FORT LAUDERDALE, Fla. — Already a prominent home lender, BankAtlantic Bancorp has suddenly become one of Florida’s most prolific home builders.

The thrift company entered the building business in late 1999 when it bought Levitt Corp. — which was best known for developing the Levittown suburban communities soon after the end of World War II — from Starret Housing Corp. in New York City.

Buoyed by a $50 million investment from $4.6 billion-asset BankAtlantic, Levitt last year began building six active-adult communities in Florida and became the lead developer of St. Lucie West, a 4,600-acre planned community that includes the New York Mets’ spring training center. In all, Levitt built 600 homes and signed 703 contracts in 2000, more than doubling its 1999 activity.

Though it is uncommon for thrifts to venture into home building, BankAtlantic chairman and chief executive officer Alan B. Levan said the move seemed a natural extension of the company’s business lines. BankAtlantic was already in the development business — it was the primary owner of St. Lucie West — and has been making home loans for 50 years. Moreover, Boca Raton, Fla.-based Levitt had been a commercial customer of BankAtlantic for 15 years.

“We wanted to diversify and had a desire to build up our noninterest income,” Mr. Levan said, “and we thought an external acquisition of business we knew and had a longstanding relationship with was the best route. We believe that this diversification strategy gives us a unique competitive advantage in Florida.”

The decision appears to be paying off. In the fourth quarter, the Levitt subsidiary earned $7.3 million, nearly 37% of BankAtlantic’s noninterest income. For the year, Levitt earned $10.2 million, or about 22% of all fee income.

The Levitt purchase continued BankAtlantic’s strategy of breaking out of its role as a traditional thrift and expanding its income base. In 1997, it began an ambitious plan to blanket the Southeast with automated teller machines and install ATMs on cruise ships and in Native American-owned casinos. In 1998, it bought the Livingston, N.J., investment firm Ryan, Beck & Co. and, for the first time, began making small-business loans.

Though some initiatives succeeded, others failed to meet the company’s goals. For example, a series of bad small-business loans in 1998 led to numerous chargeoffs and a loss that year of $8 million. Ryan Beck’s 2000 income was down more than 51% from 1999, due to the stock market’s weakness. This contributed to a 20% decline in BankAtlantic’s earnings last year.

Though many of the company’s 800 ATMs, including those on cruise ships and in casinos, were quite profitable, others struggled to meet the company’s expectations, and 350 ATMs were shut down this year.

With its small-business lending problems behind it and a better hold on its ATM network, BankAtlantic is expecting to rebound this year. Expectations are particularly high for the Levitt unit, which plans to use its healthy profits from 2000 to fund expansion this year.

“The only change in plans is to grow more,” said John E. Abdo, CEO of Levitt and vice chairman at BankAtlantic. “There are a lot of markets in Florida we want to capitalize on, like around Jacksonville and Orlando, and we will also be looking into other parts of the South.”

Steve Davidson, financial economist for the Washington thrift group America’s Community Bankers, said few thrifts have ventured into home building, let alone made money at it.

“It’s not a widespread trend, and there are certainly some risk exposures,” Mr. Davidson said. He added that the risks go along with fluctuations in the real estate market that hit home building and sales much harder than mortgage production.

But one analyst said he is confident that BankAtlantic will succeed where few have dared to tread. (Federal law prohibits commercial banks from engaging in real estate development.)

Scott Valentin of Friedman Billings Ramsey & Co. in Arlington, Va., said he believes the partnership will work out because Mr. Levan, who has been with the company since it began developing apartment properties in 1985, understands the housing business.

The Levitt name also brings a certain cachet to BankAtlantic. Founded in 1929 as Levitt and Sons Inc., the company quickly made a name for itself with its affordable, easily built Cape Cod homes. In the 1950s it built two of the best-known — and certainly most-scrutinized — planned communities in history, Levittown, N.Y., and Levittown, Pa.

“A lot of people that were involved in the original Levitt homes are now reaching retirement, and when they come to make that purchase, there is an immediate acceptance of a trusted brand,” Mr. Abdo said.

Now that BankAtlantic has had a year to incorporate Levitt and promote its name, the thrift and the home builder are beginning to look into the “strategic advantages” of cross-selling, said James White, BankAtlantic’s chief financial officer.

In fact, some cross selling is already going on. For example, a few builders in the St. Lucie West development are BankAtlantic loan customers, as are builders in other projects that Levitt is developing. The result: Last year, BankAtlantic topped the $1 billion mark in commercial lending for the first time in its history.

On the residential lending side, many of those who buy Levitt homes also take out mortgages at BankAtlantic. The thrift also is putting branches in a few of Levitt’s active-adult communities.

Though Levitt and BankAtlantic have worked successfully together for more than a year, Mr. White said many investors do not understand or even know about the relationship.

So to promote the Levitt partnership, as well as BankAtlantic’s ownership of Ryan Beck, the thrift is taking its show on the road. Mr. Levan said that after a few presentations he is sensing that investors have a better appreciation of BankAtlantic.

“Most investors know about the companies but do not realize how they are all related,” he said, “and many are intrigued by the relationships.”

Indeed, investors have taken notice. BankAtlantic’s stock price, which hovered around $4 a share for most of 2000, is up 74% since Jan 1. It was trading at $6.77 at midday Tuesday, a level it had not seen in since mid-1999. The stock reached its all-time high of $16.875 in January 1998.

Analysts are also bullish on BankAtlantic. It earned 54 cents per share in 2000, and the consensus estimate for this year is 66 cents.

“In 1999 and 2000, with all of the earnings misses, investors shied away from the company,” said Friedman Billings’ Mr. Valentin, “and now that the management is confident and on the road, people are beginning to see the value of the stock and the company.”

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