Table of Contents
Filed Pursuant to Rule 424(b)(1)
Registration No. 333-98579
Registration No. 333-98579
5,000,000 Shares
Common Stock
We are offering 5,000,000 shares of our common stock. Our common stock is traded on the Nasdaq National Market
under the symbol “GLDB.” The last reported sale price of our common stock as reported on the Nasdaq National Market on October 15, 2002 was $8.98 per share.
Some of our executive officers and directors have indicated their intent to purchase an aggregate of 300,000 shares of common stock in this offering, at the same price and
on the same terms as offered to the public.
Investing in our common stock involves risks.
See “
Risk Factors” beginning on page 9.
| Per Share |
Total | |||||
| Public offering price |
$ |
8.75 |
$ |
43,750,000 | ||
| Underwriting discount |
$ |
0.48 |
$ |
2,400,000 | ||
| Proceeds, before expenses, to Gold Banc Corporation, Inc. |
$ |
8.27 |
$ |
41,350,000 | ||
We have granted the underwriters the right to purchase up to an
additional 750,000 shares of our common stock to cover over-allotments. The underwriters expect to deliver the shares to purchasers on or about October 21, 2002.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
A.G. Edwards & Sons, Inc.
RBC Capital Markets
Sandler O’Neill & Partners, L.P.
Prospectus dated October 16, 2002
Table of Contents
GOLD BANC LOCATIONS
Table of Contents
This summary highlights information contained elsewhere in this
prospectus. This summary does not contain all of the information that you should consider before investing in our common stock. You should carefully read the entire prospectus, including the documents incorporated by reference into it, particularly
the consolidated financial statements and the notes to the consolidated financial statements and the section entitled “Risk Factors” beginning on page 9.
Gold Banc Corporation, Inc.
We are a financial holding
company that has grown from the acquisition of a single bank with $2.9 million in assets in 1978 to approximately $3.3 billion in assets as of June 30, 2002. We own three commercial banks with 53 offices in 36 communities in Kansas, Missouri,
Oklahoma and Florida. Our subsidiary banks are Gold Bank-Kansas, Gold Bank-Oklahoma, and Gold Bank-Florida, which had total assets as of June 30, 2002 of $1.7 billion, $954 million, and $629 million, respectively. We also own non-bank financial
services subsidiaries that provide investment management, trust and other fiduciary services, institutional fixed income brokerage, public finance underwriting and advisory services, title insurance, and data processing and information technology
services.
We have a community bank style that is built upon creating long-term customer relationships by
providing outstanding service, enabling local decision-makers to make prompt lending decisions, delivering a broad array of sophisticated banking and wealth management services, and maintaining extensive community involvement. Our target markets are
small- to mid-sized businesses and high net-worth individuals who desire a more personal banking and investment relationship that is responsive to their needs. To continue our growth we are placing increasing emphasis on expanding our presence in
metropolitan communities such as Kansas City, Tulsa, Oklahoma City, Sarasota/Bradenton and Tampa, as well as their surrounding affluent areas, including Johnson County, Kansas and the Florida counties of Manatee, Sarasota, Hillsborough and
Charlotte. These areas have experienced extensive residential and small- to mid-sized business development, which has enabled our loans and deposits to grow faster in these areas than in our rural markets. In the aggregate, this model has been
successful in increasing our loans and deposits per banker, improving market share, enhancing return on equity and assets, and producing a higher percentage of non-interest income from wealth management and other services.
The consolidation of financial institutions in our markets, driven by larger regional and national banks, has resulted in decision-making
being centralized away from the local markets that these acquired banks served. As a result, we have been able to attract and retain as customers those owner-operated and other businesses that require flexible and prompt lending decisions and desire
a more personal banking relationship. We have experienced significant loan growth, particularly in Kansas and Florida, by applying our community banking style and personalized customer service in these higher growth markets without compromising our
strong credit standards. We have also hired additional experienced bankers in these markets who are involved in the communities they serve and who subscribe to our credit culture and operating philosophy. They bring to us new banking relationships
that are seasoned and familiar to such bankers.
Our principal executive offices are located at 11301 Nall Avenue,
Leawood, Kansas 66211, and our telephone number is (913) 451-8050.
Principal Operating Businesses. We
conduct our operations through our subsidiary banks and several non-bank subsidiaries.
• |
Gold Bank-Kansas. Gold Bank-Kansas has 22 banking offices located throughout the state of Kansas, as well as two locations in Kansas City, Missouri and
two locations in St. Joseph, Missouri. It is
|
1
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headquartered in Leawood, Kansas, an affluent suburb of Kansas City. Our focus on growth in Gold Bank-Kansas’ metropolitan markets is evidenced by the increase in deposits and loans located
in the Kansas City metropolitan market from 42.6% of deposits and 51.2% of loans as of December 31, 1999, to 66.0% of deposits and 54.4% of loans as of June 30, 2002. To continue this positive trend, we are locating our new branches in the more
affluent and higher growth areas of the metropolitan markets where our target customers reside or are headquartered. As of June 30, 2002, Gold Bank-Kansas had $1.7 billion of total assets, $1.3 billion of loans, $1.3 billion of deposits and $149
million of stockholders’ equity.
• |
Gold Bank-Oklahoma. Gold Bank-Oklahoma has 17 banking offices located in Oklahoma and one location in Kansas. Its headquarters is located in Oklahoma
City. As of June 30, 2002, approximately 70% of the deposits and approximately 50% of the loans of Gold Bank-Oklahoma were located in rural markets. We are focusing on growing Gold Bank-Oklahoma’s deposits and loans in the Tulsa and Oklahoma
City markets. Gold Bank-Oklahoma has had a more stable deposit base and a lower cost of funds than our other banks. As of June 30, 2002, Gold Bank-Oklahoma had $954 million in total assets, $710 million of loans, $729 million of deposits and $79
million of stockholders’ equity. |
• |
Gold Bank-Florida. Gold Bank-Florida is headquartered in Bradenton, Florida, and operates eight other banking offices in the Sarasota/Bradenton market,
one of the fastest growing metropolitan areas of the United States. We are in the process of opening new banking offices in Tampa and Sarasota. As of June 30, 2002, 99% of the deposits and 99% of the loans of Gold Bank-Florida were located
in metropolitan markets. Since we acquired Gold Bank-Florida in March 2000, we have increased the deposits and loans of the bank from $412 million and $372 million, respectively, on December 31, 2000, to $465 million and $418 million, respectively,
as of June 30, 2002. We have also increased Gold Bank-Florida’s return on assets and return on equity from 0.48% and 7.99%, respectively, for the year ended December 31, 1999, to 1.14% and 16.09%, respectively, for the year ended December 31,
2001, and to 1.21% and 17.57%, respectively, on an annualized basis, for the six months ended June 30, 2002. As of June 30, 2002, Gold Bank-Florida had $629 million in total assets, $418 million of loans, $465 million of deposits and $46 million of
stockholders’ equity. |
• |
Financial services subsidiaries. Our wealth management capabilities complement our community banking style by enabling us to meet more of our
customers’ needs for financial services. Our wealth management services include individually managed equity and fixed income investment portfolios, trust and other fiduciary services, institutional fixed income brokerage, public finance
underwriting and advisory services, proprietary equity and money-market mutual funds, and estate planning. These activities are principally conducted through Gold Capital Management, Inc. and Gold Trust Company. |
• |
Gold Capital Management, Inc., which we acquired in January 1998, is a broker-dealer and investment advisor marketing fixed income investments to commercial
banks and high net-worth individuals located in Kansas, Missouri and contiguous states. |
• |
Gold Trust Company, which we acquired in December 1998, provides trust and investment management services to customers in Kansas, Missouri, Oklahoma and
Florida. As of June 30, 2002, Gold Trust Company had approximately $373 million in discretionary trust assets under management and approximately $134 million in non-discretionary trust assets under administration. |
• |
CompuNet Engineering, Inc. In March 1999, we acquired CompuNet Engineering, Inc., which provides information technology, e-commerce services and
networking solutions for banks and other businesses, including the design and implementation of local- and wide-area networks. CompuNet is headquartered in Overland Park, Kansas and serves customers primarily in the Midwest. CompuNet’s gross
revenues for the years ended December 31, 1999, 2000 and 2001 were $3.8 million, $4.4 million and $13.3 million, respectively, and $9.7 million for the six months ended June 30, 2002. Included in this growth are the
|
2
Table of Contents
results of CompuNet’s 2001 acquisition of the assets of Information Products, Inc., a networking services provider. In addition to its strong and growing external client base, CompuNet is a
key strategic provider of technology and systems support to us and our subsidiary banks.
Our Strategy. Our
strategic focus is commercial banking and wealth management delivered with a community banking style. Our target markets in each of our service areas are small- and medium-sized businesses and high net-worth individuals. We offer a full range of
financial products and services that are tailored to meet the needs of these types of customers. We emphasize personal relationships with customers, involvement in local community activities and responsive lending decisions. We strive to maintain
responsive community banking offices with local decision makers. Allowing senior management at each banking location to make credit and pricing decisions within specified guidelines enables us to retain a local identity and expand our banking
relationships at each bank. In addition, through our non-bank subsidiaries, we seek to increase our non-interest income above its already strong current level.
The principal elements of our strategy are:
• |
Emphasize personalized customer service and community involvement. We believe that customer loyalty and service are the most important competitive
factors in most of our market areas. Our primary goal is to provide exceptional and personalized customer service, making tangible Gold Banc’s marketing slogan: “More Than Money”®. Our focus is to combine commercial banking and wealth management in order to become the “Financial Services Company of Choice.” Our
banks’ management and other employees participate actively in a wide variety of community activities and organizations in order to develop and maintain customer relationships. Our banks seek to retain and recruit the best available banking
talent to deliver the quality of personal banking services required to meet customer expectations and to permit us to meet our goals for long-term profitable growth. |
• |
Capitalize on changing market conditions. Our management continually monitors economic and other developments in our market areas in order to tailor our
operations to the evolving strengths and needs of the local communities. In recent years, consolidation of community banks in our markets has resulted in their conversion to branches of regional and national banks. We believe this trend has created
a significant opportunity for our community banking style due to the resulting loss of local decision making, de-emphasis of the customer base we are seeking, and decline in personalized service to those customers. |
• |
Consolidate operations. To improve operating efficiencies and allow our bankers to focus on sales and customer service, we have centralized certain
management and administrative functions, including data processing, human resources, internal audit, loan review and regulatory administration. Other specific consolidation initiatives include: |
• |
the consolidation in the first quarter of 2000 of ten subsidiary banks located in Kansas and Missouri into a single Kansas-chartered bank
|
• |
the consolidation in the fourth quarter of 2000 of three subsidiary banks located in Oklahoma into a single Oklahoma-chartered bank
|
• |
the merger in the third quarter of 2001 of our thrift subsidiary, Provident Savings, F.S.B. of St. Joseph, Missouri, into our Kansas-chartered bank
|
• |
the ongoing centralization of operations at our technology center in Overland Park, Kansas |
• |
a company-wide migration to a common data processing platform, begun in 2001 and scheduled for completion in the second quarter of 2003
|
3
Table of Contents
• |
Continue building a strong loan portfolio. A central element of our strategic focus on commercial banking is the development of a strong, diversified
loan portfolio in each of our subsidiary banks. We emphasize commercial and real estate lending in each of our metropolitan markets and have enjoyed strong loan demand, attractive yield opportunities and generally high asset quality in our lending
activities. For the year ended December 31, 2001, our loan portfolio grew by $256.3 million, or 13.4%, before reflecting the impact of the sale of $40.0 million of single family mortgage loans in the secondary market in May 2001. For the six months
ended June 30, 2002, our loan portfolio grew by an additional $274.8 million, or 12.8%. As of June 30, 2002, our loan portfolio composition, excluding mortgage loans held for sale, was as follows: |
| Amount |
% |
|||||
| (dollars in thousands) |
||||||
| Real estate |
||||||
| Commercial |
$ |
837,425 |
34.5 |
% | ||
| Construction |
|
268,757 |
11.1 |
| ||
| 1 to 4 family residential |
|
296,968 |
12.2 |
| ||
| Agricultural |
|
87,087 |
3.6 |
| ||
| Commercial |
|
697,412 |
28.8 |
| ||
| Agricultural |
|
164,704 |
6.8 |
| ||
| Consumer and other |
|
72,720 |
3.0 |
| ||
| |
|
|
| |||
| Total loans |
|
2,425,073 |
100.0 |
% | ||
| |
| |||||
| Less allowance for loan losses |
|
30,459 |
||||
| |
|
|||||
| Total |
$ |
2,394,614 |
||||
| |
|
|||||
• |
Maintain and enhance high asset quality. We believe the success of our banking activities depends to a significant extent on the quality of our assets,
particularly our loans. We have endeavored to build a strong credit culture throughout the Gold Banc organization, with a stringent underwriting and loan approval process, centralized loan administration and early, close attention to any
deterioration in current or prospective performance of loans. For a more detailed description of our lending process, see “Business—Lending Activities,” and “—Loan Origination and Processing” in Amendment No. 1 to our
Annual Report on Form 10-K/A for the year ended December 31, 2001. We actively manage our past due and non-performing loans in each bank in an effort to minimize credit loss and related expenses and to ensure that our allowance for loan losses is
adequate. |
During 2000 and 2001, our levels of non-performing loans rose, and during 2001 we
increased our
provision for loan losses significantly over historic levels. This increase in non-performing loans, and the corresponding increase in
provision for loan losses, was primarily the result of unexpected non-performing loans at Gold Bank-Oklahoma, arising principally from a bank we acquired in early 2000. We have taken aggressive action to address the issues identified in Oklahoma,
and for the six months ended June 30, 2002, Gold Bank-Oklahoma’s non-performing loans declined by $2.9 million, or 22.3%, from their December 31, 2001 levels.
4
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Selected ratios related to asset quality and our allowance for loan losses are
set forth below:
| As of or for the years ended December 31, |
As of or for the six months
ended June 30, | |||||||||||||
| 1997 |
1998 |
1999 |
2000 |
2001 |
2001 |
2002 | ||||||||
| (unaudited) | ||||||||||||||
| Ratios: |
||||||||||||||
| Allowance for loan losses to non-performing loans |
270.20% |
278.38% |
331.65% |
126.34% |
113.42% |
135.68% |
168.28% | |||||||
| Allowance for loan losses to total loans |
1.37% |
1.32% |
1.43% |
1.35% |
1.21% |
1.24% |
1.25% | |||||||
| Non-performing loans to total loans |
0.51% |
0.47% |
0.43% |
1.06% |
1.06% |
0.91% |
0.74% | |||||||
| Non-performing assets to total assets |
0.46% |
0.47% |
0.42% |
0.90% |
0.91% |
0.73% |
0.60% | |||||||
| Net loan charge-offs to average loans (1) |
0.30% |
0.28% |
0.48% |
0.24% |
0.78% |
0.68% |
0.46% | |||||||
(1) |
Ratios for interim periods have been annualized. |
• |
Minimize impact of interest rate fluctuations. As part of our efforts to minimize fluctuations in net interest income caused by changes in market
interest rates, we continually manage the repricing of interest rate-sensitive assets and liabilities, and we regularly use asset/liability management modeling to monitor any mismatch in our current gap position. |
While we have not historically used interest rate swaps or other derivative instruments to manage our interest rate exposure,
in August 2002 we entered into three interest rate swap agreements with an aggregate notional amount of $82.5 million. The swaps effectively converted our fixed interest rate obligations under our three outstanding series of trust preferred
securities to variable interest rate obligations, decreasing the asset sensitivity of our balance sheet by more closely matching our variable rate assets with variable rate liabilities. Each swap has a notional amount equal to the outstanding
principal amount of the related trust preferred securities, together with the same payment dates, maturity date and call provisions as the related trust preferred securities. Under each of the swaps, we pay at a variable rate equal to a spread over
90-day LIBOR, adjusted quarterly, and receive a fixed rate equal to the interest we are obligated to pay on the related trust preferred securities.
Under our asset/liability management model, which assumes a static balance sheet, instantaneous upward and downward parallel shifts in interest rates and the effect of the interest rate swap agreements
as if they had been in effect, as of June 30, 2002, an increase in interest rates of 200 basis points would increase our net interest income by approximately 1.27%, while a decrease in interest rates of 200 basis points would decrease our net
interest income by approximately 8.32%.
• |
Develop branches in existing metropolitan markets. The loan demand in metropolitan Kansas City, as well as in Tulsa, Oklahoma City, and
Bradenton/Sarasota, Florida, is greater than that experienced in our rural market areas. As a result, our revenues and earnings will depend primarily on our growth in metropolitan markets. Our strategy is therefore focused on developing new branches
and selectively acquiring branches in metropolitan markets. We have been implementing this strategy by: |
• |
opening a new branch in northwestern Oklahoma City |
• |
opening four new branches in the Kansas City metropolitan market |
• |
filing regulatory applications to open new branches in Sarasota and Tampa, Florida |
• |
acquiring a branch facility located in Leawood, Kansas, with $51 million of deposits |
• |
selling four rural Kansas branches with $67 million of deposits |
• |
acquiring four additional branch facilities, with approximately $144 million of deposits, located in Johnson County, Kansas |
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Table of Contents
• |
Pursue selected acquisitions. We completed numerous bank acquisitions during the period from 1996 to 2000 to build profitable market share, achieve
economies of scale and implement our strategy of entering higher-growth metropolitan markets. In the future, we may supplement our internal growth by acquiring financial institutions or individual branches located in metropolitan areas with higher
growth opportunities, primarily in the Midwest and the west coast of Florida. Such acquisition candidates would have to fit strategically within our growth objectives and would generally be expected to be accretive to our earnings per share within
twelve months after closing. |
Recent Developments
We expect to meet or exceed consensus analyst earnings estimates of $0.21 per share for the third quarter of 2002. We also expect non-performing loans and other asset
quality measures to be in line with or better than those announced in the second quarter of 2002.
The Offering
Common stock offered |
5,000,000 shares |
Offering price per share |
$8.75 |
Common stock outstanding after the offering |
38,715,496 shares (1) |
Use of proceeds |
The net proceeds from the sale of 5,000,000 shares of our common stock in this offering will be approximately $41.1 million after deducting the underwriting
discount and the aggregate offering expenses payable by us. We estimate the offering expenses payable by us to be approximately $315,000. If the underwriters exercise their over-allotment option in full, the net proceeds will be approximately $47.3
million. |
We are conducting this offering to raise capital that we will contribute to our subsidiary banks to maintain their “well capitalized” status. We intend
to use approximately $18.0 million of the net proceeds to increase the capital of our subsidiary banks to support their asset growth, approximately $23.0 million of the net proceeds to pay down our line of credit (substantially all of the proceeds
of which have been invested in the capital of our subsidiary banks), and the remaining net proceeds for general corporate purposes. |
Purchases by our directors and officers |
Some of our directors and officers have indicated their intent to purchase up to 300,000 shares of common stock in this offering. For more information, see
“Underwriting.” |
Nasdaq National Market symbol |
GLDB |
(1) |
The information above assumes that the underwriters do not exercise the option that we have granted to them to purchase additional shares in the offering and is
based on the shares outstanding as of October 15, 2002. |
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Table of Contents
Summary Financial Data
(in
thousands, except per share data and ratios)
The summary consolidated financial data presented below, as of
or for each of the years in the five-year period ended December 31, 2001, are derived from our audited historical financial statements. The summary data presented below as of or for the six-month periods ended June 30, 2001 and 2002, are derived
from our unaudited consolidated financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results as of or for the six-month periods have been included.
This information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto incorporated by reference into
this prospectus from Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2001, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002. Results for past periods are not
necessarily indicative of results that may be expected for any future period, and results for the six-month period ended June 30, 2002 are not necessarily indicative of results that may be expected for the entire year ending December 31, 2002.
| As of or for the years ended December 31, |
As of or for the six months
ended June 30, |
|||||||||||||||||||||||||||
| 1997 |
1998 |
1999 |
2000 |
2001 |
2001 |
2002 |
||||||||||||||||||||||
| (unaudited) |
||||||||||||||||||||||||||||
| Statement of Operations Data: |
||||||||||||||||||||||||||||
| Net interest income |
$ |
64,087 |
|
$ |
78,800 |
|
$ |
88,185 |
|
$ |
93,460 |
|
$ |
89,078 |
|
$ |
43,775 |
|
$ |
49,732 |
| |||||||
| Provision for loan losses |
|
4,921 |
|
|
5,111 |
|
|
11,586 |
|
|
4,673 |
|
|
15,314 |
|
|
4,340 |
|
|
9,955 |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Net interest income after provision for loan losses |
|
59,166 |
|
|
73,689 |
|
|
76,599 |
|
|
88,787 |
|
|
73,764 |
|
|
39,435 |
|
|
39,777 |
| |||||||
| Non-interest income |
|
12,660 |
|
|
17,731 |
|
|
29,449 |
|
|
28,837 |
|
|
45,048 |
|
|
19,872 |
|
|
30,754 |
| |||||||
| Non-interest expense (1)(2)(3)(4)(5) |
|
46,569 |
|
|
63,962 |
|
|
83,373 |
|
|
116,803 |
|
|
89,639 |
|
|
41,462 |
|
|
52,279 |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Earnings before income taxes |
|
25,257 |
|
|
27,458 |
|
|
22,675 |
|
|
821 |
|
|
29,173 |
|
|
17,845 |
|
|
18,252 |
| |||||||
| Income taxes |
|
7,738 |
|
|
6,792 |
|
|
7,900 |
|
|
5,275 |
|
|
4,820 |
|
|
5,798 |
|
|
5,133 |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Net earnings (loss) |
|
17,519 |
|
|
20,666 |
|
|
14,775 |
|
|
(4,454 |
) |
|
24,353 |
|
|
12,047 |
|
|
13,119 |
| |||||||
| Less pro forma tax expense (6) |
|
1,579 |
|
|
2,797 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
| Add back goodwill amortization (7) |
|
634 |
|
|
609 |
|
|
1,996 |
|
|
2,464 |
|
|
1,917 |
|
|
1,060 |
|
|
— |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| As adjusted net earnings (loss) (6)(7) |
$ |
16,574 |
|
$ |
18,478 |
|
$ |
16,771 |
|
$ |
(1,990 |
) |
$ |
26,270 |
|
$ |
13,107 |
|
$ |
13,119 |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Per Share Data: |
||||||||||||||||||||||||||||
| Net earnings (loss) per share |
$ |
0.49 |
|
$ |
0.56 |
|
$ |
0.39 |
|
$ |
(0.12 |
) |
$ |
0.69 |
|
$ |
0.33 |
|
$ |
0.39 |
| |||||||
| Less pro forma tax expense (6) |
|
0.04 |
|
|
0.07 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
| |||||||
| Add back goodwill amortization (7) |
|
0.02 |
|
|
0.02 |
|
|
0.05 |
|
|
0.07 |
|
|
0.05 |
|
|
0.03 |
|
|
— |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| As adjusted net earnings (loss) per share (6)(7) |
$ |
0.47 |
|
$ |
0.51 |
|
$ |
0.44 |
|
$ |
(0.05 |
) |
$ |
0.74 |
|
$ |
0.36 |
|
$ |
0.39 |
| |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Book value per share |
$ |
3.91 |
|
$ |
4.48 |
|
$ |
4.48 |
|
$ |
4.51 |
|
$ |
4.88 |
|
$ |
4.75 |
|
$ |
5.15 |
| |||||||
| Balance Sheet Data: |
||||||||||||||||||||||||||||
| Total assets |
$ |
1,745,200 |
|
$ |
2,213,270 |
|
$ |
2,550,741 |
|
$ |
2,717,598 |
|
$ |
3,016,472 |
|
$ |
2,871,250 |
|
$ |
3,323,414 |
| |||||||
| Loans, net |
|
1,185,718 |
|
|
1,503,717 |
|
|
1,793,810 |
|
|
1,919,988 |
|
|
2,136,308 |
|
|
1,920,347 |
|
|
2,411,113 |
| |||||||
| Deposits |
|
1,477,986 |
|
|
1,824,557 |
|
|
2,006,154 |
|
|
2,133,877 |
|
|
2,163,866 |
|
|
2,057,421 |
|
|
2,435,078 |
| |||||||
| Stockholders’ equity |
|
135,774 |
|
|
163,637 |
|
|
167,048 |
|
|
169,246 |
|
|
165,645 |
|
|
166,567 |
|
|
173,773 |
| |||||||
| Ratios: |
||||||||||||||||||||||||||||
| Return (loss) on average assets (8) |
|
1.10 |
% |
|
1.03 |
% |
|
0.63 |
% |
|
(0.17 |
%) |
|
0.86 |
% |
|
0.88 |
% |
|
0.83 |
% | |||||||
| Return (loss) on average equity (8) |
|
13.92 |
% |
|
13.35 |
% |
|
8.71 |
% |
|
(2.40 |
%) |
|
14.38 |
% |
|
14.42 |
% |
|
15.68 |
% | |||||||
| Net interest margin |
|
4.40 |
% |
|
4.36 |
% |
|
4.18 |
% |
|
3.96 |
% |
|
3.57 |
% |
|
3.58 |
% |
|
3.57 |
% | |||||||
| Capital Ratios: |
||||||||||||||||||||||||||||
| Tier 1 risk-based capital ratio |
|
11.73 |
% |
|
11.16 |
% |
|
9.76 |
% |
|
8.92 |
% |
|
7.85 |
% |
|
8.12 |
% |
|
7.13 |
% | |||||||
| Total risk-based capital ratio |
|
12.91 |
% |
|
12.38 |
% |
|
12.20 |
% |
|
11.41 |
% |
|
11.41 |
% |
|
10.60 |
% |
|
10.40 |
% | |||||||
| Leverage ratio |
|
9.06 |
% |
|
8.36 |
% |
|
7.55 |
% |
|
7.16 |
% |
|
6.27 |
% |
|
6.63 |
% |
|
5.80 |
% | |||||||
7
Table of Contents
(1) |
In 1999 and 2000, we recorded pre-tax charges of $4,630 ($3,010 after-tax) and $4,024 ($2,616 after-tax), respectively, related to consolidation and
repositioning expenses incurred in consolidating our Kansas banks into a single statewide organization during 1999 and our Oklahoma banks into a single statewide organization during 2000. These charges included exiting certain duplicate branch
locations, resulting in asset write-downs to fair value, eliminating duplicate back office functions, abandoning certain leases and reducing the number of full-time employees. |
(2) |
In 2000, we recorded a pre-tax charge of $9,000 ($6,832 after-tax) related to transaction expenses in connection with the acquisition of three financial
institutions during the first quarter of 2000 that were accounted for as poolings of interests. These expenses were primarily comprised of legal, accounting, severance, lease termination, asset write-down and data processing conversion costs.
|
(3) |
In 2000, we recorded a pre-tax charge of $19,803 ($17,765 after-tax) related to the closing of our separate mortgage banking subsidiary, Gold Banc Mortgage,
Inc., during the fourth quarter of 2000. This charge included severance costs, asset write-downs, abandonment of certain leases and other closing expenses. In 2001, we determined that we had overaccrued certain expenses related to this closing and
recovered a pre-tax amount of $477 ($310 after-tax) which is presented as a reduction of mortgage closing expenses. |
(4) |
In 2001, we recorded a pre-tax gain of $4,569 ($4,569 after-tax) related to an arbitration settlement ruled in our favor in connection with a lawsuit related to
the acquisition of the mortgage banking subsidiary. The settlement cancelled promissory notes owed by us to the former owners of the subsidiary totaling $4,080 and awarded us monetary damages of $489, both of which were recorded as a reduction of
mortgage closing expenses. |
(5) |
Excluding the impact of the items discussed in footnotes one through four above, non-interest expense would have been $78,743, $83,976 and $94,685 for the years
ended December 31, 1999, 2000 and 2001, respectively. |
(6) |
Citizens Bank of Tulsa, which we acquired in a transaction that was accounted for as a pooling of interests in December 1998, was taxed as a Subchapter S
corporation for 1997 and 1998. As a Subchapter S corporation, Citizens Bank was not subject to federal income taxes; rather, such income was included in the taxable income of stockholders. The 1997 and 1998 data have been adjusted to include pro
forma tax expense, net earnings, and net earnings per share as if Citizens Bank had not been a Subchapter S corporation. |
(7) |
Effective January 1, 2002, we adopted Statement of Financial Accounting Standards (SFAS) No. 142 “Goodwill and Other Intangible Assets” and
discontinued amortization of goodwill for periods beginning after January 1, 2002. The 1997, 1998, 1999, 2000 and 2001 data have been adjusted as if the adoption of SFAS 142 had occurred at the beginning of these respective periods.
|
(8) |
Certain financial ratios for interim periods have been annualized. |
8
Table of Contents
You should carefully consider the following risk factors before you decide
to buy our common stock. You should also consider the other information in this prospectus, as well as the documents incorporated by reference in this prospectus.
We may not be able to maintain our growth rate.
It may be
difficult for us to maintain our rapid rate of growth. The rural market areas we now serve offer more limited opportunities for growth than our metropolitan markets. We believe future growth in our revenues and net earnings will depend primarily on
our internal growth in the metropolitan markets where we are located. Other financial institutions in these metropolitan markets also compete intensely for assets and deposits. This competition may adversely affect our ability to profitably grow our
asset and deposit base.
During the period from 1996 to 2000, we grew significantly through acquisitions. While we
may supplement our internal growth through future acquisitions in metropolitan markets, primarily in the Midwest and the west coast of Florida, there is great competition for such acquisition candidates. We may not be successful in identifying, or
evaluating risks inherent in, any such acquisition candidates or be able to acquire such acquisition candidates on terms we feel are favorable. In addition, we plan to open several new branches in the next twelve months. The increased operating
expenses incurred in opening these branches may not be offset by increases in net interest income and other income from these new branches.
Our objectives for earnings growth, return on equity and return on assets have been achieved primarily through extensive growth in loans in Kansas and Florida. Satisfying these objectives in the future
will require increasing amounts of capital to meet regulatory requirements. We may not be able to obtain such capital in adequate amounts or on attractive terms.
Our allowance for loan losses may not be adequate.
Our allowance for loan losses
may not be adequate to cover actual loan losses. As a lender, we are exposed to the risk that our customers will be unable to repay their loans according to their terms and that any collateral securing the payment of their loans may not be
sufficient to cover repayment. Credit losses are inherent in the lending business and could have a material adverse effect on our operating results. Additionally, approximately 84.8% of our loan portfolio on June 30, 2002 consisted of construction
loans, agricultural loans, loans secured by commercial real estate, and commercial business loans. These loans generally involve a greater degree of risk of nonpayment or late payment than home equity loans or residential mortgage loans and carry
higher loan balances. The risk of loss will vary with general economic conditions, the type of loan being made, the creditworthiness of the borrower over the term of the loan and the quality and value of the collateral in the case of collateralized
loans, among other things. Our credit risk with respect to our real estate and construction loan portfolio relates principally to the general creditworthiness of individuals and the value of real estate serving as security for the repayment of such
loans. Our credit risk with respect to our commercial and consumer installment loan portfolio relates principally to the general creditworthiness of businesses and individuals within our local markets. Our credit risk with respect to our
agricultural loan portfolio relates principally to commodity prices and weather patterns.
As we have completed
numerous acquisitions from 1996 through 2000 that significantly enhanced our growth, a significant portion of our existing loan portfolio was not originally underwritten by us but was added through these acquisitions. While we had the opportunity to
review the loan portfolios of the banks we acquired before completing the transactions and have conformed the credit and underwriting policies and procedures of these banks to ours following the acquisitions, these loans may not have undergone the
same level of rigorous analysis and review at inception as loans that we originate, and may not have the level and quality of supporting
9
Table of Contents
documentation in the loan files as our policies require. Therefore, these acquired loans are subject to greater risk than if we had originally underwritten these loans ourselves.
We make various assumptions and judgments about the collectibility of our loan portfolio and provide an allowance for losses
based on a number of factors. If our assumptions are wrong, our allowance for loan losses may not be sufficient to cover our loan losses. We may have to increase the allowance in the future. Material additions to our allowance for loan losses
would have a material adverse effect on our net earnings.
Changes in interest rates could adversely affect profitability.
We may be unable to manage interest rate risk that could reduce our net interest income. Like other financial
institutions, our results of operations are impacted principally by net interest income, which is the difference between interest earned on loans and investments and interest expense paid on deposits and other borrowings. We cannot predict or
control changes in interest rates. Regional and local economic conditions and the policies of regulatory authorities, including monetary policies of the Federal Reserve, affect interest income and interest expense. Interest rate cuts by the Federal
Reserve throughout 2001 have generally reduced our net interest income. While we continually take measures intended to manage the risks from changes in market interest rates, including interest rate swap agreements, changes in interest rates can
still have a material adverse effect on our profitability.
Funding our substantial cash requirements with dividends from our bank
subsidiaries will reduce the capital levels of the banks and thus their ability to grow.
We are a separate
legal entity from our subsidiaries and do not have significant operations of our own. We depend primarily on dividends we receive from our subsidiaries, which may be limited by statute and regulations, and our cash and liquid investments, to pay
dividends on our common stock and to pay our operating expenses. In addition, we currently have an aggregate outstanding amount of $111.7 million in subordinated debt and trust preferred securities, as compared to total equity of $173.8 million
outstanding. As of June 30, 2002, our annual interest payments due on these borrowings were approximately $9.3 million. In the current interest rate environment, the effect of the interest rate swap agreements would be to reduce such interest
payments. We are also dependent on dividends from our bank subsidiaries to service these borrowings, and ultimately for principal repayment at maturity, as well as to service our line of credit.
Even if our subsidiaries are able to generate sufficient earnings to pay dividends to us, their boards of directors may decide to retain a greater portion of their
earnings to maintain existing capital or achieve additional capital necessary in light of the financial condition, asset quality or regulatory requirements of the subsidiaries or other business considerations. The extent to which our bank
subsidiaries pay us a significant portion of their retained earnings as dividends to fund our substantial cash requirements may also reduce the ability of the bank subsidiaries to grow while maintaining regulatory capital ratios at “well
capitalized” standards set by federal regulators.
Loss of key personnel could have an adverse effect on our operations.
The loss of certain key personnel could adversely affect our operations. Our success depends in large part on
the retention of a limited number of key persons, including: Michael W. Gullion, our Chairman and Chief Executive Officer; Malcolm M. Aslin, our President and Chief Operating Officer; Rick J. Tremblay, our Executive Vice President and Chief
Financial Officer; and John Price, our Executive Vice President and Chief Credit Officer. We will likely undergo a difficult transition period if we lose the services of any or all of these individuals. In recognition of this risk, we own, and are
the beneficiary of, insurance policies on the lives of these key employees and have entered into employment agreements with Messrs. Gullion and Aslin.
We also place great value on the experience of the presidents of our subsidiary banks and the community bank presidents in each of our markets and on their relationships with the communities they
serve. The loss of these key persons could negatively impact the affected banking locations. We may not be able to retain our current key personnel or attract additional qualified key persons as needed.
10
Table of Contents
Local economic conditions could adversely affect our operations.
Changes in the local economic conditions could adversely affect our loan portfolio and results of operations. Our success depends to a
certain extent upon the general economic conditions of the local markets that we serve. Unlike larger banks that are more geographically diversified, we provide banking and financial services to customers in those markets in Kansas, Oklahoma,
Missouri and Florida, including a number of rural markets, where our subsidiary banks operate or are expected to operate. Our commercial, agricultural, real estate and construction loans, and the ability of the borrowers to repay these loans and the
value of the collateral securing these loans, are impacted by the local economic conditions. Favorable economic conditions may not continue in such markets.
Our ability to pay dividends on our common stock is limited by the ability of our subsidiary banks to pay dividends under applicable law and by contracts relating to our trust preferred securities.
Our ability to pay dividends on our common stock largely depends on our receipt of dividends from our subsidiary banks. The
amount of dividends that our subsidiary banks may pay to us is limited by federal and state banking laws and regulations. As a financial holding company, our subsidiary banks are required to maintain capital sufficient to meet the “well
capitalized” standard set by the regulators and will be able to pay dividends to us only so long as their capital continues to exceed these levels. We or our banks may decide to limit the payment of dividends even when we or they have the legal
ability to pay them in order to retain earnings for use in our or our banks’ business. Under contracts relating to our trust preferred securities, we are prohibited from paying dividends on our common stock if we have not made required payments
on, or have elected to defer payments of interest on, the junior subordinated debentures that support our trust preferred securities or if an event of default has occurred and is continuing with respect to such debentures. Substantially similar
contractual provisions related to the trust preferred securities for Gold Bank-Florida limit the payment of dividends by our Florida intermediate holding company.
Our shareholder rights plan and provisions in our articles of incorporation and our bylaws may delay or prevent an acquisition of us by a third party.
Our board of directors has implemented a shareholder rights plan. The rights, which are attached to our shares and trade together with our
common stock, have certain anti-takeover effects. The plan may discourage or make it more difficult for another party to complete a merger or tender offer for our shares without negotiating with our board of directors or to launch a proxy contest or
to acquire control of a larger block of our shares. If triggered, the rights will cause substantial dilution to a person or group that attempts to acquire us without approval of our board of directors, and under certain circumstances, the rights
beneficially owned by the person or group may become void. In addition, our executive officers may be more likely to retain their positions with us as a result of the plan, even if their removal would be beneficial to shareholders generally.
Our articles of incorporation and our bylaws contain provisions, including a staggered board and advance notice
of stockholder proposals, that make it more difficult for a third party to gain control or acquire us without the consent of our board of directors. These provisions also could discourage proxy contests and may make it more difficult for dissident
shareholders to elect representatives as directors and take other corporate actions. These provisions of our governing documents may also have the effect of delaying, deferring or preventing a transaction or a change in control that might be in the
best interest of our shareholders.
11
Table of Contents
We make certain forward-looking statements
in this prospectus and in the documents incorporated herein by reference that are based upon our current expectations, assumptions and information currently available to us. We intend these forward-looking statements to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and we are including this statement for purposes of these safe harbor provisions. You can identify these statements whenever they relate to
matters other than historical facts and from our use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,”
“believe,” “intend,” “anticipate,” “except,” “target” and similar expressions. These forward-looking statements include statements relating to our goals, intentions and expectations, our business
plans and growth strategies, and estimates of our risks and future costs and benefits. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including, but not limited to, those described in the periodic
reports we file under the Securities Exchange Act of 1934 under the captions “Forward-Looking Statements” and “Factors That May Affect Future Results of Operations, Financial Condition or Business.” These factors are not intended
to represent a complete list of the general or specific factors that may affect us. Because of these and other uncertainties, our actual results may be materially different from that indicated by these forward-looking statements. You should not
place undue reliance on any forward-looking statements. We will not update these forward-looking statements, even though our situation may change in the future, unless we are obligated to do so under the federal securities laws.
12
Table of Contents
The net proceeds to us from the sale of 5,000,000 shares of our common
stock in this offering will be approximately $41.1 million (assuming no exercise of the underwriters’ over-allotment option) after deducting the underwriting discount and aggregate offering expenses payable by us. The offering expenses are
estimated to be approximately $315,000. If the underwriters’ over-allotment option is exercised in full, the net proceeds will be approximately $47.3 million. We are conducting this offering to raise capital that we will contribute to our
subsidiary banks to maintain their “well capitalized” status. We intend to use approximately $18.0 million of the net proceeds to increase the capital of our subsidiary banks to support their asset growth, approximately $23.0 million of
the net proceeds to pay down our line of credit (substantially all of the proceeds of which have been invested in the capital of our subsidiary banks), and the remaining net proceeds for general corporate purposes. Currently, our line of credit is
$25.0 million, of which approximately $23.0 million is outstanding as of the date of this prospectus, and bears interest at the rate equal to the greater of LIBOR plus 1.25% or 3.5% per annum.
Our common stock is traded on the Nasdaq National
Market under the symbol “GLDB”. The following table sets forth both the high and low sales prices reported on the Nasdaq National Market for our common stock and the dividends paid per share for the periods indicated.
| Price Range |
Dividends Paid per Share | ||||||||
| High |
Low |
||||||||
| Year ended December 31, 2000 |
|||||||||
| First Quarter |
$ |
9.81 |
$ |
6.13 |
$ |
0.02 | |||
| Second Quarter |
|
7.00 |
|
4.00 |
|
0.02 | |||
| Third Quarter |
|
5.88 |
|
4.44 |
|
0.02 | |||
| Fourth Quarter |
|
5.25 |
|
3.47 |
|
0.02 | |||
| Year ended December 31, 2001 |
|||||||||
| First Quarter |
|
7.66 |
|
4.50 |
|
0.02 | |||
| Second Quarter |
|
8.00 |
|
6.38 |
|
0.02 | |||
| Third Quarter |
|
8.05 |
|
6.85 |
|
0.02 | |||
| Fourth Quarter |
|
7.80 |
|
7.05 |
|
0.02 | |||
| Year ending December 31, 2002 |
|||||||||
| First Quarter |
|
9.03 |
|
6.96 |
|
0.02 | |||
| Second Quarter |
|
11.29 |
|
8.90 |
|
0.02 | |||
| Third Quarter |
|
11.05 |
|
8.75 |
|
0.02 | |||
| Fourth Quarter (through October 15, 2002) |
|
9.64 |
|
8.72 |
|
— | |||
On October 15, 2002, the last reported sale price of our common
stock on the Nasdaq National Market was $8.98 per share. As of such date there were approximately 801 shareholders of record of our common stock.
Since the second quarter of 1998, we have paid a quarterly dividend equal to $0.02 per share on each share of our common stock. We do not anticipate any change to our current dividends as a result of
this offering. Any future determination to pay dividends will remain at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements and other factors the board of directors deems
relevant.
13
Table of Contents
(in thousands, except ratios)
The following table sets forth our total indebtedness and capitalization as of June 30, 2002, on a historical basis and as adjusted to reflect the net proceeds to us from this offering (assuming no
exercise of the underwriters’ over-allotment option). The table reflects a repayment of $23.0 million of other borrowings. This information should be read in conjunction with the consolidated financial statements and notes thereto incorporated
by reference into this prospectus from Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2001, and from our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002.
| June 30, 2002 |
||||||||
| Actual |
As Adjusted |
|||||||
| Borrowings: |
||||||||
| Subordinated debt and guaranteed preferred beneficial interest in company debentures |
$ |
111,749 |
|
$ |
111,749 |
| ||
| Other borrowings |
|
575,370 |
|
|
552,370 |
| ||
| |
|
|
|
|
| |||
| Total borrowings |
|
687,119 |
|
|
664,119 |
| ||
| Stockholders’ Equity: |
||||||||
| Preferred stock, no par value; 50,000,000 shares authorized; no shares issued |
|
— |
|
|
— |
| ||
| Common stock, $1 par value; 50,000,000 shares authorized; 38,431,693 shares issued; 43,431,693 shares issued as
adjusted |
|
38,432 |
|
|
43,432 |
| ||
| Additional paid-in capital |
|
76,105 |
|
|
112,215 |
| ||
| Retained earnings |
|
97,492 |
|
|
97,492 |
| ||
| Accumulated other comprehensive income, net |
|
4,547 |
|
|
4,547 |
| ||
| Unearned compensation |
|
(9,683 |
) |
|
(9,683 |
) | ||
| Less treasury stock (4,721,510 shares at June 30, 2002) |
|
(33,120 |
) |
|
(33,120 |
) | ||
| |
|
|
|
|
| |||
| Total stockholders’ equity |
|
173,773 |
|
|
214,883 |
| ||
| |
|
|
|
|
| |||
| Total capitalization |
$ |
860,892 |
|
$ |
879,002 |
| ||
| |
|
|
|
|
| |||
| Capital Ratios: |
||||||||
| Tier 1 risk-based capital ratio |
|
7.13 |
% |
|
9.21 |
% | ||
| Total risk-based capital ratio |
|
10.40 |
% |
|
11.96 |
% | ||
| Leverage ratio |
|
5.80 |
% |
|
7.50 |
% | ||
14
Table of Contents
(in thousands, except per share data and ratios)
The selected consolidated financial data presented below, as of or for each of the years in the five-year period ended December 31, 2001,
are derived from our audited historical financial statements. The selected data presented below as of or for the six-month periods ended June 30, 2001 and 2002, are derived from our unaudited consolidated financial statements. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of results as of or for the six-month periods have been included. This information should be read in conjunction with
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and the notes thereto incorporated by reference into this prospectus from Amendment No. 1 to our Annual
Report on Form 10-K/A for the year ended December 31, 2001, and our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002. Results for past periods are not necessarily indicative of results that may be expected
for any future period, and results for the six-month period ended June 30, 2002 are not necessarily indicative of results that may be expected for the entire year ending December 31, 2002.
| As of or for the years ended December 31, |
As of or for the six months ended June 30, | |||||||||||||||||||||
| 1997 |
1998 |
1999 |
2000 |
2001 |
2001 |
2002 | ||||||||||||||||
| (unaudited) | ||||||||||||||||||||||
| Statement of Operations Data: |
||||||||||||||||||||||
| Net interest income |
$ |
64,087 |
$ |
78,800 |
$ |
88,185 |
$ |
93,460 |
|
$ |
89,078 |
$ |
43,775 |
$ |
49,732 | |||||||
| Provision for loan losses |
|
4,921 |
|
5,111 |
|
11,586 |
|
4,673 |
|
|
15,314 |
|
4,340 |
|
9,955 | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Net interest income after provision for loan losses |
|
59,166 |
|
73,689 |
|
76,599 |
|
88,787 |
|
|
73,764 |
|
39,435 |
|
39,777 | |||||||
| Non-interest income |
|
12,660 |
|
17,731 |
|
29,449 |
|
28,837 |
|
|
45,048 |
|
19,872 |
|
30,754 | |||||||
| Non-interest expense (1)(2)(3)(4)(5) |
|
46,569 |
|
63,962 |
|
83,373 |
|
116,803 |
|
|
89,639 |
|
41,462 |
|
52,279 | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Earnings before income taxes |
|
25,257 |
|
27,458 |
|
22,675 |
|
821 |
|
|
29,173 |
|
17,845 |
|
18,252 | |||||||
| Income taxes |
|
7,738 |
|
6,792 |
|
7,900 |
|
5,275 |
|
|
4,820 |
|
5,798 |
|
5,133 | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Net earnings (loss) |
|
17,519 |
|
20,666 |
|
14,775 |
|
(4,454 |
) |
|
24,353 |
|
12,047 |
|
13,119 | |||||||
| Less pro forma tax expense (6) |
|
1,579 |
|
2,797 |
|
— |
|
— |
|
|
— |
|
— |
|
— | |||||||
| Add back goodwill amortization (7) |
|
634 |
|
609 |
|
1,996 |
|
2,464 |
|
|
1,917 |
|
1,060 |
|
— | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| As adjusted net earnings (loss) (6)(7) |
$ |
16,574 |
$ |
18,478 |
$ |
16,771 |
$ |
(1,990 |
) |
$ |
26,270 |
$ |
13,107 |
$ |
13,119 | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Balance Sheet Data: |
||||||||||||||||||||||
| Total assets |
$ |
1,745,200 |
$ |
2,213,270 |
$ |
2,550,741 |
$ |
2,717,598 |
|
$ |
3,016,472 |
$ |
2,871,250 |
$ |
3,323,414 | |||||||
| Loans |
|
1,202,173 |
|
1,523,858 |
|
1,819,848 |
|
1,946,168 |
|
|
2,162,405 |
|
1,944,460 |
|
2,441,572 | |||||||
| Allowance for loan losses |
|
16,455 |
|
20,141 |
|
26,038 |
|
26,180 |
|
|
26,097 |
|
24,113 |
|
30,459 | |||||||
| Loans, net |
|
1,185,718 |
|
1,503,717 |
|
1,793,810 |
|
1,919,988 |
|
|
2,136,308 |
|
1,920,347 |
|
2,411,113 | |||||||
| Investment securities |
|
349,577 |
|
432,634 |
|
455,162 |
|
525,981 |
|
|
588,844 |
|
638,552 |
|
602,204 | |||||||
| Goodwill and other intangibles, net |
|
10,293 |
|
22,996 |
|
47,576 |
|
33,376 |
|
|
38,720 |
|
34,852 |
|
38,274 | |||||||
| Deposits |
|
1,477,986 |
|
1,824,557 |
|
2,006,154 |
|
2,133,877 |
|
|
2,163,866 |
|
2,057,421 |
|
2,435,078 | |||||||
| Long-term borrowings |
|
18,849 |
|
97,283 |
|
89,753 |
|
200,561 |
|
|
416,413 |
|
296,005 |
|
448,453 | |||||||
| Subordinated debt and guaranteed preferred beneficial interest in company debentures |
|
28,750 |
|
44,999 |
|
83,319 |
|
82,549 |
|
|
111,749 |
|
81,749 |
|
111,749 | |||||||
| Stockholders’ equity |
|
135,774 |
|
163,637 |
|
167,048 |
|
169,246 |
|
|
165,645 |
|
166,567 |
|
173,773 | |||||||
| Per Share Data: |
||||||||||||||||||||||
| Net earnings (loss) per share |
$ |
0.49 |
$ |
0.56 |
$ |
0.39 |
$ |
(0.12 |
) |
$ |
0.69 |
$ |
0.33 |
$ |
0.39 | |||||||
| Less pro forma tax expense (6) |
|
0.04 |
|
0.07 |
|
— |
|
— |
|
|
— |
|
— |
|
— | |||||||
| Add back goodwill amortization (7) |
|
0.02 |
|
0.02 |
|
0.05 |
|
0.07 |
|
|
0.05 |
|
0.03 |
|
— | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| As adjusted net earnings (loss) per share (6)(7) |
$ |
0.47 |
$ |
0.51 |
$ |
0.44 |
$ |
(0.05 |
) |
$ |
0.74 |
$ |
0.36 |
$ |
0.39 | |||||||
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
| Book value per share |
$ |
3.91 |
$ |
4.48 |
$ |
4.48 |
$ |
4.51 |
|
$ |
4.88 |
$ |
4.75 |
$ |
5.15 | |||||||
| Tangible book value per share |
|
3.61 |
|
3.85 |
|
3.20 |
|
3.62 |
|
|
3.74 |
|
3.75 |
|
4.02 | |||||||
| Cash dividends declared |
|
0.045 |
|
0.075 |
|
0.08 |
|
0.08 |
|
|
0.08 |
|
0.04 |
|
0.04 | |||||||
| Weighted average shares outstanding |
|
35,399 |
|
36,584 |
|
37,529 |
|
37,653 |
|
|
35,520 |
|
36,279 |
|
33,871 | |||||||
15
Table of Contents
| As of or for the years ended December 31, |
As of or for the six months ended June 30, |
||||||||||||||||||||
| 1997 |
1998 |
1999 |
2000 |
2001 |
2001 |
2002 |
|||||||||||||||
| (unaudited) |
|||||||||||||||||||||
| Ratios: |
|||||||||||||||||||||
| Return (loss) on average assets (8) |
1.10 |
% |
1.03 |
% |
0.63 |
% |
(0.17 |
)% |
0.86 |
% |
0.88 |
% |
0.83 |
% | |||||||
| Return (loss) on average equity (8) |
13.92 |
% |
13.35 |
% |
8.71 |
% |
(2.40 |
)% |
14.38 |
% |
14.42 |
% |
15.68 |
% | |||||||
| Dividend payout |
9.18 |
% |
13.39 |
% |
20.51 |
% |
— |
|
11.60 |
% |
11.70 |
% |
10.28 |
% | |||||||
| Net interest margin |
4.40 |
% |
4.36 |
% |
4.18 |
% |
3.96 |
% |
3.57 |
% |
3.58 |
% |
3.57 |
% | |||||||
| Allowance for loan losses to non-performing loans |
270.20 |
% |
278.38 |
% |
331.65 |
% |
126.34 |
% |
113.42 |
% |
135.68 |
% |
168.28 |
% | |||||||
| Allowance for loan losses to total loans |
1.37 |
% |
1.32 |
% |
1.43 |
% |
1.35 |
% |
1.21 |
% |
1.24 |
% |
1.25 |
% | |||||||
| Non-performing loans to total loans |
0.51 |
% |
0.47 |
% |
0.43 |
% |
1.06 |
% |
1.06 |
% |
0.91 |
% |
0.74 |
% | |||||||
| Non-performing assets to total assets |
0.46 |
% |
0.47 |
% |
0.42 |
% |
0.90 |
% |
0.91 |
% |
0.73 |
% |
0.60 |
% | |||||||
| Net loan charge-offs to average loans (8) |
0.30 |
% |
0.28 |
% |
0.48 |
% |
0.24 |
% |
0.78 |
% |
0.68 |
% |
0.46 |
% | |||||||
| Efficiency ratio (9) |
67.99 |
% |
67.50 |
% |
74.40 |
% |
69.46 |
% |
63.63 |
% |
63.43 |
% |
64.31 |
% | |||||||
| Capital Ratios: |
|||||||||||||||||||||
| Tier 1 risk-based capital ratio |
11.73 |
% |
11.16 |
% |
9.76 |
% |
8.92 |
% |
7.85 |
% |
8.12 |
% |
7.13 |
% | |||||||
| Total risk-based capital ratio |
12.91 |
% |
12.38 |
% |
12.20 |
% |
11.41 |
% |
11.41 |
% |
10.60 |
% |
10.40 |
% | |||||||
| Leverage ratio |
9.06 |
% |
8.36 |
% |
7.55 |
% |
7.16 |
% |
6.27 |
% |
6.63 |
% |
5.80 |
% | |||||||
(1) |
In 1999 and 2000, we recorded pre-tax charges of $4,630 ($3,010 after-tax) and $4,024 ($2,616 after-tax), respectively, related to consolidation and
repositioning expenses incurred in consolidating our Kansas banks into a single statewide organization during 1999 and our Oklahoma banks into a single statewide organization during 2000. These charges included exiting certain duplicate branch
locations, resulting in asset write-downs to fair value, eliminating duplicate back office functions, abandoning certain leases and reducing the number of full-time employees. |
(2) |
In 2000, we recorded a pre-tax charge of $9,000 ($6,832 after-tax) related to transaction expenses in connection with the acquisition of three financial
institutions during the first quarter of 2000 that were accounted for as poolings of interests. These expenses were primarily comprised of legal, accounting, severance, lease termination, asset write-down and data processing conversion costs.
|
(3) |
In 2000, we recorded a pre-tax charge of $19,803 ($17,765 after-tax) related to the closing of our separate mortgage banking subsidiary, Gold Banc Mortgage,
Inc., during the fourth quarter of 2000. This charge included severance costs, asset write-downs, abandonment of certain leases and other closing expenses. In 2001, we determined that we had overaccrued certain expenses related to this closing and
recovered a pre-tax amount of $477 ($310 after-tax) which is presented as a reduction of mortgage closing expenses. |
(4) |
In 2001, we recorded a pre-tax gain of $4,569 ($4,569 after-tax) related to an arbitration settlement ruled in our favor in connection with a lawsuit related to
the acquisition of the mortgage banking subsidiary. The settlement cancelled promissory notes owed by us to the former owners of the subsidiary totaling $4,080 and awarded us monetary damages of $489, both of which were recorded as a reduction of
mortgage closing expenses. |
(5) |
Excluding the impact of the items discussed in footnotes one through four above, non-interest expense would have been $78,743, $83,976 and $94,685 for the years
ended December 31, 1999, 2000 and 2001, respectively. |
(6) |
Citizens Bank of Tulsa, which we acquired in a transaction that was accounted for as a pooling of interests in December 1998, was taxed as a Subchapter S
corporation for 1997 and 1998. As a Subchapter S corporation, Citizens Bank was not subject to federal income taxes; rather, such income was included in the taxable income of stockholders. The 1997 and 1998 data have been adjusted to include pro
forma tax expense, net earnings, and net earnings per share as if Citizens Bank had not been a Subchapter S corporation. |
(7) |
Effective January 1, 2002, we adopted Statement of Financial Accounting Standards (SFAS) No. 142 “Goodwill and Other Intangible Assets” and
discontinued amortization of goodwill for periods beginning after January 1, 2002. The 1997, 1998, 1999, 2000 and 2001 data have been adjusted as if the adoption of SFAS 142 had occurred at the beginning of these respective periods.
|
(8) |
Certain financial ratios for interim periods have been annualized. |
(9) |
We calculate the efficiency ratio as a ratio, expressed as a percentage, the numerator of which is non-interest expense (excluding any non-recurring expenses),
and the denominator of which is the sum of net interest income before provision for loan losses, plus non-interest income (excluding any non-recurring income). For 2001 and 2002, we have excluded CompuNet’s revenue and expenses from this
calculation. |
16
Table of Contents
Subject to the terms and conditions of the underwriting agreement among Gold
Banc Corporation, Inc. and A.G. Edwards & Sons, Inc., RBC Dain Rauscher Inc. and Sandler O’Neill & Partners, L.P., as the representatives on behalf of the underwriters, the underwriters have agreed severally to purchase from us the
following number of shares of common stock at the offering price less the underwriting discounts and commissions set forth on the cover page of this prospectus.
| Underwriter |
Shares | |
| A.G. Edwards & Sons, Inc. |
2,000,000 | |
| RBC Dain Rauscher Inc. |
1,500,000 | |
| Sandler O’Neill & Partners, L.P. |
1,500,000 | |
| | ||
| Total |
5,000,000 | |
| |
The underwriting agreement provides that the obligations of the
underwriters are subject to certain conditions precedent and that the underwriters will purchase all shares of the common stock if any of these shares are purchased. The underwriters are obligated to take and pay for all of the shares of common
stock offered in this offering, other than those covered by the over-allotment option described below, if any are taken.
The representatives of the underwriters have advised us that they propose to offer the shares of common stock to the public at the offering price set forth on the cover page of this prospectus and to certain dealers, including our
wholly-owned broker-dealer subsidiary, Gold Capital Management, Inc., at that price, less a concession not in excess of $0.28 per share. The underwriters may allow, and such dealers may re-allow, a concession not in excess of $0.10 per
share to certain other dealers. The offering price was determined by negotiations among us and the representatives of the underwriters, taking into account, among other factors, the last reported sales price of our common stock as reported on the
Nasdaq National Market on the date of this prospectus, and prevailing economic and market conditions. After the offering, the offering price and other selling terms may be changed by the underwriters.
Pursuant to the underwriting agreement, we have granted to the underwriters an option, exercisable for 30 days after the date of this
prospectus, to purchase up to 750,000 additional shares of common stock at the offering price, less the underwriting discounts and commissions set forth on the cover page of this prospectus, solely to cover over-allotments. To the extent that the
underwriters exercise their option, the underwriters will become obligated, subject to some conditions, to purchase approximately the same percentage of such additional shares as the number set forth next to the underwriter’s name in the
preceding table bears to the total number of shares in the table, and we will be obligated, pursuant to the option, to sell these shares to the underwriters.
Some of our executive officers and directors, including Michael W. Gullion, Chairman and Chief Executive Officer, Malcolm M. Aslin, President and Chief Operating Officer, Richard J. Tremblay, Executive
Vice President and Chief Financial Officer, Allen D. Petersen, Director, E. Miles Prentice III, Director, and William F. Wright, Director, have indicated their intent to purchase an aggregate of up to 300,000 shares of common stock in the offering,
at the same price and on the same terms as offered to the public. While the underwriters have not formally reserved these shares for sale, they have indicated their willingness to sell them to these executive officers and directors at the public
offering price and only in compliance with the National Association of Securities Dealers, Inc.’s Conduct Rule 2110 and the related Interpretation on “Free-Riding and Withholding.” We are not making loans to these executive officers
or directors to purchase such shares.
We and each of our directors and executive officers have agreed not to sell
or otherwise dispose of any shares of our common stock for a period of 180 days after the date of this prospectus without the prior written consent of A.G. Edwards & Sons, Inc. A.G. Edwards may, in its sole discretion, allow any of
these parties to dispose of common stock or other securities prior to the expiration of the 180-day period. There are, however, no agreements between A.G. Edwards and the parties that would allow them to do so as of the date of this prospectus.
17
Table of Contents
In accordance with NASD Conduct Rule 2720(d)(2), the offering is being made by
Gold Capital Management, Inc., our affiliate, which is a member of the NASD and a member of the selling group in the offering. The representatives have advised us that they do not intend to confirm sales to any account over which they exercise
discretionary authority without the prior specific written approval of the customer in compliance with NASD Conduct Rule 2720(l).
The following table summarizes the discounts and commissions that we will pay to the underwriters in the offering. These amounts assume either no exercise or full exercise of the underwriters’ option to purchase additional
shares of common stock.
| No Exercise |
Full Exercise | |||||
| Per share |
$ |
0.48 |
$ |
0.48 | ||
| Total |
$ |
2,400,000 |
$ |
2,760,000 | ||
We expect to incur expenses of approximately $315,000 in connection
with this offering. The underwriters have agreed to pay up to $75,000 of these expenses on our behalf, which has the effect of reducing compensation paid by us to them.
We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act.
Until the distribution of the common stock is completed, rules of the Securities and Exchange Commission may limit the ability of the
underwriters and some selling group members to bid for and purchase the common stock. As an exception to these rules, the underwriters are permitted to engage in certain transactions that stabilize, maintain or otherwise affect the price of the
common stock.
If the underwriters create a short position in the common stock in connection with the offering,
that is, if they sell more than 5,000,000 shares of the common stock, the underwriters may reduce that short position by purchasing shares of common stock in the open market. This is known as a “syndicate covering transaction.” The
underwriters may also elect to reduce any short position by exercising all or part of their over-allotment option.
Naked short sales are sales in excess of the over-allotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the
underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
The underwriters may also impose a penalty bid on some selling group members. This means that if the underwriters purchase common stock in the open market to reduce the
selling group members’ short position or to stabilize the price of the common stock, the underwriters may reclaim the amount of the selling concession from the selling group members who sold those shares of common stock as part of the offering.
In general, purchases of a security for the purpose of stabilization or to reduce a short position could cause
the price of the security to be higher than it might be in the absence of such purchases. The imposition of a penalty bid might also have an effect on the price of a security to the extent that it were to discourage resale of the security.
Such activities, which may be commenced and discontinued at any time, may be effected on the Nasdaq National
Market, in the over-the-counter market, or otherwise. Also, prior to the pricing of the shares of common stock and until such time as a stabilizing bid may have been made, some or all of the underwriters who are market makers in the common stock may
make bids for or purchases of shares of common stock subject to some restrictions, which bids or purchases are known as “passive market making activities.”
Neither we nor the representatives makes any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on
the price of the common stock. In addition,
18
Table of Contents
neither we nor the representatives make any representation that the underwriters will engage in these transactions or that the transactions, once commenced, will not be discontinued without
notice.
Each of the representatives of the underwriters has provided, and from time to time may provide in the
future, financial advisory or investment banking services to us.
The transfer agent for our common stock is American Stock Transfer &
Trust Company, located at 6201 15th Avenue, Brooklyn, New York 11219. Its telephone number is
800-937-5449.
Certain legal matters relating to the common stock offered by this prospectus,
including the validity of the common stock, have been passed upon for us by Stinson Morrison Hecker LLP, Kansas City, Missouri. Certain legal matters have been passed upon for the underwriters by Bryan Cave LLP, Kansas City, Missouri.
Our consolidated financial statements included in Amendment No. 1 to our Annual
Report on Form 10-K/A for the year ended December 31, 2001, have been audited by KPMG LLP, independent auditors, as set forth in their report thereon included in our Annual Report and incorporated by reference in this prospectus. These consolidated
financial statements are incorporated by reference in this prospectus in reliance upon the report given on the authority of KPMG LLP as experts in accounting and auditing.
This prospectus is a part of a Registration Statement
on Form S-3 that we filed with the SEC under the Securities Act. This prospectus does not contain all the information set forth in the registration statement, certain parts of which are omitted in accordance with the rules and regulations of the
SEC. For further information with respect to us and the securities offered by this prospectus, reference is made to the registration statement, including the exhibits to the registration statement and the documents incorporated by reference.
We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our filings
are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facilities at 450 Fifth Street, N.W., Washington, D.C. 20549. You
can also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of
the public reference facilities. Our SEC filings are also available on our web site at http://www.goldbanc.com, and at the office of the Nasdaq National Market. Other than the SEC filings incorporated by reference in this prospectus, information on
our web site is not a part of this prospectus. For further information on obtaining copies of our public filings at the Nasdaq National Market, you should call (212) 656-5060.
We “incorporate by reference” into this
prospectus the information we file with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus.
19
Table of Contents
Some information contained in this prospectus updates and supersedes the
information incorporated by reference and some information that we file subsequently with the SEC will automatically update this prospectus. We incorporate by reference the documents listed below:
• |
our Annual Report on Form 10-K for the year ended December 31, 2001, filed with the SEC on March 25, 2002 (File No. 0-28936)
|
• |
Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2001, filed with the SEC on October 15, 2002 (File No. 0-28936)
|
• |
our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002, filed with the SEC on May 15, 2002 (File No. 0-28936) |
• |
our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002, filed with the SEC on |
August 13, 2002 (File No. 0-28936)
• |
our Current Report on Form 8-K dated January 2, 2002, filed with the SEC on January 3, 2002 (File No. 0-28936) |
• |
our Current Report on Form 8-K dated February 27, 2002, filed with the SEC on February 27, 2002 (File No. 0-28936) |
• |
our Current Report on Form 8-K dated June 17, 2002, filed with the SEC on June 19, 2002 (File No. 0-28936) |
• |
the descriptions of our Common Stock contained in our Registration Statement on Form SB-2 dated September 20, 1996 (File No. 333-12377)
|
• |
the description of our shareholder rights plan and the rights attached to our Common Stock contained in our Registration Statement on Form 8-A dated October 15,
1999, filed with the SEC on October 15, 1999 (File No. 0-28936) |
We also incorporate by
reference any filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the initial filing of the registration statement that contains this prospectus and before the time that all of the
shares offered by this prospectus are sold.
You may request, either orally or in writing, and we will provide, a
copy of these filings at no cost by contacting Rick J. Tremblay, our Chief Financial Officer, at the following address and phone number:
Gold Banc Corporation, Inc.
11301 Nall Avenue
Leawood, KS
66211
(913) 451-8050
20
Table of Contents
You may rely on the
information contained in this prospectus. We have not authorized anyone to provide information different from that contained in this prospectus. Neither the delivery of this prospectus nor the sale of common stock means that information contained in
this prospectus is correct after the date of this prospectus. This prospectus is not an offer to sell or solicitation of an offer to buy these shares of common stock in any circumstances under which the offer or solicitation is unlawful.
| Page | ||
| 1 | ||
| 9 | ||
| 12 | ||
| 13 | ||
| 13 | ||
| 14 | ||
| 15 | ||
| 17 | ||
| 19 | ||
| 19 | ||
| 19 | ||
| 19 | ||
| 19 |
5,000,000 Shares
Common Stock
PROSPECTUS
A.G. Edwards & Sons, Inc.
RBC Capital Markets
Sandler
O’Neill & Partners, L.P.
October 16, 2002