TeamBank capital restoration plan rejected; parent says bankruptcy possible

By Caroline Salls

Pittsburgh, March 20 - Team Financial, Inc. wholly owned subsidiary TeamBank, NA has received formal notice from the Office of the Comptroller of Currency that the OCC did not accept the capital restoration plan submitted by TeamBank on March 2, according to an 8-K filed with the Securities and Exchange Commission.

As a result, TeamBank will now be treated as if it were significantly undercapitalized and is subject to mandatory restrictions and requirements under federal banking laws, including restrictions on bonuses and compensation paid to senior executive officers, restrictions on the payment of capital distributions and management fees, and a prohibition from accepting employee benefit plan deposits.

Although the OCC may accept a revised plan, the company said TeamBank is not expected to be able to provide one in the foreseeable future.

In the meantime, Team Financial said the OCC or other regulators can take other actions, including placing Team Bank and the company's other bank subsidiary, Colorado National Bank, into receivership.

If this happens, Team Financial said its ability to continue operations would be extremely doubtful, and the company could be forced to file Chapter 11 bankruptcy.

Team Financial, located in Paola, Kan., is the financial holding company for TeamBank, NA and Colorado National Bank.

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