BankAtlantic Bancorp Inc.'s shares plunged to below $1 Monday on fears that the Fort Lauderdale, Fla., company does not have enough capital to absorb loan losses.
The $6 billion-asset BankAtlantic, however, insists that it is well capitalized, and in a Securities and Exchange Commission filing, a news release, and a letter to customers Monday blamed the stock slide on an "erroneous" and "misleading" analyst report released Sunday by Ladenburg Thalmann & Co. analyst Richard X. Bove.
The report, titled "Who Is Next?", examined which banking companies are most in danger of failing, and though it did not name BankAtlantic, it did name BFC Financial Corp., which is a major investor in BankAtlantic. The chairman of BFC, which is not a banking company, is, Alan B. Levan, who is also the chairman and chief executive of BankAtlantic.
"Unfortunately, wire service outlets and cable news services have picked up the incorrect Ladenburg story, confused BFC Financial Corp. with BankAtlantic, and published stories that omit reference to the actual financial condition of BankAtlantic," the banking company said in the news release, issued late Monday.
Mr. Bove did not return calls Monday afternoon.
BankAtlantic has been hard hit by the Florida's real estate downturn. The company lost $23.4 million in the first quarter, and industry observers have been speculating for weeks that it would need to raise more capital to cope with mounting losses in its commercial real estate loan portfolio.
With investors already on edge over the failure of IndyMac Bancorp Inc. late Friday and the perceived liquidity problems at Fannie Mae and Freddie Mac, bank stocks fell sharply across the board Monday.
BankAtlantic's shares fell 25%, to an all-time low of 90 cents. They have now lost 91% of their value over the last nine months.
BankAtlantic said in the SEC filing that all of its capital levels are above what regulators consider to be well capitalized and that its ratio of nonperformers to total common equity plus reserves was at 12.5% — well below the 40% that Mr. Bove said in his report is a "danger zone."
The company did acknowledge its high levels of nonperforming commercial real estate and consumer loans, but said it is "optimistic" that a number of real estate markets in Florida are "showing signs of stabilizing."
