Strength of core community banking franchise fuels attainment of 13 cents per
share quarterly earnings goal despite costs associated with heightened
acquisition activity and market volatility
LEAWOOD, Kan., Oct. 21 /PRNewswire/ -- Gold Banc (Nasdaq: GLDB) today
announced net income increased 60.0% to a record $1.4 million for the quarter
ended September 30, 1998, compared to $900,000 for the third quarter of 1997.
Net income per diluted share for the third quarter of 1998 was $0.13 on
11.1 million weighted average common shares and common share equivalents
outstanding, versus $0.09 per diluted share on 9.6 million weighted average
common shares outstanding for the third quarter of 1997, representing a 44.4%
increase in net income per diluted share.
Summary of Third Quarter 1998 Financial Highlights
(unaudited, dollars in thousands except per share and share amounts)
At or for the At or for the
Three Months Ended Nine Months Ended
September 30, September 30,
1998 1997 Change 1998 1997 Change
Total Loans, Net $463,192 $290,948 +59.2% $463,192 $290,948 +59.2%
Total Deposits $567,782 $344,271 +64.9% $567,782 $344,271 +64.9%
Total Assets $690,822 $411,086 +68.0% $690,822 $411,086 +68.0%
Net Income $1,443 $902 +60.0% $3,958 $2,673 +48.1%
Net Income
Per Diluted Share $0.13 $0.09 +44.4% $0.37 $0.28 +32.1%
Weighted Avg.
Common and Common
Share Equivalents
Outstanding 11,104,000 9,587,000+15.8% 10,843,0009,587,000 +13.1%
"Especially notable this quarter was our attainment of earnings in line
with Street expectations despite the extra closing costs from three
acquisitions, as well as absorbing -- like many financial institutions -- an
unrealized decrease in the market value of some of the other community bank
stocks which we hold. Equally notable has been the ongoing diversification of
our income stream toward a less interest-sensitive basis via the fee-based
income generated by our thriving Midwest Capital broker/dealer business.
Complementing our plans for further bank acquisitions is additional
significant sources of non-interest income -- such as our pending acquisition
of The Trust Company, a Midwest trust services business -- which reinforce our
ultimate goal of building a broad-based, high-performance financial services
organization."
-- Michael W. Gullion, President & CEO
Third quarter 1998 net income also includes one-time costs associated with
the Company's heightened level of acquisition activity, as well as an
unrealized decrease in the market value of certain community bank stocks held
by the Company. Excluding these costs, which totaled approximately $480,000
on a pretax basis, net income for the third quarter of 1998 would have been
$0.16 per diluted share.
Results for the nine month period ended September 30, 1998 included a
48.1% increase in net income to $4.0 million, versus $2.7 million for the same
period in 1997. Net income per diluted share for the first nine months of
1998 was $0.37 on 10.8 million weighted average common shares and common share
equivalents outstanding, compared to $0.28 per diluted share on 9.6 million
weighted average common shares outstanding for the year ago period, a
32.1% increase in net income per diluted share for the comparable nine month
periods. These increases reflect both the Company's internal growth as well
as the effects of the six acquisitions completed since the beginning of the
fourth quarter of 1997. Per share figures for 1997 have been adjusted to
reflect the Company's 2-for-1 stock split in May 1998.
Total assets, loans and deposits attained further record levels for the
third quarter of 1998, driven by the region's continued strong economy and six
completed acquisitions. Gold Banc's flagship institution, Exchange National
Bank and its locations in Johnson County, Kansas -- one of the country's
fastest-growing counties -- have historically contributed the majority of
internal loan and deposit growth.
As of September 30, 1998, total assets increased 68.0% to $690.8 million,
net loans rose 59.2% to $463.2 million and deposits increased 64.9% to
$567.8 million, versus the same date last year.
Net interest income for the third quarter of 1998 increased 52.9% to
$5.8 million versus $3.8 million for the third quarter of 1997. After
adjusting for provisions for loan losses, net interest income for the third
quarter of 1998 was $5.6 million compared with $3.5 million in the third
quarter of 1997, an increase of 60.7%.
With a continued strong emphasis on credit quality, Gold Banc reported
$2.7 million in total non-performing loans at the end of the third quarter of
1998, or 0.58% of total loans, compared to the third quarter 1997 ratio of
0.32%. Gold Banc's loan loss reserve at September 30, 1998 was $7.0 million,
or 1.48% of loans and 254.4% of non-performing loans compared to 1.23% and
387.7% respectively for the same period in 1997. Net charge-offs reflected
0.01% to average loans for the first nine months of 1998, versus a net
recovery of 0.10% to average loans for the first nine months of 1997.
Non-interest income for the third quarter of 1998 was $1.4 million, an
increase of 116.9% compared to the third quarter of 1997, primarily reflecting
investment management and broker/dealer fees generated by Midwest Capital
Management, Inc., a significant new component of non-interest income for the
Company since closing its acquisition of Midwest Capital in January 1998. The
balance of the increase in non-interest income primarily resulted from gains
on the sale of mortgage loans, service charges and gains on the sale of
investment securities, partially offset by the unrealized decrease in the
market value of certain other community bank stocks held by the Company as
previously noted.
Non-interest expenses increased 83.3% to $5.1 million for the third
quarter of 1998 compared to the year ago quarter. The balance of the increase
primarily reflects a 73.3% rise in salaries and benefits attributable to
growth of the Company's employee base as a result of the three acquisitions
closed during the third quarter of 1998, as well as a 95.1% increase in
operating expenses primarily due to occupancy and other operating expenses of
the newly acquired entities in addition to expenses related to the new
Shawnee, Kansas location of Exchange National Bank.
CEO Michael W. Gullion Comments on Results
Michael W. Gullion, President and Chief Executive Officer, commented:
"Especially notable this quarter was our attainment of earnings in line with
Street expectations despite the extra closing costs from three acquisitions,
as well as absorbing -- like many financial institutions -- an unrealized
decrease in the market value of some of the other community bank stocks which
we hold. Equally notable has been the ongoing diversification of our income
stream toward a less interest-sensitive basis via the fee-based income
generated by our thriving Midwest Capital broker/dealer business.
Complementing our plans for further bank acquisitions is additional
significant sources of non-interest income -- such as our pending acquisition
of The Trust Company, a Midwest trust services business -- which reinforce our
ultimate goal of building a broad-based, high-performance financial services
organization."
"Gold Banc is on track for its best year yet and, as we approach the
$1 billion asset milestone, our formula for success has not changed. Our
record performance through the end of this latest quarter was again driven
mainly by strong loan activity at our flagship Johnson County and Kansas
locations combined with the ongoing positive effects of the accretive
acquisitions we've completed. We continue to add to our family well-run
community banks with number one or two deposit market share primarily in
county seat towns. And, to enhance this performance, we continue to maintain
Gold's traditionally solid credit quality standards," said Gullion.
Acquisitions Completed During the Third Quarter 1998
Peoples State Bank of Colby, Kansas
On August 4, 1998 the Company completed its acquisition of Northwest
Bancshares, Inc. and its wholly-owned subsidiary, Peoples State Bank of Colby,
Kansas, in a tax-free exchange of stock valued at approximately $2.95 million.
Peoples State Bank had total assets of $21.8 million, total deposits of
$19.2 million and net loans of $18.1 million at June 30, 1998.
Tri-County National Bank, Washington, Kansas
On August 17, 1998, the Company completed its acquisition of Tri-County
Bancshares, Inc. of Washington, Kansas for a combination cash and stock-for-
stock/tax free transaction valued at $4.4 million. Tri-Country National Bank,
a wholly-owned subsidiary of Tri-County Bancshares with locations in
Concordia, Linn and Washington, Kansas had total assets of $43.2 million,
deposits of $39.8 million and net loans of $26.1 million at June 30, 1998.
Farmers State Bank of Sabetha, Kansas
On July 9, 1998, the Company completed its acquisition of Farmers State
Bancshares, Inc. of Sabetha, Kansas and its wholly-owned subsidiary, Farmers
State Bank, in a cash transaction valued at $8.3 million. Farmers State Bank
had total assets of $47.6 million, deposits of $41.6 million and net loans of
$21.7 million at June 30, 1998.
About the Gold Banc Family
Gold Banc is a multi-bank holding company which owns and operates a
growing family of community banks which provide 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. Gold Banc also 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. Factors that might cause such a
difference include, but are not limited to: (1) expected cost savings from a
merger cannot be fully realized or realized within the expected time frame;
(2) revenues following the merger are lower than expected; (3) competitive
pressures among depository institutions increase significantly; (4) costs or
difficulties related to the integration of the business of the organizations
are greater than expected; (5) changes in the interest rate environment reduce
interest margins; (6) general economic conditions, either nationally or in
states in which the combined company will be doing business, are less
favorable than expected; and (7) legislation or regulatory changes adversely
affect the businesses in which the combined company would be engaged.
Visit the Gold Banc web site at: http://www.goldbanc.com
Gold Banc Corporation, Inc.
Selected Consolidated Operating Data
(Dollars in thousands except per-share amounts)
(unaudited)(unaudited) (unaudited) (unaudited)
Year to date Quarter Year to date Quarter
earnings earnings earnings earnings
as of as of as of as of
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
1998 1998 1997 1997
Selected Operating Data:
Interest income $34,324 $ 12,857 $22,624 $8,092
Interest expense 18,951 7,064 11,840 4,302
Net interest income 15,373 5,793 10,784 3,790
Provision for loan losses 746 152 535 280
Net interest income after
provision for loan losses 14,627 5,641 10,249 3,510
Non-interest income:
Service charges 1,060 396 738 248
Gain on sale of assets (11) (8) 205 6
Gain on sale of mortgage
loans 769 250 501 212
Gain on sale of securities 92 34 89 88
Investment trading fees
& commissions 2,177 768 - -
Other 285 (67) 265 79
Total Non-interest income 4,372 1,373 1,798 633
Non-interest expenses:
Salaries and employee
benefits 7,122 2,615 4,350 1,508
Occupancy expense 2,041 865 1,417 483
Federal deposit insurance
premiums 74 29 76 19
Other 4,115 1,607 2,185 780
Total Non-interest
expenses 13,352 5,116 8,028 2,790
Net Income before
income taxes 5,647 1,898 4,019 1,353
Income tax expense 1,689 455 1,346 451
Net income $3,958 $1,443 $2,673 $902
Per Share Data:
Net Income per share $0.37 $0.13 $0.28 $0.09
Book Value per share $4.97 $4.97 $3.87 $3.87
Period end shares
outstanding 11,125 11,125 9,587 9,587
Weighted Avg. Shares
Outstanding 10,843 11,104 9,587 9,587
Gold Banc Corporation, Inc.
Consolidated Condensed Statement of Condition
(Dollars in thousands except per-share amounts)
September 30, 1998 and 1997
(unaudited) (unaudited)
September 30, 1998 September 30, 1997
Assets
Cash and due from banks $15,984 $10,422
Interest-bearing deposits & Fed funds $18,701 $6,630
Loans (net of allowance for loan losses
of $6,982 as of September 30,1998
and $3,613 as of September 30,1997) $463,192 $290,948
Investment securities $145,707 $81,504
Premises and equipment $20,344 $14,114
Other assets $26,894 $7,468
Total Assets $690,822 $411,086
Liabilities
Deposits $567,782 $344,271
Short-term borrowings 23,036 25,026
Other borrowings and long-term debt 39,956 1,667
Other liabilities 4,756 3,057
Total Liabilities 635,530 374,021
Stockholders' Equity
Common stock $11,125 $4,794
Additional paid-in capital 25,288 18,784
Retained earnings 18,445 13,700
Unrealized gain(loss) on available-for-
sale-securities 670 63
55,528 37,341
less: unearned compensation (236) (276)
Total Stockholders' Equity 55,292 37,065
Total Liabilities and
Stockholders' Equity $690,822 $411,086
Gold Banc Corporation, Inc.
Key Ratios and Other Data
September 30, 1998
(Dollars in thousands except per-share data)
Year-to-date
Percent
Increase
Sept. 30, 1998 Sept. 30, 1997 (Decrease)
Key Ratios and Other Data
Net interest margin 3.81% 4.06% (6.16)
Net interest spread 3.38% 3.61% (6.37)
Return on average assets 0.88% 0.91% (3.30)
Return on average equity 10.49% 9.90% 5.96
Leverage ratio 9.08% 9.11% (0.33)
Non-performing loans to
total loans 0.58% 0.32% 81.3
Non-performing assets to
total assets 0.59% 0.26% 126.9
Allowance for loan losses to
total loans 1.48% 1.23% 20.3
Allowance for loan losses to
non-performing loans 254.35% 438.54% (42.00)
Net loan charge-offs (recoveries)
to avg. loans 0.01% -0.10% 110.00
Efficiency Ratio 69.23% 66.62% 3.92
Income Statement Highlights
Net Income $3,958 $2,673 48.07
Net Interest Income 15,373 10,784 42.55
Loan Loss Provision 746 535 39.44
Noninterest Income 4,372 1,798 143.16
Noninterest Expense 13,352 8,028 66.32
Income Tax Expense(Benefit) 1,689 1,346 25.48
Earnings Per Share $0.37 $0.28 32.14
At At
Balance Sheet Highlights Sept. 30, 1998 Sept. 30, 1997
Total Assets $690,822 $411,086 68.05
Total Loans, net 463,192 290,948 59.20
Nonperforming Loans 2,745 932 194.50
Total Deposits 567,782 344,271 64.92
Stockholders' Equity $55,292 $37,065 49.18
Book Value Per Share $4.97 $3.87 28.42
SOURCE Gold Banc
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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, of Gold Banc, 913-451-8050, or Mike Arneth,
General Information, 312-640-6734, or mga@chi.frbd.com, or Paul
Scheeler, Analysts-Investors, 312-640-6742, or pas@chi.frbd.com,
or Bess Gallanis, Media Inquiries, 312-640-6737, or
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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