Stormy Seas for BankAtlantic

BankAtlantic also has significant mortgage exposure, with $2.3 billion in residential loans. While detailed numbers will not be available until the company files its third-quarter 10-Q report, this portfolio has held up so far. But with "For Sale" signs on almost every block in many towns in BankAtlantic's market area, the mortgage portfolio will likely suffer in the coming quarters.

The past two days' selling puts BankAtlantic's price-to-book ratio at just 0.48. Value investors tend to take a close look at any financial firm whose stock trades at parity with book value or less.

Moreover, BankAtlantic holds a 16% stake in Stifel Financial (SF) as a result of February's sale of Ryan Beck to Stifel. That stake was worth $137 million at Friday's prices -- meaning Wall Street is currently valuing BankAtlantic's core banking business, with more than 100 branches and a dedication to customer service along the lines of Commerce (CBH), at less than $2 a share.

So is BankAtlantic a buy?

It's hard to say, in part because of the company's complex structure. Levan and BankAtlantic's Vice Chairman, John E. Abdo, control another holding company, the thinly traded BFC Financial (BFF), which holds 16.5% of BankAtlantic's stock and a controlling stake of the bank's voting shares. BFC Financial also holds a controlling stake in troubled builder Levitt (LEV), and a stake in Japanese steakhouse chain Benihana (BNHN). BFC Financial's stock has been hit just about as hard as BankAtlantic's this year, falling more than 65%.

And while BankAtlantic is still well capitalized, further asset quality weakness, loan charge-offs and net losses could erode its capital position over the next few quarters. At this point, 12% of its $1.3 billion commercial real estate portfolio is categorized as nonaccrual. In addition to the commercial real estate exposure, the bank's large residential mortgage portfolio is at risk if it follows the Florida trend.

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