Highlights include close of Midwest Capital and First National Bank in
Alma acquisitions; credit quality maintained at hallmark levels;
independent firm retained to enhance efficiency
LEAWOOD, Kan., April 21 /PRNewswire/ -- Gold Banc (Nasdaq: GLDB) today
announced net income increased 44.6% for the quarter ended March 31, 1998.
Net income for the first quarter of 1998 was a record $1.1 million, compared
to $785,000 for the first quarter of 1997. Net income per diluted share for
the first quarter of 1998 was $0.22 on 5,269,000 weighted average common
shares and common share equivalents outstanding, versus $0.16 per diluted
share on 4,794,000 weighted average common shares outstanding for the first
quarter of 1997, representing a 37.5% increase in net income per diluted
share.
Summary of First Quarter 1998 Financial Highlights
(unaudited; dollars in thousands except per share and share amounts)
At or for the Three Months Ended March 31,
1998 1997 Change
Total Loans, net $369,553 $243,698 +51.6%
Total Deposits $455,084 $317,047 +43.5%
Total Assets $566,680 $381,713 +48.5%
Net Income $1,135 $785 +44.6%
Net Income Per Diluted Share $0.22 $0.16 +37.5%
Weighted Average Common Shares
and Common Share Equivalents
Outstanding 5,269,000 4,794,000 +9.9%
"Gold Banc's first quarter earnings reflect the increased loan activity at
our flagship Johnson County and Kansas locations, plus increases in fee-based
or noninterest income fueled by our growing Midwest Capital broker/dealer
business. While the effect of the Midwest Capital and Alma acquisitions
closed in the first quarter contributed to across-the-board increases, our
performance is still notable because it was achieved at the same time that we
incurred, as expected, the interest expense from the issuance of $28.8 million
of subordinated debentures in December. This provided us with additional
capital for growth and acquisition, a portion of which we have yet to deploy.
With credit quality holding steady at traditional hallmark levels and the
identification and leveraging of further operating efficiencies, these first
quarter results should serve as a good bellwether for the rest of the year."
-- Michael W. Gullion, Chairman, President & Chief Executive Officer
Total assets, loans and deposits reached new record levels for the first
quarter of 1998, primarily as a result of the healthy regional economy. The
majority of internal loan and deposit growth continues to be driven by Gold
Banc's lead institution, Exchange National Bank, and its locations in Johnson
County, Kansas.
As of March 31, 1998, total assets increased 48.5% to $566.7 million, net
loans rose 51.6% to $369.6 million and deposits increased 43.5% to
$455.1 million, versus the same date last year.
Net interest income for the first quarter of 1998 increased 36.5% to
$4.6 million versus $3.4 million for the first quarter of 1997. After
adjusting for provisions for loan losses, net interest income for the first
quarter of 1998 was $4.3 million compared with $3.3 million in the first
quarter of 1997, an increase of 29.9%.
Gold Banc continued its strong emphasis on credit quality, reporting
$533,000 in total nonperforming loans for the first quarter of 1998, or 0.14%
of total loans, compared to the first quarter 1997 ratio of 0.33%. Gold
Banc's loan loss reserve at March 31, 1998 was $5.4 million, or 1.44% of loans
and 1,014.3% of nonperforming loans. Net charge-offs reflected a net loss of
0.01% to average loans for the first quarter of 1998, versus a net loss of
0.02% to average loans for the first quarter of 1997.
Noninterest income for the first quarter of 1998 was $1.4 million, an
increase of 217.8% compared to the first quarter of 1997, primarily reflecting
investment management and broker/dealer fees generated by Midwest Capital
Management, Inc., comprising a significant new component of the Company's
noninterest income. The balance of the increase in noninterest income
primarily resulted from gains on sale of mortgage loans, service charges and
gains on the Company's trading investment securities.
Noninterest expenses increased 55.9% to $4.0 million for the first quarter
of 1998 versus the year ago quarter. The balance of the increase primarily
reflected a 62% expansion in salaries and benefits attributable to growth of
the Company's employee base as a result of the acquisitions closed during the
fourth quarter of 1997 and the first quarter of 1998, as well as a 7% increase
in other maintenance expenses directed mainly toward various upgrades and
enhancements of newly acquired locations and facilities.
CEO Michael W. Gullion Comments on First Quarter Results
Michael W. Gullion, Gold Banc President and Chief Executive Officer,
commented: "Gold Banc's first quarter earnings reflect the increased loan
activity at our flagship Johnson County and Kansas locations, plus increases
in fee-based or noninterest income fueled by our growing Midwest Capital
broker/dealer business."
Continued Gullion: "While the effect of the Midwest Capital and Alma
acquisitions closed in the first quarter contributed to across-the-board
increases, our performance is still notable because it was achieved at the
same time that we incurred, as expected, the interest expense from the
issuance of $28.8 million of subordinated debentures in December. This
provided us with additional capital for growth and acquisition, a portion of
which we have yet to deploy. With credit quality holding steady at
traditional hallmark levels and the identification and leveraging of further
operating efficiencies, these first quarter results should serve as a good
bellwether for the rest of the year."
Operating Efficiency Enhancement Initiatives Continue
Gold Banc's efficiency ratio for the first quarter of 1998 was 70.5%,
versus 68.6% for the restated first quarter of 1997. Management has set a
goal of building a high-performance bank for customers and shareholders which
has a level of operating efficiency comparable to Gold Banc's industry peers.
Part of the strategy for achieving this goal focuses on maintaining strong
deposit and loan growth within organization's established customer base and
current markets as new members join the Gold Banc family. This allows the
Company to achieve efficiencies by spreading operating expenses across a
broader asset base.
While increasing the delivery of products and services, management has
also focused on streamlining and re-engineering the organization's back office
operations in pursuit of improved operating efficiencies and expense
reductions. To assist these efforts, Gold Banc has engaged an independent
consultant to review the Company's operations and formulate recommendations to
further enhance Gold Banc's efficiency ratio. A comprehensive study is
currently underway and should conclude in the second quarter of 1998.
Gullion emphasized: "We have more than doubled the number of our
locations over the last year, primarily through acquisitions, and continue to
identify community banks which would make excellent prospective Gold Banc
members. This rapid growth has created the need to standardize back office
functions and streamline the operating efficiency of our core franchise as we
prepare to add even more new locations. Therefore, the Company's Board of
Directors has retained an accomplished profitability and efficiency
improvement consulting firm to assist us in achieving our aggressive operating
goals. The firm will conduct a thorough review of our organization and issue
a report of their findings and recommendations to our Board, followed by
implementation, as appropriate. We anticipate that this effort will offer us
the added benefit of allowing management to focus more fully on further
expanding the organization's regional presence via additional accretive
acquisitions."
Status of Progress on Year 2000 Compliance Initiatives
Like most financial institutions, a significant amount of Gold Banc's
business transaction and reporting activity involves interest and other
calculations pertaining to loans, deposits, assets and investments which
depend on accurate date information in the Company's computers and software.
Gold Banc management has proactively identified year 2000 transition issues
wherever it has been determined that operations could potentially be affected.
Gullion noted: "Although we continue to believe the organization's
exposure to be limited, appropriate resources have been allocated for systems
and software conversions, as needed, at each of the Company's business
entities. Internal testing has already been conducted and certain
examinations by regulatory authorities have been completed. Based on our
progress to date, we expect the Company to be year 2000-compliant by December
31, 1998."
Acquisitions Closed During the First Quarter
During the first quarter of 1998, the Company announced the closing of two
acquisitions: Midwest Capital Management, Inc. and First National Bank in
Alma. Since both the Midwest Capital and Alma acquisitions were accounted for
as purchase transactions, the Company's financial results for prior periods
have not been restated to reflect the inclusion of these acquisitions.
Midwest Capital Management, Inc.
On January 30, 1998, the Company closed its acquisition of Midwest Capital
Management, Inc., a full-service broker/dealer and investment management firm
based in Kansas City, Missouri in a combination stock-for-stock and cash
transaction valued at $4.40 million. The Midwest Capital transaction was the
Company's fourth acquisition/merger announced in 1997, the first closed during
1998 and was immediately accretive to Gold Banc's earnings in the first
quarter of 1998.
Midwest Capital is an investment management firm, managing a wide variety
of stock, bond and money market portfolios. The firm's clients currently
include a significant number of commercial banks located primarily in Kansas,
Missouri, Oklahoma, Nebraska and Iowa, as well as trusts, pension plans,
insurance companies, commercial businesses, government entities, foundations
and high net worth individuals. The firm is dually registered with NASD as a
broker/dealer and investment adviser.
Gullion remarked: "The acquisition of Midwest Capital created a
significant new source of noninterest or fee-based income for Gold Banc. In
addition, Midwest Capital's management team will enable the Company to
strengthen its internal asset management practices. Also, both organizations
share a community-oriented focus and a personalized approach to customer
service. Leveraging these synergies, we have begun capitalizing on the myriad
cross-selling opportunities by having all of our community banks offer
investment products and services to individual accountholders and small
business customers."
First National Bank in Alma
On February 19, 1998, Gold Banc completed the closing of its acquisition
of First Alma Bancshares, Inc. of Alma, Kansas in a combination cash and
stock-for-stock transaction valued at $3.8 million. First Alma was the
Company's third community bank acquisition announced in 1997, the first closed
in 1998 and was immediately accretive to Gold Banc's earnings in the first
quarter of 1998. First Alma exemplifies the prosperous, well-managed county
seat banks which form the Gold Banc family: it is among the top three
financial institutions in terms of deposit share in its primary market and has
assets of approximately $30 million.
First National Bank in Alma, a wholly-owned subsidiary of First Alma
Bancshares, had total assets of $30.1 million, deposits of $26.9 million and
loans of $19.3 million at December 31, 1997. According to FDIC data available
as of June 30, 1997, First National Bank in Alma held 38%, or the number one
market share, of total deposits in Wabaunsee County, its primary market.
Founded in 1932, the bank's main office is located in the county seat and is
well known for its civic, social and economic commitment to the community.
Annual Meeting of Shareholders
The Gold Banc Second Annual Meeting of Shareholders as a publicly traded
company is scheduled for 10:00 a.m. Central Time, Wednesday, April 29, 1998 at
the Ritz-Carlton Hotel in Kansas City, Missouri. For additional information,
please contact Gold Banc's Investor Relations Manager, Brian Ruisinger, at
913-451-8050 or via e-mail at: brianr@goldbanc.com.
About Gold Banc
Gold Banc, a multi-bank holding company, currently owns and operates the
following community banks: Exchange National Bank, with locations in Leawood,
Shawnee and Marysville, Kansas; Citizens State Bank and Trust Company, located
in Seneca, Kansas; Peoples National Bank, Clay Center, Kansas; Farmers
National Bank, Oberlin, Kansas; the First National Bank in Alma, located in
Alma, Kansas; and Provident Bank, f.s.b., located in St. Joseph, Missouri.
Each of these community banks provides a full range of commercial and consumer
banking services in their respective markets, with each bank retaining its
board of directors, local identity and decision-making authority. In
addition, Gold Banc owns Midwest Capital Management, Inc., a full service
broker/dealer and investment management firm based in Kansas City, Missouri.
Safe Harbor Statement
This news release contains comments or information that constitute
forward-looking statements (within the meaning of the Private Securities
Litigation Reform Act of 1995), which involve significant risks and
uncertainties. Actual results may differ materially from the results
discussed in the forward-looking statements. Important factors that might
cause such a difference include, but are not limited to: (1) the independent
consultant retained by the Company is not able to identify achievable measures
that will improve the Company's efficiency; (2) costs or difficulties related
to the integration of recently acquired businesses will be more difficult than
expected; (3) general economic conditions will be less favorable than expected
and impair the ability of borrowers to meet their loan obligations; and (4)
the Company may acquire institutions that are not year 2000 compliant.
GOLD BANC CORPORATION, INC.
Selected Consolidated Operating Data
(Dollars in thousands except per-share and share amounts)
(unaudited) (unaudited)
For the three months ended March 31,
1998 1997
Selected Operating Data:
Interest income $10,414 $7,121
Interest expense 5,775 3,722
Net interest income 4,639 3,399
Provision for loan losses 360 105
Net interest income after
provision for loan losses 4,279 3,294
Non-interest income:
Service charges 302 239
Gain on sale of assets -- (1)
Gain on sale of
mortgage loans 225 117
Gain on sale of securities 1 (12)
Investment trading fees
and commissions 691 --
Other 195 102
Total Non-interest income 1,414 445
Non-interest expenses:
Salaries and employee
benefits 2,258 1,391
Occupancy expense 550 487
Federal deposit insurance
premiums 22 28
Other 1,181 667
Total Non-interest
expenses 4,011 2,573
Net Income before income taxes 1,682 1,166
Income tax expense 547 381
Net income $1,135 $785
Per Share Data:
Net Income per share $0.22 $0.16
Book Value per share $9.15 $7.27
Period end shares
outstanding 5,352,000 4,794,000
Weighted Average Common Shares
and Common Share Equivalents
Outstanding 5,269,000 4,794,000
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES
Consolidated Statement of Condition
(Dollars in thousands)
(unaudited) (unaudited)
Assets March 31, 1998 March 31, 1997
Cash and due from Banks $14,144 $7,706
Interest-bearing deposits
and Fed funds 15,796 10,808
Loans (net of allowance for loan
losses of $5,406 as of March 31,
1998 and $3,046 as of March
31, 1997) 369,553 243,698
Investment securities 131,007 99,372
Premises and equipment 17,418 9,062
Other assets 18,762 11,067
Total assets $566,680 $381,713
Liabilities:
Deposits $455,084 $317,047
Short-term borrowings 19,407 22,631
Other borrowings and
long-term debt 38,856 4,609
Other liabilities 4,384 2,562
Total liabilities 517,731 346,849
Stockholders' Equity:
Common stockholders'
equity $5,352 $4,794
Additional paid-in
capital 27,962 18,784
Retained earnings 15,580 12,084
Unrealized gain (loss) on
available-for-sale
securities 291 (522)
49,185 35,140
less: ESOP note payable (236) (276)
Total stockholders'
equity 48,949 34,864
Total Liabilities and
Stockholders' Equity $566,680 $381,713
Gold Banc Corporation, Inc.
Key Ratios and Other Data
March 31, 1998
(Dollars in thousands except per-share data)
March 31, March 31, Percent Increase
1998 1997 (Decrease)
Key Ratios and Other Data
Net interest margin 3.70% 4.06% (8.87)
Net interest spread 3.29% 3.67% (10.35)
Return on average assets 0.82% 0.84% (2.38)
Return on average equity 9.62% 9.06% 6.18
Leverage ratio 10.62% 9.04% 17.48
Non-performing loans
to total loans 0.14% 0.33% (57.58)
Non-performing assets
to total assets 0.22% 0.21% 4.76
Allowance for loan losses
to total loans 1.44% 1.23% 17.07
Allowance for loan losses
to non-performing loans 1014.26% 374.20% 171.05
Net loan charge-offs
(recoveries) to average
loans 0.01% 0.02% (50.00)
Efficiency Ratio 70.49% 68.58% 2.79
Income Statement Highlights
Net Income $1,135 $785 44.59
Net Interest Income 4,639 3,399 36.48
Loan Loss Provision 360 105 242.86
Noninterest Income 1,414 445 217.75
Noninterest Expense 4,011 2,573 55.89
Income Tax Expense (Benefit) 547 381 43.57
Earnings Per Share $0.22 $0.16 37.50
At At
March 31, March 31,
Balance Sheet Highlights 1998 1997
Total Assets $566,680 $381,713 48.46
Total Loans, net 369,553 243,698 51.64
Nonperforming Loans 533 814 (34.52)
Total Deposits 455,084 317,047 43.54
Stockholders' Equity $48,949 $34,864 40.40
Book Value Per Share $9.15 $7.27 25.86
SOURCE Gold Banc Corporation, Inc.
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Related links:
http://www.goldbanc.com
CONTACT:
Keith E. Bouchey, Exec. V.P. & CFO,
keithb@goldbanc.com, or Brian J. Ruisinger, Investor Relations,
brianr@goldbanc.com, 913-451-8050, both of Gold Banc; or Mike
Arneth, General Information, 312-640-6734, mga@chi.frbd.com, Paul
Scheeler, Analysts-Investors, 312-640-6742, pas@chi.frbd.com, or
Bess Gallanis, Media Inquiries, 312-640-6737, bag@chi.frbd.com,
all of The Financial Relations Board
NOTE TO EDITORS: For more information on Gold Banc toll-free via
fax, simply dial 1-800-PRO-INFO, follow the voice menu prompts
and enter the company code "GLDB" on any touch tone phone.
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