SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 19, 1999
GOLD BANC CORPORATION, INC.
(Exact name of registrant as specified in its charter)
KANSAS 0-28936 48-1008593
(State or other (Commission File Number) (IRS Employer
jurisdiction of Identification
incorporation) No.)
11301 Nall Avenue, Leawood, Kansas 66211
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (913) 451-8050
None
(Former name or former address, if changed since last report)
<PAGE>
ITEM 5. OTHER EVENTS.
On September 6, 1999 Gold Banc Corporation, Inc. ("Gold
Banc") entered into an Agreement and Plan of Reorganization to
acquire American Bancshares, Inc., a Florida corporation
("American"). Attached hereto as Exhibits 99.1 and 99.2 are
certain financial statements of American.
ITEM 7. FINANCIAL STATEMENTS AND OTHER EXHIBITS.
EXHIBITS NO. DESCRIPTION
23.1 Consent of Independent Certified Public
Accountants.
99.1 American Bancshares, Inc. and Subsidiaries
Consolidated Financial Statements for the Years
Ended December 31, 1998, 1997 and 1996 with Report
of Independent Certified Public Accountants.
99.2 American Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheet as of September 30,
1999 (unaudited); Consolidated Statements of
Income and Cash Flows for the Nine Months Ended
September 30, 1999 and 1998 (unaudited).
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 hereunto duly authorized.
Dated: November 19, 1999.
GOLD BANC CORPORATION, INC.
By: /s/ J. Craig Peterson
J. Craig Peterson,
Chief Financial Officer
EXHIBIT 99.1
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders of
American Bancshares, Inc. and Subsidiaries
Bradenton, Florida
In our opinion, based upon our audits and the report of the other
auditors, the accompanying consolidated balance sheets and the
related consolidated statements of income, shareholders' equity
and comprehensive income and cash flows present fairly, in all
material respects, the financial position of American Bancshares,
Inc. and its subsidiaries (the "Company") at December 31, 1998
and 1997, and the results of their operations and their cash
flows for each of the three years in the period ended December
31, 1998, in conformity with generally accepted accounting
principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of Murdock Florida Bank
which statements reflect total assets of 18% and 23% at December
31, 1997 and 1996, respectively, and net income of 15% and 13%
for the years ended December 31, 1997 and 1996, respectively, of
the related consolidated totals. Those statements were audited
by other auditors whose report thereon has been furnished to us,
and our opinion expressed herein, insofar as it relates to the
amounts included for Murdock Florida Bank, is based solely on the
report of the other auditors. We conducted our audits of these
statements in accordance with generally accepted auditing
standards which 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, assessing the accounting
principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We
believe that our audits and the report of other auditors provide
a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Tampa, Florida
February 13, 1999
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 1998 and 1997 (in thousands except share amounts)
ASSETS 1998 1997
Cash and due from banks $20,319 $13,276
Federal funds sold 0 5,120
Loans held for sale 88,158 39,588
Investment securities
available for sale
(at aggregate fair value) 77,078 68,664
Loans receivable (net
of allowance for
loan losses and
deferred loan
fees/costs of
$1,620 in 1998
and $1,705 in 1997)
Loans receivable, net 248,808 213,405
Premises and equipment,
net 12,894 9,161
Other assets 7,907 4,687
Total assets $455,164 $353,901
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits $344,845 $302,746
Securities sold
under agreements to
repurchase 29,592 17,528
Federal Home Loan
Bank advances 34,900 5,000
Note payable 0 500
Guaranteed preferred
beneficial interests
in the Company's
junior subordinated
debentures 16,249 0
Other liabilities 2,151 2,048
Total liabilities 427,737 327,822
COMMITMENTS AND CONTINGENCIES (Note 14)
SHAREHOLDERS' EQUITY AND COMPREHENSIVE INCOME
Common stock - $1.175 par value;
10,000,000 shares authorized;
4,994,984 and 4,994,484
shares issued and outstanding at
December 31, 1998 and 1997,
respectively 5,870 5,870
Additional paid-in capital 15,551 15,548
Accumulated other comprehensive
income, net of tax of
$(87) and $86 at
December 31, 1998 and 1997,
respectively (143) 139
Retained earnings 6,149 4,522
Total shareholders' equity 27,427 26,079
Total liabilities and
shareholders' equity $455,164 $353,901
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
for the years ended December 31, 1998, 1997 and 1996 (in
thousands except share amounts)
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
Interest income:
Interest and fees on loans $26,250 $20,101 $16,150
Interest on federal
funds sold 265 534 336
Interest on investment
securities 4,670 3,996 2,945
Total interest income 31,185 24,631 19,431
Interest expense:
Deposits 13,142 11,905 9,475
Borrowings 3,030 1,012 490
Total interest expense 16,172 12,917 9,965
Net interest income 15,013 11,714 9,466
Provision for loan losses 1,180 921 515
Net interest income
after provision for
loan losses 13,833 10,793 8,951
Other income 5,245 4,156 2,148
Other expenses 16,574 11,912 9,856
Income before
income tax provision 2,504 3,037 1,243
Income tax provision 877 1,117 461
Net income $ 1,627 $1,920 $782
Weighted average
basic shares outstanding 4,994,765 4,988,318 4,637,565
Weighted average diluted
shares outstanding 5,019,291 5,019,484 4,692,093
Earnings per share:
Basic $ 0.33 $0.38 $0.17
Diluted $ 0.32 $0.38 $0.17
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
AND COMPREHENSIVE INCOME
for the years ended December 31, 1998, 1997 and 1996
(in thousands except share amounts)
<TABLE>
<CAPTION>
--------------COMMON STOCK----------------
COMPREHENSIVE AUTHORIZED OUTSTANDING
INCOME SHARES SHARES PAR VALUE
<S> <C> <C> <C> <C>
Balance, January 1, 1996 10,000,000 3,325,094 $ 3,907
Exercise of warrants 0 163,695 192
Issuance of stock 0 1,436,979 1,689
Net income $782 0 0 0
Change in net unrealized
gain on investment
securities available
for sale (270) 0 0 0
Comprehensive income $512 0 0 0
Balance,
December 31, 1996 10,000,000 4,925,768 5,788
Exercise of warrants 0 61,597 73
Issuance of stock 0 7,119 9
Net income $ 1,920 0 0 0
Change in net unrealized
loss on investment
securities available
for sale 230 0 0 0
Comprehensive income $2,150 0 0 0
Balance,
December 31, 1997 10,000,000 4,994,484 5,870
Exercise of stock option 0 500 0
Net income $1,627 0 0 0
Change in net unrealized
gain on investment
securities available
for sale (282) 0 0 0
Comprehensive income $1,345 0 0 0
Balance,
December 31, 1998 10,000,000 4,994,984 $5,870
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
<PAGE>
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL COMPREHENSIVE
PAID-IN RETAINED INCOME,
CAPITAL EARNINGS NET TOTAL
<S> <C> <C> <C> <C>
Balance,
January 1, 1996 $8,725 $1,820 $179 $14,631
Exercise of warrants 790 0 0 982
Issuance of stock 5,689 0 0 7,378
Net income 0 782 0 782
Change in net unrealized
gain on investment
securities available
for sale 0 0 (270) (270)
Comprehensive income 0 0 0 0
Balance,
December 31, 1996 15,204 2,602 (91) 23,503
Exercise of warrants 297 0 0 370
Issuance of stock 47 0 0 56
Net income 0 1,920 0 1,920
Change in net unrealized
loss on investment
securities available
for sale 0 0 230 230
Comprehensive income 0 0 0 0
Balance,
December 31, 1997 15,548 4,522 139 26,079
Exercise of stock option 3 0 0 3
Net income 0 1,627 0 1,627
Change in net unrealized
gain on investment
securities available
for sale 0 0 (282) (282)
Comprehensive income 0 0 0 0
Balance,
December 31, 1998 $15,551 $6,149 $(143) $27,427
</TABLE>
The accompanying notes are an integral
part of these consolidated financial statements.
<PAGE>
AMERICAN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
for the years ended December 31, 1998, 1997 and 1996
(in thousands)
<TABLE>
<CAPTION>
1998 1997 1996
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $1,627 $1,920 $782
Adjustments to reconcile
net income to net cash
(used in) provided by
operating activities:
Deferred taxes (177) (199) (420)
Depreciation 964 718 486
Amortization of
investment securities 6 18 120
Provision for loan losses 1,180 921 515
Net gain on sale of
investment securities
available for sale (410) (140) (107)
Gain on sale of loans (1,321) (678) (514)
(Gain) loss on sale of
other real estate owned 0 (13) 336
Origination of loans
held for sale,
net of repayments (116,184) (58,452) (38,628)
Proceeds from sales of
loans held for sale 68,179 44,113 38,159
Increase in deferred
loan costs 0 23 150
Increase in other
liabilities 103 767 71
(Increase) decrease in
other assets (2,036) (962) 682
Total adjustments (49,696) (13,884) 850
Net cash (used in)
provided by
operating activities (48,069) (11,964) 1,632
CASH FLOWS FROM INVESTING ACTIVITIES
Net loans to customers (35,949) (43,153) (36,812)
Purchases of bank
premises and equipment (4,697) (2,744) (3,332)
Proceeds from sales of
available for sale
investment securities 50,445 17,998 33,501
Proceeds from maturities
of available for sale
investment securities 50,779 14,178 12,338
Purchases of available for
sale investment
securities (109,516) (56,936) (49,449)
Recoveries on loans charged
off 122 101 46
Net cash used in
investing activities (48,816) (70,556) (43,708)
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand
deposits, NOW, money market
and savings accounts 37,795 36,469 28,231
Net increase in time deposits 4,304 33,844 17,475
Net increase in securities
sold under agreements to
repurchase 12,064 7,415 546
Net proceeds (repayments)
from advances and from
borrowings 29,400 (800) (200)
Payments for debt issue
costs (1,007) 0 0
Proceeds from issuance of
guaranteed preferred
beneficial interests in
the Company's junior
subordinated debentures 16,249 0 0
Proceeds from stock sale 3 425 8,359
Net cash provided by
financing activities 98,808 77,353 54,411
Net increase (decrease) in
cash and cash equivalents 1,923 (5,167) 12,335
Cash and cash equivalents
at beginning of year 18,396 23,563 11,228
Cash and cash equivalents at
end of year $20,319 $18,396 $23,563
</TABLE>
DISCLOSURES end 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 payment of a fee. Since many of the commitments are
expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash
requirements. The Company evaluates each customer's credit
worthiness on a case-by-case basis. The amount of
collateral obtained if deemed necessary by the Company upon
extension of credit is based on management's credit
evaluation of the counter-party. Collateral held varies but
may include accounts receivable, inventory, property, plant,
and equipment, and income-producing commercial properties.
Standby 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 guarantees at December 31, 1998 are short-term, expiring
in 1999.
<PAGE>
17. EMPLOYEE BENEFIT AND STOCK OPTION PLANS:
The Company has qualified plans under Section 401(k) of the
Internal Revenue Code (Plans) for all employees meeting
certain eligibility requirements. The Plans allow
participants to make annual contributions equal to 15% or
less of the participant's compensation up to a maximum
allowed by Internal Revenue Service regulation. The Company
may match a percentage of the participant's contributions.
Plan contributions by the Company for the year ended
December 31, 1998, 1997 and 1996 was approximately $49,000,
$28,000 and $18,0000 respectively.
The Company has a qualified Incentive Stock Option plan
(Incentive Plan) and a Non-qualified Share Option Plan for
non-employee directors (Non-qualified Plan) (together Option
Plans) under which the Company may grant options for up to
150,000 and 75,000 shares of common stock, respectively.
Under the Option Plans, the exercise price of each option
equals the market price of the Company's stock on the date
of grant. Options are granted upon approval of the Board of
Directors and vest 33% per year for three years and are
exercisable over 10 years from the date of the grant.
The Company applies APB Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its Option Plans.
Accordingly, no compensation cost has been recognized for
options granted under the Option Plans. Had compensation
cost for the Company's Option Plans been determined based on
the fair value at the grant dates for awards under the
Option Plans consistent with the method of Financial
Accounting Standards Statement No. 123, "Accounting for
Stock-Based Compensation," the Company's net income and net
income per share would have been reduced to the pro forma
amounts of approximately $1,562,000, $1,891,000 and $775,000
net income and basic earnings per share of .31, .38 and .17
for the years ended December 31, 1998, 1997 and 1996,
respectively.
The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with
the following weighted-average assumptions used for grants
in 1998; dividend yield of 0% in each period, as there has
been no regular dividend payment history, expected stock
price volatility of 27.1%, 23.6% and 23.6%, risk-free
interest rates of 5.36%, 6.35%, and 6.39% for December 31,
1998, 1997 and 1996, respectively; and expected lives of
five years.
A summary of the status of the Company's Option Plans as of
December 31, 1998, 1997 and 1996, respectively, and changes
during the years ending on those dates is presented below:
<TABLE>
<CAPTION>
1998
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 63,600 $6.71
Granted 122,698 11.13
Forfeited (1,000) 8.37
Exercised (500) 8.37
Outstanding at end of year 184,798 10.94
Options exercisable at year-end 184,798
</TABLE>
<TABLE>
<CAPTION>
1997
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 28,800 $5.24
Granted 34,800 7.93
Forfeited 0 0
Exercised 0 0
Outstanding at end of year 63,600 6.71
Options exercisable at year-end 33,600
</TABLE>
<TABLE>
<CAPTION>
1996
WEIGHTED
AVERAGE
EXERCISE
SHARES PRICE
<S> <C> <C>
Outstanding at beginning of year 24,000 $5.25
Granted 4,800 5.17
Forfeited 0
Exercised 0
Outstanding at end of year 28,800 5.24
Options exercisable at year-end 43,600
</TABLE>
<PAGE>
17. EMPLOYEE BENEFIT AND STOCK OPTION PLANS, CONTINUED:
The following table summarizes information about the Option
Plans' stock options at December 31, 1998:
<TABLE>
<CAPTION>
-------------------OPTIONS OUTSTANDING-----------------
NUMBER WEIGHTED-AVERAGE WEIGHTED
RANGE OF OUTSTANDING REMAINING AVERAGE
EXERCISE PRICES CONTRACTUAL LIFE EXERCISE PRICE
<S> <C> <C> <C>
5.00 - 11.125 186,798 10 years $10.94
</TABLE>
<TABLE>
<CAPTION>
---------------OPTIONS EXERCISABLE----------
NUMBER WEIGHTED
RANGE OF EXERCISABLE AVERAGE
EXERCISE PRICES EXERCISE PRICE
<S> <C> <C>
5.00 - 11.125 43,600 $11.57
</TABLE>
18. SHAREHOLDERS' EQUITY:
The Company's current policy is to retain all earnings to
fund operations. Future dividend payments will be at the
discretion of the Board of Directors of the Company and will
be dependent upon several factors, including State and
Federal banking regulations that impose limitations on such
payments.
In February 1996, the Company completed a public offering of
1,250,000 shares of common stock at $6.00 per share (the
Offering). Subsequent to the Offering, an additional
187,000 shares of common stock were issued as part of the
over-allotment amount. The net proceeds of the Offering,
after deducting applicable issuance costs and expenses, were
approximately $7,378,000.
In January 1997, the Company acquired the net assets of
Deschamps & Gregory Mortgage Company, Inc., a mortgage
brokerage company, for approximately $56,000. The Company
issued 7,119 shares of common stock in connection with the
acquisition. The Company accounted for the acquisition
using the purchase method of accounting.
The following table summarizes the activity of the Company's
issued and outstanding warrants and their corresponding
exercise prices for December 31, 1997 and 1996. There were
no warrants issued or outstanding at December 31, 1998.
<TABLE>
<CAPTION>
1992 WARRANTS 1994 WARRANTS
WARRANTS EXERCISE WARRANTS EXERCISE
OUTSTANDING PRICE OUTSTANDING PRICE
<S> <C> <C> <C> <C>
Balance, January 1, 1996 18,594 $4.00 227,224 $6.00
Warrants exercised - 0.00 (163,695) 6.00
Balance, December 31, 1996 18,594 4.00 63,529 6.00
Warrants expired (18,594) 0.00 (1,932) 6.00
Warrants exercised - 0.00 (61,597) 6.00
Balance, December 31, 1997 0 $4.00 0 6.00
</TABLE>
<PAGE>
19. DIVIDEND RESTRICTIONS:
State banking regulations limit the amount of dividends that
may be paid by the Bank to its Parent without prior approval
of regulatory agencies. The amount of dividends that may be
paid is based on the net profits of the current year
combined with retained net profits of the preceding two
years as defined by state banking regulations. At December
31, 1998, approximately $5,503,000 are available for payment
of dividends without prior regulatory approval.
20. FAIR VALUES OF FINANCIAL INSTRUMENTS:
Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Value of Financial Instruments,"
requires that the Company disclose estimated fair values for
its financial instruments. Fair value is defined as the
price at which a financial instrument could be liquidated in
an orderly manner over a reasonable time period under
present market conditions. Fair values estimates, methods
and assumptions are set forth below for the Company's
financial instruments.
CASH AND DUE FROM BANK AND FEDERAL FUNDS SOLD - For cash and
due from banks and Federal Funds Sold, the carrying amount
is a reasonable estimate of fair value.
INVESTMENTS AND MORTGAGE-BACKED SECURITIES - The fair value
of investments and mortgage-backed securities is estimated
based on bid prices published in financial newspapers or bid
quotations received from securities dealers.
LOANS RECEIVABLE - The estimated fair value of the Company's
fixed rate loans was calculated by discounting contractual
cash flows adjusted for current prepayment estimates. The
discount rates were based on the interest rate charged to
current customers for comparable loans. The Company's
adjustable rate loans reprice frequently at current market
rates. Therefore, the fair value of these loans has been
estimated to be approximately equal to their carrying
amount.
The impact of delinquent loans on the estimation of the fair
values described above is not considered to have a material
effect and, accordingly, delinquent loans have been
disregarded in the valuation methodologies used.
DEPOSIT LIABILITIES - The fair value of deposits with no
stated maturity, such as demand, NOW, money market and
savings is equal to the amount payable on demand as of
December 31, 1998. The fair value of time deposits is
estimated using the rates currently offered for deposits of
similar remaining maturities.
SECURITIES SOLD UNDER REPURCHASE AGREEMENTS - The repurchase
agreements outstanding at December 31, 1998 mature within 30
days. The estimated fair value of these agreements
approximates the carrying value.
FHLB ADVANCES AND NOTE PAYABLE - Cash flow from fixed-rate
borrowings are discounted at a spread to the zero Treasury
curve which equates to the LIBOR yield. The note payables
interest rate reprices quarterly. The estimated fair value
approximates the carrying value.
GUARANTEED PREFERRED BENEFICIAL INTERESTS IN THE COMPANY'S
JUNIOR SUBORDINATED DEBENTURES - The fair values are
estimated based on bid prices published in financial
newspapers.
<PAGE>
20. FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:
COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT -
The fair value of commitments to extend credit 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
standby letters of credit is based on fees currently charged
for similar agreements or on the estimated cost to terminate
them or otherwise settle the obligations with the
counterparties.
The estimated fair values of the Company's financial
instruments are as follows:
<TABLE>
<CAPTION>
-----------(AMOUNTS IN THOUSANDS)-----------
--------1998------- -------1997--------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from bank $20,215 $20,215 $13,276 $13,276
Federal funds sold 0 0 5,120 5,120
Loans held for sale 88,158 89,674 39,588 39,747
Investment securities
available for sale 77,078 77,078 68,664 68,664
Loans receivable, net 248,808 253,008 213,405 218,927
Financial liabilities:
Deposits 344,845 190,670 302,746 303,586
Securities sold under
agreements to repurchase 29,592 29,592 17,528 17,528
FHLB advances 34,900 34,900 5,000 5,000
Note payable 0 0 500 500
Guaranteed preferred beneficial
interests in the Company's
junior subordinated
debentures 16,249 16,249 0 0
</TABLE>
<TABLE>
<CAPTION>
CONTRACT FAIR CONTRACT FAIR
AMOUNT VALUE AMOUNT VALUE
<S> <C> <C> <C> <C>
Unrecognized financial instruments:
Loan commitments $75,799 $114 $56,598 $80
Standby letters of credit 986 0 537 0
Credit cards 6,840 0 4,742 0
</TABLE>
LIMITATIONS - The fair value estimates are made at a
discrete point in time based on relevant market information
and information about the financial instrument. Quoted
market prices, when available, are used as the measure of
fair value. When quoted market prices are not available,
fair value estimates have been based on judgments regarding
future expected loss experience, current economic
conditions, risk characteristics of various financial
instruments, and other factors. These estimates are
inherently subjective, involving uncertainties and matters
of significant judgment, and, therefore, may not be
indicative of the value that could be realized in a current
market exchange. Changes in assumptions could significantly
affect the estimates.
<PAGE>
20. FAIR VALUES OF FINANCIAL INSTRUMENTS, CONTINUED:
The value estimates are based on existing on- and
off-balance-sheet financial instruments without attempting
to estimate the value of anticipated future business and the
value of assets and liabilities that are not considered
financial instruments. Other significant assets and
liabilities that are not considered financial assets or
liabilities include deferred tax assets and property, plant
and equipment. In addition, the tax ramifications related
to the realization of the unrealized gains and losses for
investments and mortgage-backed securities can have a
significant effect on fair value estimates and have not been
considered in many of the estimates.
21. RISKS AND UNCERTAINTIES:
The earnings of the Company depend on the earnings of the
Bank. The Bank is dependent primarily upon the level of net
interest income, which is the difference between interest
earned on its interest earning assets, such as loans and
investments and the interest paid on its interest-bearing
liabilities, such as deposits and borrowings. Accordingly,
the operations of the Bank are subject to risks and
uncertainties surrounding its exposure to changes in the
interest rate environment.
Most of the Bank's lending activity is with customers
located within Sarasota and Manatee counties. Generally,
the loans are collateralized by real estate consisting of
single family residential properties and commercial
properties. While this represents a concentration of credit
risk, the credit losses arising from this type of lending
compares favorably with the Bank's credit loss experience on
its portfolio as a whole. The ultimate repayment of these
loans is dependent to a certain degree on the local economy
and real estate market.
The financial statements of the Company are prepared in
conformity with generally accepted accounting principles
that require management to make estimates and assumptions
that affect the reported amounts of assets and liabilities
and disclosures of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
revenues and expenses during the reported period. Actual
results could differ from these estimates.
22. REGULATORY CAPITAL:
The Bank is subject to various regulatory capital
requirements administered by the 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 Bank's financial statements.
Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Bank must meet
specific capital guidelines that involve quantitative
measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and
classification are also subject to qualitative judgments by
the regulators about components, risk weightings, and other
factors.
<PAGE>
22. REGULATORY CAPITAL, CONTINUED:
Quantitative measures established by regulation to ensure
capital adequacy require the Bank to maintain minimum
amounts and ratios (set forth in the table below) of total
and Tier I capital (as defined in the regulations) to
risk-weighted assets (as defined), and of Tier I capital (as
defined) to average assets (as defined). Management
believes, as of December 31, 1998, that the Bank meets all
capital adequacy requirements to which it is subject.
As of December 31, 1998, 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 I risk-based, and Tier I
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 Bank's actual capital amounts and ratios are also
presented in the table. There were no deductions for
interest-rate risk in 1998 or 1997.
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
ACTUAL
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted
Assets) $39,642 12.40%
Tier I Capital
(to Risk Weighted
Assets) $37,319 11.70%
Tier I Capital
(to Averaged
Assets) $37,319 8.40%
As of December 31, 1997:
Total Capital
(to Risk Weighted
Assets) $25,709 10.90%
Tier I Capital
(to Risk Weighted
Assets) $23,820 10.11%
Tier I Capital
(to Averaged
Assets) $23,820 6.87%
</TABLE>
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
FOR CAPITAL
ADEQUACY PURPOSES
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $24,496 or equal to 8.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $12,748 or equal to 4.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $13,297 or equal to 3.0
As of December 31, 1997:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $18,857 or equal to 8.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $9,428 or equal to 4.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $10,398 or equal to 3.0
</TABLE>
<TABLE>
<CAPTION>
(AMOUNTS IN THOUSANDS)
TO BE WELL
CAPITALIZED UNDER
PROMPT CORRECTIVE
ACTION PROVISIONS
AMOUNT RATIO
<S> <C> <C>
As of December 31, 1998:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $31,869 or equal to 10.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $19,122 or equal to 6.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $22,162 or equal to 5.0
As of December 31, 1997:
Total Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $23,571 or equal to 10.0
Tier I Capital
(to Risk Weighted Greater than/ Greater than/
Assets) or equal to $14,143 or equal to 6.0
Tier I Capital
(to Averaged Greater than/ Greater than/
Assets) or equal to $17,330 or equal to 5.0
</TABLE>
23. FUTURE ACCOUNTING PRONOUNCEMENTS:
Financial Accounting Standards Board Statement (FAS) No.
133, "Accounting for Derivative Instruments and Hedging
Activities," requires all derivatives to be recorded on the
balance sheet at fair value and establishes standard
accounting methodologies for hedging activities. The
standard will result in the recognition of offsetting
changes in value or cash flows of both the hedge and the
hedged item in earnings or comprehensive income in the same
period. The statement is effective for the Company's fiscal
year ending December 31, 2000. Because the Company does not
currently hold any derivative investments, the adoption of
this statement is not expected to have an impact on the
financial statements.
<PAGE>
23. FUTURE ACCOUNTING PRONOUNCEMENTS, CONTINUED:
FAS No. 134, "Accounting for Mortgage-Backed Securities
retained after the Securitization of Mortgage Loans Held for
Sale by a Mortgage Banking Entity," amends FAS No. 65
allowing mortgage-backed securities or other retained
interests arising from the securitization of mortgage loans
to be classified based on the mortgage banking entities'
ability and intent to sell of hold those securities.
Previously these securities had to be held within a trading
account. This statement is effective for the Company's
fiscal year ending December 31, 1999. The adoption of this
standards is not expected to have a significant impact on
the financial statements.
24. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS:
The condensed financial statements of American Bancshares,
Inc., as the parent organization, are presented as follows:
CONDENSED BALANCE SHEET (AMOUNTS IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
1998 1997
Assets:
Cash $4,335 $374
Investment in banking subsidiary 37,535 24,040
Investment in finance subsidiary 245 0
Investment in trust subsidiary 503 0
Premises and equipment 0 2,160
Prepaid expense 588 156
Debt issue costs 1,007 0
Other assets 6 3
Total assets $44,219 $26,733
Liabilities:
Junior subordinated debentures $16,752 $0
Other liabilities 40 654
Total liabilities 16,792 654
Shareholders' equity:
Common stock 5,870 5,870
Additional paid-in capital 15,551 15,548
Unrealized gain (loss) on
investment securities
available for sale, net (143) 139
Retained earnings 6,149 4,522
Total shareholders' equity 27,427 26,079
Total liabilities and
shareholders' equity $44,219 $26,733
<PAGE>
24. CONDENSED PARENT COMPANY FINANCIAL STATEMENTS, CONTINUED:
CONDENSED STATEMENT OF OPERATIONS
--------(AMOUNTS IN THOUSANDS)----------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
Equity in undistributed
earnings of banking
subsidiaries $2,576 $2,021 852
Operating expense (949) (101) (70)
Net income $1,627 $1,920 $782
CONDENSED STATEMENT OF CASH FLOWS
-----------(AMOUNTS IN THOUSANDS)--------
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996
Cash flows (used in)
provided by
operating
activities $670 $399 (76)
Cash flows (used in)
investing activities:
Investments and
advances to
subsidiary (11,957)
Acquisition of
premises and
equipment 0 (3,843) (4,891)
(11,957) (3,843) (4,891)
Cash flows provided by
(used in) financing
activities:
Proceeds from sale
of common stock
(net of stock
offering costs) 3 425 8,360
Proceeds from
junior subordinate
debentures 16,752 0 0
Payments of
debt issue costs (1,007) 0 0
Net repayment of
line of credit (500) 0 0
15,248 425 8,360
Net increase
(decrease) in cash 3,961 (3,019) 3,393
Cash at beginning
of year 374 3,393 0
Cash at end of year $4,335 $374 $3,393
<PAGE>
25. SAIF ASSESSMENT
On September 30, 1996, a one-time SAIF recapitalization
assessment was enacted. The rate was 65.7 cents per $100 on
domestic deposits held as of March 31, 1995. The effect on
the Bank is a pretax charge of $348,000 on deposits of $52.9
million at March 31, 1995. This amount was paid in November
1996.
<PAGE>
AMERICAN BANCSHARES AND SUBSIDIARIES
QUARTERLY EARNINGS SUMMARY (UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
QUARTER ENDED 1998 MARCH 31 JUNE 30 SEPT. 30 DEC. 31
<S> <C> <C> <C> <C>
Interest income 7,101 7,482 8,241 8,361
Interest expense 3,583 3,675 4,527 4,387
Net interest income 3,518 3,807 3,714 3,974
Provision for
loan losses 124 151 154 751
Net interest income
after provision for
loan losses 3,394 3,656 3,560 3,223
Other income 1,103 1,172 1,477 1,493
Other expenses 3,876 4,531 4,060 4,107
Provision for
income taxes 217 104 342 214
Net income 404 193 635 395
Earnings per share:
Basic 0.08 0.04 0.13 0.08
Diluted 0.08 0.04 0.13 0.07
</TABLE>
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Balance Sheets
(unaudited, $ in thousands)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31, % $
ASSETS 1999 1998 CHANGE CHANGE
<S> <C> <C> <C> <C>
Cash and due from banks 17,357 20,215 (14.14) (2,858)
Interest bearing deposits
in banks 43 104 (58.65) (61)
Mortgage loans held for sale 102,220 88,158 15.95 14,062
Investment securities,
available for sale 37,065 48,323 (23.30) (11,258)
Mortgage-backed securities,
available for sale 34,275 28,755 19.20 5,520
Loans (net of allowance for
credit losses and
deferred loan fees of $1,651
as of September 30, 1999
and $1,620 as of
December 31, 1998) 257,467 248,808 3.48 8,659
Premises and equipment, net 12,682 12,894 (1.64) (212)
Other real estate owned, net 318 1,003 (68.30) (685)
Goodwill 70 74 (5.41) (4)
Other assets 9,962 6,830 45.86 3,132
Total assets 471,459 455,164 3.58 16,295
Liabilities and shareholders' equity
Liabilities
Deposits 352,138 344,845 2.11 7,293
Securities sold under
agreements to repurchase 29,195 29,592 (1.34) (397)
Federal funds purchased and
FHLB borrowings 43,150 34,900 23.64 8,250
Guaranteed Preferred Beneficial
Interests in the Company's
Junior Subordinated Debentures 16,249 16,249 0.00 0
Other liabilities 3,734 2,151 73.59 1,583
Total liabilities 444,466 427,737 3.91 16,729
Shareholders' equity
Preferred shares,
5,000,000 shares authorized,
0 shares issued and
outstanding as of
September 30, 1999 0 0 0.00 0
Common shares,
$1.175 par value,
20,000,000 shares authorized,
5,032,584 shares issued
and outstanding as of
September 30, 1999
and 4,994,984 as of
December 31, 1998 761 500 52.20 261
Total noninterest income 4,608 3,753 22.78 855
Noninterest expense
Salaries & employee benefits 6,124 5,131 19.35 993
Net occupancy expense 863 650 32.77 213
Furniture and equipment expenses 1,053 726 45.04 327
Data processing fees 674 707 (4.67) (33)
Interchange fee expense 531 363 46.28 168
Legal fees 287 604 (52.48) (317)
Litigation settlement 0 525 (100.00) (525)
Other expense 3,911 3,761 3.99 150
Total noninterest expense 13,443 12,467 7.83 976
Income before income taxes 2,631 1,896 38.77 735
<PAGE>
Provision for income taxes 961 664 44.73 297
Net income 1,670 1,232 35.55 438
Earnings per share (actual $'s)
Basic 0.33 0.25
Diluted 0.33 0.25
Average Number of shares outstanding
Basic 5,023,535 4,994,691
Diluted 5,031,406 5,022,425
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
American Bancshares, Inc. and Subsidiaries
Consolidated Condensed Statement of Cashflows
(unaudited, $ in thousands)
<TABLE>
NINE MONTHS ENDED SEPTEMBER 30,
1999 1998
<S> <C> <C>
Cash flows from operating activities:
Net income 1,670 1,232
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for loan losses 1,203 429
Net gain on sale of investment securities (20) (170)
Net gain on sale of loans (617) (949)
Net gain on sale of mortgage servicing
rights (206) (87)
Net loss on sale of foreclosed
real estate 50 0
Depreciation 964 689
Origination of loans held for sale
(net of repayments) (58,451) (95,199)
Proceeds from sales of loans
held for sale 44,389 52,191
Net amortization of premiums and
accretion of discounts on
investment securities 39 3
Increase in other liabilities 1,583 1,049
(Increase) decrease in other assets (2 287) (2,413)
Total adjustments (13,353) (44,457)
Net cash provided by/(used in)
operating activities (11,683) (43,225)
Cash flows from investing activities:
Loan originations, net of repayments (9,412) (21,088)
Purchases of bank premises and equipment (752) (3,983)
Proceeds from sales and maturities of
available for sale investment securities 18,321 54,201
Purchases of available for sale
investment securities, net of
repayments (14,914) (66,405)
Recoveries on loans charged off 166 83
Net cash used in investing activities (6,591) (37,192)
Cash flows from financing activities:
Net increase (decrease) in demand
deposits, NOW and savings accounts (662) 25,644
Net increase (decrease) in
time deposits 7,955 (1,533)
Net increase (decrease) in
securities sold under agreements to
repurchase (397) 12,850
Proceeds from issuance of
trust preferred securities 0 16,249
Net proceeds from advances
(repayments)from the FHLB and
Federal Funds purchased 8,250 27,000
Proceeds from issuance of stock 209 0
Net cash provided by financing activities 15,355 80,210
Net increase (decrease) in cash and
cash equivalents (2,919) (207)
Cash and cash equivalents at
beginning of period 20,319 18,396
Cash and cash equivalents at
end of period 17,400 18,189
Supplemental disclosures:
Interest paid 12,988 11,422
Income taxes paid 415
</TABLE>
The accompanying notes are an integral part of these financial statements.
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-4 (No.333-65539) of Gold Banc
Corporation, Inc. of our report dated February 13, 1999 relating
to the financial statements of American Bancshares, Inc., which
appears in this Current Report on Form 8-K of Gold Banc
Corporation, Inc.
PricewaterhouseCoopers LLP
Tampa, Florida
November 19, 1999
