Gold Banc Corp. of Leawood, Kan., on Tuesday announced another step in its geographic expansion, saying it has agreed to acquire American Bancshares of Bradenton, Fla., for $91.4 million in stock.
American, which has $482.7 million of assets, would be Gold's largest purchase. Last month the Kansas company announced a $65 million agreement with Denver-based Union Bankshares, which has $340 million of assets.
After the two deals close -- the Union purchase is expected to do so in December, the American in February or March -- Gold's assets would rise above $2 billion, from the current $1.2 billion.
"We're building a financial services company, not just buying banks," said Michael W. Gullion, Gold's chairman and chief executive officer. "Our focus is on opportunities which offer a superior return on invested capital."
Analysts applauded the deals.
"Though they're in different markets, the Union Bank deal in Colorado and this deal in Bradenton are similar in what Gold is setting out to do," said Erick Reim, an analyst with U.S. Bancorp Piper Jaffray in Minneapolis. "They're finding good community banks in high-growth markets that provide a lot of opportunity to enhance the products and profitability of the acquired banks."
Gold executives said they expect the American acquisition to add to per-share profits within a year. American, founded in 1989, has 10 branches and is the largest independent bank in Manatee County, which has been the second-fastest growing U.S. county in population since 1986, Mr. Gullion said.
Mr. Reim and Anthony Polini, an analyst with Advest Group Inc. in New York, both raised their 2000 earnings estimate for Gold from $1.02 to $1.04 a share. In 1998, Gold reported record net income of $9.1 million, or 55 cents per share.
Mr. Reim and Mr. Polini both reiterated "strong buy" ratings on Gold shares. Mr. Polini also raised his rating on American from "buy" to "strong buy."
Gold is paying 3.4 times book value for American. The share-exchange ratio values American at $18.1875 per share a 53.1% premium over the $11.875 closing price last Friday. At midday Tuesday, American was trading at $14 and Gold at $11.375, down 50 cents.
The scarcity of sizable Florida banks available for acquisition could have forced up the price, said Kenneth H. Thomas, an independent banking analyst in Miami.
"There are very few (Florida) banking franchises of this $500 million asset size or larger available," Mr. Thomas said. "That makes this deal very valuable. Gold instantly can move into this fast-growing Bradenton area and become a top player."
In terms of total assets, only Bank of America Corp. of Charlotte, N.C., and SouthTrust Corp. of Birmingham, Ala., rank higher than American in Manatee County. Gold, which operates banks in 18 communities in Missouri, Kansas, and Oklahoma, announced eight acquisitions of smaller community banks in 1998 alone. It has more than doubled its asset size from $550 million in the first quarter of last year.
That acquisitiveness, combined with its Florida foothold, could mean that Gold will soon look for more banks in the Sunshine State, Mr. Polini said. "There are a lot of fast-growing counties in Florida," he said. "Perhaps the best thing they could do" would be to concentrate expansion efforts exclusively in Florida, which Mr. Polini said is "one of the most coveted banking markets."