Gold Banc growing into regional power through acquisitions

Northwestern Financial Review, Mar 15, 2001 by Ernster, Barb

Amid the large bank mergers and acquisitions that make national headlines, Gold Banc Corporation of Leawood, Kan., has quietly gone about building a $3 billion organization in four states, doubling its size every year since 1997 when its assets totaled just $300 million. Gold Banc has built a niche in small, county seat communities, and empowers its bankers to make decisions locally while building lasting relationships with the small and mid-size businesses that are its primary focus.

Gold Banc sets itself apart from competing bank networks by offering an array of financial, business and technology services above and beyond traditional loans and deposits. It has accomplished this through an aggressive growth plan involving bank acquisitions, most recently in Florida and Oklahoma, and mergers with non-bank businesses, including investment, mortgage and technology companies.

"We're bringing product through a $3 billion bank that a lot of other banks our size and slightly larger don't provide-brokerage, investment advisory, trust, insurance, treasury services and our own plastic including credit cards, debit cards and merchant services," said Mike Gullion, chairman and CEO of Gold Banc Corp. "We think it's unique, particularly here in the Midwest."

Responsive personal service is the hallmark of Gold Banc's community banking strategy. Each bank retains its own president and board of directors. Gullion notes that with the addition of investment, trust, mortgage, insurance and international services, the community banks operate as financial service centers, offering one-stop shopping convenience to businesses and individuals. In addition to the personal touch the banks offer online banking with bill pay. Other high-tech services include telephone banking and even two-way video conferencing for some professional and business services.

Gold Banc also has a trust subsidiary serving more than 1,700 customers throughout the Midwest. Operating as The Trust Company, the St. Joseph, Mo.-based firm has $400 million in trust assets under management.

When Gullion

bought his first bank in 1978 - a $2.9 million bank in Oketo, Kansas, he was actually considering getting out of banking.

He realized soon enough, however, that in order to grow his business he needed to acquire other banks and he started investing in county seat banks throughout Kansas and Missouri. In 1996, he took his franchise public and today has banks in 19 locations. Gold Banc focuses on high-growth markets or on communities where it can be the No. 1 or No. 2 player in the market.

One year after going public, Gold Banc acquired Midwest Capital Management (MCM) in Overland Park, Kan., after a persistent courtship by Gullion. MCM's owner, Dan Stepp, had been solicited by several potential buyers but liked the vision that Gullion presented.

"Everybody wants to get into the financial services industry and we finally decided that if we really liked the culture and vision of the company, we were interested.

Personally, I was very taken with the growth plan and developmental process of the Gold Banc Corporation," Stepp said. "We think there's a real niche away from the big banks, those who still like to have close contact with their bankers, have a responsive loan officer and people who care about quality and timing of service."

One year later, Gold Banc acquired CompuNet Engineering (CNE), an information technology solutions company that Gullion foresaw as the "gateway into e-commerce."

"We view technology as an extension of service-when the customer wants it, not when we think they need it. We don't view Internet banking as a separate business line," said Gullion. "Accordingly, if we want to be a high-tech company, we can't do it with a low-tech solution."

CNE designs and builds technology infrastructures and assists companies in integrating their software packages onto that network, according to its founder, Mick Aselund, now chief operating officer at Gold Banc. CNE built the wide-area network infrastructure that allowed Gold Banc, one of its largest customers, to expand into multiple states. It was more costeffective for Gold Banc to merge with CNE, and it allowed the corporation to keep some highly talented people who understood banking technology.

CNE, on the other hand, has benefited by being able to diversify its customer base and expand into the states where Gold Banc operates. It currently serves an active base of 200 clients.

"It's been fun to take an emerging publicly-held banking company that's focused on delivering both technology and financial services through a community platform into four states. It's been a challenge and one that we've enjoyed," Aselund said.

Gold Bank of Leawood is the holding company's flagship bank. Founded in 1870, the $1.2 billion bank is the fourth-largest in the state and has offices serving every corner of Kansas. Other bank subsidiaries include Citizens Bank of Tulsa, Okla., American Bank of Bradenton, Fla., and Provident Bank of St. Joseph, Mo.