Great Southern Bank, a subsidiary of Springfield-based Great Southern Bancorp, on Friday enacted its purchase of a failed Kansas bank in a deal estimated at more than $800 million.
All 17 locations of Paola, Kan.-based TeamBank, located in Kansas, Missouri and Nebraska - including nine in metropolitan Kansas City and locations in Lamar and Nevada - opened today as Great Southern branches. Great Southern now operates 56 locations and 180 automated teller machines.
Great Southern President and CEO Joseph Turner said the bank intends to keep most of TeamBank's employees, though there may be a few positions cut due to overlapping job duties.
Officials said the purchase is worth roughly $830 million. Great Southern assumes approximately $474 million of TeamBank's deposits at a 1 percent premium, along with $443 million in loans and $7 million in other real estate at a $100 million discount.
The Federal Deposit Insurance Corp. has agreed to cover 80 percent of losses on the disposition of the loans and other real estate up to $115 million, and will cover 95 percent of losses exceeding that amount.
According to the FDIC, TeamBank was closed March 20 by the federal Office of the Comptroller of the Currency, making it the first failed bank in Kansas this year and the 20th in the country since Jan. 1. TeamBank was affiliated with Colorado National Bank, which also failed March 20.
Turner said despite the FDIC guarantee, which the FDIC estimates will cost the Deposit Insurance Fund about $98 million, the TeamBank transaction is separate from the U.S. Treasury's Capital Purchase Program; Great Southern received $58 million in exchange for 58,000 shares of the company's preferred stock through that program late last year.
"This was a transaction that we would have been interested in whether we had participated in the Capital Purchase Program or not," Turner said. "TeamBank had a good solid deposit franchise, and their problem - like many other banks - was that they had some loans that went sour on them."
He noted that, with the FDIC backing and the $100 million discount Great Southern received on the purchase of the loan portfolio, the bank is substantially protected from any loan losses.
Shares of Great Southern (Nasdaq: GSBC) closed March 20 at $11.10 and were trading up 11 percent, at $12.33, as of 11:15 a.m.
This installment of Springfield Business Journal’s Architects & Engineers Project Report showcases 26 endeavors by area design and engineering professionals.
