BB&T Acquisition Target Posts Lower Loss In 1Q

May 02–BankAtlantic, an acquisition target of BB&T Corp., on Tuesday reported a lower loss for the first quarter.

BankAtlantic's parent company, BankAtlantic Bancorp Inc., reported a loss of $14.2 million, compared with a loss of $17.5 million for the fourth quarter and a loss of $23.1 million in the first quarter of 2011.

The bank had an earnings loss of 91 cents compared with an earnings loss of $1.85 a share a year ago.

Analysts said the lower loss for BankAtlantic could increase the comfort level of BB&T shareholders about buying the struggling Fort Lauderdale, Fla., bank.

BB&T decided March 10 that gaining the No. 6 market share in the Miami market was worth taking on more calculated risk. It agreed to modify its deal by assuming responsibility for $285 million of BankAtlantic's outstanding trust-preferred securities.

BB&T would pay $301 million to gain $3.3 billion in deposits and $2.1 billion in loans from BankAtlantic, as well as 78 branches in the Miami and Fort Lauderdale markets.

Bank Atlantic's provision for loan losses was $8.5 million in the first quarter, compared with $14.6 million in the fourth quarter and $27.8 million a year ago.

Net charge-offs were at $81.7 million compared with $34.9 million a year ago. The bank said the increase reflects a requirement to begin using Office of the Comptroller of the Currency reporting guidelines.

Nonperforming assets were at $344.1 million on March 31 compared with $432.3 million on March 31, 2011. The reduction reflects the bank's decision to slow down the process of moving new loans to nonperforming status, and the sale of nonperforming assets in the past year.

Revenue from loans was $17.2 million in the first quarter, compared with $6.9 million a year ago. Revenue from loans was $17.9 million, compared with $22.9 million a year ago.

BB&T's purchase of BankAtlantic is expected to close in the second quarter. Either bank could cancel the deal if it is not closed by July 31.

At BB&T's shareholders meeting on April 24, King expressed confidence that BB&T will close the deal despite the fact BankAtlantic is facing another lawsuit trying to block it. The lawsuit says the transaction undervalues BankAtlantic Bancorp shares while BankAtlantic executives receive lucrative severance and noncompete packages.

The deal has received approval from the U.S. Office of the Comptroller of the Currency and N.C. Office of the Commissioner of Banks. BB&T is awaiting approval from the Federal Reserve and Federal Deposit Insurance Corp.

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