FORM 10Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 34-027228
---------
BANKATLANTIC BANCORP, INC.
--------------------------
(Exact name of registrant as specified in its Charter)
Florida 65-0507804
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1750 East Sunrise Boulevard
Ft. Lauderdale, Florida 33304
--------------------------- -----
(Address of principal executive offices) (Zip Code)
(954) 760-5000
--------------
(Registrant's telephone number, including area code)
Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
preferred and common stock as of the latest practicable date.
Outstanding at
Title of Each Class August 5, 1998
------------------- --------------
Class A Common Stock, par value $0.01 per share 26,707,537
Class B Common Stock, par value $0.01 per share 10,382,688
<PAGE>
TABLE OF CONTENTS
Page
FINANCIAL INFORMATION Reference
---------
Financial Statements................................................. 1-11
Consolidated Statements of Financial Condition -
June 30, 1998 and 1997 and December 31, 1997 - Unaudited........... 1
Consolidated Statements of Operations - For the Three and
Six Months Ended June 30, 1998 and 1997 - Unaudited................ 2
Consolidated Statements of Stockholders' Equity for the Six
Months Ended June 30, 1998 and 1997 - Unaudited.................... 3
Consolidated Statements of Cash Flows - For the Six Months Ended
June 30, 1998 and 1997 - Unaudited................................. 4-5
Notes to Consolidated Financial Statements - Unaudited............... 6-11
Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................... 12-19
OTHER INFORMATION
Exhibits and Reports on Form 8K...................................... 20
Signatures........................................................... 21
<PAGE>
[THIS PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED
June 30, December 31, June 30,
(In thousands, except share data) 1998 1997 1997
--------- ----------- ---------
ASSETS
<S> <C> <C> <C>
Cash and due from depository institutions ....................................... $ 87,280 $ 82,787 $ 82,490
Federal Funds sold............................................................... 0 0 7,808
Loans receivable, net ........................................................... 2,501,965 1,911,263 1,921,197
Loans available for sale ........................................................ 211,828 161,562 12,783
Investment securities-net, held to maturity, at cost which approximates
market value ................................................................. 64,559 55,213 68,587
Securities available for sale, at market value .................................. 513,550 607,490 449,422
Trading securities, at market value.............................................. 34,460 5,067 0
Accrued interest receivable ..................................................... 27,533 22,624 21,254
Investments in real estate held for development and sale and joint ventures, net 42,280 18,638 0
Real estate owned, net .......................................................... 5,775 7,528 4,618
Office properties and equipment, net ............................................ 55,665 51,130 47,494
Federal Home Loan Bank stock, at cost which approximates market value ........... 54,704 34,887 24,637
Mortgage servicing rights ....................................................... 48,146 38,789 30,491
Deferred tax asset, net ......................................................... 6,811 3,197 3,253
Cost over fair value of net assets acquired ..................................... 57,765 26,188 27,414
Other assets .................................................................... 44,250 38,117 29,026
--------- --------- ---------
Total assets .................................................................... $3,756,571 $3,064,480 $2,730,474
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits ........................................................................ $1,812,631 $ 1,763,733 $1,768,087
Advances from FHLB .............................................................. 1,059,061 697,707 467,704
Federal Funds purchased ......................................................... 13,600 2,500 0
Securities sold under agreements to repurchase .................................. 202,489 58,716 105,544
Subordinated debentures and notes payable ....................................... 181,300 179,600 78,300
Guaranteed preferred beneficial interests in the Company's Junior
Subordinated Debentures....................................................... 74,750 74,750 74,750
Advances by borrowers for taxes and insurance ................................... 81,472 39,397 47,072
Other liabilities ............................................................... 76,017 40,906 35,442
--------- --------- ---------
Total liabilities ............................................................... 3,501,320 2,857,309 2,576,899
--------- --------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value, 10,000,000 shares authorized:
none issued and outstanding .................................................. 0 0 0
Class A Common Stock, $0.01 par value, authorized 80,000,000 shares;
issued and outstanding, 26,300,906, 21,509,159 and 17,383,314 shares .......... 263 215 118
Class B Common Stock, $0.01 par value, authorized 45,000,000 shares;
issued and outstanding, 10,375,215, 10,690,231 and 10,735,440 shares .......... 104 107 107
Additional paid-in capital ...................................................... 145,224 98,475 57,747
Unearned compensation retention pool - restricted stock grants .................. (8,071) 0 0
Retained earnings ............................................................... 117,472 107,650 94,606
------- ------- ------
Total stockholders' equity before accumulated other comprehensive income ........ 254,992 206,447 152,578
Accumulated other comprehensive income - net unrealized appreciation
on securities available for sale - net of deferred income taxes .............. 259 724 997
--------- --------- ---------
Total stockholders' equity ...................................................... 255,251 207,171 153,575
--------- --------- ---------
Total liabilities and stockholders' equity ...................................... $3,756,571 $3,064,480 $2,730,474
========= ========= =========
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
For the Three Months For the Six Months
(In thousands, except share data) Ended June 30, Ended June 30,
------------------------ ------------------------
Interest income: 1998 1997 1998 1997
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Interest and fees on loans and leases .................................... $ 55,024 $ 41,948 $ 102,135 $ 83,071
Interest on banker's acceptances ......................................... 383 0 871 0
Interest and dividends on securities available for sale .................. 7,385 8,246 17,372 15,788
Interest and dividends on investment securities held to maturity and
trading securities ...................................................... 2,231 1,852 4,455 3,631
---------- ---------- ---------- ----------
Total interest income .................................................... 65,023 52,046 124,833 102,490
Interest expense:
Interest on deposits ..................................................... 16,659 17,042 33,117 34,317
Interest on advances from FHLB ........................................... 13,760 6,266 24,472 11,067
Interest on securities sold under agreements to repurchase ............... 3,072 2,309 6,152 4,858
Interest on subordinated debentures, guaranteed preferred interest
in the Company's Junior Subordinated Debentures and notes payable ...... 4,712 2,775 9,579 4,314
Capitalized interest on investments in and advances to joint ventures..... (218) 0 (218) 0
---------- ---------- ---------- ----------
Total interest expense ................................................... 37,985 28,392 73,102 54,556
---------- ---------- ---------- ----------
Net interest income ...................................................... 27,038 23,654 51,731 47,934
Provision for loan losses ................................................ 3,371 2,686 6,778 5,162
---------- ---------- ---------- ----------
Net interest income after provision for loan losses ...................... 23,667 20,968 44,953 42,772
---------- ---------- ---------- ----------
Non-interest income:
Loan servicing and other loan fees ....................................... 906 1,405 1,398 2,976
Gains on sales of loans available for sale ............................... 1,104 714 2,832 1,165
Gains on sales of mortgage servicing rights .............................. 362 2,201 2,400 4,634
Gains on sales of securities available for sale .......................... 473 689 2,193 942
Unrealized and realized gains on trading securities ...................... 532 0 703 0
Real estate held for development and sale and joint venture activity, net. 3,954 0 3,003 0
Transaction fees ......................................................... 3,040 2,267 5,640 4,412
ATM fees ................................................................. 1,590 1,351 2,887 2,665
Other .................................................................... 1,111 1,007 1,951 1,864
---------- ---------- ---------- ----------
Total non-interest income ................................................ 13,072 9,634 23,007 18,658
---------- ---------- ---------- ----------
Non-interest expense:
Employee compensation and benefits ....................................... 12,014 9,286 23,482 18,833
Occupancy and equipment .................................................. 5,426 4,245 10,554 9,037
Federal insurance premium ................................................ 258 345 520 553
Advertising and promotion ................................................ 1,693 525 2,184 894
Foreclosed asset activity, net ........................................... 125 15 (44) 28
Amortization of cost over fair value of net assets acquired .............. 701 627 1,360 1,254
Other .................................................................... 5,766 4,400 10,837 9,244
---------- ---------- ---------- ----------
Total non-interest expense ............................................... 25,983 19,443 48,893 39,843
---------- ---------- ---------- ----------
Income before income taxes ............................................... 10,756 11,159 19,067 21,587
Provision for income taxes ............................................... 4,365 4,338 7,420 8,425
---------- ---------- ---------- ----------
Net income ............................................................... $ 6,391 $ 6,821 $ 11,647 $ 13,162
========== ========== ========== ==========
Basic earnings per share Class A common stock ............................ $ 0.20 $ 0.24 $ 0.37 $ 0.46
========== ========== ========== ==========
Basic earnings per share Class B common stock ............................ $ 0.18 $ 0.23 $ 0.33 $ 0.45
========== ========== ========== ==========
Diluted earnings per share Class A common stock .......................... $ 0.16 $ 0.19 $ 0.29 $ 0.37
========== ========== ========== ==========
Diluted earnings per share Class B common stock .......................... $ 0.15 $ 0.19 $ 0.28 $ 0.37
========== ========== ========== ==========
Basic weighted average shares outstanding Class A common stock ........... 22,724,683 17,940,645 22,269,820 18,042,902
========== ========== ========== ==========
Basic weighted average shares outstanding Class B common stock ........... 10,425,815 10,742,040 10,596,437 10,656,193
========== ========== ========== ==========
Diluted weighted average shares outstanding Class A common stock ......... 39,320,600 26,933,436 39,039,828 27,007,861
========== ========== ========== ==========
Diluted weighted average shares outstanding Class B common stock ......... 11,384,648 11,767,040 11,630,834 11,727,887
========== ========== ========== ==========
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997
Unearned
Compen- Net
sation Unrealized
Retention Appreci-
Addi- Pool - ation on
Compre- tional Restricted Securities
hensive Common Paid-in Retained Stock Available
(In thousands) Income Stock Capital Earnings Grants For Sale Total
------- ------ ------- -------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 ........................ $ 183 $ 64,171 $ 82,602 $ 0 $ 748 $147,704
Comprehensive income
Net income ....................................... $13,162 0 0 13,162 0 0 13,162
------
Other comprehensive income, net of tax:
Unrealized gain on securities available for sale 766
Reclassification adjustment for gains and
(losses)included in net income ................. (517)
------
Other comprehensive income ...................... 249
------
Comprehensive income .............................. $13,411
======
Dividends on Class A common stock ................. 0 0 (487) 0 0 (487)
Dividends on Class B common stock ................. 0 0 (623) 0 0 (623)
Exercise of Class B common stock options .......... 2 1,266 0 0 0 1,268
Tax effect relating to the exercise of stock
options ......................................... 0 365 0 0 0 365
Purchase and retirement of Class A common stock ... (7) (7,416) 0 0 0 (7,423)
Purchase and retirement of Class B common stock ... (1) (839) 0 0 0 (840)
Issuance of Class A common stock upon conversion
of subordinated debentures, net .................. 0 200 0 0 0 200
5 for 4 stock split ............................... 48 0 (48) 0 0 0
Net change in unrealized appreciation (depreciation)
on securities available for sale-net of deferred
income taxes...................................... 0 0 0 0 249 249
------ ------- -------- --------- --------- -------
BALANCE, JUNE 30, 1997 ............................ $ 225 $ 57,747 $ 94,606 $ 0 $ 997 $153,575
====== ======= ======== ========= ========= =======
BALANCE, DECEMBER 31, 1997 ........................ $ 322 $ 98,475 $ 107,650 $ 0 $ 724 $207,171
Net income ....................................... $11,647 0 0 11,647 0 0 11,647
------
Other comprehensive income, net of tax:
Unrealized gains (losses) on securities
available for sale .............................. 225
Reclassification adjustment for gains and(losses)
included in net income .......................... (690)
------
Other comprehensive income ....................... (465)
------
Comprehensive income .............................. $11,182
======
Dividends on Class A common stock ................. 0 0 (1,318) 0 0 (1,318)
Dividends on Class B common stock ................. 0 0 (507) 0 0 (507)
Exercise of Class A common stock options .......... 0 156 0 0 0 156
Exercise of Class B common stock options .......... 4 1,322 0 0 0 1,326
Tax effect relating to the exercise of stock
options ......................................... 0 676 0 0 0 676
Purchase and retirement of Class B common stock ... (7) (10,640) 0 0 0 (10,647)
Issuance of Class A common stock for acquisitions . 43 42,391 0 0 0 42,434
Issuance of Class A common stock options upon
acquisition of RBCO............................... 0 1,582 0 0 0 1,582
Issuance of Class A common stock upon conversion of
subordinated debentures, net ..................... 5 3,191 0 0 0 3,196
Net change in unrealized appreciation (depreciation)
on securities available for sale-net of deferred
income taxes ..................................... 0 0 0 0 (465) (465)
Unearned compensation retention pool- restricted
stock grants...................................... 0 8,071 0 (8,071) 0 0
------ ------- ------- --------- --------- -------
BALANCE, JUNE 30, 1998 ............................ $ 367 $145,224 $ 117,472 $ (8,071) $ 259 $255,251
====== ======= ======== ========= ========= =======
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
For the Six Months
(In thousands, except share data) Ended June 30,
------------------------
Operating activities: 1998 1997
---------- --------
<S> <C> <C>
Net income ...................................................................... $ 11,647 $ 13,162
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses ....................................................... 6,778 5,162
Provision for allowance for losses on real estate owned ......................... 475 0
Depreciation .................................................................... 3,046 2,410
Amortization of mortgage servicing rights ....................................... 7,597 3,647
Gains on sales of mortgage servicing rights ..................................... (2,400) (4,634)
Decrease in deferred tax asset, net ............................................. (2,858) (53)
Net accretion of securities ..................................................... (807) (247)
Unrealized and realized (gains) losses on trading securities, net ............... (703) 12
Purchases of trading securities ................................................. (1,621) (6,417)
Proceeds from sales of trading securities ....................................... 1,753 0
Net amortization of deferred loan origination fees .............................. (655) (510)
Gains on sales of real estate owned ............................................. (915) (161)
Gains on sales of real estate held for development and sale ..................... (5,259) 0
Gains on sales of securities available for sale ................................. (2,193) (943)
Proceeds from sales of loans available for sale ................................. 144,741 55,791
Fundings of loans available for sale ............................................ (75,208) (51,850)
Gains on sales of loans available for sale ...................................... (2,832) (1,165)
Tax certificate recoveries ...................................................... (59) (231)
Amortization of dealer reserve .................................................. 4,479 3,947
Amortization of cost over fair value of net assets acquired ..................... 1,360 1,254
Net accretion of purchase accounting adjustments ................................ (14) (231)
Amortization of deferred borrowing costs ........................................ 392 194
Increase in accrued interest receivable ......................................... (4,909) (499)
Decrease in other assets ........................................................ 1,515 12,995
Net losses (gains) on sales of property and equipment ........................... (1) 16
Income (loss) from joint ventures ............................................... (62) 0
Increase in other liabilities ................................................... 19,838 (1,135)
---------- --------
Net cash provided by operating activities ....................................... 103,125 30,514
---------- --------
Investing activities:
Proceeds from redemption and maturities of investment securities ................ 29,277 28,150
Purchase of investment securities ............................................... (38,564) (35,642)
Proceeds from sales of securities available for sale ............................ 390,283 205,163
Principal collected on securities available for sale ............................ 69,416 76,178
Purchases of securities available for sale ...................................... (365,390) (283,310)
Proceeds from sales of FHLB stock ............................................... 0 1,550
FHLB stock acquired ............................................................. (19,817) (11,400)
Principal reduction on loans .................................................... 676,159 347,245
Loan fundings for portfolio ..................................................... (519,690) (248,637)
Loans purchased ................................................................. (1,022,314) (216,156)
Proceeds from maturities of banker's acceptances ................................ 210,459 287
Purchases of banker's acceptances ............................................... (94,445) (77)
Proceeds from sales of banker's acceptances ..................................... 41,877 0
Additions to dealer reserve ..................................................... (4,682) (5,240)
Proceeds from sales of real estate owned ........................................ 5,272 1,591
Mortgage servicing rights acquired .............................................. (36,641) (20,278)
Proceeds from sales of mortgage servicing rights ................................ 16,145 6,628
Cost of equipment acquired for lease ............................................ (9,473) 0
Additions to office property and equipment ...................................... (4,545) (1,646)
Investment in and advances to joint ventures .................................... (20,489) 0
Proceeds from sales of real estate held for development and sale ................ 9,536 0
Additional investment in real estate held for development and sale .............. (4,443) 0
Acquisitions, net of cash acquired .............................................. 433 0
----------- --------
Net cash used in investing activities ........................................... (691,636) (155,594)
----------- --------
See Notes to Consolidated Financial Statements - Unaudited (Continued)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(CONTINUED)
For the Six Months
Ended June 30,
----------------------
1998 1997
--------- ---------
Financing activities:
<S> <C> <C>
Net increase (decrease) in deposits ................................................... $ 21,393 $ (91,978)
Interest credited to deposits ......................................................... 27,505 27,202
Repayments of FHLB advances ........................................................... (380,646) (320,000)
Proceeds from FHLB advances ........................................................... 742,000 492,004
Net increase (decrease) in securities sold under agreements to repurchase ............. 143,773 (85,044)
Net increase (decrease) in federal funds purchased .................................... 11,100 (1,660)
Repayment of notes payable ............................................................ (6,522) 0
Increase in notes payable ............................................................. 3,162 0
Proceeds from issuance of guaranteed preferred interests in the Company's junior
subordinated debentures ............................................................. 0 74,750
Issuance of common stock relating to exercise of employee stock options ............... 1,482 1,268
Payments to acquire and retire common stock ........................................... (10,647) (8,263)
Receipts of advances by borrowers for taxes and insurance ............................. 42,075 17,413
Common stock dividends paid ........................................................... (1,671) (1,117)
--------- --------
Net cash provided by financing activities ............................................ 593,004 104,575
--------- --------
Increase (decrease) in cash and cash equivalents ..................................... 4,493 (20,505)
Cash and cash equivalents at beginning of period ...................................... 82,787 102,995
--------- --------
Cash and cash equivalents at end of period ............................................ $ 87,280 $ 82,490
========= ========
Supplementary disclosure and non-cash investing and financing activities:
Interest paid on borrowings and deposits .............................................. $ 69,863 $ 52,600
Income taxes paid ..................................................................... 5,416 9,306
Loans transferred to real estate owned ................................................ 3,079 1,130
Proceeds receivable from sales of mortgage servicing rights ........................... 13,330 9,148
Purchased residential loans held for investment transferred to held for sale .......... 108,465 0
Accrual for purchase of tax certificates paid in July ................................. 5,035 6,353
Issuance of Class A common stock upon acquisitions .................................... 42,434 0
Issuance of Class A common stock options upon acquisition ............................. 1,582 0
Issuance of Class A common stock upon conversion of subordinated debentures .......... 3,196 200
Decrease in deferred offering costs upon conversion of subordinated debentures ........ 117 0
Decrease in subordinated debentures upon conversion to Class A common stock ........... (3,313) 0
Loan charge-offs ...................................................................... 7,072 4,856
Tax certificate charge-offs (recoveries), net ......................................... 262 (507)
Class A common stock dividends; not paid until July ................................... 719 234
Class B common stock dividends; not paid until July ................................... 252 310
Increase in equity for the tax effect related to the exercise of employee stock options 676 365
Change in net unrealized appreciation (depreciation) on securities available for sale . (756) 404
Change in deferred taxes on net unrealized appreciation (depreciation) on securities
available for sale ................................................................... (291) 155
Change in stockholders' equity from net unrealized appreciation (depreciation)
on securities available for sale, less related deferred income taxes ................ (465) 249
Increase in real estate held for development and sale resulting from St. Lucie West
Holding Company ("SLWHC") purchase accounting adjustments ........................... 1,502 0
Decrease in other assets resulting from SLWHC purchase accounting adjustments ......... (1,502) 0
========= ========
See Notes to Consolidated Financial statements - Unaudited
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - UNAUDITED
1. PRESENTATION OF INTERIM FINANCIAL STATEMENTS
BankAtlantic Bancorp, Inc. (the "Company") is a unitary savings bank
holding company. The Company's primary asset is the capital stock of
BankAtlantic, its wholly owned subsidiary. Under applicable law, the Company
generally has broad authority with few restrictions to engage in various types
of business activities. The Company's primary activities relate to the
operations of BankAtlantic and BankAtlantic's subsidiaries. However, on June 30,
1998 the Company acquired Ryan, Beck & Co., ("RBCO") an investment banking firm
which is being operated as an independent autonomous subsidiary of the Company.
On March 20, 1998, Leasing Technology Inc. ("LTI") was also acquired by the
Company but it was intended to be operated as a wholly owned subsidiary of
BankAtlantic, subject to receipt of regulatory approval. Such approval was
obtained on June 30, 1998 and the Company contributed LTI to BankAtlantic at the
Company's cost . All significant intercompany balances and transactions have
been eliminated in consolidation.
In management's opinion, the accompanying consolidated financial statements
contain such adjustments necessary to present fairly the Company's consolidated
financial condition at June 30, 1998 and 1997, the consolidated results of
operations for the three and six months ended June 30, 1998 and 1997, the
consolidated stockholders' equity for the six months ended June 30, 1998 and
1997 and the consolidated cash flows for the six months ended June 30, 1998 and
1997. Such adjustments consisted only of normal recurring items. The
consolidated financial statements and related notes are presented as permitted
by Form 10Q and should be read in conjunction with the notes to consolidated
financial statements appearing in the Company's Annual Report on Form 10K for
the year ended December 31, 1997 and the March 31, 1998 Form 10Q.
2. EQUITY CAPITAL
Pursuant to previously announced plans to purchase shares of its common
stock, during the six months ended June 30, 1998, the Company paid $10.6 million
to repurchase and retire 738,500 shares of Class B common stock and during the
six months ended June 30, 1997, the Company paid $7.4 million and $840,438 to
repurchase 708,750 shares and 75,000 shares of Class A and Class B common
shares, respectively. During the six months ended June 30, 1998, the Company
issued 505,793 shares of Class A common stock upon the conversion of $3.3
million in principal amount of the Company's 6 3/4% Convertible Subordinated
Debentures due 2006 (the "6 3/4% Convertible Debentures") at a conversion price
of $6.55. This conversion increased stockholders' equity $3.2 million, net of
offering costs. During the six months ended June 30, 1998, the Company issued
2,863,367 and 718,413 shares of Class A common stock to acquire RBCO and LTI,
respectively (see also Note 7 "Acquisitions"). Upon acquisition of RBCO, the
Company assumed all options outstanding under RBCO's existing stock option plans
resulting in the issuance of options to purchase 314,145 shares of Class A
common stock at various exercise prices based upon the exercise prices of the
assumed options. Furthermore, pursuant with the RBCO acquisition agreement
683,362 restricted shares of Class A Common Stock were placed in an incentive
and retention pool for the benefit of certain RBCO employees. The incentive and
retention pool has a four year vesting period from the date of acquisition.
The following table sets forth all outstanding options:
Outstanding Outstanding
Options Options
Class B Class A
----------- -----------
Options Outstanding at December 31, 1997 2,115,547 1,616,632
Options Issued in connection with the
acquisition of RBCO .................. 0 314,145
Options granted ........................ 0 61,250
Options Exercised ...................... (429,799) (10,989)
Options Canceled ....................... (2,877) (36,203)
---------- -----------
Options Outstanding at June 30, 1998 ... 1,682,871 1,944,835
========== ===========
Exercisable at June 30, 1998 ........... 75,289 184,275
========== ===========
Exercise price per share outstanding ... $3.90-$4.00 $3.97-$14.38
========== ===========
<PAGE>
3. SALES OF FINANCIAL ASSETS
During the six months ended June 30, 1998, the Company sold $19.7 million
of mortgage servicing rights relating to approximately $1.3 billion of
underlying loans realizing gains of $2.0 million.. In addition, the Company
realized $362,000 of deferred revenues relating to mortgage servicing rights
sold during prior periods. During the three and six months ended June 30, 1997,
the Company sold $5.8 million and $11.1 million of mortgage servicing rights
realizing gains of $2.2 million and $4.6 million, respectively. These mortgage
servicing rights related to approximately $496.1 million and $1.0 billion of
loans, respectively. Included in other assets at June 30, 1998 and December 31,
1997 were $13.3 million and $9.1 million of receivables, respectively, from the
sales of mortgage servicing rights. During the three and six months ended June
30, 1998, the Company sold $72.3 million and $388.1 million of securities
available for sale for an aggregate gain of $473,000 and $2.2 million,
respectively. During the three and six months ended June 30, 1997, the Company
sold $113.0 million and $204.2 million of securities available for sale for
aggregate gains of $689,000 and $942,000, respectively. During the three and six
months ended June 30, 1998, the Company sold $48.0 million and $141.9 million of
loans held for sale for gains of $1.1 million and $2.8 million, respectively.
During the three and six months ended June 30, 1998, the Company transferred
$58.1 million and $108.5 million of purchased residential loans from the held
for investment category to the loans held for sale category. As part of its
normal operations the Company purchases bulk residential loans and continually
evaluates the portfolio. These evaluations may result in transfers from the held
for investment category to the held for sale category; however, such transfers
would not normally exceed 10% of the average annual balance of the portfolio.
During the three and six months ended June 30, 1997, the Company sold $30.0
million and $54.6 million of loans held for sale for gains $714,000 and $1.2
million, respectively.
4. TRADING SECURITIES
The unrealized and realized gains (losses) on trading securities for the
three and six months ended June 30, 1998 were $(28,000) and $560,000 and
$143,000 and $560,000, respectively. Included in trading account securities were
$27.7 million of securities owned by RBCO at June 30, 1998. Included in other
liabilities was $3.3 million of securities sold not yet purchased.
The Company's trading securities consist of the following (in thousands):
June 30, December 31,
1998 1997
------- -----------
Debt obligations:
States and municipalities .. $10,270 $ 0
Corporations ............... 636 0
U.S. Government and agencies 431 0
Corporate equities ........... 23,098 5,067
Other ........................ 25 0
------ ------
$34,460 $ 5,067
====== ======
5. REAL ESTATE HELD FOR DEVELOPMENT AND SALE AND JOINT VENTURE ACTIVITIES
In October 1997, BankAtlantic acquired the St. Lucie West Holding Corp.
("SLWHC"), the developer of the master planned community of St. Lucie West in
St. Lucie County, Florida. Upon further evaluation of the fair value of the
assets acquired in connection with the SLWHC acquisition, other assets was
reduced by $1.5 million with a corresponding increase in real estate held for
development and sale. During the three and six months ended June 30, 1998, SLWHC
land sales resulted in gains of $5.2 million and $5.3 million, respectively, the
Company invested an additional $3.6 million and $4.4 million in SLWHC,
respectively, and SLWHC had operating expenses of $1.3 million and $2.3 million,
respectively. Additionally, during the three and six months ended June 30, 1998
the Company's investments and advances to other real estate joint ventures
increased by $1.3 million and $20.5 million, respectively. Furthermore, the
Company capitalized $218,000 of interest expense in connection with investments
in and advances to joint ventures' activities.
<PAGE>
6. COMPREHENSIVE INCOME
In June 1997 the FASB issued Statement No. 130 ("FAS 130") "Reporting
Comprehensive Income". FAS 130 became effective for the Company on January 1,
1998 with earlier financial statements reclassified to reflect its application.
Comprehensive income is the change in equity of a business enterprise during a
period from transactions and other events and circumstances from nonowner
sources. Some of the items included in comprehensive income are unrealized gains
and losses on securities available for sale, foreign currency translations and
underfunded pension obligations. Reclassification adjustments are made to avoid
double counting in comprehensive income items that are displayed as part of net
income for a period that also had been displayed as part of other comprehensive
income in an earlier period. Implementation of FAS 130 required additional
disclosure in the Company's financial statements but had no impact on the
Company's Statement of Financial Condition or Statement of Operations. The
income tax benefit relating to the reclassification adjustment for the six
months ended June 30, 1998 and 1997 was $434,000 and $324,000, respectively.
7. ACQUISITIONS
In March 1998, the Company acquired LTI, a company engaged in the equipment
leasing and finance business. For financial accounting purposes the acquisition
was effective on March 1, 1998. LTI principally leases or finances trucks, and
manufacturing and construction equipment to businesses located primarily in
South Florida. In June 1998, BankAtlantic received regulatory approval and the
capital stock of LTI was contributed by the Company to BankAtlantic effective
June 30, 1998. The acquisition of LTI was accounted for under the purchase
method of accounting as if the acquisition had occurred March 1, 1998. The
results of LTI are included in the Company's results of Operations as of March
1, 1998. The Company will amortize goodwill over 25 years on a straight line
basis. Based upon an appraisal from an independent third party, the estimated
fair value of Class A common stock issued in the acquisition was reduced to
reflect contractual transfer restrictions on the Company's stock received by the
former LTI shareholders. This valuation was changed from 90% of the fair value
to 65% based on a valuation appraisal report received from an independent third
party.
On June 30, 1998 the Company acquired all of RBCO's outstanding shares of
common stock in exchange for shares of the Company's Class A common stock in an
acquisition accounted for under the purchase method of accounting. RBCO will be
operated as an autonomous independent wholly owned subsidiary under RBCO's
management. RBCO is an investment firm that is principally engaged in the
underwriting, distribution and trading of tax-exempt obligations and bank and
thrift equity and debt securities. RBCO provides investment banking, research
and financial advisory services primarily to financial services companies with a
focus on corporate finance and merger-related services. RBCO offers a general
securities brokerage business with investment products for retail and
institutional clients, as well as life insurance and annuity products. RBCO's
retail and institutional brokerage clients consist primarily of high net worth
individuals (primarily residents of New Jersey, other Mid-Atlantic and
Northeastern states and Florida), banking and thrift institutions (primarily
located in New Jersey, Pennsylvania and Florida) and, to a much lesser extent,
insurance companies and specialty finance companies. The principal executive
office of RBCO is located in Livingston, New Jersey. RBCO is registered as a
broker-dealer with the Securities and Exchange Commission ("SEC") and is a
member of the National Association of Securities Dealers, Inc. ("NASD") and the
Securities Investor Protection Corporation ("SIPC"). RBCO is not a member of any
securities exchange. Brokerage services to retail and institutional customers
are provided through RBCO's sales force of 84 sales account executives located
in the Livingston and Shrewsbury, New Jersey, Bala Cynwyd, Pennsylvania, and
West Palm Beach, Florida offices.
<PAGE>
The preliminary analysis of the fair value of assets acquired and
liabilities assumed in connection with the acquisitions of RBCO and LTI
effective June 30, 1998 and March 1, 1998, respectively, is as follows:
In thousands RBCO LTI Total
------- ------- -------
Cash acquired .............................. $ 733 $ 0 $ 733
Leases receivable, net ..................... 0 8,419 8,419
Securities available for sale .............. 0 121 121
Trading account securities ................. 27,697 0 27,697
Property and equipment ..................... 2,916 119 3,035
Deferred income tax (liability) assets ..... 1,015 (551) 464
Other assets ............................... 4,104 975 5,079
Securities sold not yet purchased .......... (3,334) 0 (3,334)
Notes payable .............................. (1,704) (6,670) (8,374)
Other liabilities .......................... (7,709) (4,151) (11,860)
Subordinated loan from the Company ......... (10,000) 0 (10,000)
-------- -------- --------
Fair value of net tangible assets acquired . 13,718 (1,738) 11,980
-------- -------- --------
Estimated fair value of Class A common stock
issued .................................... 35,017 0 35,017
Estimated fair value of restricted Class A
common stock issued ....................... 1,634 5,783 7,417
Estimated fair value of Class A common stock
options issued ............................ 1,582 0 1,582
Cash paid to shareholder ................... 0 300 300
Acquisition costs .......................... 500 100 600
-------- -------- --------
Total purchase price ....................... 38,733 6,183 44,916
-------- -------- --------
Cost over fair value of net assets acquired $ 25,015 $ 7,921 $ 32,936
======== ======== ========
The net cash acquired in connection with both of the above acquisitions was
$433,000. During March 1998, the Company extended RBCO a $10.0 million
subordinated loan on an arms length basis to enable RBCO to expand into new
products and markets. Upon acquisition, the loan was eliminated in
consolidation. Included in cost over fair value of net assets acquired was $2.6
million of goodwill related to the February 1998 acquisition by RBCO of
Cumberland Advisors and Cumberland Consulting. This valuation is subject to
change based on a valuation appraisal on Class A restricted common stock issued
in connection with the above transaction. The goodwill associated with the
Cumberland entities will be amortized on a straight line basis over 15 years
resulting in an annual expense of $171,000. This will be tax deductible and the
remaining goodwill of $22.5 million associated with RBCO will be amortized on a
straight line basis over 25 years resulting in an annual expense of $900,000
that will not be tax deductible.
The following is proforma information for the six months ended June 30,
1998 and 1997 as if the RBCO acquisition was consummated on January 1, 1998 and
1997, respectively. The proforma information is not necessarily indicative of
the results of operations which would have been realized had the acquisition
been consummated as of the dates for which the proforma financial information is
presented or future performance (in thousands, except for per share data):
For the Six Months Ended
------------------------
June 30,1998 June 30,1997
------------ ------------
Historical Proforma Historical Proforma
---------- -------- ---------- --------
Net interest income .............. $ 51,731 $ 52,010 $ 47,934 $ 48,246
------- ------- ------- -------
Provision for loan losses ........ 6,778 6,778 5,162 5,162
------- ------- ------- -------
Non-interest income .............. 23,007 45,442 18,658 33,202
Non-interest expense ............. 48,893 70,708 39,843 54,813
------- ------- ------- -------
Provision for income taxes ....... 7,420 7,927 8,425 8,484
------- ------- ------- -------
Net Income ....................... $ 11,647 $ 12,039 $ 13,162 $ 12,989
======= ======= ======= =======
Basic earnings per share Class A . $ 0.37 $ 0.35 $ 0.46 $ 0.41
======= ======= ======= =======
Basic earnings per share Class B . $ 0.33 $ 0.31 $ 0.45 $ 0.41
======= ======= ======= =======
Diluted earnings per share Class A $ 0.29 $ 0.28 $ 0.37 $ 0.34
======= ======= ======= =======
Diluted earnings per share Class B $ 0.28 $ 0.27 $ 0.37 $ 0.34
======= ======= ======= =======
<PAGE>
The RBCO acquisition agreement provided for the establishment of an
incentive and retention pool, under which shares of the Company's Class A common
stock representing 20% of the total transaction value was allocated to key
employees of RBCO. The retention pool consists of 683,362 shares of restricted
Class A common stock which will vest in four years to employees who remain for
the period. The retention pool, valued at $8.1 million at the acquisition date,
will be amortized to compensation expense over the four year vesting period and
is tax deductible at the vesting date. Included in the Company's Statement of
Financial Condition at June 30, 1998 were the assets and liabilities of RBCO.
The operations of RBCO during the six months ended June 30, 1998 were not
included in the Company's Statement of Operations.
8. NEW ACCOUNTING STANDARDS
Financial Accounting Standards Board Statement No. 132, "Employers'
Disclosures about Pensions and other Postretirement Benefits" ("FAS 132") was
issued in February 1998. This statement revises employers' disclosures about
pension and other postretirement benefit plans. It does not change the
measurement or recognition of those plans. It standardizes the disclosure
requirements for pensions and other postretirement benefits to the extent
practical, requires additional information on changes in the benefit obligations
and fair values of plan assets that will facilitate financial analysis, and
eliminates certain disclosures that are no longer useful. The statement suggests
combined formats for presentation of pension and other postretirement benefit
disclosures. This statement is effective for fiscal years beginning after
December 15, 1997. Implementation of FAS 132 will impact disclosure only, but
will not have an impact on the Company's Consolidated Statement of Operations or
Statement of Financial Condition.
Financial Accounting Standards Board Statement No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("FAS 133") was issued in June
1998. This statement establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either
assets or liabilities in the statement of financial position and measure those
instruments at fair value. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to changes in the fair
value of a recognized asset or liability or an unrecognized firm commitment, (b)
a hedge of the exposure to variable cash flows of a forecasted transaction, or
(c) a hedge of the foreign currency exposure of a net investment in a foreign
operation, an unrecognized firm commitment, an available-for-sale security, or a
foreign-currency-denominated forecasted transaction. The accounting for changes
in the fair value of a derivative (that is, gains and losses) depends on the
intended use of the derivative and the resulting designation. For a derivative
designated as hedging the exposure to changes in the fair value of a recognized
asset or liability or a firm commitment (referred to as a fair value hedge), the
gain or loss is recognized in earnings in the period of change together with the
offsetting loss or gain on the hedged item attributable to the risk being
hedged. The effect of that accounting is to reflect in earnings the extent to
which the hedge is not effective in achieving offsetting changes in fair value.
For a derivative designated as hedging the exposure to variable cash flows of a
forecasted transaction (referred to as a cash flow hedge), the effective portion
of the derivative as a gain or loss is initially reported as a component of
other comprehensive income (outside earnings) and subsequently reclassified into
earnings when the forecasted transaction affects earnings. The ineffective
portion of the gain or loss is reported in earnings immediately. For a
derivative designated as hedging the foreign currency exposure of a net
investment in a foreign operation, the gain or loss is reported in other
comprehensive income (outside earnings) as part of the cumulative translation
adjustment. The accounting for a fair value hedge described above applies to a
derivative designated as a hedge of the foreign currency exposure of an
unrecognized firm commitment or an available-for-sale security. Similarly, the
accounting for a cash flow hedge described above applies to a derivative
designated as a hedge of the foreign currency exposure of a
foreign-currency-denominated forecasted transaction. For a derivative not
designated as a hedging instrument, the gain or loss is recognized in earnings
in the period of change.
Under this statement, an entity that elects to apply hedge accounting is
required to establish at the inception of the hedge the method it will use for
assessing the effectiveness of the hedging derivative and the measurement
approach for determining the ineffective aspect of the hedge. Those methods must
be consistent with the entity's approach to managing risk.
<PAGE>
This statement is effective for all fiscal quarters of fiscal years
beginning after June 15, 1999. Initial application of this statement should be
as of the beginning of an entity's fiscal quarter; on that date, hedging
relationships must be designated anew and documented pursuant to the provisions
of this statement. Earlier application of all of the provisions of this
statement is encouraged, but it is permitted only as of the beginning of any
fiscal quarter that begins after issuance of this statement. This statement
should not be applied retroactively to financial statements of prior periods.
The Company intends to implement FAS 133, January 1, 2000 and its potential
impact on the Statement of Operations and Statement of Condition is currently
under review by management.
9. RECLASSIFICATIONS
Certain amounts for prior periods have been reclassified to conform with
statement presentation for 1998.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Except for historical information contained herein, the matters discussed
in this report contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"), and
Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), that involve substantial risks and uncertainties. When used in this
report, the words "anticipate", "believe", "estimate", "may", "intend", "expect"
and similar expressions identify certain of such forward-looking statements.
Actual results, performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking statements contained
herein. These forward-looking statements are based largely on the Company's
expectations and are subject to a number of risks and uncertainties, including
but not limited to, economic conditions, competitive and other factors affecting
the Company's assets, operations, markets, products and services, as well as
expansion strategies, including the addition of ATM machines and the success of
its real estate activities, potential impact of change in interest rates,
regulatory oversight and other factors discussed in the Company's Annual Report
on Form 10K for the year ended December 31, 1997. Many of these factors are
beyond the Company's control.
The Company's basic and diluted earnings per share for Class A common stock
were $0.20 and $0.16, respectively, for the three months ended June 30, 1998
compared to $0.24 and $0.19 for the comparable 1997 period. The Company's basic
and diluted earnings per share for Class B common stock were $0.18 and $0.15,
respectively, for the three months ended June 30, 1998 compared to $0.23 and
$0.19 for the comparable 1997 period. The Company's net income declined from
$6.8 million during the three months ended June 30, 1997 to $6.4 million during
the comparable 1998 period. The primary reasons for the decline in net income
were declines in loan servicing income, including accelerated amortization of
premiums associated with mortgage servicing rights resulting from prepayments of
the related mortgages, higher provisions for loan losses and expenses associated
with the implementation of new business initiatives.
The Company's basic and diluted earnings per share for Class A common stock
were $0.37 and $0.29, respectively, for the six months ended June 30, 1998
compared to $0.46 and $0.37 for the comparable 1997 period. The Company's basic
and diluted earnings per share for Class B common stock were $0.33 and $0.28,
respectively, for the six months ended June 30, 1998 compared to $0.45 and $0.37
for the comparable 1997 period. The Company's net income declined from $13.2
million during the six months ended June 30, 1997 to $11.6 million during the
comparable 1998 period. The primary reasons for the decline in net income were
the same as discussed above for the three month period.
NET INTEREST INCOME
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------------- -------------------------------
(In thousands) 1998 1997 Change 1998 1997 Change
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Interest and fees on loans ............................... $ 55,024 $ 41,948 $ 13,076 $102,135 $ 83,071 $ 19,064
Interest on banker's acceptances ......................... 383 0 383 871 0 871
Interest and dividends on securities available for sale . 7,385 8,246 (861) 17,372 15,788 1,584
Interest and dividends on investment securities held to
maturity and trading securities ........................ 2,231 1,852 379 4,455 3,631 824
Interest on deposits ..................................... (16,659) (17,042) 383 (33,117) (34,317) 1,200
Interest on advances from FHLB ........................... (13,760) (6,266) (7,494) (24,472) (11,067) (13,405)
Interest on securities sold under agreements to repurchase (3,072) (2,309) (763) (6,152) (4,858) (1,294)
Interest on subordinated debentures, notes payable and
guaranteed preferred interest in the Company's Junior
Subordinated Debentures .................................. (4,712) (2,775) (1,937) (9,579) (4,314) (5,265)
Capitalized interest ..................................... 218 0 218 218 0 218
------- ------- ------- ------- ------- -------
Net interest income .................................... $ 27,038 $ 23,654 $ 3,384 $ 51,731 $ 47,934 $ 3,797
======= ======= ======= ======= ======= =======
</TABLE>
<PAGE>
The increase in interest and fees on loans during the three months ended
June 30, 1998 compared to the same period in 1997 reflects higher average
balances resulting from the purchase of residential loans and the origination of
commercial mortgages, and international and small business loans. The additional
interest income from higher loan balances was partially offset by lower rates
earned on the loan portfolio due to a shift in the loan portfolio from higher
yielding consumer and commercial loans to lower yielding residential loans.
Residential loans as a percentage of total loans receivable increased from 47%
at June 30, 1997 to 56% at June 30, 1998. Purchased residential loans,
commercial mortgages, and international and small business loan balances
increased from $998.6 million, $547.9 million, $0 and $6.9 million,
respectively, at June 30, 1997 to $1.7 billion, $554.2 million, $50.4 million
and $74.4 million, respectively, at June 30, 1998. The increase in banker's
acceptances interest income resulted from the Company investing short term funds
in banker's acceptances during 1998. The decrease in interest and dividends on
securities available for sale resulted from lower average balances due to sales
of securities and repayments of asset-backed securities partially offset by the
purchases of securities available for sale. During the six months ended June 30,
1998, the Company sold $388.1 million of securities available for sale and
purchased $365.4 million of securities available for sale. The balances of
asset-backed securities declined from $16.6 million at June 30, 1997 to $1.2
million at June 30, 1998. As a result of the above purchases, sales and
principal repayments, the average balances of securities available for sale
declined from $543.8 million for the three months ended June 30, 1997 to $499.8
million for the comparable 1998 period. The increases in interest and dividends
on investment securities during the 1998 three month period were primarily due
to higher FHLB stock average balances. FHLB stock average balances increased
from $20.3 million during the three months ended June 30, 1997 to $48.4 million
during the comparable 1998 period. Increases in FHLB stock were required based
on higher FHLB advance levels.
The decrease in interest on deposits for the quarter ended June 30, 1998
compared to the 1997 quarter resulted from lower average interest bearing
deposit balances and rates during 1998. Average interest bearing deposit
balances decreased from $1.632 billion for the three months ended June 30, 1997
to $1.622 billion for the three months ended June 30, 1998, and average rates on
deposits decreased from 4.19% during the 1997 second quarter to 4.12% during the
comparable 1998 quarter. The decline in interest bearing deposit average
balances and rates reflects lower certificate account balances due to the
run-off of higher rate certificate accounts acquired in connection with the Bank
of North America acquisition. The mix in the Company's deposit portfolio changed
from 55% certificate accounts and 45% transaction accounts during the six months
ended June 30, 1997 to 51% certificate accounts and 49% transaction accounts
during the comparable 1998 period. The increase in interest expense on advances
from FHLB was primarily due to higher average balances. Advances from FHLB
average balances increased from $404.8 million during the second quarter of 1997
to $946.8 million during the comparable 1998 quarter. The additional FHLB
borrowings were primarily intermediate term advances used to fund purchases of
residential loans. The higher interest expense on securities sold under
agreements to repurchase resulted from higher average balances during 1998.
Securities sold under agreements to repurchase average balances increased from
$172.3 million during the three months ended June 30, 1997 to $228.5 million
during the comparable 1998 three month period. The increase in interest on
subordinated debentures, guaranteed preferred interest in the Company's Junior
Subordinated Debentures and notes payable resulted from the issuance in November
1997 of $100 million of 5 5/8% Convertible Subordinated Debentures due 2007 ("5
5/8% Convertible Debentures") as well as interest expense on $4.8 million of
notes payable relating primarily to SLWHC and LTI. The proceeds from the
issuance of the 5 5/8% Convertible Debentures and securities sold under
agreements to repurchase were primarily used to fund residential loan purchases.
During the six months ended June 30, 1998, net interest income increased by
$3.6 million. The increase in interest income was impacted by higher average
balances in all categories of interest earning assets partially offset by lower
yields. Total interest earning assets increased from $2.5 billion during the six
months ended June 30, 1997 to $3.2 billion during the comparable 1998 period
while weighted average interest rates on interest earning assets declined from
8.32% during the 1997 six month period to 7.89% during the comparable 1998
period. The higher interest earning asset average balances and lower yields were
primarily related to the items discussed above for the quarter. The increase in
interest expense was impacted by higher interest bearing liabilities average
balances and rates. Total interest bearing liabilities increased from $2.3
billion during the 1997 six month period to $2.9 billion during the comparable
1998 period while rates on interest bearing liabilities increased from 4.78%
during 1997 to 5.03% during 1998. The higher interest bearing liabilities
average balances and higher yields were primarily related to the items discussed
above for the quarter.
<PAGE>
PROVISION FOR LOAN LOSSES
The provision for loan losses for the second quarter 1998 was $3.4 million
compared to $2.7 million during the comparable 1997 period. The higher 1998
provision for loan losses primarily resulted from an increase in net charge-offs
from $1.7 million during the 1997 quarter to $3.1 million during the 1998
quarter. The increase in net charge-offs primarily resulted from a $783,000
charge-off of a factoring account which was fully reserved during the first
quarter of 1998, $191,000 of lease financing net charge-offs and a $398,000
increase in consumer loan net charge-offs. The allowance for loan losses was
increased by $650,000 to $30.6 million during the 1998 second quarter reflecting
the transfer of $108,000 of leases sold with recourse from other liabilities to
allowance for loan loss upon the repurchase of $4.4 million of leases previously
sold to investors with recourse. The remaining increase in the allowance for
loan losses was due to loan growth. During the three months ended June 30, 1997
the allowance for loan losses was increased by $1.0 million due primarily to
allowances acquired in connection with the LTI acquisition, loan growth,
increased consumer loan portfolio delinquencies, and consumer loan charge-off
trends.
The provision for loan losses for the six months ended June 30, 1998
increased by $1.6 million from the comparable 1997 period. The increase
primarily related to higher consumer loan charge-offs, the factoring account
mentioned above, and net charge-offs associated with LTI. The increase in the
allowance for loan losses was primarily related to the items discussed above for
the quarter.
At the indicated dates the Company's risk elements and non-performing
assets were (in thousands):
June 30, December 31,
1998 1997
------ -----------
Nonaccrual:
Tax certificates .................... $ 930 $ 880
Loans and leases .................... 18,087 17,569
------ -----------
Total nonaccrual .................... 19,017 18,449
------ -----------
Repossessed Assets:
Real estate owned, net of allowance .. 5,775 7,528
Repossessed assets ................... 2,090 2,912
------ -----------
Total repossessed assets ............. 7,865 10,440
------ -----------
Contractually past due 90 days or more (1) 3,516 647
------ -----------
Total non-performing assets .......... 30,398 29,536
Restructured loans ....................... 14 4,043
------ -----------
Total risk elements .................. $30,412 $ 33,579
====== ===========
(1) The majority of these loans have matured and the borrower continues to make
payments under the matured loan agreement. BankAtlantic is in the process
of renewing or extending these matured loans.
Total risk elements at June 30, 1998 compared to December 31, 1997
decreased by $3.2 million. The decrease in risk elements primarily relates to a
$4.0 million decline in restructured loans, partially offset by a $862,000
increase in nonperforming assets. The increase in nonperforming assets reflects
LTI non-accrual leases and commercial loans contractually past due 90 days or
more and LTI nonaccrual leases in 1998. During the six months ended June 30,
1998 a $1.1 million commercial mortgage loan was transferred from restructured
loans to loans contractually past due 90 days or more and a $2.9 million
commercial real estate loan was transferred out of restructured loans. Included
in nonaccrual loans and leases at June 30, 1998 were $766,000 of LTI leases
compared to zero at December 31, 1997. The above increases in nonperforming
assets at June 30, 1998 were significantly offset by lower consumer and
residential non-accrual balances. The change in repossessed assets includes
$327,000 of equipment and vehicles acquired in connection with the LTI
acquisition net of a decline in residential and consumer repossessed assets of
$1.5 million and $1.1 million, respectively.
<PAGE>
NON-INTEREST INCOME
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- --------------------------
(In thousands) 1998 1997 Change 1998 1997 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Loan servicing and other loan fees .......................... $ 906 $ 1,405 $ (499) $ 1,398 $ 2,976 $(1,578)
Gains on sales of loans available for sale .................. 1,104 714 390 2,832 1,165 1,667
Gains on sales of mortgage servicing rights ................. 362 2,201 (1,839) 2,400 4,634 (2,234)
Unrealized and realized gains (losses) on trading securities. 532 0 532 703 0 703
Gains on sales of securities available for sale ............. 473 689 (216) 2,193 942 1,251
Real estate held for development and sale and joint venture
activities, net ............................................ 3,954 0 3,954 3,003 0 3,003
Transaction accounts ........................................ 3,040 2,267 773 5,640 4,412 1,228
ATM fees .................................................... 1,590 1,351 239 2,887 2,665 222
Other ....................................................... 1,111 1,007 104 1,951 1,864 87
------ ------ ------ ------ ------ ------
Total non-interest income ................................. $13,072 $ 9,634 $ 3,438 $23,007 $18,658 $ 4,349
====== ====== ====== ====== ====== ======
</TABLE>
The decrease in loan servicing and other loan fees during the three and six
month period in 1998 compared to the corresponding 1997 periods resulted from a
decline in loan servicing income, partially offset by an increase in late fee
income and loan fees. Loan servicing income declined by $1.0 million and $2.4
million, respectively, due to accelerated amortization of mortgage servicing
rights caused by mortgage prepayments during the periods. Late fee and other
loan fee income increased from $980,000 and $1.8 million during the three and
six months ended June 30, 1997 to $1.5 million and $2.7 million during the
comparable 1998 periods primarily due to a larger loan portfolio.
During the three and six months ended June 30, 1998, the Company sold $48.0
million and $141.9 million of loans held for sale for gains reported in the
preceding table. During the three and six months ended June 30, 1998, the
Company transferred $58.1 million and $108.5 million of purchased residential
loans from the held for investment category to the loans held for sale category.
As part of its normal operations the Company purchases bulk residential loans
and continually evaluates the portfolio. These evaluations may result in
transfers from the held for investment category to the held for sale category;
however, such transfers would not normally exceed 10% of the average annual
balance of the portfolio. During the three and six months ended June 30, 1997,
the Company sold $30.0 million and $54.6 million of loans held for sale for
gains reported in the preceding table.
During the six months ended June 30, 1998, the Company sold $19.7 million
of mortgage servicing rights for gains reported in the above table. These rights
related to approximately $1.3 billion of loans serviced for others. Included in
the gain was $362,000 of previously deferred revenues relating to mortgage
servicing rights sold during prior periods. During the three and six months
ended June 30, 1997, the Company sold $5.8 million and $11.1 million of mortgage
servicing rights for gains as reported in the above table. These rights related
to approximately $496.1 million and $1.0 billion of loans serviced for others
during the respective three and six month periods ended June 30, 1997.
During the six months ended June 30, 1998 and 1997, the Company sold the
following securities held in the available for sale portfolio for gains as
reported in the above table: (in thousands), at cost:
l998 l997
------- -------
7 year balloon mortgage-backed securities .. $121,232 $ 0
5 year balloon mortgage-backed securities .. 27,151 0
REMIC ...................................... 0 5,992
Federal agency obligations ................. 0 7,597
FHLB Bonds ................................. 9,977 0
U.S. treasury notes ........................ 4,980 190,631
------- -------
Total fixed rate securities .............. 163,340 204,220
------- -------
Equity securities .......................... 120 0
------- -------
5-1 Adjustable rate mortgages .............. 121,447 0
3-1 Adjustable rate mortgages .............. 103,183 0
------- -------
Total adjustable rate securities ........... 224,630 0
------- -------
Total sales of securities available for sale $388,090 $204,220
======== ========
<PAGE>
During the three and six months ended June 30, 1998, the Company sold
marketable equity trading securities for a $560,000 gain. The unrealized gains
(losses) on trading securities for the three and six months ended June 30, 1998
was $(28,000) and $143,000, respectively.
The increase in transaction account fees during the three and six months
ended June 30, 1998 compared to the corresponding 1997 period resulted from
higher checking account income reflecting increased balances held in transaction
accounts. Average transaction account balances increased from $904.8 million
during the six months ended June 30, 1997 to $977.4 million during the
comparable 1998 period.
The increase in ATM fee income during the second quarter of 1998 resulted
from installations of ATM machines in Georgia Wal-Mart superstores as well as
installations of ATM machines in gas stations and convenience stores primarily
in South Florida. As a result of the above installations the number of ATM
machines increased by 115 for the three months ended June 30, 1998. Management
anticipates ATM fee income will continue to increase due to the expected
installation of an additional 232 ATM machines during the remainder of 1998.
Real estate held for development and sale and joint venture activities, net
primarily represents the results of SLWHC operations. During the three and six
months ended June 30, 1998 SLWHC recorded gains on sales of land of $5.2 million
and $5.3 million and incurred $1.3 million and $2.3 million of operating
expenses, respectively. Furthermore, included in interest expense was $218,000
of capitalized interest on investment in and advances to joint ventures during
the three and six months ended June 30, 1998.
NON-INTEREST EXPENSES
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
June 30, June 30,
-------------------------- ---------------------------
(In thousands) 1998 1997 Change 1998 1997 Change
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Employee compensation and benefits .... $12,014 $ 9,286 $ 2,728 $23,482 $18,833 $ 4,649
Occupancy and equipment ............... 5,426 4,245 1,181 10,554 9,037 1,517
Federal insurance premium ............. 258 345 (87) 520 553 (33)
Advertising and promotion ............. 1,693 525 1,168 2,184 894 1,290
Foreclosed asset activity, net ........ 125 15 110 (44) 28 (72)
Amortization of cost over fair value of
net assets acquired .................. 701 627 74 1,360 1,254 106
Other ................................. 5,766 4,400 1,366 10,837 9,244 1,593
------ ------ ------ ------ ------ ------
Total non-interest expenses .......... $25,983 $19,443 $ 6,540 $48,893 $39,843 $ 9,050
====== ====== ====== ====== ====== ======
</TABLE>
The increase in employee compensation and benefits during the three and six
months ended June 30, 1998 compared to the 1997 period resulted from the
expansion of BankAtlantic's branch network and the start-up of five new business
units (small business lending, international banking, trade finance, commercial
loan syndications, and capital markets), requiring the hiring of 100 employees
including senior managers, support and branch personnel and the acquisition of
LTI. As a result of these growth initiatives the number of full-time equivalent
employees increased from 1,009 at June 30, 1997 to 1,153 at June 30, 1998.
Occupancy and equipment expenses increased during the three months ended June
30, 1998 due to the expanded ATM and branch network and computer technology
upgrades resulting in $404,000 of higher depreciation expense, a $226,000
increase in data processing expenses and $358,000 of additional rent expense.
Depreciation, data processing and rent expenses increased by $618,000, $281,000
and $418,000, respectively, during the six months ended June 30, 1998 compared
to the same 1997 period.
The increase in advertising and promotion expenses during the three and six
months ended June 30, 1998 compared to the same 1997 period resulted from the
implementation of a new print and TV identity campaign as well as branch
expansion promotions in Miami-Dade County, and the Tampa Bay markets.
Advertising and promotion costs are expensed as incurred.
<PAGE>
The increase in the amortization of cost over fair value of net assets
acquired for the three and six months ended June 30, 1998 related to the LTI
acquisition.
The increase in other expenses during the three months ended June 30, 1998
compared to the 1997 period resulted from increases in telephone, ATM and
consulting expenses of $206,000, $238,000 and $392,000, respectively.
Furthermore, tax certificate recoveries were $285,000 lower during the 1998
three month period compared to the same 1997 period. The higher telephone
expense reflects additional costs associated with a larger organization. The ATM
expense increase reflects the larger ATM network during 1998 compared to the
1997 period. The higher consulting fees resulted from the hiring of the
consulting firm Alex Sheshunoff & Co. to provide an efficiency and profit
improvement study which is expected to be completed by the end of the third
quarter of 1998. During the six months ended June 30, 1998 compared to the 1997
period stationery, printing and supplies, telephone, postage, ATM, and
consulting expenses increased by $182,000, $270,000, $118,000 and $607,000,
respectively, primarily for the same reasons described above. Tax certificate
recoveries were $172,000 lower during the 1998 six month period compared to the
same 1997 period.
FINANCIAL CONDITION
The Company's total assets at June 30, 1998 were $3.8 billion compared to
$3.1 billion at December 31, 1997. Loans receivable, net, loans available for
sale, trading securities, investments in real estate held for development and
joint ventures, net, FHLB stock, mortgage servicing rights, cost over fair value
of net assets acquired and other assets increased by $590.7 million, $50.3
million, $29.4 million, $23.6 million, $19.8 million, $9.4 million, $31.6
million and $6.1 million, respectively, while securities available for sale
declined by $93.9 million. The higher loans receivable balances resulted from
the purchase of $1.0 billion of wholesale residential loans and $594.9 million
of loan fundings, partially offset by $676.2 million of principal reductions on
loans and $141.9 million of loan sales. Included in trading securities was $27.7
million of debt and equity securities acquired in connection with the RBCO
acquisition. During the six months ended June 30, 1998, the Company through a
wholly owned subsidiary invested or advanced $20.5 million in real estate joint
ventures located in South Florida. The additional FHLB stock balances was due to
higher FHLB advances. The higher mortgage servicing rights balances reflects
$36.6 million of mortgage servicing rights acquired partially offset by the sale
of $13.7 million of mortgage servicing rights and $7.6 million of amortization.
The LTI and RBCO acquisitions increased cost over fair value of net assets
acquired by $32.9 million partially offset by amortization of existing goodwill.
The increase in other assets primarily resulted from the assets acquired in
connection with the RBCO acquisition. The decline in securities available for
sale balances resulted from the sale of $388.1 million of securities, and
principal collected of $69.4 million, partially offset by the purchase of $365.4
million of securities available for sale. The Company sold securities primarily
to fund residential loan purchases.
The Company's total liabilities at June 30, 1998 were $3.5 billion compared
to $2.9 billion at December 31, 1997. Deposits, FHLB advances, federal funds
purchased, securities sold under agreements to repurchase, advances by borrowers
for taxes and insurance and other liabilities increased by $48.9 million, $361.4
million, $11.1 million, $143.8 million, $42.1 million and $35.1 million,
respectively. The deposit increase primarily came from the Miami-Dade and Palm
Beach County market segment and the small business banking unit. The increase in
other liabilities primarily resulted from liabilities acquired in connection
with the RBCO acquisition and increased accrued interest payables. Proceeds from
FHLB advances, securities sold under agreements to repurchase, deposit inflows
and advances by borrowers for taxes and insurance, loan repayments, sales of
financial assets, principal collected on securities available for sale and
investment securities held to maturity were used to repay securities sold under
agreements to repurchase, fund loan growth and loan purchases, deposit outflows
and to purchase securities available for sale, trading securities, mortgage
servicing rights, FHLB stock, tax certificates and to acquire outstanding shares
of Class B common stock.
MARKET RISK
Market risk is the risk arising from changes in interest rates, foreign
currency exchange rates, and commodity and equity prices. The Company maintains
a portfolio of trading and available for sale securities which subjects the
Company to equity pricing risks. The Company acquired $27.7 million of debt and
equity trading securities in connection with the RBCO acquisition as well as
securities sold not yet purchased. The debt obligations in RBCO's trading
portfolio primarily consist of municipal obligations issued by the State of New
Jersey or Municipalities within the State. Substantially all of the equity
securities are instruments issued by banking and thrift institutions. The
Company's primary market risk is interest rate risk.
<PAGE>
EQUITY PRICING RISK
Presented below is an analysis of the Company's equity pricing risk at June
30, 1998. The following table measures changes in the fair value of the
Company's trading, available for sale securities and securities sold not yet
purchased at June 30, 1998 based on percentage changes in fair value.
Percent Trading Available Securities
Change In Securities for Sale Sold Not Yet
Fair Value Fair Value Fair Value Purchased
---------- ---------- ---------- ------------
(Dollars in thousands)
20.00 % $ 41,352 $ 15,409 $ 4,001
10.00 % $ 37,906 $ 14,125 $ 3,667
0.00 % $ 34,460 $ 12,841 $ 3,334
(10.00)% $ 31,014 $ 11,557 $ 3,001
(20.00)% $ 27,568 $ 10,273 $ 2,667
INTEREST RATE RISK
The majority of the Company's assets and liabilities are monetary in nature
subjecting the Company to significant interest rate risk. The Company has
developed a model using vendor software to quantify its interest rate risk. A
sensitivity analysis was performed measuring the Company's potential gains and
losses in net portfolio fair values of interest rate sensitive instruments at
June 30, 1998 resulting from a change in interest rates. The model calculates
the net potential gains and losses in net portfolio fair value by: (i)
discounting cash flows from existing assets, liabilities and off-balance sheet
contracts to determine fair values at June 30, 1998, and (ii) discounting the
above expected cash flows based on instantaneous and parallel shifts in the
yield curve to determine fair values at June 30, 1998,). The difference between
the fair value calculated in (i) and (ii) is the potential gains and losses in
net portfolio fair values. Management has made estimates of fair value discount
rates that it believes to be reasonable, however, because there is no quoted
market for many of these financial instruments, management has no basis to
determine whether the fair value presented would be indicative of the value
negotiated in an actual sale. BankAtlantic's fair value estimates do not
consider the tax effect that would be associated with the disposition of the
assets or liabilities at their fair value estimates.
Presented below is an analysis of the Company's interest rate risk at June
30, 1998 as calculated utilizing the Company's model. The table measures changes
in net portfolio value for instantaneous and parallel shifts in the yield curve
in 100 basis point increments up or down.
Changes Net Portfolio Dollar
in Rate Value Amount Change
------- ------------- --------
(Dollars in thousands)
+200 bp $ 302,912 $ (78,759)
+100 bp $ 351,677 $ (27,955)
0 bp $ 377,463 $ 0
(100)bp $ 328,873 $ (46,242)
(200)bp $ 259,070 $(113,532)
Certain assumptions by the Company in assessing the interest rate risk were
utilized in developing the model and preparing the preceding table. These
assumptions relate to interest rates, loan prepayment rates, deposit decay
rates, and market values of certain assets under various interest rate
scenarios. It was also assumed that delinquency rates will not change as a
result of changes in interest rates although there can be no assurance that this
will be the case. Furthermore, even if interest rates change in the designated
increments, there can be no assurance that the Company's assets and liabilities
would perform as indicated in the table above. In addition, a change in U.S.
Treasury rates in the designated amounts, accompanied by a change in the shape
of the yield curve could cause significantly different changes to the fair
values than indicated above. Furthermore, the result of the calculations in the
preceding table are subject to significant deviations based upon actual future
events, including anticipatory and reactive measures which the Company may take
in the future.
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
LTI is obligated on leases sold with full recourse by LTI to investors
prior to the Company's acquisition. Under the terms of such agreements, LTI is
subject to recourse for 100% of the remaining balance of the lease receivable
sold upon a default by the lessees. At June 30, 1998, the amount of lease
payments subject to such recourse provisions was approximately $11.8 million. A
$279,000 estimated liability on leases sold with recourse is included in other
liabilities in the Company's Statement of Financial Condition.
BankAtlantic's primary sources of funds during the first six months of 1998
were from operations, principal collected on loans, securities available for
sale and investment securities held to maturity, and sales of securities
available for sale, FHLB advances, securities sold under agreements to
repurchase, mortgage servicing rights sales, deposit inflows and advances from
borrowers for taxes and insurance. These funds were primarily utilized to fund
operating expenses, deposit outflows, loan purchases and fundings and to
purchase FHLB stock, tax certificates, trading securities, mortgage servicing
rights and securities available for sale and acquire Class B common stock. At
June 30, 1998, BankAtlantic met all applicable liquidity and regulatory capital
requirements.
BankAtlantic's commitments to originate loans, purchase loans and purchase
securities available for sale at June 30, 1998 were $135.1 million, $17.0
million and $123.6 million, respectively, compared to commitments to originate
loans, purchase loans and purchase securities available for sale of $70.2
million, $90.9 million, and zero, respectively, at June 30, 1997. BankAtlantic
expects to fund the 1998 loan commitments from loan and securities available for
sale repayments. At June 30, 1998, loan commitments were 5.86% of net loans
receivable.
At the indicated date BankAtlantic's capital amounts and ratios were:
<TABLE>
<CAPTION>
To be Well
For Capital Capitalized Under
Adequacy Prompt Corrective
Actual Purposes Action Provisions
--------------- ---------------- -----------------
Amount Ratio Amount Ratio Amount Ratio
------- ----- ------- ----- ------- -----
(In thousands)
At June 30, 1998:
<S> <C> <C> <C> <C> <C> <C>
Total risk-based capital $362,616 15.18% > $191,074 > 8.00 % > $238,842 > 10.00%
= = = =
Tier I risk-based capital $332,855 13.94% > $ 95,537 > 4.00 % > $143,305 > 6.00%
= = = =
Tangible capital ........ $332,855 9.27% > $ 53,857 > 1.50 % > $ 53,857 > 1.50%
= = = =
Core capital ............ $332,855 9.27% > $143,618 > 4.00 % > $179,522 > 5.00%
= = = =
At December 31, 1997:
Total risk-based capital $355,930 18.64% > $152,785 > 8.00 % > $190,981 > 10.00%
= = = =
Tier I risk-based capital $332,010 17.38% > $ 76,392 > 4.00 % > $114,588 > 6.00%
= = = =
Tangible capital ........ $332,010 11.12% > $ 44,798 > 1.50 % > $ 44,798 > 1.50%
= = = =
Core capital ............ $332,010 11.12% > $ 89,595 > 3.00 % > $149,325 > 5.00%
= = = =
</TABLE>
Savings institutions are also subject to the provisions of the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"). Regulations
implementing the prompt corrective action provisions of FDICIA define specific
capital categories based on FDICIA's defined capital ratios, as discussed more
fully in the Company's Annual Report on Form 10K for the year ended December 31,
1997.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
As discussed in the Company's Annual Report on Form 10K for the year ended
December 31, 1997, there is a legal action in New Jersey related to the Subject
Portfolio. This action purports to be a class action on behalf of named and
unnamed plaintiffs that may have obtained loans from dealers who subsequently
sold the loans to financial institutions, including BankAtlantic. This action
seeks, among other things, rescission of the loan agreements and damages. In
November 1995, the trial court in this action entered an order dismissing the
complaint against BankAtlantic; and Plaintiffs appealed this ruling. In January
1996, the Appellate Court reversed the trial court decision and remanded the
case back to the trial court to determine whether the action could be maintained
as a class action. The reversal was without prejudice to BankAtlantic's right to
renew its summary judgment motion after the trial court made a determination as
to plaintiffs ability to maintain the case as a class action. In December 1997,
the trial court denied plaintiffs motion for class certification and in January
1998 granted BankAtlantic's summary judgment motion. The plaintiffs appealed
this ruling to the Superior Court of New Jersey Appellate Division which, in
March 1998, denied the plaintiffs motion to appeal. Plaintiff subsequently
appealed to the Supreme Court of New Jersey which, on June 30, 1998, granted
plaintiffs motion to appeal and remanded the matter to the Appellate Division to
consider the class issue on its merits. The Appellate Division has not set a
date for hearing of this matter.
Exhibits and Reports on Form 8K
Exhibit 11 Statement re: Computation of Per Share Earnings.
<PAGE>
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BANKATLANTIC BANCORP, INC.
August 14, 1998 By: /s/Alan B. Levan
- ---------------- -------------------------
Date Alan B. Levan
Chief Executive Officer/
Chairman/President
August 14, 1998 By: /s/Jasper R. Eanes
- --------------- ------------------------
Date Jasper R. Eanes
Executive Vice President/
Chief Financial Officer
<PAGE>
EXHIBIT 11
==========
EARNINGS PER SHARE
The following reconciles the numerators and denominators of the basic and
diluted earnings per share computations.
<TABLE>
<CAPTION>
For the Three Months ended June 30, For the Three Months ended June 30,
(In thousands, except per share 1998 1997
data and percentages) ----------------------------------- ------------------------------------
Class A Class B Total Class A Class B Total
---------- ---------- ------ ---------- ---------- ------
Basic Numerator
<S> <C> <C> <C> <C> <C> <C>
Actual dividends declared .............. $ 719 $ 252 $ 971 $ 234 $ 310 $ 544
Basic allocated undistributed earnings . 3,825 1,595 5,420 4,065 2,212 6,277
---------- ---------- ------ ---------- ---------- ------
Allocated basic net income available
for common shareholders ............... $ 4,544 $ 1,847 $ 6,391 $ 4,299 $ 2,522 $ 6,821
========== ========== ====== ========== ========== ======
Basic Denominator
Weighted average shares outstanding .... 22,724,683 10,425,815 17,940,645 10,742,040
========== ========== ========== ==========
Allocation percentage .................. 70.57% 29.43% 64.75% 35.25%
========== ========== ========== ==========
Basic earnings per share ............... $ 0.20 $ 0.18 $ 0.24 $ 0.23
========== ========== ========== ==========
Diluted Numerator
Actual dividends declared .............. $ 719 $ 252 $ 971 $ 234 $ 310 $ 544
---------- ---------- ------ ---------- ---------- ------
Basic allocated undistributed earnings . 3,825 1,595 5,420 4,065 2,212 6,277
Reallocation of basic undistributed
earnings due to change in allocation
percentage ............................ 466 (466) 0 428 (428) 0
---------- ---------- ------ ---------- ---------- ------
Diluted allocated undistributed earnings 4,291 1,129 5,420 4,493 1,784 6,277
Interest expense on convertible debt ... 1,170 308 1,478 456 181 637
---------- ---------- ------ ---------- ---------- ------
Allocated dilutive net income available
to common shareholders ................ $ 6,180 $ 1,689 $ 7,869 $ 5,183 $ 2,275 $ 7,458
========== ========== ====== ========== ========== ======
Diluted Denominator
Basic weighted average shares
outstanding ........................... 22,724,683 10,425,815 17,940,645 10,742,040
Convertible debentures ................. 15,973,042 0 8,748,316 0
Options ................................ 622,875 958,833 244,475 1,014,037
Warrants ............................... 0 0 0 10,963
---------- ---------- ---------- ----------
Diluted weighted average
shares outstanding .................... 39,320,600 11,384,648 26,933,436 11,767,040
========== ========== ========== ==========
Allocation percentage .................. 79.16% 20.84% 71.57% 28.43%
========== ========== ========== ==========
Diluted earnings per share ............. $ 0.16 $ 0.15 $ 0.19 $ 0.19
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
For the Six Months ended June 30, For the Six Months ended June 30,
(In thousands, except per share 1998 1997
data and percentages) ----------------------------------- ------------------------------------
Class A Class B Total Class A Class B Total
---------- ---------- ------ ---------- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
Basic Numerator
Actual dividends declared ............... $ 1,318 $ 507 $ 1,825 $ 487 $ 623 $ 1,110
Basic allocated undistributed earnings .. 6,856 2,966 9,822 7,842 4,210 12,052
---------- ---------- ------ ---------- ---------- ------
Allocated basic net income available
for common shareholders ................ $ 8,174 $ 3,473 $11,647 $ 8,329 $ 4,833 $13,162
========== ========== ====== =========== ========== ======
Basic Denominator
Weighted average shares outstanding ..... 22,269,820 10,596,437 18,042,902 10,656,193
========== ========== ========== ==========
Allocation percentage ................... 69.80% 30.20% 65.07% 34.93%
========== ========== ========== ==========
Basic earnings per share ................ $ 0.37 $ 0.33 $ 0.46 $ 0.45
========== ========== ========== ==========
Diluted Numerator
Actual dividends declared ............... $ 1,318 $ 507 $ 1,825 $ 487 $ 623 $ 1,110
---------- ---------- ------ ---------- ---------- ------
Basic allocated undistributed earnings .. 6,856 2,966 9,822 7,842 4,210 12,052
Reallocation of basic undistributed
earnings due to change in allocation
percentage ............................. 873 (873) 0 799 (799) 0
---------- ---------- ------ ---------- ---------- ------
Diluted allocated undistributed earnings 7,729 2,093 9,822 8,641 3,411 12,052
Interest expense on convertible debt .... 2,373 643 3,016 911 360 1,271
---------- ---------- ------ ---------- ---------- ------
Allocated dilutive net income available
to common shareholders ................. $ 11,420 $ 3,243 $14,663 $ 10,039 $ 4,394 $14,433
========== ========== ====== ========== ========== ======
Diluted Denominator
Basic weighted average shares
outstanding ............................ 22,269,820 10,596,437 18,042,902 10,656,193
Convertible debentures .................. 16,138,597 0 8,754,273 0
Options ................................. 631,411 1,034,397 210,686 1,060,731
Warrants ................................ 0 0 0 10,963
---------- ---------- ---------- -----------
Diluted weighted average
shares outstanding ..................... 39,039,828 11,630,834 27,007,861 11,727,887
========== ========== ========== ==========
Allocation percentage ................... 78.69% 21.31% 71.70% 28.30%
========== ========== ========== ==========
Diluted earnings per share .............. $ 0.29 $ 0.28 $ 0.37 $ 0.37
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at June 30, 1998 and the
Consolidated Statement of Operations for the six months ended June 30, 1998
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 921768
<NAME> BankAtlantic Bancorp, Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<EXCHANGE-RATE> 1
<CASH> 87,280
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 34,460
<INVESTMENTS-HELD-FOR-SALE> 513,550
<INVESTMENTS-CARRYING> 64,559
<INVESTMENTS-MARKET> 64,559
<LOANS> 2,713,793
<ALLOWANCE> 30,600
<TOTAL-ASSETS> 3,756,571
<DEPOSITS> 1,812,631
<SHORT-TERM> 216,089
<LIABILITIES-OTHER> 157,489
<LONG-TERM> 1,315,111
0
0
<COMMON> 367
<OTHER-SE> 254,884
<TOTAL-LIABILITIES-AND-EQUITY> 3,756,571
<INTEREST-LOAN> 103,006
<INTEREST-INVEST> 21,827
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 124,833
<INTEREST-DEPOSIT> 33,117
<INTEREST-EXPENSE> 73,102
<INTEREST-INCOME-NET> 51,731
<LOAN-LOSSES> 6,778
<SECURITIES-GAINS> 2,896
<EXPENSE-OTHER> 48,893
<INCOME-PRETAX> 19,067
<INCOME-PRE-EXTRAORDINARY> 19,067
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,647
<EPS-PRIMARY> 0.37
<EPS-DILUTED> 0.29
<YIELD-ACTUAL> 7.89
<LOANS-NON> 18,087
<LOANS-PAST> 3,516
<LOANS-TROUBLED> 14
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 28,450
<CHARGE-OFFS> 7,072
<RECOVERIES> 1,768
<ALLOWANCE-CLOSE> 30,600
<ALLOWANCE-DOMESTIC> 30,100
<ALLOWANCE-FOREIGN> 500
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Statement of Financial Condition at June 30, 1997 (Unaudited)
and the Consolidated Statement of Operations for the six months ended June
30, 1997 (Unaudited) and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 82,490
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 7,808
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 449,422
<INVESTMENTS-CARRYING> 68,587
<INVESTMENTS-MARKET> 68,587
<LOANS> 1,933,980
<ALLOWANCE> 27,200
<TOTAL-ASSETS> 2,730,474
<DEPOSITS> 1,768,087
<SHORT-TERM> 105,544
<LIABILITIES-OTHER> 82,514
<LONG-TERM> 620,754
0
0
<COMMON> 225
<OTHER-SE> 153,350
<TOTAL-LIABILITIES-AND-EQUITY> 2,730,474
<INTEREST-LOAN> 83,071
<INTEREST-INVEST> 19,419
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 102,490
<INTEREST-DEPOSIT> 34,317
<INTEREST-EXPENSE> 54,556
<INTEREST-INCOME-NET> 47,934
<LOAN-LOSSES> 5,162
<SECURITIES-GAINS> 942
<EXPENSE-OTHER> 39,843
<INCOME-PRETAX> 21,587
<INCOME-PRE-EXTRAORDINARY> 21,587
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,162
<EPS-PRIMARY> 0.46
<EPS-DILUTED> 0.37
<YIELD-ACTUAL> 8.32
<LOANS-NON> 14,025
<LOANS-PAST> 2,710
<LOANS-TROUBLED> 5,060
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 25,750
<CHARGE-OFFS> 4,856
<RECOVERIES> 1,144
<ALLOWANCE-CLOSE> 27,200
<ALLOWANCE-DOMESTIC> 27,200
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
