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  • z99oo z99oo Nov 1, 2011 9:30 AM Flag

    BBT buying BankAtlantic branches and assets

    Morningstar-

    Loan losses will consume BankAtlantic's thin capital base, forcing the bank to raise more dilutive equity.


    With the majority of its loan portfolio in Florida real estate, BankAtlantic faces severe loan losses that will heavily dent returns for shareholders.

    BankAtlantic's ownership structure makes it very difficult for outside shareholders to really have a voice in shaping the company's future.

    Loan losses will consume BankAtlantic's thin capital base, forcing the bank to raise more dilutive equity.
    With the majority of its loan portfolio in Florida real estate, BankAtlantic faces severe loan losses that will heavily dent returns for shareholders.
    BankAtlantic's ownership structure makes it very difficult for outside shareholders to really have a voice in shaping the company's future.
    We consider an investment in BankAtlantic highly risky, given the wide variety of possible outcomes, including outright failure. An alternative could be that another bank buys BankAtlantic. However, BankAtlantic's high nonperforming asset ratio could deter potential buyers, since these would have to pitch in more money to keep BankAtlantic afloat in the future. Alternatively, buyers could wait until the FDIC takes over the subsidiary bank and then purchase only the deposits and cherry-pick the assets that are worth keeping.
    Does this mean that the FDIC took over the Subsidiary bank, or, am I missing something?

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