KC2-35692.1
KC2-40491.
                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549
                                    FORM 10-K
(Mark One)
/ X / ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

                   For the fiscal year ended December 31, 1997
                                      OR
/  /  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934

         For the transition period from  __________ to _________

                         Commission file number 0-28936

                           GOLD BANC CORPORATION, INC.
             (Exact name of registrant as specified in its charter)

                   Kansas                                    48-1008593
(State or other jurisdiction of                             (I.R.S. Employer
         incorporation or organization)                     Identification No.)

                  11301 Nall Avenue
                  Leawood, Kansas                                66211
         (Address of principal executive offices)              (Zip Code)

Registrant's telephone number, including area code:  (913) 451-8050

        SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE

          SECURITIES REGISTERED PURSUANT TO SECTION 12 (G) OF THE ACT:

                              Title of Each Class

                          Common Stock, $1.00 par value

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. YES / X / NO / /

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K./ /

The aggregate  market value of the Common Stock,  par value $1.00 per share,  of
the registrant held by nonaffiliates of the registrant  (4,341,225 shares) as
of March 17, 1998 was  $105.8 million,  based on a closing sale price of
$24 and 3/8.

Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.

Common Stock, $1.00 par value, outstanding as of March 17, 1998 5,352,196 Shares

                       DOCUMENTS INCORPORATED BY REFERENCE


<PAGE>


1
KC2-40491.1


         None.
ITEM 1.  BUSINESS

                          THE COMPANY AND SUBSIDIARIES

Gold Banc Corporation, Inc.

         Gold Banc  Corporation,  Inc. ("the  Company") is a multi-bank  holding
company that owns and operates five commercial  banks and a federal savings bank
(the  "Banks").  The  Banks  are  community  banks  providing  a full  range  of
commercial and consumer banking  services to small and medium-sized  communities
and the  surrounding  market areas.  Since  December 1978, the Company has grown
internally and through  acquisitions  from a one bank holding  company with $2.9
million in total assets to a five bank  holding  company with total assets as of
December  31,  1997  of  $514.6  million.   The  Company's  principal  executive
offices are  located at 11301 Nall  Avenue,  Leawood,  Kansas  66211,  telephone
number (913)451-8050.

The Banks

     Exchange National Bank ("Exchange Bank").  Exchange Bank has four locations
and is headquartered in Marysville,  Kansas. The two Marysville  location's loan
portfolio  as  of  December  31,  1997  consisted   primarily  of  agricultural,
commercial and industrial loans and residential  real estate loans.  Since April
1992 and October 1995,  Exchange Bank has been operating branches in Shawnee and
Leawood, Kansas, respectively. These branches are located in Johnson County, the
rapidly  developing  suburbs southwest of Kansas City,  Missouri.  Exchange Bank
opened a new  Shawnee  branch  March 2, 1998.  The two  Johnson  County,  Kansas
branches of Exchange  Bank's loan  portfolio as of December  31, 1997  consisted
primarily of commercial,  real estate  construction  and residential real estate
loans. As of December 31, 1997, Exchange Bank had assets of $226.4 million.

     Provident  Bank,  f.s.b.  ("Provident  Bank").  Provident  Bank a federally
chartered savings and loan has one location in the city of St.Joseph,  Missouri.
The Bank's loan  portfolio as of December 31, 1997  consisted  primarily of real
estate  loans.  As of  December  31,  1997,  Provident  Bank had assets of $82.9
million.

     Citizens State Bank ("Citizens"). Citizens has two locations in the town of
Seneca,  Kansas.  As of December  31, 1997 the Bank's loan  portfolio  consisted
primarily of the agricultural sector,  including farm real estate,  agricultural
production  and  agricultural  industrial  and  residential  home  loans.  As of
December 31, 1997, the Bank had assets of $57.3 million.

     Peoples National Bank ("Peoples").  Peoples has one location in the town of
Clay  Center,  Kansas.  As of  December  31,  1997,  the Bank's  loan  portfolio
consisted  primarily of real estate and  agricultural  loans. As of December 31,
1997, the Bank had assets of $71.0 million.

     Farmers  National  Bank  ("Farmers").  Farmers  has  two  locations  and is
headquartered  in Oberlin,  Kansas.  As of December 31,  1997,  the Bank's loan
portfolio  consisted  primarily of  agricultural  and real estate  loans.  As of
December 31, 1997, the Bank had assets of $53.6 million.

     First National Bank in Alma ("Alma").  Alma has one location in the town of
Alma,  Kansas.  Alma was  acquired by the Company on February  19,  1998.  As of
December 31, 1997 the Bank's loan portfolio  consisted primarily of agricultural
and real  estate  loans.  As of  December  31,  1997,  Alma had  assets of $30.1
million.

<PAGE>
                                    BUSINESS

Community Banking Strategy

     The Company  serves the needs and caters to the  economic  strengths of the
local  communities  in which the Banks are located.  Through the Banks and their
employees,  the  Company  strives  to  provide  a high  level  of  personal  and
professional  customer service.  Employee  participation in community affairs is
encouraged in order to build long-term  banking  relationships  with established
businesses and individual customers in these market areas.

         The Company believes its central and western Kansas locations, together
with the other  communities  in their  respective  counties that comprise  their
market area,  provide a stable base of relatively  low-cost deposits compared to
larger metropolitan markets with larger competitors.  The Company believes that,
through good management, community banks such as the Banks can maximize earnings
by attracting  relatively  low cost core  deposits and investing  those funds in
loans  and  other  high  yielding  investments,  while  maintaining  risk  at an
acceptable level.

         Recently the Company has applied its community  banking strategy to two
affluent  communities in the rapidly developing Johnson County suburbs southwest
of  Kansas  City.  The  Company  believes  the  recent  wave  of  regional  bank
acquisitions  of local banks in those suburban  communities,  and the subsequent
conversion of some of those  acquired banks to branch  locations,  has alienated
the  customers  of those  locations.  This has  created an  opportunity  for the
Company to attract and retain as loan customers those owner-operated  businesses
that require  flexibility and  responsiveness  in lending decisions and desire a
more personal banking  relationship.  The Company believes that it has been able
to meet these customers expectations without compromising credit standards.  The
success of this  strategy is  reflected in the  Company's  growth and ability to
attract  significant  levels of  non-interest  bearing  deposits in the suburban
communities of Leawood and Shawnee, Kansas.

Operating Strategy

     The  Company's  operating  strategy  is to provide in each  market  that it
operates  a  full  range  of  financial  products  and  services  to  small  and
medium-sized  businesses  and to  consumers.  The  Company  emphasizes  personal
relationships  with  customers,  involvement in local  community  activities and
responsive  lending  decisions.  The  Company  strives  to  maintain  responsive
community banking offices with local decision makers, allowing senior management
at each banking location, within certain limitations, to make its own credit and
pricing  decisions  and  retaining  at each Bank a local  identity  and board of
directors. The Company's goals include long-term customer relationships,  a high
quality of service and  responsiveness to specific customer needs. The principal
elements of the Company's operating strategy are:

     Emphasize  Personalized  Customer  Service and Community  Involvement.  The
Company believes that, in most of its market areas, customer loyalty and service
are the most  important  competitive  factors.  The Banks have  experienced  low
turnover  in their  management  and  lending  staffs,  enabling  them to provide
continuity of service by the same staff members,  leading to long-term  customer
relationships,  high quality service and quick response to customer  needs.  The
Banks' management and other employees  participate actively in a wide variety of
community activities and organizations in order to develop and maintain customer
relationships.  The Banks seek to recruit the best  available  banking talent to
deliver the  quality of  personal  banking  services  required to meet  customer
expectations  and to  permit  the  Company  to  meet  its  goals  for  long-term
profitable growth.

     Capitalize  on  Changing  Market  Conditions.   The  Company's   management
continually  monitors  economic  developments  in its  market  areas in order to
tailor  its  operations  to the  evolving  strengths  and  needs  of  the  local
communities.  For example, Exchange Bank has opened branch locations in the high
growth areas of Shawnee and Leawood,  Kansas to fill the void of community banks
that management believes has been created by the recent transaction  activity of
regional  banking  institutions and to deploy excess low-cost funds derived from
its rural northeastern Kansas market.

     Centralize and Streamline  Operations to Achieve  Economies.  While each of
the Banks presently  operates  autonomously,  the Company,  in order to minimize
duplication of functions,  is centralizing certain management and administrative
functions,   including   data   processing,   human   resources  and  regulatory
administration,  that  can  better  and more  efficiently  be  performed  by the
Company.  Such  centralization will help to reduce operating expenses and enable
the Bank personnel to focus on customer service and community  involvement.  The
Company believes it has acquired the personnel  necessary to make implementation
of these  operating  efficiencies  possible.  The Company also provides  overall
direction  in  areas  of  budgets,   asset/liability  and  investment  portfolio
management and credit review.

Acquisition/Growth Strategy

     Transactions.  Management  believes that the Company is well  positioned to
acquire and  profitably  operate  community  banks because of its  experience in
operating  community  banks,  its  ability  to  provide  centralized  management
assistance  to those banks and its access to capital.  Management of the Company
believes  there are owners of  community  banks who may be willing to sell their
banks  in the  future  for,  among  other  reasons,  stockholder  liquidity,  to
diversify their own investment  portfolios,  lack of family successor  operators
and the burden of  compliance  with bank  regulations.  In addition,  management
believes there are individual  community bank owners in the targeted regions who
are  interested  in selling  their  banks to an  organization  that has a strong
capital base and  management  that has  demonstrated a commitment to maintaining
local bank identity. The Company's goal is to acquire banks with strong existing
management such that the Company's strategies can be implemented while retaining
the individual  identity of the banks through the  continuation  of the existing
management, boards of directors and bank charters.


     The Company is generally  targeting  profitable  community  banks in county
seat towns of 2,000  persons or more.  Market  factors to be  considered  by the
Company  include the size and  long-term  viability of the  community and market
area served by the target bank,  the position of the  transaction  target in the
market and the  proximity  of other banks owned by the Company.  Generally,  the
bank target must be among the top three financial  institutions in its market in
terms of deposit  share.  Financial  criteria  include  historical  performance,
comparison to peers in terms of key operating  performance  and capital  ratios,
loan  asset  quality,  operating  procedures  and  deposit  structure.  Also  of
significant financial importance is the investment required for, and opportunity
costs  of,  the  transaction.  Non-financial  considerations  in  evaluating  an
transaction  prospect  include the quality of the  target's  management  and the
demand on the Company resources to integrate the target institution.

         Because  of the large  number of  county  seat  towns and banks and its
familiarity  with the  market  place,  the  Company's  transaction  focus is the
Midwest and  primarily  in the States of Kansas and  Missouri,  but it will also
consider  institutions  in other  contiguous  states.  Kansas  is  perceived  by
management to be the Company's  best market for bank  transactions  because only
recently  have  state  banking  laws  permitted  the  large   regional   banking
institutions  based in Missouri to conduct branching  activities in the State of
Kansas.

     Internal Growth. The recent wave of regional bank transactions of community
banks in the Midwest has created what management of the Company  perceives to be
a void in the community  banking market.  It is management's  belief that it has
been the  practice of regional  banking  institutions  to convert the banks they
acquire into  branches of the acquiring  institution.  Management of the Company
believes  this  practice  detracts  from the  delivery  of quality  personalized
services to the existing  customer base of those  branches.  The Company entered
the Kansas City suburban  community market by acquiring the deposits of a failed
thrift in Shawnee, Kansas in 1992. Exchange Bank opened in 1998 another
branch location in a rapidly  developing part of Shawnee,  Kansas that presently
has few other  lending  institutions  in the  immediate  area.  In October 1995,
Exchange  Bank further  expanded its  presence in the  suburban  Johnson  County
communities  of Kansas City by opening a branch  location  in  Leawood,  Kansas,
another rapidly growing residential and small business community.  Management of
the Company believes its branching  activities are  distinguished  from those of
regional  banking  institutions by the high degree of autonomy given each branch
location.  The Company's expansion activity also has allowed it to diversify its
loan  portfolio,  which  was  previously  dominated  by  loans  related  to  the
agricultural industry. Further, the loan demand in these suburban Johnson County
communities, due to heavy residential and small business development, is greater
than that experienced in the Company's rural market areas.

         The Company expects it will continue to expand in the suburban  Johnson
County  communities  west of Kansas City  through  growth in the assets and loan
portfolios  of existing  branches  and to a limited  extent  through  additional
branching activities.

Lending Activities

     General.  The  Company  strives to provide in each  market area it serves a
full  range  of  financial  products  and  services  to small  and  medium-sized
businesses and to consumers.  The Company targets owner-operated  businesses and
emphasizes   the  use  of  Small  Business   Administration   and  Farmers  Home
Administration  lending.  The Banks participate in credits originated within the
organization  but  generally  do not  participate  in loans from  non-affiliated
lenders.  Each Bank has an  established  loan  committee  which has authority to
approve   credits,   within   established   guidelines,   of  up  to   $200,000.
Concentrations  in excess of  $200,000  must be approved  by an  executive  loan
committee comprised of the Chief Executive Officer and the Vice President of the
Company and the local Bank's president and senior lending officer.  When lending
to an entity,  the Company  generally  obtains a guaranty from the principals of
the  entity.  The  loan mix  within  the  individual  Banks  is  subject  to the
discretion  of the  Bank  board  of  directors  and  the  demands  of the  local
marketplace.  Residential  loans  are  priced  consistently  with the  secondary
market,  and commercial and consumer loans  generally are issued at or above the
prime rate.  The Company  has no  potential  negative  amortization  loans.  The
following is a brief description of each major category of the Company's lending
activity.

     Real Estate Lending.  Commercial,  residential and agricultural real estate
loans  represent the largest  class of loans of the Company.  As of December 31,
1997, real estate and real estate  construction loans totaled $147.8 million and
$47.9 million,  respectively or 42.7% and 13.8% of all loans, respectively.  One
to four  family  residential  loans at December  31, 1997 made up  approximately
37.0% of real estate  loans,  followed by  commercial  25.6%,  and  agricultural
10.6%.  Generally,  residential  loans are written on a variable rate basis with
terms of five  years or less and  amortized  over  either  15 or 30  years.  The
Company  retains in its  portfolio  some  adjustable  rate  mortgages  having an
adjustment period of five years or less. Agricultural and commercial real estate
loans are amortized over 15 or 20 years.  The Company also  generates  long-term
fixed rate residential real estate loans which it sells in the secondary market.
The  Company  takes a security  interest  in the real  estate.  Commercial  real
estate,  construction and agricultural real estate loans are generally  limited,
by policy, to 80% of the appraised value of the property. Commercial real estate
and   agricultural   real  estate  loans  also  are  supported  by  an  analysis
demonstrating the borrower's ability to repay. Residential loans that exceed 80%
of the appraised value of the real estate generally are required,  by policy, to
be supported  by private  mortgage  insurance,  although on occasion the Company
will  retain  non-conforming  residential  loans to known  customers  at premium
pricing.

     Commercial  Lending.  Loans in this category  principally  include loans to
service,  retail,  wholesale  and  light  manufacturing  businesses,   including
agricultural  service  businesses.  Commercial  loans  are  made  based on the
financial  strength  and  repayment  ability  of the  borrower,  as  well as the
collateral  securing  the loans.  As of  December  31,  1997,  commercial  loans
represented  the second  largest  class of loans at $88.7  million,  or 25.6% of
total loans. The Company targets owner-operated  businesses as its customers and
makes lending  decisions based upon a cash flow analysis of the borrower as well
as the accounts  receivable,  inventory and equipment of the borrower.  Accounts
receivable  loans and loans for inventory  purchases are generally of a one-year
renewable  term and those for equipment  generally have a term of seven years or
less. The Company  generally takes a blanket security  interest in all assets of
the  borrower.  Equipment  loans  are  generally  limited  to 75% of the cost or
appraised  value of the  equipment.  Inventory  loans are  limited to 50% of the
value of the inventory,  and accounts  receivable  loans are limited to 75% of a
pre-determined  eligible base. Each of the Banks is approved to make loans under
the Small Business Administration program.

     Agricultural  Lending. The Company provides short-term credit for operating
loans and  intermediate-term  loans for farm  product,  livestock  and machinery
purchases and other  agricultural  improvements.  Agricultural  loans were $36.9
million as of December 31, 1997,  or 10.6% of total  loans.  Farm product  loans
have  generally  a  one-year  term and  machinery  and  equipment  and  breeding
livestock loans generally have five to seven-year terms.  Extension of credit is
based upon the ability to repay, as well as the existence of federal  guarantees
and crop insurance coverage.  Farmers Home Administration guarantees are pursued
wherever  possible.  Exchange Bank and Citizens hold "Preferred Lender
Status" from the Farmers Home Administration, a guarantee program similar to the
Small Business  Administration,  that minimizes the credit exposure of the Banks
through partial transfer of the credit risk to the federal government. Preferred
Lender Status  expedites the  processing of loan  applications.  These loans are
generally  secured by a blanket lien on livestock,  equipment,  feed, hay, grain
and growing crops.  Equipment and breeding livestock loans are limited to 75% of
appraised value.

     Consumer and Other  Lending.  Loans  classified as consumer and other loans
include  automobile,  credit card, boat, home improvement and home equity loans,
the latter  two  secured  principally  through  second  mortgages.  The  Company
generally  takes a  purchase  money  security  interest  in goods  for  which it
provides the original  financing.  The terms of the loans range from one to five
years,  depending upon the use of the proceeds, and range from 75% to 90% of the
value of the collateral.  The majority of these loans are installment loans with
fixed interest rates. As of December 31, 1997, consumer and other loans amounted
to $24.0 million,  or 6.9% of total loans. The Company implemented a credit card
program in late 1994 and targeted the Banks' existing customer base as potential
consumers. As of December 31, 1997, the Company had issued 2,161 cards having an
aggregate  outstanding  balance of $1.8 million in credit card receivables.  The
Company has not marketed credit cards to persons other than existing customers.

Loan Origination and Processing

     Loan  originations  are derived from a number of sources.  Residential loan
originations  result from real estate broker  referrals,  mortgage loan brokers,
direct  solicitation by the Banks' loan officers,  present savers and borrowers,
builders,  attorneys,  walk-in customers and, in some instances,  other lenders.
Residential loan  applications,  whether originated through the Banks or through
mortgage brokers, are underwritten and closed based on the same standards, which
generally meet FNMA underwriting guidelines. Consumer and commercial real estate
loan  originations  emanate from many of the same  sources.  The average loan is
less than  $500,000.  From time to time,  loans  may be  participated  among the
Banks.

     The  loan  underwriting   procedures  followed  by  the  Banks  conform  to
regulatory specifications and are designed to assess both the borrower's ability
to make principal and interest  payments and the value of any assets or property
serving as collateral for the loan.  Generally,  as part of the process,  a loan
officer  meets with each  applicant  to obtain the  appropriate  employment  and
financial  information as well as any other required loan information.  The Bank
then obtains  reports with respect to the borrower's  credit record,  and orders
and reviews an appraisal of any  collateral  for the loan (prepared for the Bank
through an independent appraiser). The loan information supplied by the borrower
is independently verified.

     Loan  applicants  are  notified  promptly  of the  decision  of the Bank by
telephone and a letter. If the loan is approved, the commitment letter specifies
the terms and  conditions of the proposed loan including the amount of the loan,
interest  rate,  amortization  term, a  brief description of  the required
collateral,  and required  insurance  coverage.  Prior to closing any  long-term
loan,  the  borrower  must provide  proof of fire and casualty  insurance on the
property serving as collateral, and such insurance must be maintained during the
full term of the loan.  Title insurance is required on loans  collateralized  by
real property.  Interest rates on committed  loans are normally locked in at the
time of application or for a 30 to 45-day period.

Mortgage Banking Division Operations

     The mortgage  banking division of Provident Bank is engaged in the business
of originating and selling  principally  first-lien  mortgages secured by single
family  residences.  Loans originated  through Provident Bank's mortgage banking
division were 50.9 million,  $83.1 million and $83.3 million in 1997, 1996
and 1995,  respectively,  however,  as a result of a change in Company strategy,
mortgage   loans   generated  by   Provident   Bank  are  expected  to  decrease
significantly  from these  historical  levels.  The mortgage banking division's
principal sources of revenue consist of loan origination fees and gain or loss
on the sale of mortgage loans.  Mortgage loans are originated primarily in
St. Joseph, Missouri,  Johnson County, Kansas and throughout the metropolitan
Kansas City area. Loans usually are purchased by Provident Bank for investment
pending resale into the secondary market.  Loans usually are sold to investment
banking firms and other investors as whole loans,  without  retaining
servicing rights. The Company only originates mortgage loans against loan
purchase commitments from third parties.

     Mortgage loans are originated  primarily  through loan originators and from
referrals from real estate brokers,  builders,  developers and prior  customers.
The origination of a loan from the date of initial application to a loan closing
normally takes three to eight weeks. It involves  processing the borrower's loan
application,   evaluating  the  borrower's   credit  and  other   qualifications
consistent  with  underwriting  criteria  established  by private  institutional
investors and insuring or guaranteeing  agencies,  obtaining investor approvals,
property  appraisals,  and title  insurance,  arranging for hazard insurance and
handling  various other  matters  customarily  associated  with the closing of a
residential  loan.  For  this  service,   the  division  typically  collects  an
origination fee of one percent of the principal  amount of the loan.  Costs that
are  incurred in  originating  mortgage  loans  include:  overhead,  origination
commissions paid to the originators,  certain  out-of-pocket  costs and, in some
cases, commitment fees where the loans are made subject to a purchase commitment
from wholesale lenders, private investors or other intermediaries.  In the third
quarter of 1996, Provident Bank substantially reduced the resources committed to
its mortgage banking operations.

Brokerage Services

     The Company provides brokerage services through Midwest Capital Management,
Inc.("Midwest Capital"), a wholly-owned nonbank subsidiary,  which operates as a
broker-dealer   in  securities.   Customers   consist   primarily  of  financial
institutions  located throughout the United States,  with  concentrations in the
midwestern section of the United States.  Midwest Capital manages a wide variety
of stock, bond and money market portfolios for clients which currently include a
significant  number of commercial banks located  primarily in Kansas,  Missouri,
Oklahoma,  Nebraska  and  Iowa,  as well as  trusts,  pension  plans,  insurance
companies, commercial businesses,  government entities, foundations and high net
worth individuals.  Midwest Capital is registered with the National  Association
of Securities Dealers as a broker/dealer and investment advisor.

Other Services

     The Company provides trust and insurance  agency  services.  Although these
businesses are not of financial significance to the Company, management believes
these  services  are  important to certain of the Banks'  customers,  provide an
opportunity to strengthen and develop relationships with customers,  and further
the  Company's  objective of becoming a complete  financial  services  provider.

Investment Portfolio

     The Banks' investment  portfolio is used to meet the Banks' liquidity needs
while  endeavoring  to  maximize  investment  income.  Additionally,  management
augments  the  quality  of the loan  portfolio  by  maintaining  a high  quality
investment  portfolio oriented toward U.S. government and U.S. government agency
securities.  The  portfolio  is  comprised  of U.S.  Treasury  securities,  U.S.
government   agency   instruments  and  a  modest  amount  of  investment  grade
obligations of state and political  subdivisions.  In managing its interest rate
exposure,   the  Company  also  invests  in   mortgage-backed   securities   and
collateralized  mortgage  obligations.  Federal funds sold and  certificates  of
deposit  are  additional  investments  that  are not  classified  as  investment
securities. Investment securities were $104.4 million, or 20.3% of total assets,
at December 31, 1997. As of December 31, 1997, the investment portfolio included
approximately  $1.1 of equity  securities  of other  publicly  held bank holding
companies.

Deposits and Borrowings

     Deposits  are the major  source of the Banks'  funds for  lending and other
investment  purposes.  In  addition to  deposits,  including  local  public fund
deposits and demand  deposits of  commercial  customers,  the Banks derive funds
from loan principal repayments,  maturing investments,  Federal Funds borrowings
from commercial  banks,  borrowings from the Federal Reserve Bank of Kansas City
and the Federal Home Loan Bank  ("FHLB") and from  repurchase  agreements.  Loan
repayments  and maturing  investments  are a relatively  stable source of funds,
while deposit inflows are significantly influenced by general interest rates and
money  market  conditions.  Borrowings  may be used  on a  short-term  basis  to
compensate for reductions in the availability of funds from other sources.  They
also may be used on a long-term basis for funding specific loan transactions and
for general business purposes.

     The Banks offer a variety of accounts  for  depositors  designed to attract
both short-term and long-term deposits.  These accounts include  certificates of
deposit  savings  accounts,  money  market  accounts,  checking  and  individual
retirement   accounts.   Deposit  accounts  generally  earn  interest  at  rates
established by management  based on competitive  market factors and management's
desire to increase or decrease  certain  types or  maturities  of deposits.  The
Company  has not sought  brokered  deposits  and does not intend to do so in the
future.

Competition

     The deregulation of the banking industry, the widespread enactment of state
laws permitting multi-bank holding companies, and the availability of nationwide
interstate  banking has created a highly  competitive  environment for financial
services  providers,  particularly for  institutions in suburban areas,  such as
Exchange Bank's Shawnee and Leawood branches.  These branches compete with other
commercial  banks,  savings  and  loan  associations,   credit  unions,  finance
companies,  mutual funds, insurance companies,  brokerage and investment banking
companies and other financial  intermediaries.  Some of these  competitors  have
substantially  greater  resources  and  lending  limits  and may  offer  certain
services that these branches do not currently provide. In addition,  some of the
non-bank  competitors are not subject to the same extensive federal  regulations
that govern these branches.

     Management   believes  the  Banks  have  generally  been  able  to  compete
successfully in their respective  communities  because of the Company's emphasis
on local control and the autonomy of Bank management, allowing the Banks to meet
what is perceived to be the preference of community  residents and businesses to
deal with "local" banks.  While  management  believes the Banks will continue to
compete  successfully  in  their  communities,  there  is  no  assurance  future
competition will not adversely affect the Banks' earnings.

Employees

     The Company maintains a corporate staff of 7 persons. At December 31, 1997,
the Banks had 186 full-time equivalent  employees.  None of the employees of the
Company  or the Banks are  covered by a  collective  bargaining  agreement.  The
Company and the Banks believe their employee relations are good.

                           SUPERVISION AND REGULATION

Introduction

     Bank  holding  companies  and banks are  extensively  regulated  under both
federal and state law. The following  information  describes  certain aspects of
that regulation applicable to the Company and the Banks, and does not purport to
be  complete.  The  discussion  is qualified in its entirety by reference to all
particular statutory or regulatory provisions.

     The  Company  is a legal  entity  separate  and  distinct  from the  Banks.
Accordingly,  the right of the Company,  and consequently the right of creditors
and  shareholders  of the Company,  to  participate in any  distribution  of the
assets or earnings of the Banks is  necessarily  subject to the prior  claims of
creditors  of the Banks,  except to the extent that claims of the Company in its
capacity as creditor may be  recognized.  The principle  source of the Company's
revenue and cash flow is dividends  from the Banks.  There are,  however,  legal
limitations  on the extent to which a  subsidiary  bank can finance or otherwise
supply funds to its parent holding company.

The Company

     The Company is a bank  holding  company  within the meaning of Bank Holding
Company Act of 1956, as amended (the "BHCA").

     The BHCA. Under the BHCA, the Company is subject to periodic examination by
the Board of  Governors  of the Federal  Reserve  System and is required to file
periodic  reports  of its  operations  and such  additional  information  as the
Federal Reserve may require. The Company's and the Banks' activities are limited
to banking,  managing or controlling banks, furnishing services to or performing
services  for its  subsidiaries,  or engaging in any other  activity the Federal
Reserve  determines  to  be  so  closely  related  to  banking  or  managing  or
controlling banks as to be a proper incident thereto. Some of the activities the
Federal  Reserve has  determined  by  regulation  to be proper  incidents to the
business of banking  include  making or  servicing  loans and  certain  types of
leases,  engaging  in  certain  insurance  and  discount  brokerage  activities,
performing certain data processing services,  acting in certain circumstances as
a fiduciary or investment or financial advisor, owning savings associations, and
making  investments in certain  corporations or projects  designed  primarily to
promote community welfare.

     With  certain  limited  exceptions,  the BHCA  requires  every bank holding
company to obtain the prior approval of the Federal Reserve before (i) acquiring
substantially  all of the assets of any bank, (ii) acquiring  direct or indirect
ownership or control of any voting shares of any bank if after such  transaction
it would own or control  more than 5% of the voting  shares of such bank (unless
it already owns or controls the majority of such  shares),  or (iii)  merging or
consolidating with another bank holding company.

     In addition,  and subject to certain  exceptions,  the BHCA and the federal
Change in Bank Control Act,  together with the regulations  thereunder,  require
Federal  Reserve  approval  (or,  depending on the  circumstances,  no notice of
disapproval)  prior to any  person  or  company  acquiring  "control"  of a bank
holding company, such as the Company.  Control is conclusively presumed to exist
if any  individual  or  company  acquires  25% or more of any  class  of  voting
securities  of the bank  holding  company.  With  respect to  corporations  with
securities  registered  under the Securities  Exchange Act of 1934,  such as the
Company,  control will be rebuttably  presumed to exist if a person  acquires at
least 10% of any class of voting securities of the corporation.

     In accordance with Federal  Reserve policy,  the Company is expected to act
as a source of financial strength for and commit resources to support the Banks.
Under the BHCA,  the  Federal  Reserve  may  require a bank  holding  company to
terminate any activity or  relinquish  control of a non-bank  subsidiary  (other
than  a  non-bank  subsidiary  of a  bank)  upon  the  Federal  Reserve  Board's
determination  that such  activity or control  constitutes a serious risk to the
financial soundness or stability of any subsidiary depository institution of the
bank  holding  company.   Further,  federal  bank  regulatory  authorities  have
additional  discretion to require a bank holding company to divest itself of any
bank or non-bank  subsidiary if the agency  determines that  divestiture may aid
the depository institution's financial condition.

The Banks

     Exchange Bank, Peoples,  Farmers and Alma. Exchange Bank, Peoples,  Farmers
and Alma operate as national  banking  associations  organized under the laws of
the  United  States  and  are  subject  to  examination  by  the  Office  of the
Comptroller  of the Currency  (the  "OCC").  Deposits are insured by the Federal
Deposit  Insurance  Corporation  (the "FDIC") up to a maximum amount  (generally
$100,000 per  depositor,  subject to  aggregation  rules).  The OCC and the FDIC
regulate or monitor all areas of their  operations,  including  security devices
and  procedures,   adequacy  of   capitalization   and  loss  reserves,   loans,
investments,  borrowings, deposits, mergers, issuances of securities, payment of
dividends,  interest rate risk management,  establishment of branches, corporate
reorganizations,  maintenance  of  books  and  records,  and  adequacy  of staff
training  to carry on safe  lending  and deposit  gathering  practices.  The OCC
requires these Banks to maintain certain capital ratios and imposes  limitations
on its aggregate  investment in real estate,  bank  premises,  and furniture and
fixtures.  These Banks are  currently  required by the OCC to prepare  quarterly
reports on its  financial  condition  and to  conduct  an annual  audit of their
financial affairs in compliance with minimum standards and procedures prescribed
by the OCC.

     Citizens.  Citizens  operates  under a Kansas  state  bank  charter  and is
subject to regulation by the Kansas Banking  Department and the FDIC. The Kansas
Banking  Department  and  FDIC  regulate  or  monitor  all  areas  of  Citizen's
operations,  including capital requirements,  issuance of stock,  declaration of
dividends, interest rates, deposits, record keeping,  establishment of branches,
transactions,  mergers,  loans,  investments,  borrowing,  security  devices and
procedures  and  employee   responsibility  and  conduct.   The  Kansas  Banking
Department places  limitations on activities of Citizens  including the issuance
of capital  notes or  debentures  and the  holding of real  estate and  personal
property and requires  Citizens to maintain a certain ratio of reserves  against
deposits.  The Kansas  Banking  Department  requires  Citizens  to file a report
annually  showing  receipts and  disbursements  of the bank,  in addition to any
periodic report requested. Citizens is examined by the Kansas Banking Department
at least once every 18 months and at any other time deemed  necessary.  The FDIC
insures  deposits  held in Citizens up to a maximum  amount,  which is generally
$100,000 per depositor.

     Provident  Bank.  Provident  Bank  operates as a federal  savings  bank and
provides full savings bank services. As a savings institution, Provident Bank is
subject to  regulation  by the OTS.  The OTS  regulates or monitors all areas of
Provident Bank's operations, including capital requirements, loans, investments,
establishment   of   branch   offices,   mergers,   conversions,   dissolutions,
transactions,  borrowing,  management,  record  keeping,  security  devices  and
procedures and offerings of securities.  The OTS requires Provident Bank to file
annual current reports in compliance  with OTS  procedures,  as well as periodic
reports  upon the  request  of the  director  of OTS.  Provident  Bank must also
prepare a statement  of  condition  report  showing  the  savings  association's
assets,  liabilities  and  capital at the end of each fiscal  year.  The OTS may
require an independent audit of financial statements by a qualified  independent
public  accountant  when  needed for safety and  soundness  purposes.  With some
exceptions,  an appraisal by a state certified or licensed appraiser is required
for all real estate related financial transactions.

     All savings  associations,  including  Provident Bank, are required to meet
the QTL test to  avoid  certain  restrictions  on their  operations.  This  test
requires a savings  association to have at least 65% of its portfolio assets (as
defined by regulation) in qualified thrift  investments on a monthly average for
nine out of every 12 months on a rolling basis. Such assets primarily consist of
residential housing related loans and investments.  Any savings association that
fails to meet the QTL test must convert to a national  bank  charter,  unless it
requalifies  as a QTL and thereafter  remains a QTL. If such an association  has
not yet  requalified or converted to a national bank,  its new  investments  and
activities are limited to those permissible for both a savings association and a
national bank,  and it is limited to national bank branching  rights in its home
state. In addition, the association is immediately ineligible to receive any new
FHLB borrowings and is subject to national bank limits for payment of dividends.
If such  association  has not requalified or converted to a national bank within
three years after the failure,  it must divest of all  investments and cease all
activities  not  permissible  for a national  bank.  In addition,  it must repay
promptly  any  outstanding  FHLB  borrowings,  which  may  result  in  repayment
penalties. If any association that fails the QTL test is controlled by a holding
company,  then  within one year after the  failure,  the  holding  company  must
register as a bank holding  company and become  subject to all  restrictions  on
bank  holding  companies.  Provident  Bank is a  member  of the  SAIF,  which is
administered  by the  FDIC.  As  insurer,  the FDIC  imposes  deposit  insurance
premiums and is authorized to conduct  examinations of and to require  reporting
by FDIC-insured institutions.  It also may prohibit any FDIC-insured institution
from engaging in any activity the FDIC determines by regulation or order to pose
a  serious  risk to the  FDIC.  The FDIC  also  has the  authority  to  initiate
enforcement  actions  against  savings  associations,  after  giving  the OTS an
opportunity to take such action,  and may terminate the deposit  insurance if it
determines that the institution has engaged in unsafe or unsound  practices,  or
is in an unsafe or unsound condition.

Payment of Dividends

     Exchange  Bank,  Peoples,  Farmers  and Alma are  subject  to the  dividend
restrictions  set  forth  by the OCC.  Under  such  restrictions,  they may not,
without prior approval of the OCC, declare dividends in excess of the sum of the
current  year's  earnings (as defined)  plus the retained  earnings (as defined)
from the prior two years.  Provident Bank, as a Tier 1 savings  institution,  is
limited in its payment of dividends during a calendar year to the higher of 100%
of the current year earnings during the calendar year plus the amount that would
reduce by one-half its surplus  capital  ratio at the  beginning of the calendar
year, or 75% of its current earnings over the most recent  four-quarter  period.
Provident  Bank is required to obtain OTS approval for  dividends  exceeding the
preceding  amount.  There are no specific state bank regulatory  restrictions on
the ability of Citizens to pay dividends. In addition, under the Federal Deposit
Insurance  Corporation  Improvement  Act  of  1991  ("FDICIA"),  a  FDIC-insured
depository  institution  may not pay any  dividend if payment  would cause it to
become undercapitalized or in the event it is undercapitalized.

         If, in the opinion of the applicable federal bank regulatory authority,
a depository  institution or holding company is engaged in or is about to engage
in an unsafe or unsound practice (which, depending on the financial condition of
the  depository  institution  or holding  company,  could include the payment of
dividends),  such authority may require, after notice and hearing (except in the
case of an emergency proceeding where there is no notice or hearing),  that such
institution or holding company cease and desist from such practice.  The federal
banking  agencies have indicated that paying dividends that deplete a depository
institution's or holding  company's capital base to an inadequate level would be
such an unsafe and unsound banking practice.  Moreover,  the Federal Reserve and
the FDIC have issued policy statements providing that bank holding companies and
insured  depository  institutions  generally  should only pay  dividends  out of
current operating earnings.

Transactions With Affiliates and Insiders

         The Banks are subject to Section 23A of the Federal  Reserve Act, which
places limits on the amount of loans or extensions of credit to, or  investments
in, or certain other transactions with,  affiliates,  including the Company.  In
addition,  limits  are  placed  on the  amount  of  advances  to  third  parties
collateralized  by the securities or  obligations  of affiliates.  Most of these
loans and certain other transactions must be secured in prescribed amounts.  The
Banks are also subject to Section 23B of the Federal Reserve Act,  which,  among
other  things,  prohibits an  institution  from  engaging in  transactions  with
certain affiliates unless the transactions are on terms  substantially the same,
or at least as  favorable  to such  institution  or its  subsidiaries,  as those
prevailing  at  the  time  for  comparable   transactions  with   non-affiliated
companies.  The Banks are subject to  restrictions  on  extensions  of credit to
executive officers, directors, certain principal stockholders, and their related
interests.  Such extensions of credit (i) must be made on substantially the same
terms, including interest rates and collateral,  as those prevailing at the time
for  comparable  transactions  with third parties and (ii) must not involve more
than the normal risk of repayment or present other unfavorable features.

Branching

     National  bank  branches are required by the National Bank Act to adhere to
branch  banking laws  applicable  to state banks in the states in which they are
located. Under federal legislation, a bank may merge or consolidate across state
lines,  unless,  prior to May 31, 1997, either of the states involved elected to
prohibit such mergers or  consolidations.  States may also authorize  banks from
other  states  to  engage  in  branching  across  state  lines  de  novo  and by
acquisition of branches without acquiring a whole banking institution.  Missouri
has enacted legislation  authorizing interstate branching within thirty miles of
its state  borders  and  placing  a minimum  age  requirement  of five  years on
acquired  institutions.   The  Kansas  legislature  has  not  placed  limits  on
interstate  merging activities of banks. State law in Missouri permits branching
anywhere in the state. Statewide branching is also allowed in Kansas.

Community Reinvestment Act

     The  Community   Reinvestment   Act  requires  that,  in  connection   with
examinations of financial  institutions within their  jurisdiction,  the Federal
Reserve,  the FDIC,  the OCC and the OTS evaluate  the record of such  financial
institutions in meeting the credit needs of their local  communities,  including
low and  moderate  income  neighborhoods,  consistent  with the  safe and  sound
operation of those institutions. These factors are also considered in evaluating
mergers,  transactions  and  applications  to open a branch or  facility.

Other Regulations

     Interest and certain other charges collected or contracted for by the Banks
are subject to state usury laws and certain  federal  laws  concerning  interest
rates.  The Banks' loan  operations  are also  subject to certain  federal  laws
applicable  to credit  transactions,  such as the federal  Truth-In-Lending  Act
governing  disclosures of credit terms to consumer borrowers,  the Home Mortgage
Disclosure Act of 1975 requiring  financial  institutions to provide information
to enable the  public and public  officials  to  determine  whether a  financial
institution  is fulfilling  its obligation to help meet the housing needs of the
community it serves, the Equal Credit Opportunity Act prohibiting discrimination
on the basis of race, creed or other prohibited factors in extending credit, the
Fair Credit Reporting Act of 1978 governing the use and provision of information
to credit reporting agencies,  the Fair Debt Collection Act governing the manner
in which consumer debts may be collected by collection  agencies,  and the rules
and regulations of the various federal agencies charged with the  responsibility
of implementing such federal laws. The deposit  operations of the Banks also are
subject to the Right to Financial  Privacy Act, which imposes a duty to maintain
confidentiality  of consumer  financial  records and  prescribes  procedures for
complying with administrative subpoenas of financial records, and the Electronic
Funds Transfer Act and  Regulation E issued by the Federal  Reserve to implement
that act,  which  govern  automatic  deposits to and  withdrawals  from  deposit
accounts and customers' rights and liabilities arising from the use of automated
teller  machines  and other  electronic  banking  services.

Regulatory Capital Requirements

     Federal regulations establish minimum requirements for the capital adequacy
of  depository  institutions.   The  regulators  may  establish  higher  minimum
requirements if, for example,  a bank has previously  received special attention
or has a high  susceptibility  to  interest  rate risk.  The Banks with  capital
ratios below the required minimum are subject to certain administrative actions,
including prompt  corrective  action,  the termination of deposit insurance upon
notice and hearing, or a temporary suspension of insurance without a hearing.

     The federal risk-based capital guidelines for banks require a ratio of Tier
1, or core  capital,  to total  risk-weighted  assets of 4% and a ratio of total
capital to total  risk-weighted  assets of 8%. The leveraged capital  guidelines
require that banks  maintain Tier 1 capital of no less than 5% of total adjusted
assets,  except in the case of certain  highly rated banks for which the minimum
leverage ratio is 3% of total adjusted assets. OTS capital  regulations  require
savings institutions to meet three capital standards: (1) tangible capital equal
to 1.5% of total  adjusted  assets,  (2) a leverage ratio (core capital to total
adjusted assets) of at least 3% and (3) a risk-based  capital  requirement equal
to at least 8% of total risk-weighted assets.

     Federal  regulations  applicable  to  financial  institutions  define  five
capital levels:  well  capitalized,  adequately  capitalized,  undercapitalized,
severely  undercapitalized  and critically  undercapitalized.  An institution is
critically  undercapitalized  if it has a tangible  equity to total assets ratio
that is equal to or less than 2%. An institution is well capitalized (adequately
capitalized)  if it has a total  risk-based  capital  ratio  (total  capital  to
risk-weighted  assets) of 10% or greater  (8.00% to be adequately  capitalized),
has a Tier 1 risk-based  capital ratio (Tier 1 capital to risk-weighted  assets)
of 6% or greater  (4.00% to be adequately  capitalized),  has a leveraged  ratio
(Tier 1  capital  to  total  adjusted  assets)  of 5% or  greater  (4.00%  to be
adequately  capitalized),  and is not  subject to an order,  written  agreement,
capital directive,  or prompt corrective action directive to meet and maintain a
specific capital level for any capital measure.  Under the regulations,  each of
the Banks is well capitalized at December 31, 1997.

     The FDICIA requires federal banking  regulators to take "prompt  corrective
action" with respect to capital-deficient institutions. In addition to requiring
the submission of a capital restoration plan, FDICIA contains broad restrictions
on certain activities of undercapitalized  institutions  involving asset growth,
transactions,  branch  establishment,  and expansion into new lines of business.
With certain  exceptions,  an insured depository  institution is prohibited from
making capital distributions, including dividends, and is prohibited from paying
management fees to control persons if the institution would be  undercapitalized
after any such distribution or payment.

     As an institution's capital decreases, the powers of the federal regulators
become  greater.  A  significantly  undercapitalized  institution  is subject to
mandated  capital  raising  activities,  restrictions on interest rates paid and
transactions with affiliates, removal of management, and other restrictions. The
regulators   have  very  limited   discretion   in  dealing  with  a  critically
undercapitalized institution and are virtually required to appoint a receiver or
conservator if the capital deficiency is not corrected promptly.

ITEM 2.  PROPERTIES

     The Company or the Banks own each of their banking facilities.  The Company
believes each of the  facilities  is in good  condition,  adequately  covered by
insurance and sufficient to meet the needs at that location for the  foreseeable
future. The Company's headquarters and Exchange Bank's Leawood,  Kansas location
are  contained in a new 25,000 square foot  building,  60% of which is leased to
third parties.

ITEM 3.  LEGAL PROCEEDINGS

     Exchange  Bank,  along with  approximately  24 other  persons and  entities
including a number of depository  institutions,  is a named  defendant in a case
filed in the  United  States  District  Court  for the  District  of  Kansas  on
September  11,  1997 on behalf of a  putative  class of over 2,400  persons  who
allegedly invested at least $14,900 each in entities known as Parade of Toys and
Bandero  Cigar  Company.  The  complaint  alleges  violations  of the  Racketeer
Influenced  Corrupt   Organizations   ("RICO")  statute  (18  U.S.C.   1962(c)),
conspiracy to violate RICO, negligent misrepresentation, fraud, civil conspiracy
and negligence on the part of the  defendants.  The plaintiffs  contend that the
defendants,  including  Exchange  Bank,  were listed in trade  reference  sheets
provided to  plaintiffs by Parade of Toys and Bandero Cigar Company and that the
defendants  made false and  misleading  representations  on which they relied to
their detriment.  In each count, the plaintiffs have sought actual damages in an
amount in excess of $75,000  each,  treble  damages  under  RICO,  and  punitive
damages.  Exchange  Bank denies  liability  and is in the process of  vigorously
defending this claim.

     The Company is from time to time involved in routine litigation  incidental
to the conduct of its business.  The Company believes that no pending litigation
to which it is a party will have a  material  adverse  effect on its  liquidity,
financial condition or results of operations.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None.

ITEM 5.           MARKET FOR REGISTRANT'S COMMON EQUITY, AND RELATED
                  STOCKHOLDER MATTERS.

         The Company's  common stock, par value $1.00 per share, has been traded
on the Nasdaq  National  Market tier of The Nasdaq Stock Market under the symbol
"GLDB" since November 19, 1996.  Prior to that date, there was no trading market
for the Company's common stock.

         Information relating to market prices of common stock and cash
dividends declared on common stock is set forth in the table below.

                                 Market Price
--------------------------------------------------------------------------------
---------------------- ---------------------- ----------------------------------
                              High                 Low                Cash
                                                                    Dividends
------------------ ------------------- -------------------- --------------------
------------------ ------------------- -------------------- --------------------
1996 Quarters
------------------ ------------------- -------------------- --------------------
------------------ ------------------- -------------------- --------------------
Fourth                     $9.25               $8.375              $0.00
------------------ ------------------- -------------------- --------------------
------------------ ------------------- -------------------- --------------------

------------------ ------------------- -------------------- --------------------
------------------ ------------------- -------------------- --------------------
1997 Quarters
------------------ ------------------- -------------------- --------------------
------------------ ------------------- -------------------- --------------------
First                      $11.875             $8.50               $0.00
Second                      14.375             10.50                0.03
Third                       20.000             14.00                0.03
Fourth                      26.000             20.00                0.03


     As of February 26, 1998 there were  approximately  225 holders of record of
the  Company's  common stock.  On October 1, 1997,  the Company  issued  273,000
shares of its common stock in an unregistered  stock offering in connection with
its  acquisition  of Farmers  National  Bank, a closely held bank.  The sale was
completed  in  reliance  on the  exemption  from the  registration  requirements
provided by Section 4(a) of the Securities Act of 1933.




ITEM 6.  SELECTED FINANCIAL DATA

         The following selected  consolidated  information regarding the Company
should be read in conjunction with the consolidated  financial statements of the
Company and notes beginning on page 25.

<TABLE>
<CAPTION>

                                                 At or for the Years Ended
                                                         December 31,

                                         1997            1996             1995
                                     (In thousands except share data and ratios)

<S>                                        <C>        <C>             <C>
    Net interest income                   $ 15,256    $  11,334       $  10,547
    Provision for possible loan losses         865          (25)          1,334
    Non-interest income                      2,776        2,852           2,315
    Non-interest expense                    11,548       11,067           9,790
                                            ------       ------           -----
    Income taxes                             1,888        1,066             520
                                             -----        -----             ---
       Net income                         $  3,731    $   2,078       $   1,218
                                             =====    =========       =========
Financial Position
    Total assets                          $514,597    $ 376,858       $ 332,902
    Loans, net of unearned income          346,165      236,339         193,541
    Allowance for loan losses                4,677        2,981           3,252
    Goodwill                                 1,688        1,678           1,769
    Investment securities                  104,437      101,145         102,065
    Deposits                               419,139      316,572         285,720
    Long-term Debt                          32,086        4,893          12,392
    Stockholders' equity                    41,733       34,340          14,887
Share Data
    Net income                             $   .77    $    0.76     $      0.48
    Book value                                8.24         7.16            5.94
    Cash dividend(2)                           .09         0.00            0.00
Ratios
    Return on average assets                  0.84%        0.60%           0.40%
    Return on average equity                  9.26%       11.19%           8.27%
    Dividend payout (2)                      11.69%         --              --
    Stockholders' equity to total
    assets at period-end                      8.11%        9.11%           4.47%
    Average stockholders' equity
    to average total assets                   9.04%        5.37%           4.90%
Capital Ratios
    Tier 1 risk-based capital ratio          15.16%       13.59%           6.93%
    Total risk-based capital ratio           16.47%       14.85%           8.19%
    Leverage ratio                           11.70%        9.48%           4.36%
Ratios of Earnings to Fixed Charges(1)
    Excluding interest on deposits            4.67         2.82            2.06
    Including interest on deposits            1.34         1.21            1.13
</TABLE>

(1)      The consolidated ratio of earnings to fixed charges has been computed
         by dividing  income before income taxes, cumulative effect of changes
         in accounting  principles and fixed charges by fixed charges. Fixed
         charges represent all interest  expense (ratios are presented
         both excluding and including  interest on deposits).  There were no
         amortization  of notes and debentures  expense nor any portion of net
         rental expense which was deemed to be equivalent to interest on debt.
         Interest  expense  (other than on  deposits)  includes  interest on
         notes, federal funds purchased and securities sold under agreements to
         repurchase, and other funds borrowed.
(2)      Prior to the second  quarter  of 1997,  the  Company  had not paid cash
         dividends  on  shares  of  its  common  stock.  On  each  of May 30 and
         September 12, 1997, the Company paid a cash dividend of $0.03 per share
         to the holders of record at May 15 and August 29, 1997.

         ITEM 7.   Management's Discussion and Analysis of Financial Condition
                   and Results of Operations

                        Gold Banc Corporation, Inc. and Subsidiaries

General
The Company provides  community banking and related financial services in Kansas
and Missouri.  During 1997, the Company's four commercial  banks and one federal
savings  bank  operated  a total of 10  locations.  Markets  served by the Banks
include  Johnson  County,  Kansas - a growing,  affluent  suburban county in the
Kansas  City  metropolitan  area - plus  five  county  seats in the two  states.
Exchange  Bank,  the largest of the Banks,  has locations in both Johnson County
and Marshall County, Kansas.

The following table lists the Banks, their total assets (in millions of dollars)
as of December  31,  1997,  communities  served,  number of  locations  and year
acquired:

                                    Total          County, State -       Year
Banks                              Assets          No. of Locations    Acquired

Exchange National Bank             $226.4          Johnson Co., KS - 2*   1978
                                                   Marshall Co., KS - 2
Provident Bank, f.s.b.             $ 83.0          Buchanan Co., MO - 1   1994
Peoples National Bank              $ 71.0          Clay Co., KS - 1       1997
Citizens State Bank and Trust Co.  $ 57.3          Nemaha Co., KS - 2     1985
Farmers National Bank              $ 53.6          Decatur Co., KS - 2    1997

*A third Johnson County office of Exchange Bank opened in March 1998.

The Company's historical financial statements and other data in this report have
been  restated  to reflect  the  operations  of  Peoples,  acquired in a pooling
transaction  on  August  22,  1997,  but not  Farmers,  acquired  in a  purchase
transaction on October 1, 1997.  The statements do not include two  acquisitions
announced in late 1997,  which were closed in the first  quarter of 1998:  First
National Bank in Alma,  Kansas,  and Midwest  Capital  Management,  Inc., a full
service  broker/dealer  and  investment  management  firm based in Kansas  City,
Missouri.

In December 1997,  the Company  completed a public  offering of Trust  Preferred
Securities by GBCI Capital Trust, a statutory  business trust established by the
Company.  The  approximately  $27 million in net proceeds will be used to pursue
the Company's  strategy of acquiring  profitable  community banks in the Midwest
and supporting internal growth, as well as for general corporate purposes.

In November 1996, the Company completed an initial public offering of its common
stock. Net proceeds of the sale, after deducting expenses of the offering,  were
approximately $18 million,  used for retirement of debt, a capital  contribution
to Exchange Bank, investments and general corporate purposes.

Markets
The  economies of Kansas and Missouri,  including  local markets where the Banks
operate,  generally  performed well in 1997. Personal income in both states grew
approximately  in line with national  averages.  Manufacturing,  agriculture and
certain other sectors produced growth. Both states'  unemployment rates declined
during the year by nearly 1%, to 3.7% in Kansas and 4.0% in Missouri in December
1997, compared with a 4.7% national rate.

Johnson County was the largest  single market for the Company,  as Exchange Bank
offices in Leawood and Shawnee  accounted for 40% of the Company's loans and 31%
of  the  Company's   deposits  at  year-end.   Johnson  County's  retail  sales,
residential  real estate and  employment  were strong in 1997,  according to the
County  Economic  Research  Institute.  The value of  construction  activity  in
Johnson  County  rose  9.8%  in  1997,  to  $1.15  billion.   Johnson   County's
unemployment  rate was between  2.1% and 2.7%  throughout  1997,  about half the
national rate.  Johnson County has a more competitive  banking  environment than
the Company's  other markets,  but the county's  level of economic  activity and
business  growth have enabled  business at Exchange  Bank's two offices there to
grow rapidly since their  establishment in 1992 and 1995. A third Johnson County
office of Exchange Bank opened in Shawnee in the first quarter of 1998.

Other local  markets where the Banks operate  generally did not  experience  the
rapid growth seen in Johnson County,  but their economies were stable and sound,
reflecting a mix of agriculture, manufacturing and other industries. Each of the
commercial banks in the group is based in a county seat,  serves the surrounding
area and  ranks  among  the top  three  banks in  deposits  in its home  county.
Exchange  Bank ranks second in total  deposits in Marshall  County,  where it is
headquartered.  Provident  Bank, a federal  savings bank which  competes  with a
variety of thrift and lending  institutions,  is the leading mortgage lender for
home purchases in the city of St. Joseph, Missouri.

Influences on Earnings
The Company's net income depends upon the combined  results of operations of the
Banks,  each of which  conducts a commercial  and consumer  banking  business by
attracting  deposits  from the  general  public and  redeploying  those funds to
earning  assets.  Each Bank's  profitability  depends  primarily on net interest
income,  which is  interest  income on  interest-earning  assets  less  interest
expense on interest-bearing liabilities.  Interest-earning assets include loans,
investment  securities  and other  earning  assets,  such as Federal Funds sold.
Interest-bearing   liabilities  include  customer  deposits,  time  and  savings
deposits  and other  borrowings  such as  Federal  Funds  purchased,  short-term
borrowings and long-term debt, including junior subordinated deferrable interest
debentures.

Besides  the   balances   of   interest-earning   assets  and   interest-bearing
liabilities,  net  interest  income is  affected by each  Bank's  interest  rate
spread.  This  spread is the  difference  between  the Bank's  average  yield on
interest-earning   assets  and  the  average   rate  paid  on   interest-bearing
liabilities.  The interest rate spread is impacted by changes in interest rates,
deposit flows and loan demand, among other factors.

The Company's profitability is also affected by the level of non-interest income
of the Banks and non-interest expense of the Company and the Banks. Non-interest
income consists  primarily of service fees,  other fees, and gains on the saleof
mortgage  loans and  investment  securities.  Non-interest  expense  consists of
compensation  and  benefits,   occupancy  related  expenses,  deposit  insurance
premiums, expenses of opening branch offices,  acquisition-related  expenses and
other operating expenses. The Company's profitability is further impacted by the
effective  tax  rate,  the  Banks'  provision  for  loan  losses,   and  various
non-recurring items.

Results of Operations

Comparison of the Years Ended December 31, 1997 and 1996
The Company's net income was $3.7 million for the year ended  December 31, 1997,
an increase of 79.6% from $2.1 million for the year ended December 31, 1996. The
primary  reason for the earnings  increase was a 34.6%  increase in net interest
income as a result of significantly higher loan volume, coupled with an improved
net interest margin. The Company's  acquisition of Farmers in the fourth quarter
of 1997 also contributed to higher earnings, as did cost management  effortsthat
improved the Company's  efficiency  ratio.  In addition,  net income in 1996 was
negatively impacted by a one-time,  industry-wide  Savings Association Insurance
Fund ("SAIF") assessment by the FDIC on SAIF assessable deposits, which was paid
in the third quarter of 1996.

These results  yielded an improvement in annual return on average assets ("ROA")
to 0.84% for the year  ended  December  31,  1997,  compared  with 0.60% for the
previous year. Return on average common  stockholders'  equity ("ROE") was 9.26%
for the year ended  December 31, 1997,  compared  with 11.19% for the year ended
December 31, 1996,  primarily  due to increased  equity  capital  following  the
initial public offering in late 1996.

Total assets were $514.6 million at December 31, 1997, an increase of 36.5% from
$376.9  million at December  31, 1996.  The growth in assets was  achieved  both
through  acquisitions and through  internal growth in 1997,  particularly in the
Johnson County locations.  Total average assets were $445.9 million for the year
ended December 31, 1997,  compared to $345.7 million for the year ended December
31, 1996. Average  interest-earning assets were $410.9 million for the yearended
December 31, 1997 and $319.8 million for 1996.

The  increase in loans from  December  31, 1996 to December  31, 1997 was funded
through  increases  in  deposits of $102.6  million  and draws on existing  cash
reserves  of $7.2  million.  The  allowance  for loan losses  increased  to $4.7
million at  December  31,  1997 from $3.0  million at  December  31,  1996.  The
allowance  represented  1.35% and 1.26% of total loans as of December  31, 1997,
and December 31, 1996, respectively.

Comparison of Years Ended December 31, 1996 and 1995
The Company's net income was $2.1 million for the year ended  December 31, 1996,
compared to net income of $1.2  million for the year ended  December  31,  1995,
yielding an ROA of 0.60% for the year ended December 31, 1996, compared to 0.40%
for the year  ended  December  31,  1995.  ROE for 1996 and 1995 was  11.19% and
8.27%, respectively.

Total assets of $376.9 million at December 31, 1996,  represented an increase of
13.2% from $332.9 million at December 31, 1995. Total average assets were $345.7
million for the year ended December 31, 1996, compared to $300.8 million for the
previous year. Average  interest-earning assets were $319.8 million for the year
ended December 31, 1996, and $279.4 million for 1995. Assets increased primarily
because  of the  opening  of  Exchange  Bank's  office in  Leawood in the fourth
quarter of 1995, as well as growth at its Shawnee location.

The  Company's  net loans  totaled  $233.4  million  and $190.3  million,  as of
December  31, 1996 and 1995,  respectively.  The  increase in net loans of $43.1
million during 1996 compared to 1995 was funded primarily  through  increases in
deposits  of  $30.8  million,  Federal  Funds  purchased  and  other  short-term
borrowings of $1.0 million,  $3.0 million from proceeds of the Company's  public
stock offering and $2.2 million of available cash. The allowance for loan losses
decreased to $3.0  million at December  31, 1996,  from $3.3 million at December
31, 1995.  This  represented  1.26% and 1.68% of total mloans as of December 31,
1996 and 1995, respectively. See "Allowance for Loan Losses."

Net Interest Income
Total interest  income was $31.9 million for the year ended December 31, 1997, a
21% increase from 1996. The increase was primarily the result of growth in total
average  interest-earning  assets of approximately $91.1 million,  combined with
improved yield on interest-earning assets.

Total interest expense was $16.7 million for 1997, or 10.8% higher than in 1996,
as a result of an  increase  in total  interest-bearing  liabilities,  partially
offset by slightly  lower interest  rates paid.  Average total  interest-bearing
liabilities  increased  by $68.1  million  or 22.4% for 1997  compared  to 1996,
primarily due to the increased volume of deposits originated by Exchange Bank in
connection  with the opening of its Leawood  location and  increased  short-term
borrowings  to fund loan  demand in Johnson  County.  Exchange  Bank has offered
slightly above-market rates in an effort to attract and retain deposits in order
to fund loan growth.  The Company  intends to  periodically  offer  above-market
rates in certain markets to gain market share and liquidity.

Net  interest  income was $15.3  million  for 1997,  up 34.6%  from  1996.  This
increase is due to significantly  greater loan volumes,  primarily from Exchange
Bank's Leawood and Shawnee locations,  as well as a 3.78% net interest margin in
1997 compared with 3.63% in 1996.

For the year ended December 31, 1996, total interest income was $26.4 million, a
12.6%  increase from the previous year.  Average total earning assets  increased
$40.4  million,  or 14.5%,  for 1996 compared to 1995,  primarily as a result of
growth in Exchange Bank's business in Johnson County.

Total interest  expense for 1996 was $15.1 million,  a 16.8% increase from 1995,
reflecting an increase in the rate paid on interest-bearing liabilities. Average
total  interest-bearing  liabilities  increased  by $36.9  million for 1996,  or
13.8%,  primarily due to the increased volume of deposits originated by Exchange
Bank in connection with its Leawood location.

Net interest  income was $11.3  million for 1996, an increase of 7.5% from 1995.
The Company  believes this growth would have been greater but for an increase in
interest expense resulting from offering  above-market rates on time deposits to
promote the opening of Exchange Bank's Leawood location. Although these deposits
are maturing, a substantial portion of such deposits has been retained.

The following table presents the Company's average balances,  interest income or
expense,  and the related yields and rates on major  categories of the Company's
interest-earning  assets  and  interest-bearing   liabilities  for  the  periods
indicated:




Comparative Average Balances, Yields and Rates          Year Ended December 31,





<TABLE>
<CAPTION>

                                           1997                       1996                         1995


                                                              Average                            Average                 Average
                                            Interest/     Rate             Interest    Rate                     Interest  Rate

                                            Balance     Expense     Paid    Balance   Expense  Paid   Balance  Expense    Paid


<S>        <C>                              <C>         <C>         <C>    <C>       <C>       <C>    <C>      <C>      <C>
Loans, net (1)                              $296,104    $25,871     8.74%  $206,406  $19,796   9.59%  $177,712 $17,253    9.71%
Investment securities-taxable                 89,799      4,866     5.42     92,422    5,624   6.09     83,485   5,221    6.25
Investment securities-nontaxable (2)          12,002        812     6.76      9,927      770   7.76     10,690     755    7.06
Other earning assets                          12,990        669     5.15     11,035      471   4.27      7,464     439    5.88
   Total earning assets                      410,895     32,218     7.84%   319,790    6,661   8.34%   279,351  23,668    8.47%
Non-interest-earning assets                   34,991                         25,957                     21,482
          Total assets                      $445,886                       $345,747                   $300,833

Liabilities and Stockholders' Equity:
Savings deposits and
    interest-bearing checking               $131,794     $4,325     3.89%   $86,334   $3,106   3.60%   $75,169  $2,316   3.08%
Time deposits                                214,171     10,835     5.06    188,577   10,235   5.43    164,413   8,942   5.44
Short-term borrowings                         21,060      1,244     5.91     17,696    1,008   5.70     14,343     796   5.55
Long-term borrowings                           4,772        288     6.04     11,048      716   6.48     12,873     840   6.53
   Total interest-bearing liabilities        371,797     16,692     4.49%   303,655   15,065   4.96%   266,798  12,894   4.83%
Non-interest-bearing liabilities              33,775                         23,530                     19,309
Stockholders' equity                          40,314                         18,562                     14,726
  Total liabilities and stockholders'
  equity                                    $445,886                       $345,747                   $300,833
Net interest income (3)                                 $15,526                     $ 11,596                   $10,774
Net interest spread                                                 3.35%                      3.38%                     3.64%
Net interest margin (4)                                             3.78%                      3.63%                     3.86%

</TABLE>

(1) Non-accruing loans are included in the computation of average balance.
(2) Yield is  adjusted  for the tax  effect of tax  exempt  securities.  The tax
effects  in 1997,  1996 and 1995 were  $270,  $262 and $227,  respectively.  The
combined  marginal tax rate used was 34%.
(3) The Company  includes loan fees in interest income. Such fees totaled
$1,026, $873 and $671 in 1997, 1996 and 1995, respectively.
(4) The net yield on average  earning  assets is the net interest
income divided by average interest-earning assets.

The  following  table  presents the  components  of changes in the Company's net
interest income as attributed to volume and rate on a tax-equivalent  basis. The
net  change  attributable  to the  combined  impact of volume  and rate has been
solely allocated to the change in rate.



Rate/Volume Interest Analysis
<TABLE>
<CAPTION>


                                                                       Year Ended December 31,
                                                            1997 compared to 1996                           1996 compared to 1995

                                                                 Average     Total                              Average     Total
                                                      Volume       Rate    Changes                    Volume       Rate   Changes

                                                                                 (Dollars in Thousands)
Interest income:
<S>       <C>                                         <C>      <C>           <C>                     <C>        <C>       <C>
    Loans (1)                                         $8,603   $(2,528)      $6,075                  $2,786     $(243)    $2,543
    Investment securities-taxable                         84      (841)        (757)                    559      (156)       403
    Investment securities-nontaxable                     161      (119)          42                     (54)       69         15
    Other earning assets                                (88)        286         198                     210      (178)        32
        Total interest income                        $8,760     $(3,202)     $5,558                  $3,501     $(508)    $2,993
Interest expense:
    Savings deposits and interest-bearing checking   $1,635       $(416)     $1,219                    $344    $1,665     $2,009
    Time deposits                                     1,389        (789)        600                   1,314       579      1,893
    Short-term borrowings                               192         44          236                     186       262        448
    Long-term borrowings                               (407)       (21)        (428)                   (119)     (433)      (552)
        Total interest expense                       $2,809    $(1,182)      $1,627                  $1,725    $2,073     $3,798
Increase (decrease) in net interest income           $5,951    $(2,020)      $3,931                  $1,776   $(2,581)     $(805)
</TABLE>

(1) The Company includes loan fees in interest income.  Such fees totaled
$1,026, $873, and $671 in 1997, 1996, and 1995, respectively.


     Provision  for Loan Losses The provision for loan losses for the year ended
December  31,  1997,  was  $865,000,  an increase of  $890,000  over 1996.  This
increase  reflects the  Company's  recognition  of strong  expansion in its loan
business.  The  allowance  represented  1.35% of total loans as of December  31,
1997,  and 1.26% of total  loans as of  December  31,  1996.  For the year ended
December 31, 1996,  the  provision  for loan losses was  ($25,000),  compared to
$1.33  million  for  1995.  The  negative  provision  in 1996  was a  result  of
management's  estimate of the required  reserve,  coupled  with loan  recoveries
realized in the fourth  quarter of 1996 by Peoples  National  Bank, a subsidiary
acquired by the Company in a pooling transaction in 1997.

     Non-Interest  Income  Non-interest  income for the year ended  December 31,
1997 was $2.8  million,  a decrease of 2.7% from 1996,  primarily as a result of
reduced gains on sales of mortgage loans at Provident  Bank.  This is consistent
with the Company's  reduced  emphasis on low-margin  secondary  market  mortgage
lending. The Company sold its loan servicing business in 1997, and all mortgages
sold into the secondary  market are now sold without  servicing rights retained.
Of the $687,000 in other  non-interest  income in 1997,  $229,000 was unrealized
gain on trading securities.

     Non-interest  income for the year ended December 31, 1996 was $2.9 million,
an increase of 23.2% from 1995, primarily as a result of increased service fees,
gains on sales of assets in the second  half of 1996 and the gain on the sale of
loans in the first half of 1996. The Company realizes  periodic gains and losses
in connection  with the sale of  securities  to meet its liquidity  needs and in
anticipation of changes in interest rates. See "Investment Activities."

     The following  table presents the components of the Company's  non-interest
income for the periods indicated:

Non Interest Income
<TABLE>
<CAPTION>

                                                 Year Ended December 31,
                                               1997       1996       1995
                                                  (Dollars in Thousands)

<S>                                          <C>        <C>          <C>
Service charges on deposit accounts          $1,060     $1,033       $999
Gain on sale of loans                           679      1,128      1,058
Gain (loss) on sale of securities               104       (11)        (92)
Insurance premium income                         65         22         58
Fiduciary income                                181        173        125
Other non-interest income                       687        507        167
Total non-interest income                    $2,776     $2,852     $2,315
Non-interest income as a
  percentage of average total assets           0.62%      0.82%      0.77%

</TABLE>


Non-Interest Expense
Certain  savings  deposits  of two of  the  Banks  are  insured  by the  Savings
Association  Insurance Fund ("SAIF"),  with the remaining  deposits of the Banks
insured  by the  Bank  Insurance  Fund  ("BIF").  Both  SAIF  and BIF have had a
designated  reserve ratio of 1.25%. On September 30, 1996, the President  signed
into law the Deposit Insurance Fund Act of 1996 ("DIFA"). DIFA directed the FDIC
to impose a special assessment on  SAIF-assessable  deposits insured as of March
31,  1995.  The  one-time  expense for the  Company,  incurred in 1996,  totaled
$389,100  ($240,000  net  after  tax).  In  addition  to this  special  one-time
assessment,  the premiums for BIF deposits  were  increased to 1.29 basis points
per $100 of deposits and for SAIF deposits  were  decreased to 6.44 basis points
per $100 of deposits. The new premiums took effect January 1, 1997, and continue
through December 31, 1999.

Non-interest expense increased 4.3% to $11.5 million for the year ended December
31,  1997,  as  compared  to  1996.  The  Company  experienced  an  increase  in
professional  services  expenses  as a result of legal and  accounting  expenses
associated with the Company's  recent  acquisitions and its obligation to comply
for the first time with the periodic  reporting  requirements  of the Securities
and Exchange  Commission imposed on publicly held companies.  This was partially
offset  by the  ongoing  centralization  of  certain  administrative  functions,
increases in operating efficiencies, and the realization of cost savings.

Non-interest  expense was $11.1 million for the year ended  December 31, 1996, a
13%  increase  from 1995.  This  increase was  primarily  due to the addition of
employees at the newly opened  Leawood  location and Provident  Bank's  mortgage
loan production office and also was affected by annual increases in salaries and
employee  benefits and the addition of two  executive  positions at the Company.
Net occupancy expense  increased due to remodeling  projects that were completed
in Shawnee and St. Joseph and because  Exchange Bank's Leawood  location was not
open in the first half of 1995.  Non-interest expense as a percentage of average
assets  was  2.59%,  3.20% and 3.25% as of  December  31,  1997,  1996 and 1995,
respectively.

The following  table  presents the  components of  non-interest  expense for the
periods indicated:



Non Interest Expense
<TABLE>
<CAPTION>

                                                Year Ended December 31,
                                            1997       1996          1995
                                                (Dollars in Thousands)

<S>                                         <C>       <C>          <C>
Salaries and employee benefits              $6,244    $6,060       $5,332
Net occupancy expense                        1,645     1,466        1,287
Deposit insurance expense                       96       551          400
Professional services                          833       510          565
Data processing expense                        297       306          222
Supplies                                       268       308          262
Telephone                                      144       170          150
Postage                                        190       186          183
Advertising/promotion                          574       495          289
Other                                        1,257     1,015        1,100
Total non-interest expense                 $11,548   $11,067       $9,790
Efficiency ratio(1)                         67.89%    77.88%       84.93%
</TABLE>

(1) The efficiency ratio represents  total  non-interest  expense divided by net
interest income after provision for loan
losses plus total non-interest income.

Income Tax Expense
Income tax  expense  was $1.9  million  for the year ended  December  31,  1997,
compared with $1.1 million for 1996.  The effective tax rate was 33.6% for 1997,
virtually  unchanged  from 1996.  The 1996 income tax  expense of $1.1  million,
representing  an effective tax rate of 33.9%,  was an increase from $520,000 for
1995, an effective tax rate of 30.0%. The 1995 effective tax rate was lower than
subsequent years, primarily because a larger portion of income before taxes
in 1995 came from tax-exempt securities.

Asset/Liability Management
Asset/liability   management   refers  to   management's   efforts  to  minimize
fluctuations  in net interest  income caused by interest  rate changes.  This is
accomplished   by   managing   the   repricing   of  interest   rate   sensitive
interest-earning  assets and  interest-bearing  liabilities.  An  interest  rate
sensitive  balance  sheet item is one that is able to reprice  quickly,  through
maturity or otherwise. Controlling the maturity or repricing of an institution's
liabilities  and  assets in order to  minimize  interest  rate risk is  commonly
referred to as gap  management.  Close  matching of the  repricing of assets and
liabilities  will normally  result in little change in net interest  income when
interest rates change. A mismatched gap position will normally result in changes
in net interest income as interest rates change.

Along with  internal gap  management  reports,  the Company and the Banks use an
asset/liability  modeling  service to analyze each Bank's  current gap position.
The system simulates the Banks' asset and liability base and projects future net
interest  income results under several  interest rate  assumptions.  The Company
strives to maintain an  aggregate  gap  position  such that  changes in interest
rates will not affect net interest  income by more than 10% in any  twelve-month
period.  The  Company has not engaged in  derivatives  transactions  for its own
account.

The following  table indicates  that, at December  31,1997,  if there had been a
sudden and sustained increase in prevailing market interest rates, the Company's
1998 net  interest  income  would be expected to  increase,  while a decrease in
rates would indicate a decrease in income.
<TABLE>
<CAPTION>


Changes in                         Net Interest                             Percent
Interest Rates                        Income              Change             Change

<S>                                <C>                  <C>                   <C>
200 basis point rise               $19,014,400          $755,800              4.14%
100 basis point rise                18,628,600           370,000              2.03%
Base Rate Scenario                  18,258,600
100 basis point decline             17,669,400          (589,200)            -3.23%
200 basis point decline             17,098,000        (1,160,600)            -6.36%
</TABLE>

The following  table sets forth the maturities of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 1997.


Interest Rate Sensitivity Analysis
<TABLE>
<CAPTION>
                                                                             As of December 31, 1997
                                                                                 Term to Repricing
                                                             Zero to    Four Months     Over One       Over
                                                             Three      to Twelve        to Five        Five
                                                             Months      Months           Years         Years         Total
                                                                        (Dollars in Thousands)

<S>                                                         <C>          <C>         <C>              <C>          <C>
Interest-earning assets:
    Loans                                                   $144,901     $77,341     $107,300         $16,623      $346,165
    Investment securities                                     24,863      18,435       51,615            9,52       104,437
    Other interest-bearing assets                             24,438          -            -               -         24,438
        Total interest-earning assets                       $194,202     $95,776     $158,915         $26,147      $475,040
Interest-bearing liabilities:
    Savings deposits and interest-bearing checking          $149,943        $ -          $ -             $ -       $149,943
    Time deposits                                             63,695      85,720       82,143             143       231,701
    Short-term borrowings                                     14,571       2,230        1,365              -         18,166
    Long-term borrowings                                         161       1,848          999          29,078        32,086
        Total interest-bearing liabilities                  $228,370     $89,798      $84,507         $29,221      $431,896
Interest sensitivity gap                                     (34,168)      5,978       74,408        (  3,074)
Cumulative gap                                               (34,168)    (28,190)      46,218          43,144
Cumulative ratio of interest-earning assets to
     interest-bearing liabilities                             85.04%      91.14%       111.48%         109.99%
Ratio of cumulative gap to interest-earning assets           -17.59%      -9.72%        10.30%           9.08%
</TABLE>

The cumulative gap value  indicated above for the zero to five-year time periods
indicates  that a rise in  interest  rates  would have a positive  effect on net
interest  income.  The  Company  has the ability to reprice the rates on savings
deposits and interest bearing checking. Historically the rates on these deposits
have not been repriced when rates have
had small movements.

Financial Condition

Lending Activities
Commercial Loans. This category includes loans to service, retail, wholesale and
light  manufacturing  businesses,  including  agricultural  service  businesses.
Commercial  loans were $88.7  million as of December 31, 1997, or 25.6% of total
loans.  The proportion of commercial  loans  increased in 1997, due primarily to
Exchange Bank's  expanding  business in Shawnee and Leawood.  Provident Bank has
also increased its commercial loan portfolio.

Real Estate Loans.  Real estate loans  represent the largest class of loans
of the Company. The Company categorizes real estate loans as follows:

        i) Commercial.  Commercial real estate loans increased from December 31,
1995 to December 31, 1997,  due primarily to increased  lending  activity in the
Johnson County suburbs southwest of Kansas City.

        ii)  Construction.  Construction  lending  consists  primarily of single
family construction in Johnson County. The Company has experienced steady growth
in the suburban Kansas City market, and the December 31, 1997 balance reflects
continued, although seasonal, growth in the Johnson County market.

        iii) 1 to 4 Family Residential. Loans in this category consist primarily
of owner-occupied  residential  loans.  Since December 31, 1995 the mix of loans
has begun to shift from fixed rate loans to variable rate products.


        The Company has elected to portfolio  selected variable rate real estate
loans, which has resulted in the loan growth in this category.

        iv)   Agricultural.   This   category   consists  of  loans  secured  by
agricultural  real  estate.  The demand for  agricultural  real estate loans has
remained flat due to an historically low turnover of farm property.

        v) Held  for  Sale.  Loans  held for sale  represent  residential  loans
intended to be sold to secondary  market  investors  and in the process of being
delivered.

Agricultural  Loans.  Agricultural  loans are typically  made to farmers,  small
corporate  farms and feed and  grain  dealers.  Agricultural  loans  were  $36.9
million  as of  December  31,  1997,  or 10.6% of total  loans.  The  proportion
compared  to  total  loans  has  been  relatively   stable,   as  the  Company's
acquisitions  have added to agricultural  loans,  while internal growth has been
stronger in other categories.  Agricultural loan demand, generally, has remained
stable
due to a stable agricultural economy.

Consumer and Other Loans.  Loans  classified as consumer and other loans include
automobile,  residential,  other  personal  loans and  credit  card  loans.  The
majority  of these  loans are  installment  loans  with  fixed  interest  rates.
Consumer and other loans were $24.0  million as of December 31, 1997, or 6.9% of
total loans,  only  slightly  changed from the  proportion a year  earlier.  The
Company issues credit cards to its existing customers.

The following table presents the balance of each major category of the Company's
loans at the dates indicated.



Loan Portfolio Composition
<TABLE>
<CAPTION>
                                                                                      December 31,
                                                               1997                    1996                     1995
                                                         Amount    %           Amount      %                 Amount        %
                                                                            (Dollars in Thousands)

<S>                                                    <C>       <C>          <C>          <C>               <C>        <C>
Commercial                                             $88,728   25.63%       $52,524      22.22%            $43,018    22.23%
Real estate construction                               47,886    13.83         28,672      12.13              19,987    10.33
Real estate(1)                                        147,830    42.71        114,990      48.65              87,220    45.07
Agricultural                                           36,856    10.64         21,303       9.01              20,458    10.57
Consumer and other                                     24,007    6.94          16,668       7.05              16,194     8.36
Loans held for sale                                    858       0.25           2,182       0.92               6,665     3.44
Total loans                                           346,165    100.00%      236,339     100.00%            193,542   100.00%
Less allowance for loan losses                          4,677                   2,981                          3,252
    Total                                            $341,488                $233,358                       $190,290
</TABLE>

(1) Includes  commercial real estate loans,  agriculture real estate loans and 1
to 4 family residential real estate loans.

The following table sets forth the repricing of portfolio  loans  outstanding at
December 31, 1997.



Loan Repricing Schedule
<TABLE>
<CAPTION>
                                                           After ....      After One
                                               In Three   Four Month       Year But
                                                Months .  But Before        Before                 After
                                               or Less ..  One Year        Five Years            Five Years     Total
                                                                     (Dollars in Thousands)
Loan category:
<S>                                           <C>          <C>             <C>                  <C>           <C>
    Commercial ............................   $ 53,957     $15,412         $ 18,275             $1,084        $88,728
    Real estate construction ..............     43,890       3,421              575                  -         47,886
    Real estate ...........................     22,657      37,998           73,040             14,135        147,830
    Agricultural ..........................     15,253      14,573            6,169                861         36,856
    Consumer and other ....................      8,286       5,937            9,214                543         24,007
    Loans held for sale ...................        858         -                -                   -             858
        Total loans .......................   $144,901     $77,341         $107,300            $16,623       $346,165

</TABLE>
As of December 31, 1997,  loans repricing  after one year include  approximately
$49 million in fixed rate loans and $75 million in floating or  adjustable  rate
loans.

Asset Quality
The Company's asset quality  compares  favorably to its peer  institutions.  The
Company follows  regulatory  guidelines in placing loans on a non-accrual  basis
and places  loans with  doubtful  principal  repayment on a  non-accrual  basis,
whether  current or past due.  The Company  considers  non-performing  assets to
include  all  non-accrual  loans,  other  loans  past  due 90 days or more as to
principal and interest (with the exception of those loans which in  management's
opinion are well collateralized or exhibit other characteristics suggesting they
are collectable),  other real estate owned ("OREO") and repossessed  assets. The
Company  does not return a loan to accrual  status  until it is brought  current
with respect to both principal and interest and future principal payments are no
longer in doubt.  When a loan is placed on  non-accrual  status,  any previously
accrued and uncollected interest income is reversed.

Restructured  and impaired  loans are considered  insignificant  for all periods
presented. The Company would have recorded additional interest in the amounts of
$36,000, $23,000 and $27,000 for the years ended December 31, 1997, 1996 and
1995,
respectively, if non-accrual loans had been current during these periods.

Non-performing assets are summarized in the following table:



Non-Performing Assets
<TABLE>
<CAPTION>

                                                                       At December 31,
                                                             1997       1996           1995
                                                                   (Dollars in Thousands)
Loans:
    Loans 90 days or more past
<S>                                                           <C>          <C>            <C>
      due but still accruing                                  $14          $5             $4
    Non-accrual loans                                         869         324          1,762
        Non-performing loans                                  883         329          1,766
    Other assets                                               18          -               -
    OREO                                                      691          70            149
        Non-performing assets                              $1,592        $399         $1,915
Non-performing loans as a percentage of total loans          0.26%       0.14%         0.91%
Non-performing assets as a percentage of total assets        0.31%       0.11%         0.58%

</TABLE>

Allowance for Loan Losses
The success of a bank  depends to a  significant  extent upon the quality of its
assets,  particularly  loans.  This is  highlighted  by the fact  that net loans
represented  66% of the  Company's  total  assets as of December  31,  1997.  In
originating  loans,  there is a substantial  likelihood  that some credit losses
will  be  experienced.  The  risk  of  loss  will  vary  with  general  economic
conditions,  the type of loan being made, the  creditworthiness  of the borrower
over the term of the loan and the  quality o f the  collateral  in the case of a
collateralized  loan, among other things.  Management maintains an allowance for
loan losses based on industry  standards,  management's  experience,  historical
experience,  an  evaluation  of  economic  conditions  and  regular  reviews  of
delinquencies and loan portfolio quality.

Based upon such  factors,  management  makes various  assumptions  and judgments
about  the  ultimate  collectability  of the  loan  portfolio  and  provides  an
allowance for potential  loan losses based upon a percentage of the  outstanding
balances and for specific loans if their ultimate  collectability  is considered
questionable. Since certain lending activities
involve greater risks, the percentage applied to specific loan types may vary.

The Company actively manages its past due and non-performing  loans in each Bank
to minimize  credit  losses and monitors  asset  quality to maintain an adequate
loan loss allowance.  Although management believes its allowance for loan losses
is adequate for each Bank and  collectively,  there can be no assurance that the
allowance will prove sufficient to cover future loan losses.  Further,  although
management  uses the best  information  available  to make  determinations  with
respect to the allowance for loan losses, future adjustments may be necessary if
economic  conditions differ  substantially  from the assumptions used or adverse
developments   arise  with  respect  to   non-performing  or  performing  loans.
Accordingly,  there can be no assurance  that the allowance for loan losses will
be adequate to cover loan losses or that significant  increases to the allowance
will not be  required  in the  future  if  economic  conditions  should  worsen.
Material  additions to the  allowance for loan losses would result in a decrease
of the Company's net income and capital and could result in the inability to pay
dividends, among other adverse consequences.

The allowance for loan losses on December 31, 1997, totaled $4.7 million, a $1.7
million  increase from a year earlier,  resulting from  charge-offs of $447,000,
recoveries of $470,000,  provisions of $865,000,  and additional  adjustments of
$808,000 related to the purchase of Farmers Bank.

The  allowance  for loan losses on December 31, 1996,  totaled $3.0  million,  a
decrease  from  December  31,  1995,  resulting  from  charge-offs  of $501,000,
recoveries  of $255,000 and  provisions  of  ($25,000).  The  allowance for loan
losses  totaled $3.3 million as of December 31, 1995.  The  allowance  increased
during 1995 by $584,000 due to a combination of
additional provisions of $1.3 million and net charge-offs of $750,000.

The  following  table sets forth  activity in the  Company's  allowance for loan
losses during the periods indicated:

Summary of Loan Loss Experience
<TABLE>
<CAPTION>


                                                                        Year Ended December 31,
                                                         1997             1996                 1995
                                                                 (Dollars in Thousands)
<S>                                                     <C>             <C>                <C>
Total net loans outstanding at the end of period        $341,488        $233,358           $190,290
Average net loans outstanding during the period         $296,104        $206,406           $177,712
Allowance for loan losses, beginning of period           $2,981           $3,252             $2,668
Charge-Offs:
    Commercial                                              262              304                542
    Real estate construction                                 -                24                  -
    Real estate                                             102                2                 12
    Agricultural                                              2               99                260
    Consumer and other                                       81               72                 89
        Total charge-offs                                   447              501                903
Recoveries of loans previously charged off:
    Commercial                                              349               90                 10
    Real estate construction                                 -                11                  -
    Real estate                                              54              107                 57
    Agricultural                                             28               27                 58
    Consumer and other                                       39               20                 28
        Total recoveries                                    470              255                153
Net charge-offs (recoveries)                                (23)             246                750
Provision charged to operations                             865              (25)             1,334
Adjustments due to acquisitions                             808               -                  -
Allowance for loan losses, end of period                 $4,677           $2,981             $3,252
Ratios:
Net charge-offs to average loans outstanding             (0.01%)           0.12%               0.42%
Allowance for loan losses to loans, end of period         1.36%            1.26%               1.68%
Allowance for loan losses to non-performing loans       529.67%          906.08%             184.14%

</TABLE>

The following  table sets forth the  allocation  of the Company's  allowance for
loan losses among categories of loans:


Allocation of the Allowance for Loan Loss
<TABLE>
<CAPTION>
                                            As of December 31, 1997
                                                    Percent of
                                                 Loans in each
                                                   Category to
                                      Amount       Total Loans
                             (Dollars in Thousands)

<S>                                 <C>                  <C>
Commercial                          $1,199               25.6%
Real estate construction            645                  13.8%
Real estate                         2,011                43.0%
Agricultural                        498                  10.7%
Consumer and other                  324                   6.9%
    Total                           $4,677              100.0%
</TABLE>

Investment Activities
The Company's investment  portfolio serves three important functions:  First, it
enables the adjustment of the balance sheet's sensitivity to changes in interest
rate movements;  second,  it provides an outlet for investing  excess funds; and
third, it provides liquidity. The investment portfolio is structured to maximize
the return on invested funds within
conservative risk management guidelines.

The portfolio is comprised of U.S. Treasury  securities,  U.S. government agency
obligations,  state  municipal  obligations,  Federal  Reserve Bank stock,  FNMA
stock, and FHLB stock. The U.S.  government agency  obligations  include Federal
Home  Loan  Mortgage  Corporation  ("FHLMC"),  FNMA  notes  and  mortgage-backed
securities,  FHLB notes and Government  National Mortgage  Association  ("GNMA")
mortgage-backed  securities.  As of December 31, 1997,  the  portfolio  included
$11.3 million of collateralized mortgage obligations,  all of which are rated AA
or better. Federal Funds sold are not classified as investment securities.

The investment  portfolio  decreased  $920,000,  or 0.90%, during the year ended
December 31, 1996,  and  increased  $3.3  million,  or 3.3%,  for the year ended
December 31, 1997. The decreases are primarily due to strong loan demand.

     The  composition  of the  investment  portfolio as of December 31, 1997 was
21.2%  U.S.   Treasury  notes,   37.5%  U.S.   government   obligations,   27.7%
mortgage-backed  securities,  9.9% state and municipal securities and 3.7% other
securities.  The comparable  distribution  for December 31, 1996 was 29.69% U.S.
Treasury  notes,  20.24% U.S.  government  obligations,  36.57%  mortgage-backed
securities,  10.77% state and municipal securities,  and 2.73% other securities.
The estimated  maturity of the  investment  portfolio on December 31, 1997 was 2
years and 2 months.  The  average  balance  of the  investment  portfolio  as of
December 31, 1997  represented  25.4% of average  earning  assets as compared to
31.63% on December 31, 1996. In 1997, the Company invested in trading securities
for the  purpose of  generating  additional  non-interest  income.  The  Company
intends to turn over these securities as market  conditions  dictate in order to
maximize their profitability.

The Company periodically changes its balance sheet strategy to accommodate a new
interest rate  environment  when, in management's  opinion,  economic and policy
signals indicate a changing trend in interest rates.  Accordingly,  in the first
half of 1995 the Company sold bonds in  anticipation  of an increase in interest
rates.

The  following  table sets forth the  composition  of the  Company's  investment
portfolio at the dates indicated:


Investment Securities Portfolio Composition
<TABLE>
<CAPTION>
                                                                           At December 31,
                                                              1997             1996                 1995
                                                                       (Dollars in Thousands)
Securities held to maturity: (1)
<S>                                                           <C>               <C>                    <C>
Obligations of states and political subdivisions              $100              $102                   $99
Total                                                         $100              $102                   $99
Securities available for Sale: (2)
U.S. Treasury and other U.S. agencies and corporations     $61,284           $50,424               $53,525
Obligations of states and political subdivisions            10,245            10,873                 9,652
Mortgage-backed securities                                  28,971            36,986                36,027
Trading securities                                           1,072               -                    -
Other (3)                                                    2,765             2,760                 2,762
Total                                                     $104,337          $101,043              $101,966
Total investment securities                               $104,437          $101,145              $102,065
(1) Securities held to maturity are carried on the Company's books at amortized cost.
(2) Securities available for sale are carried on the Company's books at fair value.
(3) Includes FHLB stock, Federal Reserve stock and FNMA stock.
</TABLE>


The  following  table  sets  forth a summary  of  maturities  in the  investment
portfolio at December 31, 1997:

<TABLE>
<CAPTION>
Maturity Schedule of Securities
                                                 At December 31, 1997

                                                                    (At market value)
                                    One year         Over One Year       Over 5 Years            Over
                                     or less       through 5 Years      through 10 Years        10 Years         Total
                                    Weighted              Weighted             Weighted         Weighted         Weighted
                                   Amount  Yield     Amount    Yield     Amount   Yield     Amount  Yield    Amount     Yield
                                                                             (Dollars in Thousands)

U.S. Treasury and other
<S>                               <C>      <C>      <C>        <C>       <C>      <C>        <C>     <C>    <C>         <C>
  U.S. agencies and corporations  $31,264  5.01%    $28,164    5.80%     $1,327   7.39%      $529    7.5%   $61,284     5.38%
Obligations of states
  and political subdivisions        1,177  6.34%      6,423    7.38%      2,543   7.68%       202   8.27%    10,345     7.33%
Mortgage-backed securities          2,405  5.83%     20,977    6.08%      4,741   7.00%       848   6.55%    28,971     6.23%
Other                               3,837  4.58%      -          -           -      -          -     -        3,837     4.58%
Total                             $38,683           $55,564              $8,611            $1,579          $104,437     5.78%

</TABLE>

Deposit Activities
Deposits  are the  major  source  of the  Banks'  funds  for  lending  and other
investment  purposes.  In  addition to  deposits,  the Banks  derive  funds from
interest payments, loan principal payments, loan and securities sales, and funds
from  operations.  Scheduled loan  repayments are a relatively  stable source of
funds,  while deposit inflows are  significantly  influenced by general interest
rates and money market conditions.  The Banks may use borrowings on a short-term
basis if necessary to compensate  for  reductions in the  availability  of other
sources of funds,  or borrowings may be used on a longer-term  basis for general
business purposes.

Deposits are attracted  principally  from within the Banks'  primary market area
through  the  offering  of a broad  variety  of deposit  instruments,  including
checking  accounts,  money market accounts,  savings  accounts,  certificates of
deposit (including jumbo certificates in denominations of $100,000 or more), and
retirement  savings  plans.  The Banks  have  aggressively  attempted  to obtain
deposits  in  selected  markets  to  increase  market  share or meet  particular
liquidity needs.  The Company has not used brokered  deposits and has not sought
to attract deposits outside its market areas.

Maturity  terms,  service fees and withdrawal  penalties are  established by the
Banks on a periodic basis. The determination of rates and terms is predicated on
funds transaction and liquidity requirements,  rates paid by competitors, growth
goals and federal regulations.

The growth in deposits is primarily the result of the Company's  relatively  new
locations  in Leawood  and  Shawnee.  During  1997 the  Company  experienced  an
increase in savings and  interest-bearing  transaction accounts with balances of
less than $100,000. The non-interest-bearing  account balance as of December 31,
1997,  showed a $10.4 million or 38.4%  increase from the balance as of December
31, 1996.  The average  balance  increased  accordingly by $8.2 million or 36.1%
primarily as a result of growth at the Company's Shawnee and Leawood locations.

The following table sets forth the average  balances and weighted  average rates
for the Company's categories of deposits
at the dates indicated.



Average Deposit Balances and Rates
<TABLE>
<CAPTION>
                                                   Year Ended December 31,
                                         1997                          1996                             1995
                                                       % of                           %of                             % of
                                  Average   Average    Total     Average    Average  Total       Average  Average    Total
                                   Balance  Rate     Deposits     Balance     Rate   Deposits    Balance   Rate    Deposits
                                                                         (Dollars in Thousands)
<S>                               <C>       <C>         <C>       <C>        <C>        <C>      <C>        <C>          <C>
Non-interest checking             $30,799   0.00%       8%        $22,623    0.00%      8%       $17,966    0.00%        7%
Savings deposits and
    interest-bearing checking     131,794   3.28%      35%         86,334    3.60%     29%        75,169    3.08%       29%
Certificates of deposit           214,171   5.06%      57%        188,577    5.43%     63%       164,413    5.44%       64%
        Total                    $376,764             100%       $297,534             100%      $257,548               100%

</TABLE>

The Company does not have a concentration  of deposits from any one source,  the
loss of which would have a material  adverse effect on its business.  Management
believes that  substantially all of the Banks' depositors are residents in their
respective primary market areas.

The  following  table sets forth a summary of the deposits of the Company at the
dates indicated:



Deposit Composition
<TABLE>
<CAPTION>
                                                                                    December 31,
                                                                  1997            1996                1995
                                                                            (Dollars in Thousands)

<S>                                                             <C>            <C>                 <C>
Non-interest-bearing                                            $37,495        $27,093             $24,427
Interest-bearing:
    Savings and NOW accounts                                   149,943          96,025              73,114
    Time accounts less than $100,000                           188,176         151,725             154,979
    Time accounts greater than $100,000                         43,525          41,729              33,200
        Total deposits                                        $419,139        $316,572            $285,720

</TABLE>

The following table summarizes at December 31, 1997, the Company's  certificates
of deposit of $100,000 or more by time
remaining until maturity:



Certificates of Deposit
<TABLE>
<CAPTION>
                                            $100,000 or greater
                                          (Dollars in Thousands)
Maturity Period:
<S>                                                <C>
    Less than three months                         $18,743
    Over three months through six months             7,112
    Over six months through twelve months            8,171
    Over twelve months                               9,499
        Total                                      $43,525
</TABLE>

The Company has no other time deposits in excess of $100,000.

Capital and Liquidity
Sources of Liquidity.  Liquidity defines the ability of the Company and the
Banks to generate  funds to support  asset growth,  satisfy  other  disbursement
needs,  meet deposit  withdrawals and other fund  reductions,  maintain  reserve
requirements and otherwise operate on an ongoing basis. The immediate  liquidity
needs  of the  Banks  are  met  primarily  by  Federal  Funds  sold,  short-term
investments,  deposits  and  the  generally  predictable  cash  flow  (primarily
repayments) from each Bank's assets.  Intermediate term liquidity is provided by
the  Banks'  investment  portfolios.  The Banks also have  established  a credit
facility  with the FHLB  under  which  the  Banks are  eligible  for  short-term
advances  secured by real  estate  loans or  mortgage-related  investments.  The
Company's  liquidity needs and funding are provided through  non-affiliated bank
borrowing, cash dividends and tax payments from its subsidiary banks.

Capital.  The Company  and the Banks  actively  monitor  their  compliance  with
regulatory  capital  requirements.  The elements of capital  adequacy  standards
include  strict  definitions  of core capital and total  assets,  which  include
off-balance  sheet  items  such as  commitments  to  extend  credit.  Under  the
risk-based  capital  method  of  capital  measurement,  the  ratio  computed  is
dependent on the amount and  composition of assets recorded on the balance sheet
and the amount and  composition of off-balance  sheet items,  in addition to the
level of capital.  Historically,  the Banks have increased core capital  through
the  retention of earnings or capital  infusions.  Each Bank's  ability to incur
additional  indebtedness  or to issue or pay  dividends  on common  stock may be
limited by regulatory policies and the terms of the outstanding securities.

At December 31, 1997, the Company's Tier 1 risk-based capital,  total risk-based
capital and  leverage  ratios  were  15.16%,  16.47% and  11.70%,  respectively,
compared to minimum required levels of 4%, 8% and 4%,  respectively  (subject to
change and the discretion of regulatory  authorities to impose higher  standards
in individual cases).

Proceeds  from the Trust  Preferred  Securities  issued in December 1997 by GBCI
Capital Trust, a statutory business trust established by the Company,  accounted
for 25%, or $13.9 million, of the Company's Tier I, or core, capital at December
31, 1997. In the offering,  approximately $27 million in net proceeds was raised
for expansion, debt retirement and general corporate purposes.

Impact of Inflation and Changing Prices
The primary impact of inflation on the operations of the Company is reflected in
increased  operating costs. Unlike most industrial  companies,  virtually all of
the assets and liabilities of a financial institution are monetary in nature. As
a result,  changes  in  interest  rates  have a more  significant  impact on the
performance  of a financial  institution  than do changes in the general rate of
inflation and changes in prices.  Interest rate changes do not necessarily  move
in the same  direction  or have the same  magnitude  as changes in the prices of
goods and services.

Accounting and Financial Reporting
The  Financial  and  Accounting  Standards  Board  (FASB)  issued  SFAS No. 130,
Reporting  Comprehensive Income, and SFAS No. 131, Disclosures About Segments of
an Enterprise and Related  Information,  in June 1997. SFAS No. 130 will require
the Company to classify items of other  comprehensive  income by their nature in
the  financial   statements  and  display  the  accumulated   balance  of  other
comprehensive  income separately from retained  earnings and additional  paid-in
capital in the equity section of the statement of stockholders' equity. SFAS No.
131  requires  that  public   enterprises   report   financial  and  descriptive
information about their reportable  operating  segments.  Operating segments are
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated  regularly by management.  Both SFAS No. 130 and No.
131 are  effective  for fiscal years  beginning  after  December  15, 1997.  The
adoption of the  standards is not expected to have a  significant  impact on the
financial statements of the Company.

Year 2000 Initiatives
In response to potential Year 2000 transition issues for computer  systems,  the
Company is  actively  addressing  these  issues as they  relate to the Banks and
corporate systems. As with other financial institutions, the Company engages in
a significant amount of business and reporting activity that
depends on accurate date  information,  such as interest and other  calculations
pertaining to loans,  deposits,  assets and  investments.  The Company is taking
steps to implement  permanent  solutions during 1998,  rather than waiting until
potential problems develop. A task force began work on identifying and assessing
potential issues in 1997, and the Company is currently  evaluating  hardware and
software  solutions.  Appropriate  resources  are being  allocated  for hardware
systems and software,  as needed,  at each of the  Company's  current as well as
newly acquired  entities.  Expenses  associated  with this issue are expensed as
incurred.   Management  expects  to  report  periodically  on  its  progress  in
addressing the Year 2000  transition and expects to be fully Year 2000 compliant
by December 31, 1998.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Asset/Liability Management
Asset/liability   management   refers  to   management's   efforts  to  minimize
fluctuations  in net interest  income caused by interest  rate changes.  This is
accomplished   by   managing   the   repricing   of  interest   rate   sensitive
interest-earning  assets and  interest-bearing  liabilities.  An  interest  rate
sensitive  balance  sheet item is one that is able to reprice  quickly,  through
maturity or otherwise. Controlling the maturity or repricing of an institution's
liabilities  and  assets in order to  minimize  interest  rate risk is  commonly
referred to as gap  management.  Close  matching of the  repricing of assets and
liabilities  will normally  result in little change in net interest  income when
interest rates change. A mismatched gap position will normally result in changes
in net interest income as interest rates change.

Along with  internal gap  management  reports,  the Company and the Banks use an
asset/liability  modeling  service to analyze each Bank's  current gap position.
The system simulates the Banks' asset and liability base and projects future net
interest  income results under several  interest rate  assumptions.  The Company
strives to maintain an  aggregate  gap  position  such that  changes in interest
rates will not affect net interest  income by more than 10% in any  twelve-month
period.  The  Company has not engaged in  derivatives  transactions  for its own
account.

The following  table indicates  that, at December  31,1997,  if there had been a
sudden and sustained increase in prevailing market interest rates, the Company's
1998 net  interest  income  would be expected to  increase,  while a decrease in
rates would indicate a decrease in income.
<TABLE>
<CAPTION>


Changes in                         Net Interest                             Percent
Interest Rates                        Income              Change             Change

<S>                                <C>                  <C>                   <C>
200 basis point rise               $19,014,400          $755,800              4.14%
100 basis point rise                18,628,600           370,000              2.03%
Base Rate Scenario                  18,258,600
100 basis point decline             17,669,400          (589,200)            -3.23%
200 basis point decline             17,098,000        (1,160,600)            -6.36%
</TABLE>

ITEM 8    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent Auditors' Report



The Board of Directors
Gold Banc Corporation, Inc.:


We have  audited  the  accompanying  consolidated  balance  sheets  of Gold Banc
Corporation,  Inc. and  subsidiaries  (the  Company) as of December 31, 1997 and
1996 and the related consolidated  statements of earnings,  stockholders' equity
and cash flows for each of the years in the three-year period ended December 31,
1997. These  consolidated  financial  statements are the  responsibility  of the
Company's  management.  Our  responsibility  is to  express  an opinion on these
consolidated  financial  statements based on our audits. On August 22, 1997, the
Company acquired Peoples  Bancshares,  Inc. (Peoples) in a business  combination
accounted for as a  pooling-of-interest.  The  contribution  of Peoples to total
assets at December 31, 1996  represented 19%. The contribution of Peoples to net
interest income and net income for 1996 and 1995 represented 20% and 35% and 20%
and 42%,  respectively.  Those  statements  were audited by other auditors whose
report has been  furnished to us, and our opinion,  insofar as it relates to the
amounts  included  for  Peoples,  is based  solely  on the  report  of the other
auditors.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable  assurance about whether the  consolidated  financial  statements are
free of material  misstatement.  An audit includes  examining,  on a test basis,
evidence  supporting the amounts and disclosures in the  consolidated  financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
consolidated  financial  statement  presentation.  We  believe  that our  audits
provide a reasonable basis for our opinion.

In our opinion,  based on our audits and the report of the other  auditors,  the
consolidated  financial  statements  referred to above  present  fairly,  in all
material  respects,  the financial  position of Gold Banc Corporation,  Inc. and
subsidiaries  as of  December  31,  1997  and  1996  and the  results  of  their
operations and their cash flows for each of the years in the  three-year  period
ended  December 31, 1997,  in  conformity  with  generally  accepted  accounting
principles.

/s/ KPMG Peat Marwick LLP

Kansas City, Missouri
January 19, 1998

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES


GOLD BANC CORPORATION, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------------------------------------------

                                             Assets                                                     1997          1996

---------------------------------------------------------------------------------------------------------------------------

<S>                                                                                               <C>                <C>
Cash and due from banks                                                                           $    16,673        13,895
Federal funds sold and interest-bearing deposits                                                       24,438         8,902
----------------------------------------------------------------------------------------------------------------------------

Total cash and cash equivalents                                                                        41,111        22,797
----------------------------------------------------------------------------------------------------------------------------

Investment securities (note 2):
   Held-to-maturity                                                                                       100           102
   Available-for-sale                                                                                 100,500        98,725
   Trading securities                                                                                   1,072            -
   Other                                                                                                2,765         2,318
----------------------------------------------------------------------------------------------------------------------------

Total investment securities                                                                           104,437       101,145
----------------------------------------------------------------------------------------------------------------------------

Mortgage loans held for sale, net                                                                         858         2,182
Loans, net (note 3)                                                                                   340,630       231,176
Premises and equipment, net (note 4)                                                                   15,363        12,746
Deferred taxes (note 9)                                                                                   498           507
Accrued interest and other assets                                                                      11,700         6,305
----------------------------------------------------------------------------------------------------------------------------

                                                                                                      369,049       252,916
----------------------------------------------------------------------------------------------------------------------------

Total assets                                                                                      $   514,597       376,858

----------------------------------------------------------------------------------------------------------------------------

                              Liabilities and Stockholders' Equity
----------------------------------------------------------------------------------------------------------------------------

Liabilities:
   Deposits (note 5)                                                                              $   419,139       316,573
   Securities sold under agreements to repurchase (note 6)                                              6,516         5,966
   Federal funds purchased and Federal Home Loan Bank advances (note 7)                                11,650        12,675
   Long-term debt (note 8)                                                                              3,336         4,893
   Accrued interest and other liabilities                                                               3,473         2,411
----------------------------------------------------------------------------------------------------------------------------

Total liabilities                                                                                     444,114       342,518
----------------------------------------------------------------------------------------------------------------------------

Junior subordinated deferrable interest debentures (note 1)                                            28,750           -
----------------------------------------------------------------------------------------------------------------------------

Stockholders' equity (notes 10 and 13):
   Preferred stock, no par value, 25,000,000 shares authorized, no shares issued
   - Common stock,  $1 par value,  7,500,000  shares  authorized;  5,066,615 and
   4,793,615
      shares issued and outstanding at December 31, 1997 and 1996, respectively                         5,067         4,794
   Additional paid-in capital                                                                          22,265        18,784
   Retained earnings                                                                                   14,605        11,300
   Unrealized gain (loss) on available-for-sale securities, net                                            32         (262)
   Unearned compensation (note 10)                                                                      (236)         (276)
----------------------------------------------------------------------------------------------------------------------------

Total stockholders' equity                                                                             41,733        34,340

Commitments and contingent liabilities (notes 16 and 17)
----------------------------------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity                                                        $   514,597       376,858
----------------------------------------------------------------------------------------------------------------------------

See accompanying notes to consolidated financial statements.
</TABLE>






GOLD BANC CORPORATION, INC. AND SUBSIDIARIES

Consolidated Statements of Earnings

Years ended December 31, 1997,  1996 and 1995 (Dollars in thousands,  except per
share data)
<TABLE>
<CAPTION>

--------------------------------------------------------------------------------------------------------------------------

                                                                                            1997       1996        1995
--------------------------------------------------------------------------------------------------------------------------

Interest income:
<S>                                                                                     <C>             <C>        <C>
   Loans, including fees                                                                $    25,871     19,796     17,254
   Investment securities                                                                      5,408      6,134      5,992
   Other                                                                                        669        469        195
--------------------------------------------------------------------------------------------------------------------------

                                                                                             31,948     26,399     23,441
--------------------------------------------------------------------------------------------------------------------------

Interest expense:
   Deposits                                                                                  15,160     13,340     11,257
   Borrowings and other                                                                       1,532      1,725      1,637
--------------------------------------------------------------------------------------------------------------------------

                                                                                             16,692     15,065     12,894
--------------------------------------------------------------------------------------------------------------------------

Net interest income                                                                          15,256     11,334     10,547

Provision for loan losses (note 3)                                                              865       (25)      1,334
--------------------------------------------------------------------------------------------------------------------------

Net interest income after provision for loan losses                                          14,391     11,359      9,213
--------------------------------------------------------------------------------------------------------------------------

Other income:
   Service fees                                                                               1,060      1,033        999
   Net gains on sale of mortgage loans                                                          679      1,128      1,058
   Net securities gains (losses)                                                                104       (11)       (92)
   Unrealized gains on trading securities                                                       229      -          -
   Gain on sale of other assets (note 3)                                                        198        297         14
   Other                                                                                        506        405        336
--------------------------------------------------------------------------------------------------------------------------

                                                                                              2,776      2,852      2,315
--------------------------------------------------------------------------------------------------------------------------

Other expense:
   Salaries and employee benefits                                                             6,244      6,063      5,339
   Net occupancy expense                                                                      1,931      1,675      1,444
   Federal deposit insurance premiums (note 5)                                                   96        551        400
   Other                                                                                      3,277      2,778      2,607
--------------------------------------------------------------------------------------------------------------------------

                                                                                             11,548     11,067      9,790
--------------------------------------------------------------------------------------------------------------------------

Earnings before income taxes                                                                  5,619      3,144      1,738

Income taxes (note 9)                                                                         1,888      1,066        520
--------------------------------------------------------------------------------------------------------------------------

Net earnings                                                                            $     3,731      2,078      1,218
--------------------------------------------------------------------------------------------------------------------------

Net earnings per share - basic                                                          $       .77        .76        .48
Net earnings per share - diluted                                                                .76        .76        .48
--------------------------------------------------------------------------------------------------------------------------

</TABLE>



See accompanying notes to consolidated financial statements.
GOLD BANC CORPORATION, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years ended December 31, 1997, 1996 and 1995
(In thousands)
<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------------------------

                                                                                         1997        1996        1995
-------------------------------------------------------------------------------------------------------------------------

Cash flows from operating activities:
<S>                                                                                  <C>               <C>         <C>
   Net earnings                                                                      $     3,731       2,078       1,218
   Adjustments to reconcile net earnings to net cash provided by
      (used in) operating activities:
        Provision for loan losses                                                            865        (25)       1,334
        Net (gains) losses on sales of securities                                          (104)          11          92
        Amortization of investment securities' premiums, net of accretion                     26         153         104
        Depreciation and amortization                                                      1,073         803         761
        Gain on sale of assets, net                                                        (198)       (335)        (18)
        Purchases of trading securities                                                    (998)       -           -
        Proceeds from sales of trading securities                                            169       -           -
        Unrealized gains on trading securities                                             (229)       -           -
        Net (increase) decrease in mortgage loans held for sale                            1,324       4,483     (4,879)
        Other changes:
          Accrued interest receivable and other assets                                   (2,173)        (67)       (521)
          Accrued interest payable and other liabilities                                   1,048         326         392
-------------------------------------------------------------------------------------------------------------------------

Net cash provided by (used in) operating activities                                        4,534       7,427     (1,517)
-------------------------------------------------------------------------------------------------------------------------

Cash flows from investing activities:
   Net increase in loans                                                                (83,051)    (47,511)    (21,276)
   Principal collections and proceeds from maturities of held-to-
      maturity securities                                                                      2          73      12,195
   Principal collections and proceeds from sales and maturities of
      available-for-sale securities                                                       37,031      43,385      31,109
   Purchases of available-for-sale securities                                           (21,705)    (43,106)    (38,528)
   Purchases of held-to-maturity securities                                                -            (99)     (1,645)
   Purchases of other securities, net                                                      (447)        (21)       (273)
   Net additions to premises and equipment                                               (3,088)     (5,251)     (3,315)
   Proceeds from sale of other assets                                                        418         922         269
   Cash received in bank acquisition, net of cash paid                                       362       -           -
-------------------------------------------------------------------------------------------------------------------------

Net cash used in investing activities                                                $  (70,478)    (51,608)    (21,464)
-------------------------------------------------------------------------------------------------------------------------


Cash flows from financing activities:
   Increase in deposits                                                              $    59,728      30,851      39,825
   Proceeds from long-term debt                                                              -          -            500
   Principal payment on long-term debt                                                    (3,319)     (7,775)       (941)
   Proceeds from issuance of subordinated debentures                                      28,750        -            -
   Purchase of treasury stock                                                                 -         (134)     (1,095)
   Proceeds from issuance of common stock, net of costs                                       -       18,122         350
   Proceeds from sale of treasury stock                                                       -         -            263
   Increase (decrease) in repurchase agreements                                              550      (6,187)         87
   Increase (decrease) in federal funds purchased, advances
      and other short-term borrowings                                                     (1,025)      7,087         312
   Payment of dividends                                                                     (426)       -            -
-------------------------------------------------------------------------------------------------------------------------

Net cash provided by financing activities                                                 84,258      41,964      39,301
-------------------------------------------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                                          18,314      (2,217)     16,320

Cash and cash equivalents, beginning of year                                              22,797      25,014       8,694
-------------------------------------------------------------------------------------------------------------------------

Cash and cash equivalents, end of year                                               $    41,111      22,797      25,014
-------------------------------------------------------------------------------------------------------------------------

Supplemental disclosure of cash flow information:
   Cash paid during the year for interest                                            $    15,808      14,927      12,533
-------------------------------------------------------------------------------------------------------------------------

   Cash paid during the year for income taxes                                        $     1,408         985       1,256
-------------------------------------------------------------------------------------------------------------------------

Supplemental schedule of noncash investing activities:
   Loans transferred to other real estate owned                                      $       768         741          94
   Transfer of held-to-maturity investment securities to
      available-for-sale                                                                      -           -       42,968
-------------------------------------------------------------------------------------------------------------------------

Supplemental schedule of noncash financing activities:
      Issuance of common stock for acquisitions                                      $     3,754          -           -
      Common stock subscribed                                                                 -           -           50
-------------------------------------------------------------------------------------------------------------------------

Noncash activities related to purchase acquisitions:
   Investing activities:
      Increase in investments                                                        $    17,498          -           -
      Net increase in loans                                                               27,269          -           -
      Increase in land, buildings and equipment                                              474          -           -
   Financing activities:
      Increase in deposits                                                                42,838          -           -
      Increase in borrowed funds                                                           1,762          -           -
-------------------------------------------------------------------------------------------------------------------------
</TABLE>


See accompanying notes to consolidated financial statements.

GOLD BANC CORPORATION, INC. AND SUBSIDIARIES

Consolidated Statements of Stockholders' Equity

Years ended December 31, 1997, 1996 and 1995
(Dollars in thousands)
<TABLE>
<CAPTION>

---------------------------------------------------------------------------------------------------------------------------

                                                                                   Unrealized
                                                                                   gain (loss)
                                                              Additional               on
                                                                                   securities
                                           Preferred Common   paid-in  Retained    available    Unearned   Treasury
                                            stock    stock    capital  earnings    -for sale, compensation   stock    Total
                                                                                      net
---------------------------------------------------------------------------------------------------------------------------

<S>                 <C> <C>               <C>         <C>       <C>      <C>       <C>                       <C>    <C>
Balance at December 31, 1994              $   100     2,536     3,421    8,004     (1,345)        -          (35)   12,681

Purchase of 117,756 shares of common stock    -         -         -        -          -           -       (1,095)  (1,095)
Issuance of 53,346 shares of common stock     -          53       347      -          -           -           -        400
Sale of 23,339 shares of common stock         -         -        (25)      -          -           -           288      263
Retirement of 35 shares of Class B
preferred
   stock and 94,416 shares of common
   stock
   held in treasury                          (35)      (95)     (712)      -          -           -           842    -
Change in unrealized gain on securities
   available-for-sale                         -         -         -        -        1,420         -           -      1,420
Net earnings                                  -         -         -      1,218        -           -           -      1,218
---------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1995                   65     2,494     3,031    9,222         75           -          -    14,887

Conversion of 65 shares of preferred
stock
   into 14,048 shares of common stock        (65)        14        51      -          -           -           -      -
Redemption and retirement of 14,820
   shares of common stock                     -        (14)     (120)      -          -           -           -      (134)
Issuance of 2,300,000 shares of common
   stock, net of issuance costs of $1,942     -       2,300    15,822      -          -           -           -     18,122
Purchase of 31,888 shares of common stock
   for the employee stock ownership plan      -         -         -        -          -         (276)         -      (276)
Change in unrealized loss on securities
   available-for-sale                         -         -         -        -        (337)         -           -      (337)
Net earnings                                  -         -         -      2,078        -           -           -      2,078
------------------------------------------------------------------------------------------------------------------ --------

Balance at December 31, 1996                  -       4,794    18,784   11,300      (262)       (276)         -     34,340

Issuance of 273,000 shares of common          -         273     3,481    -         -              -           -      3,754
stock
Reduction of unearned compensation            -       -         -        -         -               40         -         40

Change in unrealized gain (loss) on
   securities available-for-sale              -       -         -        -            294         -           -        294
Net earnings                                  -       -         -        3,731     -              -           -      3,731

Dividends paid ($.09 per share)               -       -         -        (426)     -              -           -      (426)

---------------------------------------------------------------------------------------------------------------------------

Balance at December 31, 1997              $   -       5,067    22,265   14,605         32       (236)         -     41,733
---------------------------------------------------------------------------------------------------------------------------

</TABLE>

See accompanying notes to consolidated financial statements.


 (1)     Summary of Significant Accounting Policies

                  Principles of Consolidation

         The consolidated financial statements include the accounts of Gold Banc
Corporation,  Inc. and its subsidiary banks, Exchange National Bank, Marysville,
Kansas, Citizens State Bank and Trust Company,  Seneca, Kansas,  Provident Bank,
f.s.b., St. Joseph,  Missouri,  The Peoples National Bank, Clay Center,  Kansas,
Farmers National Bank,  Oberlin,  Kansas,  and GBCI Capital Trust,  collectively
referred to as the Company. All significant intercompany  transactions have been
eliminated.

         On August 22, 1997,  the Company  issued  493,615  shares of its common
stock in exchange for all of the shares of common  stock of Peoples  Bancshares,
Inc. (the merger). Peoples Bancshares,  Inc. owned all of the outstanding common
stock of The Peoples  National Bank located in Clay Center,  Kansas.  The merger
has been accounted for as a pooling-of-interests and, accordingly,  the 1996 and
1995  consolidated  financial  statements  have been  restated  to  include  the
accounts and results of operations of the combining companies. Subsequent to the
merger, Peoples Bancshares, Inc. was liquidated into the Company.

                  Nature of Operations

         The  Company is a  multibank  holding  company  that owns and  operates
community banks located in Kansas and northwestern Missouri. The banks provide a
full range of commercial and consumer  banking  services  primarily to small and
medium-sized  communities and the surrounding  market areas,  including suburban
Kansas City.

                  Initial Public Offering

         Effective  November 19, 1996,  the Company  completed an initial public
offering,  selling  2,000,000  shares of its  common  stock at $8.75 per  share.
Subsequently,  the Company's underwriter exercised its over-allotment option and
on December 19, 1996, the Company sold an additional 300,000 shares at $8.75 per
share. Total expenses, including underwriter's discounts, aggregated $1,942,000.
The Company's shares are registered on the NASDAQ under the symbol GLDB.

                  Junior Subordinated Deferrable Interest Debentures

         On December  15,  1997,  GBCI  Capital  Trust (the  Trust),  a Delaware
business trust formed by the Company, completed the sale of $28.75 million
of 8.75% Preferred Securities (the Preferred Securities). The Trust used the net
proceeds from the offering to purchase a like amount of 8.75% Junior
Subordinated Deferrable Interest Debentures (the Debentures) of the Company. The
Debentures are the sole assets of the Trust and are eliminated, along with the
related income statement effects, in the consolidated financial statements.  The
Company used the proceeds from the sale of the Debentures to retire certain debt
and for general corporate purposes.  Total expenses associated with the offering
approximating $1,219,000 are included in other assets and are being amortized on
a straight-line basis over the life of the debentures.

         The Preferred  Securities accrue and pay distributions  quarterly at an
annual  rate of 8.75% of the  stated  liquidation  amount  of $25 per  Preferred
Security.  The  Company  has fully  and  unconditionally  guaranteed  all of the
obligations of the Trust. The guarantee covers the quarterly  distributions  and
payments on liquidation or redemption of the Preferred  Securities,  but only to
the extent of funds held by the Trust.

         The Preferred  Securities are mandatorily  redeemable upon the maturity
of the Debentures on December 31, 2027 or upon earlier redemption as provided in
the Indenture.  The Company has the right to redeem the Debentures,  in whole or
in part, on or after  December 31, 2002 at a redemption  price  specified in the
Indenture plus any accrued but unpaid interest to the redemption date.

                  Estimates

         The preparation of the consolidated financial statements, in conformity
with  generally  accepted  accounting  principles,  requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the consolidated  financial  statements and the reported amounts of revenues and
expenses  during the reporting  period.  Actual  results could differ from those
estimates.

                  Reclassifications

         Certain   reclassifications  have  been  made  to  the  1996  and  1995
consolidated financial statements to conform to the 1997 presentation.

                  Investment Securities

         The  Company   classifies   investment   securities  in  one  of  three
categories: trading, available-for-sale or held-to-maturity.  Trading securities
are  bought and held  principally  for the  purpose of selling  them in the near
term.  Held-to-maturity  securities are those which the Company has the positive
intent and ability to hold to maturity.  All other  securities are classified as
available-for-sale.

         Held-to-maturity securities are recorded at amortized cost. Trading and
available-for-sale  securities  are recorded at fair value.  Unrealized  holding
gains and losses on trading  securities  are  included in  earnings.  Unrealized
holding  gains and  losses,  net of related tax  effect,  on  available-for-sale
securities  are excluded from earnings and are reported as a separate  component
of  stockholders'  equity  until  realized.   Realized  gains  and  losses  upon
disposition  of  available-for-sale  securities are included in income using the
specific identification method for determining the cost of the securities sold.

         A decline in the market value of any security below cost that is deemed
other than temporary is charged to income,  resulting in the  establishment of a
new cost  basis for the  security.  Premiums  and  discounts  are  amortized  or
accreted  over the life of the  related  security as an  adjustment  to interest
income. Dividend and interest income is recognized when earned.

                  Mortgage Loans Held for Sale

         Mortgage loans originated and intended for sale in the secondary market
are  carried  at the lower of  aggregate  cost or  estimated  fair  value.  Fees
received on such loans are deferred and recognized in income as part of the gain
or loss on sale.  Net  unrealized  losses  are  recognized  through a  valuation
allowance by charges to income.

                  Loans

         Loans receivable that management has the intent and ability to hold for
the  foreseeable  future or until  maturity  or  payoff  are  reported  at their
outstanding  principal  balance adjusted for any charge-offs,  the allowance for
loan losses,  and any deferred fees or costs on originated loans and unamortized
premiums or discounts on purchased loans.

         Interest income on loans is accrued and credited to operations based on
the principal amount  outstanding.  The accrual of interest on impaired loans is
discontinued when, in management's  opinion,  the borrower may be unable to meet
payments as they become due. When interest accrual is  discontinued,  all unpaid
accrued interest is reversed. Interest income is subsequently recognized only to
the extent cash  payments are  received.  Significant  loan and  commitment  fee
income and related costs are deferred and amortized over the term of the related
loan or commitment.

                  Allowance for Loan Losses

         Provisions for losses on loans  receivable are based upon  management's
estimate of the amount  required to maintain an adequate  allowance  for losses,
relative to the risk in the loan portfolio. This estimate is based on reviews of
the loan portfolio,  including  assessment of the estimated net realizable value
of the  related  underlying  collateral,  and upon  consideration  of past  loss
experience,  current  economic  conditions and such other factors which,  in the
opinion of management,  deserve current recognition.  Amounts are charged off as
soon as  probability  of loss is  established,  taking into  consideration  such
factors  as  the  borrower's  financial  condition,  underlying  collateral  and
guarantees.  Loans  are also  subject  to  periodic  examination  by  regulatory
agencies.  Such agencies may require  charge-offs  or additions to the allowance
based upon their  judgments  about  information  available  at the time of their
examination.

                  Premises and Equipment

         Premises  and   equipment   are  stated  at  cost,   less   accumulated
depreciation and amortization.  Depreciation and amortization are computed using
the straight-line and accelerated methods based on the estimated useful lives of
the related assets.

                  Goodwill

         The excess  cost over fair  value of assets  acquired  of  consolidated
subsidiaries is being amortized on a straight-line  basis over periods of ten to
twenty-five years.

                  Income Taxes

         The Company and its subsidiaries file a consolidated federal income tax
return.  Deferred tax assets and  liabilities  are recognized for the future tax
consequences   attributable  to  temporary  differences  between  the  financial
statement  carrying  amounts  of  existing  assets  and  liabilities  and  their
respective tax bases, and are measured using enacted tax rates expected to apply
to taxable  income in the years in which those  differences  are  expected to be
recovered  or settled.  The effect on deferred  tax assets and  liabilities  for
subsequent  changes in tax rates is  recognized  in the period that includes the
tax rate change.

                  Stock Option Plan

         Prior to January 1, 1996,  the Company  accounted  for its stock option
plan in accordance  with the provisions of Accounting  Principles  Board ("APB")
Opinion  No.  25,  Accounting  for  Stock  Issued  to  Employees,   and  related
interpretations.  As such, compensation expense would be recorded on the date of
grant only if the current  market  price of the  underlying  stock  exceeded the
exercise price.  On January 1, 1996, the Company adopted  Statement of Financial
Accounting  Standards (SFAS) No. 123,  Accounting for Stock-Based  Compensation,
which permits  entities to recognize as expense over the vesting period the fair
value of all stock-based  awards on the date of grant.  Alternatively,  SFAS No.
123 also allows  entities to continue to apply the provisions of APB Opinion No.
25 and provide pro forma net income and pro forma earnings per share disclosures
for employee  stock  option  grants made in 1995 and future years as if the fair
value-based  method  defined in SFAS No. 123 had been  applied.  The Company has
elected to  continue to apply the  provisions  of APB Opinion No. 25 and provide
the pro forma disclosure provisions of SFAS No. 123.

                  Cash and Cash Equivalents

         For  purposes  of the  consolidated  statements  of  cash  flows,  cash
equivalents include cash on hand, amounts due from banks, federal funds sold and
interest-bearing deposits.

                  Earnings Per Share

         Earnings  per share  are  computed  in  accordance  with SFAS No.  128,
Earnings per Share.  Basic earnings per share is based upon the weighted average
number of common shares outstanding during the periods presented. Diluted income
per  share  includes  the  effects  of  all  dilutive  potential  common  shares
outstanding  during each period. All per share data has been restated to conform
to SFAS No. 128.

         The shares  used in the  calculation  of basic and  diluted  income per
share are shown below (in thousands):
<TABLE>
<CAPTION>


                                                     1997     1996    1995

<S>                                                  <C>      <C>      <C>
         Weighted average common shares outstanding  4,862    2,740    2,557
         Stock options                                  20       -       -

                                                     4,882    2,740    2,557
</TABLE>

                  Future Accounting Pronouncements

         The Financial  Accounting  Standards  Board (FASB) issued SFAS No. 130,
Reporting  Comprehensive Income, and SFAS No. 131, Disclosures About Segments of
an Enterprise and Related  Information,  in June 1997. SFAS No. 130 will require
the Company to classify items of other  comprehensive  income by their nature in
the  financial   statements  and  display  the  accumulated   balance  of  other
comprehensive  income separately from retained  earnings and additional  paid-in
capital in the equity section of the statement of stockholders' equity. SFAS No.
131  requires  that  public   enterprises   report   financial  and  descriptive
information about their reportable  operating  segments.  Operating segments are
components  of an  enterprise  about which  separate  financial  information  is
available that is evaluated regularly by management.  Both SFAS No. 130 and SFAS
No. 131 are effective for fiscal years  beginning  after  December 15, 1997. The
adoption of the  standards is not expected to have a  significant  impact on the
financial statements of the Company.



 (2)     Investment Securities

         The amortized  cost,  gross  unrealized  gains and losses and estimated
fair value of investment  securities by major security type at December 31, 1997
and 1996 are as follows (in thousands):

<TABLE>
<CAPTION>


                                                                    Gross         Gross        Estimated


                                                        Amortized  unrealized    unrealized         fair
         1997                                                cost      gains        losses          value

         Held-to-maturity:
             Obligations of states and
<S>                                                        <C>         <C>            <C>            <C>
             political subdivisions                        $100        $-             $-             $100

         Available-for-sale:
             U. S. treasury and agency securities          $61,262     $87            $(65)       $61,284
             Obligations of states and political
                           subdivisions                     10,121     133              (9)        10,245
                  Mortgage-backed securities                29,077      96            (202)        28,971

         Total                                            $100,460     316            (276)       100,500

         1996

         Held-to-maturity:
                  Obligations of states and
                  political subdivisions                      $102      -               -            102

         Available-for-sale:
                  U. S. treasury and agency securities        $50,586   58            (220)       50,424
                  Obligations of states and political
                           subdivisions                        10,786   121            (34)       10,873
                  Mortgage-backed securities                   37,339   115           (468)       36,986
                  Equity securities                               435     7             -            442

         Total                                                $99,146   301           (722)       98,725

</TABLE>

         The amortized cost and estimated  fair values of investment  securities
at December 31, 1997, by contractual  maturity,  are shown below (in thousands).
Expected  maturities will differ from contractual  maturities  because borrowers
may have  the  right  to call or  prepay  obligations  with or  without  call or
prepayment penalties.
<TABLE>
<CAPTION>



                                                                              Held-to-maturity                   Available-for-sale

                                                          Amortized        Estimated         Amortized         Estimated
                                                             cost          fair value          cost            fair value

<S>                                                           <C>               <C>            <C>               <C>
         Due in one year or less                              $75               75             33,505            33,493
         Due after one year through five years                 25               25             34,804            34,886
         Due after five years through ten years                 -                -              5,100             5,188
         Due after ten years                                    -                -              1,227             1,232
         Mortgage-backed securities                             -                -             25,824            25,701

         Total                                               $100             $100           $100,460          $100,500
</TABLE>

         The Company's trading securities  consist of a segregated  portfolio of
equity  securities  purchased with the intent to actively  manage and trade such
securities   frequently.   Realized  gains  since  the  trading   portfolio  was
established aggregate $14,000.

         Other securities at December 31, 1997, 1996 and 1995 consist  primarily
of stock in the Federal Reserve Bank,  Federal Home Loan Bank and Kansas Venture
Capital Stock.  The cost of such investments  approximates  their fair value. At
December  31,  1997,  investment  securities  with fair values of  approximately
$63,452,000 were pledged to secure public deposits and for other purposes.




 (3)     Loans


         Loans are summarized as follows (in thousands):
<TABLE>
<CAPTION>


                                              1997     1996

<S>                                        <C>       <C>
         Real estate - mortgage            $147,830  114,990
         Real estate - construction          47,886   28,672
         Commercial                          88,728   52,524
         Agricultural                        36,856   21,303
         Consumer                            17,080   13,027
         Other                                6,927    3,641

                                            345,307  234,157

         Allowance for loan losses           (4,677)  (2,981)

                                    $       340,630  231,176

</TABLE>

         Prior  to June  1997,  the  Company  serviced  loans  of  approximately
$29,035,000  for  investors.  During June 1997,  the  Company  sold the right to
service  such  loans  to  another  company,  realizing  a gain of  approximately
$198,000.  Service fee income of  approximately  $33,000,  $82,000 and  $90,000,
respectively,  related to these  portfolios is included in service fee income in
the  consolidated  statements of earnings for the years ended December 31, 1997,
1996 and 1995.

         Loans  made  to  directors  and  executive   officers  of  the  Company
approximated  $9,331,000,  $9,644,000 and $5,071,000 at December 31, 1997,  1996
and 1995, respectively.  Such loans were made in the ordinary course of business
on normal credit terms, including interest rate and  collateralization.  Changes
in such loans for 1997 are as follows (in thousands):

<TABLE>
<CAPTION>

<S>                                                  <C>
         Balance at January 1, 1997                   $9,644
         Additions                                    15,081
         Amounts collected                           (15,457)
         Amounts of acquired bank                         63

         Balance at December 31, 1997                 $9,331
</TABLE>

         Impaired  loans are considered  insignificant  at December 31, 1997 and
1996.  Nonaccrual loans approximated  $869,000 and $324,000 at December 31, 1997
and 1996,  respectively.  The interest  income not recognized on these loans was
approximately $36,000, $23,000 and $27,000 in 1997, 1996 and 1995, respectively.

         Activity  in the  allowance  for loan  losses  during  the years  ended
December 31, 1997, 1996 and 1995 are as follows (in thousands):

<TABLE>
<CAPTION>


                                                      1997     1996    1995

<S>                                                 <C>       <C>      <C>
         Balance at beginning of year               $2,981    3,252    2,668
         Allowance of acquired bank                    808      -        -
         Provision for loan losses                     865      (25)   1,334
         Charge-offs                                  (447)    (501)    (903)
         Recoveries                                    470      255      153

         Balance at end of year                     $4,677    2,981    3,252
</TABLE>

 (4)     Premises and Equipment

         Premises and equipment are summarized as follows (in thousands):
<TABLE>
<CAPTION>



                                                               1997     1996

<S>                                                           <C>      <C>
         Land                                                 $3,629   2,795
         Buildings and leasehold improvements                 10,006   4,955
         Construction in progress                              1,023   3,522
         Furniture, fixtures and equipment                     5,023   4,141
         Automobiles                                             134     146

                                                              19,815  15,559

         Accumulated depreciation and amortization             4,452   2,813

                                                             $15,363  12,746

</TABLE>

         Depreciation  expense aggregating  $945,000,  $745,000 and $666,000 for
the  years  ended  December  31,  1997,  1996 and 1995,  respectively,  has been
included in net occupancy expense in the accompanying consolidated statements of
earnings.


 (5)Deposits

  Deposits are summarized as follows (in thousands):
<TABLE>
<CAPTION>



                                                       1997     1996

                  Demand:
<S>                                                 <C>       <C>
                  Noninterest bearing               $37,495   27,093

                  Interest-bearing:
                           NOW                       53,365   30,300
                           Super NOW                 20,318   14,916
                           Money market              59,678   37,670

                                                    133,361   82,886

                  Total demand                      170,856  109,979

                          Savings                    16,582   13,139
                             Time                   231,701  193,455

                                                   $419,139  316,573
</TABLE>

         Time  deposits  include  certificates  of deposit of $100,000  and over
totaling  approximately  $43,525,000  and  $41,729,000  at December 31, 1997 and
1996, respectively.

         Principal  maturities  of time  deposits  at  December  31, 1997 are as
follows (in thousands):

<TABLE>
<CAPTION>



         Year                       Amount

<S>      <C>                      <C>
         1998                     $148,162
         1999                       55,059
         2000                       21,296
         2001                        5,498
         2002                        1,543
         Thereafter                    143

                                  $231,701
</TABLE>

         During  1996,  the  Federal  Deposit  Insurance  Corporation  imposed a
one-time  special  assessment  on  Savings  Association  Insurance  Fund  (SAIF)
assessable deposits.  The assessment on the Company's SAIF deposits was $389,000
and is included in federal deposit  insurance  premiums in the accompanying 1996
consolidated statement of earnings.


 (6)     Securities Sold Under Agreements to Repurchase

         Information  concerning  securities sold under agreements to repurchase
is as follows (in thousands):
<TABLE>
<CAPTION>


                                                              1997     1996

<S>                                                          <C>       <C>
         Average monthly balance during the year             $6,835    7,825
         Weighted average interest rate during the year        5.75%   5.46%
         Maximum month-end balance during the year           $6,516    8,053
</TABLE>

         At December 31, 1997,  such  agreements  were secured by investment and
mortgage-backed  securities.  Pledged securities are maintained by a safekeeping
agent under the control of the Company.


 (7)     Federal Funds Purchased and Federal Home Loan Bank Advances

         Federal funds purchased fluctuate daily based on the liquidity needs of
the Company.  At December 31, 1997, the Company had no federal funds  purchased.
As of December 31, 1996,  federal  funds  purchased of  $6,675,000  had weighted
average interest rates of 6.53% and a one-day maturity.

         Federal Home Loan Bank (FHLB) advances  represent  short-term  advances
received from the FHLB.  Such advances mature within one year and are secured by
qualifying  one-to-four  family  mortgage  loans. At December 31, 1997 and 1996,
these advances totaled $11,650,000 and $6,000,000, respectively.

 (8)     Long-term Debt


         Following is a summary of long-term borrowings at December 31, 1997 and
1996 (in thousands):
<TABLE>
<CAPTION>
                                                  1997           1996

                                                                                          1997     1996
<S>                                               <C>            <C>
Notes  payable  of  subsidiary  to
former  stockholders  of  Farmers  Bank,
interest rates ranging from 6.62% to 7.59%,
maturities ranging from January 31,
2005  to  July  31,  2005                         $1,500         $-


Notes  payable  of  subsidiary  to  former
stockholders of Farmers Bank, interest rates
at NationsBank  corporate base rate
(8.50% at December 31,  1997),  maturing
February 1, 2000                                     262          -


Note payable to
bank, interest at 6.6%, maturing April 1, 1997         -         3,015

Note payable of Gold Banc
Corporation,  Inc.  Employee  Stock  Ownership
Plan,  interest  at  NationsBank
corporate  base rate (8.50% at December 31,  1997),
secured by 27,333 shares of
Company stock (see note 10)                         236            276

Federal Home Loan Bank (FHLB)  borrowings by
a subsidiary  bank bearing  weighted
average fixed  interest rates of 6.10% and
5.48% at December 31, 1997 and 1996,
secured by qualifying  one-to-four  family
mortgage loans                                    1,338          1,602

                                                 $3,336          4,893

  </TABLE>
      Principal  maturities of long-term  borrowings at December 31, 1997 are
as follows (in thousands):
<TABLE>
<CAPTION>


            Year          Amount

<S>      <C>               <C>
         1998              $613
         1999               573
         2000               471
         2001               371
         2002               334
         Thereafter         974

                           $3,336
</TABLE>

         None of the Company  borrowings have any related  compensating  balance
requirements which restrict the usage of Company assets. However, regulations of
the Federal  Reserve  System  require  reserves to be  maintained by all banking
institutions  according to the types and amounts of certain deposit liabilities.
These  requirements  restrict  usage  of a  portion  of  the  amounts  shown  as
consolidated  "cash and due from banks" from everyday  usage in operation of the
banks. The minimum reserve requirements for the subsidiary banks at December 31,
1997 approximated $2,258,000.

 (9)     Income Taxes

         Income tax expense  (benefit)  related to operations for 1997, 1996 and
1995 is summarized as follows (in thousands):
<TABLE>
<CAPTION>



                           Current      Deferred     Total

         1997:
<S>                        <C>              <C>      <C>
                  Federal  $ 1,694          (31)     1,663
                  State        241          (16)       225

                           $ 1,935          (47)     1,888

         1996:
                  Federal  $   473          435        908
                  State        155            3        158

                           $   628          438      1,066

         1995:
                  Federal  $   713         (429)       284
                  State        246          (10)       236

                           $   959         (439)       520
</TABLE>


         The tax effects of temporary  differences that give rise to significant
portions of deferred  tax assets and deferred  tax  liabilities  at December 31,
1997, 1996 and 1995 are presented below (in thousands):

<TABLE>
<CAPTION>


                                                    1997     1996    1995

         Deferred tax assets:
<S>                                                 <C>       <C>      <C>
                  Allowance for loan losses         $907      334      663
                  Unrealized losses on available
                  -for-sale securities, net          (15)     180       60
                  State taxes                        250      488      320
                  Other                              144      150      167

         Total deferred tax assets                 1,286    1,152    1,210

         Deferred tax liabilities:
                  FHLB stock dividends               142      125      125
                  Premises and equipment             527      427      206
                  Other                              119       93      143

         Total deferred tax liabilities              788      645      474

         Net deferred tax asset                     $498      507      736
</TABLE>

         A valuation  allowance  for  deferred  tax assets was not  necessary at
December 31, 1997, 1996 or 1995.

         A reconciliation  of expected income tax expense based on the statutory
rate of 34% to actual  tax  expense  for 1997,  1996 and 1995 is  summarized  as
follows (in thousands):
<TABLE>
<CAPTION>




                                                1997                            1996                      1995
                                          Amount   Percent                 Amount   Percent           Amount   Percent

         Expected federal income
<S>                                        <C>       <C>                    <C>       <C>              <C>      <C>
                  tax expense              $1,910    34.00%                 $1,069    34.00%           $591     34.00%
         Municipal interest                  (156)   (2.78)                   (147)   (4.69)           (154)    (8.85)
         State taxes, net of federal
                  tax benefit                 225     4.00                     155     4.94             167      9.64
         Other, net                           (91)   (1.62)                    (11)    (.34)            (84)    (4.87)

                                           $1,888    33.60%                  $1,066    33.91%           $520     29.92%


</TABLE>
0)     Employee Benefit Plans

         On January 1, 1986, the Company  established the Gold Banc Corporation,
Inc.  Employee  Stock  Ownership  Plan  (ESOP) to acquire  shares of the Company
common  stock for the benefit of all  eligible  employees.  The amount of annual
contributions from the Company, if any, is determined by the Board of Directors.
Contributions  were  approximately  $92,000,  $78,000  and $75,000 for the years
ended  December  31,  1997,  1996 and 1995,  respectively.  The  ESOP,  which is
noncontributory, covers substantially all employees of the corporation.

         During 1996, the ESOP borrowed  $275,800 from an  unaffiliated  bank to
purchase  31,888 shares of common stock from a  stockholder  of the Company (see
note 8).  The ESOP  will  repay the loan with  contributions  received  from the
Company. Accordingly, the Company has recorded the obligation with an offsetting
amount  of  unearned  compensation  included  in  stockholders'  equity  in  the
accompanying  consolidated balance sheets. During 1997, the Company contribution
was used to make  principal  payments on the note of $40,000  and in  connection
with that payment, 4,555 shares were released to participants.

         In 1995, the Company  established a 401(k) savings plan for the benefit
of all eligible employees. Prior to December 31, 1997, the Company did not match
employee contributions. Effective January 1, 1998, the Company will match 50% of
employee  contributions  up to 5%  of  base  compensation,  subject  to  certain
Internal Revenue Service  limitations.  The 401(k) plan covers substantially all
employees of the corporation.

         In 1996, the Company  established a stock option plan.  Under the stock
option plan, options to acquire 250,000 shares of the Company's common stock may
be granted to certain  officers,  directors  and  employees of the Company.  The
options will enable the recipient to purchase  stock at an exercise  price equal
to or greater  than the fair market value of the stock at the date of the grant.
On April 7, 1997,  the  Company  granted  options to acquire  70,500  shares for
$10.50 per share. Each of the options vested as of October 6, 1997 and expire in
2007.

         No options  have been  exercised  at  December  31,  1997.  The Company
applies APB  Opinion  No. 25 in  accounting  for its plan and,  accordingly,  no
compensation  expense has been recognized for its incentive  stock options.  Had
compensation  cost for the Company's  incentive  stock  options been  determined
based  upon the fair  value at the grant date  consistent  with the  methodology
prescribed under SFAS No. 123, the Company's net earnings and basic earnings per
share would have been decreased by approximately  $185,000 and $.04 per share in
1997.  The  weighted  average fair value of the options  granted  during 1997 is
estimated at $4.23 per share on the date of grant using an option-pricing  model
with the  following  assumptions:  expected  dividend  yield of 1.0%,  risk-free
interest rate of 7.0% and an expected life of ten years.


(11)     Financial Instruments With Off-balance Sheet Risk

         Financial  instruments,  which represent off-balance sheet credit risk,
consist of open commitments to extend credit,  irrevocable letters of credit and
loans sold with  recourse.  Open  commitments  to extend credit and  irrevocable
letters of credit  amounted to  approximately  $79,726,000 at December 31, 1997.
Such agreements require the Company to lend to a customer as long as there is no
violation of any condition  established in the contract.  Commitments  generally
have fixed  expiration  dates or other  termination  clauses.  Since many of the
commitments  are expected to expire  without  being fully drawn upon,  the total
commitment amounts do not necessarily  represent future cash  requirements.  The
Company evaluates each customer's  creditworthiness on a case-by-case basis. The
amount of collateral obtained (if deemed necessary by the Company upon extension
of  credit)  is  based  on  management's  credit  evaluation  of  the  customer.
Collateral  held  varies,  but  may  include  accounts  receivable,   inventory,
property, plant and equipment, and income-producing commercial properties.

         The Company  processes  residential home mortgage loans for sale in the
secondary  market.  In conjunction  with the sale of such loans, the Company has
entered into agreements with the purchasers of the loans,  setting forth certain
provisions.  Among those  provisions is the right of the purchaser to return the
loans to the Company in the event the borrower  defaults within a stated period.
This period  ranges  among the  various  purchasers  from  between one to twelve
months.   Loans  sold  with  recourse  amounted  to  approximately   $3,642,000,
$6,021,000 and  $26,511,000 at December 31, 1997,  1996 and 1995,  respectively.
The  Company's  exposure to credit loss in the event of default by the  borrower
and the return of the loan by the purchaser is  represented by the difference in
the amount of the loan and the recovery value of the underlying collateral.


(12)     Disclosures About the Fair Value of Financial Instruments

         The  following  disclosures  of the  estimated  fair value of financial
instruments  are made in  accordance  with  the  requirements  of SFAS No.  107,
"Disclosures  About Fair Value of Financial  Instruments."  The  estimated  fair
value  amounts have been  determined by the Company and its  subsidiaries  using
available market information and valuation methodologies.  However, considerable
judgment  is  necessarily  required  to  interpret  market  data to develop  the
estimates of fair value.  Accordingly,  the estimates  presented  herein are not
necessarily  indicative  of the amounts the Company and its  subsidiaries  could
realize in a current market exchange.  The use of different  market  assumptions
and/or estimation methodologies may have a material impact on the estimated fair
value amounts.

         The estimated fair value of the Company's  financial  instruments is as
follows (in thousands):

<TABLE>
<CAPTION>


                                                   1997                        1996
                                             Carrying Estimated        Carrying   Estimated
                                             amount   fair value       amount     fair value

<S>                                         <C>       <C>                 <C>       <C>
         Investment securities              $104,437  104,437             101,145   98,725

         Mortgage loans held for sale           $858      858               2,182    2,182

         Loans                              $340,630  340,227             231,176  231,064

         Deposits                           $419,139  411,820             316,573  316,380

         Securities sold under agreements
                  to repurchase               $6,516    6,516               5,966    5,966

         Federal funds purchased, FHLB
         advances and other
         short-term borrowings               $11,650   11,650              12,675   12,675

         Long-term debt                       $3,336    3,336               4,893    4,893
</TABLE>

         The following  methods and  assumptions  were used to estimate the fair
value of each class of  financial  instruments  for which it is  practicable  to
estimate that value:

o Investment  Securities - Various methods and assumptions were used to estimate
fair value of the investment securities.  For investment  securities,  excluding
other  securities,  fair  values  are  based on quoted  market  prices or dealer
quotes. If a quoted market price is not available, fair value is estimated using
quoted prices for similar  securities.  The carrying  value of other  securities
approximates fair values.

o Mortgage  Loans Held for Sale - The fair value of mortgage loans held for sale
equals the contractual sales price agreed upon with third-party investors.

o Loans  - For  certain  homogenous  categories  of  loans,  such as some  Small
Business Administration  guaranteed loans, student loans, residential mortgages,
consumer loans and commercial loans, fair value is estimated using quoted market
prices for similar loans or  securities  backed by similar  loans,  adjusted for
differences in loan  characteristics.  The fair value of other types of loans is
estimated by discounting  the future cash flows using the current rates at which
similar loans would be made to borrowers with similar credit ratings and for the
same remaining maturities.

o Deposits  - The fair  value of demand  deposits,  savings  accounts  and money
market  deposits is the amount payable on demand at the reporting date. The fair
value of fixed-maturity  certificates of deposit is estimated by discounting the
future cash flows  using the rates  currently  offered  for  deposits of similar
remaining maturities.

o Federal Funds Purchased,  Securities Sold Under Agreements to Repurchase, FHLB
Advances and Other Short-term  Borrowings - For these  instruments,  the current
carrying amount is a reasonable estimate of fair value.

o  Long-term  Debt - The  fair  value  of  long-term  debt  is  estimated  using
discounted cash flow analyses based on the Company's and  subsidiaries'  current
incremental borrowing rates for similar types of borrowing arrangements.

o  Junior Subordinated Deferrable Interest Debentures- for these instruments,
   issued on December 15, 1997, the carrying value approximates the fair value
   at December 31, 1997.

o  Commitments  to Extend  Credit and  Irrevocable  Letters of Credit - The fair
value of commitments is estimated using the fees currently charged to enter into
similar  agreements,  taking into account the remaining  terms of the agreements
and  the  present   creditworthiness  of  the  customers.  For  fixed-rate  loan
commitments,  fair value also considers the difference between current levels of
interest rates and the committed  rates.  The estimated fair value of letters of
credit is based on the fees  currently  charged  for similar  agreements.  These
instruments  were  determined  to have no  positive  or  negative  market  value
adjustments and are not listed in the following table.

o Loans  Sold with  Recourse - The fair  value of loans  sold with  recourse  is
limited to the contractual amount of the loans required to be repurchased. Loans
currently  under the recourse  provision have been sold to investors  within the
last twelve months.  Because the recourse provisions have not yet expired, it is
impractical to determine the fair value;  however, it is not believed they would
have a material market value adjustment.

         The fair  value  estimates  presented  herein  are  based on  pertinent
information  available to management as of December 31, 1997 and 1996.  Although
management  is not aware of any  factors  that  would  significantly  affect the
estimated  fair  value  amounts,  such  amounts  have not  been  comprehensively
revalued for purposes of the consolidated  financial  statements since that date
and,  therefore,  current estimates of fair value may differ  significantly from
the amounts presented herein.

(13)     Capital Adequacy

         Quantitative  measures  established  by  regulation  to ensure  capital
adequacy  require the Company and its  subsidiaries to maintain  minimum amounts
and ratios (set forth in the table  below on a  consolidated  basis,  dollars in
thousands)  of total and Tier I  capital  (as  defined  in the  regulations)  to
risk-weighted  assets and of Tier I capital to  average  assets.  Tier I capital
includes approximately $14,000,000 of subordinated debentures (see note 1) which
is permitted under regulatory  guidelines.  Management believes,  as of December
31, 1997, that the Company meets all capital  adequacy  requirements to which it
is subject.

<TABLE>
<CAPTION>


                                                                                              To be well
                                                                                              capitalized
                                                                          For capital         under prompt
                                                                           adequacy         corrective action
                                                        Actual             purposes           provisions
                                                    Amount   Ratio       Amount   Ratio      Amount   Ratio

         At December 31, 1997:
                  Total risk-based capital
<S>                                                 <C>       <C>       <C>       <C>        <C>      <C>
                  (to risk-weighted assets)         $58,601   16.47%    $28,601   8.00%      35,752   10.00%
                  Tier I capital
                  (to risk-weighted assets)          53,924   15.16      14,301   4.00       21,451    6.00
                  Tier I capital
                  (to average assets)                53,924   11.66      18,494   4.00       23,117    5.00

         At December 31, 1996:
                  Total risk-based capital
                  (to risk-weighted assets)         $36,181   14.85%    $19,493   8.00%     $24,366   10.00%
                  Tier I capital
                  (to risk-weighted assets)          33,200   13.59       9,746   4.00       14,620    6.00
                  Tier I capital
                  (to average assets)                33,200    9.56      13,780   4.00       17,225    5.00

</TABLE>

(14)     Parent Company Condensed Financial Statements

         Following is condensed  financial  information of the Company as of and
for the years ended December 31, 1997, 1996 and 1995 (in thousands):


Condensed Balance Sheets
December 31, 1997 and 1996
<TABLE>
<CAPTION>




       Assets                                                1997      1996
<S>                                                           <C>        <C>
         Cash                                                 $196       62
         Investment securities                               7,488       77
         Federal funds sold, securities purchased
         under agreements to resell and interest-bearing
         deposits                                           16,819    8,641
         Investment in subsidiaries                         45,335   28,340
         Other                                               1,974      606

         Total assets                                      $71,812   37,726

       Liabilities and Stockholders' Equity
         Guaranteed preferred beneficial interests
         in the Company's subordinated debt                $29,639       -
         Long-term debt                                        236    3,291
         Other                                                 204       95
         Stockholders' equity                               41,733   34,340

         Total liabilities and stockholders' equity        $71,812   37,726
</TABLE>




Condensed Statements of Earnings
Years ended December 31, 1997, 1996 and 1995


<TABLE>
<CAPTION>
                                                       1997     1996     1995

<S>                                                     <C>    <C>       <C>
         Dividends from subsidiaries                    $-     1,048     2,309
         Interest income                               366        61        28
         Unrealized gains on trading securities        229      -        -
         Other expense, net                          1,800     1,442     1,563

         Income (loss) before equity in
         undistributed earnings
         of subsidiaries                            (1,205)     (333)      774

         Increase (decrease) in undistributed
         equity of subsidiaries                      4,483     1,933       (88)

         Earnings before income taxes                3,278     1,600       686

         Income tax benefit                            453       478       532

         Net earnings                               $3,731     2,078     1,218

Condensed Statements of Cash Flows
Years ended December 31, 1997, 1996 and 1995

                                                       1997     1996     1995

         Cash flows from operating activities:
                  Net earnings                        $3,731    2,078    1,218
                  Decrease (increase) in
                  undistributed
                  equity of subsidiaries              (5,372)  (1,933)      88
                  Net change in trading securities    (1,072)      -        -
                  Other                                 (812)     344       31

         Net cash provided by (used in)
         operating activities                         (3,525)     489    1,337

         Cash flows from investing activities:
                  Net change in held-to-maturity
                  securities                               2       (5)     (75)
                  Net change in available-for-sale
                  securities                          (6,341)       -       -
                  Net change in loans                      -      501     (501)
                  Net additions to premises
                  and equipment                          (18)       5       12
                  Capital contributions
                  to subsidiaries                     (6,000)  (3,000)       -
                  Cash paid for acquisition           (1,964)       -        -

         Net cash used in investing activities       (14,321)  (2,499)    (564)

         Cash flows from financing activities:
                  Principal payments on
                  long-term debt                      (3,055)  (7,385)    (491)
                  Purchase of treasury stock               -     (134)    (832)
                  Issuance of common stock                 -   18,122      350
                  Issuance of subordinated
                  debentures                          29,639        -        -
                  Payment of dividends                  (426)       -        -

                  Net cash provided by (used in)
                  financing activities                26,158   10,603     (973)

         Net increase (decrease) in cash               8,312    8,593     (200)

         Cash at beginning of year                     8,703      110      310

         Cash at end of year                         $17,015    8,703      110
</TABLE>

         The primary source of funds  available to the Company is the payment of
dividends by the subsidiaries. Subject to maintaining certain minimum regulatory
capital requirements, regulations limit the amount of dividends that may be paid
without prior approval of the subsidiaries' regulatory agencies. At December 31,
1997,  the  subsidiaries   could  pay  dividends  of  $8,341,000  without  prior
regulatory approval.

(15)     Mergers and Acquisitions

         As  discussed  in note 1,  the 1996  and  1995  consolidated  financial
statements  have been restated to include the accounts and results of operations
of Peoples Bancshares, Inc. with those of the Company. The results of operations
previously  reported by each of the companies  and the amounts  presented in the
accompanying consolidated financial statements for the six months ended June 30,
1997 and the years ended  December  31, 1996 and 1995 are  summarized  below (in
thousands):
<TABLE>
<CAPTION>


                                                                   1997      1996    1995

         Net interest income, after provision for loan losses:
<S>                                                               <C>       <C>      <C>
                  Gold Banc Corporation, Inc.                     $5,505    8,936    7,102
                  Peoples Bancshares, Inc.                         1,235    2,423    2,111

                                                                  $6,740   11,359    9,213

         Net income:
                  Gold Banc Corporation, Inc.                     $1,406    1,351      704
                  Peoples Bancshares, Inc.                           366      727      514

                                                                  $1,772    2,078    1,218
</TABLE>

         Effective  October 1, 1997,  the Company  acquired all the  outstanding
common  stock  of  Farmers  Bancshares  of  Oberlin,   Inc.  (Farmers)  and  its
wholly-owned  subsidiary,  Farmers  National  Bank,  in  exchange  for  cash  of
$1,964,000 and 273,000 shares of Company common stock valued at $3,754,000.  The
acquisition has been accounted for by the purchase method and, accordingly,  the
results  of   operations   of  Farmers  have  been  included  in  the  Company's
consolidated  financial  statements  from  October  1,  1997.  The excess of the
purchase  price over the fair value of the  underlying  net assets  acquired  of
$269,000 has been recorded as goodwill and is being amortized on a straight-line
basis over twenty years.

         The following  unaudited pro forma financial  information  presents the
combined  results of operations of the Company and Farmers as if the acquisition
had  occurred  as of the  beginning  of 1996,  after  giving  effect to  certain
adjustments,  including  amortization  of  goodwill.  The  pro  forma  financial
information  does not  necessarily  reflect the results of operations that would
have  occurred had the Company and Farmers  constituted  a single  entity during
such periods (in thousands):
<TABLE>
<CAPTION>


                           Year ended
                           December 31,
                                                                        1997     1996

<S>                                                                   <C>       <C>
         Net interest income, after provision for loan losses         $15,526   13,179

         Net income                                                    $3,792    2,447

         Net income per share - basic                                    $.75      .81

(16)     Pending Acquisitions
</TABLE>

         On November 25, 1997,  the Company  executed a definitive  agreement to
acquire Alma Bancshares (Alma). Alma is a one bank holding company that owns all
of the  stock of First  National  Bank in Alma,  located  in Alma,  Kansas.  The
agreement calls for the issuance of 147,456 shares of the Company's common stock
and the payment of cash of $750,000 to be  delivered  by the Company in exchange
for all the  outstanding  stock of Alma.  The  acquisition,  which is subject to
regulatory approval and the satisfaction of other conditions,  will be accounted
for as a  purchase.  Alma had  assets of $27  million,  loans of $16.6  million,
deposits  of $24.6  million  and  stockholders'  equity  of $2.1  million  as of
December 31, 1997 and net income of $85,000 for the year then ended.

         On November 26,  1997,  the Company  executed a definitive  acquisition
agreement with Midwest Capital  Management,  Inc.  (Midwest).  Midwest is a full
service  broker/dealer  located in Kansas City, Missouri and also manages stock,
bond  and  money  market  portfolios  of  financial  institutions,  governmental
agencies,  businesses, pension plans, foundations and individuals. The agreement
calls for the issuance of 138,125  shares of the Company's  common stock and the
payment of cash of $1,487,500.  The acquisition,  which is subject to regulatory
approval and the  satisfaction of other  conditions,  will be accounted for as a
purchase.  On  December  31,  1997,  Midwest  had  assets  of $6.5  million  and
stockholders'  equity of $812,000.  For the nine months ended December 31, 1997,
Midwest had net income of $249,000.


(17)     Litigation

         Exchange  National Bank (Exchange),  a wholly-owned  subsidiary of Gold
Banc  Corporation,  Inc.,  is a named  defendant  in a case  filed in the United
States District Court for the District of Kansas on September 11, 1997. The case
caption  is Lisa  Wilson,  et al. v.  Olathe  Bank,  et al.  On April 28,  1997,
Exchange was named as  defendant in a lawsuit that was  commenced on behalf of a
putative class consisting of 2,400 persons who had invested in  distributorships
sold by Parade of Toys,  Inc.  and  Bandero  Cigar  Company.  Parade of Toys and
Bandero Cigar sold business opportunities. They involved distribution of toys or
cigars  through the  placement  of  carousels  or humidors in retail  locations.
Plaintiffs  allege  that they and the class  that  they seek to  represent  were
induced to invest in the distributorships through fraudulent misrepresentations.
Some of those who invested in Parade of Toys were provided with Trade  Reference
lists that included Exchange.  Some of the distributors who received such a list
called  Exchange  to discuss the  Company's  relationships  with a principal  of
Parade of Toys and Bandero Cigar. The complaint alleges theories of violation of
RICO   and   RICO   conspiracy   statutes,    common   law   fraud,    negligent
misrepresentation,  civil  conspiracy  and  negligence.  The complaint  does not
allege which defendants engaged in what specific wrongdoing. Nor does it specify
the amount of damages  plaintiffs are alleged to have  sustained.  The complaint
does allege that it is believed  that over 2,400  persons  invested in Parade of
Toys or Bandero Cigar and that the minimum investment was $14,900.  Exchange has
denied any liability and is vigorously  contesting the allegations  made against
it. The Company is not yet in a position to  determine  whether the expenses and
losses, if any, in connection with this action will be material.

ITEM 9. CHANGES IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         In November 1995, the Company retained Keith E. Bouchey, a principal of
GRA Thompson,  White & Company,  P.C. ("GRA Thompson") to serve as its Executive
Vice President,  Chief Financial Officer,  Treasurer and Corporate Secretary. At
the time of his employment by the Company,  GRA Thompson served as the Company's
independent certified public accountants. In view of the Securities and Exchange
Commission's  rules dealing with the  independence of accountants,  the Board of
Directors  of the  Company  retained  KPMG  Peat  Marwick  LLP to  serve  as the
Company's new independent  certified public accountants on April 29, 1996. There
were and are no  disagreements  with GRA  Thompson  on any matter of  accounting
principles or practice,  financial statement  disclosure,  or auditing scope and
procedure  and  GRA  Thompson's  reports  on  any  of  the  Company's  financial
statements  have not  contained an adverse  opinion or  disclaimer of opinion or
been qualified as to uncertainty, audit scope or accounting principles.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

                                   MANAGEMENT

Management of the Company

         The directors  and  executive  officers of the Company are as set forth
below.



     Name            Age               Principal  Occupation and
                                     Five-Year Employment History

Michael W.Gullion    43      Mr.  Gullion  has  served as  Chairman  of the
                             Board of  Directors, President and Chief
                             Executive  Officer of the Company  since its
                             inception.  His term of office as a director
                             expires  at the  annual  meeting of stockholders
                             to be held in 1999.  Mr.Gullion is the son-in-law
                             of William Wallman.

Keith E. Bouchey     47      Mr.  Bouchey was elected to the Board of Directors
                             of the Company on May 30, 1996. His term of office
                             as a director  expires at the annual  meeting  of
                             stockholders  to be  held in  2000.  He has
                             served  as the Executive Vice President, Chief
                             Financial Officer and Corporate Secretary of the
                             Company  since  joining  the  Company in November
                             1995.  Prior to joining  the Company,  Mr. Bouchey
                             had been, since August 1977, a principal of GRA,
                             Thompson, White & Company,  P.C., a regional
                             bank accounting and consulting firm, where he
                             served on the  executive  committee  and as the
                             managing  director of the firm's regulatory
                             services practice.

William F. Wright   55       Mr. Wright was elected as a director of the
                             Company on May 30, 1996.  His term of office
                             as a  director expires at the annual meeting of
                             stockholders to be held in 2000. Mr. Wright has
                             served as the Chairman of the Board of AMCON
                             Distributing Company, a wholesale distributor
                             headquartered in Omaha, Nebraska.

D. Michael Browne   45       Mr.Browne has served as a director of the
                             Company since November 1989.  His term of
                             office as a director expires at the annual
                             meeting of stockholders to be held in 1998.  He
                             has been the Chairman and Chief Executive Officer
                             of Consortia, LTD (formerly Mike Browne
                             International LTD), a direct marketing advertising
                             agency.

William  Wallman    74       Mr. Wallman has served as a director of the
                             Company since November 1989. His term of office
                             as a director expires at the annual meeting of
                             stockholders to be held in 1999.  For more than
                             five  years  Mr. Wallman  has been the President
                             and owner of Wallman Chrysler-Plymouth,  Inc.,
                             a car dealership  located in Beatrice,  Nebraska.
                             Mr. Wallman is the father-in-law of Mr. Gullion.

Allen D. Petersen   57       Mr. Petersen was appointed to the Board of
                             Directors  of the Company on July 31, 1997.  His
                             term of office as a director expires at the
                             annual meeting of stockholders to be held in
                             1998. Mr. Petersen  previously  served in an
                             advisory capacity to the Board of Directors.
                             For more than five years Mr. Petersen has been
                             the Chairman and Chief  Executive  Officer of
                             American  Tool Companies located in Hoffman
                             Estates, Illinois.

Section 16(a) Beneficial Ownership Reporting Compliance

     Under Section 16(a) of the  Securities  Exchange Act of 1934, the Company's
directors and executive officers and shareholders  holding more than ten percent
of the  outstanding  stock of the Company are required to report  their  initial
ownership of stock and any subsequent change in such ownership to the Securities
and Exchange Commission and the Company. Specific time deadlines for the Section
16(a) filing  requirements  have been established by the Securities and Exchange
Commission.  To the Company's knowledge,  all reports due pursuant to Section 16
were filed on a timely basis, except that one report relating to the acquisition
of shares by William  Wallman  and one report  relating  to the receipt of stock
options by William Wright were filed later than required.

ITEM 11. EXECUTIVE COMPENSATION.

         The table  below  sets  forth  information  concerning  the  annual and
long-term  compensation  paid to the  Chief  Executive  Officer  and  all  other
employees of the Company whose  compensation  exceeded  $100,000 during the last
fiscal
year.









<TABLE>
<CAPTION>



                                          Summary Compensation Table
                                                                                 Long Term
                                                                                Compensation
                                                                                   Awards
                                                   Annual Compensation
                                                                                 Securities
                                                                                 Underlying
Name and                                                                           Options        All Other
Principal Position                      Year        Salary ($)    Bonus($)(1)        (#)        Compensation ($)


<S>                                      <C>         <C>          <C>             <C>              <C>


Michael W. Gullion                       1997        $241,000     $112,500        35,000           $ 16,809(2)

President and Chief Executive            1996        $186,000     $165,000         None            $ 15,923(2)
Officer                                  1995        $156,000     $165,000         None            $  9,587(2)


Keith E. Bouchey                         1997        $156,000      $31,000        12,500           $  7,841(4)

Executive Vice President,                1996(3)     $156,000      $31,000         None            $  3,933(4)
Chief Financial Officer and Corporate
Secretary
</TABLE>

(1) Represents amounts earned in fiscal year.  Acual cash payment is made in
    the following year.
(2) Consists of  contributions  to the Company's  Employee Stock  Ownership
    Plan,  personal use of  Company-owned  automobile,  and country club
    membership dues.
(3) Mr.Bouchey became an executive officer of the Company in November 1995.
(4) Consists of contributions to the Company's Employee Stock Ownership Plan
    and country club membership dues.

                                         Option/SAR Grants in Last Fiscal Year


<TABLE>
<CAPTION>
                                                            Individual Grants
Term                                                                                                    Potential Realized Value
                                         Number of        Percent of                                       at Assumed Annual
                                        Securities       Total Options                                    Rates of Stock Price
                                        Underlying        Granted to      Exercise or                       Appreciation for
                                          Options        Employees in      Base Price     Expiration          Option Term
                   Name                 Granted(#)        Fiscal Year       ($/Shr)           Date              5%       10%
<S>                                       <C>                <C>             <C>            <C>               <C>        <C>
        Michael W. Gullion                35,000             49.6%           $10.50         4/7/2007        $231,000   $585,550
        Keith E. Bouchey                  12,500             17.7%           $10.50         4/7/2007        $ 82,500   $209,125

</TABLE>
                         Aggregated  Option/SAR  Exercises in Last
                          Fiscal Year and FY-End Option/SAR Values
<TABLE>
<CAPTION>

                                                Number of Underlying
                                                     Unexercised        Value of Unexercised In-the-
                                                   Options at Fiscal     Money Options at Fiscal Year-
                                                      Year-End(#)                 end($)

                   Shares Acquired      Value         Exercisable/              Exercisable/
      Name          on Exercise(#)    Received ($)    Unexercisable            Unexercisable

<S>                       <C>             <C>           <C>                     <C>
Michael W. Gullion        0               0             35,000/0                $516,250/0

Keith E. Bouchey          0               0             12,500/0                $184,375/0

</TABLE>

Employment Contracts



     Messrs. Gullion and Bouchey (the "Executives") have entered into employment
agreements with the Company (each an  "Agreement").  The terms of the Agreements
are three years (automatically renewed on the anniversary date of the Agreements
unless either party gives notice of its intention not to renew) and provide that
Mr. Gullion will be the Chairman,  Chief Executive Officer and President and Mr.
Bouchey will be Executive Vice President,  Chief Financial Officer and Corporate
Secretary  of  the  Company.  Throughout  the  employment  period,  each  of the
Executives will be nominated by the Board of Directors for directorships and the
base  compensation  of the  Executives  and their  opportunity to earn incentive
compensation   will  be  at  least  as  great  as  in  existence  prior  to  the
effectiveness of the Agreements. An Executive may be terminated for "cause" only
(as defined in the  Agreement).  An Executive  may  terminate  the Agreement for
"good  reason"  which is defined as a material  breach of the  Agreement  by the
Company.  The death or disability of an Executive  automatically  terminates the
Agreement.

     If the Company terminates an Agreement for cause or an Executive terminates
without  good  reason,  neither the Company  nor the  Executive  has any further
obligations to the other. If the Company  terminates an Executive  without cause
(as  defined in the  Agreement),  an  Executive  terminates  for good reason (as
defined in the  Agreement),  or a Change in Control  (as  defined  below) of the
Company  occurs,  the Company is obligated to pay the Executive  three times the
present  value of the  Executive's  long and  short-term  compensation  in place
immediately  prior to the  termination or Change in Control,  provided that such
benefits cannot exceed an amount that would be subject to federal excise taxes.

     A Change in  Control  of the  Company  will be deemed to occur upon (i) the
hostile  replacement of at least the majority of the Board of Directors,  (ii) a
person  acquiring  25% or more of the shares or voting power of the stock of the
Company,  provided  such person is not an  existing  director  or  Executive  or
relative  of such a person or does not  acquire  such  shares  or voting  rights
pursuant to an  agreement to which the  Executive is a party,  or as a result of
the acquisition does not become the largest stockholder of the Company,  (iii) a
merger or sale of  substantially  all of the  assets of the  Company or (iv) the
occurrence  of any other event the Board of Directors  determines to be a Change
in Control.

     Compensation Committee Report on Executive Compensation

     The  Compensation   Committee  (the   "Committee")  is  composed  of  three
independent non-employee Directors. The Committee is responsible for setting and
administering  executive  officers'  salaries and the annual bonus and long-term
incentive plans that govern the compensation paid to executives of the Company.

Compensation Philospophy

     The Company's compensation programs are designed to provide executives with
a competitive  base salary and with incentives  linked to the performance of the
Company and the individual. The Committee engaged the services of an independent
compensation  consultant to assist it and has developed the following guidelines
for establishing executive compensation:

     Competitiveness:  Base salaries for executives should be reasonably
     commensurate with those paid by comparable companies.

     Entrepreneurialism:  Each executive will have the opportunity to earn total
     annual compensation,  including bonuses, at approximately the 75th
     percentile of comparable companies.

     Long-Term Incentives:  In order to create a sense of executive ownership
     in and commitment to the Company, the Committee has adopted a stock option
     plan that provides executives stock options.

     The Committee  selects  comparable  companies  for purposes of  determining
competitive  levels  based upon  their  size,  industry  and other  factors  the
Committee considers  appropriate.  These companies may or may not be included in
computing  the  indices  used to prepare  the  common  stock  performance  graph
included herein.


Annual Compensation

     Total  annual  cash  compensation  for  executive  officers  of the Company
consists of a base salary and a potential  annual cash bonus based upon a target
incentive opportunity established each year by the Committee.

     The base salary of each executive officer is approved on a subjective basis
by the  Committee  at a level  believed to be  sufficient  to attract and retain
qualified individuals. In making this determination, the Committee considers the
executive's  performance,  salary levels at other  competing  businesses and the
Company's  performance.  In approving salaries and incentive bonus plan payments
for  1998,  the  Committee  considered,   among  other  matters,  the  Company's
performance  during  1997  and the  compensation  of  similar  level  executives
employed by comparable  companies for which information was available,  although
the  Committee  did not target  compensation  to any  particular  group of these
companies.  The  factors  impacting  base  salary  levels are not  independently
assigned specific weights but are subjectively considered by the Committee.

     The  incentive  bonus  plan for  executive  officers  consists  of  various
objective and subjective criteria related to areas for which each such executive
has responsibility as well as for Company wide performance.  Under the incentive
bonus plan, each executive has a target bonus  percentage with an opportunity to
earn up to a maximum amount  approved by the  Committee.  The target and maximum
incentive  bonus  opportunity  is stated as a  percentage  of base  salary.  The
percentage increases relative to the executive's level of responsibility  within
the Company.  The Committee  believes that this structure is  appropriate  given
that an  executive's  ability to affect the overall  performance  of the Company
increases with the level of responsibility.  For executives other than the Chief
Executive Officer, the executive's target incentive bonus ranges from 10% to 20%
of base salary, depending upon the executives level.

     In  February  of 1997,  the  Committee  set Mr.  Gullion's  base  salary at
$250,000.  His 1997 compensation also included $112,500 (45% of his base salary)
in payments  earned under the  Company's  incentive  bonus plan for 1997,  based
largly upon the  Company's  success  during the year as measured  by: (i) a 230%
increase in the market capitalization of the Company;  (ii) a 36% growth in the
Company's  assets;  (iii) an 80% increase in earnings;  and (iv) the substantial
improvement in the return on the Company's assets,  when adjusted for the impact
of acquisitions  made during the year. For 1998, Mr.  Gullion's base salary will
remain  $250,000.  However,  his  target  incentive  bonus  opportunity  will be
increased form 30% to 40% of his base salary.

Long-Term Incentive Compensation

     The Board of Directors and the Company  believe that stock options create a
mutuality   of  interests   between  the   Company's   executive   officers  and
stockholders.  The long-term  incentive  compensation for executive officers has
consisted of awards of stock options  granted  under the Company's  stock option
plan.  The stock option plan provides  option  recipients  the right to purchase
shares of Common Stock at a specified  exercise price.  All stock options issued
to executive  officers  generally have exercise  prices equal to the fair market
value of the Common Stock on the date of the option grant. The number of options
awarded to each executive was determined by reference to the group of comparable
companies described above.

Compensation of Directors

     Non-employee  directors of the Company receive $5,000 annually and $500 per
board  meeting or committee  meeting for serving on the Board of  Directors.  In
addition,  the Company reimburses  directors for expenses incurred in connection
with  attendance at meetings of the Board of Directors and  committees  thereof.
Employees of the Company  receive no  additional  compensation  for serving as a
director.

Indemnification and Limitation of Liability

     The Amended and Restated  Articles of  Incorporation of the Company require
it  to  indemnify  its  directors  and  officers  against  liabilities,   fines,
penalties,  settlements,  claims and  reasonable  expenses  incurred  by them in
connection  with any  proceeding  to which they may be made a party by reason of
their service in those  capacities to the fullest extent permitted by the Kansas
General  Corporation  Code  (the  "KGCC").  The KGCC  permits a  corporation  to
indemnify its present and former directors and officers if ordered to do so by a
court or after a  determination  by its independent  counsel,  stockholders or a
majority of its disinterested  directors that the person to be indemnified acted
in good faith and in a manner  such person  reasonably  believed to be in or not
opposed to the best interests of the corporation.

     Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors,  officers or controlling  persons pursuant to the
foregoing  provisions,  the Company has been informed that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act and is therefore unenforceable.

Common Stock Performance

     The  graph  set  forth  below is based  upon  information  provided  by SNL
Securities  L.C.  and  compares  the  yearly  percentage  change  in  cumulative
stockholder  return of the Company's  Common Stock since November 19, 1996 ( the
date the Company  completed its initial public offering of Common Stock) against
the  cumulative  return of the NASDAQ Stock  (U.S.),  the SNL $250 Million- $500
Million Bank Index and the SNL All Bank and Thrift Index  covering the same time
period.  The  graph  is based  on $100  invested  on  November  19,  1996 in the
Company's  Common  Stock,  the NASDAQ Stock  (U.S.),  the SNL $250 Million- $500
Million Bank Index and the SNL All Bank and Thrift Index, each assuming dividend
reinvestment.  The historical stock price performance shown on this graph is not
necessarily indicative of future performance.
<TABLE>
<CAPTION>

                                                            Period Ending
Index                           11/19/96  12/31/96  3/31/97   6/30/97   9/30/97   12/31/97
<S>                              <C>       <C>      <C>       <C>       <C>        <C>
Gold Banc Corporation, Inc.      100.00    101.47   126.47    169.52    224.44     298.71
NASDAQ-Total US                  100.00    102.51    96.95    114.72    134.13     125.79
SNL $250M-$500M Bank Index       100.00    103.71   115.00    129.73    151.72     179.37
SNL All Bank & Thrift Index      100.00    100.50   106.14    122.12    141.01     154.28
</TABLE>

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The  following  table sets  forth  information  as of  February  28,  1998,
concerning the shares of the Company's  common stock  beneficially  owned by (i)
each person known by the Company to be the beneficial owner of 5% or more of the
Company's common stock, (ii) each of the directors of the Company, and (iii) all
directors and  executive  officers of the Company as a group.  Unless  otherwise
indicated,  the named beneficial owner has sole voting and investment power over
the shares listed.

<TABLE>
<CAPTION>

        .

                          Name and Address of Beneficial Owner                    Number of Shares       Percentage of Shares
                                                                                 Beneficially Owned
Beneficially Owned
<S>                         <C>                                                        <C>                    <C>
          Michael W. Gullion(1)...............................................         949,118                17.73%
          11301 Nall Avenue
          Leawood, Kansas  66211

          William Wallman(2)..................................................         220,401                 4.13%
          538 W. Mary
          Beatrice, Nebraska  68310

          Allen D. Petersen(2)(3).............................................         167,828                 3.14%
          122 W. County Line Road
          Barrington Hills, Illinois 60010

          William F. Wright(2)................................................         165,660                 3.10%
          1431 Stratford Court
          Del Mar, California  92014

          Keith E. Bouchey(4).................................................          33,100                   *
          11301 Nall Avenue
          Leawood, Kansas  66211

          D. Michael Browne(5)................................................          28,753                   *
          6450 Campbell Drive
          Lincoln, Nebraska  68510
          Directors and executive officers as a group.........................        1,010,971               18.89%
</TABLE>
         *      Less than 1%
        (1)     Includes 553,889 shares for which Mr. Wallman, Mr. Petersen, Mr.
                Wright or The Lifeboat Foundation are the record owners and that
                are subject to the terms of an agreement  granting  Mr.  Gullion
                voting control over such shares;  27,333 shares held by the Gold
                Banc  Corporation,  Inc. Employee Stock Ownership Plan and Trust
                that are not allocated to individual accounts and over which Mr.
                Gullion, as Plan Administrator,  has voting control;  and 35,000
                shares  that  can be  acquired  pursuant  to  options  that  are
                presently exercisable.
        (2)     Subject to the terms of an agreement granting Mr. Gullion voting
                control  over such  shares;  includes  1,000  shares that may be
                acquired pursuant to options that are presently exercisable.
        (3)     166,828 of these  shares are owned by The  Lifeboat  Foundation.
                Mr.   Petersen  is  one  of  three  directors  of  The  Lifeboat
                Foundation.  The Lifeboat  Foundation has granted Mr. Gullion an
                irrevocable  proxy to vote each of these  shares.  Mr.  Petersen
                disclaims  beneficial  ownership of these shares.
        (4)     Includes 15,000 shares held in the name of Holyrood  Bancshares,
                Inc.  Mr.  Bouchey is a  director,  officer and  stockholder  of
                Holyrood Bancshares, Inc.; 600 shares  owned by children of
                Mr. Bouchey;  and 12,500 shares that may be
                acquired pursuant to options that are presently exercisable.
        (5)     Includes  1,000 shares that may be acquired  pursuant to options
                that are presently exercisable.

     Mr. Gullion has entered into a agreement with Mr. Wallman pursuant to which
Mr. Wallman has granted to Mr.Gullion an irrevocable proxy to vote all shares of
th Company's common stock (other than any director  qualifying  shares) owned or
subsequently  acquired by Mr.Wallman.  The agreement also grants to Mr. Gullion:
(i) a 180-day  first right of refusal in the event Mr.  Wallman  receives a bona
fide  offer  from a third  party to  purchase  some or all of the  shares of the
Company's common stock held by Mr. Wallman or certain  permitted  transferees to
whom Mr. Wallman may transfer shares;  and (ii) in the event Mr. Wallman dies, a
180-day  option to purchase  some or all of the shares of the  Company's  common
stock held by Mr. Wallman or certain  permitted  transferees to whom Mr. Wallman
may transfer shares.  This agreement  terminates on the earlier to occur of: (i)
the date Mr. Gullion  ceases to be President,  Chairman  and/or Chief  Executive
Officer of the Company; or (ii) six months after Mr. Wallman's death.

     Mr.  Gullion  has also  entered  into an  agreement  with Mr.  Wright,  Mr.
Petersen and the Lifeboat  Foundation pursuant to which Mr. Wright, Mr. Petersen
and the Lifeboat  Foundation have granted to Mr. Gullion an irrevocable proxy to
vote all shares of the Company's common stock owned or subsequently  acquired by
Mr. Wright, Mr. Petersen or the Lifeboat Foundation.  Such proxy continues until
the earlier of: (i) the date Mr. Gullion ceases to be President, Chairman and/or
Chief Executive Officer of the Company;  or (ii) termination of the agreement as
described  below.  The agreement  grants to Mr.  Gullion a 90 day first right of
refusal  in the  event Mr.  Wright,  Mr.  Petersen  or the  Lifeboat  Foundation
receives a bona fide offer from a third party to  purchase,  or proposes to sell
on the public  market,  some or all of the shares of the Company's  common stock
held by such person or by certain permitted  transferees to whom such shares may
be  transferred.  The agreement also grants to Mr. Wright , Mr. Petersen and the
Lifeboat  Foundation  a 90 day first  right of refusal in the event Mr.  Gullion
receives a bona fide offer from a third party to  purchase,  or proposes to sell
on the public  market,  some or all of the shares of the Company's  common stock
held by Mr.  Gullion or certain  permitted  transferees  to whom Mr. Gullion may
transfer shares. The agreement terminates in 2006.

        ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Certain of the officers, directors and principal sockholders of the Company
and its subsidiary banks, and members of their immediate families and businesses
in which these  individuals  hold  controlling  interests,  are customers of the
Company's banks and it is anticipated such parties will continue to be customers
of the banks in the future.  Credit  transactions with these parties are subject
to  review  by each  bank's  Board  of  Directors.  All  outstanding  loans  and
extensions  of credit by the banks to these  parties  were made in the  ordinary
course of business on substantially the same terms, including interest rates and
collateral,  as those  prevailing at the time for comparable  transactions  with
other  persons,  and, in the opinion of  management,  did not and do not involve
more  than  the  normal  risk  of   collectability  or  present  other  features
unfavorable  to the banks.  The  aggregate  balance of loans and advances  under
existing  lines of credit to these  parties was $9.3 million and $9.6 million at
December 31, 1997 and 1996, respectively.


ITEM 14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

     (a) Exhibits

     3(a) Amended and Restated Articles of Incorporation of the Company*

     3(a)(i) Certificate of Amendment to Restated Articles of Incorporation**

     3(b) Restated By-laws of the Company*

     4 Form of Common Stock Certificate*

     9(a) Proxy  Agreement/Shareholder  Agreement between Michael W. Gullion and
          William Wallman, dated as of September 15, 1996*

     9(b) Proxy  Agreement/Shareholder  Agreement between Michael W. Gullion and
          William F. Wright, dated as of September 15, 1996*

     9(c)    Accession    of   The    Lifeboat    Foundation    to   the   Proxy
             Agreement/Stockholder  Agreement  among Michael W. Gullion,
             William  Wright and Allen Petersen, dated as of May 28, 1997***

     10(a) Employment Agreement between the Company and Michael W. Gullion*

     10(b) Employment Agreement between the Company and Keith E. Bouchey*

     10(c) Gold Banc Corporation, Inc. 1996 Equity Compensation Plan*

     10(d) Form of Tax Sharing Agreements between the Company and the Banks*

     10(e) Form of Federal Home Loan Bank Credit  Agreement to which each of the
           Banks is a party*

     10(f) Form of Junior Subordinated Indenture dated as of December 15, 1997
           between the Company and Bankers Trust Company as Trustee.***

     10(g) Form of Trust Agreement dated as of December 15, 1997 between the
           Company and Bankers Trust (Delaware) as Trustee.***

     10(h) Form of Amended and Restated Trust Agreement among the Company,
           Bankers Trust Company, as Property Trustee, Bankers Trust
           (Delaware), as Delaware Trustee and various holders of Trust
           Securities.***

     10(i) Form of Guarantee Agreement between the Company, as Guarantor, and
           Bankers Trust Company, as Trustee, dated as of December 15, 1997.***

     16    Letter Regarding Change in Certifying Accountants*

     21    List of Subsidiaries of the Company

     27    Financial Data Schedule

     *Previously filed as an Exhibit to the Company's  Registration Statement on
      Form SB-2 No. 333-12377 and the same is incorporated herein by reference.

     **Previously filed as an Exhibit to the Company's Registration Statement on
       Form S-4 No. 333-28563 and the
       same is incorporated herein by reference.

     ***Previously filed as an Exhibit to the Company's  Registration  Statement
        on Form SB-2 No. 333-39849.

     (b) Reports on Form 8-K

                None.


                                   SIGNATURES

                Pursuant  to the  requirements  of  Section  13 or 15 (d) of the
        Securities  Exchange Act of 1934,  the  Registrant  has duly caused this
        report to be signed on its  behalf by the  undersigned,  thereunto  duly
        authorized.

                                                   GOLD BANC CORPORATION, INC.
                                                   (Registrant)

                       By:   /s/ Michael W. Gullion
                             Michael W. Gullion
                             Chief Executive Officer

        Dated:  ______________, 1998

                Pursuant to the  requirements of the Securities  Exchange Act of
        1934, this report has been signed below by the following  persons in the
        capacities and on the dated indicated:
Signature                  Title                              Date

/s/ Michael W. Gullion     Chairman of the Board,          __________, 1998
    Michael W. Gullion     President and Chief Executive
                           Officer (Principal Executive
                           Officer)


/s/ Keith E. Bouchey       Director, Executive Vice          ________, 1998
    Keith E. Bouchey       President, Chief Financial Officer
                           and Corporate Secretary
                           (Principal Financial Officer)


/s/ Brian J. Ruisinger     Treasurer and Controller         _________, 1998
    Brian J. Ruisinger     (Principal Accounting Officer)

/s/ William Wallman        Director                        __________, 1998
    William Wallman

/s/ D. Michael Browne      Director                        __________, 1998
    D. Michael Browne

/s/ William F. Wright      Director                        __________, 1998
    William F. Wright

/s/ Allen D. Petersen      Director                        __________, 1998
    Allen D. Petersen



                                      INDEX


        ITEM 1. BUSINESS..................................................1

        ITEM 2. PROPERTIES...............................................14

        ITEM 3. LEGAL PROCEEDINGS........................................14

        ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS  ....15

        ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, UNREGISTERED
                SALES OF EQUITY SECURITIES AND RELATED
                STOCKHOLDER MATTERS......................................15

        ITEM 6. SELECTED FINANCIAL DATA
                ........................................................ 16

        ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS............... 17

        ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                      MARKET RISK....................................... 34

        ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA..............34

        ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                      ACCOUNTIN AND FINANCIAL DISCLOSURE................ 34

        ITEM 10.DIRECTORS AND EXECUTIVE OFFICERS OF THE
                             REGISTRANT..................................34

        ITEM 11.EXECUTIVE COMPENSATION
                ........................................................ 34

        ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                      MANAGEMENT ........................................38

        ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS...........40

        ITEM 14.EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
                      ON FORM 8-K .......................................40

                                  EXHIBIT 21

                      LIST OF SUBSIDIARIES OF THE COMPANY

Exchange National Bank
Citizens State Bank & Trust Co.
Provident Bank f.s.b.  (Subsidiary of Provident Bancshares, Inc.)
Peoples National Bank
Farmers National Bank
First National Bank in Alma
Midwest Capital Management, Inc.
Gold Banc Financials Services, Inc.(subsidiary of Exchange National Bank)
Citizens Investments, Inc., (subsidiary of Citizens State Bank and Trust)