EX-99.1 2 g03741exv99w1.htm EX-99.1 PRESS RELEASE EX-99.1 Press release
 

Exhibit 99.1
(bankatlantic)
BankAtlantic Bancorp Reports
Financial Results for the Third Quarter 2006
     FORT LAUDERDALE, Florida — October 18, 2006 — BankAtlantic Bancorp, Inc. (NYSE: BBX) today announced financial results for the third quarter 2006. For the three-month period ending September 30, 2006, net income was $2.3 million, or $0.04 per diluted share, compared to $16.3 million, or $0.26 per diluted share, for the third quarter 2005. Year-to-date, net income was $17.2 million, or $0.27 per diluted share, compared to $60.7 million, or $0.95 per diluted share, for the nine months of 2005.
     Alan B. Levan, Chairman and Chief Executive Officer of BankAtlantic Bancorp commented, “This quarter’s performance reflects a $4.8 million loss at Ryan Beck for the quarter (or approximately $0.08 per diluted share), slower net growth in low cost deposits at BankAtlantic (although we continue to achieve increases in new accounts and balances associated with those accounts), and several other factors discussed in this release. Despite the quarter’s results, we remain committed to our banking strategy, and are pleased with the underlying growth in new account openings and growth in fee revenue at BankAtlantic. Also discussed later in this release, Ryan Beck is undertaking a review of its operations with a view toward improving its future performance.
Commentary on Business Segment Operations:
BankAtlantic:
     “For the third quarter 2006, BankAtlantic’s net income was $9.7 million, down from $19.3 million in the comparable 2005 quarter. The third quarter 2005 included a negative provision for loan losses of $3.4 million, compared to a $271,000 provision in the current quarter, contributing significantly to the earnings decline. Additionally, the current quarter reflects relatively flat net interest income and increased expenses associated with our new store expansion program and its related marketing costs, partially offset by growth in fee income.

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     “Net interest income for the third quarter 2006 was $55.1 million, or $0.8 million lower than the 2005 quarter, due to lower earning assets which more than offset an improved margin. While we continue our strategy of using the growth in low cost deposits to reduce borrowings, the slowed growth in low cost deposits resulted in a modest increase in borrowings, to a level of 33.6% of deposits and borrowings, up from 33.2% in the third quarter of 2005. Our longer term plans continue to target a reduction in this ratio toward the 10-15% range. Our ability to achieve this level will depend upon both the growth in low cost deposits and growth in core earning assets.
     “The tax equivalent net interest margin improved to 4.04%, from 3.96% in the corresponding quarter of 2005, but down from 4.17% in the second quarter of 2006. (All references to net interest margin exclude loan participations sold previously recognized as secured borrowings.) Average earning assets increased approximately $210 million from the second quarter through purchases of residential loans. The spread on the purchased assets was relatively narrow, contributing to the decline in net interest margin from the second quarter to the third quarter, 2006. Additionally, overall funding costs increased, with the overall rate paid on interest bearing liabilities rising from 3.14% to 3.52% between the second and third quarters of 2006. The continued flatness of the yield curve has created a challenging environment, in which continued growth in low cost deposits will largely determine the amount of future improvement in net interest margin. With low cost deposits growing in the 15-20% range, further margin expansion is expected, but if the growth rate continues in the single digit levels we experienced this quarter, little change in the margin is likely in the near term.
     “Non-interest income for the third quarter was $33.7 million, or 31% greater than the comparable 2005 period, primarily driven by growth in deposit service charges and other fees directly associated with the number of new accounts.
     “Non-interest expense of $75.2 million was $18.5 million, or 33% greater than the corresponding quarter of 2005. The growth in expenses from the corresponding quarter of 2005 was largely the result of a $9.4 million, or 34% increase in personnel costs, and a $4.0 million, or 37% increase in occupancy and equipment expense, again reflecting our growth initiatives and store expansion strategy. Advertising expense increased $3.3 million, or 60% increase from the prior year’s corresponding quarter, reflecting our previously announced program of advertising associated with our new stores and our efforts to attract higher levels of low cost deposits.

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     “Credit quality remained good in the third quarter, with the ratio of non-performing loans to total loans increasing only slightly from 0.12% at June 30, 2006 to 0.13% at September 30, 2006, and the ratio of non-performing assets to total loans plus other assets remaining stable at 0.17%. The Bank recorded a net recovery of $234,000 in the third quarter compared to a net recovery of $143,000 for the immediately preceding quarter. Year-to-date, the Bank has experienced net recoveries of $911,000. The Allowance for Loan Losses increased slightly from $42.0 million at June 30, 2006 to $42.5 million at September 30, 2006, and the ratio of the allowance to non-performing loans at quarter end was 674%.
     “BankAtlantic opened nearly 62,000 and 197,000 new low cost deposit accounts in the third quarter of 2006 and year-to-date 2006, respectively, an increase of 21% and 27% over the number of accounts opened in the corresponding 2005 periods. Balances of these new accounts have aggregated approximately $443 million year-to-date. At quarter end, “total bank” and “same store” low cost deposit balances increased 5.5% and 5.3%, respectively, compared to the third quarter 2005, an increase of $110 million in low cost deposit balances. As noted in earlier quarters, growth in balances in new low cost accounts remains very strong, but declines in legacy balances, due to higher interest rates and other factors, have negatively impacted growth in net aggregate balances. Demand deposits declined slightly to 27.5% of total deposits from 29.2% in the second quarter 2006. Year-over-year, low cost deposit balances rose to 57.3% of total deposits, up from 54.0% in the third quarter of 2005.
     “Earlier this month, BankAtlantic announced its plans to open at least four new full service stores in the greater Orlando area in 2007. The first two stores are expected to open during the first quarter, and our total expansion plan currently calls for opening more than 20 stores in the greater Orlando area over the next several years. BankAtlantic has maintained a commercial lending presence in Orlando since 2002. We have found its demographics and growth trends particularly attractive. Earlier this year, we opened a Customer Service Center (a telephone call center which serves as a backup to our main center in Fort Lauderdale), and in preparation for this new store expansion, a new sales and training center in Orlando. In addition to the announced Orlando entry, we opened three new stores in the Miami-Dade area during the third quarter.
     “Also during the quarter, BankAtlantic announced the expansion of its fleet of Automated Teller Machines (ATMs) to include the world’s largest cruise ship, Royal Caribbean

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International’s “Freedom of the Seas.” BankAtlantic pioneered the concept of linking satellite communications technology with ATMs in a shipboard environment in 1995. In addition to its cruise ship-based ATM’s, BankAtlantic operates its own proprietary network of land-based ATMs throughout its footprint in Florida, including several in Native American gaming casinos, totaling collectively over 250 machines.
Ryan Beck & Co.:
     “During the third quarter of 2006, Ryan Beck & Co. recorded a net loss of $4.8 million compared to a profit of $0.4 million in the comparable quarter of 2005. The loss was largely due to continued weakness in its investment banking activities, plus the costs associated with the rapid expansion which took place in late 2005 and early 2006 in its capital markets and investment banking businesses, including in the municipal finance, equity capital markets and fixed income capital markets. During the third quarter, Ryan Beck began a review of its lines of business to determine where improvements in operating performance can be attained. While Ryan Beck remains committed to all of its core business lines, it is also committed to restoring the firm to profitability, and we anticipate that Ryan Beck will make decisions in the fourth quarter which will position it to return to profitability in 2007.
     “Private Client Group revenues at Ryan Beck were down for the quarter due to decreased customer activity. Ryan Beck opened five new Private Client Group offices in three states during the quarter. Retail brokerage activity, which involves providing wealth management services to the mass affluent market, had third quarter revenue of $33.8 million compared to $37.8 million for the third quarter of 2005. Total client assets have risen to $19.1 billion.
     “Revenue from capital markets activities was $14.6 million compared to $9.5 million for the third quarter of 2005. This increase was principally due to the growth in capital markets staff which was initiated in late 2005.
     “Investment banking activities provided third quarter revenue of $2.2 million compared to $4.1 million for the third quarter of 2005. This decrease was primarily due to decreased deal flow this quarter compared to the 2005 quarter.

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BankAtlantic Bancorp:
     “As part of our on-going stock repurchase program, we repurchased 310,000 shares of our Class A Common Stock in market transactions during the third quarter. Year-to-date BankAtlantic Bancorp has purchased 560,000 shares of Class A Common Stock in market transactions. We anticipate continuing this repurchase program in the fourth quarter, and in 2007 subject to market conditions and our liquidity requirements.
     “During the third quarter, BankAtlantic Bancorp’s Board of Directors declared a cash dividend of $0.041 per share to all shareholders of record of its Class A and Class B Common Stock at the close of trading on October 3, 2006. The third quarter’s declaration marked BankAtlantic Bancorp’s 53rd consecutive quarterly dividend payment since 1993.”
Financial Highlights:
Third Quarter, 2006 Compared to Third Quarter, 2005
BankAtlantic Bancorp — consolidated:
  •   Net income of $2.3 million vs. $16.3 million, a decrease of 86%
 
  •   Diluted earnings per share of $0.04 vs. $0.26, a decrease of 85%
 
  •   Return on average tangible equity was 2.07%
 
  •   Book value per share was $8.60
BankAtlantic:
  •   Business segment net income was $9.7 million vs. $19.3 million, a decrease of 50%
 
  •   Nearly 62,000 new low cost deposit accounts opened, an increase of 21% over accounts opened in the corresponding 2005 quarter, with related new balances of $134 million
 
  •   Return on average tangible assets was 0.64%
 
  •   Return on average tangible equity was 7.71%
 
  •   Tax equivalent net interest margin increased to 4.04% vs. 3.87%
 
  •   Non-interest income was $33.7 million vs. $25.7 million, an increase of 31%
 
  •   Non-interest expense grew to $75.2 million vs. $56.7 million, an increase of 33%

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Ryan Beck & Co.:
  •   Business segment loss was $4.8 million vs. income of $423,000
 
  •   Return on average tangible equity was (20.75%)
 
  •   Total operating revenues were $49.1 million vs. $54.1 million, a decrease of 9%
 
  •   Retail brokerage revenue was $33.8 million vs. $37.8 million, a decrease of 11%
 
  •   Capital markets revenue was $14.6 million vs. $9.5 million, an increase of 53%
 
  •   Investment banking revenue was $2.2 million vs. $4.1 million, a decrease of 45%
Year to Date 2006 Compared to Year to Date 2005
BankAtlantic Bancorp — consolidated:
  •   Net income was $17.2 million vs. $60.7 million, a decrease of 72%
 
  •   Diluted earnings per share were $0.27 vs. $0.95, a decrease of 72%
 
  •   Return on average tangible equity was 5.10%
BankAtlantic:
  •   Business segment net income was $32.8 million vs. $54.9 million, a decrease of 40%
 
  •   197,000 new low cost deposit accounts opened, an increase of 27% over accounts opened in the corresponding 2005 period, with related new balances of $443 million
 
  •   Return on average tangible assets was 0.74%
 
  •   Return on average tangible equity was 8.89%
 
  •   Tax equivalent net interest margin increased to 4.08% vs. 3.81%
 
  •   Non-interest income (excluding gains associated with debt redemption) was $94.2 million vs. $74.2 million, an increase of 27%
 
  •   Non-interest expense (excluding costs associated with debt redemption and a facilities impairment charge in 2005), grew to $213.3 million vs. $161.6 million, an increase of 32%
Ryan Beck & Co.:
  •   Business segment loss was $8.8 million vs. income of $16.0 million
 
  •   Return on average tangible equity was (12.12%)

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  •   Total operating revenues decreased to $163.2 million vs. $199.2 million, a decrease of 18%
 
  •   Retail brokerage revenue was $109.5 million vs. $112.3 million, a decrease of 2%
 
  •   Capital markets revenue was $42.8 million vs. $37.3 million, an increase of 15%
 
  •   Investment banking revenue was $8.5 million vs. $44.8 million, a decrease of 81%
 
BankAtlantic Bancorp will host an investor and media teleconference call and webcast on Thursday, October 19, 2006, at 11:00 a.m. (Eastern Time).
Teleconference Call Information:
     To access the teleconference call in the U.S. and Canada, the toll free number to call is 1-800-968-8156. International calls may be placed to 706-634-5752. Domestic and international callers may reference PIN number 7550253.
     A replay of the conference call will be available beginning two hours after the call’s completion through 5:00 p.m. Eastern Time, Friday, November 17, 2006. To access the replay option in the U.S. and Canada, the toll free number to call is 1-800-642-1687. International calls for the replay may be placed at 706-645-9291. The replay digital PIN number for both domestic and international calls is 7550253.
Webcast Information:
     Alternatively, individuals may listen to the live and/or archived webcast of the teleconference call. To listen to the webcast, visit www.BankAtlanticBancorp.com, access the “Investor Relations” section and click on the “Webcast” navigation link, or go directly to http://www.visualwebcaster.com/event.asp?id=35860. The archive of the teleconference call will be available through 5:00 p.m. Eastern Time, Friday, November 17, 2006.

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     BankAtlantic Bancorp’s third quarter, 2006 earnings results press release and financial summary, as well as the Supplemental Financials (a detailed summary of significant financial events and extensive business segment financial data), will be available on its website at: www.BankAtlanticBancorp.com.
  •   To view the financial summary, access the “Investor Relations” section and click on the “Quarterly Financials” navigation link.
 
  •   To view the Supplemental Financials, access the “Investor Relations” section and click on the “Supplemental Financials” navigation link.
     Copies of BankAtlantic Bancorp’s third quarter, 2006 earnings results press release and financial summary, and the Supplemental Financials will also be made available upon request via fax, email, or postal service mail. To request a copy, contact BankAtlantic Bancorp’s Investor Relations department using the contact information listed below.
About BankAtlantic Bancorp:
BankAtlantic Bancorp (NYSE: BBX) is a diversified financial services holding company and the parent company of BankAtlantic and Ryan Beck & Co. Through these subsidiaries, BankAtlantic Bancorp provides a full line of products and services encompassing consumer and commercial banking, brokerage and investment banking.
About BankAtlantic:
BankAtlantic, “Florida’s Most Convenient Bank”, is one of the largest financial institutions headquartered in Florida and provides a comprehensive offering of banking services and products via its broad network of community stores and its online banking division — BankAtlantic.com. BankAtlantic has more than 80 stores and operates approximately 250 conveniently located ATMs. BankAtlantic is open 7 days a week and offers holiday hours, extended weekday hours, including several stores open until midnight, Totally Free Online Banking & Bill Pay, 24/7 Customer Service Center, Totally Free Change Exchange coin counters and free retail and business checking with a free gift.
About Ryan Beck & Co.:
Founded in 1946, Ryan Beck & Co., Inc. provides financial advice and innovative solutions to individuals, institutions and corporate clients through the activities of approximately 1,100 employees in 45 offices located in 14 states. For individual investors, the firm’s Private Client Group provides a full range of financial services, including investment consulting, retirement plans, insurance and investment advisory services. Institutional clients benefit from the market making, underwriting and distribution activities of the firm’s experienced Capital Markets Group, which encompasses equity and fixed income trading and institutional sales as well as research. Through its Investment Banking Group, Ryan Beck raises capital and provides financial advisory services to financial institutions, middle market companies and municipalities.
For further information, please visit our websites:
www.BankAtlanticBancorp.com
www.BankAtlantic.com
www.RyanBeck.com

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* To receive future BankAtlantic Bancorp news releases or announcements directly via Email, please
click on the Email Broadcast Sign Up button on our website: www.BankAtlanticBancorp.com.
BankAtlantic Bancorp Contact Info:
Leo Hinkley,
Senior Vice President, Investor Relations
Email: InvestorRelations@BankAtlanticBancorp.com
Donna Rouzeau,
Assistant Vice President, Investor Relations & Corporate Communications
Email: CorpComm@BankAtlanticBancorp.com
Phone: (954) 940-5300, Fax: (954) 940-5320
Mailing Address: BankAtlantic Bancorp, Investor Relations
2100 West Cypress Creek Road, Fort Lauderdale, FL 33309
BankAtlantic, “Florida’s Most Convenient Bank,” Contact Info:
Public Relations:
Hattie Hess, Vice President, Public Relations
Telephone: (954) 940-6383, Fax: (954) 940-6310
Email: hhess@BankAtlantic.com
Public Relations for BankAtlantic:
Boardroom Communications
Caren Berg
Phone: (954) 370-8999, Fax: (954) 370-8892
Email: caren@boardroompr.com
# # #
Except for historical information contained herein, the matters discussed in this press release 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 press release, 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 expectations of BankAtlantic Bancorp, Inc. (“the Company”) and are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. These include, but are not limited to, risks and uncertainties associated with: the impact of economic, competitive and other factors affecting the Company and its operations, markets, products and services; credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact on the credit quality of our loans, of changes in the commercial real estate market in our trade area; changes in interest rates and the effects of, and changes in, trade, monetary and fiscal policies and laws including their impact on BankAtlantic’s net interest margin; adverse conditions in the stock market, the public debt market and other capital markets and the impact of such conditions on our activities and the value of our assets;

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BankAtlantic’s seven-day banking initiatives, new store expansion program, Orlando store expansion program and other growth, marketing or advertising initiatives not resulting in continued growth of low cost deposits or producing results which justify their costs; successfully opening the anticipated number of new stores in 2006 and 2007 and achieving growth and profitability at those new stores; and the impact of periodic testing of goodwill and other intangible assets for impairment. Past performance, actual or estimated new account openings and growth rate may not be indicative of future results. Further, this press release contains forward-looking statements with respect to Ryan Beck & Co., which are subject to a number of risks and uncertainties including but not limited to the risks and uncertainties associated with its ability to implement a strategy to improve its operating results and return to profitability, changes in economic or regulatory policies, the volatility of the stock market and fixed income markets, as well as its revenue mix, the success of new lines of business, including that the expansion of its municipal finance, investment banking and capital markets areas, including the associated increased headcount, will produce results which justify the increased expenses; and additional risks and uncertainties that are subject to change and may be outside of Ryan Beck’s control. In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission. The Company cautions that the foregoing factors are not exclusive.

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BankAtlantic Bancorp, Inc. and Subsidiaries
Summary of Selected Financial Data (unaudited)
                                                                 
                                                    For the Nine
            For The Three Months Ended   Months Ended
            9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
                                                                 
Earnings (in thousands):
                                                                
Net income (loss) (GAAP basis)
           $ 2,338       8,122       6,712       (1,493 )     16,260       17,172       60,675  
Operating net income **
   (note 1)   $ 2,338       8,084       6,704       8,507       16,260       17,126       63,084  
 
                                                                
Average Common Shares Outstanding
(in thousands):
                                                                
Basic
             61,046       61,324       61,005       60,618       60,555       61,125       60,362  
Diluted
             62,412       62,820       62,761       62,898       63,193       62,664       63,176  
 
                                                                
Key Performance Ratios (GAAP basis):
                                                                
Basic earnings (loss) per share
           $ 0.04       0.13       0.11       (0.03 )     0.27       0.28       1.01  
Diluted earnings (loss) per share *
           $ 0.04       0.13       0.11       (0.03 )     0.26       0.27       0.95  
Return on average tangible assets
   (note 2)   % 0.15       0.53       0.43       (0.09 )     0.98       0.36       1.26  
Return on average tangible equity
   (note 2)   % 2.07       7.21       6.06       (1.32 )     15.05       5.10       19.64  
 
                                                                
Key Performance Ratios (Operating basis):
                                                                
Basic earnings per share
           $ 0.04       0.13       0.11       0.14       0.27       0.28       1.05  
Diluted earnings per share *
           $ 0.04       0.13       0.11       0.13       0.26       0.27       0.99  
Return on average tangible assets
   (note 2)   % 0.15       0.52       0.43       0.53       0.98       0.36       1.31  
Return on average tangible equity
   (note 2)   % 2.07       7.18       6.05       7.52       15.05       5.09       20.42  
 
                                                                
* Diluted earnings per share calculation deducts (in thousands):
                                                                
Subsidiaries stock options, if dilutive
           $ —       —       —       (28 )     (21 )     —       (806 )
 
                                                                
Average Balance Sheet Data (in millions):
                                                                
Assets
           $ 6,467       6,272       6,388       6,463       6,692       6,376       6,489  
Tangible assets
   (note 2)   $ 6,383       6,188       6,304       6,378       6,607       6,292       6,403  
Loans excluding certain loan participations sold
   (note 3)   $ 4,611       4,482       4,488       4,550       4,726       4,528       4,574  
Loan participations sold
   (note 3)   $ —       —       125       134       148       41       159  
Investments
           $ 1,317       1,258       1,259       1,263       1,322       1,278       1,290  
Deposits and escrows
           $ 3,731       3,849       3,831       3,704       3,655       3,803       3,624  
Stockholders’ equity
           $ 526       526       522       533       516       525       495  
Tangible stockholders’ equity
   (note 2)   $ 452       451       443       453       432       449       412  
Notes:
(1)   Operating net income is defined as GAAP net income adjusted for gains and costs associated with debt redemptions, an impairment charge relating to BankAtlantic’s headquarter facility and a reserve for a compliance matter.
 
(2)   Average tangible assets is defined as average total assets less average goodwill and core deposit intangibles. Average tangible equity is defined as average total stockholders’ equity less average goodwill, core deposit intangibles and other comprehensive income.
 
(3)   Loan participations sold accounted for as secured borrowings.
 
**   Operating net income is not prepared in accordance with GAAP and this non-GAAP financial measure should not be construed as being superior to GAAP.

 

 

BankAtlantic Bancorp, Inc. and Subsidiaries
Consolidated Statements of Financial Condition (unaudited)
                         
(In thousands, except share data)   9/30/2006   12/31/2005   9/30/2005
ASSETS
                        
Cash and due from banks
   $ 134,473       167,032       140,346  
Short term investments
     1,481       3,229       11,802  
Securities available for sale (at fair value)
     663,820       674,544       702,176  
Securities owned (at fair value)
     186,588       180,292       120,298  
Investment securities and tax certificates (approximate fair value: $401,707, $364,122 and $366,456)
     398,492       364,444       366,884  
Loans receivable, net of allowance for loan losses of $42,517, $41,192 and $40,695
     4,622,964       4,622,234       4,664,456  
Residential loans held for sale
     15,251       2,538       8,680  
Federal Home Loan Bank stock, at cost which approximates fair value
     87,867       69,931       78,931  
Accrued interest receivable
     46,169       41,490       39,766  
Real estate held for development and sale
     24,420       21,177       24,493  
Investments and advances to unconsolidated subsidiaries
     13,359       12,464       12,510  
Office properties and equipment, net
     201,509       154,120       140,466  
Deferred tax asset, net
     29,602       29,615       25,591  
Goodwill
     76,674       76,674       76,674  
Core deposit intangible asset
     7,221       8,395       8,796  
Due from clearing agent
     13,579       —       15,650  
Other assets
     46,181       43,232       45,194  
 
                        
Total assets
   $ 6,569,650       6,471,411       6,482,713  
 
                        
 
                        
LIABILITIES AND STOCKHOLDERS’ EQUITY
                        
Liabilities:
                        
Deposits
                        
Demand
   $ 1,011,531       1,019,949       1,017,071  
NOW
     723,211       755,708       673,803  
Savings
     370,169       313,889       303,348  
Money market
     695,591       846,441       921,585  
Certificates of deposit
     874,956       816,689       777,743  
 
                        
Total deposits
     3,675,458       3,752,676       3,693,550  
Advances from FHLB
     1,687,062       1,283,532       1,485,649  
Securities sold under agreements to repurchase
     91,512       116,026       147,966  
Federal funds purchased
     51,435       139,475       28,042  
Secured borrowings
     —       138,270       129,891  
Subordinated debentures, notes and bonds payable
     30,192       39,092       40,702  
Junior subordinated debentures
     263,266       263,266       263,266  
Securities sold but not yet purchased
     68,820       35,177       20,688  
Due to clearing agent
     40,842       24,486       —  
Other liabilities
     136,515       163,075       149,567  
 
                        
Total liabilities
     6,045,102       5,955,075       5,959,321  
 
                        
Stockholders’ equity:
                        
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued and outstanding
     —       —       —  
Class A common stock, $.01 par value, authorized 80,000,000 shares; issued and outstanding 56,114,600, 55,884,089 and 55,862,486 shares
     562       559       559  
Class B common stock, $.01 par value, authorized 45,000,000 shares; issued and outstanding 4,876,124, 4,876,124 and 4,876,124 shares
     49       49       49  
Additional paid-in capital
     258,887       261,720       261,587  
Unearned compensation — restricted stock grants
     —       (936 )     (1,021 )
Retained earnings
     271,281       261,279       265,082  
 
                        
Total stockholders’ equity before accumulated other comprehensive loss
     530,779       522,671       526,256  
Accumulated other comprehensive loss
     (6,231 )     (6,335 )     (2,864 )
 
                        
Total stockholders’ equity
     524,548       516,336       523,392  
 
                        
Total liabilities and stockholders’ equity
   $ 6,569,650       6,471,411       6,482,713  
 
                        

 

 

BankAtlantic Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
                                                                 
                                                      For the Nine
            For The Three Months Ended     Months Ended
(in thousands)           9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
 
INTEREST INCOME:
                                                                
Interest and fees on loans
           $ 80,790       75,765       75,386       75,404       75,747       231,941       217,846  
Interest on securities available for sale
             4,483       4,314       4,305       4,379       4,741       13,102       15,294  
Interest on tax exempt securities
             4,183       4,506       4,229       4,027       3,963       12,918       11,332  
Interest and dividends on investments and securities owned
             9,516       7,743       8,191       8,777       8,478       25,450       23,346  
 
                                                                
Total interest income
             98,972       92,328       92,111       92,587       92,929       283,411       267,818  
 
                                                                
 
                                                                
INTEREST EXPENSE:
                                                                
Interest on deposits
             15,095       13,852       12,754       11,736       10,519       41,701       28,348  
Interest on advances from FHLB
             18,509       13,007       14,139       15,565       17,332       45,655       46,610  
Interest on short-term borrowed funds
             5,078       4,931       2,575       2,746       2,108       12,584       6,853  
Interest on secured borrowings
             —       —       2,401       2,862       2,637       2,401       7,282  
Interest on long-term debt
             7,957       7,891       7,584       6,825       6,392       23,432       18,380  
Capitalized interest on real estate development
             (75 )     (289 )     (480 )     (513 )     (477 )     (844 )     (1,366 )
 
                                                                
Total interest expense
             46,564       39,392       38,973       39,221       38,511       124,929       106,107  
 
                                                                
NET INTEREST INCOME
             52,408       52,936       53,138       53,366       54,418       158,482       161,711  
Provision (recovery from) loan losses
             271       (20 )     163       (109 )     (3,410 )     414       (6,506 )
 
                                                                
NET INTEREST INCOME AFTER PROVISION
             52,137       52,956       52,975       53,475       57,828       158,068       168,217  
 
                                                                
 
                                                                
NON-INTEREST INCOME:
                                                                
Service charges on deposits
             24,008       21,274       19,099       17,808       16,415       64,381       44,148  
Other service charges and fees
             6,779       7,353       6,222       6,436       5,824       20,354       16,911  
Broker/dealer revenue
             45,205       51,381       54,562       49,831       50,368       151,148       188,969  
Securities activities, net
             2,243       2,830       2,541       474       181       7,614       373  
Gain on sales of loans
             175       200       94       221       295       469       521  
Gain associated with debt redemption
             —       1,092       436       —       —       1,528       —  
Income (loss) from real estate operations
             —       114       (1,096 )     (558 )     1,142       (982 )     5,038  
Income from unconsolidated subsidiaries
             266       278       820       211       142       1,364       410  
Gain (loss) on the sale of office properties and equipment, net
             (3 )     1,806       (28 )     (16 )     —       1,775       293  
Other
             2,740       2,676       2,272       2,315       2,137       7,688       7,714  
 
                                                                
Total non-interest income
             81,413       89,004       84,922       76,722       76,504       255,339       264,377  
 
                                                                
 
                                                                
NON-INTEREST EXPENSE:
                                                                
Employee compensation and benefits
             79,573       80,011       80,200       70,257       68,455       239,784       212,641  
Occupancy and equipment
             19,181       17,516       16,247       15,394       14,853       52,944       42,043  
Impairment of office properties and equipment
             —       —       —       —       —       —       3,706  
Advertising and promotion
             10,383       8,644       9,957       11,701       6,667       28,984       21,034  
Professional fees
             5,028       4,189       4,250       4,692       4,207       13,467       12,604  
Communications
             3,472       3,930       3,954       3,470       3,371       11,356       10,084  
Floor broker and clearing fees
             1,823       2,142       2,719       2,433       2,305       6,684       6,685  
Costs associated with debt redemption
             —       1,034       423       —       —       1,457       —  
Check losses
             2,855       1,875       1,246       2,627       1,434       5,976       2,549  
Reserve for fines and penalties, compliance matter
             —       —       —       10,000       —       —       —  
Other
             10,068       12,422       10,672       9,425       9,892       33,162       28,766  
 
                                                                
Total non-interest expense
             132,383       131,763       129,668       129,999       111,184       393,814       340,112  
 
                                                                
Income before income taxes
             1,167       10,197       8,229       198       23,148       19,593       92,482  
(Benefit) provision for income taxes
             (1,171 )     2,075       1,517       1,691       6,888       2,421       31,807  
 
                                                                
GAAP net income (loss)
           $ 2,338       8,122       6,712       (1,493 )     16,260       17,172       60,675  
 
                                                                
 
                                                                
Reconciliation of Operating and GAAP Net Income
                                                                
GAAP net income (loss)
           $ 2,338       8,122       6,712       (1,493 )     16,260       17,172       60,675  
Gain associated with debt redemption
             —       (710 )     (283 )     —       —       (993 )     —  
Impairment of office properties and equipment
             —       —       —       —       —       —       2,409  
Costs associated with debt redemption
             —       672       275       —       —       947       —  
Reserve for fines and penalties, compliance matter
             —       —       —       10,000       —       —       —  
 
                                                                
Operating net income
   (note 1)   $ 2,338       8,084       6,704       8,507       16,260       17,126       63,084  
 
                                                                

 

 

BankAtlantic Bancorp, Inc. and Subsidiaries
Consolidated Average Balance Sheet (unaudited)
                                                 
            For the three months ended            
(in thousands except percentages and per share data)           9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005
 
Loans:
                                                
Residential real estate
           $ 2,130,077       2,047,430       2,043,310       2,115,899       2,245,067  
Commercial real estate excluding certain loan participations sold
   (note 3)     1,498,192       1,483,299       1,561,236       1,576,131       1,643,570  
Loan participations sold
   (note 3)     —       —       125,293       134,080       147,633  
Consumer
             563,002       546,624       539,937       538,321       527,190  
Lease financing
             76       172       467       1,433       2,768  
Commercial business
             152,720       148,604       102,066       91,979       90,578  
Small business
             267,263       255,701       241,103       226,153       216,931  
 
                                                
Total Loans
             4,611,330       4,481,830       4,613,412       4,683,996       4,873,737  
Investments — taxable
             918,159       853,224       857,866       867,625       924,911  
Investments — tax exempt
             399,091       404,644       401,541       394,935       396,908  
 
                                                
Total interest earning assets
             5,928,580       5,739,698       5,872,819       5,946,556       6,195,556  
Goodwill and core deposit intangibles
             84,098       84,486       84,878       85,277       85,679  
Other non-interest earning assets
             454,220       448,191       430,746       431,215       411,116  
 
                                                
Total assets
           $ 6,466,898       6,272,375       6,388,443       6,463,048       6,692,351  
 
                                                
Tangible assets
   (note 2)   $ 6,382,800       6,187,889       6,303,565       6,377,771       6,606,672  
 
                                                
 
                                                
Deposits:
                                                
Demand deposits
           $ 1,043,497       1,109,005       1,065,510       1,017,467       1,000,219  
Savings
             367,829       364,946       331,117       309,007       303,268  
NOW
             727,517       764,738       760,419       692,128       666,567  
Money market
             733,058       765,805       829,700       887,858       904,382  
Certificates of deposit
             858,688       844,318       843,866       797,187       781,044  
 
                                                
Total deposits
             3,730,589       3,848,812       3,830,612       3,703,647       3,655,480  
Short-term borrowed funds
             374,913       396,870       239,144       276,333       251,242  
FHLB advances
             1,354,944       1,010,458       1,164,675       1,345,033       1,659,411  
Secured borrowings
   (note 3)     —       —       125,293       134,080       147,633  
Long-term debt
             300,549       303,052       301,529       301,655       298,887  
 
                                                
Total borrowings
             2,030,406       1,710,380       1,830,641       2,057,101       2,357,173  
Other liabilities
             180,093       186,741       204,693       169,156       163,581  
 
                                                
Total liabilities
             5,941,088       5,745,933       5,865,946       5,929,904       6,176,234  
 
                                                
Stockholders’ equity
             525,810       526,442       522,497       533,144       516,117  
 
                                                
Total liabilities and stockholders’ equity
           $ 6,466,898       6,272,375       6,388,443       6,463,048       6,692,351  
 
                                                
Other comprehensive (loss) in stockholders’ equity
             (10,270 )     (8,700 )     (5,350 )     (4,810 )     (1,612 )
 
                                                
Tangible stockholders’ equity
   (note 2)   $ 451,982       450,656       442,969       452,677       432,050  
 
                                                
 
                                                
Period End
                                                
Total loans, net excluding certain loan participations sold
           $ 4,638,215       4,484,764       4,412,989       4,486,502       4,543,245  
Loan participations sold
   (note 3)     —       —       111,754       138,270       129,891  
Total assets
             6,569,650       6,402,357       6,357,602       6,471,411       6,482,713  
Total stockholders’ equity
             524,548       520,991       521,770       516,336       523,392  
Common shares outstanding
             60,990,724       61,215,046       61,293,692       60,760,213       60,738,610  
Cash dividends
             2,506,136       2,330,675       2,334,112       2,308,888       2,308,067  
Common stock cash dividends per share
             0.041       0.038       0.038       0.038       0.038  
Closing stock price
             14.22       14.84       14.39       14.00       16.99  
High stock price for the quarter
             14.97       15.99       15.23       17.19       19.33  
Low stock price for the quarter
             12.96       13.86       12.67       13.29       15.64  
Book value per share
             8.60       8.51       8.51       8.50       8.62  

 

 

Bank Operations Business Segment
Condensed Statements of Operations (Unaudited)
                                                         
                                            For the Nine
    For the Three Months Ended   Months Ended
(In thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
 
Net interest income
   $ 55,107       55,257       55,138       54,760       55,939       165,502       166,315  
Provision (recovery from) loan losses
     271       (20 )     163       (109 )     (3,410 )     414       (6,506 )
 
                                                        
Net Interest income after provision for loan losses
     54,836       55,277       54,975       54,869       59,349       165,088       172,821  
 
                                                        
 
                                                        
Non-interest income
                                                        
Service charges on deposits
     24,008       21,274       19,099       17,808       16,415       64,381       44,148  
Other service charges and fees
     6,779       7,353       6,222       6,436       5,824       20,354       16,911  
Securities activities, net
     —       458       (1 )     —       23       457       117  
Gain on sales of loans
     175       200       94       221       295       469       521  
Gain associated with debt redemption
     —       1,092       436       —       —       1,528       —  
Income (loss) from real estate operations
     —       114       (1,096 )     (558 )     1,142       (982 )     5,038  
Gain (loss) on the sale of office properties, net
     (3 )     1,806       (28 )     (16 )     —       1,775       293  
Other non-interest income
     2,752       2,663       2,282       1,944       2,019       7,697       7,196  
 
                                                        
Total non-interest income
     33,711       34,960       27,008       25,835       25,718       95,679       74,224  
 
                                                        
 
                                                        
Non-interest expense
                                                        
Employee compensation and benefits
     37,524       36,517       34,357       31,445       28,106       108,398       82,081  
Occupancy and equipment
     14,809       13,584       12,372       11,503       10,826       40,765       30,108  
Impairment of office properties and equipment
     —       —       —       —       —       —       3,706  
Advertising
     8,855       7,123       8,296       10,244       5,518       24,274       16,651  
Professional fees
     1,928       2,020       2,193       2,521       2,641       6,141       7,174  
Costs associated with debt redemption
     —       1,034       423       —       —       1,457       —  
Reserve for fines and penalties, compliance matter
     —       —       —       10,000       —       —       —  
Other
     12,098       11,906       9,742       10,076       9,631       33,746       25,582  
 
                                                        
Total non-interest expense
     75,214       72,184       67,383       75,789       56,722       214,781       165,302  
 
                                                        
 
                                                        
Income from bank operations business segment before income taxes
     13,333       18,053       14,600       4,915       28,345       45,986       81,743  
Provision for income taxes
     3,682       5,301       4,182       4,018       9,054       13,165       26,820  
 
                                                        
Net income from bank operations business segment
   $ 9,651       12,752       10,418       897       19,291       32,821       54,923  
 
                                                        
 
                                                        
Reconciliation of Operating and business segment net income
Business segment income
   $ 9,651       12,752       10,418       897       19,291       32,821       54,923  
Gain associated with debt redemption
     —       (710 )     (283 )     —       —       (993 )     —  
Impairment of office properties and equipment
     —       —       —       —       —       —       2,409  
Costs associated with debt redemption
     —       672       275       —       —       947       —  
Reserve for fines and penalties, compliance matter
     —       —       —       10,000       —       —       —  
 
                                                        
Operating net income
   $ 9,651       12,714       10,410       10,897       19,291       32,775       57,332  
 
                                                        

 

 

Bank Operations Business Segment
Condensed Statements of Condition and Statistics (Unaudited)
                                                         
                                            For the Nine
    For the Three Months Ended   Months Ended
(in thousands except percentages                            
and per share data)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
 
Statistics:
                                                        
GAAP tax equivalent:
                                                        
Average earning assets
   $ 5,669,550       5,460,276       5,591,286       5,709,807       5,967,885       5,573,990       5,958,545  
Average interest bearing liabilities
   $ 4,457,382       4,189,321       4,338,215       4,485,417       4,754,244       4,328,741       4,783,203  
Average tangible assets
   $ 6,041,302       5,827,060       5,947,154       6,053,697       6,280,162       5,938,841       6,256,418  
Average tangible equity
   $ 500,655       491,459       484,162       495,614       473,387       492,159       462,048  
Borrowings to deposits and borrowings
   % 33.63       29.35       26.31       31.45       33.24       33.63       33.24  
Operating (2):
                                                        
Average earning assets
   $ 5,669,550       5,460,276       5,465,993       5,575,727       5,820,252       5,532,684       5,799,958  
Average interest bearing liabilities
   $ 4,457,382       4,189,321       4,212,922       4,351,337       4,606,611       4,287,435       4,624,616  
Average tangible assets
   $ 6,041,302       5,827,060       5,821,861       5,919,617       6,132,529       5,897,535       6,097,831  
Average tangible equity
   $ 500,654       491,459       484,162       495,614       473,387       492,152       462,048  
GAAP tax equivalent:
                                                        
Yield on earning assets
   % 6.81       6.58       6.39       6.29       6.08       6.60       5.85  
Cost of interest-bearing liabilities
   % 3.52       3.14       3.06       2.97       2.78       3.24       2.54  
Interest spread
   % 3.29       3.44       3.33       3.32       3.30       3.35       3.31  
Net interest margin
   % 4.04       4.17       4.02       3.96       3.87       4.08       3.81  
Operating tax equivalent (2):
                                                        
Yield on earning assets
   % 6.81       6.58       6.36       6.24       6.05       6.59       5.84  
Cost of interest-bearing liabilities
   % 3.52       3.14       2.92       2.80       2.64       3.20       2.42  
Interest spread
   % 3.29       3.44       3.44       3.44       3.41       3.39       3.42  
Net interest margin
   % 4.04       4.17       4.11       4.05       3.96       4.11       3.91  
GAAP:
                                                        
Efficiency ratio
   % 84.68       80.01       82.03       94.04       69.46       82.23       68.72  
Return on average tangible assets
   % 0.64       0.88       0.70       0.06       1.23       0.74       1.17  
Return on average tangible equity
   % 7.71       10.38       8.61       0.72       16.30       8.89       15.85  
Operating (1):
                                                        
Efficiency ratio
   % 84.68       79.83       81.95       81.63       69.46       81.68       67.18  
Return on average tangible assets
   % 0.64       0.87       0.72       0.74       1.26       0.74       1.25  
Return on average tangible equity
   % 7.71       10.35       8.60       8.79       16.30       8.88       16.54  
Earning assets repricing:
                                                        
Percent of earning assets that have fixed rates
   % 52       52       55       54       50                  
Percent of earning assets that have variable rates
   % 48       48       45       46       50                  
One year Gap
   % (4 )     (2 )     9       7       4                  
(1)   Ratios have been adjusted to exclude gains and costs associated with debt redemptions, impairment on BankAtlantic’s former corporate headquarters and a reserve for a compliance matter.
 
(2)   Adjusted to exclude loan participations sold accounted for as secured borrowings.

 

 

Bank Operations Business Segment
Condensed Statements of Financial Condition (Unaudited)
                                         
    As of
(In thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005
 
ASSETS
                                        
Loans receivable, net
   $ 4,638,215       4,484,764       4,409,971       4,483,142       4,539,544  
Loan participations sold (1)
     —       —       111,754       138,270       129,891  
Held to maturity securities
     479,859       470,994       396,251       427,575       439,015  
Available for sale securities
     568,699       569,618       567,664       578,913       608,375  
Goodwill
     70,489       70,489       70,489       70,489       70,489  
Core deposit intangible asset
     7,221       7,608       7,995       8,395       8,796  
Other assets
     417,982       444,923       435,976       402,546       369,994  
 
                                        
Total assets
   $ 6,182,465       6,048,396       6,000,100       6,109,330       6,166,104  
 
                                        
 
                                        
LIABILITIES AND STOCKHOLDER’S EQUITY
                                        
Deposits
                                        
Demand
   $ 1,011,531       1,119,608       1,152,365       1,019,992       1,017,866  
NOW
     723,211       747,437       790,225       755,708       673,803  
Savings
     370,169       372,212       351,839       313,889       303,348  
 
                                        
Total low cost deposits
     2,104,911       2,239,257       2,294,429       2,089,589       1,995,017  
Money market
     695,591       740,192       806,871       846,441       921,585  
Certificate of deposits
     874,956       855,561       859,470       816,689       777,743  
 
                                        
Total deposits
     3,675,458       3,835,010       3,960,770       3,752,719       3,694,345  
Advances from Federal Home Loan Bank
     1,687,062       1,127,065       1,085,914       1,283,532       1,485,649  
Short term borrowings
     144,722       428,942       179,850       261,154       187,513  
Secured borrowings (1)
     —       —       111,754       138,270       129,891  
Long term debt
     30,192       37,378       36,832       39,092       36,702  
Other liabilities
     78,853       65,907       72,102       89,834       79,228  
 
                                        
Total liabilities
     5,616,287       5,494,302       5,447,222       5,564,601       5,613,328  
Stockholder’s equity
     566,178       554,094       552,878       544,729       552,776  
 
                                        
Total liabilities and stockholder’s equity
   $ 6,182,465       6,048,396       6,000,100       6,109,330       6,166,104  
 
                                        
(1)   Amount represents loan participations sold accounted for as secured borrowings.

 

 

Bank Operations Business Segment
Average Balance Sheet — Yield/Rate Analysis
                                                 
    For the Three Months Ended
    September 30, 2006   September 30, 2005
(in thousands)   Average   Revenue/   Yield/   Average   Revenue/   Yield/
    Balance   Expense   Rate   Balance   Expense   Rate
 
Loans:
                                                
Residential real estate
   $ 2,130,077       27,891       5.24 %   $ 2,245,067       27,676       4.93 %
Commercial real estate
     1,498,192       32,979       8.81       1,639,530       30,839       7.52  
Loan participations sold
     —       —       —       147,633       2,637       7.09  
Consumer
     563,001       11,024       7.83       527,189       8,433       6.40  
Lease financing
     76       3       15.79       2,768       66       9.54  
Commercial business
     152,720       3,405       8.92       90,578       1,828       8.07  
Small business
     267,263       5,489       8.22       216,931       4,268       7.87  
 
                                                
Total loans
     4,611,329       80,791       7.01       4,869,696       75,747       6.22  
Investments — tax exempt
     397,436       5,806 (1)     5.84       386,097       5,617 (1)     5.82  
Investments — taxable
     660,785       9,993       6.05       712,092       9,348       5.25  
 
                                                
Total interest earning assets
     5,669,550       96,590       6.81 %     5,967,885       90,712       6.08 %
 
                                                
Goodwill and core deposit intangibles
     77,913                       79,494                  
Other non-interest earning assets
     371,752                       312,261                  
 
                                                
Total Assets
   $ 6,119,215                     $ 6,359,640                  
 
                                                
 
                                                
Deposits:
                                                
Savings
   $ 367,829       721       0.78 %   $ 303,268       229       0.30 %
NOW
     727,517       1,149       0.63       666,567       773       0.46  
Money market
     733,058       4,019       2.18       904,382       3,729       1.64  
Certificate of deposit
     858,688       9,206       4.25       781,044       5,788       2.94  
 
                                                
Total interest bearing deposits
     2,687,092       15,095       2.23       2,655,261       10,519       1.57  
 
                                                
Short-term borrowed funds
     378,063       5,117       5.37       256,492       2,151       3.33  
Advances from FHLB
     1,354,944       18,509       5.42       1,659,411       17,332       4.14  
Secured borrowings
     —       —       —       147,633       2,637       7.09  
Long-term debt
     37,283       805       8.57       35,447       645       7.22  
 
                                                
Total interest bearing liabilities
     4,457,382       39,526       3.52       4,754,244       33,284       2.78  
Demand deposits
     1,043,574                       1,000,694                  
Non-interest bearing other liabilities
     53,567                       56,659                  
 
                                                
Total Liabilities
     5,554,523                       5,811,597                  
Stockholder’s equity
     564,692                       548,043                  
 
                                                
Total liabilities and stockholder’s equity
   $ 6,119,215                     $ 6,359,640                  
 
                                                
Net tax equivalent interest income/ net interest spread
           $ 57,064       3.29 %           $ 57,428       3.30 %
 
                                                
Tax equivalent adjustment
             (2,032 )                     (1,966 )        
Capitalized interest from real estate operations
             75                       477          
 
                                                
Net interest income
             55,107                       55,939          
 
                                                
 
                                                
Margin
                                                
Interest income/interest earning assets
                     6.81 %                     6.08 %
Interest expense/interest earning assets
                     2.77                       2.21  
 
                                                
Net interest margin (tax equivalent)
                     4.04 %                     3.87 %
 
                                                
Net interest margin (tax equivalent) excluding secured borrowings
                 4.04 %                     3.96 %
 
                                                
(1)   The tax equivalent basis is computed using a 35% tax rate.

 

 

Bank Operations
Average Balance Sheet — Yield / Rate Analysis
                                                 
    For the Nine Months Ended
    September 30, 2006   September 30, 2005
(in thousands)   Average   Revenue/   Yield/   Average   Revenue/   Yield/
    Balance   Expense   Rate   Balance   Expense   Rate
 
Loans:
                                                
Residential real estate
   $ 2,073,923       79,890       5.14 %   $ 2,198,170       80,782       4.90 %
Commercial real estate
     1,511,983       94,775       8.36       1,708,272       89,460       6.98  
Loan participations sold
     41,306       2,401       7.75       158,587       7,281       6.12  
Consumer
     549,939       30,676       7.44       506,902       22,376       5.89  
Lease financing
     237       23       12.94       4,561       365       10.67  
Commercial business
     135,035       8,914       8.80       90,199       5,047       7.46  
Small business
     254,325       15,262       8.00       206,389       11,978       7.74  
 
                                                
Total loans
     4,566,748       231,941       6.77       4,873,080       217,289       5.95  
Investments — tax exempt
     396,348       17,355 (1)     5.84       362,988       15,775 (1)     5.79  
Investments — taxable
     610,894       26,422       5.77       722,477       28,423       5.25  
 
                                                
Total interest earning assets
     5,573,990       275,718       6.60 %     5,958,545       261,487       5.85 %
 
                                                
Goodwill and core deposit intangibles
     78,300                       79,923                  
Other non-interest earning assets
     364,851                       297,873                  
 
                                                
Total Assets
   $ 6,017,141                     $ 6,336,341                  
 
                                                
 
                                                
Deposits:
                                                
Savings
   $ 354,765       1,557       0.59 %   $ 295,450       628       0.28 %
NOW
     750,771       3,106       0.55       672,224       2,097       0.42  
Money market
     775,833       11,977       2.06       910,697       9,727       1.43  
Certificate of deposit
     849,011       25,061       3.95       780,258       15,896       2.72  
 
                                                
Total deposits
     2,730,380       41,701       2.04       2,658,629       28,348       1.43  
 
                                                
Short-term borrowed funds
     342,413       12,760       4.98       325,670       6,955       2.86  
Advances from FHLB
     1,177,389       45,655       5.18       1,604,169       46,610       3.88  
Secured borrowings
     41,306       2,401       7.75       158,587       7,281       5.89  
Long-term debt
     37,253       2,469       8.86       36,148       1,823       6.74  
 
                                                
Total interest bearing liabilities
     4,328,741       104,986       3.24       4,783,203       91,017       2.54  
Demand deposits
     1,072,867                       965,900                  
Non-interest bearing other liabilities
     58,383                       49,823                  
 
                                                
Total Liabilities
     5,459,991                       5,798,926                  
Stockholder’s equity
     557,150                       537,415                  
 
                                                
Total liabilities and stockholder’s equity
   $ 6,017,141                     $ 6,336,341                  
 
                                                
Net interest income/net interest spread
           $ 170,732       3.35 %           $ 170,470       3.31 %
 
                                                
Tax equivalent adjustment
             (6,074 )                     (5,521 )        
Capitalized interest from real estate operations
             844                       1,366          
 
                                                
Net interest income
             165,502                       166,315          
 
                                                
 
                                                
Margin
                                                
Interest income/interest earning assets
                     6.60 %                     5.85 %
Interest expense/interest earning assets
                     2.52                       2.04  
 
                                                
Net interest margin
                     4.08 %                     3.81 %
 
                                                
Net interest margin (tax equivalent) excluding secured borrowings
                 4.11 %                     3.91 %
 
                                                
(1)   The tax equivalent basis is computed using a 35% tax rate.

 

 

Bank Operations Business Segment
Allowance for Loan Loss and Credit Quality
                                                         
(in thousands)   For the Three Months Ended   For the Nine
Months Ended
    9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
Allowance for Loan Losses
                                                        
 
                                                        
Beginning balance
   $ 42,012       41,889       41,192       40,695       43,650       41,192       46,010  
 
                                                        
Charge-offs:
                                                        
Residential real estate
     (111 )     (60 )     (68 )     (8 )     (191 )     (239 )     (445 )
Commercial real estate
     —       —       —       —       —       —       —  
Commercial business
     —       (22 )     (12 )     (119 )     (222 )     (34 )     (1,019 )
Consumer
     (232 )     (39 )     (201 )     (91 )     (99 )     (472 )     (248 )
Small business
     (93 )     (229 )     (85 )     (102 )     (68 )     (407 )     (662 )
 
                                                        
Total charge-offs
     (436 )     (350 )     (366 )     (320 )     (580 )     (1,152 )     (2,374 )
 
                                                        
 
                                                        
Recoveries:
                                                        
Residential real estate
     170       —       178       9       55       348       56  
Commercial real estate
     10       —       9       —       —       19       —  
Commercial business
     54       116       111       306       355       281       816  
Consumer
     163       98       199       238       159       460       456  
Small business
     193       119       140       205       289       452       694  
Other
     80       160       263       168       177       503       1,543  
 
                                                        
Total recoveries
     670       493       900       926       1,035       2,063       3,565  
 
                                                        
Net recoveries
     234       143       534       606       455       911       1,191  
 
                                                        
Provision (recovery from) loan losses
     271       (20 )     163       (109 )     (3,410 )     414       (6,506 )
 
                                                        
Ending balance
   $ 42,517       42,012       41,889       41,192       40,695       42,517       40,695  
 
                                                        
Annualized net recoveries to average loans
   % (0.02 )     (0.01 )     (0.05 )     (0.05 )     (0.04 )     (0.04 )     (0.05 )
 
                                                        
                                           
    As of
    9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005
Credit Quality
                                        
 
                                        
Nonaccrual loans
   $ 6,306       5,349       6,101       6,801       6,883  
Nonaccrual tax certificates
     760       857       685       388       385  
Real estate owned
     1,439       1,907       1,647       967       912  
Other repossessed assets
     —       —       —       —       46  
 
                                        
Total nonperforming assets
   $ 8,505       8,113       8,433       8,156       8,226  
 
                                        
 
                                        
Nonperforming assets to total loans and other assets
   % 0.17       0.17       0.18       0.17       0.17  
Allowance for loan losses to total loans
   % 0.91       0.93       0.94       0.91       0.89  
Provision (recovery) to average loans
   % 0.02       (0.00 )     0.01       (0.01 )     (0.29 )
Allowance to nonperforming loans
   % 674.23       785.42       686.59       605.68       591.24  
(1) Average and total loans exclude loan participations sold financed by secured borrowings.

 

Ryan Beck & Co., Inc. Business Segment
Consolidated Statements of Operations and Statistics — Unaudited
                                                         
                                            For the Nine
    For the Three Months Ended   Months Ended
(in thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
Revenues
                                                        
Retail brokerage
   $ 33,778       36,209       39,490       36,093       37,831       109,477       112,286  
Capital markets activities
     14,583       14,489       13,747       10,346       9,534       42,819       37,263  
Investment banking activities
     2,238       3,384       2,917       5,242       4,065       8,539       44,800  
Other
     (1,538 )     1,290       2,646       2,469       2,694       2,398       4,812  
 
                                                        
Total operating revenues
     49,061       55,372       58,800       54,150       54,124       163,233       199,161  
 
                                                        
Expenses
                                                        
Employee compensation and benefits
     40,943       42,433       44,355       37,764       39,358       127,731       127,561  
Occupancy and equipment
     4,369       3,927       3,871       3,887       4,025       12,167       11,929  
Advertising and promotion
     1,479       1,326       1,567       1,333       1,072       4,372       4,085  
Professional fees
     2,888       1,905       1,951       2,287       1,411       6,744       4,419  
Communications
     3,472       3,930       3,954       3,470       3,371       11,356       10,084  
Floor broker and clearing fees
     1,823       2,142       2,719       2,433       2,305       6,684       6,685  
Interest expense
     1,436       1,514       1,621       1,130       819       4,571       2,289  
Other
     598       2,086       1,918       1,828       1,604       4,602       5,376  
 
                                                        
Total expenses
     57,008       59,263       61,956       54,132       53,965       178,227       172,428  
 
                                                        
Income (loss) from Ryan Beck business segment — before income taxes
     (7,947 )     (3,891 )     (3,156 )     18       159       (14,994 )     26,733  
Provision (benefit) for income taxes
     (3,105 )     (1,524 )     (1,591 )     (654 )     (264 )     (6,220 )     10,749  
 
                                                        
Net income (loss) from Ryan Beck business segment
   $ (4,842 )     (2,367 )     (1,565 )     672       423       (8,774 )     15,984  
 
                                                        
Statistics:
                                                        
Average tangible assets
   $ 236,129       238,827       231,145       220,065       208,883       235,367       189,423  
Average tangible equity
     93,350       97,098       99,220       99,456       99,195       96,556       91,689  
GAAP return on average tangible assets
   % (8.20 )     (3.96 )     (2.71 )     1.22       0.81       (4.97 )     11.25  
GAAP return on average tangible equity
     (20.75 )     (9.75 )     (6.31 )     2.70       1.71       (12.12 )     23.24  
Compensation as a percent of revenues
     83.45       76.63       75.43       69.74       72.72       78.25       64.05  
Retail brokerage to total revenues
     68.85       65.39       67.16       66.65       69.90       67.07       56.38  
Capital markets activities to total revenues
     29.72       26.17       23.38       19.11       17.62       26.23       18.71  
Investment banking revenue to total revenues
     4.56       6.11       4.96       9.68       7.51       5.23       22.49  
Condensed Statements of Financial Condition — Unaudited
                                           
    As of
(in thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005
ASSETS
                                        
Cash and cash equivalents
   $ 12,153       3,799       3,396       5,366       5,388  
Securities
     186,588       174,657       169,570       180,292       120,298  
Notes receivable — GMS
     —       —       3,018       3,360       3,702  
Property and equipment, net
     9,935       8,307       7,629       7,573       7,503  
Goodwill
     6,184       6,184       6,184       6,184       6,184  
Due from clearing agent
     13,579       3,963       2,672       —       15,650  
Other assets
     41,041       41,650       37,916       37,334       37,332  
 
                                        
Total assets
   $ 269,480       238,560       230,385       240,109       196,057  
 
                                        
LIABILITIES AND STOCKHOLDER’S EQUITY
                                        
Liabilities:
                                        
Securities sold not yet purchased
   $ 68,820       39,173       41,828       35,177       20,688  
Due to clearing agent
     40,842       38,730       32,206       24,486       —  
Other liabilities
     61,760       57,899       51,465       74,100       69,695  
 
                                        
Total liabilities
     171,422       135,802       125,499       133,763       90,383  
 
                                        
Stockholder’s equity
     98,058       102,758       104,886       106,346       105,674  
 
                                        
Total liabilities and stockholder’s equity
   $ 269,480       238,560       230,385       240,109       196,057  
 
                                        

 

Parent Company Business Segment Activities
Condensed Statements of Operations — Unaudited
                                                         
                                            For the Nine
    For the Three Months Ended   Months Ended
(in thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005   9/30/2006   9/30/2005
Net interest (expense)
   $ (5,117 )     (4,798 )     (4,618 )     (4,583 )     (4,458 )     (14,533 )     (12,507 )
Non-Interest income
                                                        
Income from unconsolidated subsidiaries
     266       278       820       211       142       1,364       410  
Securities activities, net
     2,243       2,372       2,541       475       158       7,156       256  
Other
     —       —       —       514       150       —       658  
 
                                                        
Non-interest income
     2,509       2,650       3,361       1,200       450       8,520       1,324  
 
                                                        
Non-interest expense
                                                        
Employee compensation and benefits
     1,107       1,061       1,487       1,048       991       3,655       2,999  
Advertising and promotion
     49       195       94       123       77       338       298  
Professional fees
     212       264       106       28       186       582       1,151  
Other
     243       297       271       153       94       811       363  
 
                                                        
Non-interest expense
     1,611       1,817       1,958       1,352       1,348       5,386       4,811  
 
                                                        
Loss from parent company activities before income taxes
     (4,219 )     (3,965 )     (3,215 )     (4,735 )     (5,356 )     (11,399 )     (15,994 )
Benefit for income taxes
     (1,748 )     (1,702 )     (1,074 )     (1,673 )     (1,902 )     (4,524 )     (5,762 )
 
                                                        
Net loss from parent company business segment
   $ (2,471 )     (2,263 )     (2,141 )     (3,062 )     (3,454 )     (6,875 )     (10,232 )
 
                                                        
Condensed Statements of Financial Condition — Unaudited
                                           
    As of
(in thousands)   9/30/2006   6/30/2006   3/31/2006   12/31/2005   9/30/2005
ASSETS
                                        
Cash
   $ 2,246       8,796       4,933       7,342       12,783  
Securities
     101,621       99,486       112,006       104,602       103,755  
Investment in subsidiaries
     664,239       656,854       657,765       651,078       658,454  
Investment in unconsolidated subsidiaries
     11,996       11,996       11,996       12,464       12,510  
Other assets
     12,256       10,716       7,383       8,210       7,075  
 
                                        
Total assets
   $ 792,358       787,848       794,083       783,696       794,577  
 
                                        
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                        
Subordinated debentures and notes payable
   $ 263,266       263,266       268,266       263,266       263,266  
Other liabilities
     4,544       3,881       4,047       4,094       7,919  
 
                                        
Total liabilities
     267,810       267,147       272,313       267,360       271,185  
 
                                        
Stockholders’ equity
     524,548       520,701       521,770       516,336       523,392  
 
                                        
Total liabilities and stockholders’ equity
   $ 792,358       787,848       794,083       783,696       794,577