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 March 31, 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 May 1. 1998
Class A Common Stock, par value $0.01 per share 22,746,543
Class B Common Stock, par value $0.01 per share 10,318,382
<PAGE>
TABLE OF CONTENTS
FINANCIAL INFORMATION Page Reference
Financial Statements................................................... 1-8
Consolidated Statements of Financial Condition - March 31, 1998
and 1997 and December 31, 1997 - Unaudited............................. 1
Consolidated Statements of Operations - For the Three Months Ended
March 31, 1998 and 1997 - Unaudited.................................... 2
Consolidated Statements of Stockholders' Equity for the Three
Months Ended March 31, 1998 and 1997 - Unaudited....................... 3
Consolidated Statements of Cash Flows - For the Three Months Ended
March 31, 1998 and 1997 - Unaudited.................................... 4-5
Notes to Consolidated Financial Statements - Unaudited................. 6-8
Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................. 9-15
OTHER INFORMATION
Exhibits and Reports on Form 8K....................................... 16
Signatures............................................................ 17
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED
March 31, December 31, March 31,
(In thousands, except share data) 1998 1997 1997
--------- ----------- ---------
ASSETS
<S> <C> <C> <C>
Cash and due from depository institutions ..................... $ 72,102 $ 82,787 $ 81,099
Federal Funds sold ............................................ 21,000 0 0
Other interest bearing deposits with depository institutions .. 0 0 22,998
Loans receivable, net ......................................... 2,496,510 1,911,263 1,835,233
Loans available for sale ...................................... 139,903 161,562 16,208
Investment securities-net, held to maturity, at cost which
approximates market value .................................... 48,499 55,213 46,715
Securities available for sale, at market value ................ 458,123 607,490 572,783
Trading securities, at market value ........................... 7,804 5,067 6,349
Accrued interest receivable ................................... 26,601 22,624 21,333
Real estate held for development and sale, net ................ 17,736 18,638 0
Real estate owned, net ........................................ 5,660 7,528 4,713
Office properties and equipment, net .......................... 51,342 51,130 47,884
Federal Home Loan Bank stock, at cost which approximates market
value ........................................................ 48,587 34,887 19,137
Mortgage servicing rights ..................................... 45,159 38,789 27,408
Deferred tax asset, net ....................................... 3,322 3,197 5,481
Cost over fair value of net assets acquired ................... 35,063 26,188 28,050
Other assets .................................................. 49,097 38,117 37,694
--------- --------- ---------
Total assets .................................................. $3,526,508 $3,064,480 $2,773,085
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits ...................................................... $1,830,083 $1,763,733 $1,824,189
Advances from FHLB ............................................ 971,709 697,707 382,702
Federal Funds purchased ....................................... 0 2,500 0
Securities sold under agreements to repurchase ................ 117,389 58,716 255,967
Subordinated debentures and notes payable ..................... 179,596 179,600 78,500
Guaranteed preferred beneficial interests in the Company's
Junior Subordinated Debentures ............................... 74,750 74,750 0
Advances by borrowers for taxes and insurance ................. 72,762 39,397 43,612
Other liabilities ............................................. 63,176 40,906 35,510
--------- --------- ---------
Total liabilities ............................................. 3,309,465 2,857,309 2,620,480
--------- --------- ---------
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 22,383,185, 21,509,159 and
18,252,888 shares ............................................. 224 215 78
Class B Common Stock, $0.01 par value, authorized 45,000,000
shares; issued and outstanding, 10,612,664, 10,690,231 and
10,735,440 shares ............................................. 106 107 107
Additional paid-in capital ..................................... 104,373 98,475 65,612
Retained earnings .............................................. 112,052 107,650 88,377
--------- --------- ---------
Total stockholders' equity before accumulated other
comprehensive income (loss) ................................... 216,755 206,447 154,174
Accumulated other comprehensive income - net unrealized
appreciation (depreciation) on securities available for
sale - net of deferred income taxes ......................... 288 724 (1,569)
--------- --------- ---------
Total stockholders' equity ..................................... 217,043 207,171 152,605
--------- --------- ---------
Total liabilities and stockholders' equity $3,526,508 $3,064,480 $2,773,085
========= ========= =========
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
For the Three Months
(In thousands, except share data) Ended March 31,
- - --------------------------------- ------------------------
Interest income: 1998 1997
- - ---------------- ---------- ----------
<S> <C> <C>
Interest and fees on loans and leases .............................. $ 47,139 $ 41,123
Interest on banker's acceptances ................................... 460 0
Interest and dividends on securities available for sale ............ 9,987 7,542
Interest and dividends on investment securities held to maturity
and trading securities ............................................ 2,224 1,779
---------- ----------
Total interest income .............................................. 59,810 50,444
---------- ----------
Interest expense:
Interest on deposits ............................................... 16,458 17,275
Interest on advances from FHLB ..................................... 10,712 4,801
Interest on securities sold under agreements to repurchase ......... 3,080 2,549
Interest on subordinated debentures, guaranteed preferred interest
in the Company's
Junior Subordinated Debentures and notes payable ................... 4,867 1,539
---------- ----------
Total interest expense ............................................. 35,117 26,164
---------- ----------
Net interest income ................................................ 24,693 24,280
Provision for loan losses .......................................... 3,407 2,476
---------- ----------
Net interest income after provision for loan losses ................ 21,286 21,804
---------- ----------
Non-interest income:
Loan servicing and other loan fees ................................. 492 1,571
Gains on sales of loans available for sale ......................... 1,728 451
Gains on sales of mortgage servicing rights ........................ 2,038 2,433
Gains on sales of securities available for sale .................... 1,720 253
Unrealized and realized gains (losses) on trading securities ....... 171 (68)
Real estate held for development and sale activity, net ............ (951) 0
Transaction fees ................................................... 2,600 2,145
ATM fees ........................................................... 1,297 1,314
Other .............................................................. 840 925
---------- ----------
Total non-interest income .......................................... 9,935 9,024
---------- ----------
Non-interest expense:
Employee compensation and benefits ................................. 11,468 9,547
Occupancy and equipment ............................................ 5,128 4,792
Federal insurance premium .......................................... 262 208
Advertising and promotion .......................................... 491 369
Foreclosed asset activity, net ..................................... (169) 13
Amortization of cost over fair value of net assets acquired ........ 659 627
Other .............................................................. 5,071 4,844
---------- ----------
Total non-interest expense ......................................... 22,910 20,400
---------- ----------
Income before income taxes ......................................... 8,311 10,428
Provision for income taxes ......................................... 3,055 4,087
---------- ----------
Net income ......................................................... $ 5,256 $ 6,341
========== ==========
Basic earnings per share Class A common stock ...................... $ 0.17 $ 0.22
========== ==========
Basic earnings per share Class B common stock ...................... $ 0.15 $ 0.22
========== ==========
Diluted earnings per share Class A common stock .................... $ 0.14 $ 0.18
========== ==========
Diluted earnings per share Class B common stock .................... $ 0.13 $ 0.18
========== ==========
Basic weighted average shares outstanding Class A common stock ..... 21,809,903 18,146,296
========== ==========
Basic weighted average shares outstanding Class B common stock ..... 10,768,956 10,569,392
========== ==========
Diluted weighted average shares outstanding Class A common stock ... 38,764,353 27,107,913
========== ==========
Diluted weighted average shares outstanding Class B common stock ... 11,879,710 11,673,630
========== ==========
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Net
Unrealized
Appreciation
on
Compre- Additional Securities
hensive Common Paid-in Retained Available
(In thousands) Income Stock Capital Earnings For Sale Total
- - -------------- ------- ------ ---------- -------- ------------ --------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 ...................... $ 183 $ 64,171 $ 82,602 $ 748 $147,704
Comprehensive income
Net income ..................................... $ 6,341 0 0 6,341 0 6,341
------
Other comprehensive income, net of tax:
Unrealized loss on securities available for
sale.......................................... (2,275)
Reclassification adjustment for gains and
losses included in net income ................ (42)
------
Other comprehensive income .................... (2,317)
------
Comprehensive income ............................ $ 4,024
======
Dividends on Class A common stock ............... 0 0 (253) 0 (253)
Dividends on Class B common stock ............... 0 0 (313) 0 (313)
Exercise of Class B common stock options ........ 2 1,099 0 0 1,101
Tax effect relating to the exercise of stock
options ........................................ 0 342 0 0 342
Net change in unrealized appreciation
(depreciation)on securities available for
sale-net of deferred income taxes .............. 0 0 0 (2,317) (2,317)
------ -------- ------- -------- -------
BALANCE, MARCH 31, 1997 ......................... $ 185 $ 65,612 $ 88,377 $ (1,569) $152,605
====== ======== ======= ======== =======
BALANCE, DECEMBER 31, 1997 ...................... $ 322 $ 98,475 $107,650 $ 724 $207,171
Net income ..................................... $ 5,256 0 0 5,256 0 5,256
------
Other comprehensive income, net of tax:
Unrealized gain on securities available for ... 51
sale
Reclassification adjustment for gains and
losses included in net income ................ (487)
------
Other comprehensive income ..................... (436)
------
Comprehensive income ............................ $ 4,820
======
Dividends on Class A common stock ............... 0 0 (599) 0 (599)
Dividends on Class B common stock ............... 0 0 (255) 0 (255)
Exercise of Class B common stock options ........ 2 760 0 0 762
Exercise of Class A common stock options ........ 0 93 0 0 93
Tax effect relating to the exercise of stock
options ........................................ 0 286 0 0 286
Purchase and retirement of Class B common stock . (2) (4,439) 0 0 (4,441)
Issuance of Class A common stock upon acquisition
of Leasing Technology, Inc. .................... 7 8,358 0 0 8,365
Issuance of Class A common stock upon conversion
of subordinated debentures, net ................ 1 840 0 0 841
Net change in unrealized appreciation
(depreciation)on securities available for
sale-net of deferred income taxes .............. 0 0 0 (436) (436)
------- -------- ------- -------- -------
BALANCE, MARCH 31, 1998 ......................... $ 330 $ 104,373 $112,052 $ 288 $217,043
======= ======== ======= ======== =======
See Notes to Consolidated Financial Statements - Unaudited
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
For the Three Months
(In thousands, except share data) Ended March 31,
---------------------
Operating activities: 1998 1997
-------- --------
<S> <C> <C>
Net income ...................................................................... $ 5,256 $ 6,341
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses ....................................................... 3,407 2,476
Provision for (reversal of) allowance for losses on real estate owned ........... 432 0
Depreciation .................................................................... 1,505 1,290
Amortization of mortgage servicing rights ....................................... 3,970 1,833
Gains on sales of mortgage servicing rights ..................................... (2,038) (2,433)
Decrease in deferred tax asset, net ............................................. (447) (671)
Net accretion of securities ..................................................... (471) (131)
Unrealized and realized (gains) losses on trading securities, net ............... (171) 68
Purchases of trading securities ................................................. (1,441) (6,417)
Net amortization of deferred loan origination fees .............................. (297) (290)
Gains on sales of real estate owned ............................................. (724) (79)
Gains on sales of real estate held for development and sale ..................... (100) 0
Gains on sales of securities available for sale ................................. (1,720) (253)
Proceeds from sales of loans available for sale ................................. 95,619 25,005
Fundings of loans available for sale ............................................ (17,056) (13,074)
Gains on sales of loans available for sale ...................................... (1,728) (451)
Provision for (recovery from) tax certificate losses ............................ (35) 78
Amortization of dealer reserve .................................................. 2,128 2,061
Amortization of cost over fair value of net assets acquired ..................... 659 627
Net accretion of purchase accounting adjustments ................................ (37) (221)
Amortization of deferred borrowing costs ........................................ 200 85
Increase in accrued interest receivable ......................................... (3,977) (578)
Decrease (increase) in other assets ............................................. (1,544) 769
Net losses (gains) on sales of property and equipment ........................... (2) 18
Increase in other liabilities ................................................... 5,526 5,155
-------- --------
Net cash provided by operating activities ....................................... 86,914 21,208
-------- --------
Investing activities:
Proceeds from redemption and maturities of investment securities ................ 11,787 12,311
Purchase of investment securities ............................................... (5,038) (4,593)
Proceeds from sales of securities available for sale ............................ 334,836 91,519
Principal collected on securities available for sale ............................ 30,159 43,147
Purchases of securities available for sale ...................................... (215,648) (271,434)
Proceeds from sales of FHLB stock ............................................... 0 1,550
FHLB stock acquired ............................................................. (13,700) (5,900)
Principal reduction on loans .................................................... 309,861 218,968
Loan fundings for portfolio ..................................................... (233,916) (190,361)
Loans purchased ................................................................. (778,401) (68,957)
Proceeds from maturities of banker's acceptances ................................ 135,985 208
Fundings of banker's acceptances ................................................ (91,381) (77)
Proceeds from sales of banker's acceptances ..................................... 24,593 0
Net increase in other interest bearing deposits with depository institutions .... 0 (22,998)
Additions to dealer reserve ..................................................... (2,086) (2,630)
Proceeds from sales of real estate owned ........................................ 3,192 429
Mortgage servicing rights acquired .............................................. (17,027) (9,155)
Proceeds from sales of mortgage servicing rights ................................ 15,394 1,291
Cost of equipment acquired for lease ............................................ (1,657) 0
Additions to office property and equipment ...................................... (1,596) (918)
Investment in joint ventures .................................................... (1,345) 0
Proceeds from sales of real estate held for development and sale ................ 840 0
Additional investment in real estate held for development and sale .............. (847) 0
Acquisition of Leasing Technology, Inc., net of cash acquired ................... (300) 0
-------- --------
Net cash (used) by investing activities ......................................... (496,295) (207,600)
-------- --------
See Notes to Consolidated Financial Statements - Unaudited (Continued)
</TABLE>
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<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS FOR CASH FLOWS - UNAUDITED
(CONTINUED)
For the Three Months
Ended March 31,
-------------------------
1998 1997
-------- --------
Financing activities:
<S> <C> <C>
Net increase (decrease) in deposits ......................................... 52,987 (21,847)
Interest credited to deposits ............................................... 13,363 13,311
Repayments of FHLB advances ................................................. (150,998) (160,000)
Proceeds from FHLB advances ................................................. 425,000 247,002
Net increase in securities sold under agreements to repurchase ............ 58,673 65,379
Net decrease in federal funds purchased ..................................... (2,500) 0
Repayment of notes payable .................................................. (6,396) 0
Increase in notes payable ................................................... 605 0
Issuance of common stock relating to exercise of employee stock options ..... 855 1,101
Payments to acquire and retire common stock ................................. (4,441) 0
Receipts of advances by borrowers for taxes and insurance ................... 33,365 13,953
Common stock dividends paid ................................................. (817) (551)
-------- --------
Net cash provided by financing activities .................................. 419,696 158,348
-------- --------
Increase in cash and cash equivalents ...................................... 10,315 (28,044)
Cash and cash equivalents at beginning of period ............................ 82,787 109,143
-------- --------
Cash and cash equivalents at end of period .................................. $ 93,102 $ 81,099
======== ========
Supplementary disclosure and non-cash investing and financing activities:
Interest paid on borrowings and deposits .................................... $ 31,744 $ 26,599
Income taxes paid ........................................................... 1,361 910
Loans transferred to real estate owned ...................................... 1,032 145
Proceeds receivable from sales of mortgage servicing rights ................. 6,331 6,058
Purchased residential loans held to maturity transferred to
available for sale ......................................................... 50,377 0
Issuance of Class A common stock upon acquisition of LTI .................... 8,365 0
Issuance of Class A common stock upon conversion of subordinated
debentures ................................................................. 841 0
Decrease in deferred offering costs upon conversion of subordinated
debentures ................................................................. (42) 0
Decrease in subordinated debentures upon conversion to Class A
common stock ............................................................... 883 0
Loan charge-offs ............................................................ 3,040 2,423
Tax certificate charge-offs, net of (recoveries) ............................ (220) (226)
Class A common stock dividend; not paid until April ......................... 599 253
Class B common stock dividends; not paid until April ........................ 255 313
Increase in equity for the tax effect related to the exercise of
employee stock options ..................................................... 286 342
Change in net unrealized appreciation (depreciation) on securities
available for sale ......................................................... (718) (3,772)
Change in deferred taxes on net unrealized appreciation (depreciation)
on securities available for sale ........................................... (282) (1,455)
Change in stockholders' equity from net unrealized appreciation
(depreciation)on securities available for sale, less related
deferred income taxes ...................................................... (436) (2,317)
Accrual for mortgage servicing rights purchased and not paid for ............ 13,000 0
Decrease in real estate held for development and sale resulting from
St. Lucie West("SLWHC")adjustments to purchase accounting .................. 1,009 0
Increase in other assets resulting from SLWHC purchase accounting adjustments 1,009 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, the Company
recently entered into an agreement, contingent upon necessary approvals, to
acquire Ryan, Beck & Co., ("RBCO") an investment banking firm and on March 26,
1998 provided RBCO with a $10.0 million subordinated loan which is not
contingent upon consummation of the acquisition. The Company recently acquired
Leasing Technology Inc. ("LTI"), a company engaged in the equipment leasing and
financing business. It is anticipated that LTI will operate as a wholly owned
subsidiary of BankAtlantic subject to pending regulatory approval. The Company
also recently invested in real estate joint ventures. 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 March 31, 1998 and 1997, the consolidated results of
operations for the three months ended March 31, 1998 and 1997, the consolidated
stockholders' equity for the three months ended March 31, 1998 and 1997 and the
consolidated cash flows for the three months ended March 31, 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.
2. Equity Capital
In March 1998, the Company announced a plan to purchase up to 2.0 million
shares of common stock. During the three months ended March 31, 1998, the
Company paid $4.4 million to repurchase and retire 303,500 shares of Class B
common stock. During the three months ended March 31, 1998, the Company issued
134,804 shares of Class A common stock upon the conversion of $883,000 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 $841,000, net of offering costs.
3. Sales of Financial Assets
During the three months ended March 31, 1998 and 1997, the Company sold
$19.7 million and $5.3 million of mortgage servicing rights realizing gains of
$2.0 million and $2.4 million, respectively, and these mortgage servicing rights
related to approximately $1.3 billion and $518.2 million of underlying loans,
respectively. Included in other assets at March 31, 1998 and December 31, 1997
were $13.7 million and $7.4 million of receivables, respectively, from the sales
of mortgage servicing rights. During the three months ended March 31, 1998, the
Company sold $328.1 million of mortgage-backed securities and $5.0 million of
treasury notes, for an aggregate gain of $1.7 million. During the three months
ended March 31, 1997, the Company sold $91.3 million of treasury notes for a
$253,000 gain. All securities sold were classified as securities available for
sale.
4. Trading Securities
During the three months ended March 31, 1998, the Company transferred $1.8
million of equity securities available for sale to trading securities resulting
in a $562,000 unrealized gain at the date of transfer. The unrealized and
realized gains (losses) on trading securities for the three months ended March
31, 1998 and 1997 were $171,000 and $(68,000), respectively.
5. St. Lucie West
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 assets
acquired in connection with the SLWHC acquisition, an additional $1.0 million of
utility receivable and road impact fees was added to other assets with a
corresponding reduction in land held for development and sale. The Company will
likely make further adjustments to the purchase accounting allocations after an
evaluation of an appraisal from an independent third party.
<PAGE>
6. Comprehensive Income
In June 1997 the FASB issued Statement No. 130 ("FAS 130") "Reporting
Comprehensive income". The statement became effective for the Company on January
1, 1998 with earlier financial statements reclassified to reflect the
application of FAS 130. 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 and 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 three months ended March 31, 1998 and 1997 was $306,000 and $26,000,
respectively.
7. Acquisitions and Potential Acquisitions
On March 20, 1998, the Company acquired LTI, a company engaged in the
equipment leasing and finance business. LTI principally leases or finances
trucks, and manufacturing and construction equipment to businesses located
primarily in South Florida. LTI was acquired by the Company in exchange for
718,413 shares of Class A common stock and $300,000 cash in a merger transaction
accounted for under the purchase method of accounting. The Class A common stock
received by the LTI shareholders is subject to restrictions prohibiting
transfers for periods ranging from one to three years. The estimated fair value
of Class A common stock issued in the acquisition was reduced by 10% to reflect
the contractual transfer restrictions. However this valuation is subject to
change based on a valuation appraisal report to be received from an independent
third party. Cost over fair value of net assets acquired is being amortized over
a 25 year period.
The preliminary analysis of the fair value of assets acquired and
liabilities assumed in connection with the acquisition of LTI effective March 1,
1998 for financial reporting follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
Leases receivable ................................. $ 9,038
Securities available for sale ..................... 121
Property and equipment ............................ 119
Other assets ...................................... 1,120
Notes payable ..................................... (6,670)
Other liabilities ................................. (3,893)
Deferred income tax liability ..................... (604)
------
Fair value of net asset acquired .................. (769)
------
Estimated fair value of Class A common stock issued 8,365
Acquisition costs ................................. 100
Cash paid to LTI shareholder ...................... 300
------
Total purchase price .............................. 8,765
------
Cost over fair value of net assets acquired ....... $ 9,534
======
</TABLE>
On February 9, 1998 the Company entered into a definitive agreement with
Ryan, Beck & Co. ("RBCO") whereby all of RBCO outstanding shares will, subject
to receipt of certain prior approvals, be acquired by the Company in exchange
for shares of the Company's Class A common stock. While RBCO will be a
wholly-owned subsidiary of the Company, it is anticipated that RBCO will be an
autonomous independent subsidiary, operated by RBCO's current management. RBCO,
based in New Jersey, engages in underwriting, market making distribution,
trading of bank and thrift equity and debt securities, tax exempt bonds,
consulting, research and financial advisory services. The total assets and
equity of RBCO at December 31, 1997 were $56.6 million and $14.7 million,
respectively, and net income for the year ended December 31, 1997 and the three
months ended March 31, 1998 was $ 3.9 million and $1.4 million, respectively.
The agreement establishes an exchange ratio of .761 shares of the Company's
Class A common stock for each share of RBCO, which, based on the closing price
of the Class A common stock on February 9, 1998, would result in an aggregate
purchase price of approximately $39.4 million.
<PAGE>
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.
The agreement provides for the establishment of an incentive and retention
pool, under which the Company's Class A common stock, representing approximately
20% of the total transaction value will be allocated to key employees of RBCO.
The allocated shares will be distributed in four years to employees who remain
for the period. The retention pool will be considered compensation under
generally accepted accounting principles.
The acquisition is subject to regulatory approvals and the approval of the
shareholders of RBCO. It is anticipated that the transaction will be closed,
contingent upon the necessary approvals, in the second or third quarter of 1998
and will be accounted for under the purchase method of accounting.
8. Loans Receivable
The increase in the loans receivable balances from December 31, 1997
through March 31, 1998 resulted from the purchase of $778.4 million of wholesale
residential loans. As a result of these purchases, wholesale residential loan
balances increased from $772.9 million at December 31, 1997 to $1.4 billion at
March 31, 1998.
Activity in the allowance for loan losses was (in thousands):
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
--------------------------
(in thousands) 1998 1997
------- -------
<S> <C> <C>
Balance, beginning of period ........ $ 28,450 $ 25,750
Charge-offs:
Commercial business loans ......... (18) (11)
Commercial real estate loans ...... (101) 0
Lease financing .................. (85) 0
Consumer loans .................... (2,705) (2,408)
Residential real estate loans ..... (131) (4)
------- -------
Total charge-offs ................... (3,040) (2,423)
------- -------
Recoveries:
Commercial business loans ......... 159 24
Commercial real estate loans ...... 1 8
Lease financing .................. 37 0
Consumer loans .................... 652 365
------- -------
Total recoveries .................... 849 397
------- -------
Net charge-offs ..................... (2,191) (2,026)
Allowance for loan losses acquired 284 0
Provision for loan losses ........ 3,407 2,476
------- -------
Balance, end of period .............. $ 29,950 $ 26,200
======= =======
</TABLE>
9. Reclassifications
Certain amounts for prior periods have been reclassified to conform
with statement presentation for 1998.
<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 1993, 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 operations, markets, products and services, as well as expansion
strategies, 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 $0.17 and $0.14, respectively, for the three months ended March 31, 1998
compared to $0.22 and $0.18 for the comparable 1997 period. The Company's basic
and diluted earnings per share for Class B common stock were $0.15 and $0.13,
respectively for the three months ended March 31, 1998 compared to $0.22 and
$0.18 for the comparable 1997 period. The Company's net income declined from
$6.3 million during the three months ended March 31, 1997 to $5.3 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 and expense increases associated with real estate
development and sale activity and other growth initiatives undertaken by the
Company.
<TABLE>
NET INTEREST INCOME
For the Three Months Ended
March 31,
------------------------------
(In thousands) 1998 1997 Change
------- ------- ------
<S> <C> <C> <C>
Interest and fees on loans ......................................... $ 47,139 $ 41,123 $ 6,016
Interest on banker's acceptances ................................... 460 0 460
Interest and dividends on securities available for sale ........... 9,987 7,542 2,445
Interest and dividends on investment securities held to maturity
and trading securities ............................................ 2,224 1,779 445
Interest on deposits ............................................... (16,458) (17,275) 817
Interest on advances from FHLB ..................................... (10,712) (4,801) (5,911)
Interest on securities sold under agreements to repurchase ......... (3,080) (2,549) (531)
Interest on subordinated debentures, notes payable and guaranteed
preferred interest in the Company's Junior Subordinated Debentures
and notes payable ................................................. (4,867) (1,539) (3,328)
------- ------- ------
Net interest income ................................................ $ 24,693 $ 24,280 $ 413
======= ======= ======
</TABLE>
<PAGE>
The increase in interest and fees on loans during the three months ended
March 31, 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 loans. The above increases in loan
average balances were partially offset by lower originated residential and
consumer loan average balances due to sales and prepayments of residential loans
and consumer loan payoffs. The additional interest income from higher loan
average 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 48.6% during the three
months ended March 31, 1997 to 55.7% during the comparable 1998 period. Average
balances of purchased residential loans, commercial mortgages and international
loans increased from $445.6 million, $534.5 million and $0, respectively, during
the three months ended March 31, 1997 to $1.1 billion, $554.2 million and $24.2
million, respectively during the comparable 1998 period. Originated residential
and consumer loan average balances declined from $456.0 million and $344.8
million, respectively, during the three months ended March 31, 1997 to $206.8
million and $328.6 million, respectively, during the comparable 1998 period. The
increase in banker's acceptances interest income resulted from the Company
investing short term funds in banker's acceptances during the first quarter of
1998. The increase in interest and dividends on securities available for sale
resulted from higher average balances due to purchases of securities available
for sale. During the year ended December 31, 1997 and the three months ended
March 31, 1998, the Company purchased $665.0 million and $215.6 million of
securities available for sale, respectively. The above purchases were partially
offset by sales of securities available for sale of $333.1 million and $355.5
million during the three months ended March 31, 1998 and the year ended December
31, 1997, respectively. The increases in interest and dividends on investment
securities during 1998 were primarily due to higher FHLB stock average balances.
FHLB stock average balances increased from $16.1 million during the three months
ended March 31, 1997 to $38.1 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 March 31, 1998
compared to the comparable 1997 quarter resulted from lower average deposit
balances and rates during 1998. Average interest bearing deposit balances
decreased from $1.7 billion for the three months ended March 31, 1997 to $1.6
billion for the three months ended March 31, 1998, and average rates on deposits
decreased from 4.19% during the 1997 first quarter to 4.14% during the
comparable 1998 quarter. The decline in deposit average balances 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
decline in deposit average rates resulted from a change in the mix of the
deposit portfolio from higher rate certificate accounts to lower rate
transaction accounts. The mix in the Company's deposit portfolio changed from
55% certificate accounts and 45% transaction accounts during the three months
ended March 31, 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 $314.5 million during the first quarter of 1997
to $721.0 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 and rates during
1998. Securities sold under agreements to repurchase average balances and rates
increased from $194.5 million and 5.26% during the three months ended March 31,
1997 to $229.1 million and 5.40% during the comparable 1998 three month period.
During the 1997 quarter interest on subordinated debentures included interest on
$21.0 million of the Company's 9% Subordinated Debentures and $57.5 million of 6
3/4% Convertible Debentures. The interest expense during the 1998 quarter
includes interest on each of the above Debentures plus interest on $74.5 million
of the Company's 9 1/2% Junior Subordinated Debentures issued in April 1997,
interest on the Company's $100 million of 5 5/8% Convertible Subordinated
Debentures issued in November 1997 and interest on $2.4 million of notes payable
relating primarily to SLWHC and LTI. The proceeds from the offerings and
increases in securities sold under agreements to repurchase average balances
were primarily used to fund growth in loans and investments available for sale.
<PAGE>
PROVISION FOR LOAN LOSSES
The provision for loan losses for the first quarter 1998 was $3.4 million
compared to $2.5 million during the comparable 1997 period. The higher 1998
provision for loan losses primarily resulted from an $800,000 specific reserve
established for a factoring account. Consumer loan net charge-offs remained
constant at $2.0 million during the three months ended March 31, 1998 and 1997
while residential loan net charge-offs increased by $127,000 compared to the
first quarter of 1997. Lease net charge-offs relating to the operations of LTI
were $48,000 for the one month ended March 31, 1998.
At the indicated dates the Company's risk elements and non-performing
assets were (in thousands):
<TABLE>
<CAPTION>
March 31, December 31,
1998 1997
--------- ------------
<S> <C> <C>
Nonaccrual :
Tax certificates ....................... $ 765 $ 880
Loans and leases ....................... 23,465 17,569
------ ------
Total nonaccrual ....................... 24,230 18,449
------ ------
Repossessed Assets:
Real estate owned ...................... 5,660 7,528
Repossessed assets ..................... 3,314 2,912
------ ------
Total repossessed assets ............... 8,974 10,440
------ ------
Contractually past due 90 days or more (1) 6,853 647
------ ------
Total non-performing assets ............ 40,057 29,536
Restructured loans ....................... 1,125 4,043
------ ------
Total risk elements .................... $41,182 $33,579
====== ======
</TABLE>
(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 March 31, 1998 compared to December 31, 1997
increased by $7.6 million. The increase in risk elements primarily relates to
non-accrual commercial loans and commercial loans contractually past due 90 days
or more. During the three months ended March 31, 1998 a $2.9 million commercial
non-residential mortgage loan was transferred from restructured loans to
non-accrual and a $2.7 million commercial non-residential mortgage loan was
transferred to non-accrual status. Also, during the 1998 period a $5.0 million
commercial loan matured and is currently in the renewal process. The above
increases in risk elements at March 31, 1998 were partially offset by lower
consumer, residential and tax certificate non-accrual balances. Repossessed
assets includes $567,000 of equipment and vehicles acquired in connection with
the LTI acquisition.
NON-INTEREST INCOME
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
------------------------------
(In thousands) 1998 1997 Change
------ ------ ------
<S> <C> <C> <C>
Loan servicing and other loan fees ......................... $ 492 $ 1,571 $(1,079)
Gains on sales of loans available for sale ................. 1,728 451 1,277
Unrealized and realized gains (losses) on trading securities 171 (68) 239
Gains on sales of mortgage servicing rights ................ 2,038 2,433 (395)
Gains on sales of securities available for sale ............ 1,720 253 1,467
Real estate held for development and sale activity, net .... (951) 0 (951)
Transaction accounts ....................................... 2,600 2,145 455
ATM fees ................................................... 1,297 1,314 (17)
Other ...................................................... 840 925 (85)
------ ------ ------
Total non-interest income ................................ $ 9,935 $ 9,024 $ 911
====== ====== ======
</TABLE>
<PAGE>
The decrease in loan servicing and other loan fees during the three month
period in 1998 compared to the corresponding 1997 period 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 $1.4 million due to accelerated
amortization of mortgage servicing rights caused by mortgage prepayments during
the period. Late fee and other loan fee income increased from $856,000 during
the three months ended March 31, 1997 to $1.2 million during the comparable 1998
period primarily due to a larger loan portfolio.
During the three months ended March 31, 1998 and 1997, BankAtlantic sold
$93.9 million and $24.6 million of loans available for sale for gains reported
in the preceding table. In March 1998, BankAtlantic, transferred $50.4 million
of purchased residential loans from the held to maturity category to loans
available for sale category.
During the three months ended March 31, 1998 and 1997, BankAtlantic sold
$19.7 million and $5.3 million, respectively, of mortgage servicing rights for
gains reported in the above table. These rights related to approximately $1.3
billion and $518.2 million of loans serviced for others, respectively.
During the three months ended March 31, 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)
<TABLE>
<CAPTION>
l998 l997
------- ------
<S> <C> <C>
7 year balloon mortgage-backed securities .. $ 76,359 $ 0
5 year balloon mortgage-backed securities .. 27,151 0
U.S. treasury notes ........................ 4,980 91,266
------- ------
Total fixed rate securities .............. 108,490 91,266
------- ------
5-1 Adjustable rate mortgages .............. 121,443 0
3-1 Adjustable rate mortgages .............. 103,183 0
------- ------
Total adjustable rate securities ......... 224,626 0
------- ------
Total sales of securities available for sale $333,116 $91,266
======= ======
</TABLE>
During the three months ended March 31, 1998, the Company transferred $1.8
million of marketable equity securities from securities available for sale to
trading securities. The unrealized gain on the transfer date was $562,000.
The increase in transaction account fees during the three months ended
March 31, 1998 compared to the corresponding 1997 period resulted from higher
checking account income reflecting increased transaction accounts. Average
transaction account balances increased from $909.6 million at March 31, 1997 to
$997.7 million at March 31, 1998.
ATM fee income during the first quarter of 1998 remained at 1997 levels
while transaction volumes at ATM machines decreased slightly. Management
anticipates ATM fee income will increase due to the expected installation during
1998 of 127 ATM machines in Georgia and Alabama Wal-Mart SuperStores, and 57 ATM
machines in Exxon gas stations located in Florida.
Real estate held for development and sale activities, net represents the
results of SLWHC operations. During the three months ended March 31, 1998 SLWHC
recorded a $100,000 gain on sale of land and incurred $1.1 million of operating
expenses.
<PAGE>
NON-INTEREST EXPENSES
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
----------------------------
(In thousands) 1998 1997 Change
------- ------ ------
<S> <C> <C> <C>
Employee compensation and benefits .... $ 11,468 $ 9,547 $ 1,921
Occupancy and equipment ............... 5,128 4,792 336
Federal insurance premium ............. 262 208 54
Advertising and promotion ............. 491 369 122
Foreclosed asset activity, net ........ (169) 13 (182)
Amortization of cost over fair value of
net assets acquired .................. 659 627 32
Other ................................. 5,071 4,844 227
------- ------ ------
Total non-interest expenses ....... $ 22,910 $20,400 $ 2,510
======= ====== ======
</TABLE>
The increase in employee compensation and benefits during the three months
ended March 31, 1998 compared to the 1997 period resulted from the expansion of
BankAtlantic's branch network, the start-up of two new business units (small
business and international), the hiring of 50 senior managers, support and
branch personnel from competing banks to enlarge the Company's market share in
Miami-Dade County, and the acquisition of LTI. As a result of these growth
initiatives the number of full-time equivalent employees increased from 985 at
March 31, 1997 to 1,113 at March 31, 1998. Occupancy and equipment expenses
increased due to the expanded branch network and computer technology upgrades
resulting in $214,000 of higher depreciation expense, $60,000 of additional rent
expense and $91,000 of higher equipment expenses. During the three months ended
March 31, 1998 and the year ended December 31, 1997 additions to property and
equipment totaled $1.6 million and $7.9 million, respectively.
The increase in federal insurance premiums during the three months ended
March 31, 1998 compared to the same 1997 period reflects a lower deposit
assessment base during 1997 resulting from the BNA acquisition in October 1996.
The first quarter 1997 deposit premium was based on September 30, 1996 total
assets.
The increase in advertising and promotion expenses during the March 1998
quarter resulted from promotions associated with the branch expansion in
Miami-Dade County, Florida and BankAtlantic's small business banking unit.
The increase in the amortization of cost over fair value of net assets
acquired for the three months ended March 31, 1998 related to the LTI
acquisition.
The increase in other expenses during the three months ended March 31, 1998
compared to the 1997 period reflects additional operating expenses generally
associated with a larger organization. As a result, total stationery, printing
and supplies, telephone, and postage expenses increased from $1.2 million during
the three months ended March 31, 1997 to $1.4 million during the same 1998
period.
FINANCIAL CONDITION
The Company's total assets at March 31, 1998 were $3.5 billion compared to
$3.1 billion at December 31, 1997. Loans receivable, net, other assets and cost
over fair value of net assets acquired increased by $563.6 million, $11.0
million and $8.9 million, respectively, while securities available for sale
declined by $149.4 million. The higher loans receivable balances resulted from
the purchase of $778.4 million of wholesale residential loans and $342.4 million
of loan fundings, partially offset by $445.6 million of principal reductions on
loans and $93.9 million of loan sales. Included in other assets at March 31,
1998 was an $11.0 million receivable from the sale of mortgage servicing rights.
The LTI acquisition increased cost over fair value of net assets acquired by
$9.5 million offset by amortization of existing goodwill. The decline in
securities available for sale balances resulted from the sale of $333.1 million
of securities, and principal collected of $30.2 million, partially offset by the
purchase of $215.6 million of securities available for sale. The Company sold
securities to fund loan growth.
<PAGE>
The Company's total liabilities at March 31, 1998 were $3.3 billion
compared to $2.9 billion at December 31, 1997. Deposits, FHLB advances,
securities sold under agreements to repurchase, advances by borrowers for taxes
and insurance and other liabilities increased by $66.4 million, $274.0 million,
$58.7 million, $33.4 million and $22.3 million, respectively. Transaction and
certificate accounts increased $54.8 million and $11.6 million, respectively.
The deposit increase primarily came from the Miami-Dade County market segment
and the small business banking unit. The increase in other liabilities reflects
$13.0 million of mortgage servicing rights purchased and not yet funded.
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 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's equity pricing risk did not
significantly change from December 31, 1997. The Company's primary market risk
is 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
March 31, 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 March 31, 1998, (ii) discounting the above
expected cash flows based on instantaneous and parallel shifts in the yield
curve to determine fair values (iii) 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 March
31, 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.
<TABLE>
<CAPTION>
Changes Net Portfolio Dollar
in Rate Value Amount Change
------- ------------- ---------
(dollars in thousands)
<S> <C> <C>
+200 bp $ 368,147 $ (16,023)
+100 bp $ 387,963 $ 3,793
0 bp $ 384,170 $ 0
(100) bp $ 339,061 $ (45,109)
(200) bp $ 294,241 $ (85,929)
</TABLE>
Certain assumptions by the Company in assessing the interest rate risk were
utilized in 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. 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
In March 1998, the Company extended a $10.0 million subordinated loan to
RBCO which was used by RBCO to increase its regulatory equity capital. The loan
bears interest at BankAtlantic's prime interest rate and matures on March 30,
2001. The loan will qualify as equity capital to RBCO under the National
Association of Securities Dealers Inc. regulations enabling RBCO to expand into
new products and markets.
LTI is obligated on leases sold with full recourse by LTI to investors
prior to the 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 March 31, 1998, the amount of lease payments subject
to such recourse provisions was approximately $15.8 million. A $373,000
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 three 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 and securities
available for sale. At March 31, 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 March 31, 1998 were $144.1 million, $26.5
million and $30.1 million, respectively compared to commitments to originate
loans, purchase loans and purchase securities available for sale of $46.9
million, $24.0 million, and zero, respectively, at March 31, 1997. BankAtlantic
expects to fund the 1998 loan commitments from loan and securities available for
sale repayments. At March 31, 1998, loan commitments were 6.47 % 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)
<S> <C> <C> <C> <C> <C> <C> <C><C> <C><C>
AT MARCH 31, 1998:
Total risk-based capital $365,434 16.18% > $180,677 > 8.00% > $225,846 > 10.00%
= = = =
Tier I risk-based capital $337,202 14.93% > $ 90,338 > 4.00% > $135,508 > 6.00%
= = = =
Tangible capital ........ $337,202 9.81% > $ 51,536 > 1.50% > $ 51,536 > 1.50%
= = = =
Core capital ............ $337,202 9.81% > $103,072 > 3.00% > $171,883 > 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 4. Submission of Matters to a Vote of Security Holders
The registrant held an Annual Meeting of Shareholders on April 14, 1998. At
the meeting three directors were elected by a vote of 10,192,806 for and 67,122
against and the shareholders approved the BankAtlantic Bancorp 1998 Employee
Stock Option Plan by a vote of 9,323,828 for, 843,621 against, with 44,815
abstaining.
Exhibits and Reports on Form 8K
(a) Exhibit 11 Statement re: Computation of Per Share Earnings.
(b) A report on Form 8K dated February 9, 1998 was filed with the
Securities and Exchange Commission announcing the Company's execution
of a merger agreement with Ryan, Beck & Co., Inc.
A report on Form 8K dated March 13, 1998 was filed with the Securities and
Exchange Commission announcing the Company's plan to buy back up to 2.0 million
shares of common stock.
<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.
May 15, 1998 By: /s/Alan B. Levan
- - ------------ -----------------------
Date Alan B. Levan
Chief Executive Officer/
Chairman/President
May 15, 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>
March 31, March 31,
(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 ............... $ 599 $ 255 $ 854 $ 253 $ 313 $ 566
Basic allocated undistributed earnings .. 3,038 1,364 4,402 3,775 2,000 5,775
---------- ---------- ------ ---------- ---------- ------
Allocated net income available
for common shareholders ................ $ 3,637 $ 1,619 $ 5,256 $ 4,028 $ 2,313 $ 6,341
========== ========== ====== ========== ========== ======
Basic Denominator
- - -----------------
Weighted average shares outstanding ..... 21,809,903 10,768,956 18,146,296 10,569,392
========== ========== ========== ==========
Allocation percentage ................... 69.02% 30.98% 65.38% 34.62%
========== ========== ========== ==========
Basic earnings per share ................ $ 0.17 $ 0.15 $ 0.22 $ 0.22
========== ========== ========== ==========
Diluted Numerator
- - -----------------
Actual dividends declared ............... $ 599 $ 255 $ 854 $ 253 $ 313 $ 566
---------- ----------- ------ ---------- ---------- ------
Basic allocated undistributed earnings .. 3,038 1,364 4,402 3,775 2,000 5,775
Reallocation of basic undistributed
earnings due to change in allocation
percentage ............................. 405 (405) 0 374 (374) 0
---------- ---------- ------ ---------- ---------- ------
Diluted allocated undistributed earnings 3,443 959 4,402 4,149 1,626 5,775
Interest expense on convertible debt .... 1,202 335 1,537 459 180 639
Allocated dilutive net income available ---------- ---------- ------ ---------- ---------- ------
to common shareholders ................. $ 4,645 $ 1,294 $ 5,939 $ 4,608 $ 1,806 $ 6,414
========== ========== ====== ========== ========== ======
Diluted Denominator
- - -------------------
Basic weighted average shares
outstanding ............................ 21,809,903 10,768,956 18,146,296 10,569,392
Convertible debentures .................. 16,314,540 0 8,773,804 0
Options ................................. 639,910 1,110,754 187,813 1,093,275
Warrants ................................ 0 0 0 10,963
---------- ---------- ---------- ----------
Diluted weighted average
shares outstanding ..................... 38,764,353 11,879,710 27,107,913 11,673,630
========== ========== ========== ==========
Allocation percentage ................... 78.21% 21.79% 71.87% 38.13%
========== ========== ========== ==========
Diluted earnings per share .............. $ 0.14 $ 0.13 $ 0.18 $ 0.18
========== ========== ========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information
extracted from the Consolidated Statement of Financial
Condition at March 31, 1998 and the
Consolidated Statement of Operations for the three months
ended March 31, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 72,102
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 21,000
<TRADING-ASSETS> 7,804
<INVESTMENTS-HELD-FOR-SALE> 458,123
<INVESTMENTS-CARRYING> 48,499
<INVESTMENTS-MARKET> 48,499
<LOANS> 2,666,363
<ALLOWANCE> 29,950
<TOTAL-ASSETS> 3,526,508
<DEPOSITS> 1,830,083
<SHORT-TERM> 191,389
<LIABILITIES-OTHER> 135,938
<LONG-TERM> 1,152,055
0
0
<COMMON> 330
<OTHER-SE> 216,713
<TOTAL-LIABILITIES-AND-EQUITY> 3,526,508
<INTEREST-LOAN> 47,599
<INTEREST-INVEST> 12,211
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 59,810
<INTEREST-DEPOSIT> 16,458
<INTEREST-EXPENSE> 35,117
<INTEREST-INCOME-NET> 24,693
<LOAN-LOSSES> 3,407
<SECURITIES-GAINS> 1,891
<EXPENSE-OTHER> 22,910
<INCOME-PRETAX> 8,311
<INCOME-PRE-EXTRAORDINARY> 5,256
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,256
<EPS-PRIMARY> 0.17
<EPS-DILUTED> 0.14
<YIELD-ACTUAL> 7.86
<LOANS-NON> 23,465
<LOANS-PAST> 6,853
<LOANS-TROUBLED> 1,125
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 28,450
<CHARGE-OFFS> 3,040
<RECOVERIES> 849
<ALLOWANCE-CLOSE> 29,950
<ALLOWANCE-DOMESTIC> 29,650
<ALLOWANCE-FOREIGN> 300
<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 March 31, 1997 (Unaudited)
and the Consolidated Statement of Operations for
the three months ended March 31, 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<EXCHANGE-RATE> 1
<CASH> 81,099
<INT-BEARING-DEPOSITS> 22,998
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 6,349
<INVESTMENTS-HELD-FOR-SALE> 572,783
<INVESTMENTS-CARRYING> 46,715
<INVESTMENTS-MARKET> 46,715
<LOANS> 1,877,641
<ALLOWANCE> 26,200
<TOTAL-ASSETS> 2,773,085
<DEPOSITS> 1,824,189
<SHORT-TERM> 415,967
<LIABILITIES-OTHER> 79,122
<LONG-TERM> 301,202
0
0
<COMMON> 185
<OTHER-SE> 152,420
<TOTAL-LIABILITIES-AND-EQUITY> 2,773,085
<INTEREST-LOAN> 41,123
<INTEREST-INVEST> 9,321
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 50,444
<INTEREST-DEPOSIT> 17,275
<INTEREST-EXPENSE> 26,164
<INTEREST-INCOME-NET> 24,280
<LOAN-LOSSES> 2,476
<SECURITIES-GAINS> 253
<EXPENSE-OTHER> 20,400
<INCOME-PRETAX> 10,428
<INCOME-PRE-EXTRAORDINARY> 6,341
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,341
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.18
<YIELD-ACTUAL> 8.33
<LOANS-NON> 12,339
<LOANS-PAST> 935
<LOANS-TROUBLED> 3,762
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 25,750
<CHARGE-OFFS> 2,423
<RECOVERIES> 397
<ALLOWANCE-CLOSE> 26,200
<ALLOWANCE-DOMESTIC> 26,200
<ALLOWANCE-FOREIGN> 0
<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 December 31, 1996 and the
Consolidated Statement of Operations for the year
ended December 31, 1996 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> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 102,995
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 6,148
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 439,345
<INVESTMENTS-CARRYING> 54,511
<INVESTMENTS-MARKET> 54,511
<LOANS> 1,850,606
<ALLOWANCE> 25,750
<TOTAL-ASSETS> 2,605,527
<DEPOSITS> 1,832,780
<SHORT-TERM> 310,553
<LIABILITIES-OTHER> 60,255
<LONG-TERM> 254,235
0
0
<COMMON> 183
<OTHER-SE> 147,521
<TOTAL-LIABILITIES-AND-EQUITY> 2,605,527
<INTEREST-LOAN> 107,944
<INTEREST-INVEST> 44,687
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 152,631
<INTEREST-DEPOSIT> 55,028
<INTEREST-EXPENSE> 77,031
<INTEREST-INCOME-NET> 75,600
<LOAN-LOSSES> 5,844
<SECURITIES-GAINS> 5,959
<EXPENSE-OTHER> 72,241
<INCOME-PRETAX> 31,252
<INCOME-PRE-EXTRAORDINARY> 19,011
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,011
<EPS-PRIMARY> 0.64
<EPS-DILUTED> 0.58
<YIELD-ACTUAL> 8.23
<LOANS-NON> 12,424
<LOANS-PAST> 2,961
<LOANS-TROUBLED> 3,718
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 19,000
<CHARGE-OFFS> 7,718
<RECOVERIES> 2,224
<ALLOWANCE-CLOSE> 25,750
<ALLOWANCE-DOMESTIC> 25,750
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
