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The written agreement with the Federal Reserve Bank of Kansas City, which was signed Friday, requires the Paola, Kan.-based bank holding company and two affiliates to:
--Come up with a plan within 60 days to maintain sufficient capital, taking into account its troubled loans and other factors.
-- Refrain from declaring or paying shareholder dividends without prior approval of the Kansas City Fed.
--Not incur, increase or guarantee any debts without prior KC Fed approval.
--Submit a statement within 60 days of its planned sources and uses of cash flow.
--Not increase current management fees or impose new ones on the company's banks.
"This was actually an agreement we disclosed quite a while ago," said Sandy Moll, chief operating officer of Team Financial and interim chief executive of TeamBank. "It's very typical when the holding company has banks that are under agreements with their primary regulators that the holding company also enters into an agreement. That's all this is."
In September, TeamBank, which has offices in the Kansas City area, agreed to boost its capital by $3.5 million, improve its operations and address specific problems cited by examiners. Its smaller sister bank, Colorado National Bank in Colorado Springs, Colo., consented to similar regulatory demands, citing a need for $1.6 million in new capital
TeamBank had assets of $669 million as of the end of September. Colorado National Bank had assets of $118 million.
Earlier Team Financial had said that regulators determined that its banks had engaged in unsafe and unsound banking practices and that it expected to come under its own regulatory orders to raise capital. The holding company said at the time that it was in discussions with the Federal Reserve Bank of Kansas City and expected "formal supervisory action" from the Fed.
Last week Team disclosed an additional $6.3 million in losses and said it expected to lose $9.8 million, or $2.72 a share, in the third quarter. Team is looking at the possibility of applying for a capital boost through the U.S. Treasury's Capital Purchase Program.
Shares of Team's stock closed Tuesday at 70 cents, up 18 cents.
To reach Dan Margolies, call 816-234-4481 or send e-mail to dmargolies@kcstar.com.
To see more of The Kansas City Star, or to subscribe to the newspaper, go to http://www.kansascity.com. Copyright (c) 2008, The Kansas City Star, Mo. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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