Magazine article American Banker

Funding Suburban Growth with Rural Deposits

Magazine article American Banker

Funding Suburban Growth with Rural Deposits

Article excerpt

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. …

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