BankAtlantic Bancorp, Inc.
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 25, 2006
BankAtlantic Bancorp, Inc.
 
(Exact name of registrant as specified in its charter)
         
Florida   34-027228   65-0507804
         
(State or other jurisdiction
of incorporation)
  (Commission
File Number)
  (I.R.S. Employer
Identification No.)
         
2100 West Cypress Creek Road
Ft. Lauderdale, Florida
  33309
     
(Address of principal executive offices)   (Zip Code)
Registrant’s telephone number, including area code 954-940-5000
Not Applicable
 
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13a-4(c))
 
 

 


 

Item 2.02. Results of Operations and Financial Condition
     The information in this item (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and 9.01 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act. On January 25, 2006, BankAtlantic Bancorp, Inc. (the Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2005. The press release, and accompanying financial tables are attached hereto as Exhibit 99.1 and are incorporated herein by reference. In addition to financial results determined in accordance with generally accepted accounting principles (“GAAP”), the press release also contains financial information determined by methods other than in accordance with GAAP. The Company’s management uses these non-GAAP measures, which it defines as “operating” measures, in their analysis of the Company’s performance. These “operating” measures adjust GAAP net income to exclude the reserve for fines and penalties related to a compliance matter, impairment charge related to the Company’s former headquarters, costs associated with debt redemptions and a litigation settlement gain. The Company believes that these non-GAAP operating measures supplement our GAAP financial information and provide useful measures of evaluating the Company’s operating results and any related trends that may be affecting the Company’s business. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Item 9.01 Financial Statements and Exhibits
     (c) Press Release dated January 25, 2006
Signature
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Date: January 25, 2006
         
  BANKATLANTIC BANCORP, INC.
 
 
  By:   /s/James A. White    
    James A. White   
    Executive Vice President -
Chief Financial Officer 
 
 

 


 

BankAtlantic Bancorp Reports Earnings
For The Fourth Quarter and Full Year 2005;
Fourth Quarter Includes $10 million Charge for Compliance Matter
FORT LAUDERDALE, Florida – January 25, 2006 — BankAtlantic Bancorp, Inc. (NYSE: BBX), the parent company of BankAtlantic and Ryan Beck & Co., today reported net income was $59.1 million, or $0.92 per diluted share, for the year ended December 31, 2005, compared to $70.8 million, or $1.11 per diluted share, reported in 2004. For the fourth quarter 2005, a net loss of ($1.6) million was recorded, equivalent to ($0.03) per diluted share, compared to earnings of $17.3 million, or $0.27 per diluted share, for the fourth quarter, 2004.
Operating income, which excludes a $10 million charge relating to the compliance matter discussed below and a $2.4 million facilities charge earlier in 2005 was $71.5 million (or $1.12 per diluted share) for the full year, up 12% from operating income in 2004, which excluded items relating to the early redemption of debt and a litigation settlement. Operating income for the fourth quarter, 2005 was down 52% from the corresponding quarter in 2004. A reconciliation of net income and operating income is contained in the attached financial data, and is also available on the Company’s website.
Chairman and Chief Executive Officer Alan B. Levan commented “As we previously have disclosed, deficiencies in our Anti Money-Laundering and Bank Secrecy Act (‘AML- BSA’) compliance were identified in mid-2004. With the assistance of our Audit Committee, we embarked on a complete review of our AML-BSA compliance policies and procedures. We engaged a nationally recognized consulting firm with specific expertise in this area which reviewed the identified deficiencies in our operating systems and procedures and our employee training programs. In connection with their review, which was completed in late 2004, we incurred expenses of approximately $4 million. Following their review and recommendations, we internally created a separate AML-BSA Department which resulted in a staff increase of approximately 30 employees and made significant improvements to our systems, processes, and training programs. The on-going financial impact of those changes and additions was to increase recurring expenses by approximately $3.5 million annually.

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“We believe that the Bank is currently in full compliance with all AML-BSA laws and regulations. Notwithstanding our current compliance status, as we have previously reported, many financial institutions have been the subject of proceedings which have resulted in substantial fines and penalties and have been required to enter into cease and desist orders with their primary regulators based on AML-BSA deficiencies. Under these circumstances, we determined that it was appropriate at this time to establish a $10 million reserve with respect to these matters, and we anticipate that we will be required to enter into a cease and desist order under which we agree to maintain satisfactory compliance status.
Accomplishments and highlights include:
BankAtlantic
“BankAtlantic’s ‘Florida’s Most Convenient Bank’ initiative combined with the fourth quarter introduction of our aggressive new marketing and advertising campaigns brought unprecedented growth in new customer accounts. As the result of these initiatives, we opened 67,000 low cost deposit accounts in the fourth quarter, representing an increase of 69% over the same period in 2004, and an all-time high for BankAtlantic. Driving this growth were the results for November and December 2005, when new accounts rose 107% and 90%, respectively, from the same 2004 periods. We believe this strong growth in new account openings is directly attributable to the new advertising and marketing program, which we launched in November. Ending low cost deposit balances increased to an all time high of $2.1 billion, up 15% over 2004, and average low cost deposit balances for 2005 increased 23% over 2004.
“As we discussed in our third quarter, 2005 release, we continue to believe the creation of long-term value lies in sustaining high growth rates in core deposits. Additional marketing outlays of approximately $5 million per quarter were spent in the fourth quarter, 2005, and will continue throughout 2006, which will have an impact on earnings in the short run. We believe this short-term negative impact on earnings will be compensated by above average ‘top line’ (low cost deposit) growth that over the long run is vitally important to our franchise value and achieving superior profitability.

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“Earnings within the bank declined in the fourth quarter, principally as the result of the increase in marketing expenses, and an increase in personnel expense (up $3.3 million, or 12%, from the third quarter, 2005). These personnel costs were directly related to longer store hours, the opening of new stores, and personnel necessary to maintain the service levels from increased account volume.
“The tax equivalent net interest margin improved to 4.05% during the fourth quarter, compared with 3.91% in the same period in 2004, and 3.96% in the third quarter of 2005. Year-over-year, the net interest margin improved to 3.95%, up from 3.79% in 2004.
“Total loans were $4.5 billion at year-end. Loans are down $300 million and total earning assets are down approximately $450 million from their midyear peaks in 2005, consistent with our strategy of limiting earning asset growth due to the relative flatness of the current yield curve. The decline in loans is concentrated in residential real estate, the direct result of our decision to delay purchases of mortgages in light of the current yield curve; and in commercial real estate, because of runoff in our high rise condominium portfolio. We remain comfortable with the commercial real estate market in our trade area, and expect the decline in our commercial real estate loan balances to prove temporary. Small business and consumer loans continued to grow, with linked quarter increases of 18% and 15%, respectively.
“Borrowings, principally advances from the Federal Home Loan Bank, are approximately $400 million lower than at year-end 2004, as we utilized the funds associated with the increased levels of low cost deposits to reduce borrowings rather than to fund earning asset growth. We anticipate following this strategy over the course of 2006, reflecting our belief that reduction of leverage, particularly given the yields available in the market today, is the most appropriate use of these funds.
“Credit quality remained strong in the fourth quarter, with total non-performing loans declining to $6.8 million at December 31, 2005 compared to $7.9 million at December 31, 2004 and relatively flat compared to the $6.9 million level at September 30, 2005. The ratio of non-performing loans to total loans declined to 0.15% at December 31, 2005 from 0.17% at December 31, 2004. In 2005, the Bank continued to experience net recoveries — which totaled $606,000 for the fourth quarter and $1.8 million for the year. As a result, negative provisions of $109,000 and $6.6 million were recorded for the quarter and year, respectively. Most

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significantly, our coverage of non-performing loans remained extremely high, with the ratio of the allowance for loan losses to non-performing loans at 606% at December 31, 2005.
“During 2005 we experienced continued growth throughout the organization. BankAtlantic expanded its ‘branch’ network with the opening of five new stores during the year, including two that were opened during the fourth quarter. One of the new stores is a midnight location, open from 7:30 AM to midnight, seven days a week, bringing the total number of our stores with this unprecedented level of convenience to seven. Additionally, in December BankAtlantic reached the 100,000 online customers milestone for our award-winning Internet banking service. We anticipate surpassing 1,000,000 monthly logins in 2006.
Ryan Beck & Co.
“During the quarter, Ryan Beck’s Private Client Group opened two new Central Pennsylvania offices in Camp Hill and Lebanon, and also relocated its Scarsdale office to White Plains, New York. Over the course of 2005, Ryan Beck added 63 experienced financial consultants to its Private Client Group, with assets under management totaling $2.3 billion and production of $18 million, bringing the total number of financial consultants to 450. Total assets of Ryan Beck’s customers reached a new record of $18.3 billion.
“Ryan Beck & Co. was ranked as the number one mutual to stock conversion advisor (based upon proceeds) by SNL Securities for the fourth consecutive year, and second in SNL Securities’ Bank and Thrift 2005 Capital Offerings rankings.
“Additionally, Ryan Beck continued expansion of its Capital Markets Division with the hiring of 18 new associates during the fourth quarter, covering several industry sectors. Included in this move is the addition of a wholesale mortgage-backed securities desk to deal in origination and trading of mortgage backed securities. Ryan Beck also expanded its Investment Banking Division through the hiring of three senior bankers in its Middle Markets Group. The new associates included David P. Lazar, Managing Director covering a broad range of industries, Robert von Furth, Managing Director covering companies in the consumer sector with a primary focus on retailing and restaurants, and Jay Gaydosh, Managing Director responsible for REIT transactions. This year’s expansion brought Ryan Beck to a year-end level of approximately 1,100 employees, in 42 offices across the nation,” Levan concluded.

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Financial Highlights:
Fourth Quarter, 2005 Compared to Fourth Quarter, 2004
BankAtlantic Bancorp — consolidated:
    Net loss of $1.6 million vs. net income of $17.3 million.
 
    Operating income was $8.4 million vs. $17.3 million, a decrease of 51%, excluding the charge related to the compliance matter.
 
    Earnings per share of ($0.03) vs. $0.27.
 
    Operating earnings per share of $0.13 vs. $0.27, a decrease of 52%.
 
    Return on average tangible equity was (1.42%).
 
    Operating return on average tangible equity was 7.42%
 
    Book value per share was $8.50.
BankAtlantic:
    Business segment operating income was $10.9 million vs. $16.8 million a decrease of 35%.
 
    Operating return on average tangible assets was 0.74%.
 
    Operating return on average tangible equity was 8.79%.
 
    Tax equivalent net interest margin increased to 4.05% vs. 3.91%.
 
    Non-interest income was $25.8 million vs. $23.0 million, an increase of 12%.
 
    Operating non-interest expense grew to $65.8 million vs. $51.7 million, an increase of 27%, due principally to new stores and the previously announced marketing initiatives.
Ryan Beck & Co.:
    Business segment operating income was $562,000 vs. $1.2 million, a decrease of 55%.
 
    Return on average tangible equity was 2.26%.
 
    Total operating revenues were $54.2 million vs. $55.9 million.
 
    Principal transactions were $20.9 million vs. $24.9 million.
 
    Investment banking revenue was $4.5 million vs. $3.8 million.
 
    Commission income was $21.9 million vs. $23.1 million.

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Year-End 2005 Compared to Year-End 2004
BankAtlantic Bancorp — consolidated:
    Net income was $59.1 million vs. $70.8 million.
 
    Operating income was $71.5 million in 2005 vs. $63.6 million in 2004, an increase of 12%, excluding an impairment charge of $3.7 million on our former headquarters building (abandoned during June 2005 quarter), the $10 million reserve for compliance matters, a gain in 2004 of $22.8 million from a litigation settlement and an $11.7 million expense in 2004 resulting from early redemption of debt,
 
    Earnings per share were $0.92 vs. $1.11. Excluding the effects of items discussed above, diluted earnings per share were $1.12 vs. $1.00, an increase of 12%.
 
    Return on average tangible equity was 13.99%.
 
    Operating return on tangible equity was 16.92%.
BankAtlantic:
    Business segment operating income was $68.2 million vs. $56.2 million, an increase of 21%.
 
    Operating return on average tangible assets was 1.13%.
 
    Operating return on average tangible equity was 14.50%.
 
    Tax equivalent net interest margin increased to 3.95% vs. 3.79%.
 
    Non-interest income was $100.1 million vs. $85.7 million, an increase of 17%.
 
    Operating non-interest expense grew to $227.4 million vs. $181.9 million, an increase of 25%.
Ryan Beck & Co.:
    Business segment operating income was $16.5 million vs. $17.5 million, a decrease of 5%.
 
    Return on average tangible equity was 17.7%.
 
    Total revenue increased to $253.3 million vs. $243.2 million.
 
    Principal transactions were $100.3 million vs. $90.4 million.
 
    Investment banking revenue was $45.5 million vs. $48.2 million.
 
    Commission income was $83.1 million vs. $89.3 million.
- — - — - — - — - — -

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BankAtlantic Bancorp will host an investor and media teleconference call and webcast on Thursday, January 26, 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 3959154.
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, February 24, 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 3959154.
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. The archive of the teleconference call will be available through 5:00 p.m. Eastern Time, Friday, February 24, 2006.
BankAtlantic Bancorp’s fourth quarter, 2005 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 press release and 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 fourth quarter, 2005 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 78 stores and operates more than 200 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 &

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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 42 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 Groups, 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
* 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:
Investor Relations & Corporate Communications

Donna Rouzeau, Assistant Vice President, Investor Relations & Corporate Communications
Email: CorpComm@BankAtlanticBancorp.com
Leo Hinkley, Senior Vice President, Investor Relations
Email: InvestorRelations@BankAtlanticBancorp.com
Phone: (954) 940-5300, Fax: (954) 940-5320
Mailing Address: BankAtlantic Bancorp, Investor Relations & Corporate Communications
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
# # #

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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 and in any documents incorporated by reference herein, 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 the banks 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; BankAtlantic’s seven-day banking initiative and other growth, marketing or advertising initiatives not resulting in continued growth of low cost deposits or producing results which do justify their costs; the impact of periodic testing of goodwill and other intangible assets for impairment; as well as achieving the benefits of the prepayment of Federal Home Loan Bank advances or other borrowings; and the $10 million reserve established during the 2005 fourth quarter may not be sufficient to cover the fines, penalties or expenses associated with any resolution of AML-BSA compliance matters. The results or performance derived or implied, directly or indirectly from the estimates and assumptions, are based on our beliefs and may not be accurate. 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 operations, products and services, changes in economic or regulatory policies, its ability to recruit and retain financial consultants, the volatility of the stock market and fixed income markets, as well as its revenue mix, the success of new lines of business and growth; 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 Three Months Ended   For the Years Ended
            12/31/2005   9/30/2005   6/30/2005   3/31/2005   12/31/2004   12/31/2005   12/31/2004
Earnings (in thousands):
                                                               
Net income (loss) (GAAP basis)
          (1,603 )     16,260       24,537       19,878       17,293       59,072       70,768  
Operating net income **
  (note 1)     8,397       16,260       26,946       19,878       17,293       71,481       63,615  
 
                                                               
Average Common Shares Outstanding (in thousands):
                                                               
Basic
            60,618       60,555       60,453       60,072       59,827       60,426       59,526  
Diluted
            62,898       63,193       63,161       63,207       63,156       63,120       63,056  
 
                                                               
Key Performance Ratios (GAAP basis):
                                                               
Basic earnings per share
        $   (0.03 )     0.27       0.41       0.33       0.29       0.98       1.19  
Diluted earnings per share *
        $   (0.03 )     0.26       0.38       0.31       0.27       0.92       1.11  
Return on average tangible assets
  (note 2)     %   (0.10 )     1.01       1.51       1.27       1.19       0.93       1.36  
Return on average tangible equity
  (note 2)     %   (1.42 )     15.05       23.98       20.20       18.34       13.99       20.01  
 
                                                               
Key Performance Ratios (Operating basis):
                                                               
Basic earnings per share
        $   0.14       0.27       0.45       0.33       0.29       1.18       1.07  
Diluted earnings per share *
        $   0.13       0.26       0.42       0.31       0.27       1.12       1.00  
Return on average tangible assets
  (note 2)     %   0.54       1.01       1.66       1.27       1.19       1.12       1.22  
Return on average tangible equity
  (note 2)     %   7.42       15.05       26.33       20.20       18.34       16.93       17.99  
 
                                                               
* Diluted earnings per share calculation deducts (in thousands):
                                                               
Subsidiaries stock options, if dilutive
        $   (28 )     (21 )     (665 )     (120 )     (51 )     (834 )     (668 )
 
                                                               
Average Balance Sheet Data (in millions):
                                                               
Assets
        $   6,329       6,545       6,565       6,355       5,877       6,449       5,294  
Tangible assets
  (note 2)     $   6,244       6,459       6,479       6,268       5,790       6,363       5,207  
Loans
        $   4,550       4,726       4,802       4,668       4,359       4,686       3,976  
Investments
        $   1,263       1,322       1,306       1,242       1,076       1,283       896  
Deposits and escrows
        $   3,704       3,655       3,658       3,557       3,371       3,644       3,232  
Stockholders’ equity
        $   533       516       490       480       468       505       445  
Tangible stockholders’ equity
  (note 2)     $   453       432       409       394       377       422       354  
Notes:
 
(1)   Operating net income is defined as GAAP net income adjusted for gain from a litigation settlement, costs associated with debt redemptions, an impairment charge relating to BankAtlantic’s former 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.
 
**   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)   12/31/2005     12/31/2004  
ASSETS
               
Cash and due from banks
  $ 167,032       118,967  
Short term investments
    3,229       16,093  
Securities available for sale (at fair value)
    674,544       747,160  
Securities owned (at fair value)
    180,292       125,443  
Investment securities and tax certificates (approximate fair value: $363,329 and $306,963)
    364,444       307,438  
Loans receivable, net of allowance for loan losses of $41,192 and $46,010
    4,486,502       4,599,048  
Federal Home Loan Bank stock, at cost which approximates fair value
    69,931       78,619  
Accrued interest receivable
    41,490       35,982  
Real estate held for development and sale
    21,177       27,692  
Investments and advances to unconsolidated subsidiaries
    12,464       7,910  
Office properties and equipment, net
    154,120       129,790  
Deferred tax asset, net
    28,032       20,269  
Goodwill
    76,674       76,674  
Core deposit intangible asset
    8,395       10,270  
Due from clearing agent
          16,619  
Other assets
    43,232       38,803  
 
           
Total assets
  $ 6,331,558       6,356,777  
 
           
 
               
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Liabilities:
               
Deposits
               
Demand
  $ 1,019,949       890,398  
NOW
    755,708       658,137  
Savings
    313,889       270,001  
Money market
    846,441       875,422  
Certificates of deposit
    816,689       763,244  
 
           
Total deposits
    3,752,676       3,457,202  
Advances from FHLB
    1,283,532       1,544,497  
Securities sold under agreements to repurchase
    116,026       296,643  
Federal funds purchased
    139,475       105,000  
Subordinated debentures, notes and bonds payable
    39,092       37,741  
Junior subordinated debentures
    263,266       263,266  
Securities sold but not yet purchased
    35,177       39,462  
Due to clearing agent
    24,486        
Other liabilities
    161,602       143,701  
 
           
Total liabilities
    5,815,332       5,887,512  
 
           
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 55,884,089 and 55,214,225 shares
    559       552  
Class B common stock, $.01 par value, authorized 45,000,000 shares; issued and outstanding 4,876,124 and 4,876,124 shares
    49       49  
Additional paid-in capital
    261,720       259,702  
Unearned compensation — restricted stock grants
    (936 )     (1,001 )
Retained earnings
    261,169       210,955  
 
           
Total stockholders’ equity before accumulated other comprehensive income
    522,561       470,257  
Accumulated other comprehensive (loss)
    (6,335 )     (992 )
 
           
Total stockholders’ equity
    516,226       469,265  
 
           
Total liabilities and stockholders’ equity
  $ 6,331,558       6,356,777  
 
           

 


 

BankAtlantic Bancorp, Inc. and Subsidiaries
Consolidated Statements of Operations (unaudited)
                                                                 
            For The Three Months Ended     For the Years Ended  
(in thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
INTEREST INCOME:
                                                               
Interest and fees on loans
        $   72,542       73,110       71,099       66,355       60,088       283,106       209,719  
Interest on securities available for sale
            4,379       4,741       5,258       5,295       4,905       19,673       18,083  
Interest on tax exempt securities
            3,695       3,733       3,769       3,225       2,076       14,422       4,048  
Interest and dividends on investments and securities owned
            9,109       8,708       7,932       7,311       7,377       33,060       28,705  
 
                                                 
Total interest income
            89,725       90,292       88,058       82,186       74,446       350,261       260,555  
 
                                                 
INTEREST EXPENSE:
                                                               
Interest on deposits
            11,736       10,519       9,534       8,295       7,534       40,084       28,355  
Interest on advances from FHLB
            15,565       17,332       15,604       13,674       11,458       62,175       37,689  
Interest on short-term borrowed funds
            2,746       2,108       2,646       2,099       1,356       9,599       3,191  
Interest on long-term debt
            6,825       6,392       6,316       5,672       5,112       25,205       19,885  
Capitalized interest on real estate developments
            (513 )     (477 )     (437 )     (452 )     (390 )     (1,879 )     (1,398 )
 
                                                 
Total interest expense
            36,359       35,874       33,663       29,288       25,070       135,184       87,722  
 
                                                 
NET INTEREST INCOME
            53,366       54,418       54,395       52,898       49,376       215,077       172,833  
Provision (recovery) for loan losses
            (109 )     (3,410 )     820       (3,916 )     (4,004 )     (6,615 )     (5,109 )
 
                                                 
NET INTEREST INCOME AFTER PROVISION
            53,475       57,828       53,575       56,814       53,380       221,692       177,942  
 
                                                 
NON-INTEREST INCOME:
                                                               
Service charges on deposits
            17,808       16,415       14,744       12,989       13,637       61,956       51,435  
Other service charges and fees
            6,436       5,824       5,849       5,238       6,733       23,347       23,620  
Broker/dealer revenue
            49,831       50,368       83,915       54,686       53,061       238,800       231,804  
Securities activities, net
            474       181       90       102       3,653       847       3,730  
Litigation settlement
                                                22,840  
Gain on sales of loans
            221       295       116       110       152       742       483  
Income (loss) from real estate operations
            (558 )     1,142       1,655       2,241       517       4,480       2,405  
Income from unconsolidated subsidiaries
            211       142       137       131       126       621       485  
Other
            2,299       2,137       2,697       3,173       2,026       10,306       7,987  
 
                                                 
Total non-interest income
            76,722       76,504       109,203       78,670       79,905       341,099       344,789  
 
                                                 
NON-INTEREST EXPENSE:
                                                               
Employee compensation and benefits
            70,257       68,455       78,391       65,795       65,354       282,898       255,064  
Occupancy and equipment
            15,394       14,853       13,953       13,237       14,753       57,437       48,146  
Impairment of office properties and equipment
                        3,706                   3,706        
Advertising and promotion
            11,701       6,667       8,069       6,298       5,955       32,735       21,036  
Professional fees
            4,692       4,207       4,316       4,081       7,245       17,296       18,207  
Communications
            3,470       3,371       3,508       3,205       3,301       13,554       12,527  
Floor broker and clearing fees
            2,433       2,305       2,012       2,368       2,452       9,118       9,835  
Cost associated with debt redemption
                                                11,741  
Reserve for fines and penalties, compliance matter
            10,000                               10,000        
Other
            12,052       11,326       10,188       9,801       8,460       43,367       35,497  
 
                                                 
Total non-interest expense
            129,999       111,184       124,143       104,785       107,520       470,111       412,053  
 
                                                 
Income (loss) before income taxes
            198       23,148       38,635       30,699       25,765       92,680       110,678  
Provision for income taxes
            1,801       6,888       14,098       10,821       8,472       33,608       39,910  
 
                                                 
GAAP net income (loss)
        $   (1,603 )     16,260       24,537       19,878       17,293       59,072       70,768  
 
                                                 
 
                                                               
Reconciliation of Operating and GAAP Net Income
                                                               
GAAP net income (loss)
        $   (1,603 )     16,260       24,537       19,878       17,293       59,072       70,768  
Impairment of office properties and equipment
                        2,409                   2,409        
Costs associated with debt redemption
                                                7,632  
Reserve for fines and penalties, compliance matter
            10,000                               10,000        
Litigation settlement
                                                (14,785 )
 
                                                 
Operating net income
  (note 1)     $   8,397       16,260       26,946       19,878       17,293       71,481       63,615  
 
                                                 

 


 

BankAtlantic Bancorp, Inc. and Subsidiaries
Consolidated Average Balance Sheet (unaudited)
                                                         
                    For the three months ended  
(in thousands except percentages and per share data)                   12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004  
Loans:
                                                       
Residential real estate
                $   2,115,899       2,245,067       2,262,214       2,085,473       1,812,018  
Commercial real estate
                    1,576,131       1,643,570       1,731,243       1,764,927       1,743,952  
Consumer
                    538,321       527,190       505,338       487,746       467,716  
Lease financing
                    1,433       2,768       4,710       6,242       8,219  
Commercial business
                    91,979       90,578       91,756       128,372       136,391  
Small business
                    226,153       216,931       206,272       195,733       190,849  
 
                                             
Total Loans
                    4,549,916       4,726,104       4,801,533       4,668,493       4,359,145  
Investments — taxable
                    867,625       924,911       899,134       877,003       823,903  
Investments — tax exempt
                    394,935       396,908       406,403       364,824       251,699  
 
                                             
Total interest earning assets
                    5,812,476       6,047,923       6,107,070       5,910,320       5,434,747  
Goodwill and core deposit intangibles
                    85,277       85,679       86,095       86,791       87,164  
Other non-interest earning assets
                    431,215       411,116       371,549       358,024       354,815  
 
                                             
Total assets
                $   6,328,968       6,544,718       6,564,714       6,355,135       5,876,726  
 
                                             
Tangible assets
        (note 2)       $   6,243,691       6,459,039       6,478,619       6,268,344       5,789,562  
 
                                             
Deposits:
                                                       
Demand deposits
                $   1,017,467       1,000,219       981,643       912,897       845,797  
Savings
                    309,007       303,268       301,331       281,512       262,549  
NOW
                    692,128       666,567       685,769       664,313       622,308  
Money market
                    887,858       904,382       906,514       921,382       903,602  
Certificates of deposit
                    797,187       781,044       782,335       777,353       736,704  
 
                                             
Total deposits
                    3,703,647       3,655,480       3,657,592       3,557,457       3,370,960  
Short-term borrowed funds
                    276,333       251,242       359,861       352,911       266,840  
FHLB advances
                    1,345,033       1,659,411       1,615,310       1,536,434       1,339,051  
Long-term debt
                    301,655       298,887       299,075       300,551       299,741  
 
                                             
Total borrowings
                    1,923,021       2,209,540       2,274,246       2,189,896       1,905,632  
Other liabilities
                    169,156       163,581       142,617       128,233       132,047  
 
                                             
 
                    5,795,824       6,028,601       6,074,455       5,875,586       5,408,639  
 
                                             
Stockholders’ equity
                    533,144       516,117       490,259       479,549       468,087  
 
                                             
Total liabilities and stockholders’ equity
                $   6,328,968       6,544,718       6,564,714       6,355,135       5,876,726  
 
                                             
Other comprehensive income (loss) in stockholders’ equity
                $   (4,810 )     (1,612 )     (5,119 )     (949 )     3,656  
 
                                             
Tangible stockholders’ equity
        (note 2)       $   452,677       432,050       409,283       393,707       377,267  
 
                                             
Period End
                                                       
Total loans, net
                  $ 4,486,502       4,543,245       4,803,529       4,637,232       4,599,048  
Total assets
                    6,331,558       6,352,822       6,717,676       6,418,351       6,356,777  
Total stockholders’ equity
                    516,226       523,392       510,394       480,981       469,265  
Common shares outstanding
                    60,760,213       60,738,610       60,642,777       60,542,092       60,090,349  
Cash dividends
                    2,308,888       2,308,067       2,122,497       2,118,973       2,103,164  
Common stock cash dividends per share
                    0.038       0.038       0.035       0.035       0.035  
Closing stock price
                    14.00       16.99       18.95       17.40       19.90  
High stock price for the quarter
                    17.19       19.33       19.15       20.00       20.08  
Low stock price for the quarter
                    13.29       15.64       16.51       17.02       16.06  
Book value per share
                    8.50       8.62       8.42       7.94       7.81  

 


 

Bank Operations Business Segment
Condensed Statements of Operations (Unaudited)
                                                         
    For the Three Months Ended     For the Years Ended  
(In thousands)   12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
Net interest income
  $ 54,760       55,939       56,031       54,345       50,339       221,075       176,858  
Provision (recovery) for loan losses
    (109 )     (3,410 )     820       (3,916 )     (4,004 )     (6,615 )     (5,109 )
 
                                         
Net Interest income after provision for loan losses
    54,869       59,349       55,211       58,261       54,343       227,690       181,967  
 
                                         
Non-interest income
                                                       
Service charges on deposits
    17,808       16,415       14,744       12,989       13,637       61,956       51,435  
Other service charges and fees
    6,436       5,824       5,849       5,238       6,733       23,347       23,620  
Securities gains (losses)
          23       87       7       40       117       37  
Gain on sales of loans
    221       295       116       110       152       742       483  
Income from real estate operations
    (558 )     1,142       1,655       2,241       517       4,480       2,405  
Other non-interest income
    1,928       2,019       2,514       2,956       1,924       9,417       7,744  
 
                                         
Total non-interest income
    25,835       25,718       24,965       23,541       23,003       100,059       85,724  
 
                                         
Non-interest expense
                                                       
Employee compensation and benefits
    31,445       28,106       27,577       26,398       25,136       113,526       93,154  
Occupancy and equipment
    11,503       10,826       10,165       9,117       9,658       41,611       32,713  
Impairment of office properties and equipment
                3,706                   3,706        
Advertising
    10,244       5,518       5,965       5,168       5,087       26,895       16,012  
Professional fees
    2,521       2,641       2,638       1,895       4,725       9,695       11,286  
Cost associated with debt redemption
                                        11,741  
Reserve for fines and penalties, compliance matter
    10,000                               10,000        
Other
    10,076       9,631       8,265       7,686       7,058       35,658       28,716  
 
                                         
Total non-interest expense
    75,789       56,722       58,316       50,264       51,664       241,091       193,622  
 
                                         
Income from bank operations business segment before income taxes
    4,915       28,345       21,860       31,538       25,682       86,658       74,069  
Provision for income taxes
    4,018       9,054       7,089       10,677       8,870       30,838       25,529  
 
                                         
Net income from bank operations business segment
  $ 897       19,291       14,771       20,861       16,812       55,820       48,540  
 
                                         
Reconciliation of Operating and business segment net income
                                                       
Business segment income
  $ 897       19,291       14,771       20,861       16,812       55,820       48,540  
Impairment of office properties and equipment
                2,409                   2,409        
Cost associated with debt redemption
                                        7,632  
Reserve for fines and penalties, compliance matter
    10,000                               10,000        
 
                                         
Operating net income
  $ 10,897       19,291       17,180       20,861       16,812       68,229       56,172  
 
                                         

 


 

Bank Operations Business Segment
Condensed Statements of Condition and Statistics (Unaudited)
                                                                 
            For the Three Months Ended     For the Years Ended  
(in thousands except percentages                                                  
and per share data)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
Statistics:
                                                               
Average earning assets
    $       5,575,727       5,820,252       5,882,065       5,696,192       5,225,840       5,743,439       4,680,006  
Average interest bearing liabilities
    $       4,351,337       4,606,611       4,691,644       4,575,247       4,172,665       4,555,734       3,715,591  
Average tangible assets
    $       5,919,617       6,132,529       6,180,083       5,979,211       5,492,505       6,052,911       4,931,637  
Average tangible equity
    $       495,614       473,387       463,813       448,667       435,787       470,508       423,252  
Borrowings to deposits and borrowings
    %       29.68       31.64       36.18       33.79       36.53       29.68       36.53  
Tax equivalent:
                                                               
Yield on earning assets
    %       6.24       6.05       5.84       5.64       5.50       5.94       5.32  
Cost of interest-bearing liabilities
    %       2.80       2.64       2.43       2.19       1.99       2.51       1.92  
Interest spread
    %       3.44       3.41       3.41       3.45       3.51       3.43       3.40  
Net interest margin
    %       4.05       3.96       3.90       3.88       3.91       3.95       3.79  
GAAP:
                                                               
Efficiency ratio
    %       94.04       69.46       72.00       64.54       70.44       75.07       73.74  
Return on average tangible assets
    %       0.06       1.26       0.96       1.40       1.22       0.92       0.98  
Return on average tangible equity
    %       0.72       16.30       12.74       18.60       15.43       11.86       11.47  
Operating (1):
                                                               
Efficiency ratio
    %       81.63       69.46       67.42       64.54       70.44       70.81       69.27  
Return on average tangible assets
    %       0.74       1.26       1.11       1.40       1.22       1.13       1.14  
Return on average tangible equity
    %       8.79       16.30       14.82       18.60       15.43       14.50       13.27  
Earning assets repricing (2):
                                                               
Percent of earning assets that have fixed rates
    %       46       50                                          
Percent of earning assets that have variable rates
    %       54       50                                          
One year Gap
    %       7       4                                          
 
(1)   Ratios have been adjusted to exclude costs associated with debt redemptions, impairment on BankAtlantic’s former corporate headquarters and a reserve for a compliance matter.
 
(2)   Percentages for periods prior to September 30, 2005 are not available.

 


 

Condensed Statements of Financial Condition (Unaudited)
                                                 
            As of  
(In thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004  
ASSETS
                                               
Loans receivable, net
      $     4,483,142       4,539,544       4,799,485       4,616,846       4,554,952  
Held to maturity securities
            427,575       439,015       483,992       376,298       378,912  
Available for sale securities
            578,913       608,375       658,532       695,154       700,642  
Goodwill
            70,489       70,489       70,489       70,489       70,489  
Core deposit intangible asset
            8,395       8,796       9,197       9,597       10,270  
Other assets
            402,546       369,994       374,207       335,215       329,723  
 
                                     
Total assets
      $     5,971,060       6,036,213       6,395,902       6,103,599       6,044,988  
 
                                     
 
                                               
LIABILITIES AND STOCKHOLDER’S EQUITY
                               
Deposits
                                               
Demand
      $     1,019,992       1,017,866       1,039,703       960,152       890,919  
NOW
            755,708       673,803       660,633       676,945       658,137  
Savings
            313,889       303,348       302,677       296,485       270,001  
 
                                     
Total low cost deposits
            2,089,589       1,995,017       2,003,013       1,933,582       1,819,057  
Money market
            846,441       921,585       899,364       913,434       875,422  
Certificate of deposits
            816,689       777,743       789,533       796,928       763,244  
 
                                     
Total deposits
            3,752,719       3,694,345       3,691,910       3,643,944       3,457,723  
Advances from Federal Home Loan Bank
            1,283,532       1,485,649       1,695,265       1,524,881       1,544,497  
Short term borrowings
            261,154       187,513       362,307       298,816       407,841  
Long term debt
            39,092       36,702       35,232       35,878       37,641  
Other liabilities
            89,834       79,228       69,235       73,191       80,410  
 
                                     
Total liabilities
            5,426,331       5,483,437       5,853,949       5,576,710       5,528,112  
Stockholder’s equity
            544,729       552,776       541,953       526,889       516,876  
 
                                     
Total liabilities and stockholder’s equity
      $     5,971,060       6,036,213       6,395,902       6,103,599       6,044,988  
 
                                     

 


 

Bank Operations Business Segment
Average Balance Sheet — Yield / Rate Analysis
                                                 
    For the Three Months Ended  
    December 31, 2005     December 31, 2004  
(in thousands)   Average     Revenue/     Yield/     Average     Revenue/     Yield/  
    Balance     Expense     Rate     Balance     Expense     Rate  
Loans:                    
                                               
Residential real estate
  $ 2,115,899       26,210       4.95 %   $ 1,812,018       22,400       4.94 %
Commercial real estate
    1,572,433       30,773       7.83       1,737,518       26,483       6.10  
Consumer
    538,321       8,972       6.67       467,716       5,384       4.60  
Lease financing
    1,433       29       8.09       8,219       192       9.34  
Commercial business
    91,979       2,015       8.76       98,391       1,698       6.90  
Small business
    226,153       4,542       8.03       190,849       3,438       7.21  
 
                                   
Total loans
    4,546,218       72,541       6.38       4,314,711       59,595       5.52  
Investments — tax exempt
    386,073       5,615 (1)     5.82       221,247       3,051 (1)     5.52  
Investments — taxable
    643,436       8,779       5.46       689,882       9,242       5.36  
 
                                   
Total interest earning assets
    5,575,727       86,935       6.24 %     5,225,840       71,888       5.50 %
 
                                       
Goodwill and core deposit intangibles
    79,092                       80,979                  
Other non-interest earning assets
    343,890                       266,665                  
 
                                           
Total Assets
  $ 5,998,709                     $ 5,573,484                  
 
                                           
 
                                               
Deposits:
                                               
Savings
  $ 309,007       281       0.36 %   $ 262,549       179       0.27 %
NOW
    692,128       866       0.50       622,308       582       0.37  
Money market
    887,858       3,902       1.74       903,602       2,423       1.07  
Certificate of deposit
    797,187       6,687       3.33       736,704       4,350       2.35  
 
                                   
Total interest bearing deposits
    2,686,180       11,736       1.73       2,525,163       7,534       1.19  
 
                                   
Short-term borrowed funds
    282,474       2,805       3.94       272,075       1,379       2.02  
Advances from FHLB
    1,345,033       15,565       4.59       1,339,051       11,458       3.40  
Long-term debt
    37,650       617       6.50       36,376       500       5.47  
 
                                   
Total interest bearing liabilities
    4,351,337       30,723       2.80       4,172,665       20,871       1.99  
Demand deposits
    1,018,169                       846,528                  
Non-interest bearing other liabilities
    63,021                       35,214                  
 
                                           
Total Liabilities
    5,432,527                       5,054,407                  
Stockholder’s equity
    566,182                       519,077                  
 
                                           
Total liabilities and stockholder’s equity
  $ 5,998,709                     $ 5,573,484                  
 
                                           
Net tax equivalent interest income/ net interest spread
          $ 56,212       3.44 %           $ 51,017       3.51 %
 
                                           
Tax equivalent adjustment
            (1,965 )                     (1,068 )        
Capitalized interest from real estate operations
            513                       390          
 
                                           
Net interest income
            54,760                       50,339          
 
                                           
 
                                               
Margin
                                               
Interest income/interest earning assets
                    6.24 %                     5.50 %
Interest expense/interest earning assets
                    2.19                       1.59  
 
                                           
Net interest margin (tax equivalent)
                    4.05 %                     3.91 %
 
                                           
 
(1)   The tax equivalent basis is computed using a 35% tax rate.

 


 

Bank Operations
Average Balance Sheet — Yield / Rate Analysis
                                                 
    For the Years Ended  
    December 31, 2005     December 31, 2004  
(in thousands)   Average     Revenue/     Yield/     Average     Revenue/     Yield/  
    Balance     Expense     Rate     Balance     Expense     Rate  
Loans:               
                                               
Residential real estate
  $ 2,177,432       106,992       4.91 %   $ 1,527,911       72,758       4.76 %
Commercial real estate
    1,674,033       120,235       7.18       1,683,068       96,585       5.74  
Consumer
    514,822       31,348       6.09       421,167       17,959       4.26  
Lease financing
    3,772       394       10.45       10,771       1,125       10.44  
Commercial business
    90,648       7,061       7.79       101,288       6,423       6.34  
Small business
    211,371       16,520       7.82       183,642       13,118       7.14  
 
                                   
Total loans
    4,672,078       282,550       6.05       3,927,847       207,968       5.29  
Investments — tax exempt
    368,807       21,391 (1)     5.80       110,748       5,988       5.41  
Investments — taxable
    702,554       37,201       5.30       641,411       34,995       5.46  
 
                                   
Total interest earning assets
    5,743,439       341,142       5.94 %     4,680,006       248,951       5.32 %
 
                                       
Goodwill and core deposit intangibles
    79,714                       81,622                  
Other non-interest earning assets
    309,472                       251,631                  
 
                                           
Total Assets
  $ 6,132,625                     $ 5,013,259                  
 
                                           
Deposits:
                                               
Savings
  $ 298,867       909       0.30 %   $ 243,906       652       0.27 %
NOW
    677,241       2,964       0.44       585,857       2,163       0.37  
Money market
    904,941       13,629       1.51       903,585       8,698       0.96  
Certificate of deposit
    784,525       22,582       2.88       733,717       16,842       2.30  
 
                                   
Total deposits
    2,665,574       40,084       1.50       2,467,065       28,355       1.15  
 
                                   
Short-term borrowed funds
    314,782       9,760       3.10       252,718       3,349       1.33  
Advances from FHLB
    1,538,852       62,175       4.04       959,588       37,689       3.93  
Long-term debt
    36,526       2,440       6.68       36,220       2,002       5.53  
 
                                   
Total interest bearing liabilities
    4,555,734       114,459       2.51       3,715,591       71,395       1.92  
Demand deposits
    979,075                       765,084                  
Non-interest bearing other liabilities
    53,150                       29,111                  
 
                                           
Total Liabilities
    5,587,959                       4,509,786                  
Stockholder’s equity
    544,666                       503,473                  
 
                                           
Total liabilities and stockholder’s equity
  $ 6,132,625                     $ 5,013,259                  
 
                                           
Net interest income/net interest spread
          $ 226,683       3.43 %           $ 177,556       3.40 %
 
                                           
Tax equivalent adjustment
            (7,487 )                     (2,096 )        
Capitalized interest from real estate operations
            1,879                       1,398          
 
                                           
Net interest income
            221,075                       176,858          
 
                                           
Margin
                                               
Interest income/interest earning assets
                    5.94 %                     5.32 %
Interest expense/interest earning assets
                    1.99                       1.53  
 
                                           
Net interest margin
                    3.95 %                     3.79 %
 
                                           
 
(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 Years Ended  
            12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
Allowance for Loan Losses
                                                               
Beginning balance
    $       40,695       43,650       43,042       46,010     $ 48,778       46,010       45,595  
 
                                                               
Charge-offs:
                                                               
Residential real estate
            (8 )     (191 )     (56 )     (198 )     (76 )     (453 )     (582 )
Commercial real estate
                                    (645 )           (645 )
Commercial business
            (119 )     (222 )     (511 )     (286 )     (762 )     (1,138 )     (1,615 )
Consumer
            (91 )     (99 )     (43 )     (106 )     (71 )     (339 )     (778 )
Small business
            (102 )     (68 )     (466 )     (128 )     (233 )     (764 )     (456 )
 
                                                 
Total charge-offs
            (320 )     (580 )     (1,076 )     (718 )     (1,787 )     (2,694 )     (4,076 )
 
                                                 
 
                                                               
Recoveries:
                                                               
Residential real estate
            9       55             1       190       65       486  
Commercial real estate
                                    2,000             4,052  
Commercial business
            306       355       345       116       259       1,122       2,100  
Consumer
            238       159       121       176       266       694       1,011  
Small business
            205       289       220       185       231       899       1,430  
Other
            168       177       178       1,188       77       1,711       521  
 
                                                 
Total recoveries
            926       1,035       864       1,666       3,023       4,491       9,600  
 
                                                 
Net (charge-offs) recoveries
            606       455       (212 )     948       1,236       1,797       5,524  
 
                                                 
Provision (recovery) for loan losses
            (109 )     (3,410 )     820       (3,916 )     (4,004 )     (6,615 )     (5,109 )
 
                                                 
Ending balance
    $       41,192       40,695       43,650       43,042       46,010       41,192       46,010  
 
                                                 
Annualized net charge-offs (recoveries) to average loans
    %       (0.05 )     (0.04 )     0.02       (0.08 )     (0.11 )     (0.04 )     (0.14 )
 
                                                 
                                                 
            As of  
            12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004  
Credit Quality
                                               
 
                                               
Nonaccrual loans
    $       6,801       6,883       5,785       6,504       7,903  
Nonaccrual tax certificates
            388       385       562       417       381  
Real estate owned
            967       912       1,178       1,438       692  
Other repossessed assets
                  46       328              
 
                                     
Total nonperforming assets
    $       8,156       8,226       7,853       8,359       8,976  
 
                                     
Nonperforming assets to total loans and other assets
    %       0.17       0.17       0.16       0.17       0.19  
Allowance for loan losses to total loans
    %       0.91       0.89       0.90       0.92       1.00  
Provision expense (recovery) to average loans
    %       (0.01 )     (0.29 )     0.07       (0.34 )     (0.37 )
Allowance to nonperforming loans
    %       605.68       591.24       754.54       661.78       582.18  

 


 

Ryan Beck & Co., Inc. Business Segment
Consolidated Statements of Operations and Statistics — Unaudited
                                                                 
            For the Three Months Ended     For the Years Ended  
(in thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
Revenues
                                                               
Principal transactions
      $     20,900       22,895       36,690       19,802       24,925       100,287       90,415  
Investment banking
            4,511       3,741       25,394       11,882       3,753       45,528       48,245  
Commissions
            21,891       21,390       19,478       20,315       23,109       83,074       89,289  
Interest, dividends and other
            6,848       6,098       5,842       5,634       4,114       24,422       15,206  
 
                                                 
Total operating revenues
            54,150       54,124       87,404       57,633       55,901       253,311       243,155  
 
                                                 
Operating expenses
                                                               
Compensation, benefits
            37,764       39,358       49,766       38,437       39,439       165,325       158,868  
Professional fees
            2,287       1,411       1,591       1,417       2,044       6,706       5,482  
Communications
            3,470       3,371       3,508       3,205       3,301       13,554       12,527  
Occupancy and equipment
            3,887       4,025       3,786       4,118       5,095       15,816       15,429  
Floor broker and clearing fees
            2,433       2,305       2,012       2,368       2,452       9,118       9,835  
Interest and other
            4,291       3,495       4,733       3,522       2,318       16,041       11,841  
 
                                                 
Total operating expenses
            54,132       53,965       65,396       53,067       54,649       226,560       213,982  
 
                                                 
Income (loss) from Ryan Beck business segment — before income taxes
            18       159       22,008       4,566       1,252       26,751       29,173  
Provision (benefit) for income taxes
            (544 )     (264 )     8,977       2,036       11       10,205       11,689  
 
                                                 
Net income from Ryan Beck business segment
      $     562       423       13,031       2,530       1,241       16,546       17,484  
 
                                                 
 
                                                               
Statistics:
                                                               
Average tangible assets
      $     219,537       208,883       184,601       171,833       178,967       196,951       171,727  
Average tangible equity
            99,420       99,195       85,735       85,248       83,242       93,621       79,856  
GAAP return on average tangible assets
      %     1.02       0.81       28.24       5.89       2.77       8.40       10.18  
GAAP return on average tangible equity
            2.26       1.71       60.80       11.87       5.96       17.67       21.89  
Compensation as a percent of revenues
            69.74       72.72       56.94       66.69       70.55       65.27       65.34  
Commissions to total revenues
            40.43       39.52       22.29       35.25       41.34       32.80       36.72  
Principal transactions to total revenues
            38.60       42.30       41.98       34.36       44.59       39.59       37.18  
Investment banking revenue to total revenues
            8.33       6.91       29.05       20.62       6.71       17.97       19.84  
Condensed Statements of Financial Condition — Unaudited
                                                 
             
            As of  
(in thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004  
ASSETS
                                               
Cash and cash equivalents
      $     5,366       5,388       4,103       6,312       3,674  
Securities
            180,292       120,298       109,095       142,294       125,443  
Notes receivable — GMS
            3,360       3,702       4,043       4,386       6,096  
Property and equipment, net
            7,573       7,503       6,795       7,020       7,472  
Goodwill
            6,184       6,184       6,184       6,184       6,184  
Due from clearing agent
                  15,650       22,091       1,120       16,619  
Other assets
            35,751       37,332       51,338       29,426       28,129  
 
                                     
Total assets
      $     238,526       196,057       203,649       196,742       193,617  
 
                                     
 
                                               
LIABILITIES AND STOCKHOLDER’S EQUITY
                                               
Liabilities:
                                               
Securities sold not yet purchased
      $     35,177       20,688       28,184       60,276       39,462  
Due to clearing agent
            24,486                          
Other liabilities
            72,627       69,695       70,214       44,246       63,974  
 
                                     
Total liabilities
            132,290       90,383       98,398       104,522       103,436  
 
                                     
Stockholder’s equity
            106,236       105,674       105,251       92,220       90,181  
 
                                     
Total liabilities and stockholder’s equity
      $     238,526       196,057       203,649       196,742       193,617  
 
                                     

 


 

Parent Company Business Segment Activities
Condensed Statements of Operations — Unaudited
                                                                 
                   
            For the Three Months Ended     For Years Ended  
(in thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004     12/31/2005     12/31/2004  
Net interest (expense)
      $     (4,583 )     (4,457 )     (4,157 )     (3,892 )     (3,593 )     (17,089 )     (14,451 )
Income from unconsolidated subsidiaries
            211       142       137       131       126       621       485  
Gains on sales of securities
            475       158       3       95       3,613       731       3,693  
Litigation settlement
                                                22,840  
Employee compensation and benefits
            (1,048 )     (991 )     (1,048 )     (960 )     (778 )     (4,047 )     (3,042 )
Other income (expense)
            210       (208 )     (168 )     (779 )     (536 )     (945 )     (2,088 )
 
                                                 
Income (loss) from parent company activities before income taxes
            (4,735 )     (5,356 )     (5,233 )     (5,405 )     (1,168 )     (20,729 )     7,437  
Provision (benefit) for income taxes
            (1,673 )     (1,902 )     (1,968 )     (1,892 )     (409 )     (7,435 )     2,692  
 
                                                 
Net income (loss) from parent company business segment
      $     (3,062 )     (3,454 )     (3,265 )     (3,513 )     (759 )     (13,294 )     4,745  
 
                                                 
 
                                                               
Reconciliation of Operating and business segment income
                                                               
Business segment net income
      $     (3,062 )     (3,454 )     (3,265 )     (3,513 )     (759 )     (13,294 )     4,745  
Litigation settlement
                                                (14,785 )
 
                                                 
Operating loss
      $     (3,062 )     (3,454 )     (3,265 )     (3,513 )     (759 )     (13,294 )     (10,040 )
 
                                                 
Condensed Statements of Financial Condition — Unaudited
                                                 
             
            As of  
(in thousands)           12/31/2005     9/30/2005     6/30/2005     3/31/2005     12/31/2004  
ASSETS
                                               
Cash
      $     7,342       12,783       11,218       8,032       9,131  
Securities
            104,602       103,755       100,592       85,711       64,656  
Notes receivable from related parties
                              16,000       38,000  
Investment in subsidiaries
            650,968       658,454       647,207       619,111       607,061  
Investment in unconsolidated subsidiaries
            12,528       12,510       7,910       7,910       7,910  
Other assets
            8,146       7,075       13,905       15,452       8,918  
 
                                     
Total assets
      $     783,586       794,577       780,832       752,216       735,676  
 
                                     
 
                                               
LIABILITIES AND STOCKHOLDERS’ EQUITY
                                               
Subordinated debentures and notes payable
      $     263,266       263,266       263,266       263,266       263,366  
Other liabilities
            4,094       7,919       7,172       7,969       3,045  
 
                                     
Total liabilities
            267,360       271,185       270,438       271,235       266,411  
 
                                     
Stockholders’ equity
            516,226       523,392       510,394       480,981       469,265  
 
                                     
Total liabilities and stockholders’ equity
      $     783,586       794,577       780,832       752,216       735,676