BankAtlantic Bancorp (NYSE: BBX) has finally broken the loss-making spell, returning to profitability after 15 straight quarters of net losses. This was largely due to the sale of its 19 Tampa branches to PNC (NYSE: PNC). But does that mean that the Fort Lauderdale-based bank is back on track? Before answering this question, let’s take a look at its performance during the quarter.

The quarter in detail
The regional bank’s net income rose to $23.4 million in the quarter from a net loss of $22.9 million in the prior quarter and $51.3 million in the second quarter of 2010. The Tampa branch sale boosted its earnings by $38.7 million. The bank strengthened its capital position by achieving a Tier 1 Capital ratio of 8.24, and also witnessed some significant improvements in credit trends.

On a year-over-year basis, BankAtlantic’s provision for loan losses declined to $10.2 million from $43.6 million. Net charge-offs and delinquencies fell considerably. Rivals such as BancorpSouth (NYSE: BXS) and Synovus Financial (NYSE: SNV) have also reported better results on the back of shrinking loan-loss provisions and improved credit quality.

The bank’s net interest income declined to $33 million from $37 million a year ago, primarily due to the decrease in yield on earning assets and increase in cash and lower-yielding investments. A decline in service charges also resulted in non-interest income dropping to $21.4 million from $26.3 million.

The Foolish bottom line
As I see it, the turnaround in BankAtlantic’s earnings wasn’t due to many noticeable improvements in its core operations, but instead to the gains from the sale of its branches. The dip in both interest and non-interest income has continued.

The divestment looks like a smart move that will allow it to focus on core earnings from its branches in Southeast Florida. But at the moment, BankAtlantic still doesn’t look like a very attractive investment to me.