The annual audit process is wrapping up and provides a reminder that Brooke’s corporate life is closely audited, regulated, examined, inspected and monitored by many different regulatory bodies, institutions and individuals.

This is a consequence of being a finance company, a bank, an insurance company, a franchisor and listed on a national stock exchange. This intense scrutiny consumes time and resources but it provides assurances to Brooke’s many different constituents. The following summarizes some of those that put Brooke under a microscope.

Auditors Our annual audit is more extensive than most audits because audits of companies that report to the Securities and Exchange Commission (SEC) are more comprehensive than audits for non-reporting companies. Auditors for reporting companies typically have a much greater responsibility, and liability, than auditors for nonreporting companies. Unlike many auditors, the work of our audit firm is regularly reviewed by the Public Company Accounting Oversight Board. To ensure that they meet their responsibilities, our audit firm has one or more teams in our offices for about 9 weeks of every year.

Franchisees Each new franchisee makes a significant financial and professional investment in our company. As such, prospective franchisees investigate Brooke by reading franchise disclosures, researching public filings, calling insurance companies and talking with existing franchisees. The weighted average years of insurance experience for our franchise borrowers is more than 10 years so this investigation is typically performed by seasoned industry professionals. Each month, we are put under the microscope by 15-20 prospective franchisees.

NASDAQ As a listed public company we must meet NASDAQ requirements for investor protections and disclosures, including the requirements of the Sarbanes Oxley legislation. Although Sarbanes Oxley includes several investor protections, perhaps the most important is an audit of our internal controls. Our internal audit department has worked closely with a major consulting firm for more than 12 months to identify and test internal controls.

Securities & Exchange Commissions (SEC) Regulators As a publicly listed company, we are regulated by the SEC. As part of regulatory process, full and accurate disclosures are required through public filings of quarterly results (Form 10-Q), annual results (Form 10-K) and other significant events (Form 8-K). We have found SEC reviews to be a rigorous and thorough analysis of our accounting practices and the corresponding disclosures. The SEC’s most recent review was in conjunction with a follow- on public offering in 2005.

Federal Bank Regulators In December 2006 we received approval from the Office of Thrift Supervision
(OTS) to acquire Generations Bank and we are now supervised by federal bank regulators. The approval process was lengthy and included an extensive on-site examination by regulators to determine that our organization was sufficiently sound and well managed to acquire a bank.

State Insurance Regulators After a comprehensive application process, the Kansas Insurance Department approved our filing in December 2006 to acquire a life insurance company. As insurance agents, we have long been regulated by state insurance departments. However, as the result of acquiring an insurance company, the level of direct regulatory supervision by the Kansas Insurance Department has increased significantly.

Franchise Regulators As a franchisor, we are regulated by individual states and the Federal Trade Commission. Regulatory oversight is focused on full and accurate disclosures to prospective franchisees. Our franchise disclosures are lengthy and provide significant information about us. Prospective franchisees can put us under a microscope when the information from our franchise disclosures is supplemented with public information available from the SEC, bank and insurance regulators.