UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997
__ TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE EXCHANGE ACT For the
transition period from _________________________ to ___________________.
Commission File Number: 0-28936
GOLD BANC CORPORATION, INC.
(Exact name of small business issuer as specified in its charter)
Kansas 48-1008593
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
11301 Nall Avenue, Leawood, Kansas 66211
(Address of principal executive office) (Zip code)
(913) 451-8050
(Registrant's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 past 90 days. Yes X No __
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practical date.
Class Outstanding at April 30, 1997
- ----------------------------------- ------------------------------
Common Stock, $1.00 par value 4,300,000
<PAGE>
GOLD BANC CORPORATION, INC.
INDEX TO 10-QSB FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 1997
PAGE
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS 1
Consolidated Balance Sheets at March 31, 1997 (unaudited)
and December 31, 1996 1
Consolidated Statements of Earnings - Three months ended March
31, 1997 and March 31, 1996 (unaudited) 2
Consolidated Statements of Cash Flows - Three months ended
March 31, 1997 and March 31, 1996 (unaudited) 3
Notes to Consolidated Financial Statements 5
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS 6
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS 8
ITEM 2: CHANGES IN SECURITIES 8
ITEM 3: DEFAULTS UPON SENIOR SECURITIES 8
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 8
ITEM 5: OTHER INFORMATION 8
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K 8
SIGNATURES 9
<PAGE>
PART I
FINANCIAL INFORMATION
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheet
(In thousands)
March 31, 1997 Dec. 31, 1996
---------------- -------------
(unaudited)
Assets
Cash and due from banks $ 9,774 $ 12,380
Federal funds sold and interest-bearing deposits 6,802 8,891
----------------------------
Total cash and cash equivalents 16,576 21,271
Investment Securities:
Held-to-maturity securities 25 25
Available-for-sale securities 64,486 64,551
Other 2,090 2,076
-----------------------------
Total investment securities 66,601 66,652
----------------------------
Loans, net (Note 2) 210,217 200,096
Premises and equipment, net 12,137 11,977
Deferred taxes 688 678
Accrued interest and other assets 4,195 3,935
-------- ---------------
Total Assets $ 310,414 $ 304,609
=========== =============
Liabilities and Stockholders' Equity
Liabilities:
Deposits $ 257,707 $ 255,656
Securities sold under agreements to repurchase 17,969 10,050
Federal funds purchased, long-term debt and other 2,319 6,878
borrowings
Accrued interest and other liabilities 1,809 1,884
------------- --------------
Total liabilities 279,804 274,468
------------ -------------
Stockholders' equity:
Preferred stock, 7,500,000 shares authorized, no
shares issued - -
Common stock, $1.00 par value, 7,500,000 shares
authorized, 4,300,000 shares issued and
outstanding 4,300 4,300
Additional paid-in capital 16,768 16,768
Retained earnings 10,306 9,704
Unrealized loss on available-for-sale securities, (488) (355)
Unearned compensation (276) (276)
--------- ----------------
Total stockholders' equity 30,610 30,141
------------- -------------
$ 310,414 $ 304,609
============ ============
<PAGE>
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES
Consolidated Statements of Earnings
For The Three Months Ended
(In thousands, except per share data)
(unaudited)
March 31, 1997 March 31, 1996
-------------- --------------
Interest Income:
Loans, including fees $ 4,757 $ 3,843
Investments securities 1,001 1,194
Other 63 1
------------- --------------
5,821 5,038
Interest expense:
Deposits 2,827 2,653
Borrowings and Other 225 334
------------- -------------
3,052 2,987
------------- -------------
Net interest income 2,769 2,051
Provision for loan losses 105 30
------------- -------------
Net interest income after provision for loan 2,664 2,021
losses ------------- -------------
Other income:
Service fees 161 150
Net gains on sale of mortgage loans 117 353
Net securities losses (13) -
Net loss on sale of other assets (1) -
Other 82 119
------------ ------------
346 622
Other expense:
Salaries and employee benefits 1,129 1,255
Net occupancy expense 417 341
Federal deposit insurance premiums 26 49
Other 512 448
------------ ------------
2,084 2,093
------------- -------------
Earnings before income taxes 926 550
Income taxes 323 197
------------ ------------
Net earnings $ 603 $ 353
============ ============
Earnings per share (Note 3) $ .14 $ .18
------------ ------------
Weighted average common shares outstanding 4,300,000 2,003,616
----------- ------------
<PAGE>
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the Three Months Ended
(In thousands)
(unaudited)
March 31, March 31,
1997 1996
---- ----
Cash flows from operating activities:
Net earnings $603 $353
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Provision for loan losses 105 30
Net losses on sales of available-for-sale
securities 13 --
Depreciation and amortization, net of
accretion 233 (90)
Loss on sale of assets, net 1 154
Net decrease in mortgage loans held for
sale 1,046 1,031
Other changes:
Accrued interested receivable and other
assets (516) (1,712)
Accrued interest payable and other
liabilities 149 443
-------------
Net cash provided by operating
activities 1,634 209
---------------
Cash flows from investing activities:
Net increase in loans (11,271) (1,140)
Principal collections and proceeds from sales and
maturities of available-for-sale securities 5,750 6,409
Purchases of available-for-sale securities (5,926) (18,230)
Net additions to premises and equipment (374) (537)
Proceeds from sale of other assets 80 59
----------------
Net cash used in investing activities (11,741) (13,439)
------------------
Cash flows from investing activities:
Increase in deposits 2,051 462
Net increase (decrease) in short-term borrowings 3,420 (2,892)
Principal payments on long-term debt (59) (439)
Purchase of treasury stock -- (196)
Proceeds from sale of common stock -- 65
Net cash provided (used) by financing
activities 5,412 (3,000)
Decrease in cash and cash equivalents (4,695) (16,230)
Cash and cash equivalents, beginning of year 21,271 23,223
----------------
Cash and cash equivalents, end of quarter $16,576 $ 6,993
=================
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of presentation.
The accompanying consolidated financial statements have been prepared in
accordance with the instructions for Form 10-QSB. The consolidated financial
statements should be read in conjunction with the audited financial statements
included in the Company's 1996 Annual Report on Form 10-KSB.
The consolidated financial statements include the accounts of the Company's
subsidiaries, Exchange National Bank, Citizens State Bank, and Provident Bank,
f.s.b. (the "Banks"). All significant intercompany balances and transactions
have been eliminated.
The consolidated financial statements as of March 31, 1997, and for the
three months ended March 31, 1997 and 1996 are unaudited but include all
adjustments (consisting only of normal recurring adjustments) which the Company
considers necessary for a fair presentation of financial position and results of
operations for those periods. The Consolidated Statements of Earnings for the
three months ended March 31, 1997 are not necessarily indicative of the results
that will be achieved for the entire year.
2. Earnings per common share.
Earnings per common share are based upon the weighted average number of
common shares outstanding during the periods.
3. Subsequent Events.
The Company announced on April 17, 1997, the signing of an agreement to
acquire Peoples Bancshares, Inc., Clay Center, Kansas and its subsidiary,
Peoples National Bank, through a tax-free exchange of stock. At December 31,
1996, Peoples National Bank had total assets of $72.4 million, deposits of $60.9
million and loans of $33.2 million. The transaction is expected to close in the
third quarter of 1997 and be accounted for as a pooling of interests.
On April 7, 1997, the Company granted options to certain officers of the
Company to purchase a total of 70,500 shares of the Company's Common Stock at
the fair market value of the Company's stock on that date.
On April 30, 1997 the Company declared a quarterly dividend in the amount
of $.03 per share.
4. New Accounting Pronouncement.
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share" which revises the calculation and presentation
provisions of Accounting Principles Board Opinion 15 and related
interpretations. Statement No. 128 is effective for the Company's fiscal year
ending December 31, 1997. Retroactive application will be required. The Company
believes the adoption of Statement No. 128 will not have a significant effect on
its reported earnings per share.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company's net income was $603,000 for the three months ended March 31,
1997, compared to net income of $353,000 for the three months ended March 31,
1996, yielding an annualized return on average assets ("ROA") of .79% for the
quarter ended March 31, 1997, compared to 0.54% for the quarter ended March 31,
1996. Return on average common stockholders' equity ("ROE") for three month
periods ended March 31, 1997 and 1996 was 7.86% and 12.30%, respectively. The
primary reason for the earnings increase for the first quarter of 1997 over 1996
was greater interest income through an improved net interest margin coupled with
greater loan volume.
FINANCIAL CONDITION
Total assets were $310.4 million at March 31, 1997, an increase of $5.8
million from December 31, 1996. Total average assets were $304.0 million for the
quarter ended March 31, 1997, compared to $260.6 million for the quarter ended
March 31, 1996. Average interest-earning assets were $280.7 million for the
three months ended March 31, 1997 and $241.8 million for the three months ended
March 31, 1996. Assets increased during the quarter due to loan growth during
the quarter of $10.1 million primarily at Exchange National Bank's Leawood and
Shawnee, Kansas locations.
The increase in net loans from December 31, 1996 to March 31, 1997 was
funded through increases in deposits of $2.1 million, short-term borrowings of
$3.4 million and draws an existing cash reserves of $4.7 million. The allowance
for loan losses increased to $2.6 million at March 31, 1997 from $2.5 million at
December 31, 1996. The allowance represented 1.22% and 1.25% of total loans as
of March 31, 1997 and December 31, 1996, respectively.
RESULTS OF OPERATIONS
Net Interest Income
Total interest income for the quarter ended March 31, 1997 was $5.8
million, a 15.5% increase over the three months ended March 31, 1996. Average
total earning assets increased $39.4 million or 18.3% at March 31, 1997,
compared to December 31, 1996. The increase is primarily the result of the
opening of Exchange National Bank's branch facility in Leawood, Kansas in the
fourth quarter of 1995 as well as the continued growth in loans at the Shawnee
branch.
Total interest expense for the first quarter of 1997 was 2.2% higher than in
the first quarter of 1996 as a result of the increases in interest-bearing
liabilities and interest rates. Average total interest-bearing liabilities
increased by $19.5 million or 8.4% during the first quarter of 1997 compared to
the first quarter of 1996, primarily due to increased volume of time deposits
originated by Exchange National Bank in connection with the opening of its
Leawood location and the continued growth of its Shawnee location.
Net interest income was $2.8 million for the three months ended March 31,
1997, compared to $2.1 million for the same period in 1996, an increase of
35.0%. This increase is attributable to significantly greater loan volumes
primarily originated from Exchange National Bank's Leawood and Shawnee, Kansas
branches and a net interest margin for the period of 3.98% compared with 3.43%
for the same period in 1996.
Provisions for Loan Losses
The provision for loan losses for the three months ended March 31, 1997,
was $105,000, an increase of $75,000, or 250% from the $30,000 provision during
the comparable 1996 period. This increase reflects the Company's objective of
maintaining adequate reserve levels in recognition of significant loan growth.
The allowance
<PAGE>
represented 1.22% and 1.25% of total loans as of March 31, 1997 and March 31,
1996, respectively.
Non-Interest Income
Non-interest income for the three months ended March 31, 1997, was
$346,000, a decrease of 44.4% from the same period in 1996. The decrease is
primarily a result of reduced gains on sales of mortgage loans at Provident
Bank, f.s.b., which is consistent with the Company's plan to reduce its reliance
on secondary market mortgage lending.
Non-Interest Expense
Non-interest expense decreased slightly by $9,000 for the three months
ended March 31, 1997, as compared to the same period in 1996. This decrease was
primarily due to a 10% reduction in salaries and benefits expenses. In the third
quarter of 1996, Provident Bank, f.s.b. substantially altered the manner in
which it conducts its mortgage banking business. The changes include a
substantial reduction in personnel that decreased the Company's salaries and
employee benefits expenses. Net occupancy expense increased due to depreciation,
property taxes and utility costs associated with Exchange National Bank's new
Leawood branch. The Company's overall efficiency ratio showed its third
consecutive quarter of improvement, ending the first quarter of 1997 at 66.9%,
compared to 78.3% for the first quarter of 1996.
Income Tax Expense
Income tax expense for the three months ended March 31, 1997 and March 31,
1996 was $323,500 and $197,000, respectively. The effective tax rates for those
periods were 34.9% and 35.8%, respectively.
CAPITAL AND LIQUIDITY
At March 31, 1997, the Company's Tier 1 risk-based capital, total
risk-based capital and leverage ratios were 14.5%, 15.8% and 10.1%,
respectively, compared to minimum required levels of 4%, 8% and 4%, respectively
(subject to change and the discretion of regulatory authorities to impose higher
standards in individual cases). At March 31, 1997, the Company had risk-weighted
assets of $212.5 million. On April 30, 1997, the Company's Board of Directors
declared a quarterly dividend in the amount of $.03 per common share.
The Company had approximately $8.4 million in cash and short-term
investment grade securities at March 31, 1997 remaining from its initial public
offering completed in the fourth quarter of 1996. Those proceeds are expected to
be used to finance the Company's growth strategy and for general corporate
purposes. The Company established a line of credit in the amount of $10.0
million with a correspondent bank during the first quarter of 1997. No amounts
had been drawn under the line as of March 31, 1997. On April 30, 1997, the
Company's Board of Directors declared a quarterly dividend in the amount of $.03
per common share.
ACCOUNTING AND FINANCIAL REPORTING
In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, "Earnings Per Share" which revises the calculation and presentation
provisions of Accounting Principles Board Opinion 15 and related
interpretations. Statement No. 128 is effective for the Company's fiscal year
ending December 31, 1997. Retroactive application will be required. The Company
believes the adoption of Statement No. 128 will not have a significant effect on
its reported earnings per share.
<PAGE>
PART II
OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-B
27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
GOLD BANC CORPORATION, INC.
Date: May 14, 1997 By: /s/ Keith E. Bouchey
-----------------------------------
Keith E. Bouchey
Executive Vice President,
Chief Financial Officer,
Treasurer and Corporate
Secretary
(Authorized officer and principal financial officer of the registrant)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
EXHIBIT 27
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF GOLD BANC CORPORATION, INC. AS OF MARCH 31,
1997. ALL NUMBERS ARE IN THOUSANDS, EXCEPT FOR PER SHARE DATA.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Mar-31-1997
<EXCHANGE-RATE> 1
<CASH> 9,774
<INT-BEARING-DEPOSITS> 4,352
<FED-FUNDS-SOLD> 2,450
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 66,576
<INVESTMENTS-CARRYING> 25
<INVESTMENTS-MARKET> 0
<LOANS> 212,823
<ALLOWANCE> 2,606
<TOTAL-ASSETS> 310,414
<DEPOSITS> 257,707
<SHORT-TERM> 18,469
<LIABILITIES-OTHER> 1,809
<LONG-TERM> 1,819
0
0
<COMMON> 4,300
<OTHER-SE> 26,310
<TOTAL-LIABILITIES-AND-EQUITY> 310,414
<INTEREST-LOAN> 4,757
<INTEREST-INVEST> 1,001
<INTEREST-OTHER> 63
<INTEREST-TOTAL> 5,821
<INTEREST-DEPOSIT> 2,827
<INTEREST-EXPENSE> 3,052
<INTEREST-INCOME-NET> 2,769
<LOAN-LOSSES> 105
<SECURITIES-GAINS> (13)
<EXPENSE-OTHER> 2,084
<INCOME-PRETAX> 926
<INCOME-PRE-EXTRAORDINARY> 926
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 603
<EPS-PRIMARY> .14
<EPS-DILUTED> .14
<YIELD-ACTUAL> 3.46
<LOANS-NON> 716
<LOANS-PAST> 98
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,534
<CHARGE-OFFS> 66
<RECOVERIES> 33
<ALLOWANCE-CLOSE> 2,606
<ALLOWANCE-DOMESTIC> 2,606
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
