Opinion ID: 2301005
Heading Depth: 2
Heading Rank: 2

Heading: Bancorp's Dependence On BankAtlantic

Text: In 2002 and 2003, when the bulk of the TruPS were issued, Bancorp described itself in its annual reports on Form 10-K as a diversified financial services holding company. JX 2 at 2; JX 17 at 2. At the time, in addition to BankAtlantic, Bancorp owned Levitt Corporation, a real estate company, and Ryan Beck & Co., Inc., an investment bank with approximately forty offices nationwide. Through these subsidiaries, Bancorp provide[d] a full line of products and services encompassing consumer and commercial banking, real estate development, and brokerage and investment banking. JX 17 at 2. Bancorp spun off Levitt Corporation in 2003 and sold Ryan Beck & Co., Inc. to Stifel Financial Corporation in 2007. Even when it held other businesses, Bancorp's financial health depended on BankAtlantic, its principal asset. In 2002, Bancorp disclosed that about 69% of its consolidated revenues came from BankAtlantic, which provided Bancorp's principal source of liquidity. JX 17 at 57; JX 1 at S-4. Bancorp further explained that its ability to repay approximately $246.2 million in debt, the bulk comprising subordinated notes underlying the TruPS, was largely dependent on BankAtlantic's ability to pay dividends to Bancorp. JX 17 at 14. From 2002 to 2007, Bancorp's corporate strategy revolved around growing BankAtlantic. In 2002, Bancorp sought to increase BankAtlantic's core deposits (generally demand deposit accounts, negotiable order of withdrawal (NOW) checking accounts, and savings accounts) by marketing BankAtlantic as Florida's Most Convenient Bank. Bancorp spent upwards of $100 million on the campaign and created a highly valuable brand. BankAtlantic's core deposits increased from approximately $600 million at the end of 2001 to $2.8 billion at the end of 2010. Since 2007, Bancorp has described itself in its public filings as a unitary savings bank holding company whose principal asset is its investment in BankAtlantic. JX 154 at 8. Bancorp currently has few assets and no meaningful operations other than BankAtlantic. Bancorp's only other business is a workout subsidiary formed in 2008 to move non-performing loans off BankAtlantic's balance sheet. As of December 31, 2010, BankAtlantic had 1,202 full-time employees; Bancorp employed eight. During the first nine months of 2011, BankAtlantic generated $110 million in interest income; Bancorp generated $196,000.