Gold Banc Reports $8.1 Million Net Earnings for the First Quarter, Inc

Gold Banc Reports $8.1 Million Net Earnings for the First Quarter, Increased Cash Dividend and $20 Million Additional Stock Repurchase Authorization

    Business Editors/Financial Editors

    LEAWOOD, Kan.--(BUSINESS WIRE)--April 18, 2005--Gold Banc Corporation, Inc. (Nasdaq: GLDB), a $4.4 billion financial services company offering banking and asset management services, today announced an 11.0% increase in net income over the prior quarter. Net income increased to $8.1 million for the first quarter of 2005, from $7.3 million in the fourth quarter of 2004. Earnings per share for the same period grew $0.02 per share from $0.19 to $0.21. "Continued loan growth in strategic, high-growth markets in metropolitan Kansas City and Tampa, Sarasota and Bradenton, Florida, fueled the expansion," said Mick Aslin, Gold Banc President and CEO. "We believe the key initiatives and repositioning undertaken during the past two years have set the stage for further growth throughout 2005, and we are pleased with our pipeline for new loans over the next 90 days. Additionally, we are pleased with our core deposit growth; however, we have taken note of the incremental cost in this growth and its impact on net interest margin," continued Aslin. "We have worked hard to bring clarity and transparency to our financial results, and we are hopeful that this will be the first of many quarters of easily understood results."
    First quarter earnings for 2005 declined from $13.3 million in the first quarter of 2004 due primarily to a $17.0 million gain on branch sales recognized in the prior year, offset in part by other one-time expenses including costs to refinance debt and provide restricted stock grants.

    Net Interest Income

    For the first quarter of 2005, net interest income after provision for loan loss was $29.0 million, compared to $25.7 million for the first quarter of 2004 and $29.3 million for the fourth quarter of 2004. The increase over the prior year is attributed to loan growth outpacing deposit growth. Additional interest income from loan growth exceeded additional interest on deposits, despite the impact of increased rates on both. In addition, there was a decrease associated with the provision for loan losses due to an allocation of $1.8 million of the allowance in the first quarter of 2004 due to branch sales. These improvements were offset with lesser earnings from the investment portfolio due to declines in the principal balances from pay-downs and maturities of securities. Net interest income is nearly unchanged from the fourth quarter of 2004 with increases in interest income on loans being offset by increases in interest expense on deposits and borrowings. The tax equivalent net interest margin for the first quarter of 2005 increased to 2.99% from 2.89% for the first quarter of 2004. The costs of growing core deposits have slightly eroded the gain in net interest margin.

    Non-Interest Income

    Non-interest income totaled $6.4 million in the first quarter of 2005 compared to $7.8 million for the first quarter of 2004, excluding the 2004 gain on branch sales of $17.0 million. Without the gain on branch sales, the remaining decrease is primarily due to declines of $0.7 million in service fees and a change in the losses on sales of securities of $0.3 million. Non-interest income is down slightly from the fourth quarter of 2004 with declines in service fees being somewhat offset by fewer losses on securities and increased trading and commission income.

    Non-Interest Expense

    Non-interest expense for the three months ended March 31, 2005, was $24.3 million, compared to $28.8 million for the first quarter of 2004, which contained additional expenses associated with the refinancing of subordinated debt of $2.0 million as well as expense on interest rate swaps of $0.4 million and acquisition costs of $0.6 million. Salaries and employee benefits were down $1.0 million as the accelerated expensing of restricted stock has been completed, and savings from branch disposals are being realized. The current quarter showed improvement over the prior quarter ended December 31, 2004, with non-interest expense of $24.7 million. Impacting expenses in the fourth quarter of 2004 were consulting and contract labor costs associated primarily with Sarbanes-Oxley compliance of approximately $0.5 million and the cost of refinancing subordinated debt of $1.3 million to call outstanding debt and refinance the amounts at more favorable interest rates. "We are pleased that our efforts to reduce overhead and other operating costs from consolidation of charters, sale of non-core locations and economies of scale are beginning to be realized," said Aslin.

    Balance Sheet

    As of March 31, 2005, Gold Banc total assets were $4.4 billion including total loans net of allowance of $3.2 billion (including loans held for sale), investment securities of $894.3 million and total deposits of $3.2 billion (including deposits held for sale). Loans and deposits held for sale are part of a pending transaction to sell five rural Oklahoma branches. As of December 31, 2004, Gold Banc's total assets were $4.3 billion, total investment securities were $916.0 million, total loans (net of allowance, including loans held for sale) were $3.1 billion and total deposits (including deposits held for sale) were $3.1 billion. Excluding loans held for sale, net loan growth was $101.9 million or 3.3% for the quarter. Excluding deposits held for sale, deposits grew $81.3 million or 2.9% from December 31, 2004, to March 31, 2005, despite a reduction in brokered certificates of deposit. Brokered certificates of deposit totaled $461.4 million as of March 31, 2004, a reduction of $75.2 million from $536.6 million at the end of 2004. Federal Home Loan Bank advances were $512.2 million at March 31, 2005, compared to $571.9 million at December 31, 2004, a reduction of $59.6 million. This reduction of $134.8 million in brokered deposits and FHLB borrowings reflects Gold Banc's commitment to move away from wholesale funding and to build core deposits.
    The available-for-sale securities portfolio of $487.3 million is comprised of $317.4 million in obligations of U.S. government-sponsored entities, $116.7 million of mortgage-backed securities, $39.2 million of stock and other investments, $13.3 million in municipal securities, and $0.7 million in US Treasury securities. The average maturity is approximately 3.8 years. Held-to-maturity securities total $403.1 and are comprised of $251.9 million in obligations of U.S. government-sponsored entities, $89.8 million of mortgage-backed securities, $44.5 million of trust-preferred securities, and $16.9 million of municipal securities. Held-to-maturity securities reflect the needs of the balance sheet and provide a degree of desirable insulation to our tangible equity level in a rising interest rate environment.

    Credit Quality

    Non-performing loans totaled $17.8 million or 0.56% of total loans at March 31, 2005, compared to $15.7 million or 0.51% of total loans on December 31, 2004. Other real estate owned remained $3.7 million as of March 31, 2005, and December 31, 2004. Non-performing assets as a percentage of total assets remained steady at 0.49% on March 31, 2005, compared to 0.45% on December 31, 2004. These numbers represent some of the best levels attained in asset quality in the past five years and reflect the improvement in the overall portfolio, which resulted in a provision for loan losses for the quarter of $1.3 million compared to $1.1 million in the fourth quarter of 2004. The provision for the loan loss for the current quarter declined from $2.9 million in the first quarter of 2004 due to allocation of $1.8 million of the allowance in the prior year for branch sales. The allowance for loan losses was $32.3 million on March 31, 2005, compared to $32.1 million on December 31, 2004.

    Capital

    The capital levels of Gold Banc continue to be well in excess of the well-capitalized levels established by regulatory agencies. At March 31, 2005, the company's total capital ratio was 11.95%, its tier one ratio was 8.96% and, its leverage ratio was 7.60%. Leverage and tier one ratios have declined slightly from the previous year and the previous sequential quarter due to stock repurchases as discussed below. Book value per share was $6.56 and tangible book value was $5.66 on March 31, 2005, compared to $6.73 and $5.84, respectively on December 31, 2004.
    Gold's tangible equity to asset ratio at the end of the first quarter 2005 was 5.95%, down slightly from 6.24% at December 31, 2004. This ratio is expected to improve to over 6.0% with the completion of Gold's previously-announced sale of five branches in Oklahoma early in the second quarter of 2005.

    Share Repurchase

    On April 18, 2005, the board of directors authorized an additional expenditure of up to $20.0 million for the repurchase of its outstanding common stock from time to time during the next twelve months in open market purchases and private transactions subject to market conditions, and as permitted by securities laws and other legal requirements. This authorization is in addition to the expenditure of up to $12.0 million authorized on October 21, 2004. During the quarter, 766,114 shares of stock have been repurchased at a total cost of $10,994,465 (average cost per share of $14.35).

    Dividend

    The Gold Banc board of directors also declared a cash dividend of $0.05 per common share on April 18, 2005. The dividend will be payable on May 10, 2005, to shareholders of record as of May 3, 2005. Gold Banc has 39,609,691 shares outstanding as of March 31, 2005. This marks an increase from dividends paid in previous quarters, which have been $0.03 per common share since the first quarter of 2003.

    Conference Call

    A conference call has been scheduled for April 21, 2005, at 9:00 a.m. (EDT) and 8:00 a.m. (CDT) to discuss earnings and results of operations for the first quarter, and its strategic direction and goals. An archived version of the call will be available on www.goldbanc.com accessible by clicking Presentations, after 5:00 p.m. (CDT) on April 21, 2005.

    To call in, please call:
    719-457-2633
    Toll Free: 800-967-7184
    Confirmation Code: 5432524

    The operator will ask which category each participant belongs in
    as follows:

    1) Gold Banc Shareholders
    2) Financial Analyst/Investment Managers
    3) Associates
    4) Media

    About Gold Banc

    Gold Banc is a $4.4 billion financial holding company headquartered in Leawood, Kansas, a part of the Kansas City metropolitan area. Gold Banc provides banking, and asset management services in Kansas, Missouri, Oklahoma and Florida through 38 banking locations. Gold Banc is traded on the Nasdaq under the symbol GLDB.

    Cautionary Statements Regarding Forward-Looking Information

    The Company does not intend to update the above information. The above information included herein contains certain "forward-looking statements" with respect to the financial condition, results of operations, plans objectives, future financial performance and business of our company and its subsidiaries, including, without limitation:

--	statements that are not historical in nature;
--	statements preceded by, followed by or that include the words "believes," "expects," "may," "will," "should," "could," "anticipates," "estimates," "intends" or similar expressions; and
--	statements regarding the timing of the closing of branch sales.

    Forward-looking statements are not guarantees of future performance or results. They involve risks, uncertainties and assumptions. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

    -- inability to obtain waivers of defaults under our credit
    facilities or find alternative financing;

    -- transition and strategies of new management;

    -- changes in interest margins on loans;

    -- changes in allowance for loan losses;

    -- changes in the interest rate environment;

    -- competitive pressures among financial services companies may
    increase significantly;

    -- general economic conditions, either nationally or in our
    markets, may be less favorable than expected;

    -- legislative or regulatory changes may adversely affect the
    business in which our Company and its subsidiaries are
    engaged;

    -- technological changes may be more difficult or expensive than
    anticipated;

    -- hedging activities may be less effective than anticipated; and

    -- changes may occur in the securities markets.

    We have described under the caption "Factors That May Affect Future Results of Operation, Financial Condition or Business" in Exhibit 99.1 to the Company's Annual Report on Form 10-K/A for 2004 additional factors that could cause actual results to be materially different from those described in the forward-looking statements. Other factors that we have not identified under that caption could also have this effect. You are cautioned not to put undue reliance on any forward-looking statement, which speaks only as of the date it was made.

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands) (unaudited)

March 31, Dec. 31, 2005 2004 ----------- ----------- Assets

Cash and due from banks $54,830 $65,011 Federal funds sold and interest-bearing deposits 16,247 43,286 ----------- ----------- Total cash and cash equivalents 71,077 108,297 ----------- -----------

Investment securities: Available-for-sale, at fair value 487,271 498,763 Held-to-maturity (fair value of $400,387 and $411,232 as of March 31, 2005 and December 31, 2004, respectively) 403,085 411,802 Trading, at fair value 3,987 5,456 ----------- ----------- Total investment securities 894,343 916,021 ----------- -----------

Loans 2,818,614 2,716,700 Allowance for loan losses (32,300) (32,108) ----------------------- 2,786,314 2,684,592 -----------------------

Mortgage loans held-for-sale, net 6,807 5,724 Premises and equipment, net 52,807 51,613 Goodwill 30,484 30,484 Other intangible assets, net 5,148 5,336 Accrued interest and other assets 57,701 57,807 Cash surrender value of bank-owned life insurance, net of surrender charges 83,920 82,992 Assets held for sale 376,716 387,510 ----------- -----------

Total assets $4,365,317 $4,330,376 =========== ===========

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES Consolidated Balance Sheets (In thousands) (unaudited)

March 31, Dec. 31, 2005 2004 ----------- ----------- Liabilities and Stockholders' Equity

Liabilities: Deposits $2,868,028 $2,786,774 Securities sold under agreements to repurchase 142,577 112,205 Federal funds purchased and other short-term borrowings 6,715 2,463 Subordinated debt 116,599 116,599 Long-term borrowings 601,893 661,534 Accrued interest and other liabilities 42,395 30,231 Liabilities held for sale 326,816 350,186 ----------- -----------

Total liabilities 4,105,023 4,059,992 ----------- -----------

Stockholders' equity: Preferred stock, no par value; 50,000,000 shares authorized, no shares issued - -

Common stock, $1.00 par value; 50,000,000 shares authorized 45,200,080 and 45,011,227 shares issued at March 31, 2005 and December 31, 2004 45,200 45,011

Additional paid-in capital 131,682 129,381 Retained earnings 153,277 146,360 Accumulated other comprehensive loss, net (12,497) (6,007) Unearned compensation (12,084) (10,072) ----------- ----------- 305,578 304,673 Less treasury stock (5,590,689 shares and 4,824,575 shares at March 31, 2005 and December 31, 2004) (45,284) (34,289) ----------- -----------

Total stockholders' equity 260,294 270,384 ----------- ----------- Total liabilities and stockholders' equity $4,365,317 $4,330,376 =========== ===========

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES Consolidated Statements of Earnings For the Three Months ended (In thousands, except per share data) (unaudited)

March 31, March 31, 2005 2004 ----------- ---------- Interest Income: Loans, including fees $48,318 $40,595 Investment securities 7,906 9,331 Other 787 590 ----------- ---------- Total interest income 57,011 50,516 ----------- ----------

Interest Expense: Deposits 17,732 14,523 Borrowings and other 8,979 7,453 ----------- ---------- Total interest expense 26,711 21,976 ----------- ----------

Net interest income 30,300 28,540

Provision for loan losses 1,252 2,864 ----------- ----------

Net interest income after provision for loan losses 29,048 25,676 ----------- ----------

Other income: Service fees 3,211 3,905 Investment trading fees and commissions 794 910 Net gains on sale of mortgage loans 208 387 Net gains (losses) on sale of securities (180) 101 Gain on sale of branch facilities - 16,953 Bank-owned life insurance 934 1,029 Trust fees 1,282 1,139 Other 188 323 ----------- ---------- Total other income 6,437 24,747 ----------- ----------

Other expense: Salaries and employee benefits 12,908 13,952 Data processing 1,887 2,100 Net occupancy expense 1,729 1,762 Depreciation expense 1,771 1,567 Professional services 1,198 1,977 Other 4,830 7,470 ----------- ---------- Total other expense 24,323 28,828 ----------- ----------

Earnings from continuing operations before income taxes 11,162 21,595

Income tax expense 3,039 7,737 ----------- ----------

Net earnings from continuing operations 8,123 13,858 Net loss from discontinued operations, net of tax - (551) ----------- ---------- Net earnings $8,123 $13,307 =========== ==========

Net earnings from continuing operations per share - basic $0.21 $0.35 Net loss from discontinued operations per share - basic $- $(0.01) ----------- ---------- Net earnings per share - basic $0.21 $0.34 =========== ========== Net earnings from continuing operations per share - diluted $0.21 $0.35 Net loss from discontinued operations per share - diluted $- $(0.01) ----------- ---------- Net earnings per share - diluted $0.21 $0.34 =========== ==========

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES Key Ratios March 31, 2005 and Dec. 31, 2004 (In thousands, except per share data and percentages)

Mar. 31, Dec. 31, 2005 2004 ----------- ---------- Balance Sheet Ratios:

Total shares outstanding 39,609 40,188 Book value per share $ 6.56 $ 6.73 Tangible book value per share $ 5.66 $ 5.84

Leverage ratio 7.60% 7.75% Tier 1 risk-based capital ratio 8.96% 9.32% Total risk-based capital ratio 11.95% 11.08%

Non-performing loans (NPL) $ 17,784 $ 15,693 NPL/Loans 0.56% 0.51% Allowance/NPL 181.62% 204.60% Allowance/Loans 1.01% 1.03%

Non-performing assets (NPA) $ 21,479 $ 19,567 NPA/Assets 0.49% 0.45%

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES Key Ratios -- Three Months ended (In thousands, except per share data and percentages)

Mar. 31, Mar. 31, 2005 2004 ----------- ---------- Income Statement Ratios: Weighted Average shares outstanding 39,298 38,874

Net income per share - basic $ 0.21 $ 0.34 Net income per share - diluted $ 0.21 $ 0.34 Net income per share - continuing operations - basic $ 0.21 $ 0.35 Net income per share - continuing operations - diluted $ 0.21 $ 0.35 Net loss per share - discontinued operations - basic $ - $ (0.01) Net loss per share - discontinued operations - diluted $ - $ (0.01)

Return on average assets (annualized) 0.75% 1.24% Return on average equity (annualized) 12.25% 20.36%

Net interest margin (tax equivalent) 2.99% 2.89% Net interest margin 2.98% 2.84% Non-interest income/Net interest income 18.43% 87.90% Efficiency ratio 65.08% 72.24% Net loans charged off $ 1,061 $ 756 Net charge offs to loans (annualized) 0.12% 0.11% Average loans (in thousands, including loans held for sale) $3,118,275 $2,933,468 Average assets (in thousands) $4,395,031 $4,294,039

--30--PT/dx*

CONTACT: Gold Banc Corporation, Inc. Rick J. Tremblay, 913-451-8050 ricktremblay@goldbanc.com www.goldbanc.com

KEYWORD: MISSOURI KANSAS OKLAHOMA FLORIDA INDUSTRY KEYWORD: BANKING EARNINGS CONFERENCE CALLS SOURCE: Gold Banc Corporation, Inc.

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