Ryan Beck & Co., Inc. Business Information, Profile, and History

Company Perspectives:

Our focus is clear--whether we create strategic alliances, build proprietary products or commit to new technology, our goal is to provide our clients with outstanding opportunities. Helping our clients invest for their long-term goals is the premise upon which Ryan Beck & Co. was founded, and this premise will continue to be our inspiration. We look forward to continued expansion and profitability in the coming years. We could not have achieved our past goals--nor our vision for the future--without our dedicated employees and clients. We truly appreciate the opportunity to continue to provide you with innovative solutions to your financial needs.

History of Ryan Beck & Co., Inc.

Ryan Beck & Co., Inc. is an investment banking and brokerage firm. Ryan Beck offers services to individuals, institutions, and corporate clients, operating 36 offices in 13 states. The company provides services to individual investors, offering its clients advice on investments and retirement plans. For institutional clients, Ryan Beck underwrites municipal bonds. The company provides consulting and merger and acquisition advisory services to corporate clients. Ryan Beck operated primarily in New Jersey and New York until its 2002 acquisition of Gruntal & Co. increased its physical and geographic presence considerably, turning a nine-branch, five-state operation into a firm with more than 30 offices in 13 states. The company is owned by BankAtlantic Bancorp., Inc., a bank holding company based in Florida.

Origins

Ryan Beck's founder, John J. Ryan, launched his entrepreneurial enterprise shortly after the end of World War II. During the war years, Ryan was employed by Lehman Brothers, where he worked as a bond buyer. In 1946, he started his own investment banking firm. During its formative years, the company was devoted to underwriting and distributing tax-exempt municipal bonds, bidding on city, county, and state bonds that were used to finance public projects in New Jersey. The company earned distinction as an underwriter of municipal bonds but recognition came later for John J. Ryan & Co., as the company recorded only modest growth during its first years in business. By the time the company celebrated its fifth anniversary, it employed only a half-dozen people, holding slightly more than $40,000 in capital. The company's anniversary year marked the arrival of Roy G. Beck, who, while working as a bond salesman, met Ryan in 1951. Ryan and Beck were both bidding on a bond issue for a project in Monmouth County, New Jersey. Both failed to enter winning the bids, but their introduction led Ryan to offer the younger Beck a job at his small firm. Beck accepted the offer, becoming John J. Ryan & Co.'s lead bond salesman.

John J. Ryan's company did not begin to distinguish itself until the 1960s, when it diversified into the areas that later defined its expertise. The majority of the company's customers were New Jersey-based banks, which naturally led it into covering bank stocks. In 1963, a dozen years after joining the firm, Beck formed a bank-stock trading and research subsidiary, an action that the company's historians later hailed as one of the most important events in Ryan Beck's development. The company's bank stock business, which represented a second source of revenue, grew during the decade, as did the company's municipal bond business. In 1966, John J. Ryan & Co. was named co-manager of the $179-million bond issue for the New Jersey Turnpike. Although John J. Ryan & Co. had been guaranteeing the issue of municipal bonds for 20 years by 1966, the scale of the New Jersey Turnpike project did much to cement the company's reputation as one of the elite underwriters in the state.

Before the end of the 1960s, Ryan Beck added a third source of revenue, rounding out its portfolio of financial services. New Jersey's banking laws were slated for significant changes at the end of the decade, changes that enabled the company to diversify into corporate finance. In 1969, the company established a department equipped to oversee mergers and acquisitions, which quickly led to its first assignment, the merger of the Bank of Sussex County into the National Community Bank. Although the company would continue to diversify into other financial services, by the end of the 1960s Ryan Beck had established its involvement in its three principal business areas. In the years ahead, the company increased its stature by underwriting municipal bonds, by facilitating mergers and acquisitions, and by providing research and analysis of stocks, primarily bank stocks.

Development into a Regional Firm Begins in the 1980s

Ryan Beck recorded steady growth during the 1970s, gradually developing into a firm that attracted national attention. Toward the end of the decade, the company promoted and oversaw the first competitive bid for the sale of a bank branch, pioneering a concept that later would become commonplace in the industry. The company performed well during the 1980s as well, prospering during turbulent market conditions. In 1982, after changing its name to Ryan, Beck & Co. the previous year, the company opened a branch office in Philadelphia. The Philadelphia office was established to assist in the company's corporate finance business, serving as a satellite operation in support of the company's corporate finance efforts at its headquarters in West Orange, New Jersey. The mid-1980s were years of diversification, growth, and change. In 1984, Ryan Beck converted its first savings bank, Central Jersey Savings and Loan. In 1985, the company was selected as co-manager of a $2 billion New Jersey Turnpike issue, the largest public issue in the history of municipal financing. The following year, the company's 40th anniversary was celebrated with its conversion to public ownership after two million shares were sold in an initial public offering of stock.

The 1990s brought significant change to Ryan Beck, as the company completed its first half-century of business. The company opened a branch office in West Palm Beach in 1995, the same year Ryan, Beck Planning & Insurance Agency was formed, which served as the company's entry into business related to insurance, estate planning, and annuities. In 1997, when the company moved its headquarters from West Orange to Livingston, Ben A. Plotkin was appointed president and chief executive officer. Plotkin had joined Ryan Beck ten years earlier as an investment banker at the company's branch in Philadelphia. Eventually, he was promoted to steward the company's entire investment banking department, recording sufficient success to warrant his appointment as Ryan Beck's principal strategist.

Not long after Plotkin's tenure began, Ryan Beck embarked on a new era. In February 1998, the company acquired Cumberland Advisors, Inc., a leading fixed income money management firm, but the most significant event of the year occurred several months later. In June, Ryan Beck was acquired by BankAtlantic Bancorp, Inc., the largest bank based in Florida. BankAtlantic, whose primary subsidiary was a savings bank with 68 branches, acquired Ryan Beck for $39.4 million in stock, marking only the third time a thrift and securities firm had merged during the previous ten years. For Plotkin and his executive team, the affiliation with BankAtlantic gave them the chance to focus on larger deals. At the time the merger was announced, Ryan Beck held $56.5 million in assets, produced $35 million in annual revenues, and operated five branch offices. Historically, the company had limited itself to smaller bank deals because of its size, but with the access to capital provided by BankAtlantic, Ryan Beck could begin to focus on larger deals. The merger also allowed the company to keep its own identity, positioning Ryan Beck as an autonomous subsidiary of BankAtlantic: No offices were slated for closure, no employees were to be laid off, and the company was allowed to remain in Livingston with its existing management team.

Ryan Beck exited the 1990s buoyed by the financial resources of its new parent company. BankAtlantic, for its part, entered the lucrative business of underwriting, market making, and merger advisory work. The years immediately following the merger proved to be positive for Ryan Beck, as the company expanded, most notably through acquisitions. For much of its history, Ryan Beck had confined its activities to New Jersey, gradually building its reputation over the course of decades. Expansion outside New Jersey, begun in 1982 with the opening of the branch office in Philadelphia, started the firm down the road to becoming a regional concern. After opening branches in Chicago and Florida, the company began to broaden its geographic scope beyond that of a regional enterprise. In the wake of the merger with BankAtlantic, the company strengthened its position as an eastern U.S. financial services firm. In 1999, Ryan Beck acquired a Boca Raton, Florida-based company named Southeast Research Partners, paying $1.9 million in cash and stock for the firm. Founded in 1990, Southeast Research comprised a dozen stock analysts who covered industries such as energy, homebuilding, and health care, as well as a team of brokers who sold stocks and other investments to institutional clients.

Acquisition of Gruntal in 2002

Ryan Beck embarked a new era in the 21st century, concluding a deal that exponentially increased the company's stature. In the spring of 2002, the company announced it was acquiring the retail brokerage operations of one of the oldest investment firms in the country, New York-based Gruntal & Co. The transaction was by far the largest deal Ryan Beck had been involved in, adding 34 offices in 13 states and more than 600 account executives to its fold. The acquisition, completed in June 2002, quadrupled the size of Ryan Beck's brokerage business, giving the company nearly $19 billion in assets.

In the wake of the Gruntal acquisition, Ryan Beck emerged as a far more comprehensive investment bank. The company's focus on investment banking for regional commercial banks and thrifts and underwriting tax-free municipal issues remained, but the addition of Gruntal enabled Ryan Beck to offer a number of new services to its clients. The company added trust services, residential mortgages, mutual fund programs, and several other products as it "morphed into a full service retail firm," according to Ryan Beck's head of marketing in the July 1, 2003 issue of On Wall Street. As the company prepared for the future, the integration of Gruntal continued, as did Ryan Beck's efforts to expand its product offerings.

Ryan Beck's achievements in 2004 promised to put its greater geographical and operational scope to the company's advantage. During the spring of that year, the company expanded its stock coverage to include the business and consumer services sectors, hoping to distinguish itself from other brokerage firms. "There aren't many middle market firms that have a focus on the consumer and finance sectors," the company's director of research explained in a May 31, 2004 interview with Wall Street Letter. "If you look down the road, we're going to be one of the very few or maybe the only one that has a focus on the services economy versus the manufacturing economy," he added. In the summer of 2004, Ryan Beck launched a new advertising campaign designed around the slogan "Let's Get Down to Work." The campaign focused on the company's direct, no-nonsense approach to investing, a message--after the acquisition of Gruntal--that was delivered to many more markets than previous marketing programs had addressed. Ryan Beck's senior vice-president, Eric Siber, explained the thinking behind the advertising campaign in a July 6, 2004 interview with PR Newswire. "With nearly 500 financial consultants operating out of 36 offices in 13 states," he stated, "we needed to move away from our market positioning as one of the best-kept secrets in financial services." Siber continued, hinting at a more aggressive Ryan Beck in the future: "In the past, we've relied solely on clients to spread the word about Ryan Beck. Now it's time to blow our own horn."

Principal Subsidiaries: Ryan Beck Financial Corporation.

Principal Competitors: Banc of America Securities LLC; Friedman, Billings, Ramsey Group, Inc.; Morgan Stanley.

Chronology

• Key Dates:
• 1946: John J. Ryan founds an investment banking firm.
• 1951: Roy G. Beck joins the company.
• 1963: The company begins covering bank stocks.
• 1969: Ryan Beck establishes its corporate finance department.
• 1982: A branch office in Philadelphia is opened.
• 1986: Ryan Beck completes its initial public offering of stock.
• 1997: Ben A. Plotkin is named president and chief executive officer.
• 1998: Ryan Beck is acquired by BankAtlantic Bancorp.
• 2002: Ryan Beck acquires the retail brokerage operations of Gruntal & Co., quadrupling its size.