Ryan Beck & Co.'s plan to raise $100 million in a public offering would give the investment bank and brokerage firm more independence from its parent company, BankAtlantic Bancorp Inc. in Fort Lauderdale, Fla.
But the move would not be the clean break that some analysts and investors had been hoping for.
Many have said in recent years that Ryan Beck's erratic earnings were a drag on BankAtlantic's performance and had been clamoring for the investment bank to be spun off or sold. Instead, the $6.5 billion-asset BankAtlantic would retain "a controlling voting interest and majority economic interest," according to the initial public offering registration filed Monday with the Securities and Exchange Commission.
BankAtlantic acquired Ryan Beck in 1998 for $38.2 million in stock.
Alan B. Levan, BankAtlantic's chairman, president and chief executive, said in an interview Monday that he was "not unmindful of the sentiment on Wall Street" and that the public offering is in some ways a compromise.
The stock sale, he said, "allows us to maintain some of our investment and at the same time monetize a portion of it."
He added that BankAtlantic likes the investment banking business and that it has "an excellent relationship with Ryan Beck. "We have and we have always indicated high confidence in their management," he said.
BankAtlantic would receive the bulk of the proceeds from the stock sale. Mr. Levan said it would use the money it raises to invest in its banking franchise.
A spokesman for Ryan Beck, of Florham Park, N.J., declined to comment, citing SEC restrictions associated with the filing.
Barry McCarver, an analyst at Stephens Inc., the Little Rock investment banking firm, said he was pleased BankAtlantic was putting some space between itself and Ryan Beck but disappointed it would retain a significant stake.
But Mark Muth, an analyst with First Horizon National Corp.'s FTN Midwest Research Securities Corp. in Nashville, said he would have been surprised if BankAtlantic had fully divested Ryan Beck.
"Management has constantly defended the business as very strategic and core to the company," Mr. Muth said.
Theodore P. Kovaleff of Sky Capital LLC in New York said the move "appears to be good and the market appears to agree with me."
Indeed, BankAtlantic's rose 5.06% Monday in heavy trading, closing at $15.56.
The extra capital is crucial now that Commerce Bancorp Inc. of Cherry Hill, N.J., is in the market, Mr. Kovaleff said. Commerce entered South Florida in December when it bought Palm Beach County Bank and has said it wants to add branches there.
BankAtlantic, which like Commerce stresses convenience and offers such services as seven-day-a-week banking, has spent heavily on marketing to attract retail customers. Last week BankAtlantic announced it had opened 77,000 low-cost deposits in the first quarter alone, a 37% increase from a year earlier.
Mr. McCarver also said that the stock sale could divert BankAtlantic from its core banking business at a time when competition in South Florida has become even more cutthroat.
Mr. Muth disagreed. "Most of the heavy lifting is done by lawyers and investment bankers and Ryan Beck's management team," he said.
