exercisable by the holders thereof.

     2.22 Capital Requirements. The Seller is maintaining such amount of capital as may be prescribed by Regulatory Authorities from time to time, whether by regulation, agreement or order and is at least “well capitalized” (within the meaning of 12 U.S.C. 1831o, as amended, reenacted or redesignated from time to time). Since December 31, 2004, Seller’s Tier 1 Ratio has not been less than 6.00% at the end of each of Seller’s fiscal quarters.

     2.23 Solvency. As of the Effective Time, and after giving effect to all of the transactions contemplated by this Agreement, the Seller, the Bank and the other Seller Subsidiaries will be Solvent. “Solvent” means that, with respect to the Seller, the Bank and/or the other Seller Subsidiaries, and as of any date of determination, (a) the amount of the “present fair saleable value” of the assets thereof will, as of such date, exceed the amount of all “liabilities thereof, contingent or otherwise,” as of such date, as such quoted terms are generally determined in accordance with applicable federal Laws governing determinations of the insolvency of debtors, (b) the present fair saleable value of the assets of such entity or entities will, as of such date, be greater than the amount that will be required to pay their liabilities on their indebtedness as their indebtedness becomes absolute and mature, (c) each of the Seller, the Bank and the other Seller Subsidiaries will not have, as of such date, an unreasonably small amount of capital with which to conduct their business, and (d) the Seller, the Bank and the other Seller Subsidiaries will be able to pay their indebtedness as it matures. “Indebtedness” means a liability in connection with the applicable entity’s (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or (y) right to any equitable remedy for

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breach of performance if such breach gives rise to a right of payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured.

     2.24 Contracts. Except as would not reasonably be expected to be material to the business of the Seller and the Seller Subsidiaries, taken as a whole, (i) neither the Seller nor any Seller Subsidiary has received any written notice or claim of default under any material contract or any written notice of an intention, and to the Seller’s Knowledge, no other party to any material contract intends to terminate, not renew or challenge the validity or enforceability of any material contract, (ii) to the Seller’s Knowledge, no event has occurred that, with or without notice or lapse of time or both, would result in a breach or a default under any material contract, (iii) each of the material contracts is in full force and effect and is the valid, binding and enforceable obligation of the Seller or a Seller Subsidiary, and, to the Seller’s Knowledge, of the other parties thereto (except that such enforceability (a) may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to the enforcement of creditors’ rights generally, and (b) is subject to general principles of equity (regardless of whether considered in a proceeding in equity or at law), and (iv) the Seller and the Seller Subsidiaries have performed all respective material obligations required to be performed by them to date under the material contracts and are not (with or without the lapse of time or the giving of notice, or both) in material breach thereunder. The Seller has made available to the Company true and complete copies of each material contract, including all material amendments thereto.

ARTICLE III — REPRESENTATIONS AND WARRANTIES OF THE SELLER AS TO THE BANK

     3.1 Loans. During the term of this Agreement, the aggregate amount of the Bank’s Classified Loans will not exceed $2,500,000. The Bank has no outstanding loans, discounts or commitments to loan or discount which have not or will not be made for good and valuable consideration in the ordinary course of the Bank’s business and the notes or other evidences of indebtedness evidencing any loans or discounts are true and genuine and are what they purport to be.

     3.2 Reserve Ratio. During the term of this Agreement, the Bank’s Reserve Ratio, as of the end of each of Bank’s fiscal quarters, shall not be less than 100%.

     3.3 Capital Requirements. During the term of this Agreement:

          (a) the Bank shall maintain such amount of capital as may be prescribed by Regulatory Authorities from time to time, whether by regulation, agreement or order and will be at least “well capitalized” (within the meaning of 12 U.S.C. 1831o, as amended, reenacted or designated from time to time)

          (b) the Bank’s Tier 1 Ratio shall not be less than 6.0% at the end of each of the Bank’s fiscal quarters.

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ARTICLE IV — REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except as disclosed in the Company Reports or in the disclosure schedule (the “Company Disclosure Schedule”) delivered by the Company to the Seller prior to the execution of this Agreement (which schedule sets forth items of disclosure with specific reference to the particular Section or subsection of this Agreement to which the information in the Company Disclosure Schedule relates) and noting that any information set forth in one section of the Company Disclosure Schedule will be deemed to apply to each other Section or subsection of this Agreement to which its relevance is reasonably apparent, the Company hereby represents and warrants to the Seller as follows:

     4.1 Organization and Qualification; Subsidiaries.

          (a) The Company is a company duly organized, validly existing and in active status under the laws of the State of Kansas and a registered bank holding company under the BHCA. The Company is also subject to regulation by the Federal Reserve Board. The Company’s banking subsidiary, Bank of Blue Valley (the “Company Bank Subsidiary”), is a duly organized and validly existing Kansas state chartered, member bank.

          (b) The Company is duly qualified or licensed as a foreign business entity to do business, and is in good standing, in each jurisdiction where the character of its properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that would not, either individually or in the aggregate, have a Company Material Adverse Effect.

          (c) The Company Bank Subsidiary is the only subsidiary of the Company that is a “Significant Subsidiary” as that term is defined in Rule 1-02 of Regulation S-X.

          (d) As used in this Agreement, the term “Company Material Adverse Effect” means any Effect that, individually or in the aggregate with other Effects, materially impairs the ability of the Company to consummate the transactions contemplated hereby. The term “Company Material Adverse Effect” does not include the impact of: (i) any Effect to the extent resulting from the announcement of this Agreement or the transactions contemplated hereby, (ii) any Effect resulting from compliance with the terms and conditions of this Agreement, (iii) any decrease in the price or trading volume of the shares of the Company’s issued and outstanding common stock following execution of this Agreement (but not excluding any Effect underlying such decrease to the extent such Effect would constitute a Company Material Adverse Effect), (iv) any Effect to the extent resulting from changes in Laws or regulations or interpretations thereof that are generally applicable to the banking industry, (v) any Effect to the extent resulting from changes in generally accepted accounting principles which the Company or any of its Subsidiaries is required to adopt, or (vi) changes attributable to or resulting from changes in general economic conditions affecting the banking industry generally (unless such Effect would reasonably be expected to have a materially disproportionate impact on the business, assets, liabilities, financial condition or results of operations of the Company its Subsidiaries taken as a whole relative to other banking industry participants).

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     4.2 Articles of Incorporation and By Laws. The Company has previously furnished or made available to the Seller a complete and correct copy of the Company’s Articles of Incorporation and the Company’s Bylaws (“Company Articles” and “Company Bylaws”, respectively), the Sub Articles and the Sub Bylaws. All such documents are in full force and effect and neither the Company nor the Sub is in breach of any of the provisions of its articles or bylaws.

     4.3 Authority. The Company and the Sub each has the requisite corporate power and authority to execute and deliver this Agreement, and to perform its respective obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the Sub and the consummation by the Company and the Sub of the transactions contemplated hereby have been duly and validly authorized by all corporate action on the part of the Company and the Sub, including, without limitation, the Company’s and the Sub’s Boards of Directors, and no other corporate proceedings on the part of the Company or the Sub are necessary to authorize this Agreement or to consummate the transactions so contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and the Sub and constitutes a valid and binding obligation of the Company and the Sub assuming the due authorization, execution and delivery by the Seller, enforceable against the Company and the Sub in accordance with its terms, except as enforcement may be limited by laws affecting insured depository institutions, general principles of equity, whether applied in a court of law or a court of equity, and by bankruptcy, insolvency and similar laws affecting creditors’ rights and remedies generally.

     4.4 No Conflict; Required Filings and Consents.

          (a) The execution and delivery of this Agreement by the Company and the Sub do not, and the performance of this Agreement by the Company and the Sub will not, (i) conflict with or violate the Company Articles or Company By Laws or the Articles of Incorporation or By Laws of the Sub, (ii) conflict with or violate any Laws applicable to the Company or the Sub, or (iii) result in any breach of or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a lien or encumbrance on any of the properties or assets of the Company or the Sub pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease, license, permit, franchise or other instrument or obligation to which the Company or the Sub is a party or by which the Company or the Sub or its or any of their respective properties is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually or in the aggregate, have a Company Material Adverse Effect.

          (b) The execution and delivery of this Agreement by the Company and the Sub do not, and the performance of this Agreement by the Company and the Sub will not, require any consent, approval, authorization or permit of, or filing with or notification to, any governmental or regulatory authority, domestic or foreign, except (i) for applicable requirements, if any, of the Securities Act of 1933 (the “Securities Act”), the Exchange Act, state securities or blue sky laws, the BHCA, the OSBC, or any other applicable Regulatory Authority and the filing and recordation of appropriate merger or other documents as required by Kansas law, and (ii) where the failure to obtain such consents, approvals, authorizations or permits, or to make such

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filings or notifications, would not prevent or delay consummation of the Merger, or otherwise would not prevent or delay consummation of the Merger, or otherwise prevent the Company from performing its obligations under this Agreement, and would not have, or be reasonably expected to have, a Company Material Adverse Effect.

     4.5 Absence of Litigation.

          (a) Neither the Company nor any of the Company’s subsidiaries is a party to any, and there are no pending or, to the best of the Company’s Knowledge, threatened, legal, administrative, arbitral or other proceedings, claims, actions or governmental or regulatory investigations of any nature against the Company or any of the Company’s subsidiaries or challenging the validity or propriety of the transactions contemplated by this Agreement.

          (b) Neither the Company nor the Company Bank Subsidiary has received any order, decree, notice or other communication from any Governmental Authority asserting or claiming that the Company or the Company Bank Subsidiary is operating in violation of the Bank Secrecy Act, the Patriot Act, any order issued with respect to anti-money laundering by the U.S. Department of the Treasury’s Office of Foreign Assets Control, or any other applicable anti-money laundering statute, rule or regulation, except where any such violation would not have a Company Material Adverse Effect.

     4.6 Brokers. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Company.

     4.7 Adequate Resources. The Sub has or will have at the Effective Time cash on hand or borrowing availability under financing arrangements from financially responsible third parties, or a combination thereof, in an aggregate amount sufficient to enable the Company or the Sub, as applicable, to pay in full the Merger Consideration and all fees and expenses payable by such entity in connection with this Agreement and the transactions contemplated thereby.

     4.8 Company Material Adverse Effect. Since June 30, 2006, there has not been any Effect that has had, individually or in the aggregate, a Company Material Adverse Effect.

     4.9 CRA Rating. Each of the subsidiaries or affiliates of the Company that is an insured depository institution was rated “Satisfactory” or “Outstanding” following its most recent Community Reinvestment Act examination by the regulatory agency responsible for its supervision. The Company has received no notice of and has no knowledge of any planned or threatened objection by any community group to the transaction contemplated hereby.

     4.10 Pro Forma Capital Requirements. The Company is, and on a pro forma basis giving effect for this transaction and any financing or capital injection contemplated by the Company, will be “well capitalized”, as defined for purposes of the Federal Deposit Insurance Act, and in compliance with all capital requirements, standards and ratios required by each state or federal bank regulator with jurisdiction over the Company, including without limitation, any such higher requirement, standard, or ratio as shall apply to institutions engaging in the acquisition of insured institution deposits, assets or branches, and no such regulator has indicated

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that it will condition any regulatory approval of the Merger upon an additional increase in the Company’s capital.

ARTICLE V — COVENANTS OF SELLER

     5.1 Affirmative Covenants. The Seller hereby covenants and agrees with the Company that, except (i) as permitted by this Agreement; (ii) as disclosed in the Seller Disclosure Schedule; (iii) as required by Law, or by a Governmental Authority of competent jurisdiction, provided that prior to failing to take such action the Seller notifies the Company thereof and, to the extent required by the Company, uses its reasonably best efforts to take any such action otherwise subject to such law or Governmental Authority); or (iv) as otherwise consented to in writing by the Company, during the period from the date hereof to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, it will, and it will cause each Seller Subsidiary, to:

          (a) operate its business only in the usual, regular and ordinary course consistent with past practices;

          (b) use all reasonable efforts to preserve intact its business organization and assets, maintain its rights and franchises, retain the services of its officers and key employees and maintain its relationships with customers;

          (c) use all reasonable efforts to maintain and keep its properties in as good repair and condition as at present, ordinary wear and tear excepted;

          (d) use all commercially reasonable efforts to keep in full force and effect director and officer liability insurance comparable in amount and scope of coverage to that now maintained by it (the “Existing D&O Policy”);

          (e) perform in all material respects all obligations required to be performed by it under all material contracts, leases, and documents relating to or affecting its assets, properties, and business;

          (f) comply with and perform in all material respects all obligations and duties imposed upon it by all applicable Laws; and

          (g) not take any action or fail to take any action which, individually or in the aggregate, can be expected to have a Seller Material Adverse Effect.

     5.2 Negative Covenants. Except (i) as permitted by this Agreement, (ii) as disclosed in the Seller Disclosure Schedule; (iii) as required by Law, or by a Governmental Authority of competent jurisdiction, provided that prior to taking such action, the Seller notifies the Company thereof and, to the extent required by the Company, uses its reasonably best efforts to avoid having to take such action required by such law or Governmental Authority; or (iv) as otherwise consented to in writing by the Company, during the period from the date hereof to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, the Seller shall not do, or permit any Seller Subsidiary to do, any of the following:

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          (a) (i) except to maintain qualification pursuant to the Code, adopt, amend, renew or terminate any Plan or any agreement, arrangement, plan or policy between the Seller or any Seller Subsidiary and one or more of its current or former directors, officers or employees, or (ii) increase in any manner the base salary, bonus, incentive compensation or fringe benefits of any director, officer or employee or pay any benefit not required by any plan or agreement as in effect as of the date hereof (including, without limitation, the granting of stock options, stock appreciation rights, restricted stock, restricted stock units or performance units or shares); provided, however, that, the Retention and Severance Payments made to certain employees of the Seller which are listed on Exhibit 2.1(d) hereto are expressly permitted to be made by the Seller without the prior written consent of the Company;

          (b) declare or pay any dividend on, or make any other distribution in respect of, its outstanding shares of capital stock or limited liability company interests, except for (i) dividends by the Bank or any of the other Seller Subsidiaries either to the Seller, the Bank or another wholly owned Seller Subsidiary, and (ii) subject to any prohibition or restriction by any Regulatory Authority, payments by the Seller to reimburse, up to the aggregate amount of $24,400, certain directors and former directors for their legal fees incurred in connection with defense of breach of fiduciary duty claims by the OCC;

          (c) except as contemplated by this Agreement, merge with or into any other person, permit any other person to merge into it or consolidate with any other person, or effect any reorganization or recapitalization;

          (d) purchase or otherwise acquire any substantial portion of the assets, or more than 5% of any class of stock or other equity interests, of any person other than in the ordinary course of business;

          (e) liquidate, sell, dispose of, or encumber any assets or acquire any assets outside of the ordinary course of business (including without limitation Seller Intellectual Property);

          (f) repurchase, redeem or otherwise acquire, or issue, sell or deliver, split, reclassify, combine or otherwise adjust, or agree to issue, sell or deliver, split, reclassify, combine or otherwise adjust, any stock (except pursuant to exercise of the Seller Options listed on the Seller Disclosure Schedule), bonds or other corporate securities of which the Seller or any of the Seller Subsidiaries is the issuer (whether authorized and unissued or held in treasury), or, grant or issue, or agree to grant or issue, any options, warrants or other Rights (including convertible Securities) calling for issue thereof;

          (g) propose or adopt any amendments to its articles of incorporation, by laws, articles of organization, operating agreement, or any stock option plan or agreement, as the case may be, in any way adverse to the Company;

          (h) change any of its methods of accounting in effect at December 31, 2005 or change any of its methods of reporting income or deductions for federal income tax purposes from those employed in the preparation of the federal income tax returns for the taxable year ending December 31, 2005, except as may be required by GAAP; and

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          (i) change any lending, investment, liability management or other material policies concerning the business or operations of the Seller or any of the Seller Subsidiaries, except as required by Law including, without limitation:

     (i) acquire or sell any contracts for the purchase or sale of financial or other futures or any put or call options, or enter into any hedges or interest rate swaps relating to cash, securities or any commodities whatsoever or enter into any other derivative transaction;

     (ii) sell, assign, transfer, pledge, mortgage or otherwise encumber or permit any encumbrances to exist with respect to any of its assets;

     (iii) make any investment with a maturity of five years or more;

     (iv) incur any material liabilities or material obligations, whether directly or by way of guaranty, including any obligations for borrowed money (other than indebtedness of the Seller or the Seller Subsidiaries to each other) other than overnight investments and borrowings undertaken in the ordinary course of business consistent with past practices;

     (v) enter into any agreement with respect to any acquisition of a material amount of asset or securities or any discharge, waiver, satisfaction, release or relinquishment of any material contract rights, liens, encumbrances, debt or claims, not in the ordinary course of business and consistent with past practice (which shall include creation of deposit liabilities, purchases of federal funds, advances from the Federal Reserve Bank or Federal Home Loan Bank, and entry into any repurchase agreement fully secured by U.S. Government or agency securities), or impose or suffer the imposition on any material asset of the Seller or any Seller Subsidiaries of any Lien or permit any such Lien to exist (other than in connection with deposits, repurchase agreements, bankers acceptances, “treasury tax and loan” accounts established in the ordinary course of business, the satisfaction of legal requirements in the exercise of trust powers, and Liens in effect as of the date hereof that are disclosed in the Financial Statements) and in no event with a term in excess of thirty (30) days;

     (vi) settle any claim, action, suit litigation, proceeding, arbitration, investigation or controversy of any kind, for any amount in excess of $50,000 or in any manner which would restrict in any material respect the operations or business of the Seller or any of the Seller Subsidiaries;

     (vii) purchase any new financial product or instrument which involves entering into a contract with a term of six months or longer;

     (viii) make any capital expenditure, except in the ordinary course and consistent with past practice and in no event in excess of $10,000;

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     (ix) take any action or fail to take any action which, individually or in the aggregate, would be reasonably expected to have a Seller Material Adverse Effect; or

     (x) agree in writing or otherwise to do any of the foregoing.

     5.3 Intentionally Omitted.

     5.4 No Solicitation of Transactions.

          (a) From and after the date of this Agreement until the Effective Time or termination of this Agreement pursuant to ARTICLE VIII, the Seller and the Seller Subsidiaries will not, nor will they authorize or permit any of their respective officers, directors, Affiliates or employees or any investment banker, attorney or other advisor or representative retained by any of them to, directly or indirectly:

     (i) solicit, initiate, encourage or induce the making, submission or announcement of any Acquisition Proposal,

     (ii) participate in any discussions or negotiations regarding, or furnish to any person any material non public information with respect to, or take any other action to facilitate any inquiry or the making of any proposal that constitutes or may reasonably be expected to lead to, any Acquisition Proposal, or

     (iii) enter into any contract, agreement, letter of intent or other arrangement relating to any Acquisition Transaction:

provided, however, this Section 5.4(a) shall not prohibit the Seller or the Seller’s Board of Directors from:

     (A) furnishing material nonpublic information (other than information regarding the Company supplied to the Seller by the Company) regarding the Seller or the Seller Subsidiaries to, or entering into a customary confidentiality agreement with or entering or re entering into discussions with, any person or group in response to an Acquisition Proposal submitted by such person or group (and not withdrawn) if (x) the Seller’s Board of Directors reasonably determines in good faith that such Acquisition Proposal constitutes or is reasonably likely to result in a Superior Offer, and (y) the Seller’s Board of Directors concludes in good faith, after consultation with its outside legal counsel, that failure to take such action is reasonably likely to result in a breach by the Seller’s Board of Directors of its fiduciary obligations to the Seller’s stockholders under applicable Laws, provided that in any such case neither the Seller nor any representative of the Seller and the Seller Subsidiaries shall have violated any of the restrictions set forth in this Section 5.4(a), or

     (B) taking the actions described in Section 5.4(b) below as permitted thereby, provided that neither the Seller, the Seller Subsidiaries

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nor any representatives of the Seller and the Seller Subsidiaries shall have violated any of the restrictions set forth in this
Section 5.4(a).

At least five (5) days prior to furnishing any material nonpublic information to, or entering into discussions or negotiations with, any person or group, the Seller shall:

     (iv) give the Company written notice of the identity of such person or group and of the Seller’s intention to furnish material nonpublic information to, or enter into discussions or negotiations with, such person or group, and

     (v) receive from such person or group an executed confidentiality agreement containing customary limitations on the use and disclosure of all written and oral nonpublic information furnished to such person or group by or on behalf of the Seller, and contemporaneously with furnishing any such information to such person or group, the Seller shall furnish such information to the Company (to the extent such information has not been previously furnished by the Seller to the Company).

          (b) Notwithstanding anything to the contrary contained in this Section 5.4, in the event that the Seller’s Board of Directors determines in good faith, after consultation with outside counsel, that in light of a Superior Offer it is necessary to do so in order to comply with its fiduciary duties to the Seller or the Seller’s stockholders under applicable law, the Seller’s Board of Directors may terminate this Agreement in the manner contemplated by Section 9.1(g) solely in order to concurrently enter into a definitive agreement with respect to a Superior Offer, but only after the fifth day following the Company’s receipt of written notice advising the Company that the Seller’s Board of Directors is prepared to accept a Superior Offer, and only if, during such five day period, if the Company so elects, the Seller and its advisors shall have negotiated in good faith with the Company to make such adjustments in the terms and conditions of this Agreement as would enable the Seller to proceed with the transactions contemplated herein on such adjusted terms.

          (c) Definitions.

     (i) “Acquisition Proposal” means any offer or proposal (other than an offer or proposal by the Company) relating to any Acquisition Transaction.

     (ii) “Acquisition Transaction” means any transaction or series of related transactions other than the transactions contemplated by this Agreement involving:

     (A) any acquisition or purchase from the Seller by any person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) of more than a 50.1% interest in the total outstanding voting securities of the Seller or any of the Seller Subsidiaries or any tender offer or exchange offer that if consummated would result in any person or “group” (as defined under Section 13(d) of the Exchange Act and the rules and regulations thereunder) beneficially owning 50.1% or more of the total outstanding voting securities of the Seller or any of the

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Seller Subsidiaries, or any merger, consolidation, business combination or similar transaction involving the Seller or any of the Seller Subsidiaries;

     (B) any sale, lease (other than in the ordinary course of business), exchange, transfer, license (other than in the ordinary course of business), acquisition or disposition of more than 15% of the assets of the Seller; or

     (C) any liquidation or dissolution of the Seller.

     (iii) “Superior Offer” shall mean a bona fide written offer made by a third party to consummate any of the following transactions or in one or a series of related transactions:

     (A) a merger, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving the Seller pursuant to which those shareholders of the Seller immediately preceding such transaction will hold less than 51% of the equity interest in the surviving or resulting entity of such transaction,

     (B) a sale or other disposition by the Seller of substantially all of its assets, or

     (C) the acquisition by any person or group (including by way of a tender offer or an exchange offer or issuance by the Seller), directly or indirectly, of beneficial ownership or a right to acquire beneficial ownership of shares representing in excess of 50% of the voting power of the then outstanding shares of capital stock of the Seller;

provided, that in each of case (A), (B) or (C) immediately above, the Superior Offer shall be on terms that the Seller’s Board of Directors determines, in its reasonable judgment to be more favorable to Seller stockholders (taking into account all factors which the Seller’s Board of Directors may reasonably deem relevant, including, without limitation, the relative value and form of the consideration offered, all other terms and conditions of the respective offers, including, without limitation, the presence of a financial contingency, the likelihood of obtaining financing on a timely basis if a financing contingency is present, and the likelihood of obtaining any required regulatory approvals) than the terms of the Merger (after receipt and consideration of advice of a financial advisor of nationally recognized reputation).

          (d) In addition to the obligations of the Seller set forth in Section 5.4(a), Seller as promptly as practicable shall advise the Company orally and in writing of any request received by the Seller after the date hereof for information which the Seller reasonably believes would lead to an Acquisition Proposal or of any Acquisition Proposal, or any inquiry received by the Seller after the date hereof with respect to, or which the Seller reasonably believes would lead to any Acquisition Proposal, the material terms and conditions of such request, Acquisition

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Proposal or inquiry, and the identity of the person or group making any such request, Acquisition Proposal or inquiry. The Seller will keep the Company informed in all material respects of the status and details (including material amendments or proposed amendments) of any such request, Acquisition Proposal or inquiry.

          (e) Unless this Section 5.4 dictates otherwise, (i) the Seller’s Board of Directors will make the Seller’s Board of Directors Recommendation; and (ii) neither the Seller’s Board of Directors nor any committee thereof will withdraw, amend or modify, or propose or resolve to withdraw, amend or modify, in a manner adverse to the Company, the Seller’s Board of Directors Recommendation. Further, the Seller’s Board of Directors may not withdraw or amend in a manner adverse to the Company the Seller’s Board of Directors Recommendation if prior thereto the Seller has not received a Superior Offer that has not been withdrawn as of the time of such action of the Seller’s Board of Directors.

     5.5 Update Disclosure; Breaches.

          (a) From and after the date of this Agreement until the Effective Time, the Seller shall update the Seller Disclosure Statement on a regular basis by written notice to the Company to reflect any matters which have occurred from and after the date of this Agreement which, if existing on the date of this Agreement, would have been required to be described therein; provided that (i) to the extent that any information that would be required to be included in an update under this Section 5.5(a) would have in the past been contained in internal reports prepared by the Seller or any the Seller Subsidiary in the ordinary course, such update may occur by delivery of such internal reports prepared in accordance with past practice, with appropriate steps taken by the Seller to identify relevant information contained therein, and (ii) to the extent that updating required under this Section 5.5 is unduly burdensome to the Seller, the Seller and the Company will use their reasonable best efforts to develop alternate updating procedures using, wherever possible, existing reporting systems.

          (b) The Seller shall, in the event it becomes aware of the impending or threatened occurrence of any event or condition which would cause or constitute a material breach (or would have caused or constituted a material breach had such event occurred or been known prior to the date of this Agreement) of any of its representations or agreements contained or referred to herein, give prompt written notice thereof to the Company and use its reasonable best efforts to prevent or promptly remedy the same.

     5.6 Loan and Investment Policies. The Seller agrees to maintain and to cause the Seller Subsidiaries to maintain their existing loan and investment policies and procedures designed to ensure safe and sound banking practices, which shall remain in effect, except as otherwise agreed in writing by the Company, for the period prior to the Effective Time. To the extent permitted by applicable Law, such policies and procedures shall apply to, among other matters, the following: (i) making or reviewing any commitments or loans, or purchase or renewals of any participations in loans, in excess of $500,000 for any commercial loan, $500,000 for any single-family residential loan, or $100,000 for any consumer loan; (ii) making, committing to make or renewing any loan to any Affiliate of the Seller or Seller Subsidiaries or any family member of such Affiliate or any entity to which such Affiliate has a material interest; (iii) making any investment or commitment to invest or making any loan in excess of $500,000

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with respect to any commercial real estate development project; (iv) making multiple commercial real estate loans which are in the aggregate in excess of $500,000 to any on real estate developer; or (v) entering into any significant contract, lease or license under which the Seller or any Seller Subsidiary will be bound to pay over the life of such agreement or voluntarily committing any act or omission which constitute a breach or default by the Seller or any Seller Subsidiary under any material contract, lease or license to which the Seller or any Seller Subsidiary is a party or by which it or any of its properties are bound. To the extent permitted by applicable Law, the Company shall have the right to designate at least one (1) observer to attend all meetings of the Seller’s Board of Directors and the Seller shall ensure that such representative receives all information given by the Seller or its agents to the Seller’s members of its Board of Directors. If the Company does not respond in writing to the Seller within twenty four (24) hours of delivery by the Seller of a written request made by the Seller for Seller or a Seller Subsidiary to engage in any of the actions for which the Company’s written consent is required pursuant to this Section 5.6, the Company shall be deemed to have consented to such action (except for any request made by the Seller on a Friday, in which case the Company must respond on or before Monday). All written approvals to be provided by the Company must not be unreasonably withheld.

     5.7 Access and Information. From the date hereof until the Effective Time, the Seller will give the Company and its representatives, employees, counsel and accountants reasonable access to the properties, books and records of the Seller and any other information relating to the Seller that is reasonably requested by the Company for purpose of permitting the Company, among other things, to: (a) review the financial statements of the Seller, (b) verify the accuracy of the representations and warranties of the Seller contained in this Agreement, (c) confirm compliance by the Seller with the terms of this Agreement, and (d) prepare for the consummation of the transactions contemplated by the Agreement. The parties hereto acknowledge and agree that any investigation by the Company pursuant to this Section 5.7 shall not unreasonably interfere with the business and operations of the Seller. The Company shall not, without the consent of the Seller (which consent shall not be unreasonably withheld), contact any customers or key employees of the Seller.

     5.8 Confidentiality Agreement. The Seller agrees that the Confidentiality Agreement entered into between the Company and the Seller in effect prior to the date of this Agreement (the “Confidentiality Agreement”), shall remain in full force and effect and binding upon the Seller and shall survive termination of this Agreement.

     5.9 Rights Agreement. Except for the Rights Agreement Amendment, the Seller will not redeem the Rights (as defined in the Rights Agreement) or amend, modify or terminate the Rights Agreement other than to delay the Distribution Date (as defined in the Rights Agreement) or to render the Rights (as defined in the Rights Agreement) inapplicable to the execution, delivery and performance of this Agreement and the transactions contemplated hereby.

     5.10 State Takeover Laws. If any “fair price,” “moratorium” or “control share acquisition” statute or other similar anti-takeover statute or regulation under state laws in the United States shall become applicable to the transaction contemplated hereunder, Seller and its Board of Directors shall use reasonable efforts to grant such approvals and take such actions as are necessary so that the transactions contemplated hereby may be consummated as promptly as

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practicable on the terms contemplated hereby and otherwise act to minimize the effect of any such statute or regulations on the transaction contemplated hereunder.

     5.11 Notification of Certain Matters. Seller shall give prompt written notice to the Company of the occurrence or non-occurrence of any event or events which would be reasonably likely to cause a Seller Material Adverse Effect; provided, however, that the delivery of such notice shall not limit or otherwise affect the remedies available to the Company hereunder.

ARTICLE VI — COVENANTS OF THE COMPANY

     6.1 Affirmative Covenants. The Company hereby covenants and agrees with the Seller that, except (i) as permitted by this Agreement, (ii) as disclosed in the Company Disclosure Schedule, (iii) as required by Law, or by a Governmental Authority of competent jurisdiction, or (iv) as otherwise consented to in writing by the Seller, during the period from the date hereof to the earlier of the Effective Time or the termination of this Agreement in accordance with its terms, it will, and it will cause each Company subsidiary, to:

          (a) maintain its corporate existence in good standing and maintain all books and records in accordance with accounting principles and practices as used in the Company’s financial statements applied on a consistent basis; and

          (b) conduct its business in a manner that does not violate any Law, except for possible violations which, individually or in the aggregate, do not have, and would not reasonably be expected to have, a Company Material Adverse Effect.

     6.2 Negative Covenants. Except as set forth in the Company Disclosure Schedule or as otherwise contemplated by this Agreement, from the date of this Agreement until the Effective Time, the Company shall not, or agree to commit to, or permit the Company Bank Subsidiary to, without the prior written consent of the Seller, propose or adopt any amendments to its Articles of Incorporation or By laws in a manner which would adversely affect in any manner the ability of Company or the Sub to consummate the transactions contemplated hereby, or agree in writing to do any of the foregoing.

     6.3 Breaches. The Company shall, in the event it becomes aware of the impending or threatened occurrence of any event or condition which would cause or constitute a material breach (or would have caused or constituted a material breach had such event occurred or been known prior to the date of this Agreement) of any of its representations or agreements contained or referred to herein, give prompt written notice thereof to the Seller and use its reasonable best efforts to prevent or promptly remedy the same.

     6.4 Confidentiality Agreement. The Company agrees that the Confidentiality Agreement entered into between the Company and the Seller in effect prior to the date of this Agreement, shall remain in full force and effect and binding upon the Company and shall survive termination of this Agreement.

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ARTICLE VII — ADDITIONAL AGREEMENTS

     7.1 Meeting of Seller’s Stockholders. Seller shall promptly after the date of this Agreement take all action necessary in accordance with the KGCC and the Seller Articles and the Seller By Laws to convene the stockholders of Seller for a meeting to consider the Merger (the “Seller Stockholders’ Meeting”). Seller shall use its reasonable best efforts to solicit from stockholders of Seller proxies in favor of the Merger and shall take all other action necessary or advisable to secure the vote or consent of stockholders required by the KGCC to approve the Merger, unless the Seller’s Board of Directors shall have determined in good faith based on advice of counsel that such actions would reasonably be likely to result in violation of its fiduciary duty to Seller’s stockholders under applicable Law.

     7.2 Appropriate Action; Consents; Filings. The Seller, the Sub and the Company shall use their reasonable best efforts to (i) take, or cause to be taken, all appropriate action, and do, or cause to be done, all things necessary, proper or advisable under applicable Law to consummate and make effective the transactions contemplated by this Agreement (unless the Seller’s Board of Directors shall have determined in good faith based on advice of counsel that such actions would reasonably be likely to result in violation of its fiduciary duty to Seller’s stockholders under applicable Law), (ii) obtain all consents, licenses, permits, waivers, approvals, authorizations or orders required under Law (including, without limitation, all foreign and domestic (federal, state and local) governmental and regulatory rulings and approvals and parties to contracts) required in connection with the authorization, execution and delivery of this Agreement and the consummation by them of the transactions contemplated hereby, including, without limitation, the Merger, (iii) make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement and the Merger required under (A) the Securities Act and the Exchange Act (to the extent applicable) and the rules and regulations thereunder, and any other applicable federal or state securities laws, (B) the BHCA, and any other applicable federal or state banking laws and (C) any other applicable Law; provided that, the Company and the Seller shall cooperate with each other in connection with the making of all such filings, including providing copies of all such documents to the non filing party and its advisors prior to filing and, if requested, to accept all reasonable additions, deletions or changes suggested in connection therewith. All applications and notices of the Company and the Seller required to be filed pursuant to the BHCA and any other applicable federal or state banking laws must be prepared and filed within twenty (20) Business Days following the date of this Agreement. The Seller and the Company shall furnish all information required for any application or other filing to be made pursuant to the rules and regulations of any applicable Law in connection with the transactions contemplated by this Agreement. In case at any time after the Effective Time any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and directors of each party to this Agreement shall use all reasonable efforts to take all such necessary action.

     7.3 Directors’ and Officers’ Indemnification and Insurance.

          (a) By virtue of the occurrence of the Merger, the Company shall from and after the Effective Time succeed to Seller’s obligations with respect to indemnification or exculpation now existing in favor of the directors, officers, employees and agents of Seller and the Seller Subsidiaries as provided in the Seller Articles, Seller By Laws, indemnification

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agreements of Seller or the Seller Subsidiaries or otherwise in effect as of the date of this Agreement with respect to matters occurring prior to the Effective Time. Section 7.3 of the Seller Disclosure Schedule contains a complete list of all indemnification arrangements to which Seller is a party to on the date of this Agreement.

          (b) For a period of four (4) years from and after the Effective Time, the Company will use commercially reasonable efforts to maintain tail coverage on the Existing D&O Policy for all present and former directors and officers of Seller currently covered by the Existing D&O Policy on the date of this Agreement with terms (including coverage limits) substantially similar in all respects to those currently in effect on the date of this Agreement with respect to acts, omissions and other matters occurring prior to the Effective Time for which coverage is provided under the Existing D&O Policy (the “Insurance Coverage”); provided, however, that in no event shall the Company be required to expend an aggregate amount of more than $16,400 for the four year tail coverage on the existing D&O Policy; and further provided, that if the Company is unable to maintain or obtain the insurance called for by this Section 7.3(b), the Company shall use commercially reasonable efforts to obtain as much comparable Insurance Coverage as is available.

          (c) In the event the Company or any of its successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or Surviving Corporation or entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties or assets to any person, then, and in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of the Company assume the obligations set forth in this Section 7.3.

          (d) The provisions of this Section 7.3 are intended to be for the benefit of, and shall be enforceable by, each person who is now, or has been at any time prior to the date of this Agreement or who becomes prior to the Effective Time, an officer or director of Seller or any Seller Subsidiary (the “Indemnified Parties”) and his or her heirs and representatives.

     7.4 Notification of Certain Matters. The Seller shall give prompt notice to the Company, and the Company shall give prompt notice to the Seller, of (i) the occurrence, or nonoccurrence, of any event the occurrence or non occurrence of which would be likely to cause any representation or warranty contained in this Agreement to be untrue or inaccurate, and (ii) any failure of the Seller, the Sub or the Company, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by it hereunder; provided, however, that the delivery of any notice pursuant to this Section 7.4 shall not limit or otherwise affect the remedies available hereunder to the party receiving such notice.

     7.5 Public Announcements. The Company and the Seller shall consult with each other before issuing any press release or otherwise making any public statements with respect to the Merger and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by Law, including disclosures required under the federal securities laws.

     7.6 Customer Retention. To the extent permitted by law or applicable regulation, the Seller shall use all reasonable efforts to assist the Company in its efforts to retain the customers

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of the Seller and the Seller Subsidiaries for the Sub and its Affiliates. Such efforts shall include making introductions of the Company’s employees to such customers, assisting in the mailing of information prepared by the Company and reasonably acceptable to the Seller to such customers and actively participating in any “transitional marketing programs” as the Company shall reasonably request.

     7.7 Directorships. Promptly after the Effective Time, subject to approval or objection by Regulatory Authorities, the Company will propose one member of Seller’s or a Seller Subsidiary’s current board, such director to be selected by Company in its sole discretion, to the board of directors of the Company or of the Company Bank Subsidiary.

     7.8 Employees. Those individuals who are employed by the Seller or any of the Seller Subsidiaries as of the Effective Time shall be hereinafter referred to as the “Transferred Employees.”

          (a) Prior to the Closing, the Company shall provide to the Seller a list of those employees of the Seller that the Company desires to have remain employed with the Seller’s bank subsidiary after the Effective Time (the “Continuing Employees”). Any employee not included on such list shall be terminated by the Seller (the “Terminated Employees”) immediately prior to the Effective Time, and such Terminated Employees shall be entitled to receive severance benefits in accordance with Section 7.8(f) below.

          (b) After the Effective Time, the Company and the Company Bank Subsidiary shall give the Transferred Employees full credit for their prior service with the Seller and the Seller Subsidiaries (or any service credited as such in connection with a previous acquisition by the Seller or any Seller Subsidiary): (i) for purposes of eligibility (including without limitation initial participation and eligibility for current benefits) and vesting under any qualified or nonqualified retirement or profit sharing plans maintained by the Company in which Transferred Employees may be eligible to participate; and (ii) for all purposes under any welfare benefit plans, “cafeteria plans” (as defined in Code Section 125), vacation plans and similar arrangements maintained by the Company and the Company Bank Subsidiary.

          (c) Nothing contained in this Section 7.8 shall limit the right of the Company or its Affiliates, at any time and from time to time, to amend, modify or terminate, in whole or in part, any of the plans referenced in this Section 7.8, except that no such amendment shall nullify the provisions of this Section 7.8, and the Company hereby reserves such right.

          (d) The Seller’s existing health and dental plans and other employee welfare benefit plans shall remain in effect at least until the Effective Time. Thereafter, Transferred Employees will be integrated into the Company’s health and dental plans and other employee welfare plans at a time determined on a plan by plan basis by the Company in its sole discretion.

          (e) The Seller’s 401(k) plan shall be terminated prior to the Effective Time and the respective account balances of participants shall be distributed pursuant to the terms of such plan. No employee or employer contributions shall be made to the Seller’s 401(k) plan from or on account of compensation paid after the Effective Time.

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ARTICLE VIII — CONDITIONS OF MERGER

     8.1 Conditions to Obligation of Each Party to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the satisfaction at or prior to the Effective Time of the following conditions:

          (a) Shareholder Approval. This Agreement and the Merger shall have been approved and adopted by the requisite vote of the stockholders of the Seller.

          (b) Federal Reserve Board. The Merger shall have been approved by the Federal Reserve Board and any other applicable federal Regulatory Authorities, which approvals shall not contain any condition that would significantly adversely affect the Company, all conditions required to be satisfied prior to the Effective Time imposed by the terms of such approval shall have been satisfied and all waiting periods relating to such approval shall have expired.

          (c) State and Other Approvals. The Merger shall have been approved by the OSBC, the OCC, the Kansas Secretary of State and any other applicable Regulatory Authorities, which approvals shall not contain any condition that would have a Company Material Adverse Effect. All conditions required to be satisfied prior to the Effective Time imposed by the terms of such approval shall have been satisfied and all waiting periods relating to such approval shall have expired.

          (d) No Order. No Governmental Authority, or federal or state court of competent jurisdiction, shall have enacted, issued, promulgated, enforced or entered any Law or Order which is in effect preventing or prohibiting consummation of the transactions contemplated by this Agreement or restricting the consummation of the transactions contemplated by this Agreement in a manner that would have a Seller Material Adverse Effect or a Company Material Adverse Effect.

          (e) Escrow Agreement. The Company, the Sub, the Seller and the Escrow Agent must have entered into the Escrow Agreement.

     8.2 Additional Conditions to Obligations of the Company. The obligations of the Company to effect the Merger are also subject to the following conditions:

          (a) Representations and Warranties. Without giving effect to any update to the Seller Disclosure Schedule or notice to the Company under Sections 5.5 or 7.4, above, and except for Section 2.17, above, which is provided for in subsection (g), below, (i) each of the representations and warranties of the Seller contained in this Agreement that is qualified by reference to “materiality” or Seller Material Adverse Effect shall be true and correct as of the date of this Agreement and as of the Effective Time, except to the extent such representations and warranties are made as of another date, in which case such representations and warranties shall be true and correct as of such other date; and (ii) each of the representations and warranties of the Seller that is not qualified by reference to “materiality” or Seller Material Adverse Effect shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time, except, to the extent such representations and warranties are made as of another date, in which case such representations and warranties shall be true and correct as of such other

37

date, and except in the case of either clause (i) or (ii), above, where any failure of such representations and warranties to be true and correct, either individually or in the aggregate, would not have a Seller Material Adverse Effect. The Company shall have received a certificate signed on behalf of the Seller by the chief executive officer and the chief financial officer of the Seller to the foregoing effect.

          (b) Agreements and Covenants. The Seller shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time.

          (c) Consents Obtained. All Seller Approvals and all filings required to be made by Seller for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by Seller.

          (d) No Challenge. There shall not be pending any action, proceeding or investigation before any court or administrative agency or by a government agency or any other person (i) challenging or seeking material damages in connection with, the Merger or (ii) seeking to restrain, prohibit or limit the exercise of full rights of ownership or operation by the Company or the Company Bank Subsidiary of all or any portion of the business or assets of Seller, which in either case is reasonably likely to have a Seller Material Adverse Effect or a Company Material Adverse Effect.

          (e) Burdensome Condition. There shall not be any action taken, or any statute, rule, regulation or order enacted, entered, enforced or deemed applicable to the Merger, by any federal or state governmental entity which, in connection with the grant of any regulatory approval, imposes any condition or restriction upon the Company or the Seller or their respective subsidiaries (or the Surviving Corporation or its subsidiaries after the Effective Time), which would materially adversely impact the economic or business benefits of the transactions contemplated by this Agreement in such a manner as to render inadvisable the consummation of the Merger.

          (f) No Material Adverse Changes. Since the date of the Agreement, there shall have been no event, and there has not been any Effect, that, either individually or in the aggregate, would have a Seller Material Adverse Effect.

          (g) OCC Agreement Conditions. There shall be no determination by the Company, in good faith, that the conditions referenced in the OCC Agreement and the response to such conditions by Regulatory Authorities constitute a Seller Material Adverse Effect.

          (h) Bank Classified Loans. At Closing, Classified Loans shall not be more than $2,500,000.

          (i) Loan Loss Reserves. At Closing, the Bank must have an allowance for loan loss reserves equal to or greater than the greater of (a) 1.25% of the Bank’s entire loan portfolio or (b) 100% of Non-Performing Loans.

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          (j) Dissenting Shareholders. No more than 20% of the shares of Seller’s Common Stock shall be Dissenting Shares.

          (k) Resignations. The Company shall have received (i) evidence reasonably satisfactory to the Company of the resignation of all directors of the Seller, effective at the Effective Time, and (ii) all documents and filings, completed and executed by the appropriate directors, officers and representatives of the Seller and the Seller Subsidiaries, that are necessary to record such resignations.

          (l) Absence of Certain Changes. Since the date of the Agreement the Seller and Seller Subsidiaries have operated their businesses in all material respects in the ordinary course and there has not been any:

     (i) amendment to the Seller Articles, Seller By-Laws or Subsidiary Organizational Documents;

     (ii) sale, assignment, transfer, lease or other disposition of any material tangible real property or personal property of the Seller or any Seller Subsidiary, except in the ordinary course of business or intercompany transactions;

     (iii) acquisition (by merger, consolidation or other combination, or acquisition of stock or assets or otherwise) by the Seller or any Seller Subsidiary of any corporation, partnership or other business organization, or any division thereof;

     (iv) incurrence, creation or assumption of any Lien, except in the ordinary course of business, or any assets or properties (whether tangible or intangible) of the Seller or any Seller Subsidiary, other than (A) Permitted Liens, (B) Liens to be released at or prior to the Closing, and (C) Liens on assets or properties having an aggregate value not in excess of $500,000;

     (v) issuance or sale of any additional shares of Seller Common Stock, or any capital stock of or other equity interest in any Seller Subsidiary, or securities convertible into or exchangeable for shares of Seller Common Stock or any capital stock of or other equity interests in Seller or any Seller Subsidiary, or issuance or grant of any options, warrants, calls, subscription rights or other rights of any kind to acquire additional shares of the Seller Common Stock or any capital stock of or other equity interest in any Seller Subsidiary;

     (vi) event or condition that has had a Seller Material Adverse Effect; or

     (vii) agreement, other than this Agreement, to take any actions specified in this Section 8.2(l).

     8.3 Additional Conditions to Obligations of the Seller. The obligation of the Seller to effect the Merger is also subject to the following conditions:

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          (a) Representations and Warranties. Without giving effect to any notice to the Seller under Sections 6.3 or 7.4, above, (i) each of the representations and warranties of the Company contained in this Agreement that is not qualified as to “materiality” or Company Material Adverse Effect shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time, except to the extent that such representations and warranties are made as of another date, in which case such representations and warranties shall be true and correct in all material respects as of such other date; and (ii) each of the representations and warranties of the Company that is qualified as to “materiality” or Company Material Adverse Effect shall be true and correct in all material respects as of the date of this Agreement and as of the Effective Time, except to the extent such representations and warranties are made as of another date, in which case such representations and warranties shall be true and correct as of such other date, and except in the case of either clause (i) or (ii), above, where any failure of such representations and warranties to be true and correct, either individually or in the aggregate, would not have a Company Material Adverse Effect. The Seller shall have received a certificate signed on behalf of the Company by the Chief Executive Officer and the Chief Financial Officer of the Company to the foregoing effect.

          (b) Agreements and Covenants. The Company shall have performed or complied in all material respects with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time.

          (c) Consents Obtained. All material consents, waivers, approvals, authorizations or orders required to be obtained, and all filings required to be made by the Company for the authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby shall have been obtained and made by the Company, except where the failure to obtain any consents, waivers, approvals, authorizations or orders required to be obtained or any filings required to be made would not have a Company Material Adverse Effect.

          (d) No Material Adverse Changes. Since the date of the Agreement, there shall have been no Company Material Adverse Effect, that either individually or in the aggregate, would be reasonably expected to have a Company Material Adverse Effect. The Seller shall have received a certificate of the President and the Chief Financial Officer of the Company to that effect.

ARTICLE IX — TERMINATION

     9.1 Termination. This Agreement may be terminated at any time prior to the Effective Time, whether prior to or after the stockholders of the Seller adopt this Agreement:

          (a) by mutual written consent duly authorized by the Boards of Directors of the Company and the Seller;

          (b) by either Seller or the Company if the Merger shall not have been consummated by March 1, 2007, unless extended by the Boards of Directors of Seller and the Company for any reason; provided, however, that the right to terminate this Agreement under this Section 9.1(b) shall not be available to any party whose action or failure to act has been a

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principal cause of or resulted in the failure of the Merger to occur on or before such date if such action or failure to act constitutes a breach of this Agreement;

          (c) by either the Seller or the Company if a court of competent jurisdiction or Governmental Authority shall have issued a non appealable final order, decree or ruling or taken any other action having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger;

          (d) by either the Seller or the Company if: (i) the Seller Stockholders’ Meeting (including any adjournments thereof) has been held and completed and the stockholders of the Seller have taken a final vote on a proposal to adopt this Agreement and (ii) the required approval of the stockholders of the Seller contemplated by this Agreement has not been obtained; provided, however, that the right to terminate this Agreement under this Section 9.1(d) shall not be available to the Seller where the failure to obtain approval by the Seller stockholders shall have been caused by the action or failure to act of the Seller, and such action or failure to act constitutes a breach by the Seller of any provision of this Agreement;

          (e) by the Seller, upon a breach of any covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have been untrue when made or shall have become untrue, in either case such that the conditions set forth in Section 8.3(a), above, would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the Company’s representations and warranties or breach by the Company was unintentional and is curable by the Company through exercise of commercially reasonable efforts, then the Seller may not terminate this Agreement pursuant to this Section 9.1(e) for ten (10) days after delivery of written notice from the Seller to the Company of such breach, provided, that the Company continue to exercise commercially reasonable efforts to cure such breach (it being understood that the Seller may not terminate this Agreement pursuant to this Section 9.1(e) if such breach by the Company is cured during such ten day period);

          (f) by the Company upon a breach of any covenant or agreement on the part of the Seller set forth in this Agreement, or if any representation or warranty of the Seller shall have been untrue when made or shall have become untrue, in either case such that the conditions set forth in Section 8.2(a), above, would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such inaccuracy in the Seller’s representations and warranties or breach by the Seller was unintentional and is curable by the Seller through exercise of its commercially reasonable efforts, then the Company may not terminate this Agreement pursuant to this Section 9.1(f) for ten (10) days after delivery of written notice from the Company or the Seller of such breach, provided, that the Seller continues to exercise commercially reasonable efforts to cure such breach (it being understood that the Company may not terminate this Agreement pursuant to this Section 9.1(f) if such breach by the Seller is cured during such ten day period);

          (g) by the Seller prior to the vote of the stockholders, without further action, if the Seller shall have entered into a definitive agreement with respect to a Superior Offer pursuant to and in accordance with Section 5.4(b), above; provided, however, that any payment required to be paid by the Seller pursuant to Section 9.3(b)(i) shall be made to the Company concurrently

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with and as a condition to the effectiveness of, a termination of this Agreement by the Seller pursuant to this Section 9. l(g);

          (h) by the Company if the Seller’s Board of Directors or any committee thereof has withdrawn, amended or modified in a manner adverse to the Company the Seller’s Board of Directors Recommendation (other than a withdrawal, amendment or modification permitted by Section 5.4 above);

          (i) by the Company

     (i) if any of the conditions to the obligations of the Company to effect the Merger set forth in Sections 8.1 or 8.2, above, have not been satisfied or waived by the Company at Closing or the Company reasonably determines that the timely satisfaction of any condition to the obligations of the Company to effect the Merger set forth in Sections 8.1 or 8.2, above, has become impossible (other than as a result of any failure on the part of the Company to comply with or perform any covenant or obligation of the Company set forth in this Agreement); or

     (ii) in the event there has been a Seller Material Adverse Effect; by the Seller

     (iii) if any of the conditions to the obligations of the Seller to effect the Merger set forth in Sections 8.1 or 8.3, above, have not been satisfied or waived by the Seller at Closing or the Seller reasonably determines that the timely satisfaction of any condition to the obligations of the Seller to effect the Merger set forth in Sections 8.1 or 8.3, above, has become impossible (other than as a result of any failure on the part of the Seller to comply with or perform any covenant or obligation of the Seller set forth in this Agreement); or

     (iv) in the event there has been a Company Material Adverse Effect.

     9.2 Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 9.1, above, will be effective immediately upon (or if termination is pursuant to Sections 9.1(e) or 9.1(f), above, and the proviso therein is applicable, ten (10) days after) the delivery of written notice thereof by the terminating party to the other parties. In the event of termination of this Agreement as provided in Section 9.1, above, this Agreement shall be of no further force or effect, with no liability of party to the other parties, except (i) the provisions set forth in this Section 9.2., Section 9.3 and ARTICLE X (General Provisions), shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any intentional or willful breach of this Agreement.

     9.3 Fees and Expenses.

          (a) Except as set forth in Section 9.2., above, and this Section 9.3., all fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby

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shall be paid by the party incurring such fees and expenses whether or not the Merger is consummated.

          (b) (i) Seller shall pay to the Company in immediately available funds, within one (1) business day after demand by the Company an amount equal to $500,000 (the “Termination Fee”) if this Agreement is terminated by Seller pursuant to Section 9.1(g) above.

     (ii) If (A) this Agreement is terminated by the Company or Seller, as applicable, pursuant to Section 9. l(b) (and prior to such termination Seller has not held a meeting of its stockholders pursuant to Section 7.1), Section 9.1(d), or Section 9.1(h), (B) prior to such termination an Acquisition Proposal was known to exist by the Seller’s shareholders and not withdrawn, and (C) within twelve (12) months following such termination of this Agreement either (Y) an Acquisition Transaction with the party or an Affiliate of the party making the Acquisition Proposal that was outstanding at the time of such termination is consummated or (Z) the Seller enters into an agreement or binding letter of intent providing for an Acquisition Transaction with the party or an Affiliate of the party making the Acquisition Proposal that was outstanding at the time of such termination, then the Seller shall pay or cause to be paid to the Company in immediately available funds an amount equal to the Termination Fee within one (1) Business Day after such transaction is consummated or the Seller enters into such agreement or binding letter of intent.

     (iii) each of Seller and the Company acknowledges that the agreements contained in this Section 9.3(b) are an integral part of the transactions contemplated by this Agreement and that without these agreements the Company and Seller would not enter into this Agreement; accordingly, if Seller fails to pay in a timely manner the amounts due pursuant to this Section 9.3(b) and, in order to obtain such payment, the Company makes a claim that results in a judgment against Seller for the amounts set forth in this Section 9.3(b), Seller shall pay to the Company its reasonable costs and expenses (including reasonably attorneys’ fees and expenses) in connection with such suit, together with interest on the amounts set forth in this Section 9.3 (b) at the Wall Street Journal prime rate in effect on the date such payment was required to be made.

ARTICLE X — GENERAL PROVISIONS

     10.1 Non Survival of Representations, Warranties and Agreements. The representations, warranties and agreements in this Agreement shall terminate at the Effective Time, except that the agreements set forth in ARTICLE I and Section 7.3, above, shall survive the Effective Time indefinitely.

     10.2 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed given if delivered personally, mailed by registered or certified mail (postage prepaid, return receipt requested), delivered by an express courier (with confirmation), or telecopied (with confirmation) to the parties at the following addresses or telecopy numbers, as the case may be (or at such other address or telecopy number for a party as

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shall be specified by like changes of address or telecopy number) and shall be effective upon receipt:

(a)	If to the Seller:
	Lynn Mitchelson
	5341 Mission Woods Rd.
	Mission Woods, Kansas 66205
	With a copy to:
	Stinson Morrison Hecker LLP
	1201 Walnut, Suite 2900
	Kansas City, Missouri 64106 2150
	Attention: Bob Monroe
	Facsimile: (888) 277-8082
	If to the Company:
	Blue Valley Ban Corp.
	11935 Riley
	Overland Park, Kansas 66225
	Attention: Bob Regnier
	Facsimile: (913) 338-2801
	With a copy to:
	Blackwell Sanders Peper Martin LLP
	4801 Main Street, Suite 1000
	Kansas City, Missouri 64112
	Attention: Steve Carman
	Facsimile: (816) 983-8080

     10.3 Certain Definitions. For purposes of this Agreement, the term:

     “Affiliate” means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first mentioned person; including, without limitation, any partnership or joint venture in which any person (either alone, or through or together with any other subsidiary) has, directly or indirectly, an interest of 5% or more;

     “Business Day” means any day other than a day on which banks in Kansas are required or authorized to be closed;

     “Classified Loans” means loans classified 7 or higher.

     “Code” means the Internal Revenue Code of 1986, as amended;

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     “Consent” shall mean any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any Contract, Law, Order or Permit.

     “Contract” shall mean any agreement, arrangement, authorization, commitment, contract, indenture, instrument, license, lease, obligation, plan, practice, restriction, understanding, or undertaking of any kind or character, or other document to which any Person is a party or that is binding on any Person or its capital stock, assets or business.

     “Control” shall mean the possession, direct or indirect, of the power to direct or cause the direction of management and policies of a person, whether through the ownership of voting securities, by Contract, or otherwise.

     “Default” shall mean (i) any breach or violation of or default under any Contract, Order, or Permit, (ii) any occurrence of any event that with the passage of time or the giving of notice or both would constitute a breach or violation of or default under any Contract, Order, or Permit, or (iii) any occurrence of any event that with or without the passage of time or the giving of notice would give rise to a right to terminate or revoke, change the current terms of, or renegotiate, or to accelerate, increase or impose any Liability under, any Contract, Order or Permit.

     “Intellectual Property” means United States or foreign intellectual property including (i) all inventions, patents, patent applications and patent disclosures, together with all reissuances, continuations, continuations-in-part, divisions, revisions, extensions and reexaminations thereof, (ii) all trademarks, service marks, logos, trade names, corporate names, domain names, trade dress, including all goodwill associated therewith, and all applications, registrations and renewals in connection therewith, (iii) all copyrights and copyrightable works and all applications, registrations and renewals in connection therewith, (iv) all trade secrets and confidential business information (including research and development, know-how, formulas, compositions, processes, techniques, methods, schematics, technology, technical or other data, designs, drawings, flowcharts, block diagrams, specifications, customer and supplier lists, pricing and cost information and business and marketing proposals), (v) all computer software (including databases and related documentation), and (vi) all other proprietary rights, whether now owned or hereafter recognized in any jurisdiction.

     “Knowledge” as used with respect to an entity (including references to such entity being aware of a particular matter) shall mean those facts that are actually known by the Chairman, Chief Executive Officer, President, Chief Financial Officer of such entity, or any other executive officer who is subject to the reporting requirements of Section 16 of the Securities Act.

     “Law” shall mean any code, law, ordinance, regulation, reporting or licensing requirement, rule, or statute applicable to a Person or its assets, Liabilities or business, including those promulgated, interpreted, or enforced by any Regulatory Authority.

     “Liability” shall mean any direct or indirect, primary or secondary, liability, indebtedness, obligation, penalty, cost, or expense (including costs of investigation, collection, and defense), claim, deficiency, guaranty, or endorsement of or by any Person (other than endorsements of notes, bills, checks, and drafts presented for collection or deposit in the ordinary

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course of business) of any type, whether accrued, absolute or contingent, liquidated or unliquidated, matured or unmatured, or otherwise.

     “Lien” shall mean any conditional sale agreement, default of title, easement, encroachment, encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation, restriction, security interest, title retention, or other security arrangement, or any adverse right or interest, charge, or claim of any nature whatsoever of, on, or with respect to any property or property interest, other than (i) Liens for current Taxes upon the assets or properties of a party or its subsidiaries which are not yet due and payable, and (ii) for depository institution Subsidiaries of a party, pledges to secure deposits and other Liens incurred in the ordinary course of the banking business.

     “Litigation” shall mean any action, arbitration, cause of action, claim, complaint, criminal prosecution, demand letter, governmental or other examination or investigation, hearing, inquiry, administrative or other proceeding, or notice by any Person alleging potential Liability of a party, or invoking or seeking to invoke legal process to obtain information relating to or affecting a party, which affects such Party’s business assets (including Contracts related to it), or obligations under the transactions contemplated by this Agreement, but shall not include regular, periodic examinations of depository institutions and their Affiliates by Regulatory Authorities.

     “Net Book Value” means the consolidated common stock, additional paid-in capital, retained earnings, and unrealized gain/(loss) on securities, determined in accordance with GAAP.

     “Non-Performing Loans” means the sum of: (i) loans which are classified as 90 days or more past due but which are still treated as accrual loans (regardless of whether such classification is internal or as reported to or directed by Seller’s or Seller Subsidiaries’ Regulatory Authorities); (ii) loans classified as non-accrual (regardless of whether such classification is internal or as reported to or as directed by Seller’s or Seller Subsidiaries’ Regulatory Authorities); plus (iii) loans for which the obligee has reduced the agreed interest rate, reduced the principal or interest obligation, extended the maturity, applied interest payment to reduce principal, capitalized interest, obtained or requested additional collateral or otherwise “renegotiated” the terms of the obligation based upon the actual or asserted inability of the obligor or obligors of such loans to perform their obligations pursuant to the agreements with the obligee prior to such modification or renegotiation.

     “Order” shall mean any administrative decision or award, decree, injunction, judgment, order, ruling, or writ of any Governmental Authority.

     “Permit” shall mean any federal, state, local, and foreign governmental approval, authorization, certificate, easement, filing, franchise, license, notice, permit, or right to which any Person is a party or that is or may be binding upon or inure to the benefit of any Person or its securities, assets or business.

     “Permitted Liens” means (i) statutory liens for Taxes, assessments or other charges by any Governmental Authority not yet due and payable, (ii) inchoate mechanics, materialmen’s, carriers’, workmen’s, warehouseman’s, repairmen’s landlords’ and similar liens granted or which arise in the ordinary course of business consistent with past practice, and (iii) such other liens,

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encumbrances or imperfections that are not material in amount and do not materially detract from the value of or materially impair the existing use of the property affected by such lien, encumbrance or imperfection.

     “Person” means an individual, corporation, partnership, association, trust, unincorporated organization, limited liability company, other entity or group (as defined in Section 13(d) of the Exchange Act); and

     “Regulatory Authorities” shall mean, collectively, the United States Department of Justice, the Federal Reserve Board, the FDIC, the OCC, the OSBC, Securities and Exchange Commission, and all other federal and state regulatory agencies and public authorities having jurisdiction over the Parties and their respective Subsidiaries.

     “Reserve Ratio” means, as of the end of each fiscal quarter, the ratio (expressed as a percentage) of (a) the amount of the loan loss reserves designated by the Bank and (b) the Non-Performing Loans of the Bank.

     “Rights” shall mean all arrangements, calls, commitments, Contracts, options, rights to subscribe to, scrip, warrants, or other binding obligations of any character whatsoever by which a Person is or may be bound to issue additional shares of its capital stock or other Rights, or securities or Rights convertible into or exchangeable for, shares of the capital stock of a Person, including without limitation rights under the Rights Agreement.

     “Subsidiary” or “Subsidiaries” of the Seller, the Company, the Surviving Corporation, or any other person, means any corporation, limited liability company, partnership, joint venture or other legal entity of which the Seller, the Company, the Surviving Corporation or such other person, as the case may be (either alone or through or together with any other subsidiary), owns, directly or indirectly, 10% or more of the stock or other equity interests the holders of which are generally entitled to vote for the election of the board of directors or other governing body of such corporation or other legal entity.

     “Tier 1 Ratio” means, with respect to the Seller or any Seller Subsidiary, the quotient which has Tier 1 Capital as a numerator and risk-weighted assets as a denominator, as determined based on the most recent quarterly “Consolidated Report of Condition and Income” filed by Seller or a Seller Subsidiary (or if such report is not filed for any reason, a report containing information similar to the report specified above). For purposes of this definition, “Tier 1 Capital” shall have the same definition as set forth in 12 C.F.R. § 3.2(c) and “risk-weighted assets” shall be determined pursuant to 12 C.F.R. Part 3, Appendix A, § 3.

     10.4 Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     10.5 Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good faith to

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modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.

     10.6 Entire Agreement. This Agreement (including the documents and instruments referred to in this Agreement) constitutes the entire agreement of the parties and supersedes all prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and, except as otherwise expressly provided herein, are not intended to confer upon any other person any rights or remedies hereunder.

     10.7 Assignment. This Agreement shall not be assigned by operation of law or otherwise, except that the Company may assign all or any of its rights hereunder and thereunder to any Affiliate, provided that no such assignment shall relieve the assigning party of its obligations hereunder.

     10.8 Parties in Interest. Subject to Section 10.7, above, this Agreement shall be binding upon and inure solely to the benefit of each party hereto, and nothing in this Agreement, express or implied, is intended to or shall confer upon any other person any right, benefit or remedy of any nature whatsoever under or by reason of this Agreement, other than Section 6.4, above (which is intended to be for the benefit of the Indemnified Parties and may be enforced by such Indemnified Parties).

     10.9 Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Kansas, regardless of the laws that might otherwise govern under applicable principles of choice of law or conflicts of law.

     10.10 Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties and delivered to the other party, it being understood that each party need not sign the same counterpart.

     10.11 Time is of the Essence. Time is of the essence of this Agreement.

     10.12 Specific Performance. The parties hereto acknowledge that monetary damages would not be a sufficient remedy for breach of this Agreement. Therefore, upon breach of this Agreement by any party, the aggrieved party may proceed to protect its rights and enforce this Agreement by suit in equity, action at law or other appropriate proceeding, including an action for the specific performance of any provision herein or any other remedy granted by law, equity or otherwise, in each case without posting a bond. Any action for specific performance hereunder shall not be deemed exclusive and may also include claims for monetary damages as may be warranted under the circumstances. The prevailing party in any such suit, action or other proceeding arising out of or related to this Agreement shall be entitled to recover its costs, including attorney’s fees, incurred in such suit, action or other proceeding.

     10.13 Interpretation. When a reference is made in this Agreement to Articles, Sections, Exhibits or Schedules, such reference will be to an Article or Section of or Exhibit or Schedule to this Agreement unless otherwise indicated. The table of contents contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation of

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this Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement, they will be deemed to be followed by the words “without limitation.” Unless the context otherwise requires (i) “or” is disjunctive but not necessarily exclusive, (ii) words in the singular include the plural and vice versa, (iii) the use in this Agreement of a pronoun in reference to a party hereto includes the masculine, feminine or neuter, as the context may require, and (iv) terms used herein that are defined in GAAP have the meanings ascribed to them therein. No provision of this Agreement will be interpreted in favor of, or against, any of the parties to this Agreement by reason of the extent to which any such party or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof, and no rule of strict construction will be applied against any party hereto. The Seller Disclosure Schedule and the Company Disclosure Schedule, as well as all other schedules and all exhibits hereto, will be deemed part of this Agreement and included in any reference to this Agreement. This Agreement will not be interpreted or construed to require any Person to take any action, or fail to take any action, if to do so would violate any applicable Law. References to the “other party” or “either party” will be deemed to refer to Seller or the Company, as the case may be.

[signatures on following page]

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     IN WITNESS WHEREOF, the Company, the Sub and the Seller have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

BLUE VALLEY BAN CORP.
By:	/s/ Robert D. Regnier
	Robert D. Regnier, President
BVBC ACQUISITION I, INC.
By:	/s/ Robert D. Regnier
	Robert D. Regnier, President
UNISON BANCORP, INC.
By:	/s/ Lynn Mitchelson
	Lynn Mitchelson, Chairman of the Board

Signature Page to Agreement and Plan of Merger

EX-10.7

Exhibit 10.7

Execution Version

ACQUISITION AGREEMENT AND PLAN OF MERGER

among

Northland National Bank
a national association

and

Blue Valley Ban Corp.,
a Kansas corporation

and

Western National Bank,
a national association

Dated as of March 2, 2007.

Execution Version

TABLE OF CONTENTS

Acquisition Agreement and Plan of Merger

ARTICLE I THE MERGER		4
1.01	The Merger	4
1.02	Closing	5
1.03	Effective Time	7
1.04	Articles of Association and Bylaws	9
1.05	Board of Directors and Officers	10
1.06	Additional Actions	12
1.07	Merger Consideration	14
1.08	Payment of Merger Consideration	18
1.09	Closing of Stock Transfer Books	19
1.10	Entire Transaction	22
ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE SELLER ENTITIES		27
2.01	Incorporated Seller Bank Representations and Warranties	28
2.02	Incorporated Seller Holding Company Representations and Warranties	28
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ACQUIROR BANK		29
3.01	Organization and Authority	30
3.02	Corporate Authorization	31
3.03	Regulatory Matters	36
3.04	Brokers, Investment Bankers, and Finders	38
3.05	Availability of Funds	39
3.06	Accuracy of Information	39
ARTICLE IV CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME		41
4.01	Conduct of Businesses Prior to the Effective Time	41
4.02	Forbearances by the Seller Entities	42
ARTICLE V ADDITIONAL AGREEMENTS		48
5.01	Access and Information	48
5.02	Regulatory Approvals	52
5.03	Current Information	53
5.04	Expenses	55
5.05	Miscellaneous Agreements and Consents	55
5.06	Press Releases	57
5.07	Nonsolicitation and Exclusive Dealing	58
5.08	Regulatory Fees	62
5.09	Custodial Accounts	63
5.10	FHLB Stock	65

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ARTICLE VI CERTAIN CONDITIONS		66
6.01	Conditions to Each Party’s Obligation to Effect the Merger	66
6.02	Conditions to Obligations of the Seller Entities	70
6.03	Conditions to Obligations of Acquiror Bank	72
ARTICLE VII INDEMNIFICATION		77
7.01	Indemnification	77
7.02	Indemnification Procedures	86
ARTICLE VIII TERMINATION, AMENDMENT, AND WAIVER		94
8.01	Termination	94
8.02	Effect of Termination	97
8.03	Amendment	100
8.04	Waiver	100
ARTICLE IX GENERAL PROVISIONS		101
9.01	Survival of Representations, Warranties, and Agreements	101
9.02	No Assignment; Successors and Assigns	103
9.03	Severability	104
9.04	No Implied Waiver	105
9.05	Headings	106
9.06	Entire Agreement	107
9.07	Counterparts	108
9.08	Notices	109
9.09	Governing Law; Venue; Jury Waiver	117
9.10	Third Party Beneficiaries	119
9.11	Mutual Drafting	120

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SCHEDULES
2.01	Incorporated Representations and Warranties of Seller Bank
2.02	Incorporated Representations and Warranties of Seller Holding Company
4.02	Forbearances by the Seller Entities, Exceptions

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ACQUISITION AGREEMENT AND PLAN OF MERGER

     THIS ACQUISITION AGREEMENT AND PLAN OF MERGER (this “Agreement”) is made and entered into, as of March 2, 2007, by and among Northland National Bank, a National Association with its principal offices in Gladstone, Missouri (“Acquiror Bank”), Blue Valley Ban Corp., a Kansas corporation and registered bank holding company (“Seller Holding Company”), and Western National Bank, a National Association with its principal offices in Lenexa, Kansas (“Seller Bank” and collectively with Seller Holding Company, the “Seller Entities”).

     WHEREAS, the respective Boards of Directors of Acquiror Bank and the Seller Entities have authorized the execution and delivery of this Agreement; and

     WHEREAS, Acquiror Bank and the Seller Entities desire to provide for certain undertakings, conditions, representations, warranties, and covenants in connection with the transactions contemplated by this Agreement.

     NOW, THEREFORE, in consideration of the premises and of the representations, warranties, and agreements herein contained, the parties agree as follows:

Article I
THE MERGER

     1.01 The Merger. Subject to the terms and conditions of this Agreement, Seller Bank shall be merged with and into Acquiror Bank (the “Merger”) in accordance with the National Bank Act, and the separate corporate existence of Seller Bank shall cease. Acquiror Bank shall be the surviving corporation in the Merger (referred to herein as the “Surviving Corporation” with respect to the period after the Merger is effected) and shall operate under the name “Northland National Bank”

     1.02 Closing. The closing of the Merger (the “Closing”) shall take place, subject to satisfaction or waiver of all conditions set forth in Article VI hereof, on such date (the “Closing Date”) and in such manner as may be mutually agreed by the Seller Entities and Northland. In the absence of such agreement the Closing Date shall be on a date specified by the Seller Entities or Northland upon five (5) business days’ written notice, after receipt of all Approvals (as defined below) and the expiration of all statutory waiting periods.

     As used herein, “Approvals” shall mean all approvals of all regulatory entities necessary for the consummation of the transactions contemplated in this Agreement, including, but not limited to, any approvals of the Comptroller of the Currency (the “OCC”), the Federal Reserve Bank of Kansas City (the “Fed”), the Federal Deposit Insurance Corporation (the “FDIC”), and the Kansas Office of the State Bank Commissioner (the “OSBC”), collectively referred to herein as the “Approving Authorities.”

     1.03 Effective Time. On the Closing Date, Acquiror Bank will cause the Merger to be consummated by delivering to the OCC and any other required regulatory entity, for filing, articles of merger or a notice of consummation in such form as required by, and duly executed in accordance with, the relevant provisions of federal banking laws applicable to national

associations. The Merger shall be effective as of the Closing Date, which shall have been previously approved as the date of consummation by the OCC (the “Effective Date”). The parties agree that (unless otherwise required by any of the Approving Authorities), as to the allocation of rights, responsibilities and liabilities among themselves, the Merger shall be deemed to be effective as of 11:59 p.m., local time (the “Effective Time”).

     1.04 Articles of Association and Bylaws. The Articles of Association and Bylaws of Acquiror Bank in effect immediately prior to the Effective Time shall be the Articles of Association and Bylaws of the Surviving Corporation, and shall continue in each case until amended in accordance with their respective provisions and applicable law.

     1.05 Board of Directors and Officers.

     (a) Immediately upon the Effective Time, the Board of Directors of the Surviving Corporation shall consist only of those persons serving as directors of Acquiror Bank immediately prior to the Effective Time and the terms of those directors after the Effective Time shall be the same as their respective terms immediately prior to the Effective Date.

     (b) Immediately upon the Effective Time, the officers of Acquiror Bank shall be and continue as the officers of the Surviving Corporation until their respective successors are duly elected and qualified. No person who was an officer of Seller Bank shall be an officer of the Surviving Corporation.

     (c) Immediately upon the Effective Time, the employees of Acquiror Bank shall be and constitute the employees of the Surviving Corporation. No person who was an employee of Seller Bank shall be an employee of the Surviving Corporation.

     1.06 dditional Actions. If, at any time after the Effective Time, the Surviving Corporation shall consider or be advised that any further deeds, assignments, or assurances in law or any other acts are necessary or desirable to (i) vest, perfect, or confirm, of record or otherwise, in the Surviving Corporation its right, title, or interest in, to, or under any of the rights, properties, or assets of Seller Bank and Acquiror Bank, or (ii) otherwise carry out the purposes of this Agreement, Seller Bank and its officers and directors and Acquiror Bank and its officers and directors shall be deemed to have granted to the Surviving Corporation an irrevocable power of attorney to execute and deliver all such deeds, assignments, or assurances in law and to do all acts necessary or proper to vest, perfect, or confirm title to and possession of such rights, properties, or assets in the Surviving Corporation and otherwise to carry out the purposes of this Agreement, and the officers and directors of the Surviving Corporation are authorized in the name of Seller Bank or Acquiror Bank, respectively, or otherwise to take any and all such actions.

     1.07 Merger Consideration. At the Effective Time, by virtue of the Merger and without any action on the part of Acquiror Bank, Seller Bank, or any holder of the following securities:

     (a) Each share of common stock, par value $5.00 per share, of Seller Bank (collectively, the “Seller Bank Stock”) issued and outstanding immediately prior to the Effective Time shall be canceled and extinguished and be converted into the right to receive an amount of

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cash (referred to herein in the aggregate as the “Merger Consideration”) equal to the quotient of (x) the Adjusted Book Value (as defined in the paragraph below) of Seller Bank, plus Three Hundred Twenty-five Thousand Dollars ($325,000); divided by (y) the total number of issued and outstanding shares of Seller Bank Stock as of the Closing Date (not including treasury shares). All treasury shares shall be cancelled, and no consideration shall be paid with respect to them.

     For purposes hereof, the term “Adjusted Book Value” means the total equity capital of Seller Bank as reflected on Schedule RC (line 28) of Seller Bank’s December 31, 2006 Call Report, which shall be prepared in a manner consistent with the past accounting practices of Seller Bank and in accordance with bank regulatory guidelines.

     If Seller Bank transfers assets to Seller Holding Company or Bank of Blue Valley prior to Closing, the parties will reduce the Merger Consideration by the fair market value of the assets transferred.

     (b) Each share of stock of Acquiror Bank that is issued and outstanding immediately prior to the Effective Time shall remain issued and outstanding in the hands of the holders thereof and shall be deemed issued and outstanding shares of the Surviving Corporation, unchanged by the Merger.

     1.08 Payment of Merger Consideration.

     (a) At the Closing, Seller Holding Company shall deliver to Acquiror Bank one or more certificates representing all of the Seller Bank Stock, which stock certificates shall be duly endorsed in blank for transfer and shall be presented with stock powers duly executed in blank.

     (b) At the Closing, Acquiror Bank shall pay to Seller Holding Company, as owner of all of the Seller Bank Stock, the Merger Consideration. No interest shall be payable to any holder of certificates formerly representing Seller Bank Stock.

     1.09 Closing of Stock Transfer Books. The stock transfer books of Seller Bank shall be closed at the Effective Date. In the event of a transfer of ownership of shares of Seller Bank Stock which is not registered in the transfer records of Seller Bank, the Merger Consideration to be distributed pursuant to this Agreement attributable to such shares may be delivered by Acquiror Bank, at its discretion, to a transferee if the certificate representing such shares is presented to Acquiror Bank prior to the Closing, accompanied by all documents required to evidence and effect such transfer and by payment of any applicable stock transfer taxes. Acquiror Bank shall be entitled to rely upon the stock transfer books of Seller Bank to establish the identity of those persons entitled to receive the Merger Consideration specified in this Agreement for their shares of Seller Bank Stock, which books shall be conclusive with respect to the ownership of such shares. In the event of a dispute with respect to the ownership of any such shares, Acquiror Bank shall be entitled to deposit a portion of the Merger Consideration related thereto in escrow with an independent party and thereafter be relieved with respect to any claims to such portion of the Merger Consideration.

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     1.10 Entire Transaction.

     (a) Goals. This Agreement and the transactions contemplated herein are part of a larger series of transactions contemplated by Acquiror Bank and the Seller Entities. The goals (“Goals”) of Acquiror Bank and the Seller Entities in the entire series of transactions are: (i) Acquiror Bank will become Seller Bank’s successor via the Merger and be authorized to operate retail bank branches in the State of Kansas; however, the name Western National Bank, or any variation thereof, is never to be used by Acquiror Bank; (ii) Bank of Blue Valley, a wholly-owned subsidiary of Seller Holding Company, will become the owner (pursuant to the Purchase and Assumption Agreement (defined below)) of all of the assets and assume all of the liabilities of Seller Bank existing immediately prior to the Closing (as more fully set forth in the Purchase and Assumption Agreement), with the right to operate all locations of Seller Bank (as of immediately prior to the Effective Time) as such bank’s branches; (iii) Seller Holding Company, or an affiliated bank of its choosing, will derive a direct financial benefit from these endeavors in an amount equal to $325,000 (the difference between the Merger Consideration and the Purchase Price (as defined in the Purchase and Assumption Agreement) (excluding the adjustment to the Purchase Price attributable to the book value of FHLB stock); and (iv) Bank of Blue Valley will receive the FDIC Assessment Credit allocated to Seller Bank. It is understood that at no time will Acquiror Bank operate the bank branches of Seller Bank. In the event of any review of the transactions contemplated herein by any individual, company, business entity, governmental authority or regulatory entity (each, a “Person”) for any reason, both this Agreement and the separate Purchase and Assumption Agreement shall be construed together as one integrated transaction giving full effect to the Goals.

     (b) Purchase and Assumption Agreement. Acquiror Bank, Seller Holding Company and Bank of Blue Valley have, prior to or as of the date hereof, also entered into a Purchase and Assumption Agreement (the “Purchase and Assumption Agreement”).

Article II
REPRESENTATIONS AND WARRANTIES OF THE SELLER ENTITIES

     As a material inducement to Acquiror Bank to enter into and perform its obligations under this Agreement, and notwithstanding any examinations, inspections, audits, or other investigations made by Acquiror Bank, the Seller Entities hereby represent and warrant to Acquiror Bank as follows:

     2.01 Incorporated Seller Bank Representations and Warranties. Attached as Schedule 2.01 are certain representations and warranties of Seller Bank, which are hereby incorporated herein and are made by the Seller Entities to Acquiror Bank.

     2.02 Incorporated Seller Holding Company Representations and Warranties. Attached as Schedule 2.02 are certain representations and warranties of Seller Holding Company, which are hereby incorporated herein and are made by the Seller Entities to Acquiror Bank.

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Article III
REPRESENTATIONS AND WARRANTIES OF ACQUIROR BANK

     As a material inducement to the Seller Entities to enter into and perform their obligations under this Agreement, and notwithstanding any examinations, inspections, audits, or other investigations made by the Seller Entities, Acquiror Bank hereby represents and warrants to the Seller Entities as follows:

     3.01 Organization and Authority. Acquiror Bank is a national association duly organized, validly existing, and in good standing in all jurisdictions where its ownership or leasing of property or the conduct of its business requires it to be so qualified, and has corporate power and authority to own its properties and assets and to carry on its business as it is now being conducted.

     3.02 Corporate Authorization. Acquiror Bank has the corporate power and authority to enter into this Agreement and each instrument or document to be executed and delivered by it pursuant to this Agreement or in connection with the transactions contemplated hereby, and to carry out its obligations hereunder. The execution, delivery, and performance of this Agreement and each instrument or document to be executed or delivered pursuant to this Agreement or in connection with the transactions contemplated hereby by Acquiror Bank and the consummation of the transactions contemplated hereby have been duly authorized by the board of directors of Acquiror Bank and this Agreement constitutes the legal, valid and binding obligation of Acquiror Bank.

     None of the execution, delivery or performance by Acquiror Bank of this Agreement, nor the consummation of the transactions contemplated hereby, nor compliance by Acquiror Bank with any of the provisions hereof will (i) violate, conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration of, or result in the creation of, any lien, security interest, charge, or encumbrance upon any of the properties or assets of Acquiror Bank under any of the terms, conditions, or provisions of (x) its articles of association or bylaws, or (y) any note, bond, mortgage, indenture, deed of trust, license, lease, agreement, or other instrument or obligation to which Acquiror Bank is a party or by which it may be bound, or to which Acquiror Bank or any of its properties or assets may be subject, or (ii) subject to compliance with the statutes and regulations referred to in the next paragraph, to the best knowledge of Acquiror Bank, violate any judgment, ruling, order, writ, injunction, decree, statute, rule, or regulation applicable to Acquiror Bank or any of its properties or assets.

     Other than in connection or compliance with the provisions of the National Bank Act or filings, consents, reviews, authorizations, approvals, notices, or exemptions required under the BHCA or any required approvals of the Approving Authorities, no notice to, filing with, exemption or review by, or authorization, consent, or approval of, any public body or authority or any other Person is necessary for the consummation by Acquiror Bank of the transactions contemplated by this Agreement.

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     3.03 Regulatory Matters. None of the information regarding Acquiror Bank supplied or to be supplied by Acquiror Bank for inclusion or included in any documents to be filed with the Approving Authorities or any other regulatory authority in connection with the transactions contemplated hereby will, at the respective times such documents are filed with such regulatory authority, be false or misleading with respect to any material fact, or omit to state any material fact necessary in order to make the statements therein not misleading.

     Acquiror Bank has, or will have on or before the Effective Date, complied with all federal and state statutes, regulations, and rules (including applicable provisions of the National Bank Act and the BHCA) governing the consummation of the transactions contemplated under this Agreement and obtained all Approvals required to be obtained by it.

     3.04 Brokers, Investment Bankers, and Finders. Except for The Capital Corporation, which has been retained by Acquiror Bank (and will be paid by Acquiror Bank), neither Acquiror Bank nor any of its officers, directors, or employees has employed any broker, investment banker, or finder in connection with this Agreement or the transactions contemplated hereby.

     3.05 Availability of Funds. At Closing, Acquiror Bank will have sufficient funds readily available to it to pay the Merger Consideration in accordance with Section 1.07 of this Agreement.

     3.06 Accuracy of Information. The statements contained in this Agreement, the Schedules, and in any other written document executed and delivered by or on behalf of Acquiror Bank pursuant to the terms of this Agreement are true and correct in all material respects, and such statements and documents do not omit any material fact necessary to make the statements contained therein not misleading.

Article IV
CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME

     4.01 Conduct of Businesses Prior to the Effective Time. During the period from the date of this Agreement to the Effective Time, or the earlier termination of this Agreement in accordance with Article VIII, the Seller Entities and Acquiror Bank shall not conduct their business in any way that will prevent or materially and adversely affect the Merger.

     4.02 Forbearances by the Seller Entities. During the period from the date of this Agreement to the Effective Time, or the earlier termination of this Agreement in accordance with Article VIII, and except as provided in Schedule 4.02 or as otherwise provided in this Agreement, Seller Bank shall not, and Seller Holding Company shall not cause, vote in favor of, or otherwise authorize, approve, or permit Seller Bank to, without the prior written consent of Acquiror Bank:

     (a) Authorize, recommend, propose, or announce an intention to authorize, recommend, or propose, or enter into any agreement with respect to, any acquisition of any business or assets by means of a merger or consolidation, or any acquisition or disposition of any material amount of assets or securities, or any release or relinquishment of any material contract rights not in the ordinary course of business;

6

     (b) Propose or adopt any amendments to the articles of association of Seller Bank or its bylaws or other governing or organizational documents;

     (c) Issue any shares of capital stock or effect any stock split or otherwise change its capitalization as it existed as of the date hereof;

     (d) Grant, confer, or award any options, warrants, conversion rights, or other rights not existing on the date hereof to acquire any shares of its capital stock;

     (e) Purchase or redeem any shares of its capital stock;

     (f) Take back or commence foreclosure on any property other than in the ordinary course of business;

     (g) Other than as otherwise contemplated herein, take any actions, or fail to take any actions which alone, or together with any other action or inaction, shall create, alter, or eliminate any rights, benefits, obligations, or liabilities of any Person (including, but not limited to the participants, beneficiaries, Seller Holding Company, Seller Bank, or, after the Merger, Acquiror Bank) with respect to any Employee Plans or Policies; or

     (h) Agree in writing or otherwise to take any of the foregoing actions or, subject to the provisions of this Agreement, engage in any activity, enter into any transaction, or take or omit to take any other act which would make any of the Seller Entities’ representations and warranties untrue or incorrect in any material respect if made anew after engaging in such activity, entering into such transaction, or taking or omitting such other act.

Article V
ADDITIONAL AGREEMENTS

     5.01 Access and Information. Unless this Agreement is otherwise terminated in accordance with Article VIII, during the period from the date of this Agreement to the Closing, each of the Seller Entities shall cause one or more of their representatives to confer with representatives of Acquiror Bank and report the general status of their ongoing operations at such times as Acquiror Bank may reasonably request. The Seller Entities shall promptly notify Acquiror Bank (a) of any material change in the normal course of their business or in the operation of their properties, (b) of any fact, event or circumstance which has caused, or could reasonably be expected to cause, any of the representations and warranties of the Seller Entities herein to be misleading or inaccurate, (c) to the extent permitted by applicable law, of any governmental complaints, investigations, hearings or regulatory examinations (or communications indicating that the same may be contemplated), and (d) of the institution of litigation or the threat of litigation involving either of the Seller Entities. The Seller Entities shall also provide Acquiror Bank with such information with respect to such events as Acquiror Bank may reasonably request from time to time. In the event of the termination of this Agreement, Acquiror Bank shall, and shall cause its advisors and representatives to, (x) hold confidential all information obtained in connection with any transaction contemplated hereby with respect to the Seller Entities which is not otherwise public knowledge, (y) return all documents (including copies thereof) obtained hereunder from Seller Holding Company or Seller Bank to Seller Holding Company, and (z) use its best efforts to cause all information obtained

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pursuant to this Agreement or in connection with the negotiation hereof to be treated as confidential and not use any such information unless such information becomes generally available to the public.

     5.02 Regulatory Approvals. Unless this Agreement is otherwise terminated in accordance with Article VIII, each of the parties hereto shall cooperate and use their respective best efforts to prepare all documentation, to effect all filings, and to obtain all permits, consents, approvals, and authorizations of all third parties and governmental bodies necessary to consummate the transactions contemplated by this Agreement, including, without limitation, any such approval or authorization required by the Approving Authorities. Acquiror Bank and the Seller Entities shall each cause to be prepared all applications and notices required to be filed with the Approving Authorities.

     5.03 Current Information. Unless this Agreement is otherwise terminated in accordance with Article VIII, during the period from the date of this Agreement to the Effective Time, each party shall cause one or more of its designated representatives to confer on a regular and frequent basis with representatives of the other party. Each party shall promptly notify the other party of any material change in its business, operations, or prospects and of any governmental complaints, investigations, or hearings (or communications indicating that the same may be contemplated), or the institution or the threat of material litigation or administrative or other claims involving such party, and shall keep the other party fully informed of such events.

     5.04 Expenses. Each party hereto shall bear its own expenses incident to preparing, entering into, and carrying out this Agreement and to consummating the Merger.

     5.05 Miscellaneous Agreements and Consents. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use its respective best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things necessary, proper, or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement as expeditiously as possible, including, without limitation, using its best efforts to lift or rescind any injunction or restraining order or other order adversely affecting the ability of the parties to consummate the transactions contemplated hereby. Acquiror Bank and the Seller Entities shall use their respective best efforts to obtain consents of all third parties and governmental bodies necessary or, in the opinion of any of the parties, desirable for the consummation of the transactions contemplated by this Agreement.

     5.06 Press Releases. Acquiror Bank and the Seller Entities shall cooperate with each other in the development and distribution of any news releases and other public disclosures, except regulatory notices, concerning this Agreement and the Merger and shall not issue any news release or make any other public disclosure without the prior consent of the other party.

     5.07 Nonsolicitation and Exclusive Dealing. Recognizing the substantial expenditure of time, effort, and expense Acquiror Bank has incurred as of the date hereof, and will incur through the Effective Date in connection with negotiating, performing due diligence investigations, and attempting to complete the Merger and the other transactions contemplated herein, until such time as either the Effective Date has occurred or this Agreement is terminated

8

in accordance with the provisions of Article VIII hereof, none of the Seller Entities, or any of their respective subsidiaries, directors, officers, attorneys, financial advisors, accountants, or other representatives will directly or indirectly: (i) solicit, encourage (including by way of furnishing any non-public information concerning such party’s business, property, or assets) or, except as may be required in the exercise of fiduciary duties, consider or discuss any Acquisition Offer or Proposal (as defined below); or (ii) except as may be required in the exercise of fiduciary duties, provide any information to, or negotiate with, any other person or entity in connection with any possible sale of all or any portion of the stock, assets, or business of such party when such party has reason to believe that such information may be utilized to evaluate or make a possible Acquisition Offer or Proposal. As used herein, “Acquisition Offer or Proposal” shall mean any offer or proposal for an acquisition, merger, or other business combination involving Seller Bank or for the acquisition of a substantial equity interest in, or a substantial portion of the stock, assets, or business of such entity. The Seller Entities will promptly give notice to Acquiror Bank in the manner provided for herein, regarding any contact between the Seller Entities or any of their representatives, subsidiaries, directors, officers, attorneys, financial advisors, accountants, or other representatives, and any other person in connection with any Acquisition Offer or Proposal or related inquiry.

     5.08 Regulatory Fees. Each of Seller Bank and Acquiror Bank agrees to pay promptly any and all fees and expenses payable to any of the Approving Authorities in connection with any application, examination, or review with respect to it to be conducted by such regulatory authority in connection with the transactions contemplated herein.

     5.09 Custodial Accounts. Seller Holding Company shall cause Seller Bank to resign, immediately prior to or at the Closing, as the custodian of each account (including individual retirement accounts and other fiduciary accounts) of which it is a custodian (the “Custodial Accounts”) and, to the extent permitted by the documentation governing each such Custodial Account, appoint Bank of Blue Valley as successor custodian. Such resignation and appointment shall be effected by an instrument substantially in the form mutually agreed to by the parties prior to the Closing.

     5.10 FHLB Stock. Unless this Agreement is otherwise terminated in accordance with Article VIII, Seller Bank shall, prior to the Closing, assign, transfer or otherwise dispose of any and all of its ownership or other rights in, to or under any activity stock of the Federal Home Loan Bank of Topeka (the “FHLB”), such that only the membership stock of FHLB owned by Seller Bank, if any, is transferred pursuant to this Agreement.

Article VI
CERTAIN CONDITIONS

     6.01 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment or waiver at or prior to the Closing of all of the following conditions:

     (a) This Agreement and the transactions contemplated hereby shall have been approved by the Approving Authorities and any other regulatory authority or Person the approval

9

of which is required (unless any such Person indicates its approval is not necessary) and all applicable waiting periods shall have expired.

     (b) None of Seller Holding Company, Seller Bank, or Acquiror Bank shall be subject to any order, decree, or injunction of a court, agency or regulatory body of competent jurisdiction which enjoins or prohibits the consummation of the Merger.

     (c) All necessary approvals shall have been received, and all applicable waiting periods shall have expired, for the parties to the Purchase and Assumption Agreement to close on all transactions contemplated therein.

     (d) All of the conditions to the closing of the transactions contemplated in the Purchase and Assumption Agreement as set forth in Article V thereof, except the condition set forth in Section 5.1(a) thereof, shall have been satisfied or otherwise waived in writing by all parties thereto so entitled to waive any such condition not satisfied.

     (e) Each of the parties shall have obtained any and all material consents or waivers from other parties to loan agreements, leases, or other contracts material to such party’s business required for the consummation of the Merger, and each of the parties shall have obtained any and all material permits, authorizations, consents, waivers, and approvals required for the lawful consummation of the Merger.

     6.02 Conditions to Obligations of the Seller Entities. The obligations of the Seller Entities to effect the Merger shall be subject to the fulfillment or waiver at or prior to the Closing of all of the following additional conditions:

     (a) Representations and Warranties. The representations and warranties of Acquiror Bank set forth in Article III hereof shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date except (i) to the extent such representations and warranties are by their express provisions made as of a specified date, and (ii) for the effect of transactions contemplated by this Agreement) and the Seller Entities shall have received a signed certificate of an appropriate officer of Acquiror Bank to that effect.

     (b) Performance of Obligations. Acquiror Bank shall have performed in all material respects all obligations required to be performed by it prior to the Closing pursuant to this Agreement, and the Seller Entities shall have received a signed certificate of an authorized officer of Acquiror Bank to that effect.

     6.03 Conditions to Obligations of Acquiror Bank. The obligations of Acquiror Bank to effect the Merger shall be subject to the fulfillment at or prior to the Closing of all of the following additional conditions:

     (a) Representations and Warranties. The representations and warranties of the Seller Entities set forth in Article II hereof shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date except (i) to the extent such representations and warranties are by their express provisions made as of a specific date and (ii) for the effect of transactions contemplated by this Agreement)

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and Acquiror Bank shall have received signed certificates of an authorized officer of each of the Seller Entities to that effect.

     (b) Performance of Obligations. The Seller Entities shall have performed in all material respects all obligations required to be performed by them prior to the Closing pursuant to this Agreement, and Acquiror Bank shall have received signed certificates of an authorized officer of each of the Seller Entities, signing on behalf of the Seller Entities, to that effect.

     (c) Intentionally Left Blank.

     (d) No Material Adverse Change. Since the date of this Agreement, there shall have been no material adverse change in the business, properties, financial condition, or results of operations of Seller Bank (other than changes in banking laws or regulations, or interpretations thereof, that affect the banking industry generally or changes in the general level of interest rates or economic conditions) that would, in the reasonable judgment of Acquiror Bank, impose or be likely to impose, material additional liability on Acquiror Bank.

Article VII
INDEMNIFICATION

     7.01 Indemnification.

     (a) Acquiror Bank’s Indemnification Obligations. Acquiror Bank shall indemnify, defend and hold the Seller Entities and each of their directors, officers, employees, subsidiaries and other Affiliates (as defined below) (each, a “Seller Bank Indemnified Party” and collectively, the “Seller Bank Indemnified Parties”) harmless from and against any and all losses, damages, out of pocket costs, taxes, liabilities, penalties and fines (including reasonable attorneys’ fees) (collectively, “Damages”) incurred by them, whether known or unknown, fixed or contingent, that arise in whole or in part from:

          (i) any breach of, or inaccuracy contained in, any representation or warranty of Acquiror Bank set forth in this Agreement or any schedule or certificate delivered by or on behalf of Acquiror Bank in connection herewith (whether or not the events or circumstances giving rise to such breach or inaccuracy were known by any Seller Entity to exist prior to Closing); or

          (ii) Acquiror Bank’s failure, prior to the Effective Time, to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings hereunder and in accordance with the terms hereof.

     (b) The Seller Entities’ Indemnification Obligations. The Seller Entities shall indemnify, defend and hold Acquiror Bank, and its directors, officers, employees, subsidiaries and other Affiliates (as defined below) (each, a “Acquiror Bank Indemnified Party” and collectively, the “Acquiror Bank Indemnified Parties”), harmless from and against any and all Damages incurred by them, whether known or unknown, fixed or contingent, that arise in whole or in part from:

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          (i) any breach of, or inaccuracy contained in, any representation or warranty of any Seller Entity set forth in this Agreement or any schedule or certificate delivered by or on behalf of any Seller Entity in connection herewith (whether or not the events or circumstances giving rise to such breach or inaccuracy were known by Acquiror Bank to exist prior to Closing);

          (ii) any Seller Entity’s failure prior to the Closing to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings hereunder and in accordance with the terms hereof;

          (iii) any liability of Seller Bank for taxes or any liability of Seller Bank to make payments to or indemnify any other Person with respect to taxes (x) for any taxable period, (y) resulting from or attributable to Seller Bank having been or ceasing to be a member of any affiliated group under the Code, or (z) as a transferee or successor, by contract or otherwise as a result of transactions, contracts or arrangements occurring or entered into on or before the Closing Date;

          (iv) the operation of Seller Bank or the ownership, lease or operation by Seller Bank or Seller Holding Company, whether directly, indirectly or in a fiduciary capacity, of the Seller Bank business or any other assets or liabilities of Seller Bank, prior to the Closing or after the consummation of the transactions contemplated by the Purchase and Assumption Agreement (including, without limitation, damages resulting from environmental laws or other regulatory matters);

          (v) any liability for wages, salary, overtime or other compensation or severance or other benefits under any Employee Plans or Policies or otherwise with respect to the current and former employees of Seller Bank;

          (vi) any claims against Seller Bank, whether by customers of Seller Bank, employees of Seller Bank or other Persons with respect to or arising in any way in connection with events occurring at any time prior to the Closing; and

          (vii) any claims against Acquiror Bank, in regards to real property owned or leased by Seller Bank (including other real estate owned), resulting from violations of environmental laws; and

          (viii) any claims against Acquiror Bank resulting from any Plans or employee policies.

     7.02 Indemnification Procedures.

     (a) If any Seller Bank Indemnified Party or Acquiror Bank Indemnified Party (each, an “Indemnified Party”) seeks indemnification under this Article VII, the Indemnified Party shall notify the indemnifying party (the “Indemnifying Party”) within 30 days after learning of the occurrence of any event that is asserted to be an indemnifiable event pursuant to this Agreement. If such event involves the claim of any third party and the Indemnifying Party confirms in writing its responsibility for such liability, if established, the Indemnifying Party shall be entitled to participate in and, to the extent it shall wish, assume control over (in which

12

case the Indemnifying Party shall assume all expense with respect to) the defense, settlement, adjustment or compromise of such claim.

     (b) The Indemnified Party shall have the right to employ separate counsel in any action or claim and to participate in the defense thereof at the expense of the Indemnifying Party (i) if the retention of such counsel has been specifically authorized by the Indemnifying Party or (ii) if such counsel is retained because the Indemnifying Party does not confirm responsibility for the liability as provided in subsection (a) above. The Indemnified Party shall have the right to employ counsel at the Indemnified Party’s own expense and to participate in such action or claim, including settlement or trial, as long as such participation does not substantially interfere with the Indemnifying Party’s defense of such claim or action.

     (c) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into any settlement, adjustment or compromise of such claim, or ceasing to defend against such claim, only if pursuant to or as a result of such settlement, adjustment, compromise or cessation, injunctive or other relief would be imposed against the Indemnified Party.

     (d) If the Indemnifying Party does not assume control over the defense of such claim as provided in Section 7.02(a), the Indemnified Party shall have the right to defend or settle the claim in such manner as it may deem appropriate at the cost and expense of the Indemnifying Party.

     (e) The Indemnifying Party shall remit payment for the amount of a valid and substantiated claim for indemnification hereunder promptly upon receipt of a claim notice therefor. Upon the payment in full of any claim hereunder, the Indemnifying Party shall be subrogated to the rights of the Indemnified Party against any person with respect to the subject matter of such claim.

     (f) In the event that the Indemnifying Party reimburses the Indemnified Party for any third party claim, the Indemnified Party shall remit to the Indemnifying Party any reimbursement that the Indemnified Party subsequently receives for such third party claim.

As used in this Agreement, the term “Affiliate” shall have the meaning set forth in Schedule I of the Purchase and Assumption Agreement.

     7.03 Survival. All indemnities contained in or made pursuant to this Agreement shall survive the Closing for the applicable statute of limitations period, including any and all extensions thereof, after the Closing Date, except as to any claim for which written notice shall have been given prior to such date.

Article VIII
TERMINATION, AMENDMENT, AND WAIVER

     8.01 Termination. This Agreement may be terminated at any time prior to the Closing, whether before or after approval by the shareholder of Seller Bank:

     (a) By mutual consent of the boards of directors of all parties hereto; or

13

     (b) By the board of directors of any party hereto at any time after May 31, 2007, if the Merger shall not theretofore have been consummated; or

     (c) By the board of directors of any party hereto if any Approving Authority shall have denied approval of such transaction and such denial has, after exhaustion of any and all available appellate procedures, become final, or, if any Approving Authority shall have conditioned its approval and the conditions shall have a material adverse effect upon the Goals or the continuing operations of any of the parties hereto; or

     (d) By the board of directors of Acquiror Bank or either of the boards of directors of the Seller Entities in the event of a material breach by the other of any representation, warranty, or agreement contained in this Agreement, which breach is not cured within 15 days (or such longer period not exceeding 40 days in the event such breach cannot reasonably be cured within 15 days and a cure is being pursued with reasonable diligence) after written notice thereof is given to the party committing such breach or waived by such other party(ies).

     8.02 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.01 above, this Agreement shall forthwith become void and without further effect and there shall be no liability on the part of any party hereto or the respective officers and directors of any party, except as set forth in the second sentence of Section 5.01 (respecting confidentiality and the return of information) in Section 5.04 (respecting payment of expenses), in Section 5.08 (respecting payment of regulatory fees) and, except that no termination of this Agreement pursuant to subsections (b) or (d) of Section 8.01 shall relieve the non-performing, defaulting or breaching party of any liability to any other party hereto arising from the material non-performance and/or breach prior to the date of such termination of any covenant, agreement, term, provision, representation, warranty required to be observed, performed, complied with and/or kept by such non-performing, defaulting or breaching party; provided, however, that there shall be no liability for breach of a representation or warranty that was, when given, true and correct to the knowledge and belief of the party giving same and which later turns out (without any other fault of the party giving same) to be incorrect.

     8.03 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto.

     8.04 Waiver. Any term, condition or provision of this Agreement may be waived in writing at any time by the party which is, or whose shareholders are, entitled to the benefits thereof.

Article IX
GENERAL PROVISIONS

     9.01 Survival of Representations, Warranties, and Agreements. No investigation by the parties hereto made heretofore or hereafter shall affect the representations and warranties of the parties which are contained herein and each such representation and warranty shall survive such investigation. The representations or warranties of Acquiror Bank and of the Seller Entities in this Agreement, as well as in any instrument delivered by Acquiror Bank or the Seller Entities pursuant to this Agreement, shall all survive for the applicable statute of limitations period

14

following the Closing. Each of the agreements of Acquiror Bank and of the Seller Entities in this Agreement that by their nature may be performed after the Closing Date shall survive Closing until fully performed. In the event of termination of this Agreement in accordance with its terms before the Closing Date, the agreements contained in Sections 5.01 (fourth sentence), 5.04, 5.08, and 8.02 shall survive such termination.

     9.02 No Assignment; Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, but neither this Agreement nor any right or obligation set forth in any provision hereof may be transferred or assigned by any party hereto without the prior written consent of all other parties, and any purported transfer or assignment in violation of this Section shall be void and of no effect; provided, however, that Acquiror Bank may elect, without the consent of the Seller Entities, to cause another wholly owned subsidiary of Acquiror Bank to be substituted for Acquiror Bank for purposes of the transactions contemplated by this Agreement.

     9.03 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remaining provisions of this Agreement.

     9.04 No Implied Waiver. No failure or delay on the part of either party hereto to exercise any right, power, or privilege hereunder or under any instrument executed pursuant hereto shall operate as a waiver nor shall any single or partial exercise of any right, power, or privilege preclude any other further exercise thereof or the exercise of any other right, power, or privilege.

     9.05 Headings. Article, section, subsection, and paragraph titles, captions and headings herein are inserted only as a matter of convenience and for reference, and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision hereof.

     9.06 Entire Agreement. This Agreement and the Schedules and Exhibits hereto, together with the Purchase and Assumption Agreement, constitutes the entire agreement between and among the parties with respect to the subject matter hereof and thereof and supersedes all prior negotiations, representations, warranties, commitments, offers, letters of interest or intent, proposal letters, contracts, writings, or other agreements or understandings with respect thereto. No waiver, and no modification or amendment of any provision of this Agreement shall be effective unless specifically made in writing and duly signed by all parties thereto.

     9.07 Counterparts. This Agreement may be executed in one or more counterparts, and any party to this Agreement may execute and deliver this Agreement by executing and delivering any of such counterparts, each of which when executed and delivered shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

     9.08 Notices. All notices and other communications hereunder shall be in writing and shall be deemed to be duly received (i) on the date given if delivered personally or by facsimile

15

transmission, or email or (ii) on the date received if mailed by registered or certified mail (return receipt requested), to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

(a) If to Acquiror Bank:

Northland National Bank
Attn: Kenneth Riedemann, Chairman
99 N.E. 72^nd Street
Gladstone, Missouri 64118
Facsimile: 816-436-3676
Email: kriedemann@petersoncos.net
Telephone: 816-436-3500

Copy to:

C. Robert Monroe, Esq.
Stinson Morrison Hecker LLP
1201 Walnut, Suite 2700
Kansas City, Missouri 64106
Facsimile: (888) 277-8082
Email: bmonroe@stinsonmoheck.com
Telephone: (816) 691-3351

(b) If to the Seller Entities:

Blue Valley Ban Corp.
Attn: Robert D. Regnier, President
11935 Riley
Overland Park, Kansas 66225
Facsimile: 913-234-7040
Email: bregnier@bankbv.com
Telephone: 913-234-2240

Copy to:

Steven F. Carman, Esq.
Blackwell Sanders Peper Martin LLP
4801 Main Street, Suite 1000
Kansas City, Missouri 64112
Facsimile: (816) 983-8080
Email: scarman@blackwellsanders.com
Telephone: (816) 983-8153

provided, however, that the providing of notice to counsel shall not, of itself, be deemed the providing of notice to a party hereto.

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     9.09 Governing Law; Venue; Jury Waiver. This Agreement shall be governed by and controlled as to validity, enforcement, interpretation, effect, and in all other respects by the internal laws of the State of Missouri applicable to contracts made in that state, without reference to its conflicts of laws principles. The parties agree that any action or proceeding to enforce, or arising out of, this Agreement may be commenced in the District Court of Jackson County, Missouri or in the United States District Court for the Western District of Missouri. Each party also hereby waives any right to a trial by jury such party may have in connection with this Agreement.

     9.10 Third Party Beneficiaries. With the exception of Bank of Blue Valley, which is an intended third party beneficiary of this Agreement, the parties to this Agreement intend that this Agreement shall not benefit or create any right or cause of action in or on behalf of any Person other than the Parties hereto. No future or present employee or customer of any party shall be treated as a third party beneficiary in or under this Agreement.

     9.11 Mutual Drafting. This Agreement is the mutual product of the parties hereto and each provision hereof has been subject to the mutual consultation, negotiation and agreement of each party.

[Execution page follows]

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Execution Version

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officers thereunto duly authorized as of date first above written.

SURVIVING BANK:	Northland National Bank
	By	/s/ Kenneth Riedemann
		Kenneth Riedemann
		Chairman of the Board
SELLER HOLDING COMPANY:	Blue Valley Ban Corp.
	By	/s/ Robert D. Regnier
		Robert D. Regnier
		President
SELLER BANK:	Western National Bank
	By	/s/ Robert Regnier
		Printed Name: Robert Regnier
		Title: President

EX-10.8

Exhibit 10.8

Execution Version

PURCHASE AND ASSUMPTION AGREEMENT

among

Northland National Bank
a national banking association

and

Bank of Blue Valley,
a Kansas state-chartered, Federal Reserve member bank

and

Blue Valley Ban Corp.,
a Kansas corporation

Dated as of March 2, 2007

TABLE OF CONTENTS

Purchase and Assumption Agreement

ARTICLE I DEFINITIONS		6
Section 1.1.	Defined Terms	6
Section 1.2.	Accounting Terms	7
ARTICLE II PURCHASE AND SALE OF ASSETS AND ASSIGNMENT AND ASSUMPTION OF LIABILITIES		8
Section 2.1.	Purchase and Sale of Bank Assets	8
Section 2.2.	Bank Liabilities	17
Section 2.3.	Actions With Respect to Certain Accounts	25
Section 2.4.	Entire Transaction	26
ARTICLE III PURCHASE PRICE; PAYMENT; AND SETTLEMENT		30
Section 3.1.	Purchase Price	30
Section 3.2.	Payment at Closing	31
Section 3. 3.	Closing Date Adjustments	32
Section 3.4.	Sales and Use Taxes	32
ARTICLE IV CLOSING		34
Section 4.1.	Place and Time of Closing; Effective Time	34
Section 4.2.	Northland Deliveries	35
Section 4. 3.	Buyer Deliveries	40
ARTICLE V CONDITIONS TO CLOSING		43
Section 5.1.	Conditions to Obligations of Northland	43
Section 5.2.	Conditions to Obligations of Buyer	49
ARTICLE VI REPRESENTATIONS AND WARRANTIES		53
Section 6.1.	Representations and Warranties of Northland	53
Section 6.2.	Representations and Warranties of Buyer	64
ARTICLE VII COVENANTS OF NORTHLAND		79
Section 7.1.	Regulatory Approvals	79
ARTICLE VIII COVENANTS OF BUYER		84
Section 8.1.	Regulatory Approvals and Standards	85
Section 8.2.	Corporate and Other Consents; Compliance with Law	90
Section 8.3.	Employees	91
ARTICLE IX INDEMNITY		94
Section 9.1.	Northland’s Indemnity	94
Section 9.2.	Buyer’s Indemnity	96
Section 9.3.	Indemnification Procedures	97
Section 9.4.	Survival	103

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ARTICLE X POST CLOSING MATTERS		104
Section 10.1.	Further Assurances	104
Section 10.2.	Access to and Retention of Books and Records	107
Section 10.3.	Mutual Cooperation	108
Section 10.4.	Insurance	108
ARTICLE XI MISCELLANEOUS		109
Section 11.1.	Venue; Jury Waiver	109
Section 11.2.	Expenses	110
Section 11.3.	Communications, etc	112
Section 11.4.	Termination	114
Section 11.5.	Modification and Waiver	116
Section 11.6.	Binding Effect;Assignment	116
Section 11.7.	Confidentiality	118
Section 11.8.	Entire Agreement	122
Section 11.9.	Governing Law	123
Section 11.10.	Severability	124
Section 11.11.	Counterparts	125
Section 11.12.	Notices	126
Section 11.13.	Headings; Interpretation	127
Section 11.14.	Specific Performance	128
Section 11.15.	Third Party Beneficiaries	129
Section 11.16.	Mutual Drafting	130

SCHEDULES

Schedule I	Definitions
Schedule II	Notices
Schedule III	Banking Offices
Schedule IV	Tenant Leases
Schedule V	Banking Office Leases
Schedule 2. l(b)	Retained Assets
Schedule 2.2(b)	Retained Liabilities
Schedule 6.2(d)	Compliance With Laws (Buyer)

ii

Execution Version

PURCHASE AND ASSUMPTION AGREEMENT

     THIS PURCHASE AND ASSUMPTION AGREEMENT (this “Agreement”) is dated as of March 2, 2007, by and among Northland National Bank, a national banking association with its principal offices in Gladstone, Missouri (“Northland”), Bank of Blue Valley, a Kansas state-chartered, Federal Reserve member bank with its principal offices in Overland Park, Kansas (“Bank of Blue Valley”), and Blue Valley Ban Corp., a Kansas corporation, with its principal offices in Overland Park, Kansas (“Ban Corp” and, together with Bank of Blue Valley collectively referred to as “Buyer”).

RECITALS:

     1. Ban Corp owns all of the outstanding capital stock of Western National Bank, a national banking association (“Western National”);

     2. Northland, Ban Corp and Western National have entered into an Acquisition Agreement and Plan of Merger of even date herewith (the “Merger Agreement”), which Merger Agreement provides for the merger of Western National into Northland (the “Merger”);

     3. Northland desires to sell to Bank of Blue Valley, and Bank of Blue Valley desires to purchase and assume from Northland, in accordance with the terms and provisions of this Agreement, after the consummation of the transactions contemplated in the Merger Agreement, the Bank Assets (as defined in Section 2.1 hereof) and Bank Liabilities (as defined in Section 2.2 hereof); and

     4. Each of the parties to this Agreement (each such party shall individually be referred to as a “Party” and collectively be referred to as the “Parties”) acknowledges that the Parties are relying on each other to fulfill their individual obligations hereunder so that the Bank Assets and Bank Liabilities may be sold to Bank of Blue Valley as provided in this Agreement and that if any one of the Parties fails to perform its obligations, it might jeopardize the ability of the other Parties to consummate the transactions contemplated hereunder and under the Merger Agreement.

AGREEMENT:

     NOW, THEREFORE, in consideration of the premises and the mutual promises and covenants contained herein, subject to the terms and conditions set forth herein, the Parties hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Defined Terms. Unless the context otherwise requires, capitalized terms used in this Agreement shall have the meanings set forth herein or in Schedule I attached hereto.

References to Articles, Sections, Exhibits and Schedules refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement.

     Section 1.2. Accounting Terms. All accounting terms not otherwise defined herein shall have the respective meanings assigned to them in accordance with “generally accepted accounting principles” (“GAAP”) consistently applied as in effect from time to time in the United States.

ARTICLE II

PURCHASE AND SALE OF ASSETS AND
ASSIGNMENT AND ASSUMPTION OF LIABILITIES

     Section 2.1. Purchase and Sale of Bank Assets.

     (a) Subject to the terms and conditions of this Agreement, on the Closing Date, Northland shall sell, convey, assign, transfer and deliver to Bank of Blue Valley, without recourse, representation or warranty (except as expressly set forth in Article VI hereof) and Bank of Blue Valley shall purchase and accept from Northland, all of the right, title and interest in and to all of the assets of Northland related to or used by Western National in its pre-Merger business (except as otherwise provided in Section 2.1(b)) (collectively, the “Bank Assets”), including, but not limited to, the following:

                    (i) real property and Other Real Estate Owned;

                    (ii) Personalty;

                    (iii) Loans;

                    (iv) Banking Office Leases, Tenant Leases and Safe Deposit Agreements;

                    (v) rights under any building maintenance, service or other contracts in effect as of the Closing relating to the services, functions and activities conducted or performed by Western National (the “Bank Business”) to the extent such contracts are assignable;

                    (vi) Cash;

                    (vii) prepaid expenses relating to the Bank Assets as of the Closing;

                    (viii) rights appertaining to the contracts and relationships giving rise to the Deposit Liabilities that Bank of Blue Valley is assuming;

                    (ix) rights appertaining to any negative deposits (overdrafts) in accounts booked at or allocated to the Banking Offices and outstanding as of the Closing Date;

                    (x) insurance premiums paid by Western National to the FDIC which are allocated to insurance coverage for Deposit Liabilities of the Banking Offices following the Closing Date to the extent a proration or adjustment is made with respect thereto pursuant to Section 3.3;

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                    (xi) securities in Western National’s investment portfolio (excluding all such securities that are Retained Assets);

                    (xii) rights to the use of the name “Western National Bank”; and

                    (xiii) any FDIC Assessment Credit allocated to Western National;

                    (xiv) any and all other rights, property and assets relating to or used in Western National’s business and not excluded pursuant to Section 2.1(b) hereof.

     (b) Notwithstanding the foregoing or anything else contained in this Agreement, Northland shall not sell, convey, assign, transfer or deliver to Bank of Blue Valley those assets of Northland set forth on Schedule 2.1(b) (the “Retained Assets”), it being understood and agreed by the Parties that Northland is retaining the Retained Assets.

     Section 2.2. Bank Liabilities.

     (a) Subject to the terms and conditions of this Agreement, on the Closing Date, Bank of Blue Valley shall assume, pay, perform and discharge, all of the liabilities and obligations of Northland related to or used by Western National in its pre-Merger business, and which are outstanding on the Closing (except as otherwise provided in Section 2.2(b)) (collectively, the “Bank Liabilities”), including, but not limited to, the following:

                    (i) the Deposit Liabilities including, without limitation, any negative deposits (overdrafts);

                    (ii) the Banking Office Leases and Tenant Leases (irrespective of whether any necessary third-party consents to the transfer thereof have been obtained);

                    (iii) the Safe Deposit Agreements;

                    (iv) the Loans;
(v) the Custodial Accounts, as contemplated by Section 2.3;

                    (vi) all obligations due under any service, maintenance or other contract relating to Western National’s business in effect at the Closing, regardless of whether such contract is assignable and/or included in Section 2.1(a)(v) or (viii), including costs of terminating any such contracts that Buyer chooses to terminate in connection with the transactions contemplated by this Agreement;

                    (vii) any and all borrowings from the Federal Home Loan Bank, or any other person related to Western National’s business;

                    (viii) any liabilities with respect to real property and Other Real Estate Owned;

                    (ix) any liabilities with respect to any employees of Western National (whether employed directly by Western National or through leases or otherwise);

                    (x) any and all other liabilities arising out of or relating to Western National’s business; and

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                    (xi) any and all liabilities that are within the scope of the indemnification of the Acquirer Bank Indemnified Parties (as defined in the Merger Agreement), as provided for in the Merger Agreement.

     (b) Notwithstanding the foregoing or anything else contained in this Agreement, Bank of Blue Valley shall not assume those liabilities of Northland set forth on Schedule 2.2(b) (the “Retained Liabilities”), it being understood and agreed by the Parties that Northland is retaining the Retained Liabilities.

     Section 2.3. Actions With Respect to Certain Accounts. Pursuant to Section 5.09 of the Merger Agreement, Ban Corp is required to cause Western National to resign prior to or as of the close of the Merger as the custodian of each account (including individual retirement accounts and other fiduciary accounts) of which it is the custodian, if any (“Custodial Accounts”). Bank of Blue Valley agrees to accept each such custodianship under the terms and conditions of Western National’s documents for its Custodial Accounts and assume all fiduciary and custodial obligations with respect thereto.

     Section 2.4. Entire Transaction

     (a) This Agreement and the transactions contemplated herein are part of a larger series of transactions contemplated by Northland, Buyer and Western National. The goals (“Goals”) of Northland, Buyer and Western National in the entire series of transactions are: (i) Northland will become Western National’s successor via the Merger and be authorized to operate retail bank branches in Kansas; however, the name Western National Bank, or any variation thereof, is never to be used by Northland; (ii) Bank of Blue Valley will become the owner, pursuant to this Agreement, of all of the assets and assume all of the liabilities of Western National (as more fully set forth herein) existing immediately prior to the closing of the Merger, with the right to operate all locations of Western National (as of immediately prior to the closing of the Merger) as such bank’s branches; (iii) Ban Corp, or an affiliated bank of its choosing, will derive a direct financial benefit from these endeavors in an amount equal to $325,000 (the difference between the Merger Consideration (as defined in the Merger Agreement) and the Purchase Price (as defined below) (excluding the adjustment to the Purchase Price attributable to the book value of the Federal Home Loan Bank stock set forth below)); and (iv) Bank of Blue Valley will receive the FDIC Assessment Credit allocated to Western National. It is understood that at no time will Northland operate the bank branches of Western National. In the event of any review of the transactions discussed herein by any Person for any reason, both this Agreement and the Merger Agreement shall be construed together as one integrated transaction giving the full effect of the Goals.

ARTICLE III

PURCHASE PRICE; PAYMENT; AND SETTLEMENT

     Section 3.1. Purchase Price. The purchase price (the “Purchase Price”) for the Bank Assets shall be an amount equal to the Adjusted Book Value (as defined in the Merger Agreement) of Western National, as determined pursuant to, and consistent with the Merger Agreement, minus the aggregate book value of the membership stock of the Federal Home Loan Bank of Topeka acquired by Northland from Western National in connection with the Merger.

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     Section 3.2. Payment at Closing. At the Closing, Buyer shall pay the Purchase Price to Northland, or its designee, by wire transfer of immediately available federal funds to such account as Northland shall advise Buyer in writing prior to the Closing.

     Section 3.3. Closing Date Adjustments. It is the intention of the Parties that Western National will operate the Banking Offices for its own account until the close of business on the day immediately preceding the Closing Date, and that Bank of Blue Valley shall operate the Banking Offices, own the Bank Assets and assume the Bank Liabilities from and after the opening of business on the Closing Date.

     Section 3.4. Sales and Use Taxes Except as otherwise provided in this Agreement, any sales, use, transfer or similar taxes that are payable or arise as a result of this Agreement or the consummation of the transactions contemplated hereby (including the Merger) shall be paid by Buyer on the Closing Date. Buyer shall indemnify and hold harmless Western National and Northland from and against any and all losses, damages, fees, penalties, interest, costs and expenses (including reasonable attorneys’ fees) resulting from Buyer’s failure to timely and accurately pay such taxes, including those arising upon subsequent audit by any taxing authority, and including interest and penalties.

ARTICLE IV

CLOSING

     Section 4.1. Place and Time of Closing; Effective Time. The Closing shall take place at the offices of Stinson Morrison Hecker LLP, at 7:59 a.m. local time, or at such other mutually agreeable time and place on the Closing Date. The parties agree that (unless otherwise required by any of the Approving Authorities (as defined in the Merger Agreement)), as to the allocation of rights, responsibilities and liabilities among themselves, the Closing shall be deemed to be effective as of 12:01 a.m. on the Closing Date (the “Effective Time”).

     Section 4.2. Northland Deliveries. On or prior to the Closing, Northland shall deliver to Buyer:

     (a) quitclaim deeds for each parcel of real property or Other Real Estate Owned of Western National by quitclaim deed, pursuant to which such real property or Other Real Estate Owned shall be transferred “AS IS”, “WHERE IS” and with all faults and subject to any and all encumbrances, liens and other title imperfections affecting such real property and Other Real Estate Owned of Western National as of immediately following the Merger;

     (b) a duly executed bill of sale for the Bank Assets substantially in the form of Exhibit A attached hereto, pursuant to which the Bank Assets shall be transferred “AS IS”,“WHERE IS” and with all faults (the “Bill of Sale”);

     (c) a duly executed assignment and assumption agreement with respect to the Bank Liabilities substantially in the form of Exhibit B attached hereto (the “Assignment and Assumption Agreement”);

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     (d) an officer’s certificate executed by an authorized officer of Northland in substantially the form of Exhibit C attached hereto;

     (e) to the extent not effected in connection with the Merger Agreement, assignments (without recourse or warranty) transferring the Banking Office Leases (if any) and Tenant Leases(if any) to Buyer (provided that neither Northland nor Western National shall have any liability with regard to obtaining any third-party consents with respect to any such assignments or any failures, conditions or delays in connection therewith; and further provided that failure by Northland to obtain said consents or assignments of said Banking Office Leases and/or Tenant Leases shall not be a condition precedent to Buyer’s obligation to consummate the transactions contemplated hereby);

     (f) a duly executed limited power of attorney substantially in the form of Exhibit D; and

     (g) such other documents necessary to effect the transactions contemplated hereby as Ban Corp, Bank of Blue Valley, or their respective counsel, shall reasonably request.

     Section 4.3. Buyer Deliveries. On or prior to the Closing, Buyer shall deliver to Northland the Purchase Price and the following documents in accordance with the terms of this Agreement:

     (a) a duly executed Assignment and Assumption Agreement;

     (b) a duly executed Bill of Sale;

     (c) the acceptance of Bank of Blue Valley’s appointment as successor custodian of the Custodial Accounts and assumption of the fiduciary obligations of the custodian with respect thereto, as contemplated by Section 2.3;

     (d) an officer’s certificate in substantially the form of Exhibit C attached hereto, executed and delivered by the president or chief executive officer of each of Bank of Blue Valley and Ban Corp; and

     (e) such other documents necessary to effect the transactions contemplated hereby, as Northland, or its counsel, shall reasonably request.

ARTICLE V

CONDITIONS TO CLOSING

     Section 5.1. Conditions to Obligations of Northland. Unless expressly waived in writing by Northland, the obligations of Northland under this Agreement are subject to the satisfaction as of the Closing of each of the following conditions:

     (a) Western National shall have successfully merged into Northland pursuant to the Merger Agreement and all of the conditions thereunder shall have been fulfilled;

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     (b) all of the covenants and other agreements required by this Agreement to be complied with and performed by Bank of Blue Valley or Ban Corp on or before the Closing shall have been duly complied with and performed;

     (c) the representations and warranties of Bank of Blue Valley and Ban Corp set forth in Article VI shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date except (i) to the extent such representations and warranties are by their express provisions made as of a specified date, and (ii)for the effect of transactions contemplated by this Agreement) and Northland shall have received a signed certificate of an appropriate officer of each of Bank of Blue Valley and Ban Corp to that effect;

     (d) approvals in writing of all required regulatory agencies or other Persons for Bank of Blue Valley’s purchase of the Bank Assets and assumption of the Bank Liabilities shall have been obtained by Buyer;

     (e) all necessary conditions, including any additional governmental approvals, permissions or consents, if any, including the giving of all legally required notices and the expiration of all legally required waiting or protest periods, of or relating to licenses, approvals and consents shall have been met (all of such approvals, conditions, permissions, licenses and consents, together with the regulatory approvals required under Section 5.1(d) shall herein collectively be referred to as the “Regulatory Approvals”), and such Regulatory Approvals shall include no Material Condition applicable to Western National, Northland or Buyer;

     (f) Northland shall not be subject to any order, decree or injunction of a court, agency or other regulatory body of competent jurisdiction which enjoins or prohibits the consummation of any of the transactions contemplated hereby;

     (g) Northland shall have received the items to be delivered by Buyer pursuant to Section 4.3; and

     (h) there shall be no litigation filed with any court that would prevent or materially affect the Merger or the transaction contemplated by this Agreement.

     Section 5.2. Conditions to Obligations of Buyer. Unless expressly waived in writing by Buyer, the obligations of Buyer under this Agreement are subject to the satisfaction on or before the Closing Date of each of the following conditions:

     (a) all of the covenants and agreements required by this Agreement to be complied with and performed by Northland on or before the Closing Date shall have been duly complied with and performed;

     (b) the representations and warranties of Northland set forth in Article VI shall be true and correct in all material respects as of the date of this Agreement and as of the Closing Date (as though made on and as of the Closing Date except (i) to the extent such representations and warranties are by their express provisions made as of a specified date, and (ii) for the effect of transactions contemplated by this Agreement) and Buyer shall have received a signed certificate of an appropriate officer of Northland to that effect;

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     (c) the Regulatory Approvals, which shall include no Material Condition applicable to Buyer, shall have been obtained;

     (d) approvals in writing of all required regulatory agencies or other Persons for Bank of Blue Valley’s purchase of the Bank Assets and assumption of the Bank Liabilities shall have been obtained by Northland;

     (e) Bank of Blue Valley or Ban Corp shall not be subject to any order, decree or injunction of a court, agency or other regulatory body of competent jurisdiction which enjoins or prohibits the consummation of any of the transactions contemplated hereby;

     (f) Buyer shall have received the items to be delivered by Northland pursuant to Section 4.2; and

     (g) there shall be no litigation filed with any court that would prevent or materially affect the Merger or the transaction contemplated by this Agreement.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

     Section 6.1. Representations and Warranties of Northland. Northland represents and warrants to Buyer as follows:

     (a) Organization. Northland is a national banking association duly organized, validly existing and in good standing under the laws of the United States.

     (b) Authority. Northland has the power and authority to enter into and perform this Agreement. This Agreement and any other documents or instruments executed pursuant hereto and the execution, delivery and performance hereof and thereof have been duly authorized and approved by all necessary corporate actions on the part of Northland, and this Agreement and the instruments and documents executed pursuant hereto constitute, or will constitute, the valid and binding obligations of Northland, enforceable against Northland in accordance with their terms, except as enforcement may be limited by federal and state regulators of Northland or by bankruptcy, insolvency, reorganization, moratorium or other laws of general applicability relating to or affecting creditors’ rights, or the limiting effect of rules of law governing specific performance, equitable relief and other equitable remedies or the waiver of rights or remedies.

     (c) Non-Contravention. The execution and delivery of this Agreement and the instruments and documents executed pursuant hereto by Northland do not and, subject to the receipt of all required approvals and consents, the consummation of the transactions contemplated by this Agreement will not, constitute (i) a breach or violation of or default under any law, rule,regulation, judgment, order, governmental permit or license of Northland or to which Northland is subject, which breach, violation or default would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby; or (ii) a breach or violation of or a default under the articles of association or bylaws of Northland or any material contract or other instrument to which Northland is a party or by which Northland is bound, which

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breach, violation or default would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby.

     (d) Compliance with Laws. Northland is not in violation of, nor is any of the property owned or leased by Northland in violation of, its articles of association or bylaws, or of any applicable federal, state or local law or ordinance or any order, rule or regulation of any federal, state, local or other governmental agency or body (including, without limitation, all banking (including without limitation all regulatory capital requirements) fiduciary or agency,consumer protection, securities, municipal securities, safety, health, environmental, zoning, anti- discrimination, antitrust, and wage and hour laws, ordinances, orders, rules and regulations), which would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby, or in default with respect to any order, writ, injunction or decree of any court, or in default under any order, license, regulation or demand of any governmental agency which would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby, and in the past three years Northland has not received notice of a material violation of any statute, ordinance, order,rule or regulation. Northland is not subject to any regulatory or supervisory cease and desist order, agreement, written directive, memorandum of understanding or written commitment (other than those of general applicability to all banks and holding companies thereof), and has received no written communication requesting that it enter into any of the foregoing.

     (e) Legal Proceedings. There are no actions, suits, claims, formal governmental investigations or proceedings instituted or pending against Northland or against any officer,director or employee of Northland which would be reasonably likely to prevent or hinder the consummation of the transactions contemplated by this Agreement.

     (f) Brokers and Finders. Northland shall bear the sole responsibility for payment of any broker, investment banker, finder or other fee incurred by Northland, or its Affiliates, regarding the transactions contemplated hereby.

     (g) Disclaimer of Warranties. The Bank Assets and Bank Liabilities will be delivered to Buyer “AS IS” “WHERE IS” with all faults. Northland makes no other warranties, guarantees, or representations of any kind with respect to such Bank Assets and Bank Liabilities, either express or implied, arising by law or otherwise, which shall survive delivery of the Bank Assets to, or assumption of Bank Liabilities by, Buyer, including, but not limited to, the condition or value of the Bank Assets, the amount or nature of any obligations or liabilities included in the Bank Liabilities, any implied warranty of merchantability, any implied warranty arising from course of performance, course of dealing or usage or trade, and any implied warranty of fitness for any particular purpose. Northland hereby disclaims any warranties, guarantees or verbal or written statements regarding the viability or continued success of the use or operation of the Bank Assets and Bank Liabilities by Buyer.

     Section 6.2. Representations and Warranties of Buyer. Each of Bank of Blue Valley and Ban Corp hereby jointly and severally represent and warrant to Northland as follows:

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     (a) Organization. Ban Corp is a Kansas corporation, duly organized and validly existing under the laws of the State of Kansas. Bank of Blue Valley is a Kansas state-chartered bank, duly organized and validly existing under the laws of the State of Kansas.

     (b) Authority. Each of Bank of Blue Valley and Ban Corp has the power and authority to enter into and perform this Agreement and any instruments or other documents executed pursuant hereto. This Agreement and any instruments or other documents executed pursuant hereto, and the execution, delivery and performance hereof and thereof have been duly authorized and approved by all necessary corporate actions on the part of each of Bank of Blue Valley and Ban Corp, and this Agreement, and the instruments and documents executed pursuant hereto, constitute a valid and binding obligation of each of Bank of Blue Valley and Ban Corp, enforceable against each in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws of general applicability relating to or affecting creditors’ rights, or the limiting effect of rules of law governing specific performance, equitable relief and other equitable remedies or the waiver of rights or remedies.

     (c) Non-Contravention. The execution and delivery of this Agreement and any instruments or other documents executed pursuant hereto by each of Bank of Blue Valley and Ban Corp do not and, subject to the receipt of all required approvals and consents, the consummation of the transactions contemplated by this Agreement will not, constitute (i) a breach or violation of or default under any law, rule, regulation, judgment, order, governmental permit or license of either of Bank of Blue Valley or Ban Corp, or to which either of them is subject, which breach, violation or default would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby, or (ii) a breach or violation of or a default under the organizational documents of either Bank of Blue Valley or Ban Corp or any material contract or other instrument to which it is a party or by which it is bound, except to the extent that any such breaches or violations, in the aggregate, would not have a material adverse effect on Bank of Blue Valley or Ban Corp or would not impair the validity or consummation of this Agreement or the transactions contemplated hereby.

     (d) Compliance with Laws. Except as disclosed on Schedule 6.2(d), neither Bank of Blue Valley nor Ban Corp is in violation of, nor is any of the property owned or leased by either in violation of, its organizational documents, or of any applicable federal, state or local law or ordinance or any order, rule or regulation of any federal, state, local or other governmental agency or body (including, without limitation, all banking (including without limitation all regulatory capital requirements), fiduciary or agency, consumer protection, securities, municipal securities, safety, health, environmental, zoning, anti-discrimination, antitrust, and wage and hour laws, ordinances, orders, rules and regulations) which would reasonably be expected to impair the validity or consummation of this Agreement or the transactions contemplated hereby, or in default with respect to any order, writ, injunction or decree of any court, or in default under any order,license, regulation or demand of any governmental agency, and in the past three years neither Bank of Blue Valley nor Ban Corp has received notice of a violation of any statute, ordinance, order, rule or regulation. Neither Bank of Blue Valley nor Ban Corp is subject to any regulatory or supervisory cease and desist order, agreement, written directive, memorandum of understanding or written commitment (other than those of general applicability to all banks and holding companies thereof), or has received any written communication requesting that it enter into any of the foregoing. Neither Bank of Blue Valley nor Ban Corp has received any objection

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from any regulatory agency to its response to any violation, criticism or exception with respect to any report or statement relating to any examinations of it.

     (e) Legal Proceedings. There are no actions, suits, claims, formal governmental investigations or proceedings instituted or pending against either Bank of Blue Valley or Ban Corp or against any officer, director or employee of either of them which would be reasonably likely to prevent or hinder the consummation of the transactions contemplated by this Agreement.

     (f) Brokers and Finders. Neither Bank of Blue Valley nor Ban Corp nor any of their respective directors, officers or employees has employed any broker or finder or incurred any liability for any broker or finder fees or commissions in connection with the transactions contemplated hereby.

     (g) Buyer Investigation. Bank of Blue Valley and Ban Corp each acknowledges that: (i) it has had the opportunity to visit with Western National and Northland and meet with their representative officers and other representatives to discuss the business, assets, liabilities, reserves, financial condition, cash flow and operations of Western National, and (ii) all materials and information requested by Bank of Blue Valley or Ban Corp have been provided to Bank of Blue Valley or Ban Corp, respectively, to the reasonable satisfaction of such party. Bank of Blue Valley and Ban Corp each acknowledges that it has made its own independent examination, investigation, analysis and evaluation of Western National and Northland, including its own estimate of the value of the Bank Assets and Bank Liabilities. Each of Bank of Blue Valley and Ban Corp acknowledges that it has undertaken such investigation (including a review of the assets, liabilities, books, records and contracts of Western National and Northland) as Bank of Blue Valley or Ban Corp deems adequate, including that described above.

     (h) Disclaimer of Further Warranties. With respect to the disclaimer of warranties set forth in Section 6.1(g), Buyer acknowledges that it is acquiring the Bank Assets and Bank Liabilities based on its own investigation, evaluation and knowledge of the Bank Assets and Bank Liabilities, and other matters solely in its determination. Any statements which the Buyer is relying upon which were made by Northland or any of its officers, employees, agents or Affiliates are in writing and are contained in this Agreement, or the Schedules and Exhibits attached hereto.

ARTICLE VII

COVENANTS OF NORTHLAND

     Northland covenants and agrees with Buyer as follows:

     Section 7.1. Regulatory Approvals.

     (a) Northland shall file with the appropriate governmental entities all the applications for the Regulatory Approvals that are necessary for Northland to obtain relating to the transactions hereunder and for all other consents, permits and authorizations that Northland is required to obtain in connection with the consummation of the transactions contemplated by this Agreement. In addition, Northland shall cooperate with Buyer and use commercially reasonable efforts to promptly prepare and file all necessary documentation; to effect all applications, notices, petitions and filings; and to obtain as promptly as practicable all permits, consents,

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approvals, waivers and authorizations of all third parties and governmental entities which are necessary or advisable for Northland to obtain to consummate the transactions contemplated by this Agreement.

     (b) Subject to applicable laws relating to the exchange of information, Northland and Buyer shall consult with each other on all information in connection with obtaining all permits, consents, approvals and authorizations from all third parties and governmental entities which are necessary or advisable to consummate the transactions contemplated by this Agreement.

     (c) Northland and Buyer shall keep each other apprised of the status of all applications and filings.

     (d) Except for any confidential portions thereof, as determined at the discretion of the Party responsible for making and filing any documentation with respect to any Regulatory Approval, such Party shall promptly (i) provide a copy of the filing, and any supplement, amendment or item of additional information in connection with the filing, to the other Parties and (ii) deliver to the other Parties a copy of each material notice, order, opinion and other item of correspondence received by it in respect of any such filing from any governmental entity whose consent or approval is required for consummation of the transactions contemplated by this Agreement.

     (e) Buyer and Northland shall promptly advise each other of any communication received from a governmental entity which causes such Party to believe that there is reasonable likelihood that a requisite Regulatory Approval will not be obtained or that the receipt of such approval will be materially delayed.

ARTICLE VIII

COVENANTS OF BUYER

     Each of Bank of Blue Valley and Ban Corp with respect to itself covenants and agrees with Northland as follows:

     Section 8.1. Regulatory Approvals and Standards.

     (a) Buyer shall file with the appropriate governmental entities all the applications for the Regulatory Approvals that are necessary for it to obtain relating to the transactions hereunder and for all other consents, permits and authorizations that Bank of Blue Valley or Ban Corp is required to obtain in connection with the consummation of the transactions contemplated by this Agreement. In addition, Buyer shall cooperate with Northland and use commercially reasonable efforts to promptly prepare and file all necessary documentation; to effect all applications, notices, petitions and filings; and to obtain as promptly as practicable all permits, consents, approvals, waivers and authorizations of all third parties and governmental entities which are necessary or advisable for Buyer to obtain to consummate the transactions contemplated by this Agreement.

     (b) Bank of Blue Valley and Ban Corp will each use commercially reasonable efforts to obtain as expeditiously as possible the Regulatory Approvals and will cooperate with

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Northland with regard to any Regulatory Approvals that Northland must obtain. As of the Closing Date, each of Bank of Blue Valley and Ban Corp will satisfy each and all of the standards and requirements reasonably within its control imposed as a condition to obtaining or necessary to comply with Regulatory Approvals. Neither Bank of Blue Valley nor Ban Corp shall take any action that would adversely affect or delay the ability of any Party to obtain any Regulatory Approval or to perform its covenants and agreements under this Agreement.

     (c) After the Closing Date, it is the intention of each of Bank of Blue Valley and Ban Corp to conduct the Bank Business at the Banking Offices, and therefore it is not expected that the transactions contemplated by this Agreement will result in the closing, consolidation or relocation of any of the Banking Offices. Bank of Blue Valley and Ban Corp each agrees that it shall be responsible for complying with any required Banking Office closing or other notices to regulators and customers in the event either Bank of Blue Valley or Ban Corp should at any subsequent time determine to close, consolidate or relocate any of the Banking Offices or to close, consolidate or relocate any Banking Office of either Bank of Blue Valley or Ban Corp in connection with or relating to the transactions contemplated by this Agreement.

     Section 8.2. Corporate and Other Consents; Compliance with Law.

     (a) Bank of Blue Valley and Ban Corp shall each use commercially reasonable efforts to secure all necessary corporate and other non-regulatory consents and shall provide certified copies to Northland upon Northland’s request.

     (b) Bank of Blue Valley and Ban Corp shall each promptly comply with all applicable laws, regulations, and rulings in connection with this Agreement and the consummation of the transactions contemplated hereby.

     Section 8.3. Employees.

     With respect to all Employee Plans or Policies (as defined in the Merger Agreement) maintained by Western National prior to the Merger, if any, Buyer shall retain or assume full responsibility and liability for compliance with the Internal Revenue Code and ERISA, including, without limitation, the continuation health care coverage requirements of Internal Revenue Code Section 4980B and ERISA Sections 601 through 608 for all “qualifying events” within the meaning of Section 4980B(f)(3) of the Code and Section 603 of ERISA with respect to such Employee Plans or Policies occurring on or prior to the Closing Date. Northland shall not have any liability or obligation whatsoever arising or resulting from any Employee Plans or Policies, and Buyer shall indemnify and hold Northland and its owners, directors, officers, employees or agents from any losses, damages, penalties, fines, costs and expenses (including reasonable attorneys’ fees) resulting from Buyer’s failure to maintain any Employee Plans or Policies in accordance with the terms of this Section 8.3 or applicable law.

ARTICLE IX

INDEMNITY

     Section 9.1. Northland’s Indemnity. Except as otherwise provided in this Agreement, Northland shall indemnify, hold harmless and defend Bank of Blue Valley and Ban Corp, and

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their respective directors, shareholders, officers, agents and employees (the “Buyer Indemnitees”) from and against all claims, losses, liabilities, demands and obligations (including reasonable legal fees and expenses) (the “Claims”) asserted by third parties which any Buyer Indemnitee shall receive, suffer or incur arising out of or resulting from (a) any Retained Asset or Retained Liability after the Closing Date provided such Claim is the result of any act or omission of Northland, and not the result of any pre-Closing act or omission by any other Person; or (b) the breach of any representation, warranty or covenant made by Northland in this Agreement.

     Section 9.2. Buyer’s Indemnity. Except as otherwise provided in this Agreement, Bank of Blue Valley and Ban Corp shall jointly and severally indemnify, hold harmless and defend Northland and its directors, shareholders, officers, agents and employees (the “Northland Indemnitees”) from and against all Claims asserted by third parties which any Northland Indemnitee shall receive, suffer or incur arising out of, related to or resulting at any time from (a) the Bank Assets or Bank Liabilities, whether accruing on, before or after the Closing; (b) the breach of any representation, warranty or covenant made by Bank of Blue Valley or Ban Corp in this Agreement; or (c) any employees of Western National.

     Section 9.3. Indemnification Procedures.

     (a) If any Northland Indemnitee or Buyer Indemnitee (each, an “Indemnified Party”) seeks indemnification under this Article IX, the Indemnified Party shall notify in writing the indemnifying party (the “Indemnifying Party”) within 30 days after learning of the occurrence of any event that is asserted to be an indemnifiable event pursuant to this Agreement. If such event involves the claim of any third party and the Indemnifying Party confirms in writing its responsibility for such liability, if established, the Indemnifying Party shall be entitled to participate in and, to the extent it shall wish, assume control over (in which case the Indemnifying Party shall assume all expense with respect to) the defense, settlement, adjustment or compromise of such claim.

     (b) The Indemnified Party shall have the right to employ separate counsel in any action or claim and to participate in the defense thereof at the expense of the Indemnifying Party (i) if the retention of such counsel has been specifically authorized by the Indemnifying Party or (ii) if such counsel is retained because the Indemnifying Party does not confirm responsibility for the liability as provided in subsection (a) above. The Indemnified Party shall have the right to employ counsel at the Indemnified Party’s own expense and to participate in such action or claim,including settlement or trial, as long as such participation does not substantially interfere with the Indemnifying Party’s defense of such claim or action.

     (c) The Indemnifying Party shall obtain the prior written approval of the Indemnified Party before entering into any settlement, adjustment or compromise of such claim or ceasing to defend against such claim only if pursuant to or as a result of such settlement, adjustment, compromise or cessation, injunctive or other relief would be imposed against the Indemnified Party.

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     (d) If the Indemnifying Party does not assume control over the defense of such claim as provided in Section 9.3(a), the Indemnified Party shall have the right to defend the claim in such manner as it may deem appropriate at the cost and expense of the Indemnifying Party.

     (e) The Indemnifying Party shall remit payment for the amount of a valid and substantiated claim for indemnification hereunder promptly upon receipt of a claim notice therefor. Upon the payment in full of any claim hereunder, the Indemnifying Party shall be subrogated to the rights of the Indemnified Party against any person with respect to the subject matter of such claim.

     (f) In the event that the Indemnifying Party reimburses the Indemnified Party for any third party claim, the Indemnified Party shall remit to the Indemnifying Party any reimbursement that the Indemnified Party subsequently receives for such third party claim.

     Section 9.4. Survival. All indemnities contained in or made pursuant to this Agreement shall survive the Closing for the applicable statute of limitations period, including any and all extensions thereof, after the Closing Date, except as to any claim for which written notice shall have been given prior to such date.

ARTICLE X

POST CLOSING MATTERS

     Section 10.1. Further Assurances.

     On or after the Closing Date:

     (a) except as otherwise specifically provided herein, Northland shall give such further assurances to Buyer in the orderly transition of the operations of the Banking Offices and shall give such further assurances and execute, acknowledge and deliver all such instruments as may be necessary and appropriate to effectively vest in Buyer title in the Bank Assets in the manner contemplated hereby; and

     (b) except as specifically provided otherwise herein, Buyer shall give such further assurances to Northland and Western National and shall execute, acknowledge and deliver all such acknowledgments and other instruments and take such further action as may be necessary and appropriate to effectively release, relieve and discharge Western National and Northland from any obligations remaining with respect to the Bank Assets and Bank Liabilities assumed by Bank of Blue Valley hereunder.

     Section 10.2. Access to and Retention of Books and Records. Following the Closing Date, Buyer shall make available to Northland for inspection the books, records, documents, instruments, accounts, correspondence, writings, evidences of title, Tax Returns and other papers relating to Western National as of or prior to the Closing Date which are reasonably necessary for tax or regulatory filings, for seven years or for such longer period as may be required by any law or court order.

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     Section 10.3. Mutual Cooperation. The Parties agree to mutually cooperate after the Closing Date to take any action necessary to accomplish an orderly transition to accomplish the Goals.

     Section 10.4. Insurance. Buyer shall continue to maintain after the Closing Date all insurance policies transferred pursuant to this Agreement as part of the Bank Assets with respect to actions or claims regarding Western National arising on or before the Closing Date.

ARTICLE XI

MISCELLANEOUS

     Section 11.1. Venue; Jury Waiver. The Parties agree that any action or proceeding to enforce, or arising out of, this Agreement may be commenced in the District Court of Jackson County, Missouri or in the United States District Court for the Western District of Missouri. Each Party also hereby waives any right to a trial by jury such party may have in connection with this Agreement.

     Section 11.2. Expenses. Except as otherwise provided herein, each Party shall pay all of its own out-of-pocket expenses in connection with this Agreement, including appraisal, accounting, consulting, professional and legal fees, if any, whether or not the transactions contemplated by this Agreement are consummated; except that Buyer shall pay all (a) recording, filing or other fees, cost and expenses (including fees, costs and expenses for (i) preparation of title certificates or searches, surveys, inspections, environmental audits or other investigations, (ii) filing of any forms (including without limitation tax forms) with governmental instrumentalities in connection with the transfer of Western National or Northland’s real property or Personalty, and (iii) recording instruments or documents evidencing any transfers of interests in real property), and (b) costs and expenses relating to the preparation, execution and recording of assignments of mortgages, financing statements, notes, security agreements or other instruments (other than the items to be delivered by Northland pursuant to Section 4.2), applicable to or arising in connection with the transfer, assignment or assumption of the Loans (and mortgages, financing statements, notes, security agreements and other instruments relating thereto), real property, the Banking Office leases, if any, or the Personalty.

     Section 11.3. Communications, etc. Buyer shall furnish to Northland copies of the text of all notices, advertisements, information or communications, written or oral, proposed to be sent or transmitted by the furnishing party to the public generally regarding the transfer of the Bank Assets and Bank Liabilities (including any public notices required to be given by law or regulation in connection with such transactions or applications for approval thereof), and the furnishing Party shall not send or transmit such notices, advertisements, information or communications or otherwise make them public unless and until Northland has been afforded an opportunity to review and raise any reasonable objections it may have to any such notices, advertisements, information or communications, which such objections shall have been addressed to the reasonable satisfaction of Northland before the same is sent or transmitted.

     Section 11.4. Termination. This Agreement shall terminate and shall be of no further force or effect as between and among the Parties, upon the occurrence of any of the following:

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     (a) mutual agreement of the Parties;

     (b) receipt by any Party of notice from any regulatory authority that such Party has been denied any Regulatory Approval by Final order; or

     (c) upon termination of the Merger Agreement.

     Section 11.5. Modification and Waiver. This Agreement may not be modified except in a writing duly executed by all Parties. Any waiver must be in writing.

     Section 11.6. Binding Effect; Assignment. No Party may assign its rights or obligations under this Agreement without the prior written consent of the other Parties, which consent shall not be unreasonably withheld; provided, however, that Northland may, without the prior consent of Bank of Blue Valley or Ban Corp, assign or transfer its rights and obligations under the Agreement, in whole or in part, to (a) any Affiliate of Northland, (b) any new entity created for purposes of (i) operating Northland’s business or (ii) effecting the transactions contemplated by this Agreement and the Merger Agreement or (c) any Person or entity that acquires or succeeds to all or substantially all of Northland’s business or assets (respectively). Subject to the preceding sentence, all terms of this Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

     Section 11.7. Confidentiality.

     (a) All information furnished previously in connection with the transactions contemplated by this Agreement or pursuant hereto shall be treated as the sole property of the Party furnishing the information. Each Party shall use its best efforts to keep confidential all such information and shall not directly or indirectly use such information for any competitive or other commercial purposes and, if such transactions shall not occur, the Party receiving the information shall either destroy or return to the Party that furnished such information all documents or other materials containing, reflecting or referring to such information. The obligation to keep such information confidential shall continue for five years from the date the transactions contemplated herein are consummated or abandoned, but shall not apply to (i) any information that (x) the Party receiving the information can establish by convincing evidence was already in its possession prior to the disclosure thereof by the Party furnishing the information; (y) was then generally known to the public; or (z) became known to the public through no fault of the Party receiving the information; or (ii) disclosures pursuant to a legal requirement or in accordance with an order of a court of competent jurisdiction; provided that the Party that is the subject of any such legal requirement or order shall use its reasonable efforts to give the Party that disclosed the information at least 10 business days prior notice thereof. This Section 11.7 shall survive the termination or consummation of this Agreement.

     (b) The Parties acknowledge that the breach of any portion of Section 11.7(a) would cause the Party furnishing information irreparable harm for which monetary damages would be inadequate. Accordingly, in addition to other remedies available to it, the Party furnishing information shall be entitled to seek injunctive or other equitable relief to remedy any threatened or actual breach of any portion of Section 11.7(a) by the Party receiving the information, notwithstanding anything else contained in this Agreement.

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     Section 11.8. Entire Agreement. This Agreement and the Merger Agreement, including any and all Exhibits and Schedules hereto and thereto, represent the entire agreement of the Parties with respect to the subject matter hereof and thereof. All prior negotiations between the Parties are merged into this Agreement and the Merger Agreement, and there are no understandings or agreements other than those incorporated herein and therein.

     Section 11.9. Governing Law. Except to the extent governed by federal law, this Agreement shall be interpreted, construed and enforced in all respects in accordance with the laws of the State of Missouri (without regard to any principles of conflicts of laws thereof).

     Section 11.10. Severability. In the event that any one or more provisions of this Agreement shall for any reason be held invalid, illegal or unenforceable in any respect by any court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provisions of this Agreement, and the Parties shall use their reasonable efforts to substitute a valid, legal and enforceable provision that, insofar as practical, implements the purposes and intents of this Agreement.

     Section 11.11. Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed to be an original and all of which taken together shall constitute one and the same instrument.

     Section 11.12. Notices. All notices required or permitted under this Agreement shall be given in writing, shall reference this Agreement and shall be deemed to have been delivered and given (a) upon personal delivery to the Party to be notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient or, if not, then on the next business day; (c) five days after having been sent by registered or certified U.S. mail, return receipt requested, postage and charges prepaid; or (c) one business day after deposit with a nationally-recognized commercial overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the addresses set forth on Schedule II or to such other address as may be designated by a Party by giving written notice to the other Parties pursuant to this Section 11.12.

     Section 11.13. Headings; Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect the meaning or interpretation hereof. The use of the singular pronoun in this Agreement shall be deemed to be or include the plural (and vice versa), whenever appropriate. Whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”.

     Section 11.14. Specific Performance. The Parties acknowledge that monetary damages could not adequately compensate the Parties in the event of a breach of this Agreement by one Party, that the non-breaching Party or Parties would suffer irreparable harm in the event of such breach and that the non-breaching Party or Parties shall have, in addition to any other rights or remedies it or they may have at law or in equity, specific performance and injunctive relief as a remedy for the enforcement hereof.

     Section 11.15. Third Party Beneficiaries. Except for Western National, which is an intended beneficiary, the Parties intend that this Agreement shall not benefit or create any right

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or cause of action in or on behalf of any Person other than the Parties. No future or present employee or customer of any of the Parties shall be treated as a third party beneficiary in or under this Agreement.

     Section 11.16. Mutual Drafting. This Agreement is the mutual product of the Parties, and each provision hereof has been subject to the mutual consultation, negotiation and agreement of each Party and shall not be construed for or against any Party.

[Execution page follows]

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Execution Version

     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed, by their duly authorized representatives, as of the day and year first above written.

NORTHLAND: NORTHLAND NATIONAL BANK
By:
	Kenneth Riedemann
	Chairman of the Board
BAN CORP: BLUE VALLEY BAN CORP.
By:
	Robert D. Regnier
	President
BANK OF BLUE VALLEY: BANK OF BLUE VALLEY
By:
	Robert D. Regnier
	President

EX-21.1

EXHIBIT 21.1

LIST OF SUBSIDIARIES OF BLUE VALLEY BAN CORP.

Exhibit 21.1

Blue Valley Ban Corp.

Subsidiaries of the Registrant

Subsidiaries of Blue Valley Ban Corp.

1.	Bank of Blue Valley — Incorporated in Kansas
2.	Blue Valley Building Corp. — Incorporated in Kansas
3.	BVBC Capital Trust II — Organized under the laws of the State of Delaware
4.	BVBC Capital Trust III — Organized under the laws of the State of Delaware
5.	Blue Valley Insurance Services, Inc. — Incorporated in Kansas
6.	BVBC Acquisition I, Inc. — Incorporated in Kansas

Subsidiary of Bank of Blue Valley

1.	Blue Valley Investment Corporation — Incorporated in Kansas
2.	BBV Accommodations, LLC — Incorporated in Kansas

EX-23.3

Exhibit 23.3

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Blue Valley Ban Corp.
Overland Park, Kansas

We consent to the incorporation by reference in Registration Statement No. 333-46022 on Form S-8 of Blue Valley Ban Corp., of our report, dated March 21, 2007, relating to the consolidated balance sheets of Blue Valley Ban Corp. as of December 31, 2006 and 2005, and the related consolidated statements of income, stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2006, which report appears in the December 31, 2006 Annual Report on Form 10-K of Blue Valley Ban Corp.

/s/ BKD, LLP

Kansas City, Missouri
March 21, 2007

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE
CHIEF EXECUTIVE OFFICER

          I, Robert D. Regnier, certify that:

          1. I have reviewed this annual report on Form 10-K of Blue Valley Ban Corp. (the “Company”);

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 28^th, 2007

/s/ Robert D. Regnier
Robert D. Regnier,
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE
CHIEF FINANCIAL OFFICER

          I, Mark A. Fortino, certify that:

          1. I have reviewed this annual report on Form 10-K of Blue Valley Ban Corp. (the “Company”);

          2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

          3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

          4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

     a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

     b) Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America;

     c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

     d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

          5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

     a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

March 28^th, 2007

/s/ Mark A. Fortino
Mark A. Fortino,
Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

     In connection with the Annual Report of Blue Valley Ban Corp. (the “Company”) on Form 10-K for the period ended December 31, 2006, as filed with the United States Securities and Exchange Commission on the date hereof (the “Report”), we certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

     (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

     (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 28^th, 2007

/s/ Robert D. Regnier

Robert D. Regnier,

President and Chief Executive Officer

/s/ Mark A. Fortino

Mark A. Fortino,

Chief Financial Officer