Team Financial, Inc. Announces Second Quarter Results

PAOLA, Kan., Aug. 2  /PRNewswire-FirstCall/ -- Team Financial, Inc. (the Company, Nasdaq: TFIN) today announced net income of $1,411,000, or $.39 basic and $.38 diluted income per share, for the three months ended June 30, 2007, an increase of 53.4%, compared to $920,000 or $.24 basic and $.23 diluted income per share, for the three months ended June 30, 2006.  Net income for the six months ended June 30, 2007 was $2,579,000, or $.72 basic and $.70 diluted income per share, compared to $1,818,000, or $.46 basic and $.45 diluted income per share for the six months ended June 30, 2006, an increase of 41.8%.

Net interest income for the three months ended June 30, 2007 increased approximately $446,000, or 7.5%, from the same period last year, primarily due to the increase in loan balances and an increase in net interest margin.  The net interest margin on average earning assets increased five basis points to 3.81% during the three months ended June 30, 2007 from 3.76% during the same period last year.  Non-interest income increased approximately $191,000, or 11.0%, primarily due to a $90,000 loss on sales of investment securities that was incurred during the second quarter of 2006 as a result of restructuring the investment portfolio.  Also contributing to the increase in non-interest income was a $43,000, or 20.9%, increase in trust fees and a $24,000 increase in bank owned life insurance income.  Non-interest expenses decreased $27,000, or 0.4%, for the three months ended June 30, 2007 compared to the same period in 2006 primarily due to decreases in salaries and benefits expense and professional expenses.  The decrease in professional expenses was largely due to insurance coverage taking effect to cover the legal costs associated with a pending lawsuit.  Offsetting these decreases were increases in occupancy and equipment and marketing expenses, which were largely related to the opening of a new banking location in Falcon, Colorado.

Loans receivable increased approximately $23.5 million, or 4.8%, to $510.0 million at June 30, 2007 compared to $486.5 million at December 31, 2006. This increase was primarily a result of an increase in construction and land development loans.

The provision for loan losses was $77,000 for the three months ended June 30, 2007 compared to $157,000 for the same period ended June 30, 2006.  The allowance for loan losses as a percent of loans receivable was 1.15% at June 30, 2007 and 1.17% at December 31, 2006, and non-performing loans were .96% of loans receivable at June 30, 2007 and 1.92% of loans receivable at December 31, 2006.  The substantial decrease in non-performing loans during the first quarter of 2007 was attributable to the pay-off of a group of loans of approximately $2.2 million that were delinquent as of December 31, 2006.

"Despite a tough market, we managed to grow loans and increase our net interest margin during the second quarter and we've seen a marked improvement in our loan quality ratios.  We have never been a player in the subprime lending market, so we do not have the credit problems that are plaguing many other financial institutions.  We've also seen widespread improvement in our non-interest income, and we've held our expenses down.  It all makes for a pretty good quarter," said Robert J. Weatherbie, Chairman and Chief Executive Officer of Team Financial, Inc.

Team Financial, Inc. is a financial services company with $766 million in total assets.  It operates in the Kansas City metropolitan area, southeastern Kansas, western Missouri, the Omaha, Nebraska metropolitan area, and in the Colorado Springs, Colorado metropolitan area.  The Company offers a full range of consumer and corporate banking services, including small business loans, mortgage loans, trust services, and investment and brokerage services.  For additional information on Team Financial, Inc., visit its Web site at http://www.teamfinancialinc.com/ or call 913-294-9667.

Note: 2006 data has been adjusted to reflect the adoption and application of Staff Accounting Bulletin No. 108 ("SAB 108").  The adoption of SAB 108 resulted in a $29,000 and $59,000 decrease to the net income for the three and six months ending June 30, 2006, or $.01 basic and diluted income per share decrease for the three months ending June 30, 2006 and $.02 basic and diluted income per share decrease for the six months ended June 30, 2006.

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995 that are subject to certain risks and uncertainties that could cause actual results to differ materially from historical income and those presently anticipated or projected.  The Company cautions readers not to place undue reliance on any such forward looking statements, which speak only as of the date of this release.  Such risks and uncertainties include those detailed in the Company's filings with the Securities and Exchange Commission, risks of adversely changing results of operations, risks related to the Company's expansion strategies, risks relating to loans and investments, including the effect of the change of the local economic conditions, risks associated with the adverse effects of the changes in interest rates, and competition for the Company's customers by other providers of financial services, all of which are difficult to predict and many of which are beyond the control of the Company.

                  TEAM FINANCIAL, INC. AND SUBSIDIARIES
           Unaudited Consolidated Statements of Financial Condition
                                (In thousands)


                                             June 30,         December 31,
  Assets                                       2007               2006

  Cash and due from banks                     $16,583            $14,529
  Federal funds sold and interest
   bearing bank deposits                        1,611             22,621
    Cash and cash equivalents                  18,194             37,150

  Investment securities:
   Available for sale, at fair value
    (amortized cost of $174,473 and
    $171,301 at June 30, 2007 and
    December 31, 2006, respectively)          171,309            170,079
   Non-marketable equity securities
    (amortized cost of $9,274 and
    $9,061 at June 30, 2007 and
    December 31, 2006, respectively)            9,274              9,061
    Total investment securities               180,583            179,140

  Loans receivable, net of unearned
   fees                                       509,982            486,497
  Allowance for loan losses                    (5,856)            (5,715)
    Net loans receivable                      504,126            480,782

  Accrued interest receivable                   5,840              5,558
  Premises and equipment, net                  20,420             17,628
  Assets acquired through foreclosure             615                817
  Goodwill                                     10,700             10,700
  Intangible assets, net of
   accumulated amortization                     2,825              2,659
  Bank-owned life insurance policies           20,325             19,926
  Other assets                                  2,121              2,068

    Total assets                             $765,749           $756,428

  Liabilities and Stockholder's
   Equity
  Deposits:
   Checking deposits                         $174,304           $194,979
   Savings deposits                            27,873             28,536
   Money market deposits                       63,119             57,123
   Certificates of deposit                    305,617             82,244
    Total deposits                            570,913            562,882
  Federal funds purchased and
   securities sold under agreements
   to repurchase                                7,363              6,215
  Federal Home Loan Bank advances             108,038            108,069
  Notes payable                                   100                200
  Subordinated debentures                      22,681             22,681
  Accrued expenses and other
   liabilities                                  5,232              5,864

    Total liabilities                         714,327            705,911



  Stockholders' Equity:
  Preferred stock, no par value,
   10,000,000 shares authorized; no
   shares issued                                   --                 --
  Common stock, no par value,
   50,000,000 shares authorized;
   4,502,791 and 4,501,516 shares
   issued; 3,633,564 and 3,594,784
   shares outstanding at June 30,
   2007 and December 31, 2006,
   respectively                                27,916             27,901
  Capital surplus                                 290                680
  Retained earnings                            36,456             34,449
  Treasury stock, 869,227 and 906,732
   shares of common stock at cost
   at June 30, 2007, and December
   31, 2006, respectively                     (11,066)           (11,707)
  Accumulated other comprehensive
   loss                                        (2,174)              (806)

    Total stockholders' equity                 51,422             50,517

    Total liabilities and
     stockholders' equity                    $765,749           $756,428



                    TEAM FINANCIAL, INC. AND SUBSIDIARIES
               Unaudited Consolidated Statements of Operations
                (Dollars in thousands, except per share data)

                                  Three Months Ended     Six Months Ended
                                       June 30,              June 30,
                                   2007        2006      2007       2006
  Interest Income:
  Interest and fees on loans      $10,283     $8,690    $20,213    $16,612
  Taxable investment securities     1,961      1,928      3,992      3,814
  Nontaxable investment
   securities                         293        271        580        540
  Other                               199        170        380        307

    Total interest income          12,736     11,059     25,165     21,273

  Interest Expense:
  Deposits:
   Checking deposits                  509        479      1,053        939
   Savings deposits                    50         53        102        106
   Money market deposits              520        338      1,034        577
   Certificates of deposit          3,680      2,632      7,224      4,805
  Federal funds purchased and
   securities sold under
   agreements to repurchase            52         52         89         88
  FHLB advances payable             1,126      1,129      2,239      2,263
  Notes payable and other
    borrowings                          3         39          7         43
  Subordinated debentures             402        389        804        777

    Total interest expense          6,342      5,111     12,552      9,598

    Net interest income before
     provision for loan losses      6,394      5,948     12,613     11,675

  Provision for loan losses            77        157        307        432

    Net interest income after
     provision for loan losses      6,317      5,791     12,306     11,243

  Non-Interest Income:
  Service charges                     908        904      1,725      1,751
  Trust fees                          249        206        418        382
  Gain on sales of mortgage
   loans                              154        139        299        330
  Gain (loss) on sales of
   investment securities                1        (90)         1        (90)
  Bank-owned life insurance
   income                             238        214        475        430
  Other                               383        369        750        718

    Total non-interest income       1,933      1,742      3,668      3,521

  Non-Interest Expenses:
  Salaries and employee
   benefits                         3,067      3,169      6,197      6,253
  Occupancy and equipment             842        728      1,577      1,496
  Data processing                     785        725      1,522      1,421
  Professional fees                   222        476        672        850
  Marketing                           169         95        279        175
  Supplies                            111         85        192        186
  Intangible asset amortization       126        148        266        295
  Other                               929        852      1,715      1,661

    Total non-interest expenses     6,251      6,278     12,420     12,337

    Income before income taxes      1,999      1,255      3,554      2,427

  Income tax expense                  588        335        975        609

    Net income                     $1,411       $920     $2,579     $1,818

  Basic income per share            $0.39      $0.24      $0.72      $0.46
  Diluted income per share          $0.38      $0.23      $0.70      $0.45
  Shares applicable to basic
   income per share             3,615,244  3,850,049  3,605,229  3,937,321
  Shares applicable to diluted
   income per share             3,684,649  3,941,529  3,675,921  4,026,881



                    Team Financial, Inc. And Subsidiaries
                  Unaudited Selected Ratios and Other Data

                                        As of and For      As of and For
                                      Three Months Ended  Six Months Ended
                                           June 30            June 30
  Selected Data                         2007      2006(c)  2007     2006(c)

  Balance Sheet Highlights

  Average Assets                      $762,514  $717,689 $762,167 $708,156

  Average Loans                       $504,821  $458,044 $498,803 $445,750

  Non Performing Loans                  $4,897    $5,848   $4,897   $5,848


  Performance Ratios

  Return On Average Assets               0.74%     0.51%    0.68%    0.52%

  Return On Average Equity              10.96%     7.44%   10.16%    7.11%

  Average Equity To Average Assets       6.77%     6.91%    6.71%    7.28%

  Net Interest Margin On Average
   Earning Assets During The Period
   (Tax Equivalent)                      3.81%     3.76%    3.79%    3.77%

  Efficiency Ratio(a)                   75.07%    81.64%   76.29%   81.19%

  Book Value Per Share                  $14.15    $14.78

  Tangible Book Value Per Share(b)      $10.51    $11.09



  Asset Quality Ratios

  Non Performing Loans As A Percent
   Of Total Loans                        0.96%     1.28%

  Non Performing Assets As A Percent
   Of Total Assets                       0.72%     0.94%

  Allowance For Loan Losses As A
   Percent Of Total Loans                1.15%     1.25%

  Allowance For Loan Losses As A
   Percent Of Non Performing Loans     119.58%    97.49%


  (a) Calculated as non-interest expense/(net interest income plus
      non-interest income)

  (b) Calculated as (stockholders equity less goodwill, less intangible
      assets, net of accumulated amortization plus mortgage servicing
      rights) divided by shares outstanding.

  (c) 2006 data has been adjusted to reflect the adoption and application of
      Staff Accounting Bulletin No. 108


DATASOURCE: Team Financial, Inc.



CONTACT:  Rick J. Tremblay, Chief Financial Officer of Team Financial,

Inc., [phone], 



Web site:  http://www.teamfinancialinc.com/ 

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