Slower net growth in low-cost deposits and a $4.8 million loss at its investment banking subsidiary Ryan Beck & Co. led to disappointing third-quarter earnings for BankAtlantic Bancorp Inc.
The $6.6 billion-asset Fort Lauderdale, Fla., banking company said net income plummeted 86%, to $2.3 million, from the year earlier. It reported third-quarter results late Wednesday.
BankAtlantic opened 62,000 low-cost deposit accounts in the quarter, up 21% from the year earlier. But a decline in "legacy," or existing, accounts produced slower overall low-cost deposit growth. As a result, demand deposits as a percentage of total deposits fell from 29.2% in the second quarter to 27.5%.
In a conference call with analysts Thursday, Alan Levan, BankAtlantic's chairman and chief executive officer, called the development "intolerable" but said his management team would study the issue and tweak existing strategy rather than undertake a radical overhaul.
Mr. Levan also attributed the earnings decline to a higher loan-loss provision, lower interest income, and increased expenses for its expansion plan.
BankAtlantic postponed a planned initial public offering for Ryan Beck in July on account of its lackluster second-quarter earnings. During Thursday's call, Mr. Levan said, "It is still our desire to monetize at Ryan Beck" but that this would be unlikely to occur in the next two quarters.
