SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
(Amendment No. 2)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report
March 22, 2002
BankAtlantic Bancorp, Inc.
Florida | 34-027228 | 65-0507804 | ||
(State of other jurisdiction or incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) | ||
1750 East Sunrise Blvd. Ft. Lauderdale, Florida | 33304 | |||
(Address of principal executive offices) | (Zip Code) |
(954) 760-5000
Not Applicable
Item 2. Acquisition or Disposition of Assets
On March 22, 2002, BankAtlantic, a wholly-owned subsidiary of BankAtlantic Bancorp, Inc., acquired Community Savings Bankshares Inc. (“CSB”), the parent company of Community Savings, F.A. (“Community”), for approximately $170.3 million in cash and immediately merged CSB into BankAtlantic. At the acquisition date, BankAtlantic Bancorp made a $78.5 million capital contribution to BankAtlantic. BankAtlantic funded the acquisition of CSB using funds from this capital contribution and funds obtained from the liquidation of investments and short term borrowings. Community was a federally chartered savings and loan association founded in 1955 and headquartered in North Palm Beach, Florida. Community had 21 branches, with 13 located in Palm Beach County, 4 located in Martin County, 3 located in St. Lucie County and 1 located in Indian River County.
Item 7. Financial Statements and Exhibits
(a) | Financial Statements of Business Acquired |
Community Savings Bankshares, Inc.’s statements of financial condition as of December 31, 2001 and 2000, and the related consolidated statements of income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2001 are contained herein.
(b) | Pro Forma Financial Information |
This pro forma financial information was derived by combining our reported historical financial information with CSB’s historical financial information and making adjustments to the combined information to reflect events that occurred subsequent to December 31, 2001 and events that we assume would have occurred because of the acquisition. The pro forma information should be read along with our historical financial statements and CSB’s historical financial statements. CSB was a public company and filed annual, quarterly, proxy statements and other information with the SEC. In addition, CSB’s financial statements as of and for the year ended December 31, 2001 are included with this Form 8-K and filed as an exhibit hereto. CSB’s common stock was listed on the Nasdaq National Market under the trading symbol “CMSV.” This pro forma combined financial data is furnished for illustrative purposes only, and this information is not necessarily indicative of the results of operations or financial position which actually would have been obtained if the merger had been effected at the beginning of the periods or as of the date indicated or of the financial position or results of operations which we might obtain in the future.
Our historical financial information has been adjusted to reflect the completion, during the first quarter of 2002, of an underwritten public offering of our 8.50% Trust Preferred Securities. The pro forma information is based upon the purchase method of accounting. Under this method of accounting, assets and liabilities of CSB are recorded at their estimated fair value, and the amount of purchase price in excess of the fair value of tangible and identifiable intangible net assets acquired is recorded as cost over fair value of net assets acquired.
The pro forma combined statement of operations does not include $1.1 million (pre-tax) of BankAtlantic’s non-recurring merger related costs and restructuring charges. In addition, the pro forma does not assume or include any possible cost savings or revenue opportunities that may be realized as a result of the acquisition.
The pro forma combined statement of financial position and statement of operations also does not include our investment in Bluegreen Corporation (“Bluegreen”), which included the borrowing of $29.9 million under BankAtlantic Bancorp’s existing line of credit. In April 2002, BankAtlantic Bancorp and its wholly owned subsidiary, Levitt Companies, announced the acquisition of a 40% interest in Bluegreen, a New York Stock Exchange listed company, for an aggregate purchase price of approximately $56 million. The acquisition of Bluegreen will be accounted for based on the equity method of accounting. Under the equity method of accounting the investment in Bluegreen was recorded at cost and the carrying amount of the investment will be adjusted to recognize our 40% interest in the earnings or loss of Bluegreen after the acquisition date. The funds for the investment in Bluegreen were obtained from $29.9 million of borrowings from BankAtlantic Bancorp’s existing bank line of credit, the trust preferred offering described above, the sale of equity securities from BankAtlantic Bancorp’s portfolio and Levitt Companies’ working capital. Our investment in Bluegreen did not meet the requirements for pro forma disclosure under the applicable accounting rules.
2
The pro forma combined statement of financial position and statement of operations also does not include the April 26, 2002 acquisition of certain assets and the assumption of certain liabilities from Gruntal & Co., LLC (“Gruntal”) by Ryan, Beck & Co. LLC, BankAtlantic Bancorp’s wholly owned subsidiary.
The pro forma combined statement of financial position assumes the acquisition occurred on December 31, 2001. The pro forma combined statement of operations assumes the acquisition occurred on January 1, 2001.
BankAtlantic Bancorp Inc.
Unaudited Pro Forma Combined Statement of Financial Position
December 31, 2001
BankAtlantic | (A) | (B) | ||||||||||||||||||||||||
Bancorp | Trust | Adjusted | Community | Acquisition | Pro Forma | |||||||||||||||||||||
December 31, | Preferred | BankAtlantic | December 31, | Pro Forma | December 31, | |||||||||||||||||||||
(In Thousands) | 2001 | Offering | Bancorp | 2001 | Adjustments | 2001 | ||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Loans receivable, net | $ | 2,774,238 | $ | — | $ | 2,774,238 | $ | 663,419 | $ | (4,884 | ) | $ | 3,432,773 | |||||||||||||
Securities and short term investments | 1,397,465 | — | 1,397,465 | 211,429 | (137,775 | ) | 1,471,119 | |||||||||||||||||||
Cost over fair value of net assets acquired | 39,859 | — | 39,859 | — | 62,019 | 101,878 | ||||||||||||||||||||
Real estate held for development and sale | 178,273 | — | 178,273 | 20,607 | (7,000 | ) | 191,880 | |||||||||||||||||||
Core deposit intangible assets | — | — | — | — | 15,117 | 15,117 | ||||||||||||||||||||
Other Assets | 264,651 | 55,375 | 320,026 | 60,072 | 2,559 | 382,657 | ||||||||||||||||||||
Total assets | $ | 4,654,486 | $ | 55,375 | $ | 4,709,861 | $ | 955,527 | $ | (69,964 | ) | $ | 5,595,424 | |||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||||||||
Deposits | $ | 2,276,567 | $ | — | $ | 2,276,567 | $ | 686,278 | $ | 1,729 | $ | 2,964,574 | ||||||||||||||
Advances from FHLB | 1,106,030 | — | 1,106,030 | 134,143 | 4,838 | 1,245,011 | ||||||||||||||||||||
Short-term borrowings | 467,070 | — | 467,070 | — | 31,466 | 498,536 | ||||||||||||||||||||
Other borrowings | 206,178 | 55,375 | 261,553 | 12,645 | 1,881 | 276,079 | ||||||||||||||||||||
Other liabilities | 162,968 | — | 162,968 | 7,376 | 5,207 | 175,551 | ||||||||||||||||||||
Total liabilities | 4,218,813 | 55,375 | 4,274,188 | 840,442 | 45,121 | 5,159,751 | ||||||||||||||||||||
Total stockholders’ equity | 435,673 | — | 435,673 | 115,085 | (115,085 | ) | 435,673 | |||||||||||||||||||
Total liabilities and stockholders’ equity | $ | 4,654,486 | $ | 55,375 | $ | 4,709,861 | $ | 955,527 | $ | (69,964 | ) | $ | 5,595,424 | |||||||||||||
PRO FORMA COMBINED STATEMENT OF FINANCIAL CONDITION FOOTNOTES
A. Trust preferred offering
In March 2002, we received net proceeds of $53.5 million (net of $1.8 million of offering costs) through an underwritten public offering of $55.4 million of 8.50% Trust Preferred Securities. We used the proceeds from the Trust Preferred Securities offering to partially fund the CSB acquisition in the above pro forma. The Trust Preferred Securities were included in the above pro forma information as if the transaction occurred at December 31, 2001.
3
B. Acquisition pro forma adjustments
Included in the table below is the estimated fair value of assets acquired and liabilities assumed in connection with the acquisition of CSB, assuming the acquisition was consummated at December 31, 2001 (in thousands).
Historical | ||||||||||||
CSB | Acquisition | Estimated | ||||||||||
Dec. 31, | Pro Forma | Fair | ||||||||||
2001 | Adjustments | Value | ||||||||||
Loans receivable, net | $ | 663,419 | $ | (4,884 | )A | $ | 658,535 | |||||
Securities and short term investments | 211,429 | 1,058 | A | 212,487 | ||||||||
Real estate held for development and sale and joint ventures | 20,607 | (7,000 | )B | 13,607 | ||||||||
Other Assets | 60,072 | 2,559 | C | 62,631 | ||||||||
Deposits | (686,278 | ) | (1,729 | )A | (688,007 | ) | ||||||
Advances from FHLB | (134,143 | ) | (4,838 | )A | (138,981 | ) | ||||||
Other borrowings | (12,645 | ) | (1,881 | )A | (14,526 | ) | ||||||
Other liabilities | $ | (7,376 | ) | $ | (5,207 | )D | (12,583 | ) | ||||
Estimated fair value of net tangible assets acquired | 93,163 | |||||||||||
Cost over fair value of net assets acquired | 62,019 | |||||||||||
Core deposit intangible assets | 15,117 | |||||||||||
Total acquisition cost | $ | 170,299 | ||||||||||
The total acquisition cost represents $165.3 million in cash paid to CSB shareholders, $4.5 million of change in control payments and $500,000 of acquisition costs. The acquisition pro forma adjustments assume that the CSB acquisition was funded by the trust preferred securities offering, the December 2001 equity offering, short term borrowings and the liquidation of securities available for sale and short term investments.
A. | The acquisition pro forma adjustments represent the fair value of the above financial assets and liabilities based on market interest rates at the acquisition date. | ||
B. | Real estate held for development and sale and joint venture acquisition pro forma adjustment was based on an estimated fair value of our investment using discounted cash flow methodology. | ||
C. | Other assets acquisition pro forma adjustments consisted of a $6.5 million increase in deferred tax assets and $4.9 million of mortgage servicing rights, partially offset by a $8.8 million decrease associated with office properties and equipment. The adjustment to Community’s office properties and equipment were primarily reductions in the carrying amounts of branch and back office facilities. The increase in deferred tax assets resulted from book versus tax temporary differences associated with purchase accounting entries. Residential mortgage servicing rights were valued at the acquisition date in anticipation of a subsequent sale of the mortgage servicing rights | ||
D. | Other liabilities acquisition pro forma entries consisted of accrued liabilities for employee related benefits and investment banking and professional fees. |
4
BANKATLANTIC BANCORP, INC.
UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
BankAtlantic | ||||||||||||||||||||||||
Bancorp | Community | Pro Forma | ||||||||||||||||||||||
for the | for the | for the | ||||||||||||||||||||||
Year | Trust | Adjusted | Year | Acquisition | Year | |||||||||||||||||||
Ended Dec. 31, | Preferred | BankAtlantic | Ended Dec. 31, | Pro Forma | Ended Dec. 31, | |||||||||||||||||||
(In Thousands Except Per Share Data) | 2001 | Offering | Bancorp | 2001 | Adjustments | 2001 | ||||||||||||||||||
Interest and fees on loans and leases | $ | 237,064 | $ | — | $ | 237,064 | $ | 53,154 | $ | (611 | ) | $ | 289,607 | |||||||||||
Interest and dividends on investments | 88,554 | — | 88,554 | 11,758 | (6,474 | ) | 93,838 | |||||||||||||||||
Total interest income | 325,618 | — | 325,618 | 64,912 | (7,085 | ) | 383,445 | |||||||||||||||||
Interest on deposits | 85,668 | — | 85,668 | 27,764 | (865 | ) | 112,567 | |||||||||||||||||
Interest on short term borrowings | 24,270 | — | 24,270 | — | 1,281 | 25,551 | ||||||||||||||||||
Interest on other borrowings | 77,661 | 4,767 | 82,428 | 9,128 | (1,366 | ) | 90,190 | |||||||||||||||||
Total interest expense | 187,599 | 4,767 | 192,366 | 36,892 | (950 | ) | 228,308 | |||||||||||||||||
Net interest income | 138,019 | (4,767 | ) | 133,252 | 28,020 | (6,135 | ) | 155,137 | ||||||||||||||||
Provision for loan losses | 16,905 | — | 16,905 | 5,138 | — | 22,043 | ||||||||||||||||||
Net interest income after provision for loan losses | 121,114 | (4,767 | ) | 116,347 | 22,882 | (6,135 | ) | 133,094 | ||||||||||||||||
Investment banking income | 43,436 | — | 43,436 | — | — | 43,436 | ||||||||||||||||||
Service charges on deposits | 16,372 | — | 16,372 | 3,928 | — | 20,300 | ||||||||||||||||||
Other service charges and fees | 14,731 | — | 14,731 | 224 | — | 14,955 | ||||||||||||||||||
Gains on sales of securities, net | 3,597 | — | 3,597 | — | — | 3,597 | ||||||||||||||||||
Gains on sales of real estate and joint venture activities | 36,583 | — | 36,583 | 438 | — | 37,021 | ||||||||||||||||||
Other | 8,554 | — | 8,554 | 415 | — | 8,969 | ||||||||||||||||||
Total non-interest income | 123,273 | — | 123,273 | 5,005 | — | 128,278 | ||||||||||||||||||
Employee compensation and benefits | 95,098 | — | 95,098 | 13,548 | — | 108,646 | ||||||||||||||||||
Occupancy and equipment | 28,491 | — | 28,491 | 5,885 | (295 | ) | 34,081 | |||||||||||||||||
Advertising and promotion | 7,897 | — | 7,897 | 635 | — | 8,532 | ||||||||||||||||||
Intangible asset impairment and amortization | 10,697 | — | 10,697 | — | 1,512 | 12,209 | ||||||||||||||||||
Other | 48,193 | — | 48,193 | 5,094 | — | 53,287 | ||||||||||||||||||
Total non-interest expense | 190,376 | — | 190,376 | 25,162 | 1,217 | 216,755 | ||||||||||||||||||
Income before income taxes, extraordinary item and cumulative effect of a change in accounting principles | 54,011 | (4,767 | ) | 49,244 | 2,725 | (7,352 | ) | 44,618 | ||||||||||||||||
Provision for income taxes | 22,736 | (1,716 | ) | 21,020 | 564 | (2,647 | ) | 18,937 | ||||||||||||||||
Income before extraordinary item and cumulative effect of a change in accounting principles | $ | 31,275 | $ | (3,051 | ) | $ | 28,224 | $ | 2,161 | $ | (4,705 | ) | $ | 25,680 | ||||||||||
Basic earnings per share before extraordinary item and cumulative effect of a change in accounting principles | $ | 0.74 | $ | 0.61 | ||||||||||||||||||||
Diluted earnings per share before extraordinary item and cumulative effect of a change in accounting principles | $ | 0.63 | $ | 0.54 | ||||||||||||||||||||
Basic weighted average number of common and common equivalent shares outstanding | 42,091,961 | 42,091,961 | ||||||||||||||||||||||
Diluted weighted average number of common and common equivalent shares outstanding | 54,313,104 | 54,313,104 | ||||||||||||||||||||||
5
PRO FORMA COMBINED STATEMENT OF OPERATIONS FOOTNOTES
A. Trust Preferred Offering
Interest on other borrowings adjustment consisted of additional interest expense associated with the issuance of the 8.50% Trust Preferred Securities.
B. Acquisition Pro Forma Adjustments
The interest income adjustment primarily consisted of (i) the projected amortization of loan fair value adjustments over a projected eight year life, (ii) the amortization of fair value adjustments associated with investment securities over a projected five year life and (iii) the reduction in investment interest income associated with the liquidation of securities available for sale and short term investments which were used to fund a portion of the acquisition purchase price. The assumed average interest rate on the investment securities were 3.72% for the year ended December 31, 2001.
The interest expense adjustment primarily consisted of: (i) a decrease in interest expense associated with the projected amortization of fair value adjustments on certificate accounts over a two year projected average maturity, (ii) an increase in interest expense associated with the projected amortization of fair value adjustments on mortgage bonds over a twelve year average life, (iii) the decrease in interest expense associated with the projected amortization of fair value adjustments on advances from the FHLB over a five year average life and (iv) an increase in short term borrowings in order to fund the acquisition. The assumed short term borrowings average interest rate was 4.07% for the year ended December 31, 2001.
The adjustment to non-interest expense represents the straight-line amortization of the core deposit intangible asset over ten years and the straight line amortization of the branch facilities fair value adjustment over twenty years. The amortization of the core deposit intangible asset is not deductible for income tax purposes.
Cost over fair value of net assets acquired associated with the acquisition is not amortized in the above pro forma due to Financial Accounting Standards Board Statement Number 142 and is subject to impairment testing on an annual basis. The cost over fair value of net assets acquired associated with the acquisition is not deductible for income tax purposes.
BankAtlantic’s merger related non-recurring expenses, estimated to be approximately $1.1 million, were not included in the above pro forma. These expenses consisted of impairment charges associated with closed BankAtlantic branches, data conversion costs relating to transferring customers to BankAtlantic’s systems and professional fees.
The assumed effective income tax rate was 36%.
(c) | Exhibits |
Exhibit 23.1 - | Consent of Crowe Chizek and Company, LLP | |
Exhibit 99.1 - | Consolidated Financial Statements of Community Savings Bankshares, Inc. as of and for the year ended December 31, 2001. |
6
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BANKATLANTIC BANCORP, INC. | ||
By: /s/ James A. White | ||
James A. White Chief Financial Officer |
7