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BBX BankAtlantic Bancorp Reports Financial Results for the Fourth Quarter and Full Year, 2009


Companies:Bankatlantic Bancorp Inc.Bfc Financial Corporation
Press Release Source: BankAtlantic Bancorp, Inc. On Thursday January 28, 2010, 6:00 am EST
FORT LAUDERDALE, Fla.--(BUSINESS WIRE)--BankAtlantic Bancorp, Inc. (NYSE: BBX - News) today reported financial results for the fourth quarter and full year ending December 31, 2009.

Fourth Quarter 2009

BankAtlantic Bancorp, Inc. (the “Company”) today reported a net loss from continuing operations of ($48.0) million, or ($0.97) per diluted share, for the quarter ended December 31, 2009, compared to a net loss from continuing operations of ($164.3) million, or ($10.89) per diluted share, for the quarter ended December 31, 2008, and a net loss from continuing operations of ($52.1) million, or ($3.45) per diluted share, for the quarter ended September 30, 2009.

Full Year 2009

BankAtlantic Bancorp reported a net loss from continuing operations of ($185.0) million, or ($7.83) per diluted share, for the year ended December 31, 2009, compared to a net loss from continuing operations of ($219.2) million, or ($14.54) per diluted share, for the year ended December 31, 2008.

BankAtlantic Bancorp’s Chairman and Chief Executive Officer, Alan B. Levan, commented, “Both the current quarter and full year 2009 results continue to reflect losses associated with our real estate related loan portfolios, especially in the commercial real estate sector. The decreased losses in both the fourth quarter 2009 and full year 2009 compared to the corresponding periods in 2008 resulted primarily from accounting for income taxes resulting in a net benefit of $31.7 million for the fourth quarter and full year 2009 versus a net provision in 2008 (described more fully in this release) and higher goodwill impairment charges in 2008 compared to 2009; partially offset by higher loan loss provisions in the 2009 fourth quarter and full year.

“As disclosed last week in a Form 8-K filed with the SEC on January 21, 2010, BankAtlantic Bancorp has commenced cash offers to purchase $285.4 million of its outstanding trust preferred securities (TruPS) at a price of $200 per $1,000 principal amount outstanding, or $57.1 million for all of the outstanding series of TruPS. The completion of these offers is subject to numerous conditions, risks and uncertainties, including our ability to consummate a financing transaction sufficient to fund the purchase of the TruPS tendered in response to the offers and acceptance of a sufficient number of the offers by holders of a requisite amount of each series of TruPS."


Highlights of the BankAtlantic Operating Segment:

BankAtlantic Performance:

Deposits and Liquidity– BankAtlantic’s Chief Executive Officer, Jarett S. Levan, commented, “Core (1) and total deposits at December 31, 2009 were $2.6 billion and $4.0 billion, respectively, with the following characteristics:


Non-CD balances represented approximately 75.8% of total deposits;
The average cost of core deposits and total deposits for the fourth quarter of 2009 was 0.38% and 0.79%, respectively; and
Brokered deposit balances represented 1.5% of assets.
“During the fourth quarter of 2009:
Core deposits increased $175.3 million, at an average cost of deposits of 0.66%.
Total deposits increased by $10.2 million, as core deposit growth was partially offset by decreases in brokered deposits of $83.1 million and decreases in other non-core deposit categories of $82.0 million.
“For the full year 2009:
Core deposits increased approximately $495.1 million, at an average cost of deposits of 0.99%.
Total deposits increased approximately $43.3 million as the growth in core deposits offset net declines in non-core accounts.
“BankAtlantic continued to reduce its borrowings, resulting in total borrowings of $345.4 million, or 7.3% of total assets, at December 31, 2009.
During the fourth quarter of 2009, borrowings were reduced by $71.2 million, or 17.1%. Since December 31, 2008, borrowings have been reduced by $955.6 million, or 73.5%.
“BankAtlantic’s ratio of total borrowings to deposits plus borrowings was 8.0% at December 31, 2009 compared to 9.52% at September 30, 2009 and 24.9% at December 31, 2008.

(1) Core deposits is a term that we use to refer to Demand, NOW and Savings accounts. A reconciliation of core deposits to total deposits is included in BankAtlantic Bancorp’s Fourth Quarter and Full Year, 2009 Supplemental Financials available at www.BankAtlanticBancorp.com. To view the financial data, access the “Investor Relations” section and click on the “Quarterly Financials or Supplemental Financials” navigation links.

Net Income– “BankAtlantic’s net loss was ($44.1) million for the fourth quarter of 2009, compared to a net loss of ($35.3) million for the third quarter of 2009 and a net loss of ($133.0) million for the fourth quarter of 2008.


“Pretax core operating earnings (2) for the fourth quarter of 2009 was $10.6 million compared to $23.9 million in the third quarter of 2009, and $9.6 million in the fourth quarter of 2008. Loan loss and tax certificate provisions, debt redemption costs, and impairment, restructuring and exit activity expenses, which are not included in pre-tax core operating earnings, were ($86.4) million for the fourth quarter of 2009, ($59.2) million for the third quarter of 2009, and ($88.6) million for the fourth quarter of 2008.

“BankAtlantic’s net loss was ($144.2) million for the full year 2009, compared to a net loss of ($166.1) million for the full year 2008.


“Pretax core operating earnings for the full year 2009 was $69.6 million compared to $67.2 million for the full year 2008. Loan loss and tax certificate provisions, debt redemption costs, FDIC special assessments, and impairment, restructuring and exit activity expenses, which are not included in pre-tax core operating earnings, were ($245.5) million for the full year 2009 and ($202.2) million for the full year 2008.

(2) Pre-tax core operating earnings is a non-GAAP measure that we use to refer to pre-tax earnings before provision for loan losses, tax certificate provisions, debt redemption costs, FDIC special assessments and impairment, restructuring and exit activities. A reconciliation of loss from bank operations before income taxes to pre-tax core operating earnings is included in BankAtlantic Bancorp’s Fourth Quarter and Full Year, 2009 Supplemental Financials available at www.BankAtlanticBancorp.com. To view the financial data, access the “Investor Relations” section and click on the “Quarterly Financials or Supplemental Financials” navigation links.

Net Interest Margin– “Net interest income for the fourth quarter of 2009 was $40.0 million compared to $41.5 million during the third quarter of 2009 and $44.5 million for the fourth quarter of 2008. Net interest income for the full year 2009 was $163.3 million compared to $193.6 million for the full year 2008.


“Net interest margin during the fourth quarter of 2009 was 3.62%, a three basis point improvement from 3.59% during the third quarter of 2009, and a 33 basis point improvement from 3.29% during the fourth quarter of 2008.
“Net interest spread during the fourth quarter of 2009 was 3.38%, improved by five basis points from 3.33% during the third quarter of 2009, and improved by 46 basis points from 2.92% during the fourth quarter of 2008.

“Quarterly net interest margin and spread improved slightly compared to the third quarter of 2009; the significant improvement in both the margin and spread compared to the fourth quarter of 2008 was largely the result of changes in the funding mix associated with growth in core deposits and the repayment of FHLB advances during 2009.

“The decline in net interest income from the fourth quarter and full year of 2009, however, was primarily due to the impact of the decline in average earning assets and increase in non-performing assets during 2009, which offset the margin improvements. Average earning assets have declined by $208.7 million from the third quarter 2009 and by $1.0 billion from the fourth quarter 2008. Additionally, while non-performing asset levels decreased by $4.5 million since September 30, 2009, they have increased by $95.7 million since December 31, 2008.

Non-interest income– “Total non-interest income for the fourth quarter of 2009 was $28.2 million compared to $35.5 million for the third quarter of 2009, and $31.1 million for the fourth quarter of 2008.


“Excluding securities gains of $4.8 million and $0.1 million in the third quarter of 2009 and fourth quarter of 2008, respectively, non-interest income would have been $28.2 million for the fourth quarter of 2009 compared to $30.7 million in the third quarter of 2009 and $31.0 million during the fourth quarter of 2008.

“Total non-interest income for the full year 2009 was $129.3 million compared to $137.3 million for the full year 2008.


“Excluding securities gains of $11.2 million in 2009 and $2.4 million in 2008, non-interest income would have been $118.1 million for 2009 compared to $134.9 million for 2008, with the decline primarily due to lower service charges on deposits.
“Service charges on deposits declined from the comparative quarters and from the prior year reflecting changes in customer behavior as well as changes in our customer mix as a result of our relationship focused deposit gathering strategies.

Non-interest expense– “Total non-interest expenses were $66.0 million in the fourth quarter of 2009 compared to $60.0 million in the third quarter of 2009, and $122.9 million in the fourth quarter of 2008.


“Core expenses (3) were $57.6 million in the fourth quarter of 2009, an increase from $53.1 million in the third quarter of 2009, but an improvement of $8.5 million, or 12.8%, over core expenses of $66.1 million in the fourth quarter of 2008. The increase from the third to fourth quarter of 2009 was primarily due to a $2.3 million increase in employee compensation and benefits, and a $1.8 million increase in professional fees (primarily legal costs).

“Total non-interest expense in 2009 was $258.8 million compared to $330.6 million in 2008.


“Core expenses for the full year 2009 were $223.1 million compared to $263.8 million in 2008, reflecting an improvement of $40.7 million, or 15.4%. The year-over-year expense improvement included decreases of $22.6 million in employee compensation and benefits; $7.7 million in advertising and business promotion; $6.2 million in occupancy and equipment; and $4.6 million in check losses (related to the decline in deposit service charges discussed above).

“Expenses not included in core expenses consisted of the following:


“Impairment, restructuring and exit charges of $7.7 million in the fourth quarter of 2009, $1.7 million in the third quarter of 2009 and $3.6 million in the fourth quarter of 2008; and $13.3 million and $10.0 million for the full years 2009 and 2008, respectively. The charges in the fourth quarter of 2009 were primarily associated with impairments related to lower real estate values of property held for sale ($2.7 million), real estate owned ($3.4 million) and leaseholds held for sale ($1.6 million).
“Tax certificate provision of $0.7 million in the fourth quarter of 2009 compared to $(0.2) million net reversal of prior provisions in the third quarter of 2009 and $3.6 million expense in the fourth quarter of 2008; and $3.4 million and $7.3 million for the full years 2009 and 2008, respectively. The decline in 2009 is due primarily to higher provisions in 2008 associated with certain out-of-state markets where we are no longer active in the tax certificate market.
“Costs associated with debt redemption of $0 in the fourth quarter of 2009, $5.4 million in the third quarter of 2009 and $1.2 million in the fourth quarter of 2008; and $7.5 million and $1.2 million for the full years 2009 and 2008, respectively. These costs were associated with the prepayment of certain FHLB borrowings as part of our balance sheet de-leveraging efforts throughout 2009.
“Goodwill impairment of $0 in the fourth and third quarters of 2009 compared to a charge of $48.3 million in the fourth quarter of 2008; and $9.1 million and $48.3 million for the full years 2009 and 2008, respectively.
“FDIC special assessment of $2.4 million and $0 for the full years 2009 and 2008, respectively.

(3) Core expense is a non-GAAP measure that we use to refer to total non-interest expenses excluding tax certificate provisions, debt redemption costs, FDIC special assessments, impairments, restructuring and exit activities. A reconciliation of total expense to core expense is included in BankAtlantic Bancorp’s Fourth Quarter and Full Year, 2009 Supplemental Financials available at www.BankAtlanticBancorp.com. To view the financial data, access the “Investor Relations” section and click on the “Quarterly Financials or Supplemental Financials” navigation links.

Income Taxes– “During the fourth quarter of 2009, legislation was enacted related to tax net operating losses (NOLs) which extended the period available for the carry back of NOLs from two years to five years. Due specifically to this change in the tax law, BankAtlantic recorded a benefit for income taxes of $31.7 million during the fourth quarter of 2009. Excluding the impact of this newly enacted legislation, BankAtlantic would not have recorded a net provision or benefit for income taxes during the fourth quarter of 2009 relating to its loss as it continues to provide for a full deferred tax asset valuation allowance. During the fourth quarter of 2008, BankAtlantic recorded an income tax provision expense of ($54.0) million as a result of the recording of a full deferred tax asset valuation allowance during that quarter. For the full year 2009, BankAtlantic recorded an income tax benefit of $31.7 million compared to an income tax provision of ($31.1) million for the full year 2008.

Credit Risk Management:


“The provision for loan losses in the fourth quarter of 2009 was $78.0 million compared to $52.2 million in the third quarter of 2009 and $31.8 million in the fourth quarter of 2008. The increased provision in the fourth quarter of 2009 reflects continued elevated levels of delinquencies, charge-offs and non-accrual loans. For the full year 2009, the provision for loan losses was $209.7 million compared to $135.4 million for the full year 2008.
“BankAtlantic’s allowance for loan losses was $169.1 million at December 31, 2009. The reserve represented 4.41% of total loans at December 31, 2009, compared to 4.18% at September 30, 2009 and 2.87% at December 31, 2008.
“The provision for loan losses in the fourth quarter of 2009 primarily related to our Commercial Real Estate ($57.2 million provision), Consumer ($8.8 million provision) and Residential Real Estate ($10.8 million provision) loan portfolios. In particular, the Commercial Real Estate portfolio continues to be adversely affected by declining collateral values and general economic conditions.
“Net charge-offs were $74.9 million in the fourth quarter 2009, compared to net charge-offs of $43.1 million in the third quarter of 2009, and net charge-offs of $12.6 million in the fourth quarter of 2008. The increase in net charge-offs was due primarily to continued declines in the value of the collateral for our non-accrual loans.
“Fourth quarter 2009 net charge-offs included $58.2 million in the Commercial Real Estate loan portfolio (of which approximately 81% of the net charge-offs were related to loans that were placed on non-accrual prior to the fourth quarter of 2009), $8.1 million in the Consumer Loan portfolio, $7.5 million in the Residential Real Estate loan portfolio and $1.6 million in the Small Business loan portfolio.
“Total non-accrual loans were $286.1 million at December 31, 2009, reflecting a decrease of $8.7 million from September 30, 2009, but reflecting an increase of $78.0 million from December 31, 2008. The decrease in non-accrual loans during the fourth quarter of 2009 included a net decrease in Commercial Real Estate non-accrual loans of $21.9 million offset by a net increase of $3.1 million in Consumer non-accrual loans and a net increase of $10.0 million related to one Commercial business non-accrual loan. Residential real estate and Small business non-accrual loan balances remained essentially unchanged quarter to quarter. The decline in Commercial Real Estate non-accrual loans was the result of the increased charge-offs discussed above.
“Total non-performing assets were $324.2 million at December 31, 2009, a decrease of $4.5 million from September 30, 2009, but an increase of $95.7 million from December 31, 2008.

“Other credit information for BankAtlantic’s three largest loan portfolios is