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Paola bank under scrutiny
Housing market problems cited as primary concern
By Brian McCauley, bmccauley@miconews.com
TeamBank, which is based in Paola, is deemed to be in “troubled condition,” according to a federal government filing.
Team Financial Inc.’s banks in the Kansas City area and its affiliate in Colorado each received a letter in late April from the Office of the Comptroller of the Currency mapping out the concerns.
Earlier this month, Team Financial’s board of directors approved a merger between TeamBank and Colorado National Bank, which is expected to garner an extra $225,000 in annual savings.
The OCC, which is Team Financial’s regulator, indicated that the economic downturn in the national housing market has accelerated, hitting Team Financial’s banks, which concentrate on lending through real estate, construction and land development loans.
“The Federal Deposit Insurance Corporation has recommended that financial institutions such as our banks, that have concentration levels in these types of loans, increase their levels of loan loss allowances and increase capital to provide ample protection from unexpected losses,” it states in a Team Financial statement filed with the Securities and Exchange Commission.
Team Financial reported that, on May 5, $1.75 million in capital was infused into TeamBank along with $250,000 into Colorado National Bank.
“We funded the capital infusions through our existing line of credit, and our remaining available borrowing capacity under the line of credit is $2 million,” according to the SEC filing.
Still, Team Financial admits it might not be enough.
“We cannot, however, assure that we will be successful in raising additional equity or … that the banks will not be subject to additional regulatory action,” according to the SEC filing.
The finding by the OCC means that Team Financial’s banks must notify the regulators 90 days before adding or replacing a member of their respective boards of directors or promoting any existing employee as a senior executive officer.
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Team Financial Inc.’s banks in the Kansas City area and its affiliate in Colorado each received a letter in late April from the Office of the Comptroller of the Currency mapping out the concerns.
Earlier this month, Team Financial’s board of directors approved a merger between TeamBank and Colorado National Bank, which is expected to garner an extra $225,000 in annual savings.
The OCC, which is Team Financial’s regulator, indicated that the economic downturn in the national housing market has accelerated, hitting Team Financial’s banks, which concentrate on lending through real estate, construction and land development loans.
“The Federal Deposit Insurance Corporation has recommended that financial institutions such as our banks, that have concentration levels in these types of loans, increase their levels of loan loss allowances and increase capital to provide ample protection from unexpected losses,” it states in a Team Financial statement filed with the Securities and Exchange Commission.
Team Financial reported that, on May 5, $1.75 million in capital was infused into TeamBank along with $250,000 into Colorado National Bank.
“We funded the capital infusions through our existing line of credit, and our remaining available borrowing capacity under the line of credit is $2 million,” according to the SEC filing.
Still, Team Financial admits it might not be enough.
“We cannot, however, assure that we will be successful in raising additional equity or … that the banks will not be subject to additional regulatory action,” according to the SEC filing.
The finding by the OCC means that Team Financial’s banks must notify the regulators 90 days before adding or replacing a member of their respective boards of directors or promoting any existing employee as a senior executive officer.