“This is a tough banking environment,” says BankAtlantic CEO Jarett Levan. BankAtlantic, like Commerce Bank, is open seven days a week, has coin-counting machines and a red mascot.

On April Fool’s Day 2002, Fort Lauderdale-based BankAtlantic rebranded itself “Florida’s Most Convenient Bank” and embarked on a new strategy to boost core deposits that borrowed heavily from Commerce Bank of New Jersey, “America’s Most Convenient Bank.”

Like Commerce Bank, BankAtlantic is open seven days a week. BankAtlantic has even longer hours, until midnight at some locations. BankAtlantic also has a red mascot, coin-counting machines and a number of other motifs similar to those at Commerce. “A pale imitation,” sniffs Commerce Bank CEO Vernon Hill, whose institution is seven times larger than BankAtlantic by assets. He has joked about opening branches opposite BankAtlantic to compete against it directly.

Like Commerce, BankAtlantic, Florida’s third-largest homegrown bank by deposits, also has pursued expansion. In the past five years, it has added 26 branches with 15 to 17 more expected by year-end for a total of 109. It expanded into Orlando, its first new market outside southeast Florida. The strategies are working, says CEO Jarett Levan. In 2001, the bank opened 40,000 core deposit accounts; last year it opened 270,000. But earnings are hurting. Last year’s parent company profits were the worst since a loss in 1998. In March, the bank laid off 225 employees, 9% of its workforce, to save $10 million, and it slashed marketing by $10 million to 2005 levels of $25 million.

“The business model is challenged at this point,” says analyst Keri McGreevy of Soleil Securities in New York. “The expansion strategy is really a drag on earnings.” Equally wary is analyst Robert Patten of Morgan Keegan & Co.: “I remain skeptical whether they can execute it or not. It’s very difficult to do.”

Levan, 33, son of longtime BankAtlantic Chairman and CEO Alan Levan, says, “This is a tough banking environment.” The younger Levan, a University of Miami law grad, just got the CEO title this year after starting in the mailroom before he was a teenager. “This company has a great culture, and it has great fundamentals, and we will weather through this storm and continue to grow.”