Across the street from Gold Banc Corp.'s flagship bank in this booming Kansas City suburb, construction crews are busy building Sprint Corp.'s new world headquarters. Within a few months, 12,000 employees will pass by the bank as they go to and from work.

Michael W. Gullion, president and chief executive officer of Gold Banc, gets a twinkle in his eye when asked whether he has a plan to lure those Sprint employees into the bank.

"Maybe," he says coyly.

While Mr. Gullion would not disclose his Sprint outreach plan, Gold Banc is clearly positioned to grow as quickly as its suburban surroundings.

Hatched from a $3 million-asset rural bank, the now $550 million-asset holding company has adopted a two-pronged strategy: first acquiring market- leading rural banks, then using the deposits to fuel loans in the suburbs. Its main loan outlet is Kansas City's Johnson County, one of the fastest- growing counties in the nation.

Mr. Gullion developed the county-seat strategy based on a mistake he made as a young banker. At age 24, Mr. Gullion convinced his father-in-law, a Nebraska car dealer, and a few friends to put up the money to buy a bank in a tiny, isolated town.

"In six months, we realized we had made a huge mistake because there was no room for growth," he said. "And no one was going to be dumb enough to buy the bank back from us."

Mr. Gullion, now 43, solved the problem by investing in county-seat community banks with top market positions until he could buy one and transfer the tiny bank's charter. By 1991, Gold Banc had grown to a $140 million-asset, three-bank holding company.

The remainder of Mr. Gullion's strategy - using rural deposits to fund suburban growth - was developed from the advice of investment bankers. The bankers told Mr. Gullion he needed a suburban presence to convince potential investors of Gold Banc's long-term growth potential.

Mr. Gullion responded by buying a failed thrift in Shawnee, Kan., a Kansas City suburb, and began Gold Banc's loan-sharing program. Mr. Gullion is careful when he describes the relationship between Gold's rural and suburban banks.

"'Locally owned' is an issue," he said. "Consumers don't want to know their deposits are going to Kansas City just like people in Kansas City don't want to hear their deposits are going to North Carolina."

Mr. Gullion said Gold's subsidiaries make local loans first and if the bank's loan-to-deposit ratio is below 80%, the subsidiaries buy other banks' loans in a traditional correspondent arrangement.

Gold Banc's strategy was a hit when the company went public in November 1996. Last year, Gold Banc was the second-best-performing bank stock on the market, and the company announced four accretive acquisitions, said Anthony J. Polini, a bank analyst with Advest Inc., the company that brought Gold Banc public.

Furthering Gold Banc's appeal is its latest acquisition, Midwest Capital Management, a Kansas City broker-dealer. Now Gold can sell securities to customers in all of its banks via video conferencing.

"Customers want nonbank investment products, and it's important that we can provide our customers the products they're looking for," Mr. Gullion said.

Midwest Capital Management should also give Gold an in with future acquisition targets, as the broker-dealer has about 200 community bank customers in Kansas, Missouri, Oklahoma, Nebraska, and Iowa.

Gold Banc plans to double its assets over the next two years. Mr. Gullion said he plans to reach $1 billion of assets by continuing to make acquisitions.

"As bankers, you can begin to smell deals," he said. "You've got to be in the right place at the right time."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.