BankAtlantic Bancorp's (NYSE: BBX) second-quarter profit seems to be just a one-time blip, as the Fort Lauderdale, Fla.-based bank has returned to reporting losses in its third quarter. In the last 17 quarters, BankAtlantic's shareholders have seen the company report 16 quarterly losses. The thing to note here is that the bank's credit quality has deteriorated despite the company's losses lessening from a year ago. Let's dig in.

A familiar story
Low interest rates continue to curb banks' ability to show any substantial revenue growth. BankAtlantic's net interest income fell 26%. However, the 22% rise in noninterest income somewhat cushioned the fall, resulting in a 7% decline in total revenue.

Credit quality improved from a year ago, but sequentially, it fell. Loan-loss provisions went down 27% compared with the same period last year, but sequentially allowance for loan losses rose 67% because of a 19% hike in the number of bad loans. BankAtlantic also met with a $7.5 million net charge-off on a joint venture that fell through.

The company did manage to trim its losses by more than half to $11.5 million as compared to a loss of $25.4 million last year. Last quarter, BankAtlantic managed to record a profit of $23.1 million, of course, helped by a $38.7 million gain from the sale of 19 of its Tampa branches and their corresponding deposits to PNC Financial Services (NYSE: PNC). But to put things into perspective, without the sale, the bank would have reported another loss of around $15.3 million.

BB&T to the rescue
 The company recently signed a definitive agreement to sell BankAtlantic, its wholly owned subsidiary, to BB&T (NYSE: BBT). BankAtlantic will receive $301 million from the sale, which is a 9% premium on the deposits.

The takeaway
 Economic conditions still remain the biggest challenge for BankAtlantic at present, though CEO Alan Levan sounded a cheery note that he believes an economic rebound is imminent. The major worry for BankAtlantic is the fall in its credit quality, but the good thing is that it has been able to offload its troubles onto BB&T. Levan believes the worst of the loan losses is behind them and that the "signs of an economic rebound" help their cause. Do you as well? Leave your thoughts below and also stay up to date on all the top news and analysis on BankAtlantic -- click here to add the stock to your own personalized watchlist.