Gold Bank Settles IRS Claims Over Housing Revenue Bond Investments For $3.5 Million, Recovers $4.6 Million in Settlement of Clai

Gold Banc (Nasdaq:GLDB) today announced that its Gold
Bank Kansas subsidiary had reached three settlements totaling $3.485
million with the Internal Revenue Service over $14.2 million in
multi-family housing revenue bonds purchased by the bank. Gold Banc
also announced that it had recovered $4.643 million in settlement of
claims against two other participants in the bond transactions.
   The bonds were marketed and sold as tax-exempt investments, and
the company had previously reported the bonds as high-yield, tax-free
investments. The IRS made a proposed determination that the interest
paid on the bonds could not be excluded from the gross income of the
bank for tax purposes.
   "While we do not agree with the IRS' assertion that the bank owed
federal income tax on the interest it received on the bonds, we
believe it is in the best interest of the bank to avoid the cost,
uncertainty, and distraction that would come from a prolonged legal
proceeding," said Mick Aslin, Chief Executive Officer. "It makes more
sense for us to move on and continue growing our bank for the benefit
of our shareholders, customers and associates, while seeking to
recover funds from other parties to the transactions in addition to
those we are announcing today," said Aslin.
   The bank will make a single cash payment to cover the three
settlements, which were signed on October 17, 2005. The payment will
be recorded as a onetime charge for the quarter ended September 30,
2005.
   The bonds were purchased by Gold Bank in 2001 and 2002 and were
issued by the City of Lee's Summit, Missouri, the Community
Development Authority of the City of Manitowoc, Wisconsin, and the
Oklahoma Housing Development Authority. The bonds were part of three
larger bond issues totaling $450 million. Gold Bank was first notified
about IRS concerns in August, after an examination of the Lee's
Summit, Missouri bonds. The bank received similar notices from the IRS
in September regarding the Wisconsin and Oklahoma bonds.
   The bank received payments on the bonds in the amount of $1.940
million, $4.225 million, $4.375 million, and $0.828 million in 2002,
2003, 2004, and 2005, respectively. The bank recorded an aggregate
impairment loss of $10.846 million on the bonds in 2004, as disclosed
in the company's quarterly report on Form 10-Q for the quarter ended
September 30, 2004 and its annual report on Form 10-K/A for the year
ended December 31, 2004. Gold Banc's Gold Capital Management
subsidiary received an aggregate of $450,000 in fees paid out of the
proceeds of the three bond issues.
   By entering into the settlement agreements, Gold Bank has resolved
any and all claims the IRS may have had against the bank related to
the bonds. Certain current and former employees who were involved in
the bond transactions were also released from liability by the IRS.
Under the settlement agreements, the interest received on the bonds
cannot be excluded from the income of the bank for federal income tax
purposes. The IRS, however, has agreed that it will not impose any
tax, penalties, additions to tax, adjustments, or assessments against
the bank. Finally, the bank will not be required to file amended tax
returns for the years in which the bank received interest on the
bonds.
   For additional information about the bonds and the IRS settlement,
please refer to our current report on Form 8-K dated October 17, 2005
filed with the Securities and Exchange Commission.

   Related Settlements

   In separate but related matters, Gold Bank has recovered an
aggregate of $4.643 million in settlement of claims it had made
against other participants in the bond transactions.
   Gold Bank has entered into a settlement agreement with the trustee
of the Oklahoma bonds. As part of the agreement, the trustee made a
cash payment of approximately $1.4 million to Gold Bank on September
29, 2005. The agreement was the result of a claim by Gold Bank that
the trustee had improperly paid fees and expenses to third parties out
of bond proceeds in which the bank had a security interest. The
settlement amount, net of a remaining write-off of $0.753 million,
will be recorded as other non-interest income in the third quarter of
2005.
   Gold Banc Corporation's corporate counsel also acted as bond
counsel in the transactions. The firm issued opinions that, based on
certain assumptions and conditions, interest on the bonds was excluded
for tax purposes from the gross income of the bondholders. The firm's
opinions were a factor relied upon by Gold Bank in purchasing the
bonds. Gold Bank made claims against the firm in connection with the
bonds, and the firm denied liability arising out of the bond
transactions. Gold Bank has agreed to settle its claims against the
firm for a total of $3.25 million, consisting of $2.05 million in cash
payments by the firm and $1.20 million in structured payments that
include discounts on legal fees over a period of up to four years
after the date of the settlement. Gold Bank will receive a total of
$2.05 million in cash, and has realized $0.150 million in structured
payments from the firm as of the date of this release. Of this amount,
$1.75 million will be received after the end of the third quarter and
is expected to be recorded as income in the fourth quarter of 2005.

   Conference Call

   Gold Banc has scheduled a conference call for October 21, 2005 at
8:00 a.m. (CDT) to discuss earnings and results of operations for the
third quarter and strategic directions and goals. Information about
the call will be provided in the third quarter earnings release. Gold
Banc may provide information and respond to questions during the call
about the events described in this release.

   About Gold Banc

   Gold Banc is a $4.1 billion financial holding company
headquartered in Leawood, Kansas, a part of the Kansas City
metropolitan area. Gold Banc provides banking and asset management
services in Florida, Kansas, Missouri and Oklahoma through 32 banking
locations. Gold Banc is traded on the NASDAQ under the symbol GLDB.