In deal-crazy Florida, BankAtlantic Bancorp Inc. has largely avoided buying banks in recent years.
Instead, the Fort Lauderdale company has preferred to use its capital to buy fee-generating businesses, including a home builder and an investment banking firm. But now Florida's second-largest banking company says it wants to get back into bank acquisitions as it aims to become a more formidable retail force in a crowded market.
James White, the $4.8 billion-asset company's chief financial officer, said last week that it is eyeing deals throughout the Sunshine State, specifically in the Jacksonville and Orlando markets, where it has only loan production offices.
Speaking at an investor conference in New York hosted by Keefe, Bruyette & Woods Inc., Mr. White said that in the past year BankAtlantic has looked at eight banks. It made offers for two of them and was rejected both times, he said.
The $171 million purchase of Community Savings Bankshares Inc. of North Palm Beach in March 2002 was BankAtlantic's only whole-bank acquisition in the past eight years. However, it has bought many nonbanking entities, including a real estate development firm, an equipment leasing company, the fabled home builder Levitt Corp., and the Livingston, N.J., investment banking firm Ryan Beck & Co. Inc.
Since Levitt was spun off in January, BankAtlantic's stock price has jumped about 27% and provided the company with a more attractive currency with which to do deals.
In an interview Tuesday, Jarett Levan, the chief marketing officer, said acquiring a bank would speed BankAtlantic's deposit-gathering initiative and complement its plans to build eight to 10 branches next year.
It has no specific bank or even type of bank in mind, Mr. Levan said. "We would look at anything … that complements our existing footprint and helps us expand into additional markets, and fits into our current strategy and culture."
Though Florida is one of the nation's most active merger-and-acquisition markets - an average of 20 banks a year have been sold there over the past five years, according to Highline Banking Data Services - there are still plenty to buy. The Orlando area has 23 community banks, and Jacksonville has 15.
The latter market has proved a tough one for acquisitions. Finding all the desirable banks there too pricey, this year Synovus Financial Corp. of Columbus, Ga., gave up trying to buy something and decided to start a bank for the first time in its history.
Mr. Levan said BankAtlantic does not want to overpay at a time when other companies are paying a premium. For the past year Florida banks with more than $100 million of assets have been fetching an average of 2.73 times book value - much higher than the average in previous years. (The national average is 2.15.)
Just this week Fifth Third Bancorp of Cincinnati announced that it was buying the $4 billion-asset First National Bancshares of Florida Inc., in Naples, for $1.58 billion, or 3.26 times book value.
Jefferson Harralson, an analyst with Keefe, Bruyette & Woods, said another problem for BankAtlantic is that most of the community banks in Florida concentrate on small-business banking, which may not fit into its consumer-focused strategy.
But the climbing stock price may finally make BankAtlantic attractive to potential sellers, Mr. Harralson said. "BankAtlantic has not had big multiples until now, but the success of its currency makes deals possible."
