##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-K
 þ
    
    Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Year Ended December 31, 2008
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number
001-09071
 BFC Financial Corporation
  Florida
    
    59-2022148(State or other jurisdiction of
    
    (I.R.S Employer Identification No.)incorporation or organization)
 2100 West Cypress Creek RoadFort Lauderdale, Florida
    
    33309(Address of principal executive office)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
 Class A Common Stock, $.01 par Value
    
    Pink Sheet Electronic Quotation Service(Title of Class)
    
    (Name of each exchange on which registered)
 Securities registered pursuant to Section 12(g) of the Act:
 Class B Common Stock, $.01 par Value
    
    OTC BB(Title of Class)
    
    (Name of each exchange on which registered)
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company þ
 o þ
   
 Documents Incorporated by Reference




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##### 



PART IItem 1. Business
    
    
    5Item 1A. Risk Factors
    
    
    37Item 1B. Unresolved Staff Comments
    
    
    61Item 2. Properties
    
    
    62Item 3. Legal Proceedings
    
    
    63Item 4. Submission of Matters to a Vote of Security Holders
    
    
    66PART IIItem 5. Market for Registrants Common Equity , Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    67Item 6.
Selected Consolidated Financial Data
    
    
    70Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    72Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    146Item 8. Financial Statements and Supplementary Data
    
    
    150Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    248Item 9A. Controls and Procedures
    
    
    248Item 9B. Other Information
    
    
    250PART IIIItem 10. Directors, Executive Officers and Corporate GovernanceItem 11. Executive CompensationItem 12. Security Ownership of Certain Beneficial Owners and Management Related Stockholder MattersItem 13. Certain Relationships and Related Transactions, and Director IndependenceItem 14. Principal Accountant Fees and ServicesPART
IVItem 15.
Exhibits, Financial Statement Schedules
    
    
    251SIGNATURES
    
    
    253EX-12.1EX-21.1EX-23.1EX-23.2EX-31.1EX-31.2EX-31.3EX-32.1EX-32.2EX-32.3EX-99.1
  2




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##### Table of Contents



PART I
   
    
    the impact of economic, competitive and other factors affecting the Company and its
subsidiaries, and their operations, markets, products and services;
    
    adverse conditions in the stock market, the public debt market and other capital markets
and the impact of such conditions on the activities of the Company and its subsidiaries;
    
    the Companys future cash flow may be insufficient to meet its operating needs and the
Company may not have the ability to provide for its ongoing operating requirements;
    
    the performance of entities in which the Company has made investments may not be as
anticipated;
    
    BFC is dependent upon dividends from its subsidiaries to fund its operations, dividends
are not currently being paid and may not be paid in the future, and even if paid BFC has
historically experienced and may continue to experience negative cash flow; BFC may need to
issue debt or equity securities to fund its operations, and any such securities may not be
issued on favorable terms, if at all;
    
    BFC will be subject to the unique business and industry risks and characteristics of
each entity in which an investment is made; and
    
    BFC shareholders interests may be diluted if additional shares of BFC common stock are
issued.
  
    
    the impact of economic, competitive and other factors affecting BankAtlantic Bancorp and
its operations, markets, products and services, including the impact of a continued and
deepening recession on its business generally, its well capitalized regulatory capital
ratios, as well as the ability of its borrowers to meet their obligations and its customers
to maintain account balances;
    
    credit risks and loan losses, and the related sufficiency of the allowance for loan
losses, including the impact on the credit quality of BankAtlantic loans (including those
held in the asset workout subsidiary of BankAtlantic Bancorp) of a sustained downturn in
the economy and in the real estate market and other changes in the real estate markets in
BankAtlantics trade area, and where BankAtlantics collateral is located;
    
    the risks of additional charge-offs, impairments and required increases in
BankAtlantics allowance for loan losses;
    
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal
policies and laws including their impact on the BankAtlantics net interest margin;
    
    adverse conditions in the stock market, the public debt market and other financial and
credit markets and the impact of such conditions on BankAtlantic Bancorps activities,
including BankAtlantic Bancorps
 
 3




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ability to raise capital, the value of its assets and on the ability of borrowers to meet
their debt obligations and BankAtlantics seven-day banking initiatives and other
initiatives not resulting in continued growth of core deposits or increasing average
balances of new deposit accounts or producing results which do not justify their costs;
    
    the success of BankAtlantic Bancorps expense reduction initiatives and the ability to
achieve additional cost savings;
    
    the impact of periodic valuation testing of goodwill and other assets;
    
    the impact of capital requirements at BankAtlantic Bancorp and BankAtlantic and the risk
that they will not be successful in raising capital at a reasonable cost if at all; and
    
    the OTS and the FDIC have significant discretion in connection with their supervisory
and enforcement activities and examination policies. Any change in such applicable
activities or policies, whether by the OTS, the FDIC or the Congress, could have a material
adverse impact on BankAtlantic Bancorps results and operations.
  
    
    the impact of economic, competitive and other factors affecting Woodbridge and its
operations;
    
    the market for real estate in the areas where Woodbridge has developments will decline
further, and the impact of market conditions will adversely impact Woodbridges margins
and the fair value of its real estate inventory;
    
    the impact if the value of the property held by Core Communities declines;
    
    the risk that the development of parcels and master-planned communities will not be
completed as anticipated;
    
    the continued declines in the estimated fair value of our real estate inventory will
result in additional write-downs or impairment charges;
    
    the impact of increases in interest rates and availability of credit to buyers of our
inventory; resulting in accelerated principal payments on Woodbridges debt obligations
due to re-margining or curtailment payment requirements;
    
    the ability to obtain financing and to renew existing credit facilities on acceptable
terms, if at all;
    
    Woodbridges ability to access additional capital on acceptable terms, if at all;
    
    the risks associated with Woodbridges business strategy, including Woodbridges
ability to successfully make investments notwithstanding current adverse conditions in the
economy and the credit markets; and
    
    Woodbridges success at managing the risks involved in the foregoing.
  4




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##### Table of Contents



ITEM 1. BUSINESS
 The Company
     PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    2,389,697
    
    
    
    23.30
    %
    
    
    12.35
    %Class B Common Stock
    
    
    975,225
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,364,922
    
    
    
    29.96
    %
    
    
    59.35
    %Woodbridge Holdings CorporationClass A Common Stock (1)
    
    
    3,735,392
    
    
    
    22.43
    %
    
    
    11.89
    %Class B Common Stock
    
    
    243,807
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,979,199
    
    
    
    23.55
    %
    
    
    58.89
    %
 
 (1)
    
    BFCs percentage of vote includes 1,229,117 shares of Woodbridges Class A Common Stock
which BFC had previously agreed not to vote (except in limited circumstances) pursuant to a
letter agreement requested by Woodbridge in connection with the listing of its shares on
the NYSE.  5




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##### Table of Contents



www.bfcfinancial.com
 Key Developments in 2008
       6




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##### Table of Contents



Business Segments
   BFC Activities Segment
   Benihana
   7




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##### Table of Contents



BFC  Employees
   December 31, 2008
    
    December 31, 2007Full-time
    
    Part-time
    
    Full-time
    
    Part-timeBFC
    
    
    
    37

    
    
    
    1

    
    
    
    47

    
    
    
    1
  8




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##### Table of Contents



Financial Services Segments
 Our Financial Services activities are comprised of the operations of BankAtlantic Bancorp.
BankAtlantic Bancorp presents its results in two reportable segments and its results of operations
are consolidated with BFC Financial Corporation. The only assets available to BFC Financial
Corporation from BankAtlantic Bancorp are dividends when and if declared and paid by BankAtlantic
Bancorp. BankAtlantic Bancorp is a separate public company and its management prepared the
following Item 1. Business regarding BankAtlantic Bancorp which was included in BankAtlantic
Bancorps Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities
and Exchange Commission. Accordingly, references to the Company, we, us , our or Parent
Company in the following discussion under the caption Financial Services are references to
BankAtlantic Bancorp and its subsidiaries, and are not references to BFC Financial Corporation.
 BankAtlantic Bancorp  the Company
  www.bankatlanticbancorp.com
  BankAtlantic
   
    
    attracting checking and savings deposits from individuals and business customers,
    
    originating commercial real estate, middle market, consumer and small business
loans,
    
    purchasing wholesale residential loans, and
    
    investing in mortgage-backed securities, tax certificates and other securities.
 BankAtlantics business strategy
  
    
    Continuing the Banks Floridas Most Convenient Bank Initiative.BankAtlantic
began its Floridas Most Convenient Bank initiative in 2002, when it introduced
seven-day banking in
 9




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##### Table of Contents



Florida. This banking initiative resulted in a significant increase in core
deposits (demand deposit accounts, NOW checking accounts and savings accounts).
BankAtlantics core deposits increased from approximately $600 million as of
December 31, 2001 to $2.2 billion as of December 31, 2008. We believe the
competitive market for deposits, the impact of the recession on our customers as
well as reduced confidence in the banking system negatively impacted the growth of
core deposits, which at December 31, 2008 declined by $151.0 million or 7% from
December 31, 2007. While we believe that the decrease is a reflection of what is
happening in the market generally, we are implementing strategies which we believe
will enhance customer loyalty with our current customers and attract new customers
in an effort to increase our core deposit balances.

    
    Maintaining and Strengthening our Capital Position.BankAtlantic exceeded all
applicable regulatory capital requirements and was considered a well capitalized
financial institution at December 31, 2008. See Regulation and Supervision 
Capital Requirements for an explanation of capital standards. Management has
implemented initiatives with a view to preserving capital in response to the
current recessionary economic environment. These initiatives include reducing
assets as a result of loan and securities repayments in the ordinary course,
eliminating cash dividends to the Parent Company, consolidating back-office
facilities, decreasing store and call center hours, reducing staffing levels and
marketing expenses, selling its central Florida stores, delaying its retail
network expansion, and pursuing efforts to improve other operational efficiencies.
    
    Managing Credit Risk.BankAtlantic believes that its underwriting policies and
procedures are structured to enable it to offer products and services to its
customers while minimizing its exposure to credit risk. However, the economic
recession and the substantial decline in real estate values throughout the United
States, and particularly in Florida, have had an adverse impact on the credit
quality of our loan portfolio. In response, BankAtlantic has attempted to address
credit risk through steps which include:
 o
    
    Specifically monitored certain commercial and
residential land acquisition, development and construction loans and
related collateral;o
    
    Focused efforts and enhanced staffing relating to loan
work-outs and collection processes;o
    
    Suspended the origination of land and residential
acquisition, development and construction loans;o
    
    Transferred $101.5 million of non-performing commercial
real estate loans to the Parent Company in March 2008;o
    
    Substantially reduced home equity loan originations
based on the implementation of new underwriting requirements;o
    
    Terminated certain home equity loan unused lines of
credit based on declines in borrower credit scores or the value of loan
collateral; ando
    
    Increased the frequency of targeted loan reviews.
 
    
    Reducing Operating Expenses. Management continued initiatives to decrease
operating expenses during 2008, including lowering advertising and marketing
expenditures, exiting the Orlando market, reducing store hours, shortening call
center hours, reducing staffing levels, renegotiating vendor contracts, outsourcing
certain back-office functions, and consolidating back-office operations. During
2009, management intends to seek to further reduce costs in a manner which does not
materially impact the quality of customer service. BankAtlantic is also continuing
to evaluate its products and services as well as its delivery systems and
back-office support infrastructure with a view to providing cost effective and
profitable products and services to its customers.
 10




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
    
    Diversification of BankAtlantics Loan Portfolio. BankAtlantic is focused on
the diversification of its loan portfolio. During 2009 BankAtlantic intends to
seek to generate a greater percentage of small business and middle market
commercial non-mortgage loans through its retail and lending network. As middle
market and small business loans grow, we expect that commercial real estate loan
portfolio balances and residential mortgage loans will decline during 2009 through
the scheduled repayment of existing loans and significant reductions in commercial
real estate loan originations.
 Loan Products
  Residential:
  Commercial Real Estate:
  11




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Commercial Business
 Standby Letters of Credit and Commitments:
 Consumer:
 Small Business:
 12




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As of December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004Amount
    
    Pct
    
    Amount
    
    Pct
    
    Amount
    
    Pct
    
    Amount
    
    Pct
    
    Amount
    
    PctLoans receivable:Real estate loans:Residential
    
    $
    1,930
    
    
    
    45.34
    
    
    
    2,156
    
    
    
    47.66
    
    
    
    2,151
    
    
    
    46.81
    
    
    
    2,030
    
    
    
    43.92
    
    
    
    2,057
    
    
    
    45.16
    %Consumer  home equity
    
    
    719
    
    
    
    16.89
    
    
    
    676
    
    
    
    14.94
    
    
    
    562
    
    
    
    12.23
    
    
    
    514
    
    
    
    11.12
    
    
    
    457
    
    
    
    10.03Construction and development
    
    
    301
    
    
    
    7.07
    
    
    
    416
    
    
    
    9.20
    
    
    
    475
    
    
    
    10.34
    
    
    
    785
    
    
    
    16.99
    
    
    
    766
    
    
    
    16.82Commercial
    
    
    930
    
    
    
    21.85
    
    
    
    882
    
    
    
    19.49
    
    
    
    973
    
    
    
    21.17
    
    
    
    979
    
    
    
    21.18
    
    
    
    1,004
    
    
    
    22.04Small business
    
    
    219
    
    
    
    5.14
    
    
    
    212
    
    
    
    4.69
    
    
    
    187
    
    
    
    4.07
    
    
    
    152
    
    
    
    3.29
    
    
    
    124
    
    
    
    2.72Loans to Levitt Corporation
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    0.00
    
    
    
    
    
    
    
    0.00
    
    
    
    9
    
    
    
    0.20Other loans:Commercial business
    
    
    143
    
    
    
    3.36
    
    
    
    131
    
    
    
    2.90
    
    
    
    157
    
    
    
    3.42
    
    
    
    88
    
    
    
    1.90
    
    
    
    93
    
    
    
    2.04Small business  non-mortgage
    
    
    108
    
    
    
    2.54
    
    
    
    106
    
    
    
    2.34
    
    
    
    98
    
    
    
    2.13
    
    
    
    83
    
    
    
    1.80
    
    
    
    67
    
    
    
    1.47Consumer
    
    
    26
    
    
    
    0.61
    
    
    
    31
    
    
    
    0.68
    
    
    
    26
    
    
    
    0.57
    
    
    
    27
    
    
    
    0.59
    
    
    
    18
    
    
    
    0.40Residential loans held for sale
    
    
    3
    
    
    
    0.07
    
    
    
    4
    
    
    
    0.09
    
    
    
    9
    
    
    
    0.20
    
    
    
    3
    
    
    
    0.06
    
    
    
    5
    
    
    
    0.11Total
    
    
    4,379
    
    
    
    102.87
    
    
    
    4,614
    
    
    
    101.99
    
    
    
    4,638
    
    
    
    100.94
    
    
    
    4,661
    
    
    
    100.85
    
    
    
    4,600
    
    
    
    100.99Adjustments:Unearned discounts (premiums)
    
    
    (3
    )
    
    
    -0.07
    
    
    
    (4
    )
    
    
    -0.09
    
    
    
    (1
    )
    
    
    -0.02
    
    
    
    (2
    )
    
    
    -0.04
    
    
    
    (1
    )
    
    
    -0.02Allowance for loan losses
    
    
    125
    
    
    
    2.94
    
    
    
    94
    
    
    
    2.08
    
    
    
    44
    
    
    
    0.96
    
    
    
    41
    
    
    
    0.89
    
    
    
    46
    
    
    
    1.01Total loans receivable,
net
    
    $
    4,257
    
    
    
    100.00
    
    
    
    4,524
    
    
    
    100.00
    
    
    
    4,595
    
    
    
    100.00
    
    
    
    4,622
    
    
    
    100.00
    
    
    
    4,555
    
    
    
    100.00
    %
   As of December 31,2008
    
    2007Builder land bank loans
    
    $
    62
    
    
    
    150Land acquisition and development loans
    
    
    166
    
    
    
    202Land acquisition, development and construction loans
    
    
    76
    
    
    
    151Total commercial residential
development loans (1)
    
    $
    304
    
    
    
    503
 
 (1)
    
    At March 31, 2008, $101.5 million of non-performing loans were transferred to a
subsidiary of the Parent Company. Investments
 Securities Available for Sale:
 13




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##### Table of Contents



Tax Certificates:
 Derivative Investments:
  CorporateMortgage-
    
    Bond
    
    
    
    
    
    WeightedTax
    
    Tax-Exempt
    
    Backed
    
    and
    
    
    
    
    
    AverageCertificates
    
    Securities
    
    Securities
    
    Other
    
    Total
    
    YieldDecember 31, 2008Maturity: (1)One year or less
    
    $
    224,434
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    224,434
    
    
    
    6.68
    %After one through five years
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    250
    
    
    
    351
    
    
    
    3.98After five through ten years
    
    
    
    
    
    
    
    
    
    
    36,885
    
    
    
    
    
    
    
    36,885
    
    
    
    5.16After ten years
    
    
    
    
    
    
    
    
    
    
    662,238
    
    
    
    
    
    
    
    662,238
    
    
    
    4.77Fair values (2)
    
    $
    224,434
    
    
    
    
    
    
    
    699,224
    
    
    
    250
    
    
    
    923,908
    
    
    
    5.25
    %Amortized cost (2)
    
    $
    213,534
    
    
    
    
    
    
    
    687,344
    
    
    
    250
    
    
    
    901,128
    
    
    
    6.00
    %Weighted average yield based
on fair values
    
    
    6.68
    
    
    
    
    
    
    
    4.79
    
    
    
    4.30
    
    
    
    5.25Weighted average maturity (yrs)
    
    
    1.0
    
    
    
    
    
    
    
    23.95
    
    
    
    1.67
    
    
    
    18.50December 31, 2007Fair values (2)
    
    $
    188,401
    
    
    
    
    
    
    
    788,461
    
    
    
    681
    
    
    
    977,543
    
    
    
    5.90
    %Amortized cost (2)
    
    $
    188,401
    
    
    
    
    
    
    
    785,682
    
    
    
    685
    
    
    
    974,768
    
    
    
    6.06
    %December 31, 2006Fair values (2)
    
    $
    195,391
    
    
    
    397,244
    
    
    
    361,750
    
    
    
    675
    
    
    
    955,060
    
    
    
    6.17
    %Amortized cost (2)
    
    $
    195,391
    
    
    
    397,469
    
    
    
    365,565
    
    
    
    685
    
    
    
    959,110
    
    
    
    6.05
    %
 
 (1)
    
    Except for tax certificates, maturities are based upon contractual maturities. Tax
certificates do not have stated maturities, and estimates in the above table are based upon
historical repayment experience (generally 1 to 2 years).(2)
    
    Equity and tax exempt securities held by the Parent Company with a cost of $3.6 million,
$162.6 million, and $88.6 million and a fair value of $4.1 million, $179.5 million, and
$99.9 million, at December 31, 2008, 2007 and 2006, respectively, were excluded from the
above table. At December 31, 2008, equities held by BankAtlantic with a cost of $0.8
million and a fair value of $0.8 million was excluded from the above table. 14




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##### Table of Contents



December 31, 2008 (1)Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    EstimatedCost
    
    Appreciation
    
    Depreciation
    
    Fair ValueTax certificates and investment securities:Tax certificates:Cost equals market
    
    $
    213,534
    
    
    
    10,900
    
    
    
    
    
    
    
    224,434Securities available for sale:Investment securities:Cost equals market
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250Market over cost
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cost over market
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Mortgage-backed securities :Cost equals market
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Market over cost
    
    
    654,199
    
    
    
    12,863
    
    
    
    
    
    
    
    667,062Cost over market
    
    
    33,145
    
    
    
    
    
    
    
    983
    
    
    
    32,162Total
    
    $
    901,128
    
    
    
    23,763
    
    
    
    983
    
    
    
    923,908
 
 1)
    
    The above table excludes Parent Company equity securities with a cost of $3.6 million
and a fair value of $4.1 million at December 31, 2008. At December 31, 2008, equities
held by BankAtlantic with a cost of $0.8 million and a fair value of $0.8 million was
excluded from the above table. Deposit products and borrowed funds:
 Deposits:
 Federal Home Loan Bank (FHLB) Advances:
 Other Short-Term Borrowings:
 
    
    Securities sold under agreements to repurchase include a sale of a portion of its
current investment portfolio (usually mortgage-backed securities and REMICs) at a
negotiated rate and an agreement to repurchase the same assets on a specified future date.
BankAtlantic issues repurchase agreements to institutions and to its customers. These
transactions are collateralized by securities in its investment portfolio but are not
insured by the FDIC. See note 16 to the Notes to Consolidated Financial Statements for
more information
 15




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##### Table of Contents



regarding BankAtlantics Securities sold under agreements to repurchase borrowings.
    
    Treasury tax and loan borrowings represent BankAtlantics participation in the Federal
Reserve Treasury Investment Program. Under this program the Federal Reserve places funds
with BankAtlantic obtained from treasury tax and loan payments received by financial
institutions. See note 15 to the Notes to Consolidated Financial Statements for more
information regarding BankAtlantics Treasury tax and loan borrowings.
    
    Federal funds borrowings occur under established facilities with various
federally-insured banking institutions to purchase federal funds. We also have a borrowing
facility with various federal agencies which may place funds with us at overnight rates.
BankAtlantic uses these facilities on an overnight basis to assist in managing its cash
requirements. These advances are collateralized by a security lien against its consumer
loans. See note 15 to the Notes to Consolidated Financial Statements for more
information regarding BankAtlantics federal funds borrowings.
    
    Term auction facilities represent short term borrowings from the Federal Reserve System.
These borrowings are collateralized by securities available for sale and are generally at
federal fund interest rates which have been lower interest rates than alternative
borrowings. See note 15 to the Notes to Consolidated Financial Statements for more
information regarding BankAtlantics term auction facilities borrowings.
    
    BankAtlantics other borrowings have floating interest rates and consist of a
mortgage-backed bond and subordinated debentures. See note 17 to the Notes to
Consolidated Financial Statements for more information regarding BankAtlantics other
borrowings.
 Parent Company
  16




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##### Table of Contents



As of December 31, 2008Gross
    
    GrossCarrying
    
    Unrealized
    
    Unrealized
    
    Estimated(in thousands)
    
    Value
    
    Appreciation
    
    Depreciation
    
    Fair ValueCash and cash equivalents
    
    $
    37,116
    
    
    
    
    
    
    
    
    
    
    
    37,116Equity securities
    
    
    1,597
    
    
    
    
    
    
    
    
    
    
    
    1,597Private investment
securities
    
    
    2,036
    
    
    
    467
    
    
    
    
    
    
    
    2,503Total
    
    $
    40,749
    
    
    
    467
    
    
    
    
    
    
    
    41,216
   (in millions)
    
    AmountBuilder land bank loans
    
    $
    22Land acquisition and development loans
    
    
    17Land acquisition, development and
construction loans
    
    
    29Commercial
    
    
    14Total commercial loans
    
    $
    82
 Employees
   December 31, 2008
    
    December 31, 2007Full-
    
    Part-
    
    Full-
    
    Part-Time
    
    time
    
    time
    
    timeBankAtlantic Bancorp
    
    
    6
    
    
    
    
    
    
    
    7
    
    
    
    BankAtlantic
    
    
    1,698
    
    
    
    143
    
    
    
    2,207
    
    
    
    355Total
    
    
    1,704
    
    
    
    143
    
    
    
    2,214
    
    
    
    355
 Competition
  17




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##### Table of Contents



Regulation and Supervision
 Holding Company
   
    
    acquiring another savings institution or its holding company without prior written
approval of the OTS;
    
    acquiring or retaining, with certain exceptions, more than 5% of a non-subsidiary
savings institution, a non-subsidiary holding company, or a non-subsidiary company engaged
in activities other than those permitted by HOLA; or
    
    Acquiring or retaining control of a depository institution that is not insured by the
FDIC.
    BankAtlantic
  18




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Regulation of Federal Savings Banks
 Business Activities
 
    
    mortgage loans secured by residential and commercial real estate;
    
    commercial and consumer loans;
    
    certain types of debt securities; and
    
    certain other assets.
  Loans to One Borrower
 QTL Test
 Capital Requirements
 
    
    a tangible capital requirement for savings banks to have tangible capital in an amount
equal to at least 1.5% of adjusted total assets;
    
    a leverage ratio requirement:
 19




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##### Table of Contents



o
    
    for savings banks assigned the highest composite rating of 1, to have
core capital in an amount equal to at least 3% of adjusted total assets; oro
    
    for savings banks assigned any other composite rating, to have core
capital in an amount equal to at least 4% of adjusted total assets, or a higher
percentage if warranted by the particular circumstances or risk profile of the
savings bank; and
 
    
    a risk-based capital requirement for savings banks to have capital in an amount equal to
at least 8% of risk-weighted assets.
    Limitation on Capital Distributions
   Liquidity
 Assessments
 
    
    the size of the savings bank, on which the basic assessment is based;
 
    
    the savings banks supervisory condition, which results in an additional assessment
based on a percentage of the basic assessment for any savings bank with a composite rating
of 3, 4 or 5 in its most recent safety and soundness examination; and
 
    
    the complexity of the savings banks operations, which results in an additional
assessment based on a percentage of the basic assessment for any savings bank that has more
than $1 billion in trust assets that it administers, loans that it services for others or
assets covered by its recourse obligations or direct credit
substitutes.
 20




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##### Table of Contents



Branching
 Community Reinvestment
 
    
    a lending test, to evaluate the institutions record of making loans in its designated
assessment areas;
 
    
    an investment test, to evaluate the institutions record of investing in community
development projects, affordable housing, and programs benefiting low or moderate income
individuals and businesses; and
 
    
    a service test, to evaluate the institutions delivery of banking services throughout
its designated assessment area.
  Transactions with Related Parties
  
    
    making or renewing a loan or other extension of credit to an affiliate;
 
    
    purchasing, or investing in, a security issued by an affiliate;
 
    
    purchasing an asset from an affiliate;
 
    
    accepting a security issued by an affiliate as collateral for a loan or other extension
of credit to any person or entity; and
 
    
    issuing a guarantee, acceptance or letter of credit on behalf of an affiliate.
  
    
    making a loan or other extension of credit to an affiliate that is engaged in any
non-bank holding company activity; and
 
    
    purchasing, or investing in, securities issued by an affiliate that is not a subsidiary.
 21




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Enforcement
 Examination
 Standards for Safety and Soundness
 Shared National Credit Program
 Real Estate Lending Standards
 22




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Prompt Corrective Regulatory Action
 
    
    its total capital is at least 10% of its risk-weighted assets;
 
    
    its core capital is at least 6% of its risk-weighted assets;
 
    
    its core capital is at least 5% of its adjusted total assets; and
 
    
    it is not subject to any written agreement, order, capital directive or prompt
corrective action directive issued by the OTS, or certain regulations, to meet or maintain
a specific capital level for any capital measure.
  Insurance of Deposit Accounts
    23




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Privacy and Security Protection
 Insurance Activities
 Federal Home Loan Bank System
 Federal Reserve System
 Anti-Terrorism and Anti-Money Laundering Regulations
 24




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##### Table of Contents




    
    internal policies, procedures and controls designed to implement and maintain the
savings banks compliance with all of the requirements of the USA PATRIOT Act, the BSA and
related laws and regulations;
 
    
    systems and procedures for monitoring and reporting of suspicious transactions and
activities;
 
    
    a designated compliance officer;
 
    
    employee training;
 
    
    an independent audit function to test the anti-money laundering program;
 
    
    procedures to verify the identity of each customer upon the opening of accounts; and
 
    
    heightened due diligence policies, procedures and controls applicable to certain foreign
accounts and relationships.
  Consumer Protection
 
    
    require lenders to disclose credit terms in meaningful and consistent ways;
 
    
    require financial institutions to establish policies and procedures regarding identity
theft and notify customers of certain information concerning their credit reporting;
 
    
    prohibit discrimination against an applicant in any consumer or business credit
transaction;
 
    
    prohibit discrimination in housing-related lending activities;
 
    
    require certain lender banks to collect and report applicant and borrower data regarding
loans for home purchase or improvement projects;
 
    
    require lenders to provide borrowers with information regarding the nature and cost of
real estate settlements;
 
    
    prohibit certain lending practices and limit escrow account amounts with respect to real
estate transactions; and
 
    
    prescribe penalties for violations of the requirements of consumer protection statutes
and regulations.
 25




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Real Estate Development Segments
 Our Real Estate Development activities are comprised of the operations of Woodbridge Holdings
Corporation. Woodbridge presents its results in two reportable segments and its results of
operations are consolidated with BFC Financial Corporation. The only assets available to BFC
Financial Corporation are dividends when and if declared and paid by Woodbridge. Woodbridge is a
separate public company and its management prepared the following Item 1. Business regarding
Woodbridge which was included in Woodbridges Annual Report on Form 10-K for the year ended
December 31, 2008 filed with the Securities and Exchange Commission. Accordingly, references to the
Company, we, us, our or Parent Company in the following discussion under the caption
Real Estate Development are references to Woodbridge and its subsidiaries, and are not references
to BFC Financial Corporation.
 General Description of Business
  Business Segments
   26




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Land Division
      27




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Closed
    
    
    
    
    
    
    Non-
    
    
    
    
    
    
    ThirdDate
    
    
    Acres
    
    
    Acres
    
    
    Current
    
    
    Saleable
    
    
    Saleable
    
    
    Party
    
    
    AcresAcquired
    
    
    Acquired
    
    
    (a)
    
    
    Inventory
    
    
    Acres (b)
    
    
    Acres (b)
    
    
    Backlog
    
    
    AvailableCurrently in DevelopmentTradition, Florida
    
    
    
    
    
    
    1998 - 2004
    
    
    
    8,246
    
    
    
    1,831
    
    
    
    6,415
    
    
    
    2,583
    
    
    
    3,832
    
    
    
    
    
    
    
    3,832Tradition Hilton Head
    
    
    
    
    2005
    
    
    
    5,390
    
    
    
    166
    
    
    
    5,224
    
    
    
    2,417
    
    
    
    2,807
    
    
    
    10
    
    
    
    2,797Total Currently in Development
    
    
    
    
    
    
    
    
    13,636
    
    
    
    1,997
    
    
    
    11,639
    
    
    
    5,000
    
    
    
    6,639
    
    
    
    10
    
    
    
    6,629
 
 (a)
    
    Closed acres for Tradition Hilton Head include 150 acres owned by Carolina Oak, a wholly owned subsidiary of Woodbridge. The
revenue from this sale was eliminated in consolidation.(b)
    
    Actual saleable and non-saleable acres may vary over time due to changes in zoning, project design, or other factors.
Non-saleable acres include, but are not limited to, areas set aside for roads, parks, schools, utilities, wetlands and other
public purposes. Other Operations
  Investment in Bluegreen Corporation
    The Meaning of Other-than-Temporary Impairment and Its Application to Certain
Investments The Equity
Method of Accounting for Investments in Common Stock
 28




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Investment in Office Depot
   Acquisition of Pizza Fusion
   29




---



##### Table of Contents



Consolidation of Variable Interest Entities
 Carolina Oak
   Accounting for the Impairment or Disposal of Long-Lived Assets
  Corporate Headquarters
  30




---



##### Table of Contents



Other Investments and Joint Ventures
   Levitt Commercial
  Homebuilding Division
    Consolidated Financial Statements
 31




---



##### Table of Contents



Recent Developments
 Bankruptcy of Levitt and Sons
  Executive Compensation Program
   32




---



##### Table of Contents



Acquisition of Pizza Fusion
  Reclassification of Discontinued Operations
  33




---



##### Table of Contents



Business Strategy
  Continue to develop master-planned communities
  Operate efficiently and effectively
 Pursue investment opportunities.
 Seasonality
  34




---



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Competition
   Employees
  Additional Information
 www.woodbridgeholdings.com
  Executive Officers of Woodbridge Holdings Corporation
 Name
    
    Position
    
    AgeAlan B. Levan
    
    Chairman of the Board and Chief Executive Officer
(Principal Executive Officer)
    
    
    64John E. Abdo
    
    Vice-Chairman of the Board
    
    
    65Seth M. Wise
    
    President
    
    
    39John K. Grelle
    
    Chief Financial Officer (Principal Accounting Officer)
    
    
    65
   35




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36




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##### Table of Contents



ITEM 1A. RISK FACTORS
 We have in the past incurred cash flow deficits that we expect will continue in the future.
  Adverse conditions and events where our investments are currently concentrated could continue to
adversely impact our results and future growth.
  Regulatory restrictions, bank performance and the terms of indebtedness limit or restrict
BankAtlantic Bancorps ability to pay dividends which may impact our cash flow.
    37




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Restrictions, operating performance and the terms of indebtedness limit the ability for Woodbridge
to pay dividends, which may impact our cash flow.
  Our activities and our subsidiaries activities are subject to a wide range of regulatory
requirements that could have a material adverse effect on our business.
  
    
    limit the payment of dividends by BankAtlantic to BankAtlantic Bancorp;
 
    
    limit transactions between us, BankAtlantic, BankAtlantic Bancorp and the subsidiaries
or affiliates
of either;
 
    
    limit the activities of BankAtlantic, BankAtlantic Bancorp or us; or
 
    
    impose capital requirements on us or BankAtlantic Bancorp.
  Certain members of our Board of Directors and certain of our executive officers are also directors
and executive officers of our affiliates.
  38




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##### Table of Contents



Risks Associated with Our Investment in Benihana and the Restaurant Industry
  
    
    general economic conditions, and the disruptions in the financial markets which have
adversely impacted consumer spending patterns and the availability and cost of credit may
continue to impact Benihana or deteriorate further;
 
    
    the failure of existing or new restaurants to perform as expected;
 
    
    The inability to construct new restaurants and remodel existing restaurants within
projected budgets and time periods;
 
    
    increases in the minimum wage;
 
    
    intense competition in the restaurant industry;
 
    
    the food service industry is affected by litigation and publicity concerning food
quality, health and other issues, which could cause customers to avoid a particular
restaurant, result in significant liabilities or litigation costs or damage reputation or
brand recognition; and
 
    
    Implementing growth and renovation strategies may strain available resources.
 Issuance of Additional Securities In The Future.
  Our portfolio of equity securities and our investments in BankAtlantic Bancorp and Woodbridge
subjects us to equity pricing risks.
    39




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Our control position may adversely affect the market price of BankAtlantic Bancorps and
Woodbridges Class A Common Stock.
  Alan B. Levan And John E. Abdos Control Position May Adversely Affect The Market Price Of Our
Common Stock.
  The terms of our articles of incorporation, which establish fixed relative voting percentages
between our Class A Common Stock and Class B Common Stock, may not be well accepted by the market.
  40




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##### Table of Contents



Financial Services Risk Factors
 Our Financial Services activities consist of BankAtlantic Bancorp results of operations, which
is consolidated with BFC Financial Corporation. The only assets available to BFC Financial
Corporation from BankAtlantic Bancorp are dividends when and if declared and paid by BankAtlantic
Bancorp. BankAtlantic Bancorp is a separate public company and its management prepared the
following Item 1A. Risk Factors regarding BankAtlantic Bancorp which was included in BankAtlantic
Bancorps Annual Report on Form 10-K for the year ended December 31, 2008 filed with the Securities
and Exchange Commission. Accordingly, references to the Company, we, us , our or Parent
Company in the following discussion under the caption Financial Services are references to
BankAtlantic Bancorp and its subsidiaries, and are not references to BFC Financial Corporation.
 Adverse market conditions have affected and may continue to affect the financial services industry
as well as our business and results of operations.
  
    
    BankAtlantics borrowers may be unable to make timely repayments of
their loans, or the value of real estate collateral securing the
payment of such loans may decrease which could result in increased
delinquencies, foreclosures and customer bankruptcies, any of which
would increase levels of non-performing loans resulting in significant
credit losses, increased expenses and could have a material adverse
effect on our operating results.
 
    
    Further disruptions in the capital markets or other events, including
actions by rating agencies and deteriorating investor expectations,
may result in an inability to borrow on favorable terms or at all from
other financial institutions or government entities.
 
    
    Increased regulation of the industry may increase costs and limit
BankAtlantics activities and operations.
 
    
    Increased competition among financial services companies based on the
recent consolidation of competing financial institutions and the
conversion of investment banks into bank holding companies, may
adversely affect BankAtlantics ability to market its products and
services.
 
    
    BankAtlantic may be required to pay significantly higher FDIC deposit premiums and assessments.
 
    
    Consumer confidence in the financial industry has weakened and
individual wealth has deteriorated, which could lead to declines in
deposits and impact liquidity.
 
    
    Continued asset valuation declines could adversely impact our credit
losses and result in additional goodwill and other asset impairments.
 41




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##### Table of Contents



There can be no assurance that recent steps taken by Congress, the FDIC and the Federal Reserve
will stabilize the U.S. financial system.
       42




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The impact on us of recently enacted legislation, in particular the EESA and its implementing
regulations, and actions by the FDIC, cannot be predicted at this time.
  The decline in the Florida real estate market has adversely affected, and may continue to adversely
affect, our earnings and financial condition.
  Our loan portfolio is concentrated in real estate lending which makes us more susceptible to
credit losses given the current depressed real estate market.
     43




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BankAtlantics consumer loan portfolio is concentrated in home equity loans collateralized by
Florida properties primarily located in the markets where BankAtlantic operates its store network.
  BankAtlantics interest-only residential loans expose it to greater credit risks.
 ,
 An increase in BankAtlantics allowance for loan losses will result in reduced earnings.
  
    
    the risk characteristics of various classifications of loans;
 44




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##### Table of Contents




    
    previous loan loss experience;
    
    specific loans that have probable loss potential;
    
    delinquency trends;
    
    estimated fair value of the collateral;
    
    current economic conditions;
    
    the views of its regulators; and
    
    geographic and industry loan concentrations.
   Our loan portfolio subjects us to high levels of credit and counterparty risk.
    Adverse events in Florida, where our business is currently concentrated, could adversely impact our
results and future growth.
  45




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##### Table of Contents



Changes in interest rates could adversely affect our net interest income and profitability.
   
    
    interest income on interest-earning assets, such as loans; and
    
    interest expense on interest-bearing liabilities, such as deposits.
   
    
    it amortizes premiums on acquired loans and securities, and if loans
or securities are prepaid, the unamortized premium will be charged
off; and
    
    the yields it earns on the investment of funds that it receives from
prepaid loans and securities are generally less than the yields that
it earned on the prepaid loans.
    BankAtlantic is subject to liquidity risk as its loans exceed its deposits.
  46




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BankAtlantics Floridas Most Convenient Bank initiative and related infrastructure expansion to
support a larger organization has resulted in higher operating expenses, which has had an adverse
impact on our earnings.
  BankAtlantic obtains a significant portion of its non-interest income through service charges on
core deposit accounts.
  Deposit premium insurance assessments may increase substantially, which will adversely affect
expenses.
  Regulatory Compliance.
  47




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We may need to raise additional capital in the future and such capital may not be available when
needed or at all.
   Continued capital and credit market volatility may adversely affect our ability to access capital
and may have a material adverse effect on our business, financial condition and results of
operations.
  A sustained decline in the Companys Class A common stock price may result in the delisting of its
Class A common stock from the New York Stock Exchange.
   BankAtlantic Bancorp services its debt and pays dividends primarily from dividends from
BankAtlantic, which are subject to regulatory limits.
    48




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The Company is controlled by BFC Financial Corporation and its controlling shareholders and this
control position may adversely affect the market price of the Companys Class A common stock.
  The Companys activities and the activities of the Companys subsidiaries, including BankAtlantic,
are subject to regulatory requirements that could have a material adverse effect on the Companys
business.
  
    
    limit the payment of dividends by BankAtlantic to the Company;
 
    
    limit transactions between the Company, BankAtlantic and the subsidiaries or affiliates
of either;
 
    
    limit the Companys activities and the activities of BankAtlantic; or
 
    
    Impose capital requirements on the Company or additional capital requirements on
BankAtlantic.
  49




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Real Estate Development Risk Factors
 Our Real Estate Development activities consists of Woodbridge results of operations, which is
consolidated with BFC Financial Corporation. The only assets available to BFC Financial Corporation
are dividends when and if declared and paid by Woodbridge. Woodbridge is a separate public company
and its management prepared the following Item 1A. Risk Factors regarding Woodbridge which was
included in Woodbridges Annual Report on Form 10-K for the year ended December 31, 2008 filed with
the Securities and Exchange Commission. Accordingly, references to the Company, we, us, our
or Parent Company in the following discussion under the caption Real Estate Development are
references to Woodbridge and its subsidiaries, and are not references to BFC Financial Corporation.
 RISKS RELATING TO OUR REAL ESTATE OPERATIONS
 Through Core Communities and Carolina Oak, we engage in real estate activities which are
speculative and involve a high degree of risk.
  
    
    overbuilding or decreases in demand to acquire land;
 
    
    the availability and cost of financing;
 
    
    unfavorable interest rates and increases in inflation;
 
    
    changes in national, regional and local economic conditions;
 
    
    cost overruns, inclement weather, and labor and material shortages;
 
    
    the impact of present or future environmental legislation, zoning laws and other
regulations;
 
    
    availability, delays and costs associated with obtaining permits, approvals or licenses
necessary to develop property; and
 
    
    increases in real estate taxes, insurance and other local government fees.
 The real estate market has experienced a significant downturn, and the duration and ultimate
severity of the downturn is uncertain. A continued deterioration of economic conditions will
adversely affect our operating results and financial condition.
   50




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Because real estate investments are illiquid, the downturn in the real estate market and in the
economy in general has had, and may continue to have, an adverse impact on our business and cash
flow.
  The commercial real estate market has been adversely affected by the current economic and credit
environment.
  
    
    the risk that a significant tenant or a number of tenants may file for bankruptcy
protection, creating the possibility that past due rents may never be recovered;
 
    
    the risk that leases with certain existing tenants may become overly burdensome to the
lessee due to reduced business activity, and lease concessions and modifications may be
necessary to avoid defaults;
 
    
    the risk that the current adverse economic conditions and limited availability of credit
may continue or deteriorate further, causing market capitalization rates on commercial
properties to increase beyond present levels, thus reducing the value at which commercial
projects can be sold;
 
    
    the risk that net operating income at the commercial leasing projects may not be
sufficient to meet certain debt service coverage ratio requirements, which would result in
requirements for additional principal curtailment payments in order to bring the loans into
compliance; and
 
    
    the risk that vacant space will take longer to lease and that rental rates will be lower
than projected or necessary to operate the project profitably.
 Commercial leasing projects may not yield anticipated returns, which could harm our operating
results, reduce cash flow, or the ability to sell commercial assets.
   51




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##### Table of Contents



We utilize community development district and special assessment district bonds to fund development
costs, and we will be responsible for assessments until the underlying property is sold .
   Cores results are subject to significant volatility.
   
    
    shortages or increases in prices of construction materials;
 
    
    natural disasters in the areas in which we operate;
 
    
    lack of availability of adequate utility infrastructure and services; and
 
    
    our need to rely on local subcontractors who may not be adequately capitalized or
insured.
  52




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We are dependent upon certain key tenants in our commercial developments, and decisions made by
these tenants or adverse developments in the business of these tenants could have a negative impact
on our financial condition.
   It may be difficult and costly to rent vacant space and space which may become vacant in future
periods.
   Additional adverse changes in economic conditions where we conduct our operations could further
reduce the demand for real estate and, as a result, could further adversely impact our results of
operations and financial condition.
  If prospective purchasers of our inventory and tenants are not able to obtain suitable financing,
our results of operations may further decline.
  53




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##### Table of Contents



Natural disasters could have an adverse effect on our real estate operations.
   A portion of our revenues from land sales in Cores master-planned communities are recognized for
accounting purposes under the percentage of completion method. Therefore, if our actual results
differ from our assumptions, our profitability may be reduced.
  Product liability litigation and claims that arise in the ordinary course of business may be
costly.
  We are subject to governmental regulations that may limit our operations, increase our expenses or
subject us to liability.
  
    
    environmental matters, including the presence of hazardous or toxic substances;
 
    
    wetland preservation;
 
    
    health and safety;
 
    
    zoning, land use and other entitlements;
 
    
    building design; and
 
    
    density levels.
  54




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##### Table of Contents




    
    the installation of utility services such as gas, electric, water and waste disposal;
 
    
    the dedication of acreage for open space, parks and schools;
 
    
    permitted land uses; and
 
    
    the construction design, methods and materials used.
  
    
    establish building moratoriums;
 
    
    limit the number of commercial properties that may be built;
 
    
    change building codes and construction requirements affecting property under
construction;
 
    
    increase the cost of development and construction; and
 
    
    delay development and construction.
   Building moratoriums and changes in governmental regulations may subject us to delays or increased
costs of construction or prohibit development of our properties.
  We are subject to environmental laws and the cost of compliance could adversely affect our
business.
  Increased insurance risk could negatively affect our business.
  55




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##### Table of Contents



Our results may vary.
  
    
    the cyclical nature of the real estate industry;
 
    
    prevailing interest rates and the availability of financing;
 
    
    weather;
 
    
    cost and availability of materials and labor;
 
    
    competitive conditions;
 
    
    timing of sales of land;
 
    
    the timing of receipt of regulatory and other governmental approvals for land
development projects; and
 
    
    the timing of the sale of our commercial leasing operations.
 Levitt and Sons had surety bonds on most of their projects, some of which were subject to indemnity
by Woodbridge.
  RISKS RELATING TO OUR OTHER ACTIVITIES AND TO OUR COMPANY, GENERALLY
 Our outstanding debt instruments impose restrictions on our operations and activities and could
adversely affect our financial condition.
   56




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Our current business strategy may require us to obtain additional capital, which may not be
available on favorable terms, if at all.
  We are subject to the risks of the businesses that we currently hold investments in, and our future
acquisitions may reduce our earnings, require us to obtain additional financing, and expose us to
additional risks.
  57




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If current economic and credit market conditions do not improve and the book value of our
investments continue to exceed the trading value of the shares we own, we may incur additional
impairment charges in the future relating to those investments, which would adversely impact our
financial condition and operating results.
    We are subject to certain additional risks relating to our investment in Bluegreen.
  58




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The loss of the services of our key management and personnel could adversely affect our business.
  Our controlling shareholders have the voting power to control the outcome of any shareholder vote,
except in limited circumstances.
  Our net operating loss carryforwards could be substantially limited if we experience an ownership
change as defined in the Internal Revenue Code.
   59




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In the event that the Company chooses to de-register its securities from registration with the
Securities and Exchange Commission, it would no longer file reports with the Securities and
Exchange Commission and this could result in lower prices and more limited trading of the Companys
securities as well as adversely impact the Companys ability to raise capital.
   60




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##### Table of Contents



ITEM 1B. UNRESOLVED STAFF COMMENTS
  61




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ITEM 2. PROPERTIES
   Miami -
    
    
    
    
    
    Palm
    
    TampaDade
    
    Broward
    
    Beach
    
    BayOwned full-service stores
    
    
    9
    
    
    
    13
    
    
    
    25
    
    
    
    7Leased full-service stores
    
    
    13
    
    
    
    11
    
    
    
    5
    
    
    
    6Ground leased full-service stores (1)
    
    
    2
    
    
    
    3
    
    
    
    1
    
    
    
    6Total full-service stores
    
    
    24
    
    
    
    27
    
    
    
    31
    
    
    
    19Lease expiration dates
    
    
    2009-2026
    
    
    
    2009-2015
    
    
    
    2011-2014
    
    
    
    2009-2026Ground lease expiration dates
    
    
    2026-2027
    
    
    
    2017-2072
    
    
    
    2026
    
    
    
    2026-2032
 
 (1)
    
    Stores in which BankAtlantic owns the building and leases the land.  Miami -
    
    
    
    
    
    Palm
    
    Tampa
    
    Orlando /Dade
    
    Broward
    
    Beach
    
    Bay
    
    JacksonvilleLeased drive-through facilities
    
    
    1
    
    
    
    2
    
    
    
    
    
    
    
    
    
    
    
    Leased drive through expiration dates
    
    
    2010
    
    
    
    2011-2014
    
    
    
    
    
    
    
    
    
    
    
    Leased back-office facilities
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    1Leased back-office expiration dates
    
    
    
    
    
    
    2009-2011
    
    
    
    
    
    
    
    2011
    
    
    
    2013Leased loan production facilities
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Leased loan production expiration
dates
    
    
    2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
  Miami -
    
    
    
    
    
    Palm
    
    Tampa
    
    Orlando /Dade
    
    Broward
    
    Beach
    
    Bay
    
    JacksonvilleExecuted leases for new stores
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    
    
    
    
    Executed lease expiration dates
    
    
    
    
    
    
    2030
    
    
    
    2029
    
    
    
    
    
    
    
    Executed leases held for sublease
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    5
    
    
    
    2Executed lease expiration dates
    
    
    
    
    
    
    2013
    
    
    
    
    
    
    
    2010-2048
    
    
    
    2028-2029Land held for sale
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1
    
    
    
    4
  62




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##### Table of Contents



ITEM 3. LEGAL PROCEEDINGS
 Lashelle Farrington, individually and on behalf of all others similarly situated, v. BankAtlantic,
a Federal Savings Bank, BA Financial Services, LLC, a Florida limited liability corporation,
BankAtlantic Bancorp, Inc., a Florida corporation, BFC Financial Corporation, a Florida
corporation, and Does 1-10, Case No. 09-006210 (11), in the Circuit Court of the Seventeenth
Judicial Circuit in and for Broward County, Florida.
    Joseph C. Hubbard, individually and on behalf of all others similarly situated, vs. BankAtlantic
Bancorp, Inc., James A. White, Valerie C. Toalson, Jarett S. Levan, and Alan B. Levan
 Hubbard Alarm Specialties, Inc. v.
BankAtlantic Bancorp, Inc.
 D.W. Hugo, individually and on behalf of Nominal Defendant BankAtlantic Bancorp, Inc. vs.
BankAtlantic Bancorp, Inc., Alan B. Levan, Jarett S. Levan, Jay C. McClung, Marcia K. Snyder,
Valerie Toalson, James A. White, John E. Abdo, D. Keith Cobb, Steven M. Coldren, and David A.
Lieberman,
 Albert R. Feldman, Derivatively on behalf
of Nominal Defendant BankAtlantic Bancorp, Inc. vs. Alan B. Levan, et al., Hugo
 63




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##### Table of Contents



Wilmine Almonor, individually and on behalf of all others similarly situated, vs. BankAtlantic
Bancorp, Inc., Steven M. Coldren, Mary E. Ginestra, Willis N. Holcombe, Jarett S. Levan, John E.
Abdo, David A. Lieberman, Charlie C. Winningham II, D. Keith Cobb, Bruno L. DiGiulian, Alan B.
Levan, James A. White, the Security Plus Plan Committee, and Unknown Fiduciary Defendants 1-50
 Hubbard
  In re: Levitt and Sons, LLC, et al., No. 07-19845-BKC-RBR, U.S. Bankruptcy Court Southern District
of Florida
  Joint Home Purchase Deposit Creditors Committee of
Creditors Holding Unsecured Claims
 Debtors Motion for Authority to Incur
Chapter 11 Administrative Expense Claim
 64




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##### Table of Contents



Robert D. Dance, individually and on behalf of all others similarly situated v. Woodbridge Holdings
Corp. (formerly known as Levitt Corp.), Alan B. Levan, and George P. Scanlon, Case No.
08-60111-Civ-Graham/OSullivan, Southern District of Florida
  Westchester Fire Insurance Company vs. City of Brooksville Case No. 8: CA-09-486
   65




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##### Table of Contents



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  66




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PART II
 
 ITEM 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
  
    
    Each share of Class A Common Stock is entitled to one vote for each share held, with
all holders of Class A Common Stock possessing in the aggregate 22% of the total voting
power. Holders of Class B Common Stock have the remaining 78% of the total voting
power. If the number of shares of Class B Common Stock outstanding decreases to
1,800,000 shares, the Class A Common Stock aggregate voting power will change to 40%
and the Class B Common Stock will have the remaining 60%. If the number of shares of
Class B Common Stock outstanding decreases to 1,400,000 shares, the Class A Common
Stock aggregate voting power will change to 53% and the Class B Common Stock will have
the remaining 47%. If the number of shares of Class B Common Stock outstanding
decreases to 500,000, the fixed voting percentages will be eliminated; and
    
    Each share of Class B Common Stock is convertible at the option of the holder
thereof into one share of Class A Common Stock.
 Market Information
   Class A Common Stock:
    
    High
    
    Low2007First Quarter
    
    $
    6.75
    
    
    $
    4.31Second Quarter
    
    
    4.50
    
    
    
    3.59Third Quarter
    
    
    4.04
    
    
    
    2.22Fourth Quarter
    
    
    3.38
    
    
    
    1.162008First Quarter
    
    $
    1.56
    
    
    $
    .50Second Quarter
    
    
    1.26
    
    
    
    .57Third Quarter
    
    
    1.04
    
    
    
    .45Fourth Quarter
    
    
    .68
    
    
    
    .12
 67




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##### Table of Contents



Class B Common Stock:
    
    High
    
    Low2007First Quarter
    
    $
    6.10
    
    
    $
    5.00Second Quarter
    
    
    4.65
    
    
    
    3.60Third Quarter
    
    
    3.50
    
    
    
    2.25Fourth Quarter
    
    
    3.00
    
    
    
    1.102008First Quarter
    
    $
    1.50
    
    
    $
    1.08Second Quarter
    
    
    1.20
    
    
    
    .65Third Quarter
    
    
    .75
    
    
    
    .52Fourth Quarter
    
    
    .55
    
    
    
    .25
 Holders
  Dividends
    68




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##### Table of Contents



Issuer Purchases of Equity Securities
  Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    Shares thatPart of Publicly
    
    
    May Yet Be PurchasedTotal Number of
    
    
    Average price
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Shares Purchased
    
    
    per share
    
    
    or Programs
    
    
    ProgramsOctober 1, 2008 through
October 31, 2008
    
    
    11,447
    
    
    $
    0.55
    
    
    
    11,447
    
    
    
    1,650,000November 1, 2008 through
November 30, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,650,000December 1, 2008
through
December 31, 2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,650,000Total
    
    
    11,447
    
    
    $
    0.55
    
    
    
    11,447
    
    
    
    1,650,000
  Number of securitiesRemaining available forNumber of securities to
    
    Weighted-average
    
    future issuance underbe issued upon exercise
    
    exercise price of
    
    equity compensation plansof outstanding options
    
    of outstanding options
    
    (excluding outstandingPlan category
    
    warrants or rights
    
    warrants or rights
    
    options)Equity compensation plans
approved by security holders
    
    
    1,797,960
    
    
    
    $4.57
    
    
    
    2,015,804Equity compensation plans
not approved by security
holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    1,797,960
    
    
    
    $4.57
    
    
    
    2,015,804
 69




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##### Table of Contents



ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
  (Dollars in thousands, except for per share data)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Income StatementRevenuesBFC Activities
    
    $
    4,408
    
    
    
    6,109
    
    
    
    3,682
    
    
    
    3,129
    
    
    
    5,683Financial Services
    
    
    449,571
    
    
    
    520,793
    
    
    
    507,746
    
    
    
    445,537
    
    
    
    358,703Real Estate Development
    
    
    33,491
    
    
    
    431,665
    
    
    
    583,152
    
    
    
    574,824
    
    
    
    558,838487,470
    
    
    
    958,567
    
    
    
    1,094,580
    
    
    
    1,023,490
    
    
    
    923,224Costs and ExpensesBFC Activities
    
    
    12,139
    
    
    
    15,015
    
    
    
    12,370
    
    
    
    9,665
    
    
    
    7,452Financial Services
    
    
    634,970
    
    
    
    579,458
    
    
    
    474,311
    
    
    
    381,916
    
    
    
    280,431Real Estate Development
    
    
    72,751
    
    
    
    697,895
    
    
    
    606,655
    
    
    
    498,760
    
    
    
    481,627719,860
    
    
    
    1,292,368
    
    
    
    1,093,336
    
    
    
    890,341
    
    
    
    769,510Equity in earnings from unconsolidated
affiliates
    
    
    15,064
    
    
    
    12,724
    
    
    
    10,935
    
    
    
    13,404
    
    
    
    19,603Impairment of unconsolidated affiliates
    
    
    (96,579
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Impairment of investments
    
    
    (15,548
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (Loss) income from continuing operations
    
    
    (329,453
    )
    
    
    (321,077
    )
    
    
    12,179
    
    
    
    146,553
    
    
    
    173,317Less: (Benefit) provision for income taxes
    
    
    15,763
    
    
    
    (69,012
    )
    
    
    (530
    )
    
    
    59,566
    
    
    
    70,917Less: Noncontrolling interest
    
    
    (272,711
    )
    
    
    (218,165
    )
    
    
    13,406
    
    
    
    79,267
    
    
    
    90,383(Loss) income from continuing operations
    
    
    (72,505
    )
    
    
    (33,900
    )
    
    
    (697
    )
    
    
    7,720
    
    
    
    12,017(Loss) income from discontinued operations,
net of noncontrolling interest and income taxes
    
    
    4,461
    
    
    
    1,038
    
    
    
    (1,524
    )
    
    
    5,054
    
    
    
    2,213Extraordinary gain, net of income taxes
    
    
    9,145
    
    
    
    2,403
    
    
    
    
    
    
    
    
    
    
    
    Net (loss) income
    
    
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )
    
    
    12,774
    
    
    
    14,230Preferred Stock dividends
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )
    
    
    (392
    )Net (loss) income allocable to
common stock
    
    $
    (59,649
    )
    
    
    (31,209
    )
    
    
    (2,971
    )
    
    
    12,024
    
    
    
    13,838Common Share Data (a), (b), ( c)
Basic (loss) earnings per share:Basic (loss) earnings per share
from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.04
    )
    
    
    0.24
    
    
    
    0.48Discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )
    
    
    0.18
    
    
    
    0.09Extraordinary items
    
    
    0.20
    
    
    
    0.06
    
    
    
    
    
    
    
    
    
    
    
    Basic (loss) earnings per share of common stock
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.09
    )
    
    
    0.42
    
    
    
    0.57Diluted (loss) earnings per share:Diluted (loss) earnings per share
from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.05
    )
    
    
    0.22
    
    
    
    0.40Discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )
    
    
    0.15
    
    
    
    0.07Extraordinary items
    
    
    0.20
    
    
    
    0.06
    
    
    
    
    
    
    
    
    
    
    
    Diluted (loss) earnings per share of common stock
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.10
    )
    
    
    0.37
    
    
    
    0.47Basic weighted average number of
common shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249
    
    
    
    28,952
    
    
    
    24,183Diluted weighted average number of
common shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249
    
    
    
    31,219
    
    
    
    27,806
 70




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##### Table of Contents



Selected Consolidated Financial Data  continued
(Dollars in thousands, except for per share data)
 December 31,Balance Sheet (at period end)
    
    2008
    
    2007
    
    2006
    
    2005
    
    2004Loans and leases and held for sale, net
    
    $
    4,317,645
    
    
    
    4,528,538
    
    
    
    4,603,505
    
    
    
    4,628,744
    
    
    
    4,561,073Securities
    
    $
    979,417
    
    
    
    1,191,173
    
    
    
    1,081,980
    
    
    
    1,064,857
    
    
    
    1,082,985Total assets
    
    $
    6,395,582
    
    
    
    7,114,433
    
    
    
    7,605,766
    
    
    
    7,395,755
    
    
    
    6,954,847Deposits
    
    $
    3,926,368
    
    
    
    3,953,405
    
    
    
    3,867,036
    
    
    
    3,752,676
    
    
    
    3,457,202Securities sold under agreements to
repurchase and federal funds purchased
    
    $
    279,726
    
    
    
    159,905
    
    
    
    128,411
    
    
    
    249,263
    
    
    
    257,002Other borrowings (d)
    
    $
    1,631,367
    
    
    
    1,992,718
    
    
    
    2,398,662
    
    
    
    2,121,315
    
    
    
    2,083,109Shareholders equity
    
    $
    112,867
    
    
    
    184,037
    
    
    
    177,585
    
    
    
    183,080
    
    
    
    125,251
 
 (a)
    
    Since its inception, BFC has not paid any cash dividends on its common stock.(b)
    
    While the Company has two classes of common stock outstanding, the two-class method is not
presented because the companys capital structure does not provide for different dividend rates or other preferences, other
than voting rights, between the two classes(c)
    
    Prior to the merger of I.R.E. Realty Advisory Group, Inc. (I.R.E. RAG) in November 2007, the
4,764,285 shares of the Companys Class A Common Stock and 500,000 shares of the Companys Class B
Common Stock that were owned by I.R.E. RAG were considered outstanding, but because the Company
owned 45.5% of the outstanding common stock of I.R.E. RAG, 2,165,367 shares of Class A Common Stock
and 227,250 shares of Class B Common Stock were eliminated from the number of shares outstanding
for purposes of computing earnings per share.(d)
    
    Other borrowings consist of FHLB advances, subordinated debentures, notes, bonds payable,
secured borrowings, and junior subordinated debentures. Secured borrowings were recognized on loan
participation agreements that constituted a legal sale of a portion of the loan but that were not
qualified to be accounted for as a loan sale. 71




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ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION  AND RESULTS OF OPERATIONS
 Overview
      72




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PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock (1)
    
    
    2,389,697
    
    
    
    23.30
    %
    
    
    12.35
    %Class B Common Stock
    
    
    975,225
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,364,922
    
    
    
    29.96
    %
    
    
    59.35
    %Woodbridge Holdings CorporationClass A Common Stock (2)
    
    
    3,735,392
    
    
    
    22.43
    %
    
    
    11.89
    %Class B Common Stock
    
    
    243,807
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,979,199
    
    
    
    23.55
    %
    
    
    58.89
    %
 
 (1)
    
    In August 2008 and December 2008, BFC purchased an aggregate of 400,000 shares and
323,848 shares, respectively, of BankAtlantic Bancorps Class A common stock on the open
market for an aggregate purchase price of $2.8 million and $1.1 million, respectively.
BFCs August 2008 and December 2008 acquisitions of BankAtlantic Bancorps Class A common
stock increased BFCs ownership interest in BankAtlantic Bancorp by approximately 3.6% in
August 2008 and 2.9% in December 2008 and increased BFCs voting interest by approximately
2.1% in August 2008 and 1.6% in December 2008. The acquisitions of additional shares of
BankAtlantic Bancorp have been accounted for as step acquisitions under the purchase method
of accounting. See Note 2 for further information.(2)
    
    BFCs percentage of vote includes 1,229,117 shares of Woodbridges Class A Common Stock
which BFC had previously agreed not to vote (except in limited circumstances) pursuant to a
letter agreement requested by Woodbridge in connection with the listing of its shares on
the NYSE  BFC Financial Corporation Summary of Consolidated Results of Operations by Business Segment
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006BFC Activities
    
    $
    5,997
    
    
    
    12,567
    
    
    
    (5,009
    )Financial Services
    
    
    (217,646
    )
    
    
    (30,012
    )
    
    
    26,879Real Estate Development
    
    
    (133,567
    )
    
    
    (234,620
    )
    
    
    (9,143
    )(345,216
    )
    
    
    (252,065
    )
    
    
    12,727Noncontrolling interest
    
    
    (272,711
    )
    
    
    (218,165
    )
    
    
    13,422Loss from continuing operations
    
    
    (72,505
    )
    
    
    (33,900
    )
    
    
    (695
    )Discontinued operations, less
controlling interest and income
tax
    
    
    4,461
    
    
    
    1,038
    
    
    
    (1,526
    )Extraordinary gain, less income tax
    
    
    9,145
    
    
    
    2,403
    
    
    
    Net loss
    
    $
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )
 73




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74




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##### Table of Contents



Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    a decrease in cash and cash equivalents of approximately $78.8 million was primarily as
a result of (i) a net decrease in cash and cash equivalents of $9.2 million at BFC, which
resulted primarily from cash used in operations of approximately $5.8 million and cash
used in investing activities of $2.5 million and (ii) Woodbridges net decrease in cash
and cash equivalents of $80.4 million, which resulted from cash used in operations of
$32.9 million, cash used in investing activities of $41.9 million and cash used in
financing activities of $5.6 million. This decrease in cash and cash equivalents was
offset in part by BankAtlantic Bancorps higher cash and due from depository institution
balances resulting from additional cash at automated teller machines and cash on hand;
    
    an increase in BankAtlantic federal funds sold and short term investments associated
with daily treasury management;
    
    an increase in Woodbridges restricted cash primarily related to the funding of the
Levitt and Sons Settlement Agreement, providing collateral for a letter of credit as a
result of a surety bond claim and the establishment of an interest reserve for one of
Cores loan agreements;
    
    a decrease in securities available for sale and other financial instruments reflecting
BankAtlantic Bancorps sale of Stifel common stock, the sale of Stifel warrants and the
liquidation of managed fund equity investments and principal repayments on agency
securities. This decrease in securities available for sale was offset in part by
Woodbridges net increase of equity securities of $4.3 million (net of shares sold and
impairment charges) relating to its investment in Office Depot and BFCs net increase in the reclassification of its investment in Benihana Convertible Preferred
Stock from investment securities which was carried at cost to investment securities available for
sale in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity
Securities. (See Note 12 for further information);
    
    a decrease in investment securities at cost primarily resulting from BankAtlantic
Bancorps sale of Stifel common stock and certain private equity securities and BFCs reclassification of its investment in Benihana Convertible Preferred Stock as discussed
above;
    
    increase in tax certificate balances in BankAtlantic primarily due to higher Florida
tax certificate acquisitions;
    
    a decline in BankAtlantic FHLB stock related to lower FHLB advance borrowings;
    
    a decrease in BankAtlantic loan receivable balances associated with a $43.2 million
increase in the allowance for loan losses as well as lower residential loan balances
partially offset by higher small business, commercial business and home equity loan
balances;
    
    lower real estate held for development and sale held by BankAtlantic associated with
impairments and the sale of inventory of homes at a real estate development. This
decrease in inventory of real estate was partially offset by a net increase of inventory
held by Woodbridge of $14.0 million primarily associated with the land development
activities of the Land Division;
    
    a decrease in office properties and equipment primarily due to the sale by
BankAtlantic of five central Florida branches to an unrelated financial institution as
well as the disposal of properties in connection with the on-going consolidation of
back-office facilities, as well as a decrease in Woodbridge property and equipment due to
the sale of three ground lease parcels and a depreciation adjustment related to the
reclassification into continuing operations of two of Cores commercial leasing assets
previously classified as discontinued operations;
    
    a decrease in BankAtlantics goodwill associated with the recognition of a $46.6
million goodwill impairment (net of purchase accounting of $1.7 million);
    
    a decrease in deferred tax assets, net due to the establishment of a deferred tax
asset valuation allowance;
    
    an increase in other intangible assets primarily associated with core deposit
intangible assets relating to BFCs step acquisitions in BankAtlantic Bancorp in August
2008 and December 2008, which increased BFCs economic ownership in BankAtlantic Bancorp
in the aggregate by approximately 6.5%. Such acquisitions were accounted as step
acquisitions under the purchase method. The increase in other intangible assets was also
due to Woodbridges intangible assets of approximately $4.3 million associated with its
acquisition of shares of convertible preferred stock of Pizza Fusion;
 75




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##### Table of Contents




    
    a decline in other assets primarily resulting from BankAtlantic Bancorps and
Woodbridges receipt of income tax refunds associated with the carry-back of taxable
losses for the year ended December 31, 2007.
  
    
    lower non-interest-bearing deposit balances primarily reflecting the migration of
non-interest bearing deposits to interest-bearing NOW accounts as BankAtlantic promoted
higher interest rate NOW accounts during 2008 in response to greater competition;
    
    decline in BankAtlantic insured savings and money market accounts primarily reflecting
deposit outflows resulting from interest rate reductions on higher yield account
products as higher rates from prior periods were discontinued;
    
    an increase in BankAtlantics certificate accounts reflecting higher brokered deposit
balances as well as a higher interest rate certificate account promotion during 2008;
    
    lower FHLB advance borrowings at BankAtlantic due to a decline in total assets and the
availability of alternative funding sources at lower interest rates;
    
    higher short-term borrowings at BankAtlantic associated with funds obtained from the
Treasury at lower interest rates than alternate funding sources;
    
    a decrease in Woodbridges notes and mortgage notes payable primarily due to
curtailment payments made in connection with a development loan collateralized by land in
Tradition Hilton Head, offset in part by draws on lines of credit in Woodbridges Land
Division; and
    
    decreases in other liabilities primarily resulting from a decline at BankAtlantic in
accrued interest payable on borrowings associated with significantly lower interest rates
at period end, as well as a decrease in accrued liabilities at Woodbridge which was
primarily attributable to decreased severance and construction accruals due to payments
made during the year ended December 31, 2008, partially offset by an increase in
Woodbridges current tax liability of approximately $2.4 million relating to its FIN 48
liability which was netted against current tax asset in 2007.
 Redeemable 5% Cumulative Preferred Stock
   76




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##### Table of Contents



Noncontrolling Interest
  December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    170,888
    
    
    
    351,148Woodbridge
    
    
    91,389
    
    
    
    207,138Joint Venture Partnership
    
    
    277
    
    
    
    664$
    262,554
    
    
    
    558,950
 Impact of Inflation
    Critical Accounting Policies
  77




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New Accounting Pronouncements
  78




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BFC Activities
 BFC Activities
    Change
    
    
    ChangeFor the Years Ended December 31,
    
    
    2008 vs.
    
    
    2007 vs.(In thousands)
    
    2008
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006RevenuesInterest and dividend income
    
    $
    1,376
    
    
    
    2,374
    
    
    
    2,292
    
    
    
    (998
    )
    
    
    82Securities activities
    
    
    898
    
    
    
    1,295
    
    
    
    
    
    
    
    (397
    )
    
    
    1,295Other income, net
    
    
    4,955
    
    
    
    4,977
    
    
    
    3,680
    
    
    
    (22
    )
    
    
    1,2977,229
    
    
    
    8,646
    
    
    
    5,972
    
    
    
    (1,417
    )
    
    
    2,674Cost and ExpensesEmployee compensation and benefits
    
    
    8,793
    
    
    
    10,932
    
    
    
    9,407
    
    
    
    (2,139
    )
    
    
    1,525Other expenses, net
    
    
    3,600
    
    
    
    4,340
    
    
    
    3,428
    
    
    
    (740
    )
    
    
    91212,393
    
    
    
    15,272
    
    
    
    12,835
    
    
    
    (2,879
    )
    
    
    2,437Equity in loss from unconsolidated affiliates
    
    
    (152
    )
    
    
    (78
    )
    
    
    
    
    
    
    (74
    )
    
    
    (78
    )Impairment of investment
    
    
    (3,574
    )
    
    
    
    
    
    
    
    
    
    
    (3,574
    )
    
    
    Loss before income taxes
    
    
    (8,890
    )
    
    
    (6,704
    )
    
    
    (6,863
    )
    
    
    (2,186
    )
    
    
    159Benefit for income taxes
    
    
    (14,887
    )
    
    
    (19,271
    )
    
    
    (1,857
    )
    
    
    4,384
    
    
    
    (17,414
    )Noncontrolling interest
    
    
    12
    
    
    
    (34
    )
    
    
    (25
    )
    
    
    46
    
    
    
    (9
    )Income (loss) from continuing operations
    
    $
    5,985
    
    
    
    12,601
    
    
    
    (4,981
    )
    
    
    (6,616
    )
    
    
    17,582
  79




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BFC Activities
        80




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BFC Activities
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006BFC Activities loss before income
taxes
    
    $
    (8,901
    )
    
    
    (6,670
    )
    
    
    (6,838
    )Subsidiaries not consolidated for income taxes:Equity from (loss) earnings in BankAtlantic
Bancorp
    
    
    (56,230
    )
    
    
    (7,206
    )
    
    
    5,807Equity from loss in Woodbridge
    
    
    (22,261
    )
    
    
    (39,622
    )
    
    
    (1,519
    )Loss before income taxes
    
    
    (87,392
    )
    
    
    (53,498
    )
    
    
    (2,550
    )Benefit for income taxes
    
    
    (14,887
    )
    
    
    (19,271
    )
    
    
    (1,857
    )Net loss
    
    $
    (72,505
    )
    
    
    (34,227
    )
    
    
    (693
    )Effective tax rate
    
    
    17
    %
    
    
    36
    %
    
    
    73
    %
   Purchase Accounting
  Liquidity and Capital Resources of BFC
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Net cash provided by (used in):Operating activities
    
    $
    (5,859
    )
    
    
    (3,267
    )
    
    
    (2,292
    )Investing activities
    
    
    (2,495
    )
    
    
    (31,548
    )
    
    
    (1,416
    )Financing activities
    
    
    (825
    )
    
    
    35,537
    
    
    
    (4,922
    )Increase (decrease) in cash and cash
equivalents
    
    
    (9,179
    )
    
    
    722
    
    
    
    (8,630
    )Cash and cash equivalents at beginning of
period
    
    
    18,898
    
    
    
    18,176
    
    
    
    26,806Cash and cash equivalents at end of period
    
    $
    9,719
    
    
    
    18,898
    
    
    
    18,176
  81




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BFC Activities
  
    
    Revenues from shared services activities for affiliated companies;
    
    Dividends from Benihana;
    
    Venture partnership distribution;
    
    Revenues from BFC/CCC;
    
    Proceeds from the sale of equity securities; and
    
    Dividends from BankAtlantic Bancorp.
  
    
    Purchase shares of Woodbridge and BankAtlantic Bancorp Class A common stock as discussed
in this report;
    
    Pay dividends on BFCs outstanding 5% Preferred Stock; and
    
    Fund BFCs operating and general and administrative expenses, including shared services
costs.
     82




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BFC Activities
      83




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BFC Activities
       84




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Financial Services
 Our Financial Services activities of BFC are comprised of the operations of BankAtlantic
Bancorp and its subsidiaries. BankAtlantic Bancorp in 2008 presents its results in two reportable
segments and its results of operations are consolidated in BFC Financial Corporation. The only
assets available to BFC Financial Corporation from BankAtlantic Bancorp are dividends when and if
paid by BankAtlantic Bancorp. BankAtlantic Bancorp is a separate public company and its management
prepared the following discussion regarding BankAtlantic Bancorp which was included in BankAtlantic
Bancorps Annual Report on Form 10-K for the year ended December 31, 2008 filed with the
Securities and Exchange Commission. Accordingly, references to the Company, we, us or our
in the following discussion under the caption Financial Services are references to BankAtlantic
Bancorp and its subsidiaries, and are not references to BFC Financial Corporation.
 Introduction
   Consolidated Results of Operations
  For the Years Ended December 31,2008
    
    2007
    
    2006BankAtlantic
    
    $
    (166,144
    )
    
    
    (19,440
    )
    
    
    36,322Parent Co.
    
    
    (53,100
    )
    
    
    (10,572
    )
    
    
    (9,443
    )Net (loss) income
    
    $
    (219,244
    )
    
    
    (30,012
    )
    
    
    26,879
  85




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Financial Services
(BankAtlantic Bancorp)
     BankAtlantic Results of Operations
 Summary
  Floridas Most Convenient Bank
 86




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Financial Services
(BankAtlantic Bancorp)
       For the Years Ended
    
    Change
    
    ChangeEnded December 31,
    
    2008 vs
    
    2007 vs2008
    
    2007
    
    2006
    
    2007
    
    2006Net interest income
    
    $
    193,648
    
    
    
    199,510
    
    
    
    219,605
    
    
    
    (5,862
    )
    
    
    (20,095
    )Provision for loan losses
    
    
    (135,383
    )
    
    
    (70,842
    )
    
    
    (8,574
    )
    
    
    (64,541
    )
    
    
    (62,268
    )Net income after provision for loan losses
    
    
    58,265
    
    
    
    128,668
    
    
    
    211,031
    
    
    
    (70,403
    )
    
    
    (82,363
    )Non-interest income
    
    
    137,308
    
    
    
    144,412
    
    
    
    131,844
    
    
    
    (7,104
    )
    
    
    12,568Non-interest expense
    
    
    (330,623
    )
    
    
    (313,898
    )
    
    
    (293,448
    )
    
    
    (16,725
    )
    
    
    (20,450
    )BankAtlantic (loss) income before
income taxes
    
    
    (135,050
    )
    
    
    (40,818
    )
    
    
    49,427
    
    
    
    (94,232
    )
    
    
    (90,245
    )(Provision)/benefit for income taxes
    
    
    (31,094
    )
    
    
    21,378
    
    
    
    (13,105
    )
    
    
    (52,472
    )
    
    
    34,483BankAtlantic net (loss) contribution
    
    $
    (166,144
    )
    
    
    (19,440
    )
    
    
    36,322
    
    
    
    (146,704
    )
    
    
    (55,762
    )
 87




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 BankAtlantics Net Interest Income
 For the Years EndedDecember 31, 2008
    
    December 31, 2007
    
    December 31, 2006Average
    
    Revenue/
    
    Yield/
    
    Average
    
    Revenue/
    
    Yield/
    
    Average
    
    Revenue/
    
    Yield/(Dollars are in thousands)
    
    Balance
    
    Expense
    
    Rate
    
    Balance
    
    Expense
    
    Rate
    
    Balance
    
    Expense
    
    RateInterest earning assetsLoans: (a)Residential real estate
    
    $
    2,053,645
    
    
    
    111,691
    
    
    
    5.44
    %
    
    $
    2,209,832
    
    
    
    120,768
    
    
    
    5.47
    %
    
    $
    2,099,664
    
    
    
    109,103
    
    
    
    5.20
    %Commercial real estate
    
    
    1,238,307
    
    
    
    69,642
    
    
    
    5.62
    
    
    
    1,367,095
    
    
    
    108,931
    
    
    
    7.97
    
    
    
    1,530,282
    
    
    
    128,420
    
    
    
    8.39Consumer
    
    
    743,863
    
    
    
    33,950
    
    
    
    4.56
    
    
    
    650,764
    
    
    
    47,625
    
    
    
    7.32
    
    
    
    558,769
    
    
    
    41,997
    
    
    
    7.52Commercial business
    
    
    132,565
    
    
    
    9,516
    
    
    
    7.18
    
    
    
    142,455
    
    
    
    12,720
    
    
    
    8.93
    
    
    
    140,465
    
    
    
    12,452
    
    
    
    8.86Small business
    
    
    320,853
    
    
    
    22,162
    
    
    
    6.91
    
    
    
    298,774
    
    
    
    23,954
    
    
    
    8.02
    
    
    
    259,816
    
    
    
    20,988
    
    
    
    8.08Total loans
    
    
    4,489,233
    
    
    
    246,961
    
    
    
    5.50
    
    
    
    4,668,920
    
    
    
    313,998
    
    
    
    6.73
    
    
    
    4,588,996
    
    
    
    312,960
    
    
    
    6.82Tax exempt securities (c)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    328,583
    
    
    
    19,272
    
    
    
    5.87
    
    
    
    396,539
    
    
    
    23,162
    
    
    
    5.84Taxable investment securities (b)
    
    
    1,078,189
    
    
    
    65,570
    
    
    
    6.08
    
    
    
    689,263
    
    
    
    42,849
    
    
    
    6.22
    
    
    
    618,913
    
    
    
    36,912
    
    
    
    5.96Federal funds sold
    
    
    44,031
    
    
    
    754
    
    
    
    1.71
    
    
    
    3,638
    
    
    
    195
    
    
    
    5.36
    
    
    
    1,824
    
    
    
    22
    
    
    
    1.21Total investment securities
    
    
    1,122,220
    
    
    
    66,324
    
    
    
    5.91
    
    
    
    1,021,484
    
    
    
    62,316
    
    
    
    6.10
    
    
    
    1,017,276
    
    
    
    60,096
    
    
    
    5.91Total interest earning assets
    
    
    5,611,453
    
    
    
    313,285
    
    
    
    5.58
    %
    
    
    5,690,404
    
    
    
    376,314
    
    
    
    6.61
    %
    
    
    5,606,272
    
    
    
    373,056
    
    
    
    6.65
    %Total non-interest earning assets
    
    
    503,028
    
    
    
    
    
    
    
    
    
    
    
    510,173
    
    
    
    
    
    
    
    
    
    
    
    448,296Total assets
    
    $
    6,114,481
    
    
    
    
    
    
    
    
    
    
    $
    6,200,577
    
    
    
    
    
    
    
    
    
    
    $
    6,054,568Interest bearing liabilitiesDeposits:Savings
    
    $
    503,464
    
    
    
    4,994
    
    
    
    0.99
    %
    
    $
    584,542
    
    
    
    12,559
    
    
    
    2.15
    %
    
    $
    369,504
    
    
    
    2,936
    
    
    
    0.79
    %NOW, money funds and checking
    
    
    1,506,479
    
    
    
    17,784
    
    
    
    1.18
    
    
    
    1,450,960
    
    
    
    26,031
    
    
    
    1.79
    
    
    
    1,502,058
    
    
    
    20,413
    
    
    
    1.36Certificate accounts
    
    
    1,088,170
    
    
    
    41,485
    
    
    
    3.81
    
    
    
    992,043
    
    
    
    45,886
    
    
    
    4.63
    
    
    
    868,777
    
    
    
    35,610
    
    
    
    4.10Total interest bearing deposits
    
    
    3,098,113
    
    
    
    64,263
    
    
    
    2.07
    
    
    
    3,027,545
    
    
    
    84,476
    
    
    
    2.79
    
    
    
    2,740,339
    
    
    
    58,959
    
    
    
    2.15Securities sold under agreements
to repurchase, federal funds
and other short term borrowings
    
    
    141,654
    
    
    
    2,699
    
    
    
    1.91
    
    
    
    194,222
    
    
    
    9,829
    
    
    
    5.06
    
    
    
    304,635
    
    
    
    15,309
    
    
    
    5.03Advances from FHLB
    
    
    1,417,718
    
    
    
    50,942
    
    
    
    3.59
    
    
    
    1,379,106
    
    
    
    73,256
    
    
    
    5.31
    
    
    
    1,265,772
    
    
    
    66,492
    
    
    
    5.25Subordinated debentures and
notes payable
    
    
    26,004
    
    
    
    1,733
    
    
    
    6.66
    
    
    
    28,946
    
    
    
    2,498
    
    
    
    8.63
    
    
    
    66,287
    
    
    
    5,513
    
    
    
    8.32Total interest bearing liabilities
    
    
    4,683,489
    
    
    
    119,637
    
    
    
    2.55
    
    
    
    4,629,819
    
    
    
    170,059
    
    
    
    3.67
    
    
    
    4,377,033
    
    
    
    146,273
    
    
    
    3.34Non-interest bearing liabilitiesDemand deposit and escrow accounts
    
    
    828,825
    
    
    
    
    
    
    
    
    
    
    
    946,356
    
    
    
    
    
    
    
    
    
    
    
    1,056,254Other liabilities
    
    
    50,584
    
    
    
    
    
    
    
    
    
    
    
    55,683
    
    
    
    
    
    
    
    
    
    
    
    61,392Total non-interest bearing liabilities
    
    
    879,409
    
    
    
    
    
    
    
    
    
    
    
    1,002,039
    
    
    
    
    
    
    
    
    
    
    
    1,117,646Stockholders equity
    
    
    551,583
    
    
    
    
    
    
    
    
    
    
    
    568,719
    
    
    
    
    
    
    
    
    
    
    
    559,889Total liabilities and stockholders
equity
    
    $
    6,114,481
    
    
    
    
    
    
    
    
    
    
    $
    6,200,577
    
    
    
    
    
    
    
    
    
    
    $
    6,054,568Net interest income/net interest spread
    
    
    
    
    
    
    193,648
    
    
    
    3.03
    %
    
    
    
    
    
    
    206,255
    
    
    
    2.94
    %
    
    
    
    
    
    
    226,683
    
    
    
    3.31
    %Tax equivalent adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,745
    )
    
    
    
    
    
    
    
    
    
    
    (8,107
    )Capitalized interest from real estate
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    929Net interest income
    
    
    
    
    
    
    193,648
    
    
    
    
    
    
    
    
    
    
    
    199,510
    
    
    
    
    
    
    
    
    
    
    
    219,605MarginInterest income/average interest earning assets
    
    
    
    
    
    
    
    
    
    
    5.58
    %
    
    
    
    
    
    
    
    
    
    
    6.61
    %
    
    
    
    
    
    
    
    
    
    
    6.65
    %Interest expense/average interest earning
assets
    
    
    
    
    
    
    
    
    
    
    2.13
    
    
    
    
    
    
    
    
    
    
    
    2.99
    
    
    
    
    
    
    
    
    
    
    
    2.61Tax equivalent net interest margin
    
    
    
    
    
    
    
    
    
    
    3.45
    %
    
    
    
    
    
    
    
    
    
    
    3.62
    %
    
    
    
    
    
    
    
    
    
    
    4.04
    %
 
 (a)
    
    Includes non-accruing loans(b)
    
    Average balances were based on amortized cost.(c)
    
    The tax equivalent basis is computed using a 35% tax rate. For the Year Ended December 31, 2008 Compared to the Same 2007 Period
  88




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Financial Services
(BankAtlantic Bancorp)
       89




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Financial Services
(BankAtlantic Bancorp)
 For the Year Ended December 31, 2007 Compared to the Same 2006 Period
        Year Ended
    
    Year EndedDecember 31, 2008
    
    December 31, 2007Compared to Year Ended
    
    Compared to Year EndedDecember 31, 2007
    
    December 31, 2006Volume (a)
    
    Rate
    
    Total
    
    Volume (a)
    
    Rate
    
    TotalIncrease (decrease) due to:Loans
    
    $
    (9,885
    )
    
    
    (57,152
    )
    
    
    (67,037
    )
    
    
    5,375
    
    
    
    (4,337
    )
    
    
    1,038Tax exempt securities
    
    
    
    
    
    
    (19,272
    )
    
    
    (19,272
    )
    
    
    (3,986
    )
    
    
    96
    
    
    
    (3,890
    )Taxable investment securities (b)
    
    
    23,652
    
    
    
    (931
    )
    
    
    22,721
    
    
    
    4,373
    
    
    
    1,564
    
    
    
    5,937Federal funds sold
    
    
    692
    
    
    
    (133
    )
    
    
    559
    
    
    
    97
    
    
    
    76
    
    
    
    173Total earning assets
    
    
    14,459
    
    
    
    (77,488
    )
    
    
    (63,029
    )
    
    
    5,859
    
    
    
    (2,601
    )
    
    
    3,258Deposits:Savings
    
    
    (804
    )
    
    
    (6,761
    )
    
    
    (7,565
    )
    
    
    4,620
    
    
    
    5,003
    
    
    
    9,623NOW, money funds,
and checking
    
    
    655
    
    
    
    (8,902
    )
    
    
    (8,247
    )
    
    
    (917
    )
    
    
    6,535
    
    
    
    5,618Certificate accounts
    
    
    3,665
    
    
    
    (8,066
    )
    
    
    (4,401
    )
    
    
    5,702
    
    
    
    4,574
    
    
    
    10,276Total deposits
    
    
    3,516
    
    
    
    (23,729
    )
    
    
    (20,213
    )
    
    
    9,405
    
    
    
    16,112
    
    
    
    25,517Securities sold under
agreements to repurchase
    
    
    (1,002
    )
    
    
    (6,128
    )
    
    
    (7,130
    )
    
    
    (5,588
    )
    
    
    108
    
    
    
    (5,480
    )Advances from FHLB
    
    
    1,387
    
    
    
    (23,701
    )
    
    
    (22,314
    )
    
    
    6,020
    
    
    
    744
    
    
    
    6,764Subordinated debentures
    
    
    (196
    )
    
    
    (569
    )
    
    
    (765
    )
    
    
    (3,222
    )
    
    
    207
    
    
    
    (3,015
    )189
    
    
    
    (30,398
    )
    
    
    (30,209
    )
    
    
    (2,790
    )
    
    
    1,059
    
    
    
    (1,731
    )Total interest bearing liabilities
    
    
    3,705
    
    
    
    (54,127
    )
    
    
    (50,422
    )
    
    
    6,615
    
    
    
    17,171
    
    
    
    23,786Change in tax equivalent
interest income
    
    $
    10,754
    
    
    
    (23,361
    )
    
    
    (12,607
    )
    
    
    (756
    )
    
    
    (19,772
    )
    
    
    (20,528
    )
 
 (a)
    
    Changes attributable to rate/volume have been allocated to volume.(b)
    
    Average balances were based on amortized cost. 90




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Financial Services
(BankAtlantic Bancorp)
   BankAtlantics Allowance for Loan Losses
  For the Years Ended December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004Balance, beginning of period
    
    $
    94,020
    
    
    
    43,602
    
    
    
    41,192
    
    
    
    46,010
    
    
    
    45,595Charge-offs:Commercial business loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial real estate loans
    
    
    (60,057
    )
    
    
    (12,562
    )
    
    
    (7,000
    )
    
    
    
    
    
    
    (645
    )Small business
    
    
    (4,886
    )
    
    
    (2,554
    )
    
    
    (951
    )
    
    
    (764
    )
    
    
    (238
    )Consumer loans
    
    
    (28,942
    )
    
    
    (7,065
    )
    
    
    (681
    )
    
    
    (259
    )
    
    
    (585
    )Residential real estate loans
    
    
    (4,816
    )
    
    
    (461
    )
    
    
    (239
    )
    
    
    (453
    )
    
    
    (582
    )Continuing loan products
    
    
    (98,701
    )
    
    
    (22,642
    )
    
    
    (8,871
    )
    
    
    (1,476
    )
    
    
    (2,050
    )Discontinued loan products
    
    
    
    
    
    
    
    
    
    
    (34
    )
    
    
    (1,218
    )
    
    
    (2,026
    )Total charge-offs
    
    
    (98,701
    )
    
    
    (22,642
    )
    
    
    (8,905
    )
    
    
    (2,694
    )
    
    
    (4,076
    )Recoveries:Commercial business loans
    
    
    7
    
    
    
    96
    
    
    
    291
    
    
    
    18
    
    
    
    536Commercial real estate loans
    
    
    
    
    
    
    304
    
    
    
    419
    
    
    
    1,471
    
    
    
    4,052Small business
    
    
    428
    
    
    
    417
    
    
    
    566
    
    
    
    899
    
    
    
    418Consumer loans
    
    
    365
    
    
    
    578
    
    
    
    536
    
    
    
    401
    
    
    
    370Residential real estate loans
    
    
    397
    
    
    
    15
    
    
    
    348
    
    
    
    65
    
    
    
    486Continuing loan products
    
    
    1,197
    
    
    
    1,410
    
    
    
    2,160
    
    
    
    2,854
    
    
    
    5,862Discontinued loan products
    
    
    113
    
    
    
    808
    
    
    
    581
    
    
    
    1,637
    
    
    
    3,738Total recoveries
    
    
    1,310
    
    
    
    2,218
    
    
    
    2,741
    
    
    
    4,491
    
    
    
    9,600Net (charge-offs) recoveries
    
    
    (97,391
    )
    
    
    (20,424
    )
    
    
    (6,164
    )
    
    
    1,797
    
    
    
    5,524Provision for (recovery from) loan losses
    
    
    135,383
    
    
    
    70,842
    
    
    
    8,574
    
    
    
    (6,615
    )
    
    
    (5,109
    )Transfer specific reserves to Parent Company
    
    
    (6,440
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, end of period
    
    $
    125,572
    
    
    
    94,020
    
    
    
    43,602
    
    
    
    41,192
    
    
    
    46,010
 91




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Financial Services
(BankAtlantic Bancorp)
     92




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Financial Services
(BankAtlantic Bancorp)
  December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006ALL
    
    
    Loans
    
    
    
    
    
    
    ALL
    
    
    Loans
    
    
    
    
    
    
    ALL
    
    
    Loansto gross
    
    
    by
    
    
    
    
    
    
    to gross
    
    
    by
    
    
    
    
    
    
    to gross
    
    
    byALL
    
    
    loans
    
    
    category
    
    
    ALL
    
    
    loans
    
    
    category
    
    
    ALL
    
    
    loans
    
    
    categoryby
    
    
    in each
    
    
    to gross
    
    
    by
    
    
    in each
    
    
    to gross
    
    
    by
    
    
    in each
    
    
    to grosscategory
    
    
    category
    
    
    loans
    
    
    category
    
    
    category
    
    
    loans
    
    
    category
    
    
    category
    
    
    loansCommercial business
    
    $
    3,173
    
    
    
    2.22
    %
    
    
    3.15
    %
    
    
    2,668
    
    
    
    2.04
    %
    
    
    2.65
    %
    
    
    2,359
    
    
    
    1.50
    %
    
    
    3.07
    %Commercial real estate
    
    
    75,850
    
    
    
    5.44
    
    
    
    30.69
    
    
    
    72,948
    
    
    
    4.51
    
    
    
    32.78
    
    
    
    24,632
    
    
    
    1.28
    
    
    
    37.54Small business
    
    
    8,133
    
    
    
    2.49
    
    
    
    7.20
    
    
    
    4,576
    
    
    
    1.44
    
    
    
    6.43
    
    
    
    4,495
    
    
    
    1.58
    
    
    
    5.57Residential real estate
    
    
    6,034
    
    
    
    0.31
    
    
    
    42.56
    
    
    
    4,177
    
    
    
    0.19
    
    
    
    43.82
    
    
    
    4,242
    
    
    
    0.20
    
    
    
    42.33Consumer  direct
    
    
    32,382
    
    
    
    4.35
    
    
    
    16.40
    
    
    
    9,651
    
    
    
    1.37
    
    
    
    14.32
    
    
    
    7,874
    
    
    
    1.34
    
    
    
    11.49Discontinued
loan products
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total assigned
    
    
    125,572
    
    
    
    
    
    
    
    
    
    
    
    94,020
    
    
    
    
    
    
    
    
    
    
    
    43,602Unassigned
    
    
    
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    
    
    
    
    N/A
    
    
    
    N/A$
    125,572
    
    
    
    2.76
    
    
    
    100.00
    
    
    
    94,020
    
    
    
    1.90
    
    
    
    100.00
    
    
    
    43,602
    
    
    
    0.85
    
    
    
    100.00
 December 31, 2005
    
    
    December 31, 2004ALL
    
    
    Loans
    
    
    
    
    
    
    ALL
    
    
    Loansto gross
    
    
    by
    
    
    
    
    
    
    to gross
    
    
    byALL
    
    
    loans
    
    
    category
    
    
    ALL
    
    
    loans
    
    
    categoryby
    
    
    in each
    
    
    to gross
    
    
    by
    
    
    in each
    
    
    to grosscategory
    
    
    category
    
    
    loans
    
    
    category
    
    
    category
    
    
    loansCommercial business
    
    $
    1,988
    
    
    
    2.30
    %
    
    
    1.63
    %
    
    
    2,507
    
    
    
    2.94
    %
    
    
    1.59
    %Commercial real estate
    
    
    17,984
    
    
    
    0.75
    
    
    
    45.20
    
    
    
    23,345
    
    
    
    0.92
    
    
    
    47.28Small business
    
    
    2,640
    
    
    
    1.12
    
    
    
    4.43
    
    
    
    2,403
    
    
    
    1.26
    
    
    
    3.55Residential real estate
    
    
    2,592
    
    
    
    0.13
    
    
    
    38.53
    
    
    
    2,565
    
    
    
    0.12
    
    
    
    38.57Consumer  direct
    
    
    6,354
    
    
    
    1.17
    
    
    
    10.19
    
    
    
    4,281
    
    
    
    0.90
    
    
    
    8.86Discontinued
loan products
    
    
    156
    
    
    
    12.92
    
    
    
    0.02
    
    
    
    1,431
    
    
    
    17.27
    
    
    
    0.15Total assigned
    
    
    31,714
    
    
    
    
    
    
    
    
    
    
    
    36,532Unassigned
    
    
    9,478
    
    
    
    N/A
    
    
    
    N/A
    
    
    
    9,478
    
    
    
    N/A
    
    
    
    N/A$
    41,192
    
    
    
    0.78
    
    
    
    100.00
    
    
    
    46,010
    
    
    
    0.86
    
    
    
    100.00
  93




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
          94




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  BankAtlantics Non-performing Assets and Potential Problem Loans
 December 31,2008
    
    2007
    
    2006
    
    2005
    
    2004NONPERFORMING ASSETSTax certificates
    
    $
    1,441
    
    
    
    2,094
    
    
    
    632
    
    
    
    388
    
    
    
    381Residential
    
    
    34,734
    
    
    
    8,678
    
    
    
    2,629
    
    
    
    5,981
    
    
    
    5,538Commercial (2)(3)
    
    
    161,947
    
    
    
    165,818
    
    
    
    
    
    
    
    340
    
    
    
    1,067Small business
    
    
    4,644
    
    
    
    877
    
    
    
    244
    
    
    
    9
    
    
    
    88Consumer
    
    
    6,763
    
    
    
    3,218
    
    
    
    1,563
    
    
    
    471
    
    
    
    1,210Total non-accrual assets
    
    
    209,529
    
    
    
    180,685
    
    
    
    5,068
    
    
    
    7,189
    
    
    
    8,284Residential real estate owned
    
    
    2,285
    
    
    
    413
    
    
    
    617
    
    
    
    86
    
    
    
    309Commercial real estate owned
    
    
    16,500
    
    
    
    16,763
    
    
    
    21,130
    
    
    
    881
    
    
    
    383Small business real estate owned
    
    
    260
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    Total repossessed assets
    
    
    19,045
    
    
    
    17,216
    
    
    
    21,747
    
    
    
    967
    
    
    
    692Total nonperforming assets
    
    $
    228,574
    
    
    
    197,901
    
    
    
    26,815
    
    
    
    8,156
    
    
    
    8,976Total nonperforming assets as
a percentage of:Total assets
    
    
    4.00
    
    
    
    3.21
    
    
    
    0.43
    
    
    
    0.13
    
    
    
    0.15
    %Loans, tax certificates and
real estate owned
    
    
    4.95
    
    
    
    4.10
    
    
    
    0.55
    
    
    
    0.17
    
    
    
    0.19
    %TOTAL ASSETS
    
    $
    5,713,690
    
    
    
    6,161,962
    
    
    
    6,187,122
    
    
    
    6,109,330
    
    
    
    6,044,988TOTAL LOANS, TAX CERTIFICATES
AND NET REAL ESTATE OWNED
    
    $
    4,614,892
    
    
    
    4,823,825
    
    
    
    4,903,961
    
    
    
    4,830,268
    
    
    
    4,771,682Allowance for loan losses
    
    $
    125,572
    
    
    
    94,020
    
    
    
    43,602
    
    
    
    41,192
    
    
    
    46,010Tax certificates
    
    $
    213,534
    
    
    
    188,401
    
    
    
    199,090
    
    
    
    166,697
    
    
    
    170,028Allowance for tax certificate losses
    
    $
    6,064
    
    
    
    3,289
    
    
    
    3,699
    
    
    
    3,271
    
    
    
    3,297OTHER POTENTIAL PROBLEM
LOANSContractually past due 90 days
or more (1)
    
    $
    15,721
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Performing impaired loans
    
    
    
    
    
    
    
    
    
    
    163
    
    
    
    193
    
    
    
    320Restructured loans
    
    
    25,843
    
    
    
    2,488
    
    
    
    
    
    
    
    77
    
    
    
    24TOTAL POTENTIAL
PROBLEM LOANS
    
    $
    41,564
    
    
    
    2,488
    
    
    
    163
    
    
    
    270
    
    
    
    344
 
 (1)
    
    The majority of these loans have matured and the borrower continues to make payments under
the matured loan agreement.(2)
    
    $121.9 million of impaired loans had specific reserves of $29.2 million and no
additional specific reserves were determined to be required on the remaining impaired
loans.(3)
    
    Excluded from the above table as of December 31, 2008 were $79.3 million of
residential commercial loans that were transferred to a work-out subsidiary of the Parent
Company in March 2008.   95




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Financial Services
(BankAtlantic Bancorp)
      BankAtlantics Non- Interest Income
  For the Years Ended
    
    Change
    
    ChangeDecember 31,
    
    2008 vs
    
    2007 vs2008
    
    2007
    
    2006
    
    2007
    
    2006Service charges on deposits
    
    $
    93,905
    
    
    
    102,639
    
    
    
    90,472
    
    
    
    (8,734
    )
    
    
    12,167Other service charges and fees
    
    
    28,959
    
    
    
    28,950
    
    
    
    27,542
    
    
    
    9
    
    
    
    1,408Securities activities, net
    
    
    2,395
    
    
    
    2,307
    
    
    
    657
    
    
    
    88
    
    
    
    1,650Income from unconsolidated subsidiaries
    
    
    1,509
    
    
    
    1,219
    
    
    
    33
    
    
    
    290
    
    
    
    1,186Gains associated with debt redemption
    
    
    
    
    
    
    
    
    
    
    1,528
    
    
    
    
    
    
    
    (1,528
    )(Losses) gains on dispositions of office
properties and equipment, net
    
    
    (213
    )
    
    
    (1,121
    )
    
    
    1,627
    
    
    
    908
    
    
    
    (2,748
    )Gains on sales of loans
    
    
    265
    
    
    
    494
    
    
    
    680
    
    
    
    (229
    )
    
    
    (186
    )Other
    
    
    10,488
    
    
    
    9,924
    
    
    
    9,305
    
    
    
    564
    
    
    
    619Non-interest income
    
    $
    137,308
    
    
    
    144,412
    
    
    
    131,844
    
    
    
    (7,104
    )
    
    
    12,568
   96




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Financial Services
(BankAtlantic Bancorp)
            97




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   BankAtlantics Non- Interest Expense
  For the Years Ended
    
    Change
    
    ChangeDecember 31,
    
    2008 vs
    
    2007 vs2008
    
    2007
    
    2006
    
    2007
    
    2006Employee compensation and benefits
    
    $
    125,851
    
    
    
    148,758
    
    
    
    146,099
    
    
    
    (22,907
    )
    
    
    2,659Occupancy and equipment
    
    
    64,774
    
    
    
    65,840
    
    
    
    57,291
    
    
    
    (1,066
    )
    
    
    8,549Advertising and promotion
    
    
    16,056
    
    
    
    19,684
    
    
    
    34,659
    
    
    
    (3,628
    )
    
    
    (14,975
    )Check losses
    
    
    8,767
    
    
    
    11,476
    
    
    
    8,615
    
    
    
    (2,709
    )
    
    
    2,861Professional fees
    
    
    10,979
    
    
    
    8,266
    
    
    
    7,653
    
    
    
    2,713
    
    
    
    613Supplies and postage
    
    
    4,580
    
    
    
    6,078
    
    
    
    6,833
    
    
    
    (1,498
    )
    
    
    (755
    )Telecommunication
    
    
    4,430
    
    
    
    5,552
    
    
    
    4,774
    
    
    
    (1,122
    )
    
    
    778Amortization of intangible assets
    
    
    1,359
    
    
    
    1,437
    
    
    
    1,561
    
    
    
    (78
    )
    
    
    (124
    )Cost associated with debt redemption
    
    
    1,238
    
    
    
    
    
    
    
    1,457
    
    
    
    1,238
    
    
    
    (1,457
    )Provision for tax certificates
    
    
    7,286
    
    
    
    300
    
    
    
    300
    
    
    
    6,986
    
    
    
    Restructuring charges, impairments
and exit activities
    
    
    7,395
    
    
    
    8,351
    
    
    
    
    
    
    
    (956
    )
    
    
    8,351Impairment of real estate held for sale
    
    
    1,169
    
    
    
    5,240
    
    
    
    
    
    
    
    (4,071
    )
    
    
    5,240Impairment of real estate owned
    
    
    1,465
    
    
    
    7,299
    
    
    
    9
    
    
    
    (5,834
    )
    
    
    7,290Impairment of goodwill
    
    
    48,284
    
    
    
    
    
    
    
    
    
    
    
    48,284
    
    
    
    Other
    
    
    26,990
    
    
    
    25,617
    
    
    
    24,197
    
    
    
    1,373
    
    
    
    1,420Total non-interest expense
    
    $
    330,623
    
    
    
    313,898
    
    
    
    293,448
    
    
    
    16,725
    
    
    
    20,450
   98




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Financial Services
(BankAtlantic Bancorp)
           99




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Financial Services
(BankAtlantic Bancorp)
          100




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 BankAtlantics Provision for Income Taxes
 For the Years Ended
    
    Change
    
    ChangeDecember 31,
    
    2008 vs
    
    2007 vs($ in thousands)
    
    2008
    
    2007
    
    2006
    
    2007
    
    2006(Loss) income before income taxes
    
    $
    (135,050
    )
    
    
    (40,818
    )
    
    
    49,427
    
    
    
    (94,232
    )
    
    
    (90,245
    )(Provision) benefit for income taxes
    
    
    (31,094
    )
    
    
    21,378
    
    
    
    (13,105
    )
    
    
    (52,472
    )
    
    
    34,483BankAtlantic net (loss) income
    
    $
    (166,144
    )
    
    
    (19,440
    )
    
    
    36,322
    
    
    
    (146,704
    )
    
    
    (55,762
    )Effective tax rate
    
    
    -23.02
    %
    
    
    52.37
    %
    
    
    26.51
    %
   Parent Company Results of Operations
  For the Years Ended
    
    Change
    
    ChangeDecember 31,
    
    2008 vs
    
    2007 vs2008
    
    2007
    
    2006
    
    2007
    
    2006Net interest income (expense):Interest income on loans
    
    $
    261
    
    
    
    
    
    
    
    
    
    
    
    261
    
    
    
    Interest and dividend income
on investments
    
    
    1,184
    
    
    
    2,320
    
    
    
    2,448
    
    
    
    (1,136
    )
    
    
    (128
    )Interest expense on Junior
subordinated debentures
    
    
    (21,262
    )
    
    
    (23,054
    )
    
    
    (21,933
    )
    
    
    1,792
    
    
    
    (1,121
    )Net interest (expense)
    
    
    (19,817
    )
    
    
    (20,734
    )
    
    
    (19,485
    )
    
    
    917
    
    
    
    (1,249
    )Provision for loan losses
    
    
    (24,418
    )
    
    
    
    
    
    
    
    
    
    
    (24,418
    )
    
    
    Net interest (expense) after provision
    
    
    (44,235
    )
    
    
    (20,734
    )
    
    
    (19,485
    )
    
    
    (23,501
    )
    
    
    (1,249
    )Non-interest income:Income from unconsolidated
subsidiaries
    
    
    600
    
    
    
    1,281
    
    
    
    1,634
    
    
    
    (681
    )
    
    
    (353
    )Securities activities, net
    
    
    (356
    )
    
    
    6,105
    
    
    
    9,156
    
    
    
    (6,461
    )
    
    
    (3,051
    )Other income
    
    
    1,027
    
    
    
    824
    
    
    
    23
    
    
    
    203
    
    
    
    801Non-interest income
    
    
    1,271
    
    
    
    8,210
    
    
    
    10,813
    
    
    
    (6,939
    )
    
    
    (2,603
    )Non-interest expense:Employee compensation and benefits
    
    
    3,046
    
    
    
    2,421
    
    
    
    4,705
    
    
    
    625
    
    
    
    (2,284
    )Advertising and promotion
    
    
    279
    
    
    
    317
    
    
    
    408
    
    
    
    (38
    )
    
    
    (91
    )Professional fees
    
    
    1,782
    
    
    
    424
    
    
    
    638
    
    
    
    1,358
    
    
    
    (214
    )Other
    
    
    3,634
    
    
    
    1,080
    
    
    
    1,028
    
    
    
    2,554
    
    
    
    52Non-interest expense
    
    
    8,741
    
    
    
    4,242
    
    
    
    6,779
    
    
    
    4,499
    
    
    
    (2,537
    )Loss before income taxes
    
    
    (51,705
    )
    
    
    (16,766
    )
    
    
    (15,451
    )
    
    
    (34,939
    )
    
    
    (1,315
    )(Provision) benefit for income taxes
    
    
    (1,395
    )
    
    
    6,194
    
    
    
    6,008
    
    
    
    (7,589
    )
    
    
    186Parent Company loss
    
    $
    (53,100
    )
    
    
    (10,572
    )
    
    
    (9,443
    )
    
    
    (42,528
    )
    
    
    (1,129
    )
  101




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Financial Services
(BankAtlantic Bancorp)
     (in thousands)
    
    AmountNonaccrual loans:Commercial residential real estate:Builder land loans
    
    $
    32,039Land acquisition and development
    
    
    19,809Land acquisition, development and
construction
    
    
    34,915Total commercial residential real estate
    
    
    86,763Commercial non-residential real estate
    
    
    14,731Total non-accrual loans
    
    
    101,494Allowance for loan losses  specific reserves
    
    
    (6,440
    )Non-accrual loans, net
    
    $
    95,054
 102




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  December 31,(in thousands)
    
    2008Nonaccrual loans:Commercial residential real estate:Builder land loans
    
    $
    22,019Land acquisition and development
    
    
    16,759Land acquisition, development and
construction
    
    
    29,163Total commercial residential real estate
    
    
    67,941Commercial non-residential real estate
    
    
    11,386Total non-accrual loans
    
    
    79,327Allowance for loan losses  specific reserves
    
    
    (11,685
    )Non-accrual loans, net
    
    $
    67,642
        103




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
      BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Higher cash and due from depository institution balances resulting from additional
cash at automated teller machines and cash on hand;
    
    Increase in federal funds sold and short term investments associated with daily
treasury management;
    
    Decrease in securities available for sale and financial instruments reflecting the
sale of Stifel common stock, the sale of Stifel warrants, the liquidation of managed fund
equity investments held by the Parent Company and principal repayments on agency
securities;
    
    Decrease in investment securities at cost primarily resulting from the sale of Stifel
common stock and certain private equity securities;
    
    Increase in tax certificate balances primarily due to higher Florida tax certificate
acquisitions;
    
    Decline in FHLB stock related to lower FHLB advance borrowings;
    
    Decrease in loan receivable balances associated with a $43.2 million increase in the
allowance for loan losses as well as lower residential loan balances partially offset by
higher small business, commercial business and home equity loan balances;
    
    Lower real estate held for development and sale balances associated with impairments
and the sale of inventory of homes at a real estate development;
 104




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 
    
    Decrease in office properties and equipment primarily due to the sale of five central
Florida stores to an unrelated financial institution as well as the disposal of
properties in connection with the on-going consolidation of back-office facilities;
    
    Decrease in deferred tax asset, net due to the establishment of a deferred tax asset
valuation allowance;
    
    Decrease in goodwill associated with the recognition of a $48.3 million goodwill
impairment; and
    
    Decline in other assets reflecting the receipt of income tax refunds associated with
the carry-back of taxable losses for the year ended December 31, 2007.
  
    
    Lower non-interest-bearing deposit balances primarily reflecting the migration of
non-interest bearing deposits to interest-bearing NOW accounts as BankAtlantic promoted
higher interest rate NOW accounts during 2008 in response to greater competition;
    
    Decline in insured savings and money market accounts primarily reflecting deposit
outflows resulting from interest rate reductions on high yield account products as
high rates from prior period promotions were discontinued;
    
    Increase in certificate accounts reflecting higher brokered deposit balances as well
as a higher interest rate certificate account promotion during 2008;
    
    Lower FHLB advance borrowings due to a decline in total assets and the availability of
alternative funding sources at lower interest rates;
    
    Higher short-term borrowings associated with funds obtained from the Treasury at lower
interest rates than alternate funding sources; and
    
    Decrease in other liabilities primarily resulting from a decline in accrued interest
payable on borrowings associated with significantly lower interest rates at period end.
 Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc.
  105




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Financial Services
(BankAtlantic Bancorp)
   As of December 31, 2008Gross
    
    GrossCarrying
    
    Unrealized
    
    Unrealized
    
    Estimated(in thousands)
    
    Value
    
    Appreciation
    
    Depreciation
    
    Fair ValueCash and cash equivalents
    
    $
    37,116
    
    
    
    
    
    
    
    
    
    
    
    37,116Equity securities
    
    
    1,597
    
    
    
    
    
    
    
    
    
    
    
    1,597Private investment securities
    
    
    2,036
    
    
    
    467
    
    
    
    
    
    
    
    2,503Total
    
    $
    40,749
    
    
    
    467
    
    
    
    
    
    
    
    41,216
    106




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Financial Services
(BankAtlantic Bancorp)
    BankAtlantic
     
 107




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Financial Services
(BankAtlantic Bancorp)
       108




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  As ofDecember 31,
    
    For the Period Ending December 31, (1)2008
    
    2009
    
    2010-2011
    
    2012-2016
    
    2017-2021
    
    2022-2026
    
    >2027Commercial real estate
    
    $
    1,449,620
    
    
    
    665,220
    
    
    
    309,179
    
    
    
    316,651
    
    
    
    94,982
    
    
    
    60,879
    
    
    
    2,709Residential real estate
    
    
    1,933,077
    
    
    
    40,286
    
    
    
    5,861
    
    
    
    30,506
    
    
    
    265,104
    
    
    
    81,892
    
    
    
    1,509,428Consumer and home
equity
    
    
    745,086
    
    
    
    1,384
    
    
    
    5,861
    
    
    
    297,845
    
    
    
    370,009
    
    
    
    69,987
    
    
    
    Commercial business
    
    
    251,248
    
    
    
    120,903
    
    
    
    43,983
    
    
    
    81,387
    
    
    
    4,428
    
    
    
    547
    
    
    
    Total loans
    
    $
    4,379,031
    
    
    
    827,793
    
    
    
    364,884
    
    
    
    726,389
    
    
    
    734,523
    
    
    
    213,305
    
    
    
    1,512,137Total securities
available for sale (1)
    
    $
    699,474
    
    
    
    
    
    
    
    277
    
    
    
    330
    
    
    
    36,850
    
    
    
    128,162
    
    
    
    533,855
 
 (1)
    
    Does not include $2.4 million of equity securities.  Commercial
    
    Real EstateBusiness
    
    Construction
    
    TotalOne year or less
    
    $
    215,440
    
    
    
    291,441
    
    
    
    506,881Over one year, but less than five years
    
    
    31,909
    
    
    
    9,084
    
    
    
    40,993Over five years
    
    
    3,899
    
    
    
    
    
    
    
    3,899$
    251,248
    
    
    
    300,525
    
    
    
    551,773Due After One Year:Pre-determined interest rate
    
    $
    35,808
    
    
    
    9,084
    
    
    
    44,892Floating or adjustable interest rate
    
    
    
    
    
    
    
    
    
    
    $
    35,808
    
    
    
    9,084
    
    
    
    44,892
  Florida
    
    
    60
    %Eastern U.S.A.
    
    
    21
    %Western U.S.A.
    
    
    15
    %Central U.S.A
    
    
    4
    %100
    %
  109




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  Minimum RatiosAdequately
    
    WellActual
    
    Capitalized
    
    CapitalizedAmount
    
    Ratio
    
    Ratio
    
    RatioAt December 31, 2008:Total risk-based capital
    
    $
    456,776
    
    
    
    11.63
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    
    385,006
    
    
    
    9.80
    
    
    
    4.00
    
    
    
    6.00Tangible capital
    
    
    385,006
    
    
    
    6.80
    
    
    
    1.50
    
    
    
    1.50Core capital
    
    
    385,006
    
    
    
    6.80
    
    
    
    4.00
    
    
    
    5.00At December 31, 2007:Total risk-based capital
    
    $
    495,668
    
    
    
    11.63
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    
    420,063
    
    
    
    9.85
    
    
    
    4.00
    
    
    
    6.00Tangible capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    1.50
    
    
    
    1.50Core capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    4.00
    
    
    
    5.00
   Consolidated Cash Flows
  For the Years Ended December 31,2008
    
    2007
    
    2006Net cash provided by (used in):Operating activities
    
    $
    75,447
    
    
    
    40,928
    
    
    
    3,359Investing activities
    
    
    281,186
    
    
    
    (22,066
    )
    
    
    (205,891
    )Financing activities
    
    
    (322,250
    )
    
    
    (30,183
    )
    
    
    174,460Increase (decrease) in cash and cash
equivalents
    
    $
    34,383
    
    
    
    (11,321
    )
    
    
    (28,072
    )
  110




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   Off Balance Sheet Arrangements, Contractual Obligations and Loan Commitments
  Amount of Commitment Expiration Per PeriodTotalAmounts
    
    Less than
    
    
    
    
    
    
    
    
    
    After 5Commercial Commitments
    
    Committed
    
    1 year
    
    1-3 years
    
    4-5 years
    
    yearsLines of credit
    
    $
    501,431
    
    
    
    70,642
    
    
    
    
    
    
    
    
    
    
    
    430,789Standby letters of credit
    
    
    20,558
    
    
    
    20,558
    
    
    
    
    
    
    
    
    
    
    
    Other commercial
commitments
    
    
    41,368
    
    
    
    41,368
    
    
    
    
    
    
    
    
    
    
    
    Total commercial
commitments
    
    $
    563,357
    
    
    
    132,568
    
    
    
    
    
    
    
    
    
    
    
    430,789
     111




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
  Payments Due by Period (2)Less than
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    1 year
    
    1-3 years
    
    4-5 years
    
    yearsTime deposits
    
    $
    1,338,176
    
    
    
    1,229,144
    
    
    
    65,640
    
    
    
    43,377
    
    
    
    15Long-term debt
    
    
    317,059
    
    
    
    
    
    
    
    22,000
    
    
    
    864
    
    
    
    294,195Advances from FHLB (1)
    
    
    967,028
    
    
    
    565,000
    
    
    
    402,028
    
    
    
    
    
    
    
    Operating lease obligations held for
sublease
    
    
    30,729
    
    
    
    1,241
    
    
    
    3,657
    
    
    
    2,403
    
    
    
    23,428Operating lease obligations held for use
    
    
    74,369
    
    
    
    7,983
    
    
    
    11,635
    
    
    
    9,562
    
    
    
    45,189Pension obligation
    
    
    17,340
    
    
    
    1,269
    
    
    
    2,995
    
    
    
    3,229
    
    
    
    9,847Other obligations
    
    
    20,056
    
    
    
    2,956
    
    
    
    5,900
    
    
    
    6,400
    
    
    
    4,800Total contractual cash obligations
    
    $
    2,764,757
    
    
    
    1,807,593
    
    
    
    513,855
    
    
    
    65,835
    
    
    
    377,474
 
 (1)
    
    Payments due by period are based on contractual maturities(2)
    
    The above table excludes interest payments on interest bearing liabilities         112




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Critical Accounting Policies
  Allowance for loan losses
    113




---



##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   Valuation of investment securities
   114




---



##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
    Other-than-Temporary Impairment of Securities.
  Impairment of Goodwill and Long Lived Assets
   115




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
      
    
    recent data observed in the market, including similar assets,
    
    cash flow modeling based on projected cash flows and market discount rates , and
    
    estimated fair value of the underlying loan collateral
   116




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##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
   Accounting for Deferred Tax Asset Valuation Allowance
    117




---



##### Table of Contents



Financial Services
(BankAtlantic Bancorp)
 Dividends
  118




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##### Table of Contents



Real Estate Development
(Woodbridge)
 Real Estate Development
 The Real Estate Development activities of BFC are comprised of the operations of Woodbridge
Holdings Corporation and its subsidiaries. Woodbridge in 2008 presents its results in two
reportable segments and its results of operations are consolidated with BFC Financial Corporation.
The only assets available to BFC Financial Corporation are dividends when and if paid by
Woodbridge. Woodbridge is a separate public company and its management prepared the following
discussion regarding Woodbridge which was included in Woodbridges Annual Report on Form 10-K for
the year ended December 31, 2008 filed with the Securities and Exchange Commission. Accordingly,
references to the Company, we, us or our in the following discussion under the caption
Real Estate Development are references to Woodbridge Holdings Corporation and its subsidiaries,
and are not references to BFC Financial Corporation.
 Executive Overview
   Financial and Non-Financial Metrics
  119




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##### Table of Contents



Real Estate Development
(Woodbridge)
  Critical Accounting Policies and Estimates
   Loss in excess of investment in Levitt and Sons
  Fair Value Measurements
 Fair Value
Measurements
 120




---



##### Table of Contents



Real Estate Development
(Woodbridge)
 
    
    Level 1. Observable inputs such as quoted prices in active markets for identical assets or liabilities;
    
    Level 2. Inputs, other than the quoted prices in active markets, that
are observable either directly or indirectly; and
    
    Level 3. Unobservable inputs, when there is little or no market data,
which require the reporting entity to develop its own assumptions.
  Investments
 Accounting for
Investments in Real Estate Ventures Determining Whether a
General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar
Entity When the Limited Partners Have Certain Rights
 Equity Method
  Cost Method
 Accounting for Certain Investments in
Debt and Equity Securities
 Impairment
   121




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##### Table of Contents



Real Estate Development
(Woodbridge)
  Goodwill and Intangible Assets
  Goodwill and Other Intangible Assets
 Revenue Recognition
 Accounting for Sales of Real Estate
   122




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##### Table of Contents



Real Estate Development
(Woodbridge)
 Accounting for Leases
 Accounting
for Real Estate Time-Sharing Transactions Accounting for Costs and Initial Rental Operations of Real Estate Projects
 Income Taxes
   Accounting for Uncertainty in Income
Taxes  an interpretation of FASB No. 109
 123




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##### Table of Contents



Real Estate Development
(Woodbridge)
 Consolidated Results of Operations
 2008
    
    
    2007Year Ended December 31,
    
    
    vs. 2007
    
    
    vs. 20062008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(In thousands, except per share data)RevenuesSales of real estate
    
    $
    13,837
    
    
    
    410,115
    
    
    
    566,086
    
    
    
    (396,278
    )
    
    
    (155,971
    )Other revenues
    
    
    11,701
    
    
    
    10,458
    
    
    
    9,241
    
    
    
    1,243
    
    
    
    1,217Total revenues
    
    
    25,538
    
    
    
    420,573
    
    
    
    575,327
    
    
    
    (395,035
    )
    
    
    (154,754
    )Costs and expensesCost of sales of real estate
    
    
    12,728
    
    
    
    573,241
    
    
    
    482,961
    
    
    
    (560,513
    )
    
    
    90,280Selling, general and administrative expenses
    
    
    50,754
    
    
    
    117,924
    
    
    
    121,151
    
    
    
    (67,170
    )
    
    
    (3,227
    )Interest expense
    
    
    10,867
    
    
    
    3,807
    
    
    
    
    
    
    
    7,060
    
    
    
    3,807Other expenses
    
    
    
    
    
    
    3,929
    
    
    
    3,677
    
    
    
    (3,929
    )
    
    
    252Total costs and expenses
    
    
    74,349
    
    
    
    698,901
    
    
    
    607,789
    
    
    
    (624,552
    )
    
    
    91,112Earnings from Bluegreen Corporation
    
    
    8,996
    
    
    
    10,275
    
    
    
    9,684
    
    
    
    (1,279
    )
    
    
    591Impairment of investment in Bluegreen Corporation
    
    
    (94,426
    )
    
    
    
    
    
    
    
    
    
    
    (94,426
    )
    
    
    Impairment of other investments
    
    
    (14,120
    )
    
    
    
    
    
    
    
    
    
    
    (14,120
    )
    
    
    Interest and other income
    
    
    8,030
    
    
    
    11,264
    
    
    
    7,844
    
    
    
    (3,234
    )
    
    
    3,420Loss before income taxes
    
    
    (140,331
    )
    
    
    (256,789
    )
    
    
    (14,934
    )
    
    
    116,458
    
    
    
    (241,855
    )Benefit for income taxes
    
    
    
    
    
    
    22,169
    
    
    
    5,770
    
    
    
    (22,169
    )
    
    
    16,399Net loss
    
    $
    (140,331
    )
    
    
    (234,620
    )
    
    
    (9,164
    )
    
    
    94,289
    
    
    
    (225,456
    )Basic loss per share (c)
    
    $
    (7.35
    )
    
    
    (30.00
    )
    
    
    (2.27
    )
    
    
    22.65
    
    
    
    (27.73
    )Total diluted loss per share (a) (c)
    
    $
    (7.35
    )
    
    
    (30.00
    )
    
    
    (2.29
    )
    
    
    22.65
    
    
    
    (27.71
    )Basic weighted average shares outstanding (b) (c)
    
    
    19,088
    
    
    
    7,821
    
    
    
    4,045
    
    
    
    11,267
    
    
    
    3,776Diluted weighted average shares outstanding (b)
(c)
    
    
    19,088
    
    
    
    7,821
    
    
    
    4,045
    
    
    
    11,267
    
    
    
    3,776
 
 (a)
    
    Diluted loss per share takes into account (i) the dilution in earnings we recognize from Bluegreen as a result of outstanding
securities issued by Bluegreen that enable the holders thereof to acquire shares of Bluegreens common stock and (ii) the
dilutive effect of our stock options and restricted stock using the treasury stock method.(b)
    
    The weighted average number of common shares outstanding in basic and diluted loss per common share for 2006 were
retroactively adjusted for a number of shares representing the bonus element arising from the rights offering that closed on
October 1, 2007. Under the rights offering, shares of our Class A common stock were issued on October 1, 2007 at a purchase
price below the market price of such shares on that date resulting in the bonus element of 1.97%. The number of weighted
average shares of Class A common stock was retroactively increased by this percentage for 2006.(c)
    
    On September 26, 2008, we effected a one-for-five reverse stock split. As a result of the reverse stock split, each five
shares of our Class A Common Stock outstanding at the time of the reverse stock split automatically converted into one share
of Class A Common Stock and each five shares of our Class B Common Stock outstanding at the time of the reverse stock split
automatically converted into one share of Class B Common Stock. Accordingly, all share and per share data presented in this
report for prior periods have been retroactively adjusted to reflect the reverse stock split.  124




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Real Estate Development
(Woodbridge)
 For the Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007
      125




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Real Estate Development
(Woodbridge)
       126




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Real Estate Development
(Woodbridge)
  For the Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
       127




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##### Table of Contents



Real Estate Development
(Woodbridge)
       128




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##### Table of Contents



Real Estate Development
(Woodbridge)
 Land Division Results of Operations
 2008
    
    
    2007Year Ended December 31,
    
    
    vs. 2007
    
    
    vs. 20062008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    11,268
    
    
    
    16,567
    
    
    
    69,778
    
    
    
    (5,299
    )
    
    
    (53,211
    )Other revenues
    
    
    10,592
    
    
    
    7,585
    
    
    
    3,816
    
    
    
    3,007
    
    
    
    3,769Total revenues
    
    
    21,860
    
    
    
    24,152
    
    
    
    73,594
    
    
    
    (2,292
    )
    
    
    (49,442
    )Costs and expensesCost of sales of real estate
    
    
    6,632
    
    
    
    7,447
    
    
    
    42,662
    
    
    
    (815
    )
    
    
    (35,215
    )Selling, general and administrative expenses
    
    
    24,608
    
    
    
    19,077
    
    
    
    15,119
    
    
    
    5,531
    
    
    
    3,958Interest expense
    
    
    3,637
    
    
    
    2,629
    
    
    
    
    
    
    
    1,008
    
    
    
    2,629Total costs and expenses
    
    
    34,877
    
    
    
    29,153
    
    
    
    57,781
    
    
    
    5,724
    
    
    
    (28,628
    )Interest and other income
    
    
    5,685
    
    
    
    4,489
    
    
    
    2,650
    
    
    
    1,196
    
    
    
    1,839(Loss) income before income taxes
    
    
    (7,332
    )
    
    
    (512
    )
    
    
    18,463
    
    
    
    (6,820
    )
    
    
    (18,975
    )Provision for income taxes
    
    
    
    
    
    
    (5,910
    )
    
    
    (6,936
    )
    
    
    5,910
    
    
    
    1,026Net (loss) income
    
    $
    (7,332
    )
    
    
    (6,422
    )
    
    
    11,527
    
    
    
    (910
    )
    
    
    (17,949
    )Operational data:Acres sold (a)
    
    
    40
    
    
    
    40
    
    
    
    371
    
    
    
    
    
    
    
    (331
    )Margin percentage (b)
    
    
    41.1
    %
    
    
    55.0
    %
    
    
    38.9
    %
    
    
    (13.9
    )%
    
    
    16.1
    %Unsold saleable acres
    
    
    6,639
    
    
    
    6,679
    
    
    
    6,871
    
    
    
    (40
    )
    
    
    (192
    )Acres subject to sales contracts  Third
parties
    
    
    10
    
    
    
    259
    
    
    
    74
    
    
    
    (249
    )
    
    
    185Aggregate sales price of acres subject to
sales contracts to third parties
    
    $
    1,050
    
    
    
    77,888
    
    
    
    21,124
    
    
    
    (76,838
    )
    
    
    56,764
 
 (a)
    
    Includes 5 acres sold related to commercial projects.(b)
    
    Margin percentage is calculated by dividing margin (sales of real
estate minus cost of sales of real estate) by sales of real estate.
Sales of real estate and margin percentage include lot sales, revenues
from look back provisions and recognition of deferred revenue
associated with sales in prior periods.  129




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Real Estate Development
(Woodbridge)
  For the Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007
       130




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Real Estate Development
(Woodbridge)
   For the Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
       131




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##### Table of Contents



Real Estate Development
(Woodbridge)
   Other Operations Results of Operations
 2008
    
    
    2007Year Ended December 31,
    
    
    Vs. 2007
    
    
    Vs. 20062008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    2,484
    
    
    
    6,574
    
    
    
    11,041
    
    
    
    (4,090
    )
    
    
    (4,467
    )Other revenues
    
    
    1,109
    
    
    
    952
    
    
    
    1,435
    
    
    
    157
    
    
    
    (483
    )Total revenues
    
    
    3,593
    
    
    
    7,526
    
    
    
    12,476
    
    
    
    (3,933
    )
    
    
    (4,950
    )Costs and expensesCost of sales of real estate
    
    
    16,151
    
    
    
    16,793
    
    
    
    11,649
    
    
    
    (642
    )
    
    
    5,144Selling, general and administrative expenses
    
    
    26,717
    
    
    
    32,508
    
    
    
    28,174
    
    
    
    (5,791
    )
    
    
    4,334Interest expense
    
    
    8,315
    
    
    
    1,073
    
    
    
    
    
    
    
    7,242
    
    
    
    1,073Other expenses
    
    
    
    
    
    
    2,390
    
    
    
    8
    
    
    
    (2,390
    )
    
    
    2,382Total costs and expenses
    
    
    51,183
    
    
    
    52,764
    
    
    
    39,831
    
    
    
    (1,581
    )
    
    
    12,933Earnings from Bluegreen Corporation
    
    
    8,996
    
    
    
    10,275
    
    
    
    9,684
    
    
    
    (1,279
    )
    
    
    591Impairment of investment in Bluegreen Corporation
    
    
    (94,426
    )
    
    
    
    
    
    
    
    
    
    
    (94,426
    )
    
    
    Impairment of other investments
    
    
    (14,120
    )
    
    
    
    
    
    
    
    
    
    
    (14,120
    )
    
    
    Interest and other income
    
    
    4,001
    
    
    
    7,367
    
    
    
    4,059
    
    
    
    (3,366
    )
    
    
    3,308Loss before income taxes
    
    
    (143,139
    )
    
    
    (27,596
    )
    
    
    (13,612
    )
    
    
    (115,543
    )
    
    
    (13,984
    )Benefit for income taxes
    
    
    
    
    
    
    34,297
    
    
    
    5,639
    
    
    
    (34,297
    )
    
    
    28,658Net (loss) income
    
    $
    (143,139
    )
    
    
    6,701
    
    
    
    (7,973
    )
    
    
    (149,840
    )
    
    
    14,674
  132




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Real Estate Development
(Woodbridge)
 For the Year Ended December 31, 2008 Compared to the Year Ended December 31, 2007
        133




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Real Estate Development
(Woodbridge)
   For the Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
       134




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##### Table of Contents



Real Estate Development
(Woodbridge)
   Primary Homebuilding Segment Results of Operations
 2008
    
    
    2007Year Ended December 31,
    
    
    vs. 2007
    
    
    vs. 20062008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(Dollars in thousands, except average price data)RevenuesSales of real estate
    
    $
    
    
    
    
    345,666
    
    
    
    424,420
    
    
    
    (345,666
    )
    
    
    (78,754
    )Other revenues
    
    
    
    
    
    
    2,243
    
    
    
    4,070
    
    
    
    (2,243
    )
    
    
    (1,827
    )Total revenues
    
    
    
    
    
    
    347,909
    
    
    
    428,490
    
    
    
    (347,909
    )
    
    
    (80,581
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    501,206
    
    
    
    367,252
    
    
    
    (501,206
    )
    
    
    133,954Selling, general and administrative expenses
    
    
    
    
    
    
    61,568
    
    
    
    65,052
    
    
    
    (61,568
    )
    
    
    (3,484
    )Interest expense
    
    
    
    
    
    
    7,258
    
    
    
    
    
    
    
    (7,258
    )
    
    
    7,258Other expenses
    
    
    
    
    
    
    1,539
    
    
    
    2,362
    
    
    
    (1,539
    )
    
    
    (823
    )Total costs and expenses
    
    
    
    
    
    
    571,571
    
    
    
    434,666
    
    
    
    (571,571
    )
    
    
    136,905Interest and other income
    
    
    
    
    
    
    6,933
    
    
    
    2,982
    
    
    
    (6,933
    )
    
    
    3,951(Loss) income before income taxes
    
    
    
    
    
    
    (216,729
    )
    
    
    (3,194
    )
    
    
    216,729
    
    
    
    (213,535
    )Benefit (provision) for income taxes
    
    
    
    
    
    
    1,396
    
    
    
    1,508
    
    
    
    (1,396
    )
    
    
    (112
    )Net (loss) income
    
    $
    
    
    
    
    (215,333
    )
    
    
    (1,686
    )
    
    
    215,333
    
    
    
    (213,647
    )Operational data:Homes delivered
    
    
    
    
    
    
    998
    
    
    
    1,320
    
    
    
    (998
    )
    
    
    (322
    )Construction starts
    
    
    
    
    
    
    558
    
    
    
    1,445
    
    
    
    (558
    )
    
    
    (887
    )Average selling price of homes delivered
    
    $
    
    
    
    
    338,000
    
    
    
    322,000
    
    
    
    (338,000
    )
    
    
    16,000Margin percentage (a)
    
    
    
    
    
    
    (45.0
    )%
    
    
    13.5
    %
    
    
    45.0
    %
    
    
    (58.5
    )%Gross sales contracts (units)
    
    
    
    
    
    
    765
    
    
    
    1,108
    
    
    
    (765
    )
    
    
    (343
    )Sales contracts cancellations (units)
    
    
    
    
    
    
    382
    
    
    
    261
    
    
    
    (382
    )
    
    
    121Net orders (units)
    
    
    
    
    
    
    383
    
    
    
    847
    
    
    
    (383
    )
    
    
    (464
    )Net orders (value)
    
    $
    
    
    
    
    94,782
    
    
    
    324,217
    
    
    
    (94,782
    )
    
    
    (229,435
    )Backlog of homes (units)
    
    
    
    
    
    
    
    
    
    
    1,126
    
    
    
    
    
    
    
    (1,126
    )Backlog of homes (value)
    
    $
    
    
    
    
    
    
    
    
    411,578
    
    
    
    
    
    
    
    (411,578
    )
 
 (a)
    
    Margin percentage is calculated by dividing margin (sales of real
estate minus cost of sales of real estate) by sales of real estate.  135




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Real Estate Development
(Woodbridge)
    For the Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
       136




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##### Table of Contents



Real Estate Development
(Woodbridge)
    Tennessee Homebuilding Segment Results of Operations
 2008
    
    
    2007Year Ended December 31,
    
    
    vs. 2007
    
    
    vs. 20062008
    
    
    2007
    
    
    2006
    
    
    Change
    
    
    Change(Dollars in thousands, except average price data)RevenuesSales of real estate
    
    $
    
    
    
    
    42,042
    
    
    
    76,299
    
    
    
    (42,042
    )
    
    
    (34,257
    )Total revenues
    
    
    
    
    
    
    42,042
    
    
    
    76,299
    
    
    
    (42,042
    )
    
    
    (34,257
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    51,360
    
    
    
    72,807
    
    
    
    (51,360
    )
    
    
    (21,447
    )Selling, general and administrative expenses
    
    
    
    
    
    
    5,010
    
    
    
    12,806
    
    
    
    (5,010
    )
    
    
    (7,796
    )Interest expense
    
    
    
    
    
    
    151
    
    
    
    
    
    
    
    (151
    )
    
    
    151Other expenses
    
    
    
    
    
    
    
    
    
    
    1,307
    
    
    
    
    
    
    
    (1,307
    )Total costs and expenses
    
    
    
    
    
    
    56,521
    
    
    
    86,920
    
    
    
    (56,521
    )
    
    
    (30,399
    )Interest and other income
    
    
    
    
    
    
    83
    
    
    
    127
    
    
    
    (83
    )
    
    
    (44
    )(Loss) income before income taxes
    
    
    
    
    
    
    (14,396
    )
    
    
    (10,494
    )
    
    
    14,396
    
    
    
    (3,902
    )(Provision) benefit for income taxes
    
    
    
    
    
    
    (1,700
    )
    
    
    3,241
    
    
    
    1,700
    
    
    
    (4,941
    )Net (loss) income
    
    $
    
    
    
    
    (16,096
    )
    
    
    (7,253
    )
    
    
    16,096
    
    
    
    (8,843
    )Operational data:Homes delivered
    
    
    
    
    
    
    146
    
    
    
    340
    
    
    
    (146
    )
    
    
    (194
    )Construction starts
    
    
    
    
    
    
    171
    
    
    
    237
    
    
    
    (171
    )
    
    
    (66
    )Average selling price of homes delivered
    
    $
    
    
    
    
    205,000
    
    
    
    224,000
    
    
    
    (205,000
    )
    
    
    (19,000
    )Margin percentage (a)
    
    
    
    
    
    
    (22.2
    )%
    
    
    4.6
    %
    
    
    22.2
    %
    
    
    (26.8
    )%Gross sales contracts (units)
    
    
    
    
    
    
    266
    
    
    
    412
    
    
    
    (266
    )
    
    
    (146
    )Sales contracts cancellations (units)
    
    
    
    
    
    
    156
    
    
    
    143
    
    
    
    (156
    )
    
    
    13Net orders (units)
    
    
    
    
    
    
    110
    
    
    
    269
    
    
    
    (110
    )
    
    
    (159
    )Net orders (value)
    
    $
    
    
    
    
    20,621
    
    
    
    57,776
    
    
    
    (20,621
    )
    
    
    (37,155
    )Backlog of homes (units)
    
    
    
    
    
    
    
    
    
    
    122
    
    
    
    
    
    
    
    (122
    )Backlog of homes (value)
    
    $
    
    
    
    
    
    
    
    
    26,662
    
    
    
    
    
    
    
    (26,662
    )
 
 (a)
    
    Margin percentage is calculated by dividing margin (sales of real
estate minus cost of sales of real estate) by sales of real estate.  137




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Real Estate Development
(Woodbridge)
  For the Year Ended December 31, 2007 Compared to the Year Ended December 31, 2006
       138




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##### Table of Contents



Real Estate Development
(Woodbridge)
 FINANCIAL CONDITION
  
    
    a net decrease in cash and cash equivalents of $80.4 million, which resulted from
cash used in operations of $32.9 million, cash used in investing activities of $41.9
million and cash used in financing activities of $5.6 million;
    
    an increase in restricted cash of $19.1 million primarily related to the funding of
the Levitt and Sons Settlement Agreement, providing collateral for a letter of credit
as a result of a surety bond claim and the establishment of an interest reserve for one
of Cores loan agreements;
    
    a decrease in current income tax receivable as a result of the receipt of a $29.7
million federal income tax refund;
    
    a decrease in our investment in Bluegreen of $86.2 million as a result of impairment
charges recorded during 2008;
    
    a net increase of our investment in other equity securities of $4.3 million as a
result of the acquisition (net of shares sold) of shares of Office Depot and a $3.0
million investment in Pizza Fusion;
    
    an increase in our investment in certificates of deposit of $9.6 million as a result
of our investment in FDIC insured certificates of deposit in 2008;
    
    a net increase in inventory of real estate of $14.0 million primarily associated
with the land development activities of the Land Division; and
    
    a decrease in property and equipment of $8.8 million due to the sale of three ground
lease parcels and a depreciation adjustment related to the reclassification into
continuing operations of two of Cores commercial leasing assets previously classified
as discontinued operations.
  
    
    a net decrease in notes and mortgage notes payable of $3.8 million primarily due to
curtailment payments made in connection with a development loan collateralized by land
in Tradition Hilton Head, offset in part by draws on lines of credit in the Land
Division; and
    
    an increase in our current tax liability of approximately $2.4 million relating to
our FIN 48 liability which was netted against our current tax asset in 2007; and
    
    a net decrease in accounts payable and other accrued liabilities of approximately
$8.1 million primarily attributable to decreased severance and construction accruals
due to payments made during the year ended December 31, 2008.
 LIQUIDITY AND CAPITAL RESOURCES
  139




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Real Estate Development
(Woodbridge)
  Woodbridge (Parent Company level)
     140




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##### Table of Contents



Real Estate Development
(Woodbridge)
   Core Communities
  .
 141




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##### Table of Contents



Real Estate Development
(Woodbridge)
       142




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##### Table of Contents



Real Estate Development
(Woodbridge)
  Off Balance Sheet Arrangements and Contractual Obligations
  Accounting for Contingencies
 Accounting for Special
Assessments and Tax Increment Financing
  143




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##### Table of Contents



Real Estate Development
(Woodbridge)
  Payments due by periodLess than
    
    
    13 - 36
    
    
    37 - 60
    
    
    More thanCategory (1)
    
    Total
    
    
    12 Months
    
    
    Months
    
    
    Months
    
    
    60 MonthsLong-term debt obligations (2)
    
    $
    349,952
    
    
    
    3,567
    
    
    
    197,233
    
    
    
    27,574
    
    
    
    121,578Interest payable on long-term debt
    
    
    244,269
    
    
    
    18,140
    
    
    
    31,476
    
    
    
    18,855
    
    
    
    175,798Operating lease obligations
    
    
    3,797
    
    
    
    1,279
    
    
    
    1,062
    
    
    
    386
    
    
    
    1,070Severance related termination
obligations
    
    
    129
    
    
    
    129
    
    
    
    
    
    
    
    
    
    
    
    Independent contractor agreements
    
    
    681
    
    
    
    681
    
    
    
    
    
    
    
    
    
    
    
    Total obligations
    
    $
    598,828
    
    
    
    23,796
    
    
    
    229,771
    
    
    
    46,815
    
    
    
    298,446
 
 (1)
    
    Long-term debt obligations consist of notes, mortgage notes and bonds payable.
Interest payable on these long-term debt obligations is the interest that will be incurred
related to the outstanding debt. Operating lease obligations consist of lease
commitments. The timing of contractual payments for debt obligations assumes the exercise
of all extensions available at our sole discretion.(2)
    
    In addition to the above scheduled payments, Cores borrowing agreements generally
require repayment of specified amounts upon a sale of a portion of the property
collateralizing the debt or upon a reappraisal of the underlying collateral if declines in
value cause the loan to exceed maximum loan to value ratios. In addition, Core is subject
to provisions in its borrowing agreements that require additional principal payments, known
as curtailment payments, in the event that sales are below those agreed to at the inception
of the borrowing. Total curtailment payments during 2008 amounted to $19.9 million,
consisting of a $14.9 million curtailment payment which was paid in January 2008 and an
additional $5 million curtailment payment which was paid in June 2008. Additionally,
certain borrowings may require increased principal payments on our debt obligations due to
re-margining requirements. Accounting for Uncertainty in Income Taxes  an
interpretation of FASB No. 109
     144




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Real Estate Development
(Woodbridge)
     145




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##### Table of Contents



ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 BFC
   BankAtlantic Bancorp
   BankAtlantic Repricing Gap TableAs of December 31, 20081 Year
    
    
    3 Years
    
    
    5 Years
    
    
    More Thanor Less
    
    
    or Less
    
    
    or Less
    
    
    5 Years
    
    
    TotalInterest earning assets:Loans:Residential loans (1)Fixed rate
    
    $
    221,281
    
    
    
    127,914
    
    
    
    65,996
    
    
    
    236,071
    
    
    
    651,262Hybrids ARM less than 5 years
    
    
    64,444
    
    
    
    40,703
    
    
    
    6,118
    
    
    
    
    
    
    
    111,265Hybrids ARM more than 5 years
    
    
    441,458
    
    
    
    274,155
    
    
    
    201,044
    
    
    
    261,715
    
    
    
    1,178,372Commercial loans
    
    
    989,437
    
    
    
    138,406
    
    
    
    110,131
    
    
    
    130,512
    
    
    
    1,368,486Small business loans
    
    
    207,950
    
    
    
    83,499
    
    
    
    26,676
    
    
    
    8,155
    
    
    
    326,280Consumer
    
    
    712,714
    
    
    
    7,578
    
    
    
    4,626
    
    
    
    21,730
    
    
    
    746,648Total loans
    
    
    2,637,284
    
    
    
    672,255
    
    
    
    414,591
    
    
    
    658,183
    
    
    
    4,382,313Investment securitiesMortgage backed securities
    
    
    210,711
    
    
    
    133,679
    
    
    
    79,576
    
    
    
    263,626
    
    
    
    687,592Taxable investment securities
    
    
    75,412
    
    
    
    250
    
    
    
    
    
    
    
    12,761
    
    
    
    88,423Tax certificates
    
    
    213,534
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    213,534Total investment securities
    
    
    499,657
    
    
    
    133,929
    
    
    
    79,576
    
    
    
    276,387
    
    
    
    989,549Total interest earning assets
    
    
    3,136,941
    
    
    
    806,184
    
    
    
    494,167
    
    
    
    934,570
    
    
    
    5,371,862Total non-earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    341,828
    
    
    
    341,828Total assets
    
    $
    3,136,941
    
    
    
    806,184
    
    
    
    494,167
    
    
    
    1,276,398
    
    
    
    5,713,690Total interest bearing liabilities
    
    $
    2,949,420
    
    
    
    658,713
    
    
    
    243,834
    
    
    
    1,368,893
    
    
    
    5,220,860Non-interest bearing liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    492,830
    
    
    
    492,830Total non-interest bearing liabilities
and equity
    
    $
    2,949,420
    
    
    
    658,713
    
    
    
    243,834
    
    
    
    1,861,723
    
    
    
    5,713,690GAP (repricing difference)
    
    $
    187,521
    
    
    
    147,471
    
    
    
    250,333
    
    
    
    (434,323
    )Cumulative GAP
    
    $
    187,521
    
    
    
    334,992
    
    
    
    585,325
    
    
    
    151,002Repricing Percentage
    
    
    3.28
    %
    
    
    2.58
    %
    
    
    4.38
    %
    
    
    -7.60
    %Cumulative Percentage
    
    
    3.28
    %
    
    
    5.86
    %
    
    
    10.24
    %
    
    
    2.64
    %
 
 1)
    
    Hybrid adjustable rate mortgages (ARM) earn fixed rates for designated periods and adjust
annually thereafter based on the one year U.S. Treasury note rate. 146




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Year Ending December 31,
    
    Amount (1)2009
    
    $
    44,8352010
    
    
    41,4132011
    
    
    85,4082012
    
    
    81,1912013
    
    
    163,330Thereafter
    
    
    563,436Total interest only loans
    
    $
    979,613
 
 (1)
    
    The above table assumes no prepayments.    i.
    
    Calculating interest income and interest expense from existing assets and liabilities
using current repricing, prepayment and volume assumptions,ii.
    
    Estimating the change in expected net interest income based on instantaneous and
parallel shifts in the yield curve to determine the effect on net interest income; andiii.
    
    Calculating the percentage change in net interest income calculated in (i) and (ii).
   
    
    Interest rates,
    
    Loan prepayment rates,
    
    Deposit decay rates,
    
    Re-pricing of certain borrowings, and
    
    Reinvestment in earning assets.
  
    
    Fixed rate mortgages
    
    20 %
    
    Fixed rate securities
    
    20 %
    
    Tax certificates
    
    10 %
    
    Adjustable rate mortgages
    
    27 %
    
    Adjustable rate securities
    
    36 %
 147




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Within
    
    1-3
    
    3-5
    
    Over 51 Year
    
    Years
    
    Years
    
    YearsMoney fund savings accounts decay
rates
    
    
    17
    %
    
    
    17
    %
    
    
    16
    %
    
    
    14
    %NOW and savings accounts decay rates
    
    
    37
    %
    
    
    32
    %
    
    
    17
    %
    
    
    17
    %
  As of December 31, 2008NetChanges
    
    Interest
    
    Percentin Rate
    
    Income
    
    Change+200 bp
    
    $
    191,139
    
    
    
    -3.99
    %+100 bp
    
    
    198,441
    
    
    
    -0.32
    %0
    
    
    199,086
    
    
    
    -100 bp
    
    
    196,893
    
    
    
    -1.10
    %-200 bp
    
    
    193,138
    
    
    
    -2.99
    %
 As of December 31, 2007NetChanges
    
    Interest
    
    Percentin Rate
    
    Income
    
    Change+200 bp
    
    $
    187,031
    
    
    
    -7.96
    %+100 bp
    
    
    198,147
    
    
    
    -2.38
    %0
    
    
    202,876
    
    
    
    -100 bp
    
    
    203,331
    
    
    
    0.23
    %-200 bp
    
    
    204,354
    
    
    
    0.74
    %
  Woodbridge
   148




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Fair MarketValue atPayments due by year
    
    
    December 31,2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter
    
    
    Total
    
    
    2008Fixed rate debt:Notes and
mortgage
payable (a)
    
    
    723
    
    
    
    561
    
    
    
    573
    
    
    
    504
    
    
    
    499
    
    
    
    99,332
    
    
    
    102,192
    
    
    
    28,384Average
interest rate
    
    
    8.09
    %
    
    
    8.11
    %
    
    
    8.12
    %
    
    
    8.13
    %
    
    
    8.14
    %
    
    
    8.15
    %
    
    
    8.12
    %Variable rate debt:Notes and
mortgage
payable (a)
    
    
    2,797
    
    
    
    8,102
    
    
    
    187,895
    
    
    
    25,751
    
    
    
    707
    
    
    
    19,217
    
    
    
    244,469
    
    
    
    227,145Average
interest rate
    
    
    4.04
    %
    
    
    4.04
    %
    
    
    4.07
    %
    
    
    5.39
    %
    
    
    5.86
    %
    
    
    5.86
    %
    
    
    4.22
    %Total debt
obligations
    
    
    3,520
    
    
    
    8,663
    
    
    
    188,468
    
    
    
    26,255
    
    
    
    1,206
    
    
    
    118,549
    
    
    
    346,661
    
    
    
    255,529
 
 (a)
    
    Fair value calculated using current estimated borrowing rates.  149




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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 BFC FINANCIAL CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Report of Independent Registered Certified Public Accounting Firm of PricewaterhouseCoopers LLPFinancial Statements:Consolidated Statements of Financial Condition as of December 31, 2008 and 2007
    
    153Consolidated Statements of Operations for each of the years in the three year period ended
December 31, 2008
    
    154Consolidated Statements of Comprehensive Loss for each of the years in the three year
period ended December 31, 2008
    
    156Consolidated Statements of Shareholders Equity for each of the years in the three year period
ended December 31, 2008
    
    157Consolidated Statements of Cash Flows for each of the years in the three year period ended
December 31, 2008
    
    158Notes to Consolidated Financial Statements
    
    161
 Bluegreen Corporation
  150




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##### Table of Contents



Report of Independent Registered Certified Public Accounting Firm
 
   151




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152




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PART I  FINANCIAL INFORMATION
 Item 1. FINANCIAL STATEMENTS
 BFC Financial Corporation
 
 Consolidated Statements of Financial Condition
 (In thousands, except share data)
 December 31,2008
    
    
    2007ASSETSCash and cash equivalents
    
    $
    247,760
    
    
    
    326,524Federal funds sold and other short-term investments
    
    
    31,177
    
    
    
    5,631Restricted cash
    
    
    21,288
    
    
    
    2,207Securities available for sale and other financial instruments (at fair value)
    
    
    722,698
    
    
    
    926,307Financial instruments accounted for at fair value
    
    
    
    
    
    
    10,661Investment securities at cost or amortized costs (fair value:$12,475 and $65,244)
    
    
    12,008
    
    
    
    60,173Tax certificates, net of allowance of $6,064 in 2008 and $3,289 in 2007
    
    
    213,534
    
    
    
    188,401Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    54,607
    
    
    
    74,003Residential loans held for sale at lower of cost or fair value
    
    
    3,461
    
    
    
    4,087Loans receivable, net of allowance for loan losses of $137,257 in 2008 and $94,020 in 2007
    
    
    4,314,184
    
    
    
    4,524,451Accrued interest receivable
    
    
    41,817
    
    
    
    46,271Real estate held for development and sale
    
    
    268,763
    
    
    
    270,229Real estate owned
    
    
    19,045
    
    
    
    17,216Investments in unconsolidated affiliates
    
    
    41,386
    
    
    
    128,321Properties and equipment, net
    
    
    315,347
    
    
    
    360,889Goodwill
    
    
    20,782
    
    
    
    70,490Other intangible assets, net
    
    
    24,204
    
    
    
    5,396Deferred tax asset, net
    
    
    
    
    
    
    16,330Other assets
    
    
    43,521
    
    
    
    76,846Total assets
    
    $
    6,395,582
    
    
    
    7,114,433LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Interest bearing
    
    $
    3,184,677
    
    
    
    3,129,194Non-interest bearing
    
    
    741,691
    
    
    
    824,211Total deposits
    
    
    3,926,368
    
    
    
    3,953,405Advances from FHLB
    
    
    967,491
    
    
    
    1,397,044Federal funds purchased and other short term borrowings
    
    
    238,339
    
    
    
    108,975Securities sold under agreements to repurchase
    
    
    41,387
    
    
    
    50,930Subordinated debentures, mortgage notes payable and mortgage-backed bonds
    
    
    287,772
    
    
    
    295,421Junior subordinated debentures
    
    
    376,104
    
    
    
    379,223Loss in excess of investment in Woodbridges subsidiary
    
    
    52,887
    
    
    
    55,214Other liabilities
    
    
    118,784
    
    
    
    131,234Total liabilities
    
    
    6,009,132
    
    
    
    6,371,446Redeemable 5% Cumulative Preferred Stock  $.01 par value;
authorized 15,000 shares; issued and outstanding 15,000 shares in 2008 and 0 in 2007,
with a redemption value of $1,000 per share (See Note 34)
    
    
    11,029
    
    
    
    Noncontrolling interest
    
    
    262,554
    
    
    
    558,950Commitments and contingenciesShareholders equity:Preferred stock of $ .01 par value; authorized 10,000,000 shares;
5% Cumulative Convertible Preferred Stock (5% Preferred Stock)
authorized 15,000 shares; issued and outstanding 0 shares in 2008
and 15,000 shares in 2007
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 38,254,389 in 2008 and 38,232,932 in 2007
    
    
    382
    
    
    
    382Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 6,875,104 in 2008 and 6,876,081 in 2007
    
    
    69
    
    
    
    69Additional paid-in capital
    
    
    123,562
    
    
    
    131,189(Accumulated deficit) retained earnings
    
    
    (8,848
    )
    
    
    50,801Total shareholders equity before
accumulated other comprehensive (loss) income
    
    
    115,165
    
    
    
    182,441Accumulated other comprehensive (loss) income
    
    
    (2,298
    )
    
    
    1,596Total shareholders equity
    
    
    112,867
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    6,395,582
    
    
    
    7,114,433
 See accompanying notes to consolidated financial statements
 153




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##### Table of Contents



BFC Financial Corporation
 
 Consolidated Statements of Operations
 (In thousands, except per share data)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006RevenuesBFC Activities:Interest and dividend income
    
    $
    1,368
    
    
    
    2,335
    
    
    
    2,249Securities activities, net
    
    
    898
    
    
    
    1,295
    
    
    
    Other income
    
    
    2,142
    
    
    
    2,479
    
    
    
    1,4334,408
    
    
    
    6,109
    
    
    
    3,682Financial Services:Interest and dividend income
    
    
    314,538
    
    
    
    371,633
    
    
    
    367,177Service charges on deposits
    
    
    93,905
    
    
    
    102,639
    
    
    
    90,472Other service charges and fees
    
    
    28,959
    
    
    
    28,950
    
    
    
    27,542Securities activities, net
    
    
    2,039
    
    
    
    8,412
    
    
    
    9,813Other income
    
    
    10,130
    
    
    
    9,159
    
    
    
    12,742449,571
    
    
    
    520,793
    
    
    
    507,746Real Estate Development:Sales of real estate
    
    
    13,837
    
    
    
    410,115
    
    
    
    566,086Interest and dividend income
    
    
    3,192
    
    
    
    3,936
    
    
    
    2,474Securities activities, net
    
    
    1,178
    
    
    
    
    
    
    
    Other income
    
    
    15,284
    
    
    
    17,614
    
    
    
    14,59233,491
    
    
    
    431,665
    
    
    
    583,152Total revenues
    
    
    487,470
    
    
    
    958,567
    
    
    
    1,094,580Costs and ExpensesBFC Activities:Employee compensation and benefits
    
    
    8,793
    
    
    
    10,932
    
    
    
    9,407Other expenses
    
    
    3,346
    
    
    
    4,083
    
    
    
    2,96312,139
    
    
    
    15,015
    
    
    
    12,370Financial Services:Interest expense, net of interest capitalized
    
    
    140,502
    
    
    
    192,672
    
    
    
    166,578Provision for (recovery of) loan losses
    
    
    159,801
    
    
    
    70,842
    
    
    
    8,574Employee compensation and benefits
    
    
    128,897
    
    
    
    151,178
    
    
    
    150,804Occupancy and equipment
    
    
    64,782
    
    
    
    65,851
    
    
    
    57,308Advertising and promotion
    
    
    16,335
    
    
    
    20,002
    
    
    
    35,067Cost associated with debt redemption
    
    
    1,238
    
    
    
    
    
    
    
    1,457Provision for tax certificates
    
    
    7,286
    
    
    
    300
    
    
    
    300Restructuring charges and exit activities
    
    
    7,395
    
    
    
    8,351
    
    
    
    Impairment of goodwill
    
    
    46,564
    
    
    
    
    
    
    
    Impairment of real estate held for sale
    
    
    1,169
    
    
    
    5,240
    
    
    
    Impairment of real estate owned
    
    
    1,465
    
    
    
    7,299
    
    
    
    9Other expenses
    
    
    59,536
    
    
    
    57,723
    
    
    
    54,214634,970
    
    
    
    579,458
    
    
    
    474,311Real Estate Development:Cost of sales of real estate
    
    
    12,838
    
    
    
    573,241
    
    
    
    482,961Interest expense, net of interest capitalized
    
    
    10,667
    
    
    
    3,807
    
    
    
    Selling, general and administrative expenses
    
    
    49,246
    
    
    
    116,918
    
    
    
    120,017Other expenses
    
    
    
    
    
    
    3,929
    
    
    
    3,67772,751
    
    
    
    697,895
    
    
    
    606,655Total costs and expenses
    
    
    719,860
    
    
    
    1,292,368
    
    
    
    1,093,336Equity in earnings from unconsolidated affiliates
    
    
    15,064
    
    
    
    12,724
    
    
    
    10,935Impairment of unconsolidated affiliates
    
    
    (96,579
    )
    
    
    
    
    
    
    Impairment of investments
    
    
    (15,548
    )
    
    
    
    
    
    
    (Loss) income from continuing operations before income taxes
and noncontrolling interest
    
    
    (329,453
    )
    
    
    (321,077
    )
    
    
    12,179Less: Provision (benefit) for income taxes
    
    
    15,763
    
    
    
    (69,012
    )
    
    
    (530
    )Less: Noncontrolling interest income (loss)
    
    
    (272,711
    )
    
    
    (218,165
    )
    
    
    13,406Loss from continuing operations
    
    
    (72,505
    )
    
    
    (33,900
    )
    
    
    (697
    )Discontinued operations, less noncontrolling interest and income tax
provision (benefit) of $0 in 2008, $(3,471) in 2007 and $(8,957) in 2006
    
    
    4,461
    
    
    
    1,038
    
    
    
    (1,524
    )Extraordinary gain, less income tax of $0 in 2008 and $1,509 in 2007
    
    
    9,145
    
    
    
    2,403
    
    
    
    Net loss
    
    
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )Preferred stock dividends
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )Net loss allocable to common stock
    
    $
    (59,649
    )
    
    
    (31,209
    )
    
    
    (2,971
    )
 See accompanying notes to consolidated financial statements.
 154




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BFC Financial Corporation
Consolidated Statements of Operations
(In thousands, except per share data)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006(Loss) earnings per common share:Basic loss per share from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.04
    )Basic earnings (loss) per share from discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )Basic earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    0.06
    
    
    
    Basic loss per share
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.09
    )Diluted loss per share from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.05
    )Diluted earnings (loss) per share from discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )Diluted earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    0.06
    
    
    
    Diluted loss per share
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.10
    )Basic weighted average number of common shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249
 See accompanying notes to consolidated financial statements.
 155




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##### Table of Contents



BFC Financial Corporation
 
 Consolidated Statements of Comprehensive Loss
 (In thousands)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Net loss
    
    $
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )Other comprehensive income (loss), net of tax:Unrealized gains (loss) on securities available for sale
    
    
    (2,004
    )
    
    
    2,543
    
    
    
    2,471(Benefit) provision for income taxes
    
    
    (1,229
    )
    
    
    981
    
    
    
    953Unrealized gains (loss) on securities available for sale, net of tax
    
    
    (775
    )
    
    
    1,562
    
    
    
    1,518Unfunded pension liability
    
    
    (4,799
    )
    
    
    102
    
    
    
    345Provision for income taxes
    
    
    
    
    
    
    39
    
    
    
    133Unfunded pension liability, net of tax
    
    
    (4,799
    )
    
    
    63
    
    
    
    212Unrealized (losses) gains associated with investment in
unconsolidated affiliates
    
    
    (476
    )
    
    
    (12
    )
    
    
    129(Benefit) provision for income taxes
    
    
    (184
    )
    
    
    (5
    )
    
    
    50Unrealized (losses) gains associated with investment in
unconsolidated affiliates, net of tax

 
    
    (292
    )
    
    
    (7
    )
    
    
    79Reclassification adjustments:Realized net periodic pension income (costs)
    
    
    74
    
    
    
    35
    
    
    
    (42
    )Provision (benefit) for income taxes
    
    
    
    
    
    
    14
    
    
    
    (16
    )Realized net periodic pension income (costs), net of tax
    
    
    74
    
    
    
    21
    
    
    
    (26
    )Net realized (gains) loss reclassified into net loss
    
    
    1,898
    
    
    
    (2,423
    )
    
    
    (1,395
    )(Benefit) for income taxes
    
    
    
    
    
    
    (929
    )
    
    
    (538
    )Net realized gains reclassified into net loss, net of tax
    
    
    1,898
    
    
    
    (1,494
    )
    
    
    (857
    )Other comprehensive (loss) income, net of tax
    
    
    (3,894
    )
    
    
    145
    
    
    
    926Comprehensive loss
    
    $
    (62,793
    )
    
    
    (30,314
    )
    
    
    (1,295
    )
 See accompanying notes to consolidated financial statements.
 156




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##### Table of Contents



BFC Financial Corporation
 
 Consolidated Statements of Shareholders Equity
 For each of the years in the three year period ended December 31, 2008
 (In thousands)
 Unearned
    
    
    
    
    
    
    AccumulatedCompen-
    
    
    
    
    
    
    Othersation
    
    
    (Accumulated)
    
    
    Compre-Shares of Common
    
    
    Class A
    
    
    Class B
    
    
    Additional
    
    
    Restricted
    
    
    Deficit
    
    
    hensiveStock Outstanding
    
    
    Common
    
    
    Common
    
    
    Paid-in
    
    
    Stock
    
    
    Retained
    
    
    (Loss)Class A
    
    
    Class B
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Grants
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance, December 31, 2005
    
    
    29,950
    
    
    
    4,285
    
    
    $
    278
    
    
    
    41
    
    
    
    97,223
    
    
    
    (100
    )
    
    
    85,113
    
    
    
    525
    
    
    
    183,080Cumulative effect adjustment
upon adoption of Staff Accounting
Bulletin No. 108 (SAB No. 108)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (253
    )
    
    
    
    
    
    
    (253
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,221
    )
    
    
    
    
    
    
    (2,221
    )Other comprehensive income, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    926
    
    
    
    926Issuance of Common Stock,
upon exercise of stock options
    
    
    30
    
    
    
    3,929
    
    
    
    1
    
    
    
    39
    
    
    
    9,076
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,116Retirement of Common Stock relating to
exercise of stock options
    
    
    (1,279
    )
    
    
    (1,068
    )
    
    
    (13
    )
    
    
    (11
    )
    
    
    (13,246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,270
    )Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )Cash dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750
    )
    
    
    
    
    
    
    (750
    )Share-based compensation related
to stock options and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    973
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    973Reversal of unamortized stock
compensation related to restricted stock
upon adoption of FAS 123 ( R)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    Transfer of shares of Common Stock
    
    
    55
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, December 31, 2006
    
    
    28,756
    
    
    
    7,091
    
    
    $
    266
    
    
    
    69
    
    
    
    93,910
    
    
    
    
    
    
    
    81,889
    
    
    
    1,451
    
    
    
    177,585Cumulative effect adjustment
upon adoption of
FASB Interpretation No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    121Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,459
    )
    
    
    
    
    
    
    (30,459
    )Other comprehensive income,
net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    145
    
    
    
    145Issuance of common stock,
net of issuance costs
    
    
    11,500
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    36,006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,121Issuance of common stock
upon exercise of stock options and
restricted stock
    
    
    152
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    188Cancelled shares of common stock
upon merger. (See notes 32 and 33)
    
    
    (2,163
    )
    
    
    (227
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (101
    )Cash dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750
    )
    
    
    
    
    
    
    (750
    )Share-based compensation related
to stock options and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,187
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,187Transfer of shares of Common Stock
    
    
    (12
    )
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Balance, December 31, 2007
    
    
    38,233
    
    
    
    6,876
    
    
    $
    382
    
    
    
    69
    
    
    
    131,189
    
    
    
    
    
    
    
    50,801
    
    
    
    1,596
    
    
    
    184,037Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58,899
    )
    
    
    
    
    
    
    (58,899
    )Other comprehensive loss, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,894
    )
    
    
    (3,894
    )Issuance of restricted Class A
Common Stock
    
    
    120
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Transfer of shares of Common Stock
    
    
    1
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Purchase and retirement of
of Class A Common Stock
    
    
    (100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (54
    )Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,398
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,398Cash dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (750
    )
    
    
    
    
    
    
    (750
    )Re-classification of the 5% Preferred Stock
to Redeemable Preferred stock (see Note 34)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,029
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,029
    )Share-based compensation
related to stock options
and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,058
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,058Balance, December 31, 2008
    
    
    38,254
    
    
    
    6,875
    
    
    $
    382
    
    
    
    69
    
    
    
    123,562
    
    
    
    
    
    
    
    (8,848
    )
    
    
    (2,298
    )
    
    
    112,867
 See accompanying notes to consolidated financial statements.
 157




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##### Table of Contents



BFC Financial Corporation
 
 Consolidated Statements of Cash Flows
 (In thousands)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Operating activities:Net loss
    
    $
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )Adjustment to reconcile net loss to net cash
used in operating activities:Extraordinary gain, net of taxes
    
    
    (9,145
    )
    
    
    (2,403
    )
    
    
    Noncontrolling interest
    
    
    (272,711
    )
    
    
    (218,165
    )
    
    
    13,406Provision for loan losses
    
    
    168,552
    
    
    
    78,441
    
    
    
    8,883Restructuring charges, impairments and exit activities
    
    
    8,564
    
    
    
    13,591
    
    
    
    Impairment of inventory and long lived assets
    
    
    3,605
    
    
    
    227,412
    
    
    
    38,328Cumulative effect adjustment before noncontrolling interest
    
    
    
    
    
    
    700
    
    
    
    (1,899
    )Depreciation, amortization and accretion, net
    
    
    28,389
    
    
    
    23,693
    
    
    
    31,845Share-based compensation expense
    
    
    3,821
    
    
    
    9,386
    
    
    
    9,291Tax benefits from share-based compensation
    
    
    
    
    
    
    (1,265
    )
    
    
    (3,719
    )Securities activities, net
    
    
    (4,116
    )
    
    
    (9,707
    )
    
    
    (9,795
    )Net losses (gains) on sales of real estate owned, loans and
office properties and equipment
    
    
    (2,448
    )
    
    
    201
    
    
    
    (5,079
    )Net gain on sale of Ryan Beck Holdings, Inc.
    
    
    
    
    
    
    (2,175
    )
    
    
    Originations and repayments of loans held for sale, net
    
    
    (59,323
    )
    
    
    (90,745
    )
    
    
    (93,887
    )Proceeds from sales of loans held for sale
    
    
    53,564
    
    
    
    96,470
    
    
    
    87,793Equity in earnings from Bluegreen
    
    
    (13,696
    )
    
    
    (10,275
    )
    
    
    (9,445
    )Equity in earnings from unconsolidated affiliates
    
    
    (323
    )
    
    
    (115
    )
    
    
    Impairment of unconsolidated affiliates
    
    
    96,579
    
    
    
    
    
    
    
    Impairment of investments
    
    
    15,548
    
    
    
    
    
    
    
    Impairment of goodwill
    
    
    46,564
    
    
    
    
    
    
    
    Deferred income tax provision (benefit)
    
    
    50,260
    
    
    
    (44,024
    )
    
    
    (20,625
    )Net losses (gains) associated with debt redemption
    
    
    1,238
    
    
    
    
    
    
    
    (71
    )Increase in forgivable notes receivable, net
    
    
    
    
    
    
    (673
    )
    
    
    (6,111
    )(Increase) decrease in real estate held for development and sale
    
    
    (8,582
    )
    
    
    27,006
    
    
    
    (259,629
    )(Increase) decrease in securities owned, net
    
    
    
    
    
    
    (23,855
    )
    
    
    67,910Increase (decrease) securities sold but not yet purchased
    
    
    
    
    
    
    28,419
    
    
    
    (3,770
    )Decrease (increase) in accrued interest receivable
    
    
    4,454
    
    
    
    1,405
    
    
    
    (6,183
    )Decrease (increase) in other assets
    
    
    15,584
    
    
    
    (12,204
    )
    
    
    (6,465
    )Increase (decrease) in due to clearing agent
    
    
    
    
    
    
    9,657
    
    
    
    (40,115
    )Decrease in customer deposits
    
    
    (123
    )
    
    
    (23,974
    )
    
    
    (8,990
    )Decrease in other liabilities
    
    
    (30,858
    )
    
    
    (45,712
    )
    
    
    (21,058
    )Net cash provided by (used in) operating activities
    
    
    36,498
    
    
    
    630
    
    
    
    (241,606
    )
 (continued)
 See accompanying notes to consolidated financial statements.
 158




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##### Table of Contents



BFC Financial Corporation
Consolidated Statements of Cash Flows
(In thousands)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Investing activities:Proceeds from redemption and maturity of investment securities
and tax certificates
    
    $
    349,397
    
    
    
    208,345
    
    
    
    199,482Purchase of investment securities and tax certificates
    
    
    (377,983
    )
    
    
    (211,402
    )
    
    
    (236,962
    )Purchase of securities available for sale
    
    
    (288,241
    )
    
    
    (682,231
    )
    
    
    (143,272
    )Proceeds from sales and maturities of securities available for sale
    
    
    541,381
    
    
    
    719,898
    
    
    
    181,444Decrease (increase) in restricted cash
    
    
    (19,081
    )
    
    
    (1,576
    )
    
    
    651Purchases of FHLB stock
    
    
    (47,655
    )
    
    
    (22,725
    )
    
    
    (49,950
    )Redemption of FHLB stock
    
    
    67,051
    
    
    
    28,939
    
    
    
    39,664Distributions from unconsolidated subs
    
    
    3,189
    
    
    
    8,186
    
    
    
    5,303Investments in unconsolidated subsidiaries
    
    
    (66
    )
    
    
    (6,863
    )
    
    
    (10,323
    )Net repayments (purchases and originations) of loans
    
    
    23,285
    
    
    
    (2,173
    )
    
    
    (106,123
    )Proceeds from the sale of loans receivable
    
    
    10,100
    
    
    
    
    
    
    
    Additions to real estate owned
    
    
    (19
    )
    
    
    (2,011
    )
    
    
    Proceeds from sales of real estate owned
    
    
    3,810
    
    
    
    2,252
    
    
    
    4,382Proceeds from sales of property and equipment
    
    
    6,693
    
    
    
    969
    
    
    
    2,055Purchases of office property and equipment, net
    
    
    (12,648
    )
    
    
    (103,033
    )
    
    
    (121,680
    )Net cash outflows from the sale of Central Florida stores
    
    
    (4,491
    )
    
    
    
    
    
    
    Equity securities received from Ryan Beck Holdings, Inc. earnout
    
    
    (11,309
    )
    
    
    
    
    
    
    Deconsolidation of Woodbridges subsidiary cash balance
    
    
    
    
    
    
    (6,387
    )
    
    
    Net proceeds from the sale of Ryan Beck Holdings, Inc.
    
    
    
    
    
    
    2,628
    
    
    
    Acquisition in Pizza Fusion Class B preferred shares
    
    
    (3,000
    )
    
    
    
    
    
    
    Acquisition of BankAtlantic Bancorp Class A shares
    
    
    (3,925
    )
    
    
    
    
    
    
    Acquisition of Woodbridge Class A shares
    
    
    
    
    
    
    (33,205
    )
    
    
    Net cash (used in) provided by investing activities
    
    $
    236,488
    
    
    
    (100,389
    )
    
    
    (235,329
    )Financing activities:Net increase in deposits
    
    $
    (3,482
    )
    
    
    86,369
    
    
    
    114,360Prepayments of FHLB advances
    
    
    (694,363
    )
    
    
    
    
    
    
    Net proceeds (repayments) of FHLB advances
    
    
    262,808
    
    
    
    (120,000
    )
    
    
    233,656Net decrease in securities sold under agreements to repurchase
    
    
    (9,543
    )
    
    
    (45,456
    )
    
    
    (13,403
    )Net increase (decrease) in federal funds purchased
    
    
    129,364
    
    
    
    76,949
    
    
    
    (107,449
    )Repayments of secured borrowings
    
    
    
    
    
    
    
    
    
    
    (26,516
    )Prepayment of notes and bonds payable
    
    
    (2,751
    )
    
    
    
    
    
    
    Repayment of notes and bonds payable
    
    
    (32,055
    )
    
    
    (162,213
    )
    
    
    (216,891
    )Proceeds from notes and bonds payable
    
    
    27,522
    
    
    
    236,839
    
    
    
    384,732Issuance of junior subordinated debentures
    
    
    
    
    
    
    30,929
    
    
    
    30,928Payments for debt issuance costs
    
    
    (518
    )
    
    
    (1,695
    )
    
    
    (3,043
    )Capital contributions in managed fund by investors
    
    
    
    
    
    
    
    
    
    
    2,905Capital withdrawals in managed fund by investors
    
    
    
    
    
    
    
    
    
    
    (4,203
    )Excess tax benefits from share-based compensation
    
    
    
    
    
    
    1,265
    
    
    
    3,719Proceeds from the issuance of BFC Class A Common Stock, net of issuance costs
    
    
    
    
    
    
    36,121
    
    
    
    Proceeds from the exercise of stock options
    
    
    
    
    
    
    187
    
    
    
    Preferred stock dividends paid
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )Purchase and retirement of Class A common stock
    
    
    (54
    )
    
    
    
    
    
    
    Purchase and retirement of Woodbridge common stock
    
    
    (1,439
    )
    
    
    
    
    
    
    Purchase and retirement of BankAtlantic Bancorp Class A common stock
    
    
    
    
    
    
    (53,769
    )
    
    
    Proceeds from the issuance of Woodbridge Class A common stock,
net of issuance costs
    
    
    
    
    
    
    152,651
    
    
    
    Payment of the minimum withholding tax upon the exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (6,871
    )Proceeds from issuance of BankAtlantic Bancorp Class A common stock
    
    
    103
    
    
    
    2,449
    
    
    
    1,479Purchase of subsidiary common stock
    
    
    
    
    
    
    
    
    
    
    (7,833
    )BankAtlantic Bancorp common stock dividends paid to non-BFC shareholders
    
    
    (636
    )
    
    
    (5,746
    )
    
    
    (7,592
    )Woodbridge common stock dividends paid to non-BFC shareholders
    
    
    
    
    
    
    (330
    )
    
    
    (1,322
    )Distribution from venture partnership to minority holders
    
    
    (410
    )
    
    
    
    
    
    
    Net cash (used in) provided by financing activities
    
    
    (326,204
    )
    
    
    233,800
    
    
    
    375,906Increase (decrease) in cash and cash equivalents
    
    
    (53,218
    )
    
    
    134,041
    
    
    
    (101,029
    )Cash and cash equivalents at beginning of period
    
    
    332,155
    
    
    
    201,123
    
    
    
    305,437Cash and cash equivalents of discontinued assets held for sale at disposal date
    
    
    
    
    
    
    (6,294
    )
    
    
    Cash and cash equivalents of discontinued assets held for sale
    
    
    
    
    
    
    3,285
    
    
    
    (3,285
    )Cash and cash equivalents at end of period
    
    $
    278,937
    
    
    
    332,155
    
    
    
    201,123
 (continued)
 See accompanying notes to consolidated financial statements.
 159




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BFC Financial Corporation
Consolidated Statements of Cash Flows
(In thousands)
 For the Years Ended December 31,2008
    
    2007
    
    2006Supplemental cash flow information:Interest on borrowings and deposits
    
    $
    153,168
    
    
    
    197,157
    
    
    
    167,430Income taxes (refunded) paid
    
    
    (44,100
    )
    
    
    5,409
    
    
    
    39,770Supplementary disclosure of non-cash investing and financing activities:Loans and tax certificates transferred to REO
    
    
    7,208
    
    
    
    2,528
    
    
    
    23,728Securities held-to-maturity transferred to securities available for sale
    
    
    
    
    
    
    203,004
    
    
    
    Long-lived assets held-for-use transferred to assets held for sale
    
    
    
    
    
    
    13,704
    
    
    
    Securities purchased pending settlement
    
    
    
    
    
    
    18,926
    
    
    
    Decrease in additional paid in capital from the re-classification of
the 5% Preferred Stock to Redeemable Preferred stock (see Note 34)
    
    
    11,029
    
    
    
    
    
    
    
    Decrease in inventory from the reclassification to
to property and equipment
    
    
    
    
    
    
    2,859
    
    
    
    8,412Reduction in loan participations sold accounted for
as secured borrowings
    
    
    
    
    
    
    
    
    
    
    111,754Exchange branch facilities
    
    
    
    
    
    
    
    
    
    
    2,350Increase (decrease) in accumulated other comprehensive income,
net of taxes
    
    
    (3,894
    )
    
    
    145
    
    
    
    926Net decrease in shareholders equity from
the effect of subsidiaries capital transactions, net of taxes
    
    
    2,398
    
    
    
    (101
    )
    
    
    (16
    )Issuance and retirement of BFC Class A Common Stock accepted as
consideration for the exercise price of stock options
    
    
    
    
    
    
    
    
    
    
    4,154Increase in deferred tax liability due to cumulative impact of change
in accounting for uncertainties in income taxes (FIN 48 - see Note 25)
    
    
    
    
    
    
    121
    
    
    
    
 See accompanying notes to consolidated financial statements.
 160




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##### Table of Contents



BFC Financial Corporation
 
 Notes to Consolidated Financial Statements
 1.
    
    Organization and Summary of Significant Accounting Policies
 Organization and Business
    PercentShares
    
    
    Percent of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock (1)
    
    
    2,389,697
    
    
    
    23.30
    %
    
    
    12.35
    %Class B Common Stock
    
    
    975,225
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,364,922
    
    
    
    29.96
    %
    
    
    59.35
    %Woodbridge Holdings CorporationClass A Common Stock (2)
    
    
    3,735,392
    
    
    
    22.43
    %
    
    
    11.89
    %Class B Common Stock
    
    
    243,807
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,979,199
    
    
    
    23.55
    %
    
    
    58.89
    %
 
 (1)
    
    In August 2008 and December 2008, BFC purchased an aggregate of 400,000 shares and
323,848 shares, respectively, of BankAtlantic Bancorps Class A common stock on the open
market for an aggregate purchase price of $2.8 million and $1.1 million, respectively.
BFCs August 2008 and December 2008 acquisitions of BankAtlantic Bancorps Class A common
stock increased BFCs ownership interest in BankAtlantic Bancorp by approximately 3.6% in
August 2008 and 2.9% in December 2008 and increased BFCs voting interest by approximately
2.1% in August 2008 and 1.6% in December 2008. The acquisitions of additional shares of
BankAtlantic Bancorp have been accounted for as step acquisitions under the purchase method
of accounting. See Note 2 for further information.(2)
    
    BFCs percentage of vote includes 1,229,117 shares of Woodbridges Class A Common Stock
which BFC had previously agreed not to vote (except in limited circumstances) pursuant to a
letter agreement requested by Woodbridge in connection with the listing of its shares on
the NYSE.
  161




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BFC Financial Corporation
Notes to Consolidated Financial Statements
        162




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Liquidity
    Summary of Significant Accounting Policies
  Use of Estimates 
 Consolidation Policy  Consolidation of Variable Interest Entities Accounting for Investments in Real Estate Ventures Determining Whether a General Partner, or the General Partners as a Group, Controls a
Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights
 163




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BFC Financial Corporation
Notes to Consolidated Financial Statements
     Reclassifications 
 Accounting for the Impairment or Disposal of Long-Lived Assets
 Loss in excess of investment in Levitt and Sons  Consolidated Financial Statements
 164




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BFC Financial Corporation
Notes to Consolidated Financial Statements
  Cash and Cash Equivalents
 Restricted Cash 
 Investment Securities at Cost or Amortized Costs  Accounting for Certain
Investments in Debt and Equity Securities
     Financial instruments and derivatives
 165




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BFC Financial Corporation
Notes to Consolidated Financial Statements
  Tax Certificates
 Allowance for Tax Certificate Losses 
 Loans 
 Loans Held for Sale
 Transfer of Loan Participations 
 Impaired Loans
 Allowance for Loan Losses
   166




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BFC Financial Corporation
Notes to Consolidated Financial Statements
  Non-performing Loans
  Real Estate Owned (REO)
 Impairment of Long Lived Assets
    167




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Equity Method 
 The
Meaning of Other-than-Temporary Impairment and Its Application to Certain Investments
 Capitalized Interest 
 Properties and Equipment
  Goodwill and Other Intangible Assets
  168




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BFC Financial Corporation
Notes to Consolidated Financial Statements
    Revenue Recognition- Real Estate Development Accounting for
Sales of Real Estate (
  Accounting for Leases
 Accounting
for Real Estate Time-Sharing Transactions Accounting for Costs and Initial Rental Operations of Real Estate Projects
 169




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BFC Financial Corporation
Notes to Consolidated Financial Statements
  Purchase Accounting  Step Acquisition Business
Combinations
 Accounting for Costs Associated with Exit or Disposal Activities
 Advertising 
 Income Taxes 
  Accounting for Uncertainty in Income Taxes an interpretation of FASB No 109
 Noncontrolling Interest
 Accounting for Contingencies
 170




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Brokered Deposits
 Loss Per Share
 Stock-Based Compensation Plans Share-Based Payment Accounting for
Stock-Based Compensation
 New Accounting Pronouncements:
 Business Combinations
 Noncontrolling Interests in
Consolidated Financial StatementsAn Amendment of ARB No. 51
 171




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Disclosures about Derivative
Instruments and Hedging Activities
 Determination of the
Useful Life of Intangible Assets Goodwill and Other Intangible Assets
 Determining
Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities,
 Issuers Accounting for Liabilities
Measured at Fair Value With a Third-Party Credit Enhancement
 Disclosures about Credit
Derivatives and Certain Guarantees: An Amendment of FASB Statement No. 133 and FASB Interpretation
No. 45; and Clarification of the Effective Date of FASB Statement No. 161,
 Determining the Fair Value of a Financial Asset
When the Market for That Asset Is Not Active
 172




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BFC Financial Corporation
Notes to Consolidated Financial Statements
 Fair Value Measurements
 Equity Method Accounting Considerations The Equity Method of Accounting for Investments in Common
Stock
 Employers Disclosure about
Postretirement Benefit Plan Assets
 Disclosures by Public
Entities (Enterprises) about Transfers of Financial Assets and Interests in Variable Interest
Entities
  2.
    
    Business Combination and Step Acquisitions
 Pizza Fusion
   173




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BFC Financial Corporation
Notes to Consolidated Financial Statements
   Acquisition of Shares in BankAtlantic Bancorp and Woodbridge
   Shares of BankAtlantic Bancorp Class A Common Stock
 s
 s
 Shares of Woodbridge Class A Common Stock
  s
 174




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  3.
    
    Discontinued Operations
      175




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Consideration received:Stifel common stock and Warrants
    
    $
    107,445Cash
    
    
    2,628Total consideration received
    
    
    110,073Net assets disposed:Discontinued operations assets held for sale at disposal date
    
    
    206,763Discontinued operations liabilities held for sale at disposal date
    
    
    (117,364
    )Net assets available for sale at disposal date
    
    
    89,399Transaction cost
    
    
    2,709Gain on disposal of Ryan Beck
before income taxes and noncontrolling interest
    
    
    17,965Provision for income taxes
    
    
    2,959Noncontrolling interest
    
    
    12,831Net gain on sale of Ryan Beck
    
    $
    2,175
  For the Years EndedDecember 31,2007
    
    
    2006Financial Services:Investment banking revenue
    
    $
    37,836
    
    
    
    218,461Expenses:Employee compensation and benefits
    
    
    27,532
    
    
    
    170,605Occupancy and equipment
    
    
    2,984
    
    
    
    16,588Advertising and promotion
    
    
    740
    
    
    
    5,788Transaction related costs (1)
    
    
    14,263
    
    
    
    Other expenses:Professional fees
    
    
    1,106
    
    
    
    8,790Communications
    
    
    2,255
    
    
    
    15,187Floor broker and clearing fees
    
    
    1,162
    
    
    
    8,612Interest expense
    
    
    985
    
    
    
    5,995Other
    
    
    1,086
    
    
    
    6,389Total expenses
    
    
    52,113
    
    
    
    237,954Loss from Ryan Beck discontinued operations
before income taxes and noncontrolling interest
    
    
    (14,277
    )
    
    
    (19,493
    )Income tax benefit
    
    
    (6,431
    )
    
    
    (8,958
    )Noncontrolling interest
    
    
    (6,709
    )
    
    
    (9,011
    )Loss from Ryan Beck discontinued operations,
net of income taxes and noncontrolling interest
    
    $
    (1,137
    )
    
    
    (1,524
    )
 
 (1)
    
    Ryan Beck sale related costs include $9.3 million of change in control payments, $3.5 million
of one-time employee termination benefits and $1.5 million of share-based compensation.
 4.
    
    Segment Reporting
   176




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BFC Financial Corporation
Notes to Consolidated Financial Statements
    BFC Activities
  BankAtlantic
  BankAtlantic Bancorp Other Operations
  Primary Homebuilding
  Tennessee Homebuilding
  Land Division
  Woodbridge Other Operations
  177




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  BankAtlanticBancorp
    
    
    
    
    
    
    Woodbridge
    
    
    AdjustmentsBFC
    
    
    
    
    
    
    Other
    
    
    Land
    
    
    Other
    
    
    and2008
    
    Activities
    
    
    BankAtlantic
    
    
    Operations
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    11,268
    
    
    
    2,484
    
    
    
    85
    
    
    
    13,837Interest and dividend income
    
    
    1,376
    
    
    
    313,307
    
    
    
    1,445
    
    
    
    1,931
    
    
    
    2,418
    
    
    
    (1,379
    )
    
    
    319,098Other income
    
    
    5,853
    
    
    
    135,799
    
    
    
    671
    
    
    
    14,341
    
    
    
    2,692
    
    
    
    (4,821
    )
    
    
    154,535Total revenues
    
    
    7,229
    
    
    
    449,106
    
    
    
    2,116
    
    
    
    27,540
    
    
    
    7,594
    
    
    
    (6,115
    )
    
    
    487,470Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,742
    
    
    
    16,151
    
    
    
    (10,055
    )
    
    
    12,838Interest expense, net
    
    
    
    
    
    
    119,534
    
    
    
    21,262
    
    
    
    3,637
    
    
    
    8,115
    
    
    
    (1,379
    )
    
    
    151,169Provision for loan losses
    
    
    
    
    
    
    135,383
    
    
    
    24,418
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    159,801Other expenses
    
    
    12,393
    
    
    
    328,534
    
    
    
    8,741
    
    
    
    24,608
    
    
    
    26,597
    
    
    
    (4,821
    )
    
    
    396,052Total costs and expenses
    
    
    12,393
    
    
    
    583,451
    
    
    
    54,421
    
    
    
    34,987
    
    
    
    50,863
    
    
    
    (16,255
    )
    
    
    719,860Equity in (loss) earnings from
unconsolidated affiliates
    
    
    (152
    )
    
    
    920
    
    
    
    600
    
    
    
    
    
    
    
    13,696
    
    
    
    
    
    
    
    15,064Impairment of unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (96,579
    )
    
    
    
    
    
    
    (96,579
    )Impairment of investments
    
    
    (3,574
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,974
    )
    
    
    
    
    
    
    (15,548
    )Loss from continuing operations before
income taxes and noncontrolling interest
    
    
    (8,890
    )
    
    
    (133,425
    )
    
    
    (51,705
    )
    
    
    (7,447
    )
    
    
    (138,126
    )
    
    
    10,140
    
    
    
    (329,453
    )(Benefit) provision for income taxes
    
    
    (14,887
    )
    
    
    31,121
    
    
    
    1,395
    
    
    
    (1,866
    )
    
    
    
    
    
    
    
    
    
    
    15,763Noncontrolling interest
    
    
    12
    
    
    
    (122,035
    )
    
    
    (39,381
    )
    
    
    (4,651
    )
    
    
    (115,105
    )
    
    
    8,449
    
    
    
    (272,711
    )Income (loss) from continuing operations
    
    $
    5,985
    
    
    
    (42,511
    )
    
    
    (13,719
    )
    
    
    (930
    )
    
    
    (23,021
    )
    
    
    1,691
    
    
    
    (72,505
    )At December 31, 2008Total assets
    
    $
    26,468
    
    
    
    5,713,690
    
    
    
    542,478
    
    
    
    339,941
    
    
    
    220,587
    
    
    
    (447,582
    )
    
    
    6,395,582
 178




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 BankAtlanticBancorp
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Woodbridge
    
    
    AdjustingBFC
    
    
    
    
    
    
    Other
    
    
    Primary
    
    
    Tennessee
    
    
    Land
    
    
    Other
    
    
    and2007
    
    Activities
    
    
    BankAtlantic
    
    
    Operations
    
    
    Homebuilding
    
    
    Homebuilding
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    345,666
    
    
    
    42,042
    
    
    
    16,567
    
    
    
    6,574
    
    
    
    (734
    )
    
    
    410,115Interest and dividend income
    
    
    2,374
    
    
    
    369,570
    
    
    
    2,320
    
    
    
    613
    
    
    
    39
    
    
    
    3,880
    
    
    
    7,158
    
    
    
    (8,050
    )
    
    
    377,904Other income
    
    
    6,272
    
    
    
    143,193
    
    
    
    6,969
    
    
    
    8,523
    
    
    
    44
    
    
    
    8,194
    
    
    
    1,174
    
    
    
    (3,821
    )
    
    
    170,5488,646
    
    
    
    512,763
    
    
    
    9,289
    
    
    
    354,802
    
    
    
    42,125
    
    
    
    28,641
    
    
    
    14,906
    
    
    
    (12,605
    )
    
    
    958,567Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    501,206
    
    
    
    51,360
    
    
    
    7,447
    
    
    
    16,793
    
    
    
    (3,565
    )
    
    
    573,241Interest expense, net
    
    
    
    
    
    
    170,060
    
    
    
    23,054
    
    
    
    7,258
    
    
    
    151
    
    
    
    2,629
    
    
    
    1,073
    
    
    
    (7,746
    )
    
    
    196,479Provision for loan losses
    
    
    
    
    
    
    70,842
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    70,842Other expenses
    
    
    15,272
    
    
    
    313,898
    
    
    
    4,282
    
    
    
    63,107
    
    
    
    5,010
    
    
    
    19,077
    
    
    
    34,898
    
    
    
    (3,738
    )
    
    
    451,80615,272
    
    
    
    554,800
    
    
    
    27,336
    
    
    
    571,571
    
    
    
    56,521
    
    
    
    29,153
    
    
    
    52,764
    
    
    
    (15,049
    )
    
    
    1,292,368Equity in (loss) earnings from
unconsolidated affiliates
    
    
    (78
    )
    
    
    1,219
    
    
    
    1,281
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    10,262
    
    
    
    
    
    
    
    12,724Loss from continuing operations before
income taxes and noncontrolling interest
    
    
    (6,704
    )
    
    
    (40,818
    )
    
    
    (16,766
    )
    
    
    (216,729
    )
    
    
    (14,396
    )
    
    
    (512
    )
    
    
    (27,596
    )
    
    
    2,444
    
    
    
    (321,077
    )(Benefit) provision for income taxes
    
    
    (19,271
    )
    
    
    (21,378
    )
    
    
    (6,194
    )
    
    
    (1,396
    )
    
    
    1,700
    
    
    
    5,910
    
    
    
    (34,297
    )
    
    
    5,914
    
    
    
    (69,012
    )Noncontrolling interest
    
    
    (34
    )
    
    
    (14,773
    )
    
    
    (8,034
    )
    
    
    (179,268
    )
    
    
    (13,400
    )
    
    
    (5,346
    )
    
    
    5,579
    
    
    
    (2,889
    )
    
    
    (218,165
    )(Loss) income from continuing operations
    
    $
    12,601
    
    
    
    (4,667
    )
    
    
    (2,538
    )
    
    
    (36,065
    )
    
    
    (2,696
    )
    
    
    (1,076
    )
    
    
    1,122
    
    
    
    (581
    )
    
    
    (33,900
    )At December 31, 2007Total assets
    
    $
    30,166
    
    
    
    6,161,962
    
    
    
    758,372
    
    
    
    38,497
    
    
    
    
    
    
    
    380,961
    
    
    
    298,700
    
    
    
    (554,225
    )
    
    
    7,114,433
 179




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 BankAtlanticBancorp
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Woodbridge
    
    
    AdjustingBFC
    
    
    
    
    
    
    Other
    
    
    Primary
    
    
    Tennessee
    
    
    Land
    
    
    Other
    
    
    and2006
    
    Activities
    
    
    BankAtlantic
    
    
    Operations
    
    
    Homebuilding
    
    
    Homebuilding
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    424,420
    
    
    
    76,299
    
    
    
    69,778
    
    
    
    11,041
    
    
    
    (15,452
    )
    
    
    566,086Interest and dividend income
    
    
    2,292
    
    
    
    364,949
    
    
    
    2,448
    
    
    
    434
    
    
    
    110
    
    
    
    961
    
    
    
    3,377
    
    
    
    (2,671
    )
    
    
    371,900Other income
    
    
    3,680
    
    
    
    131,811
    
    
    
    9,138
    
    
    
    6,897
    
    
    
    17
    
    
    
    5,505
    
    
    
    2,254
    
    
    
    (2,708
    )
    
    
    156,5945,972
    
    
    
    496,760
    
    
    
    11,586
    
    
    
    431,751
    
    
    
    76,426
    
    
    
    76,244
    
    
    
    16,672
    
    
    
    (20,831
    )
    
    
    1,094,580Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    367,252
    
    
    
    72,807
    
    
    
    42,662
    
    
    
    11,649
    
    
    
    (11,409
    )
    
    
    482,961Interest expense, net
    
    
    
    
    
    
    145,344
    
    
    
    21,933
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (699
    )
    
    
    166,578Provision for loan losses
    
    
    
    
    
    
    8,574
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,574Other expenses
    
    
    12,835
    
    
    
    293,448
    
    
    
    6,738
    
    
    
    67,414
    
    
    
    14,113
    
    
    
    15,119
    
    
    
    28,182
    
    
    
    (2,626
    )
    
    
    435,22312,835
    
    
    
    447,366
    
    
    
    28,671
    
    
    
    434,666
    
    
    
    86,920
    
    
    
    57,781
    
    
    
    39,831
    
    
    
    (14,734
    )
    
    
    1,093,336Equity in (loss) earnings from
unconsolidated affiliates
    
    
    
    
    
    
    33
    
    
    
    1,634
    
    
    
    (279
    )
    
    
    
    
    
    
    
    
    
    
    9,547
    
    
    
    
    
    
    
    10,935(Loss) income from continuing operations
before
income taxes and noncontrolling interest
    
    
    (6,863
    )
    
    
    49,427
    
    
    
    (15,451
    )
    
    
    (3,194
    )
    
    
    (10,494
    )
    
    
    18,463
    
    
    
    (13,612
    )
    
    
    (6,097
    )
    
    
    12,179Provision (benefit) for income taxes
    
    
    (1,857
    )
    
    
    13,105
    
    
    
    (6,008
    )
    
    
    (1,508
    )
    
    
    (3,241
    )
    
    
    6,936
    
    
    
    (5,639
    )
    
    
    (2,318
    )
    
    
    (530
    )Noncontrolling interest
    
    
    (25
    )
    
    
    28,474
    
    
    
    (7,403
    )
    
    
    (1,406
    )
    
    
    (6,048
    )
    
    
    9,613
    
    
    
    (6,649
    )
    
    
    (3,150
    )
    
    
    13,406(Loss) income from continuing operations
    
    $
    (4,981
    )
    
    
    7,848
    
    
    
    (2,040
    )
    
    
    (280
    )
    
    
    (1,205
    )
    
    
    1,914
    
    
    
    (1,324
    )
    
    
    (629
    )
    
    
    (697
    )At December 31, 2006Total assets
    
    $
    45,756
    
    
    
    6,187,122
    
    
    
    796,629
    
    
    
    644,447
    
    
    
    62,065
    
    
    
    271,169
    
    
    
    146,116
    
    
    
    (547,538
    )
    
    
    7,605,766
 180




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 5.
    
    Cumulative-Effect Adjustment for Quantifying Financial Statement Misstatements
   Cumulative EffectAdjustmentAs of January 1, 2006Other liabilities:Recurring operating expenses (1)
    
    $
    1,618Deferred data processing expenses (2)
    
    
    1,474Current taxes payable
    
    
    (696
    )Increase in other liabilities
    
    
    2,396Decrease in deferred tax liability
    
    
    (657
    )Decrease in noncontrolling interest
    
    
    (1,486
    )Decrease in retained earnings
    
    $
    253
 
 (1)
    
    BankAtlantic has historically expensed certain recurring invoices when paid. The effect of
this accounting policy was not material to the Companys financial statements in any given
year as the rollover impact of expenses in the following year approximated the expenses
that rolled over from the prior year.(2)
    
    BankAtlantic pays a fixed fee for certain data processing transaction services, and at the
end of each contract year, the actual number of transactions is determined and the fees
related to any greater or lesser transactions are invoiced or repaid to BankAtlantic over a
twelve month period. BankAtlantic accounted for these charges when paid. The effect of this
accounting policy was not material to the Companys financial statements in any given year
and the amount of the error had accumulated over a four year period as follows (in
thousands):
 For the Years
    
    Occupancy andEnded December 31,
    
    Equipment Expense2002
    
    $
    2212003
    
    
    2762004
    
    
    5332005
    
    
    444$
    1,474
  181




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 6.
    
    Restructuring Charges, Impairments and Exit Activities
 BankAtlantic Bancorp
  EmployeeTerminationBenefits
    
    
    Contract
    
    
    TotalLiability
    
    
    Liability
    
    
    LiabilityBalance at January 1, 2007
    
    $
    
    
    
    
    
    
    
    
    Restructuring charges
    
    
    2,527
    
    
    
    1,016
    
    
    
    3,543Amounts paid or amortized
    
    
    (2,425
    )
    
    
    (26
    )
    
    
    (2,451
    )Balance at December 31, 2007
    
    $
    102
    
    
    
    990
    
    
    
    1,092
 EmployeeTerminationBenefits
    
    
    Contract
    
    
    TotalLiability
    
    
    Liability
    
    
    LiabilityBalance at January 1, 2008
    
    $
    102
    
    
    
    990
    
    
    
    1,092Expense incurred
    
    
    2,171
    
    
    
    2,385
    
    
    
    4,556Amounts paid or amortized
    
    
    (2,102
    )
    
    
    (1,913
    )
    
    
    (4,015
    )Balance at December 31 , 2008
    
    $
    171
    
    
    
    1,462
    
    
    
    1,633
  For the Years EndedDecember 31,2008
    
    
    2007Asset impairment
    
    $
    4,758
    
    
    
    4,808Employee termination costs
    
    
    2,171
    
    
    
    2,527Lease termination, net
    
    
    2,385
    
    
    
    1,016Reversal of deferred rent upon lease termination
    
    
    (2,186
    )
    
    
    Loss on central Florida branch sale
    
    
    267
    
    
    
    Total
    
    $
    7,395
    
    
    
    8,351
    182




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
    AmountAssets sold:Loans
    
    $
    6,470Property and equipment
    
    
    13,373Total assets sold
    
    
    19,843Liabilities transferred:Deposits
    
    
    (24,477
    )Other liabilities
    
    
    (346
    )Total liabilities transferred
    
    
    (24,823
    )Net liability transferred
    
    
    (4,980
    )Deposit premium
    
    
    654Purchase transaction costs
    
    
    (165
    )Net cash outflows from sales of stores
    
    $
    (4,491
    )
 Woodbridge
  Severance
    
    
    
    
    
    Independent
    
    SuretyRelated and
    
    
    
    
    
    Contractor
    
    BondBenefits
    
    Facilities
    
    Agreements
    
    Accrual
    
    TotalBalance at December 31, 2006
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Restructuring charges
    
    
    4,864
    
    
    
    1,010
    
    
    
    1,497
    
    
    
    1,826
    
    
    
    9,197Cash payments
    
    
    (2,910
    )
    
    
    
    
    
    
    (76
    )
    
    
    
    
    
    
    (2,986
    )Balance at December 31, 2007
    
    $
    1,954
    
    
    
    1,010
    
    
    
    1,421
    
    
    
    1,826
    
    
    
    6,211Restructuring charges
    
    
    2,238
    
    
    
    140
    
    
    
    
    
    
    
    (150
    )
    
    
    2,228Cash payments
    
    
    (4,063
    )
    
    
    (446
    )
    
    
    (824
    )
    
    
    (532
    )
    
    
    (5,865
    )Balance at December 31, 2008
    
    $
    129
    
    
    
    704
    
    
    
    597
    
    
    
    1,144
    
    
    
    2,574
   183




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Accounting for Costs Associated with Exit or Disposal Activities
   7.
    
    Goodwill
    184




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
     8.
    
    Federal Funds Sold and Other Short Term Investments
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Ending Balance
    
    $
    20,825
    
    
    
    484
    
    
    
    691Maximum outstanding at any month end within period
    
    $
    362,360
    
    
    
    21,555
    
    
    
    16,276Average amount invested during period
    
    $
    44,031
    
    
    
    3,638
    
    
    
    1,824Average yield during period
    
    
    %1.92
    
    
    
    4.77
    
    
    
    3.00
  9.
    
    Securities Available for Sale
  December 31, 2008Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueGovernment agency securities:Mortgage-backed securities
    
    $
    521,895
    
    
    
    11,017
    
    
    
    39
    
    
    
    532,873Real estate mortgage investment conduits(1)
    
    
    165,449
    
    
    
    1,846
    
    
    
    944
    
    
    
    166,351Total mortgage-backed securities
    
    
    687,344
    
    
    
    12,863
    
    
    
    983
    
    
    
    699,224Investment Securities:Tax-exempt securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other bonds
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250Benihana Convertible Preferred Stock (see Note 12)
    
    
    16,426
    
    
    
    
    
    
    
    
    
    
    
    16,426Equity securities
    
    
    6,686
    
    
    
    112
    
    
    
    
    
    
    
    6,798Total investment securities
    
    
    23,362
    
    
    
    112
    
    
    
    
    
    
    
    23,474Total
    
    $
    710,706
    
    
    
    12,975
    
    
    
    983
    
    
    
    722,698
 185




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 December 31, 2007Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    EstimatedCost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueGovernment agency securities:Mortgage-backed securities
    
    $
    585,796
    
    
    
    4,378
    
    
    
    555
    
    
    
    589,619Real estate mortgage investment conduits(1)
    
    
    199,886
    
    
    
    1,359
    
    
    
    2,403
    
    
    
    198,842Total mortgage-backed securities
    
    
    785,682
    
    
    
    5,737
    
    
    
    2,958
    
    
    
    788,461Investment Securities:Tax-exempt securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other bonds
    
    
    685
    
    
    
    
    
    
    
    4
    
    
    
    681Equity securities
    
    
    123,876
    
    
    
    13,289
    
    
    
    
    
    
    
    137,165Total investment securities
    
    
    124,561
    
    
    
    13,289
    
    
    
    4
    
    
    
    137,846Total
    
    $
    910,243
    
    
    
    19,026
    
    
    
    2,962
    
    
    
    926,307
 
 (1)
    
    Real estate mortgage investment conduits are pass-through entities that hold residential
loans, and investors are issued ownership interests in the entities in the form of a bond. The
securities were issued by government agencies.
  As of December 31, 2008Less Than 12 Months
    
    
    12 Months or Greater
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesMortgage-backed securities
    
    $
    4,736
    
    
    
    (39
    )
    
    
    
    
    
    
    
    
    
    
    4,736
    
    
    
    (39
    )Real estate mortgage
investment conduits
    
    
    
    
    
    
    
    
    
    
    27,426
    
    
    
    (944
    )
    
    
    27,426
    
    
    
    (944
    )Total available for sale
securities:
    
    $
    4,736
    
    
    
    (39
    )
    
    
    27,426
    
    
    
    (944
    )
    
    
    32,162
    
    
    
    (983
    )
 As of December 31, 2007Less Than 12 Months
    
    
    12 Months or Greater
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesMortgage-backed securities
    
    $
    68,821
    
    
    
    (396
    )
    
    
    14,792
    
    
    
    (159
    )
    
    
    83,613
    
    
    
    (555
    )Real estate mortgage
investment conduits
    
    
    3,475
    
    
    
    (5
    )
    
    
    35,398
    
    
    
    (2,398
    )
    
    
    38,873
    
    
    
    (2,403
    )Other bonds
    
    
    200
    
    
    
    
    
    
    
    246
    
    
    
    (4
    )
    
    
    446
    
    
    
    (4
    )Total available for sale
securities:
    
    $
    72,496
    
    
    
    (401
    )
    
    
    50,436
    
    
    
    (2,561
    )
    
    
    122,932
    
    
    
    (2,962
    )
   186




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Debt SecuritiesAvailable for SaleEstimatedAmortized
    
    
    FairDecember 31, 2008 (1) (2)
    
    Cost
    
    
    ValueDue within one year
    
    $
    
    
    
    
    Due after one year, but within five years
    
    
    279
    
    
    
    281Due after five years, but within ten years
    
    
    868
    
    
    
    867Due after ten years
    
    
    686,447
    
    
    
    698,326Total
    
    $
    687,594
    
    
    
    699,474
 
 (1)
    
    Scheduled maturities in the above table may vary significantly
from actual maturities due to prepayments.(2)
    
    Scheduled maturities are based upon contractual
maturities.
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Gross gains on securities sales
    
    $
    8,378
    
    
    
    17,026
    
    
    
    10,137Gross losses on securities sales
    
    $
    (5,103
    )
    
    
    (4,341
    )
    
    
    (168
    )Proceeds from sales of securities
    
    $
    395,770
    
    
    
    625,095
    
    
    
    70,300Other-than-temporary impairments
    
    $
    (3,413
    )
    
    
    
    
    
    
    
  Woodbridge  Office Depot Investment
    187




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  December 31,2008Total cost
    
    $
    33,978Sale of portion of Office Depot common stock
    
    
    (17,726
    )Other-than-temporary impairment
    
    
    (11,974
    )Total fair value
    
    $
    4,278
  10. Investment Securities
  December 31, 2008Gross
    
    Gross
    
    EstimatedAmortized
    
    Unrealized
    
    Unrealized
    
    FairCost
    
    Gains
    
    Losses
    
    ValuePrivate investment securities (3)
    
    
    12,008
    
    
    
    467
    
    
    
    
    
    12,475
 December 31, 2007Gross
    
    
    Gross
    
    
    EstimatedAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    ValueStifel restricted common stock (1)
    
    $
    31,433
    
    
    
    3,061
    
    
    
    
    
    
    $
    34,494Private investment securities
    
    
    8,740
    
    
    
    1,407
    
    
    
    
    
    
    
    10,147Benihana Convertible Preferred Stock (2)
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    20,000Equity securities (4)
    
    
    
    
    
    
    603
    
    
    
    
    
    
    
    603$
    60,173
    
    
    
    5,071
    
    
    
    
    
    
    $
    65,244
 
 (1)
    
    Stifel common stock that was subject to restrictions for more than one year was accounted
for as investment securities at cost.(2)
    
    Historically, the Companys investment in
Benihanas Convertible Preferred Stock has been classified as investment securities and has been carried at historical cost (see Note 12).(3)
    
    Private investment securities consist of equity instruments purchased through private
placements and are accounted for at historical cost adjusted for other-than-temporary
declines in value.(4)
    
    Equity securities consisted of 3,587 shares of MasterCard Class B common stock acquired
through MasterCards 2006 initial public offering.
  188




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
    11.
    
    Tax Certificates
  As of December 31, 2008
    
    
    As of December 31, 2007Estimated
    
    
    
    
    
    
    EstimatedAmortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    ValueTax certificates (1) Net of allowance of $6,064
and $3,289, respectively
    
    $
    213,534
    
    
    
    224,434
    
    
    
    188,401
    
    
    
    188,401
 
 (1)
    
    The estimated fair value was calculated at December 31, 2008 from an expected cash flow model
discounted at an interest rate that takes into account the risk of the cash flows of tax
certificates relative to alternative investments. At December 31, 2007, management considered
the estimated fair value equivalent to book value for tax certificates since these securities
have no stated maturity and generally redeem in two years or less.
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    3,289
    
    
    
    3,699
    
    
    
    3,271Charge-offs
    
    
    (4,668
    )
    
    
    (867
    )
    
    
    (295
    )Recoveries
    
    
    157
    
    
    
    157
    
    
    
    423Net (charge-offs) recoveries
    
    
    (4,511
    )
    
    
    (710
    )
    
    
    128Provision charged to
non-interest expense
    
    
    7,286
    
    
    
    300
    
    
    
    300Balance, end of period
    
    $
    6,064
    
    
    
    3,289
    
    
    
    3,699
 12.
    
    Benihana Convertible Preferred Stock Investment
  189




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
    13.
    
    Loans Receivable and Loans Held for Sale
  December 31,
    
    
    December 31,2008
    
    
    2007Real estate loans:Residential
    
    $
    1,916,562
    
    
    
    2,155,752Builder land loans
    
    
    84,453
    
    
    
    149,564Land acquisition and development
    
    
    182,585
    
    
    
    202,177Land acquisition, development and construction
    
    
    104,629
    
    
    
    151,321Construction and development
    
    
    229,856
    
    
    
    265,163Commercial
    
    
    713,571
    
    
    
    534,916Consumer  home equity
    
    
    718,950
    
    
    
    676,262Small business
    
    
    218,694
    
    
    
    211,797Other loans:Commercial business
    
    
    144,554
    
    
    
    131,044Small business  non-mortgage
    
    
    108,230
    
    
    
    105,867Consumer loans
    
    
    16,406
    
    
    
    15,667Deposit overdrafts
    
    
    9,730
    
    
    
    15,005Total gross loans
    
    
    4,448,220
    
    
    
    4,614,535Adjustments:Premiums, discounts and net deferred fees
    
    
    3,221
    
    
    
    3,936Allowance for loan losses
    
    
    (137,257
    )
    
    
    (94,020
    )Loans receivable  net
    
    $
    4,314,184
    
    
    
    4,524,451Loans held for sale
    
    $
    3,461
    
    
    
    4,087
  190




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   As of December 31,2008
    
    
    2007Residential
    
    $
    
    
    
    
    2,982Construction and development
    
    
    124,332
    
    
    
    214,159Commercial
    
    
    38,930
    
    
    
    105,336Total undisbursed loans in process
    
    $
    163,262
    
    
    $
    322,477
  Florida
    
    
    60
    %Eastern U.S.A.
    
    
    21
    %Western U.S.A.
    
    
    15
    %Central U.S.A
    
    
    4
    %100
    %
 Allowance for Loan Losses (in thousands)
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    94,020
    
    
    
    44,173
    
    
    
    41,830Loans charged-off
    
    
    (117,874
    )
    
    
    (23,213
    )
    
    
    (8,905
    )Recoveries of loans previously charged-off
    
    
    1,310
    
    
    
    2,218
    
    
    
    2,674Net (charge-offs) recoveries
    
    
    (116,564
    )
    
    
    (20,995
    )
    
    
    (6,231
    )Provision for loan losses
    
    
    159,801
    
    
    
    70,842
    
    
    
    8,574Balance, end of period
    
    $
    137,257
    
    
    
    94,020
    
    
    
    44,173
  As of December 31, 2008
    
    
    As of December 31, 2007Gross
    
    
    
    
    
    
    GrossRecorded
    
    
    Specific
    
    
    Recorded
    
    
    SpecificInvestment
    
    
    Allowances
    
    
    Investment
    
    
    AllowancesImpaired loans with specific
valuation allowances
    
    $
    174,710
    
    
    
    41,192
    
    
    
    113,955
    
    
    
    17,809Impaired loans without specific
valuation allowances
    
    
    138,548
    
    
    
    
    
    
    
    67,124
    
    
    
    Total
    
    $
    313,258
    
    
    
    41,192
    
    
    
    181,079
    
    
    
    17,809
  191




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Contracted interest income
    
    $
    14,276
    
    
    
    15,042
    
    
    
    2,715Interest income recognized
    
    
    (3,368
    )
    
    
    (10,071
    )
    
    
    (2,203
    )Foregone interest income
    
    $
    10,908
    
    
    
    4,971
    
    
    
    512
  Non-performing assets (in thousands):
 As of December 31,2008
    
    
    2007
    
    
    2006Non-accrual  tax certificates
    
    $
    1,441
    
    
    
    2,094
    
    
    
    632Non-accrual  loansResidential
    
    
    34,734
    
    
    
    8,678
    
    
    
    2,629Commercial real estate and business
    
    
    241,274
    
    
    
    165,818
    
    
    
    Small business
    
    
    4,644
    
    
    
    877
    
    
    
    244Consumer
    
    
    6,763
    
    
    
    3,218
    
    
    
    1,563Total non-accrual loans
    
    
    287,415
    
    
    
    178,591
    
    
    
    4,436Real estate owned
    
    
    19,045
    
    
    
    17,216
    
    
    
    21,747Total non-performing assets
    
    $
    307,901
    
    
    
    197,901
    
    
    
    26,815
  Other potential problem loans (in thousands):
 As of December 31,2008
    
    
    2007
    
    
    2006Performing impaired loans, net of specific allowances
    
    $
    
    
    
    
    
    
    
    
    162Loan 90 days past due and still accruing
    
    
    15,721
    
    
    
    
    
    
    
    Troubled debt restructured
    
    
    28,173
    
    
    
    2,488
    
    
    
    Total potential problem loans
    
    $
    43,894
    
    
    
    2,488
    
    
    
    162
  192




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Real estate acquired in settlement of loans and tax certificates:Operating expenses, net
    
    $
    (1,243
    )
    
    
    (243
    )
    
    
    (224
    )Impairment of REO
    
    
    (1,465
    )
    
    
    (7,299
    )
    
    
    9Net (loss) gain on sales
    
    
    (124
    )
    
    
    427
    
    
    
    1,443Net (loss) gain on real estate owned activity
    
    $
    (2,832
    )
    
    
    (7,115
    )
    
    
    1,228
 14.
    
    Properties and Equipment
  December 31,2008
    
    
    2007Land, buildings and improvements
    
    $
    292,328
    
    
    
    315,430Furniture and equipment
    
    
    104,363
    
    
    
    115,504Water irrigation facilities
    
    
    12,346
    
    
    
    11,515Total
    
    
    409,037
    
    
    
    442,449Less accumulated depreciation
    
    
    93,690
    
    
    
    81,560Properties and equipment  net
    
    $
    315,347
    
    
    
    360,889
     193




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 15.
    
    Real Estate Held for Development and Sale
  December 31,2008
    
    
    2007Land and land development costs
    
    $
    221,684
    
    
    
    216,090Construction costs
    
    
    463
    
    
    
    5,426Capitalized interest and other costs
    
    
    38,539
    
    
    
    35,009Land held for sale
    
    
    8,077
    
    
    
    13,704Total
    
    $
    268,763
    
    
    
    270,229
  BankAtlantic Bancorp
  Woodbridge
   16.
    
    Capitalized Interest
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Interest expense
    
    $
    162,669
    
    
    
    243,439
    
    
    
    209,509Interest capitalized
    
    
    (11,500
    )
    
    
    (46,960
    )
    
    
    (42,931
    )Interest expense, net
    
    $
    151,169
    
    
    
    196,479
    
    
    
    166,578
 194




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 17.
    
    Investments in Unconsolidated Affiliates
  December 31,2008
    
    
    2007Investment in Bluegreen Corporation
    
    $
    29,789
    
    
    
    111,321Investments in joint ventures
    
    
    2,973
    
    
    
    5,615BankAtlantic Bancorp investment in statutory business trusts
    
    
    8,218
    
    
    
    8,820Woodbridge investment in statutory business trusts
    
    
    406
    
    
    
    2,565$
    41,386
    
    
    
    128,321
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Earnings from Bluegreen
    
    $
    13,696
    
    
    
    10,275
    
    
    
    9,684Loss from joint ventures
    
    
    (152
    )
    
    
    (51
    )
    
    
    (416
    )Earnings from statutory trusts
    
    
    1,520
    
    
    
    2,500
    
    
    
    1,667$
    15,064
    
    
    
    12,724
    
    
    
    10,935
   Investment in Bluegreen
  195




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
      December 31,2008Prorata share of Bluegreens net loss
    
    $
    (154
    )Amortization of basis difference
    
    
    13,850Total earnings from Bluegreen Corporation
    
    $
    13,696
 196




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  December 31,2008Prorata share of investment in Bluegreen Corporation
    
    $
    115,072Purchase accounting adjustment (from the step acquisition)
    
    
    (4,700
    )Amortization of basis difference
    
    
    13,850Less: Impairment of investment in Bluegreen Corporation
    
    
    (94,433
    )Investment in Bluegreen Corporation
    
    $
    29,789
  Condensed Consolidated Balance Sheet
(In thousands)
 December 31,2008
    
    
    2007Total assets
    
    $
    1,193,507
    
    
    
    1,039,578Total liabilities
    
    
    781,522
    
    
    
    632,047Minority interest
    
    
    29,518
    
    
    
    22,423Total shareholders equity
    
    
    382,467
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    1,193,507
    
    
    
    1,039,578
 Condensed Consolidated Statements of Income
(In thousands)
 Year Ended
    
    
    Year Ended
    
    
    Year EndedDecember 31,
    
    
    December 31,
    
    
    December 31,2008
    
    
    2007
    
    
    2006Revenues and other income
    
    $
    602,043
    
    
    
    691,494
    
    
    
    671,509Cost and other expenses
    
    
    594,698
    
    
    
    632,280
    
    
    
    609,018Income before minority interest and provision for income taxes
    
    
    7,345
    
    
    
    59,214
    
    
    
    62,491Minority interest
    
    
    7,095
    
    
    
    7,721
    
    
    
    7,319Income before provision for income taxes
    
    
    250
    
    
    
    51,493
    
    
    
    55,172Provision for income taxes
    
    
    (766
    )
    
    
    (19,567
    )
    
    
    (20,861
    )(Loss) income before cumulative effect of change in accounting
principle
    
    
    (516
    )
    
    
    31,926
    
    
    
    34,311Cumulative effect of change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    (5,678
    )Minority interest in cumulative effect of change in accounting
principle
    
    
    
    
    
    
    
    
    
    
    1,184Net (loss) income
    
    $
    (516
    )
    
    
    31,926
    
    
    
    29,817
  197




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 BankAtlantic Bancorp Investment in Statutory Business Trusts
  As of December 31,Statement of Financial Condition
    
    2008
    
    
    2007Junior subordinated debentures
    
    $
    294,195
    
    
    
    294,195Other assets
    
    
    1,035
    
    
    
    1,072Total Assets
    
    $
    295,230
    
    
    
    295,267Trust preferred securities
    
    $
    285,375
    
    
    
    285,375Other liabilities
    
    
    1,035
    
    
    
    1,072Total Liabilities
    
    
    286,410
    
    
    
    286,447Common securities
    
    
    8,820
    
    
    
    8,820Total Liabilities and Equity
    
    $
    295,230
    
    
    
    295,267
 For the Years Ended December 31,Statement of Operations
    
    2008
    
    
    2007
    
    
    2006Interest income from subordinated debentures
    
    $
    20,197
    
    
    
    22,274
    
    
    
    20,913Interest expense
    
    
    (19,596
    )
    
    
    (21,612
    )
    
    
    (20,286
    )Net income
    
    $
    601
    
    
    
    662
    
    
    
    627
  18.
    
    Deposits
  As of December 31,2008

    
    
    2007Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentInterest free checking
    
    $
    741,691
    
    
    
    18.89
    %
    
    
    824,211
    
    
    
    20.85
    %Insured money fund savings0.70% at December 31, 2008
    
    
    427,762
    
    
    
    10.892.45% at December 31, 2007,
    
    
    
    
    
    
    
    
    
    
    624,390
    
    
    
    15.79NOW accounts0.50% at December 31, 2008
    
    
    992,762
    
    
    
    25.281.50% at December 31, 2007,
    
    
    
    
    
    
    
    
    
    
    900,233
    
    
    
    22.77Savings accounts0.50% at December 31, 2008
    
    
    419,494
    
    
    
    10.681.50% at December 31, 2007,
    
    
    
    
    
    
    
    
    
    
    580,497
    
    
    
    14.68Total non-certificate accounts
    
    
    2,581,709
    
    
    
    65.74
    
    
    
    2,929,331
    
    
    
    74.09Certificate accounts:Less than 2.00%
    
    
    189,528
    
    
    
    4.83
    
    
    
    16,261
    
    
    
    0.412.01% to 3.00%
    
    
    145,188
    
    
    
    3.70
    
    
    
    52,435
    
    
    
    1.333.01% to 4.00%
    
    
    598,461
    
    
    
    15.24
    
    
    
    164,744
    
    
    
    4.174.01% to 5.00%
    
    
    337,885
    
    
    
    8.61
    
    
    
    445,498
    
    
    
    11.275.01% to 6.00%
    
    
    67,108
    
    
    
    1.71
    
    
    
    339,625
    
    
    
    8.596.01% to 7.00%
    
    
    6
    
    
    
    
    
    
    
    32
    
    
    
    Total certificate accounts
    
    
    1,338,176
    
    
    
    34.09
    
    
    
    1,018,595
    
    
    
    25.77Total deposit accounts
    
    
    3,919,885
    
    
    
    99.83
    
    
    
    3,947,926
    
    
    
    99.86Premium on brokered deposits
    
    
    (89
    )
    
    
    
    
    
    
    
    
    
    
    Interest earned not credited to deposit accounts
    
    
    6,572
    
    
    
    0.17
    
    
    
    5,479
    
    
    
    0.14Total
    
    $
    3,926,368
    
    
    
    100.00
    %
    
    
    3,953,405
    
    
    
    100.00
    %
 198




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Money fund savings and NOW accounts
    
    $
    17,783
    
    
    
    26,031
    
    
    
    20,413Savings accounts
    
    
    4,994
    
    
    
    12,559
    
    
    
    2,936Certificate accounts  below $100,000
    
    
    21,195
    
    
    
    25,512
    
    
    
    23,136Certificate accounts, $100,000 and above
    
    
    20,856
    
    
    
    21,002
    
    
    
    13,048Less early withdrawal penalty
    
    
    (565
    )
    
    
    (628
    )
    
    
    (574
    )Total
    
    $
    64,263
    
    
    
    84,476
    
    
    
    58,959
  For the Years Ended December 31,Interest Rates
    
    2009
    
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    Thereafter0.00% to 2.00%
    
    $
    188,928
    
    
    
    434
    
    
    
    128
    
    
    
    
    
    
    
    26
    
    
    
    112.01% to 3.00%
    
    
    136,775
    
    
    
    6,505
    
    
    
    1,342
    
    
    
    159
    
    
    
    407
    
    
    
    3.01% to 4.00%
    
    
    581,465
    
    
    
    7,435
    
    
    
    3,408
    
    
    
    2,718
    
    
    
    3,431
    
    
    
    44.01% to 5.00%
    
    
    283,391
    
    
    
    13,687
    
    
    
    6,798
    
    
    
    26,576
    
    
    
    7,433
    
    
    
    5.01% to 6.00%
    
    
    38,579
    
    
    
    25,204
    
    
    
    699
    
    
    
    870
    
    
    
    1,757
    
    
    
    6.01% and greater
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,229,144
    
    
    
    53,265
    
    
    
    12,375
    
    
    
    30,323
    
    
    
    13,054
    
    
    
    15
  December 31,20083 months or less
    
    $
    259,7044 to 6 months
    
    
    159,7637 to 12 months
    
    
    170,000More than 12 months
    
    
    74,232Total
    
    $
    663,699
  2008
    
    
    2007Brokered deposits
    
    $
    239,888
    
    
    
    14,665Public deposits
    
    
    243,745
    
    
    
    323,879Total institutional deposits
    
    $
    483,633
    
    
    
    338,544
  199




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 19.
    
    Advances from Federal Home Loan Bank
  Weighted
    
    
    WeightedAverage
    
    
    AverageMaturity
    
    
    Interest
    
    
    OutstandingAdvances Maturing During the Year Ended:
    
    Date
    
    
    Rate
    
    
    BalanceDecember 31, 2009
    
    
    7/10/2009
    
    
    
    3.69
    %
    
    $
    565,271December 31, 2010
    
    
    4/13/2010
    
    
    
    2.84
    %
    
    
    402,220Total advances from the FHLB
    
    
    
    
    
    
    
    
    
    $
    967,491
    20.
    
    Federal Funds Purchased and Treasury Borrowings
     As of December 31,2008
    
    
    2007
    
    
    2006Ending balance
    
    $
    238,339
    
    
    
    108,975
    
    
    
    32,026Maximum outstanding at any month end
within period
    
    $
    238,339
    
    
    
    175,000
    
    
    
    266,237Average amount outstanding during period
    
    $
    78,125
    
    
    
    115,334
    
    
    
    176,237Average interest cost during period
    
    
    %2.23
    
    
    
    5.17
    
    
    
    5.17
 200




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 21.
    
    Securities Sold Under Agreements to Repurchase
   For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Maximum borrowing at any month-end within the period
    
    $
    55,179
    
    
    
    109,430
    
    
    
    202,607Average borrowing during the period
    
    $
    63,529
    
    
    
    73,848
    
    
    
    123,944Average interest cost during the period
    
    
    %2.23
    
    
    
    4.88
    
    
    
    4.83Average interest cost at end of the period
    
    
    %0.12
    
    
    
    3.46
    
    
    
    5.17
  WeightedEstimated
    
    
    
    
    
    
    AverageAmortized
    
    
    Fair
    
    
    Repurchase
    
    
    InterestCost
    
    
    Value
    
    
    Balance
    
    
    RateDecember 31, 2008 (1)Mortgage-backed securities
    
    $
    46,689
    
    
    
    47,896
    
    
    
    41,387
    
    
    
    0.12
    %REMIC
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0.00Total
    
    $
    46,689
    
    
    
    47,896
    
    
    
    41,387
    
    
    
    0.00
    %December 31, 2007 (1)Mortgage-backed securities
    
    $
    30,028
    
    
    
    30,251
    
    
    
    23,468
    
    
    
    3.46
    %REMIC
    
    
    37,796
    
    
    
    35,398
    
    
    
    27,462
    
    
    
    3.46Total
    
    $
    67,824
    
    
    
    65,649
    
    
    
    50,930
    
    
    
    3.46
    %
 
 (1)
    
    At December 31, 2008 and 2007, all securities were classified as available
for sale and were recorded at fair value in the consolidated statements of
financial condition.
  201




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 22.
    
    Subordinated Debentures, Notes and Bonds Payable, Secured Borrowings, Junior Subordinated
Debentures and Other Liabilities
  December 31,
    
    
    Interest
    
    Maturity2008
    
    
    2007
    
    
    Rate
    
    DateBFC borrowingsRevolving Line of Credit
    
    
    
    
    
    $
    
    
    
    LIBOR +2.80
    
    December 15, 2007Mortgage payables
    
    
    8
    
    
    
    29
    
    
    6.00%
    
    June 2009Total BFC borrowings
    
    
    8
    
    
    
    29BankAtlantic borrowingsSubordinated debentures (1)
    
    
    22,000
    
    
    
    22,000
    
    
    LIBOR + 3.45%
    
    November 7, 2012Mortgage-Backed Bond
    
    
    864
    
    
    
    4,654
    
    
    (2)
    
    September 30, 2013Total BankAtlantic borrowings
    
    
    22,864
    
    
    
    26,654Woodbridge BorrowingsLand acquisition and
    (a)
    
    140,034
    
    
    
    136,266
    
    
    From LIBOR
    
    Range from Junedevelopment mortgage notes
    (e)
    
    
    
    
    
    
    
    
    +2.5% to Fixed
    
    2011 to Octoberpayable
    
    
    
    
    
    
    
    
    
    6.88%
    
    2019Commercial development
    (b)
    
    71,905
    
    
    
    76,278
    
    
    From LIBOR +
    
    Range from Junemortgage notes payable
    (e)
    
    
    
    
    
    
    
    
    1.70% to Prime
    
    2009 to July 2010Borrowing base facility
    (c)
    
    37,458
    
    
    
    39,674
    
    
    Prime
    
    March 2011Other mortgage notes payable
    (d)
    
    11,831
    
    
    
    12,027
    
    
    Fixed 5.47%
    
    April 2015Development Bonds
    
    
    3,291
    
    
    
    3,350
    
    
    Fixed from 6% to 6.13%
    
    2035Other borrowings
    
    
    381
    
    
    
    1,143
    
    
    Fixed from 2.44% to 9.15%
    
    Range from July 2009 to June 2013Total Woodbridge borrowings
    
    
    264,900
    
    
    
    268,738Total
    
    $
    287,772
    
    
    
    295,421
 (1)
    
    LIBOR interest rates are indexed to 3-month LIBOR and adjust quarterly.(2)
    
    The bonds adjust semi-annually to the ten year treasury constant maturity rate minus 23 basis points. 
 (a)
    
    Core Communities land acquisition and development mortgage notes payable are
collateralized by inventory of real estate and property and equipment with approximate net
carrying values aggregating $174.5 million and $159.2 million as of December 31, 2008 and
2007, respectively. Core has a credit agreement with a financial institution which provides
for borrowings of up to $88.9 million. This facility matures in June 2011 and has a loan to
value limitation of 55%. As of December 31, 2008, $86.9 million was outstanding with no
current availability for further borrowing based on available collateral. Core has a credit
agreement with a financial institution which provides for borrowings of up to $33.0
million. This facility matures in October 2019. As of
December 31, 2008, $23.2 million was outstanding with no
current availability for further borrowing based on available collateral. Core
has a credit agreement with a financial institution which provides for borrowing of up to
$5.0 million. This facility matures in October 2019. As of December 31, 2008, $4.9
million was outstanding, with no current availability for further borrowing based on available
collateral. These notes accrue interest, payable monthly, at fixed and varying rates and
are tied to various indices as noted above. For certain notes, principal payments are
required monthly or quarterly as the note dictates. Core had a $50.0 million revolving
credit facility with a loan to value limitation of 75% for construction financing for the
development of the Tradition Hilton Head master-planned community which was subsequently
modified in 2008 to $25.0 million. This agreement had a provision that required additional
principal payments, known as curtailment payments, in the event that actual sales were
below the contractual requirements. A curtailment payment of $14.9 million was paid in
January 2008. On June 27, 2008, Core modified this loan agreement, terminating the
revolving feature of the loan and reducing an approximately $19 million curtailment payment
due in June 2008 to $17.0 million, $5.0 million of which was paid in June 2008. The loan
was further modified in December 2008, reducing the loan to $25 million, eliminating the
curtailment requirements, extending the loan to February 2012 and increasing the rate to
Prime Rate plus 1%, with a floor of 5.00%, and the establishment of an interest reserve
classified as restricted cash. As of December 31, 2008,
 202




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BFC Financial Corporation
Notes to Consolidated Financial Statements
 $25.0 million was outstanding, with no current availability for borrowing based on available collateral. The facility is due and payable on February 28, 2012.(b)
    
    Core Communities has three credit agreements with a financial institution which provide
for borrowings of up to $80.3 million. As of December 31, 2008, $71.9 million was
outstanding, with no current availability for further borrowing based on available collateral.
These credit agreements required debt service coverage ratios of up to 1.15. Core also has a
credit agreement with a financial institution which provides for borrowing of up to $64.3
million. This facility matures in June 2009 and, as of December 31, 2008 $58.3 million was
outstanding with no current availability for borrowing based on available collateral In
July 2008, one of these credit agreements was refinanced by a $9.1 million construction
loan. The new loan has an interest rate of 30-day LIBOR plus 210 basis points or Prime
Rate, a maturity date of July 2010 with a one year extension subject to certain conditions
and has an outstanding balance of $8.9 million at December 31, 2008. In 2008, Core
extended the maturity of another $6.9 million credit agreement from June 2008 to June 2010,
which had an outstanding balance of $4.7 million at December 31, 2008. These notes accrue
interest at varying rates tied to various indices as noted above and interest is payable
monthly. For certain notes, principal payments are required monthly.
Core Communities commercial development mortgage notes payable are collateralized by
commercial property with approximate net carrying values aggregating $96.1 million and
$103.2 million as of December 31, 2008 and 2007, respectively.(c)
    
    Levitt and Sons had a $100.0 million revolving working capital, land
acquisition, development and residential construction borrowing base facility agreement
with 75% loan to value limitation and borrowed $30.2 million under the facility (the
Carolina Oak Loan). The proceeds were used to finance the inter-company purchase of a 150
acre parcel in Tradition Hilton Head from Core Communities and to refinance a $15.0 million
line of credit. In October 2007, in connection with Woodbridges acquisition from Levitt
and Sons of the membership interests in Carolina Oak, Woodbridge became the obligor for the
entire Carolina Oak Loan $34.1 million outstanding balance at the time of acquisition.
The Carolina Oak Loan was modified in connection with the acquisition and had an
outstanding balance of $37.5 million at December 31, 2008. The Carolina Oak Loan is
collateralized by a first mortgage on the 150 acre parcel in Tradition, Hilton Head which had
approximate net carrying values aggregating $27.6 million and $38.5 million as of December
31, 2008 and 2007, respectively. The Carolina Oak Loan is due and payable on March 21, 2011
and may be extended at the lenders sole discretion on the anniversary date of the
facility. Interest accrues at the Prime Rate and is payable monthly. At December 31, 2008,
there was no availability to draw on this facility based on available collateral.(d)
    
    Woodbridge entered into a mortgage note payable agreement with a financial institution
in March 2005 to repay the bridge loan used to temporarily fund Woodbridges purchase of an
office building in Fort Lauderdale. This note payable is collateralized by the office
building which had approximate net carrying values aggregating $13.7 million and $14.2 million
as of December 31, 2008 and 2007, respectively. The note payable contains a balloon
payment requirements of approximately $10.4 million at the maturity date in April 2015.
Principal and interest are payable monthly.(e)
    
    Core Communities credit facilities generally require it to maintain minimum net
worth and minimum working capital levels, the most restrictive of which is a minimum net
worth of $75 million and minimum liquidity of $7.5 million.
  203




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BFC Financial Corporation
Notes to Consolidated Financial Statements
  December 31,
    
    
    
    
    
    
    
    
    Beginning2008
    
    
    2007
    
    
    
    
    
    
    
    
    OptionalIssue
    
    
    Outstanding
    
    
    Outstanding
    
    
    Interest
    
    Maturity
    
    
    RedemptionJunior Subordinated Debentures
    
    Date
    
    
    Amount
    
    
    Amount
    
    
    Rate
    
    Date
    
    
    DateBBX Capital Trust I(A)
    
    
    06/26/2007
    
    
    $
    25,774
    
    
    
    25,774
    
    
    LIBOR + 1.45%
    
    
    09/15/2037
    
    
    
    09/15/2012BBX Capital Trust II(A)
    
    
    09/20/2007
    
    
    
    5,155
    
    
    
    5,155
    
    
    LIBOR + 1.50%
    
    
    12/15/2037
    
    
    
    12/15/2012BBX Capital Trust II
    
    
    03/05/2002
    
    
    
    57,088
    
    
    
    57,088
    
    
    8.50%
    
    
    03/31/2032
    
    
    
    03/31/2007BBX Capital Trust III
    
    
    06/26/2002
    
    
    
    25,774
    
    
    
    25,774
    
    
    LIBOR + 3.45%
    
    
    06/26/2032
    
    
    
    06/26/2007BBX Capital Trust IV
    
    
    09/26/2002
    
    
    
    25,774
    
    
    
    25,774
    
    
    LIBOR + 3.40%
    
    
    09/26/2032
    
    
    
    09/26/2007BBX Capital Trust V
    
    
    09/27/2002
    
    
    
    10,310
    
    
    
    10,310
    
    
    LIBOR + 3.40%
    
    
    09/30/2032
    
    
    
    09/27/2007BBX Capital Trust VI
    
    
    12/10/2002
    
    
    
    15,450
    
    
    
    15,450
    
    
    LIBOR + 3.35%
    
    
    12/10/2032
    
    
    
    12/10/2007BBX Capital Trust VII
    
    
    12/19/2002
    
    
    
    25,774
    
    
    
    25,774
    
    
    LIBOR + 3.25%
    
    
    12/19/2032
    
    
    
    12/19/2007BBX Capital Trust VIII
    
    
    12/19/2002
    
    
    
    15,464
    
    
    
    15,464
    
    
    LIBOR + 3.35%
    
    
    01/07/2033
    
    
    
    12/19/2007BBX Capital Trust IX
    
    
    12/19/2002
    
    
    
    10,310
    
    
    
    10,310
    
    
    LIBOR + 3.35%
    
    
    01/07/2033
    
    
    
    12/19/2007BBX Capital Trust X
    
    
    03/26/2003
    
    
    
    51,548
    
    
    
    51,548
    
    
    LIBOR + 3.15%
    
    
    03/26/2033
    
    
    
    03/26/2008BBX Capital Trust XI
    
    
    04/10/2003
    
    
    
    10,310
    
    
    
    10,310
    
    
    LIBOR + 3.25%
    
    
    04/24/2033
    
    
    
    04/24/2008BBX Capital Trust XII
    
    
    03/27/2003
    
    
    
    15,464
    
    
    
    15,464
    
    
    LIBOR + 3.25%
    
    
    04/07/2033
    
    
    
    04/07/2008Total BankAtlantic Bancorp
    
    
    
    
    
    
    294,195
    
    
    
    294,195Unsecured junior subordinated
debentures  Levitt Capital Trust I
(LCT I)
    
    
    03/15/2005
    
    
    
    23,196
    
    
    
    23,196
    
    
    From fixed 8.11% to LIBOR + 3.85%
    
    
    03/01/2035
    
    
    
    3/15/2010Unsecured junior subordinated
debentures  Levitt Capital Trust II
(LCT II)
    
    
    05/04/2005
    
    
    
    30,928
    
    
    
    30,928
    
    
    From fixed 8.09% to LIBOR + 3.80%
    
    
    06/30/2035
    
    
    
    05/04/2010Unsecured junior subordinated
debentures  Levitt Capital Trust
III (LCT III)
    
    
    06/01/2006
    
    
    
    15,464
    
    
    
    15,464
    
    
    From fixed 9.25% to LIBOR + 3.80%
    
    
    06/30/2036
    
    
    
    06/30/2011Unsecured junior subordinated
debentures  Levitt Capital Trust IV
(LCTIV)
    
    
    07/18/2006
    
    
    
    15,464
    
    
    
    15,464
    
    
    From fixed 9.35% to LIBOR + 3.80%
    
    
    09/30/2036
    
    
    
    09/30/2011Total Woodbridge
    
    
    
    
    
    
    85,052
    
    
    
    85,052Purchase Accounting
    
    
    
    
    
    
    (3,143
    )
    
    
    (24
    )Total Junior Subordinated Debentures
    
    
    
    
    
    $
    376,104
    
    
    
    379,223
  ConsolidatedDecember 31, 2008Year ended December 31,
2009
    
    $
    3,5752010
    
    
    8,7132011
    
    
    188,5202012
    
    
    48,3092013
    
    
    2,129Thereafter
    
    
    412,630$
    663,876
 204




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 BankAtlantic Bancorp Junior Subordinated Debentures
  BankAtlantic
   BankAtlantic Bancorp Indentures
  Woodbridge Junior Subordinated Debentures
  205




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Woodbridge Development Bonds Payable
  Accounting for Contingencies
  BFC Borrowings
 Other Liabilities
  206




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 23.
    
    Stock Based Compensation
 BFCs Stock Option Plans and Restricted Stock
      Weighted AverageFor the Twelve Months EndedDecember 31,Employees
    
    2007
    
    
    2006Expected volatility
    
    
    43.05
    %
    
    
    44.22
    %Expected dividends
    
    
    0
    %
    
    
    0
    %Expected term (in years)
    
    
    7.5
    
    
    
    7.5Average risk-free interest rate
    
    
    4.94
    %
    
    
    5.01
    %Option value
    
    $
    2.34
    
    
    $
    3.54
 207




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Weighted AverageFor the Twelve Months EndedDecember 31,Non-Employees  Directors
    
    2008
    
    2007Volatility
    
    
    50.81
    %
    
    
    43.05
    %Expected dividends
    
    
    0.00
    %
    
    
    0.00
    %Expected term (in years)
    
    
    5.00
    
    
    
    5.00Risk-free rate
    
    
    3.35
    %
    
    
    4.89
    %Option value
    
    $
    0.40
    
    
    $
    1.99
  Weighted
    
    
    WeightedAverage
    
    
    Average
    
    
    AggregateOutstanding
    
    
    Exercise
    
    
    Remaining
    
    
    IntrinsicOptions
    
    
    Price
    
    
    Contractual Term
    
    
    Value ($000)Outstanding at December 31, 2005
    
    
    5,299,569
    
    
    $
    2.92
    
    
    
    3.12Exercised
    
    
    (3,928,982
    )
    
    
    2.32Forfeited
    
    
    
    
    
    
    0.00Expired
    
    
    
    
    
    
    0.00Granted
    
    
    236,500
    
    
    
    6.36Outstanding at December 31, 2006
    
    
    1,607,087
    
    
    $
    4.88
    
    
    
    6.25
    
    
    $
    Exercised
    
    
    (129,769
    )
    
    
    1.45Forfeited
    
    
    (18,397
    )
    
    
    4.99Expired
    
    
    
    
    
    
    0.00Granted
    
    
    264,296
    
    
    
    4.44Outstanding at December 31, 2007
    
    
    1,723,217
    
    
    $
    5.07
    
    
    
    6.31
    
    
    $
    Exercised
    
    
    
    
    
    
    0.00Forfeited
    
    
    (30,000
    )
    
    
    6.04Expired
    
    
    (147,407
    )
    
    
    3.68Granted
    
    
    252,150
    
    
    
    0.83Outstanding at December 31, 2008
    
    
    1,797,960
    
    
    $
    4.57
    
    
    
    6.35
    
    
    $
    Exercisable at December 31, 2008
    
    
    881,158
    
    
    $
    1.89
    
    
    
    5.83
    
    
    $
    Available for grant at December
31, 2008
    
    
    2,015,804
     208




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  WeightedUnvested
    
    
    AverageRestricted
    
    
    Grant DateStock
    
    
    Fair ValueOutstanding at December 31, 2005
    
    
    11,262
    
    
    $
    5.52Granted
    
    
    30,028
    
    
    
    6.66Vested
    
    
    (26,276
    )
    
    
    6.29Forfeited
    
    
    
    
    
    
    Outstanding at December 31, 2006
    
    
    15,014
    
    
    $
    6.65Granted
    
    
    22,522
    
    
    
    4.44Vested
    
    
    (28,152
    )
    
    
    3.71Forfeited
    
    
    
    
    
    
    Outstanding at December 31, 2007
    
    
    9,384
    
    
    $
    5.62Granted
    
    
    120,480
    
    
    
    0.83Vested
    
    
    (79,664
    )
    
    
    0.60Forfeited
    
    
    
    
    
    
    Outstanding at December 31, 2008
    
    
    50,200
    
    
    $
    1.26
   BankAtlantic Bancorp Restricted Stock and Stock Option Plan:
 Stock Option PlansMaximum
    
    Shares
    
    Class of
    
    Vesting
    
    Type ofTerm
    
    Authorized (3)
    
    Stock
    
    Requirements
    
    Options (2)1996 Stock Option Plan
    
    10 years
    
    
    449,219
    
    
    Class A
    
    5 Years (1)
    
    ISO, NQ1999 Non-qualifying Stock
Option Plan
    
    10 years
    
    
    172,500
    
    
    Class A
    
    
    (1
    )
    
    NQ1999 Stock Option Plan
    
    10 years
    
    
    172,500
    
    
    Class A
    
    
    (1
    )
    
    ISO, NQ2000 Non-qualifying Stock
Option Plan
    
    10 years
    
    
    340,830
    
    
    Class A
    
    immediately
    
    NQ2001 Amended and Restated Stock
Option Plan
    
    10 years
    
    
    783,778
    
    
    Class A
    
    5 Years (1)
    
    ISO, NQ2005 Restricted Stock and Option
Plan (4)
    
    10 years
    
    
    1,200,000
    
    
    Class A
    
    5 Years (1)
    
    ISO, NQ
 
 (1)
    
    Vesting is established by the BankAtlantic Bancorp Compensation Committee in connection
with each grant of options or restricted stock. All directors stock options vest
immediately.(2)
    
    ISO  Incentive Stock OptionNQ  Non-qualifying Stock Option(3)
    
    During 2001 all shares remaining available for grant under all stock options plans
except the 2001 stock option plan were canceled. During 2005 all shares remaining
available for grant under the 2001 stock option plan were canceled.(4)
    
    The 2005 Restricted Stock and Option Plan provides that up to 1,200,000 shares of
BankAtlantic Bancorp Class A common stock may be issued for restricted stock awards and
upon the exercise of options granted under the Plan. 209




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Class A
    
    
    WeightedNon-vested
    
    
    AverageRestricted
    
    
    Grant dateStock
    
    
    Fair ValueOutstanding at December 31, 2005
    
    
    26,527
    
    
    $
    40.00Vested
    
    
    (6,965
    )
    
    
    55.60Forfeited
    
    
    
    
    
    
    Granted
    
    
    6,278
    
    
    
    73.68Outstanding at December 31, 2006
    
    
    25,840
    
    
    
    43.95Vested
    
    
    (7,583
    )
    
    
    48.93Forfeited
    
    
    
    
    
    
    Granted
    
    
    12,432
    
    
    
    42.18Outstanding at December 31, 2007
    
    
    30,689
    
    
    
    42.01Vested
    
    
    (10,295
    )
    
    
    33.77Forfeited
    
    
    
    
    
    
    Granted
    
    
    5,455
    
    
    
    9.70Outstanding at December 31, 2008
    
    
    25,849
    
    
    $
    38.47
    Weighted Average2008
    
    2007
    
    2006Volatility
    
    
    46.09
    %
    
    
    29.44
    %
    
    
    31.44
    %Expected dividends
    
    
    1.03
    %
    
    
    1.75
    %
    
    
    1.03
    %Expected term (in
years)
    
    
    5.00
    
    
    
    7.23
    
    
    
    7.45Risk-free rate
    
    
    3.29
    %
    
    
    4.92
    %
    
    
    5.19
    %
 210




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Weighted
    
    
    WeightedClass A
    
    
    Average
    
    
    Average
    
    
    AggregateOutstanding
    
    
    Exercise
    
    
    Remaining
    
    
    IntrinsicOptions
    
    
    Price
    
    
    Contractual Term
    
    
    Value ($000)Outstanding at December 31, 2005
    
    
    1,207,851
    
    
    $
    45.40
    
    
    
    5.7Exercised
    
    
    (291,948
    )
    
    
    20.65Forfeited
    
    
    (51,955
    )
    
    
    67.90Expired
    
    
    (6,420
    )
    
    
    46.49Granted
    
    
    190,254
    
    
    
    73.75Outstanding at December 31, 2006
    
    
    1,047,782
    
    
    
    56.45
    
    
    
    6.4Exercised
    
    
    (88,227
    )
    
    
    27.75Forfeited
    
    
    (75,486
    )
    
    
    67.95Expired
    
    
    (15,820
    )
    
    
    59.25Granted
    
    
    196,249
    
    
    
    46.79Outstanding at December 31, 2007
    
    
    1,064,498
    
    
    
    56.17
    
    
    
    6.2Exercised
    
    
    (6,630
    )
    
    
    15.60Forfeited
    
    
    (126,678
    )
    
    
    74.81Expired
    
    
    (111,526
    )
    
    
    30.50Granted
    
    
    75,954
    
    
    
    9.70Outstanding at December 31, 2008
    
    
    895,618
    
    
    
    53.09
    
    
    
    5.8
    
    
    $
    Exercisable at December 31, 2008
    
    
    441,589
    
    
    $
    31.87
    
    
    
    4.4
    
    
    $
    Available for grant at December
31, 2008
    
    
    704,726
    Woodbridge Restricted Stock and Stock Option Plan
   211




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber
    
    
    Exercise
    
    
    Contractual
    
    
    Valueof Options
    
    
    Price
    
    
    Term
    
    
    (thousands)Options outstanding at December 31, 2006
    
    
    378,521
    
    
    $
    103.65
    
    
    
    
    
    
    $
    Granted
    
    
    150,489
    
    
    
    45.92
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    156,478
    
    
    
    88.56
    
    
    
    
    
    
    
    Options outstanding at December 31, 2007
    
    
    372,532
    
    
    $
    86.66
    
    
    8.00 years
    
    
    Granted
    
    
    36,398
    
    
    
    6.70
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    90,459
    
    
    
    81.85
    
    
    
    
    
    
    
    Options outstanding at December 31, 2008
    
    
    318,471
    
    
    $
    78.89
    
    
    7.19 years
    
    $
    Options exercisable at December 31, 2008
    
    
    69,822
    
    
    $
    40.20
    
    
    8.36 years
    
    $
    Stock options available for equity
compensation grants at December 31,
2008
    
    
    281,529
  Year ended
    
    Year ended
    
    Year endedDecember 31, 2008
    
    December 31, 2007
    
    December 31, 2006Expected volatility
    

    65.47%

    
    40.05% - 52.59%

    
    37.37% - 39.80%Expected dividend yield
    
    0.00%

    
    0.00% - 0.83%

    
    0.39% - 0.61%Risk-free interest rate
    
    4.16%

    
    4.58% - 5.14%

    
    4.57% - 5.06%Expected life
    
    5 years
    
    5 - 7.5 years
    
    5 - 7.5 yearsForfeiture rate  executives
    
    5%

    
    5%
    
    5%Forfeiture rate  non-executives
    
    

    
    10%

    
    10%
   212




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
    Weighted Average
    
    
    Weighted AverageGrant Date
    
    
    Remaining
    
    
    Aggregate IntrinsicNumber of Options
    
    
    Fair Value
    
    
    Contractual Term
    
    
    Value (in thousands)Non-vested at December 31, 2006
    
    
    358,660
    
    
    $
    103.97
    
    
    
    
    
    
    $
    Grants
    
    
    150,489
    
    
    
    45.92
    
    
    
    
    
    
    
    Vested
    
    
    13,563
    
    
    
    45.80
    
    
    
    
    
    
    
    Forfeited
    
    
    156,478
    
    
    
    88.56
    
    
    
    
    
    
    
    Non-vested at December 31, 2007
    
    
    339,108
    
    
    
    87.64
    
    
    7.98 years
    
    
    Grants
    
    
    36,398
    
    
    
    6.70
    
    
    
    
    
    
    
    Vested
    
    
    36,398
    
    
    
    6.70
    
    
    
    
    
    
    
    Forfeited
    
    
    90,459
    
    
    
    81.85
    
    
    
    
    
    
    
    Non-vested at December 31, 2008
    
    
    248,649
    
    
    $
    89.75
    
    
    6.86 years
    
    $
    
  24. Pension, Profit Sharing Plan, 401(k) Plans and Deferred Retirement Agreement
 BFC
 BFC Defined Contribution 401(k) Plan
  BFC Deferred Retirement Agreement
  213




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  BankAtlantic Bancorp
 Defined Benefit Pension Plan :
   As of December 31,2008
    
    
    2007Change in benefit obligationBenefit obligation at the beginning of the year
    
    $
    28,918
    
    
    
    29,620Interest cost
    
    
    1,720
    
    
    
    1,656Actuarial loss (gain)
    
    
    1,549
    
    
    
    (1,403
    )Benefits paid
    
    
    (1,037
    )
    
    
    (955
    )Projected benefit obligation at end of year
    
    
    31,150
    
    
    
    28,918Change in plan assetsFair value of Plan assets at the beginning of year
    
    
    29,104
    
    
    
    28,626Actual return on Plan assets
    
    
    (10,146
    )
    
    
    1,433Employer contribution
    
    
    
    
    
    
    Benefits paid
    
    
    (1,037
    )
    
    
    (955
    )Fair value of Plan assets as of actuarial date
    
    
    17,921
    
    
    
    29,104Funded status at end of year
    
    $
    (13,229
    )
    
    
    186
   As of December 31,2008
    
    
    2007
    
    
    2006Net comprehensive loss
    
    $
    19,690
    
    
    
    3,915
    
    
    
    4,493
  As of December 31,2008
    
    2007Projected benefit obligation
    
    $
    31,150
    
    
    
    28,918Accumulated benefit obligation
    
    
    31,150
    
    
    
    28,918Fair value of plan assets
    
    
    17,921
    
    
    
    29,104
 214




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended2008
    
    
    2007
    
    
    2006Interest cost on projected benefit obligation
    
    $
    1,719
    
    
    
    1,656
    
    
    
    1,624Expected return on plan assets
    
    
    (2,430
    )
    
    
    (2,396
    )
    
    
    (2,190
    )Amortization of unrecognized net gains and losses
    
    
    463
    
    
    
    501
    
    
    
    933Net periodic pension (income) expense (1)
    
    $
    (248
    )
    
    
    (239
    )
    
    
    367Other changes in Plan Assets and Benefit
Obligations Recognized in Other
Comprehensive IncomeChange in funding status
    
    
    (13,415
    )
    
    
    1,180
    
    
    
    2,236Change in deferred tax assets
    
    
    (2,112
    )
    
    
    (363
    )
    
    
    (1,204
    )Total recognized net periodic benefit cost and
other comprehensive income
    
    $
    (15,775
    )
    
    
    578
    
    
    
    1,399
 
 (1)
    
    The estimated net loss for the Plan that will be amortized from accumulated other
comprehensive income into net periodic benefit cost over the next fiscal year is $1.6
million.  For the Years EndedDecember 31,2008
    
    2007
    
    2006Weighted average discount rate used to
determine benefit obligation
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    5.75
    %Weighted average discount rate used to
to determine net periodic benefit cost
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    5.50
    %Rate of increase in future compensation levels
    
    
    N/A
    
    
    
    N/A
    
    
    
    N/AExpected long-term rate of return
    
    
    8.50
    %
    
    
    8.50
    %
    
    
    8.50
    %
   215




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   Quoted PricesIn Active Marketsfor IdenticalAssetsAsset Category
    
    (Level 1)Cash
    
    $
    382Mutual Funds: (1)US Large Cap Growth
    
    
    1,581US Large Cap Value
    
    
    758US Large Cap Blend
    
    
    1,680US Mid-Cap Growth
    
    
    450US Mid-Cap Value
    
    
    811US Mid-Cap Blend
    
    
    638International Equity
    
    
    2,784Balanced
    
    
    8,235Common Stock (2)
    
    
    602Total pension assets
    
    $
    17,921
 
 (1)
    
    The Plan maintains diversified mutual funds in order to diversify risks and
reduce volatility while achieving the targeted asset mix.(2)
    
    This category invests in aggressive growth common stocks.   PensionExpected Future Service
    
    Benefits2009
    
    $
    1,2692010
    
    
    1,4802011
    
    
    1,5152012
    
    
    1,5702013
    
    
    1,659Years 2014-2018
    
    
    9,847
 Defined Contribution 401(k) Plan :
  For the Years Ended December 31,2008
    
    2007
    
    2006Employee salary contribution
Limit (1)
    
    $
    15.5
    
    
    
    15
    
    
    
    15Percentage of salary limitation
    
    
    75
    %
    
    
    75
    %
    
    
    75
    %Total match contribution (2)
    
    $
    2,551
    
    
    
    2,930
    
    
    
    2,461Vesting of employer match
    
    Immediate
    
    Immediate
    
    Immediate
 
 (1)
    
    For the year ended December 31, 2008, employees over the age of 50 were entitled to
contribute $20,500. For each of the years in the two year period ended December 31, 2007,
employees over the age of 50 were entitled to contribute $20,000.(2)
    
    The employer matched 100% of the first 3% of employee contributions and 50% of the next
2% of employee contributions. 216




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 BankAtlantic Bancorp Profit Sharing Plan and 2008 Expense Reduction Initiative
  Woodbridge
  217




---



##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 25.
    
    Income Taxes
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Continuing operations
    
    $
    15,763
    
    
    
    (69,012
    )
    
    
    (530
    )Discontinued operations
    
    
    
    
    
    
    (3,472
    )
    
    
    (8,957
    )Extraordinary items
    
    
    
    
    
    
    1,509
    
    
    
    Total provision (benefit) for income
taxes
    
    $
    15,763
    
    
    
    (70,975
    )
    
    
    (9,487
    )Continuing operations:Current:Federal
    
    $
    (2,880
    )
    
    
    (33,941
    )
    
    
    13,511State
    
    
    (1
    )
    
    
    2
    
    
    
    946(2,881
    )
    
    
    (33,939
    )
    
    
    14,457Deferred:Federal
    
    
    14,308
    
    
    
    (28,281
    )
    
    
    (13,977
    )State
    
    
    4,336
    
    
    
    (6,792
    )
    
    
    (1,010
    )18,644
    
    
    
    (35,073
    )
    
    
    (14,987
    )Provision (benefit) for income taxes
    
    $
    15,763
    
    
    
    (69,012
    )
    
    
    (530
    )
  For the Years Ended December 31,2008 (1)
    
    
    2007 (1)
    
    
    2006 (1)Income tax provision at expected
federal income tax rate of 35%
    
    $
    (115,309
    )
    
    
    (35.00
    )%
    
    $
    (112,377
    )
    
    
    (35.00)
    %
    
    $
    4,263
    
    
    
    35.00
    %Increase (decrease) resulting from:Taxes related to subsidiaries not
consolidated for income tax
purposes
    
    
    (43,000
    )
    
    
    (13.05
    )
    
    
    (16,263
    )
    
    
    (5.07
    )
    
    
    1,508
    
    
    
    12.38Provision (benefit) for state taxes,
net of federal effect
    
    
    (12,949
    )
    
    
    (3.93
    )
    
    
    (14,510
    )
    
    
    (4.52
    )
    
    
    (939
    )
    
    
    (7.71
    )Increase in valuation allowance
    
    
    190,516
    
    
    
    57.83
    
    
    
    77,586
    
    
    
    24.16
    
    
    
    1,694
    
    
    
    13.91Expired NOLs
    
    
    1,281
    
    
    
    0.39
    
    
    
    1,595
    
    
    
    0.50
    
    
    
    Loss from Levitt and Sons
    
    
    (20,981
    )
    
    
    (6.37
    )
    
    
    
    
    
    
    Goodwill impairment adjustment
    
    
    16,899
    
    
    
    5.13
    
    
    
    
    
    
    
    
    
    
    
    458
    
    
    
    3.76Tax-exempt interest income
    
    
    (152
    )
    
    
    (0.05
    )
    
    
    (4,180
    )
    
    
    (1.30
    )
    
    
    (5,110
    )
    
    
    (41.96
    )Other  net
    
    
    (542
    )
    
    
    (0.15
    )
    
    
    (863
    )
    
    
    (0.27
    )
    
    
    (2,404
    )
    
    
    (19.74
    )Provision for income taxes
    
    $
    15,763
    
    
    
    4.78
    %
    
    $
    (69,012
    )
    
    
    (21.49)
    %
    
    $
    (530
    )
    
    
    (4.35)
    %
 
 (1)
    
    Expected tax is computed based upon income (loss) from continuing operations before
noncontrolling interest. 218




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Deferred tax assets:Allowance for loans, REO, tax certificate losses and other reserves, for
financial statement purposes
    
    $
    49,642
    
    
    
    38,786
    
    
    
    20,546Federal and State net operating loss carryforward
    
    
    141,113
    
    
    
    51,645
    
    
    
    30,191Investment in Levitt and Sons
    
    
    46,393
    
    
    
    68,339
    
    
    
    Compensation expensed for books and deferred for tax purposes
    
    
    779
    
    
    
    410
    
    
    
    13,099Real estate held for development and sale capitalized
costs for tax purposes in excess of amounts
capitalized for financial statement purposes
    
    
    1,204
    
    
    
    2,358
    
    
    
    6,579Real estate valuation
    
    
    1,295
    
    
    
    
    
    
    
    12,889Accumulated other comprehensive income
    
    
    2,906
    
    
    
    
    
    
    
    896Share based compensation
    
    
    3,982
    
    
    
    3,073
    
    
    
    1,922Income recognized for tax purposes and deferred
for financial statement purposes
    
    
    7,510
    
    
    
    7,228
    
    
    
    6,949Investment in securities
    
    
    5,965
    
    
    
    
    
    
    
    Investment in Bluegreen
    
    
    11,135
    
    
    
    
    
    
    
    Other
    
    
    10,337
    
    
    
    8,715
    
    
    
    5,000Total gross deferred tax assets
    
    
    282,261
    
    
    
    180,554
    
    
    
    98,071Valuation allowance
    
    
    (272,765
    )
    
    
    (84,028
    )
    
    
    (5,035
    )Total deferred tax assets
    
    
    9,496
    
    
    
    96,526
    
    
    
    93,036Deferred tax liabilities:Subsidiaries not consolidated for income tax purposes
    
    
    
    
    
    
    39,592
    
    
    
    55,404Investment in Bluegreen
    
    
    
    
    
    
    21,768
    
    
    
    19,501Deferred loan income
    
    
    1,468
    
    
    
    1,993
    
    
    
    1,956Purchase accounting adjustments
    
    
    427
    
    
    
    2,830
    
    
    
    1,929Accumulated other comprehensive income
    
    
    
    
    
    
    3,618
    
    
    
    853Prepaid pension expense
    
    
    2,625
    
    
    
    2,530
    
    
    
    2,438Property and equipment
    
    
    3,073
    
    
    
    3,789
    
    
    
    3,670Other
    
    
    1,903
    
    
    
    4,077
    
    
    
    1,518Total gross deferred tax liabilities
    
    
    9,496
    
    
    
    80,198
    
    
    
    87,269Net deferred tax asset
    
    
    
    
    
    
    16,329
    
    
    
    5,768Less net deferred tax asset at beginning of period
    
    
    (16,329
    )
    
    
    (5,768
    )
    
    
    10,693Net deferred tax liability acquired due to purchase accounting
    
    
    (39
    )
    
    
    1,866
    
    
    
    Implementation of FIN 48
    
    
    
    
    
    
    (1,798
    )
    
    
    Increase (decrease) in deferred tax liability from subsidiaries
other capital transactions
    
    
    2,009
    
    
    
    14
    
    
    
    (177
    )Reduction in deferred tax asset associated with Stifel Ryan Beck
    
    
    
    
    
    
    16,593
    
    
    
    (Decrease) increase in BFCs accumulated other comprehensive income
    
    
    (981
    )
    
    
    95
    
    
    
    580Increase in Woodbridges accumulated other comprehensive income
    
    
    
    
    
    
    894
    
    
    
    600(Decrease) increase in BankAtlantic Bancorp accumulated
other comprehensive income
    
    
    (3,304
    )
    
    
    4,200
    
    
    
    3,161(Provision) benefit for deferred income taxes
    
    
    (18,644
    )
    
    
    32,424
    
    
    
    20,625Less: Provision (benefit) for deferred income taxes -
discontinued operations
    
    
    
    
    
    
    1,139
    
    
    
    (5,638
    )Less: Provision for deferred income taxes -
extraordinary income
    
    
    
    
    
    
    1,509
    
    
    
    Provision (benefit) for deferred income taxes  continuing operations
    
    $
    (18,644
    )
    
    
    35,073
    
    
    
    14,987
 219




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    84,028
    
    
    
    5,035
    
    
    
    3,341Other comprehensive loss
    
    
    (2,538
    )
    
    
    
    
    
    
    Increase in deferred tax valuation allowance
    
    
    190,516
    
    
    
    77,586
    
    
    
    1,694Increase in deferred tax allowance  paid
in capital
    
    
    759
    
    
    
    1,407
    
    
    
    Balance, end of period
    
    $
    272,765
    
    
    
    84,028
    
    
    
    5,035
      220




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
     Expiration Year
    
    State
    
    
    Federal2011
    
    $
    1,662
    
    
    
    1,8312012
    
    
    669
    
    
    
    9842021
    
    
    806
    
    
    
    1,4222022
    
    
    824
    
    
    
    1,5152023
    
    
    2,008
    
    
    
    3,7922024
    
    
    28,059
    
    
    
    34,7142025
    
    
    4,964
    
    
    
    5,7972026
    
    
    18,497
    
    
    
    18,5312027
    
    
    6,835
    
    
    
    6,8432028
    
    
    4,748
    
    
    
    4,754Totals
    
    $
    69,072
    
    
    
    80,183
    221




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   For the Years EndedDecember 31,2008
    
    
    2007Balance as of beginning of period
    
    $
    2,559
    
    
    
    2,185Additions based on tax positions related to
current year
    
    
    542
    
    
    
    1,322Additions based on tax positions related to
prior year
    
    
    74
    
    
    
    88Lapse of Statute of Limitations
    
    
    (575
    )
    
    
    Reductions of tax positions for prior years
    
    
    (29
    )
    
    
    (1,036
    )Balance as of end of period
    
    $
    2,571
    
    
    
    2,559
  26. Commitments and Contingencies
  Year Ending December 31,
    
    Amount2009
    
    
    10,5032010
    
    
    8,9722011
    
    
    7,3822012
    
    
    6,4042013
    
    
    5,947Thereafter
    
    
    69,687Total
    
    $
    108,895
  For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Rental expense for
premises and
equipment
    
    $
    14,407
    
    
    
    16,191
    
    
    
    13,037
  222




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   December 31,
    
    
    December 31,2008
    
    
    2007BFC ActivitiesGuaranty agreements
    
    $
    38,000
    
    
    
    59,112Financial ServicesCommitments to sell fixed rate residential loans
    
    
    25,304
    
    
    
    21,029Commitments to sell variable rate residential loans
    
    
    
    
    
    
    1,518Commitments to purchase variable rate residential
loans
    
    
    
    
    
    
    39,921Commitments to purchase fixed rate residential loans
    
    
    
    
    
    
    21,189Commitments to originate loans held for sale
    
    
    21,843
    
    
    
    18,344Commitments to originate loans held to maturity
    
    
    16,553
    
    
    
    158,589Commitments to extend credit, including the
undisbursed
portion of loans in process
    
    
    597,739
    
    
    
    992,838Standby letters of credit
    
    
    20,558
    
    
    
    41,151Commercial lines of credit
    
    
    66,954
    
    
    
    96,786Real Estate DevelopmentContinued Agreement of Indemnity- surety bonds
    
    
    19,900
    
    
    
    19,100Royalty fee license agreement
    
    
    923
    
    
    
    1,100
 BFC Activities
     223




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Financial Services
        224




---



##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Real Estate Development
      225




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 27. Regulatory Matters
     For Capital
    
    
    To Be ConsideredActual
    
    
    Adequacy Purposes
    
    
    Well CapitalizedAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2008:Total risk-based capital
    
    $
    456,776
    
    
    
    11.63
    %
    
    $
    314,339
    
    
    
    8.00
    %
    
    $
    392,923
    
    
    
    10.00
    %Tier I risk-based capital
    
    
    385,006
    
    
    
    9.80
    
    
    
    157,169
    
    
    
    4.00
    
    
    
    235,754
    
    
    
    6.00Tangible capital
    
    
    385,006
    
    
    
    6.80
    
    
    
    84,929
    
    
    
    1.50
    
    
    
    84,929
    
    
    
    1.50Core capital
    
    
    385,006
    
    
    
    6.80
    
    
    
    226,478
    
    
    
    4.00
    
    
    
    283,098
    
    
    
    5.00As of December 31, 2007:Total risk-based capital
    
    
    495,668
    
    
    
    11.63
    
    
    
    340,998
    
    
    
    8.00
    
    
    
    426,248
    
    
    
    10.00Tier I risk-based capital
    
    
    420,063
    
    
    
    9.85
    
    
    
    170,499
    
    
    
    4.00
    
    
    
    255,749
    
    
    
    6.00Tangible capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    90,821
    
    
    
    1.50
    
    
    
    90,821
    
    
    
    1.50Core capital
    
    
    420,063
    
    
    
    6.94
    
    
    
    242,190
    
    
    
    4.00
    
    
    
    302,738
    
    
    
    5.00
 226




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 28. Parent Company Financial Information
  
 December 31,2008
    
    
    2007AssetsCash and cash equivalents
    
    $
    9,218
    
    
    
    17,999Investment securities
    
    
    97
    
    
    
    862Investment in Benihana Convertible Preferred Stock
    
    
    16,426
    
    
    
    20,000Investment in venture partnerships
    
    
    361
    
    
    
    864Investment in BankAtlantic Bancorp, Inc.
    
    
    66,326
    
    
    
    108,173Investment in Woodbridge Holdings Corporation
    
    
    35,575
    
    
    
    54,637Investment in and advances to wholly owned subsidiaries
    
    
    2,323
    
    
    
    1,578Loans receivable
    
    
    
    
    
    
    3,782Other assets
    
    
    835
    
    
    
    906Total assets
    
    $
    131,161
    
    
    
    208,801Liabilities and Shareholders EquityAdvances from and negative basis in wholly owned subsidiaries
    
    $
    789
    
    
    
    3,174Other liabilities
    
    
    6,476
    
    
    
    7,722Deferred income taxes
    
    
    
    
    
    
    13,868Total liabilities
    
    
    7,265
    
    
    
    24,764Redeemable 5% Cumulative Preferred Stock
    
    
    11,029
    
    
    
    Shareholders equity
    
    
    112,867
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    131,161
    
    
    
    208,801
 
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Revenues
    
    $
    2,489
    
    
    
    3,977
    
    
    
    2,232Expenses
    
    
    11,405
    
    
    
    9,565
    
    
    
    8,413(Loss) before earnings (loss) from subsidiaries
    
    
    (8,916
    )
    
    
    (5,588
    )
    
    
    (6,181
    )Equity from (loss) earnings in BankAtlantic Bancorp
    
    
    (56,230
    )
    
    
    (7,206
    )
    
    
    5,807Equity from loss in Woodbridge
    
    
    (22,261
    )
    
    
    (39,622
    )
    
    
    (1,519
    )Equity from earnings (loss) in other subsidiaries
    
    
    15
    
    
    
    (1,083
    )
    
    
    (658
    )Loss before income taxes
    
    
    (87,392
    )
    
    
    (53,499
    )
    
    
    (2,551
    )Benefit for income taxes
    
    
    (14,887
    )
    
    
    (19,599
    )
    
    
    (1,854
    )Loss from continuing operations
    
    
    (72,505
    )
    
    
    (33,900
    )
    
    
    (697
    )Equity in subsidiaries discontinued operations, net of tax
    
    
    4,461
    
    
    
    1,038
    
    
    
    (1,524
    )Extraordinary gain, net of tax
    
    
    9,145
    
    
    
    2,403
    
    
    
    Net loss
    
    
    (58,899
    )
    
    
    (30,459
    )
    
    
    (2,221
    )5% Preferred Stock dividends
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )Net loss allocable to common stock
    
    $
    (59,649
    )
    
    
    (31,209
    )
    
    
    (2,971
    )
 227




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 
 For the Years Ended December 31,2008
    
    
    2007
    
    
    2006Operating Activities:Net cash used in operating activities
    
    $
    (5,508
    )
    
    
    (4,505
    )
    
    
    (3,041
    )Investing Activities:Proceeds from sale of investment in real estate limited
partnership
    
    
    
    
    
    
    1,000
    
    
    
    Proceeds from the sale of securities
    
    
    834
    
    
    
    1,336
    
    
    
    Distribution from partnership
    
    
    633
    
    
    
    
    
    
    
    Investment in real estate limited partnership
    
    
    
    
    
    
    
    
    
    
    (1,000
    )Additions to property and equipment
    
    
    (11
    )
    
    
    
    
    
    
    77Acquisition of Woodbridge Class A shares
    
    
    
    
    
    
    (33,205
    )
    
    
    Acquisition of BankAtlantic Bancorp Class A shares
    
    
    (3,925
    )
    
    
    
    
    
    
    Net cash used in investing activities
    
    
    (2,469
    )
    
    
    (30,869
    )
    
    
    (923
    )Financing Activities:Proceeds from issuance of Class A Common Stock
net of issuance costs
    
    
    
    
    
    
    36,121
    
    
    
    Proceeds from issuance of Common Stock upon
exercise of stock option
    
    
    
    
    
    
    187
    
    
    
    Purchase and retirement of the
Companys Class A common stock
    
    
    (54
    )
    
    
    
    
    
    
    Payment of the minimum withholding tax upon the
exercise of stock options
    
    
    
    
    
    
    
    
    
    
    (4,154
    )5% Preferred Stock dividends paid
    
    
    (750
    )
    
    
    (750
    )
    
    
    (750
    )Net cash (used in) provided by financing activities
    
    
    (804
    )
    
    
    35,558
    
    
    
    (4,904
    )(Decrease) increase in cash and cash equivalents
    
    
    (8,781
    )
    
    
    184
    
    
    
    (8,868
    )Cash at beginning of period
    
    
    17,999
    
    
    
    17,815
    
    
    
    26,683Cash at end of period
    
    $
    9,218
    
    
    
    17,999
    
    
    
    17,815Supplementary disclosure of non-cash investing and
financing activitiesNet increase (decrease) in shareholders equity from the effect
of subsidiaries capital transactions, net of income taxes
    
    $
    2,398
    
    
    
    (101
    )
    
    
    (16
    )(Decrease) increase in accumulated other comprehensive
income, net of taxes
    
    
    (3,894
    )
    
    
    145
    
    
    
    926Decrease in additional paid in capital from the
re-classification of
the 5% Preferred Stock to Redeemable Preferred Stock
    
    
    11,029
    
    
    
    
    
    
    
    Issuance and retirement of Common Stock accepted
as consideration for the exercise price of stock options
    
    
    
    
    
    
    
    
    
    
    4,154Cumulative effect adjustment upon adoption
of FASB Interpretation No. 48
    
    
    
    
    
    
    121
    
    
    
    
    228




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 29. Noncontrolling Interest
  December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    170,888
    
    
    
    351,148Woodbridge
    
    
    91,389
    
    
    
    207,138Joint Venture Partnership
    
    
    277
    
    
    
    664$
    262,554
    
    
    
    558,950
 30. Litigation
 Legal Contingencies
  Bankruptcy of Levitt and Sons
  Joint Home Purchase Deposit Creditors Committee
of Creditors Holding Unsecured Claims
  229




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
     Class Action Lawsuit
  230




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Surety Bond Claim
  31. Fair Value Measurement
          231




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Fair Value Measurements at December 31, 2008 Using:Quoted prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Securities Available for Sale:Mortgage-backed securities
    
    $
    532,873
    
    
    
    
    
    
    
    532,873
    
    
    
    REMICS
    
    
    166,351
    
    
    
    
    
    
    
    166,351
    
    
    
    Bonds
    
    
    250
    
    
    
    
    
    
    
    
    
    
    
    250Benihana Convertible Preferred Stock
    
    
    16,426
    
    
    
    
    
    
    
    
    
    
    
    16,426Other equity securities
    
    
    6,798
    
    
    
    5,210
    
    
    
    
    
    
    
    1,588Total securities available for sale
at fair value
    
    $
    722,698
    
    
    
    5,210
    
    
    
    699,224
    
    
    
    18,264
   BenihanaConvertibleStifel
    
    Preferred
    
    EquityBonds
    
    Warrants
    
    Stock
    
    Securities
    
    TotalBeginning Balance
    
    $
    681
    
    
    
    10,661
    
    
    
    20,000
    
    
    
    5,133
    
    
    
    36,475Total gains and losses
(realized/unrealized)Included in earnings (or changes
in net assets)
    
    
    
    
    
    
    3,704
    
    
    
    (3,574
    )
    
    
    (3,412
    )
    
    
    (3,282
    )Included in other comprehensive
Income
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    (133
    )
    
    
    (132
    )Purchases, issuances, and settlements
    
    
    (432
    )
    
    
    (14,365
    )
    
    
    
    
    
    
    
    
    
    
    (14,797
    )Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    250
    
    
    
    
    
    
    
    16,426
    
    
    
    1,588
    
    
    
    18,264
   Mortgage-Backed Securities and REMICs
  232




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Bonds and Other Equity Securities
  Benihana Convertible Preferred Stock
   Fair Value Measurements at December 31, 2008Quoted prices inActive Markets
    
    Significant
    
    Significantfor Identical
    
    Other Observable
    
    UnobservableDecember 31,
    
    Assets
    
    Inputs
    
    Inputs
    
    Total2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)
    
    ImpairmentsDescriptionLoans measured for impairment
using the fair value
of the collateral
    
    $
    209,012
    
    
    
    
    
    
    
    
    
    
    
    209,012
    
    
    
    103,193Investment in Bluegreen
    
    
    29,789
    
    
    
    29,789
    
    
    
    
    
    
    
    
    
    
    
    94,433Woodbridges investment in
unconsolidated trusts
    
    
    406
    
    
    
    
    
    
    
    
    
    
    
    406
    
    
    
    2,159Private equity investments
    
    
    536
    
    
    
    
    
    
    
    
    
    
    
    536
    
    
    
    1,148Total
    
    $
    239,743
    
    
    
    29,789
    
    
    
    
    
    
    
    209,954
    
    
    
    200,933
  Loans Measured for Impairment
  233




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Private Equity Investments
  Investment in Bluegreen
  Investment in Unconsolidated Trusts
  Financial Disclosures about Fair Value of Financial Instruments
  December 31, 2008
    
    December 31, 2007Carrying
    
    Fair
    
    Carrying
    
    FairAmount
    
    Value
    
    Amount
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    278,937
    
    
    
    278,937
    
    
    
    332,155
    
    
    
    332,154Restricted cash
    
    
    21,288
    
    
    
    21,288
    
    
    
    2,207
    
    
    
    2,207Securities available for sale
    
    
    722,698
    
    
    
    722,698
    
    
    
    926,307
    
    
    
    926,307Financial instruments
    
    
    
    
    
    
    
    
    
    
    10,661
    
    
    
    10,661Investment securities
    
    
    12,008
    
    
    
    12,475
    
    
    
    60,173
    
    
    
    64,666Tax Certificates
    
    
    213,534
    
    
    
    244,806
    
    
    
    188,401
    
    
    
    188,401Federal home loan bank stock
    
    
    54,607
    
    
    
    54,607
    
    
    
    74,003
    
    
    
    74,003Loans receivable including loans held for sale, net
    
    
    4,317,645
    
    
    
    3,950,557
    
    
    
    4,528,538
    
    
    
    4,614,705Financial liabilities:Deposits
    
    $
    3,926,368
    
    
    
    3,926,382
    
    
    
    3,953,405
    
    
    
    3,967,256Short term borrowings (1)
    
    
    279,726
    
    
    
    279,777
    
    
    
    159,905
    
    
    
    159,905Advances from FHLB
    
    
    967,491
    
    
    
    983,582
    
    
    
    1,397,044
    
    
    
    1,406,728Subordinated debentures, mortgage and notes
payable
    
    
    287,772
    
    
    
    266,651
    
    
    
    26,683
    
    
    
    26,746Junior subordinated debentures
    
    
    376,104
    
    
    
    152,470
    
    
    
    674,644
    
    
    
    625,943
 
 (1)
    
    Short term borrowings includes federal funds purchased and other short term borrowings
and securities sold under agreements to repurchase.   234




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
              235




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Derivatives
    Concentration of Credit Risk
   32. Certain Relationships and Related Party Transactions
  236




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  At December 31, 2008 andFor the Year Ended December 31, 2008BankAtlantic(in thousands)
    
    
    
    
    
    BFC
    
    Bancorp
    
    Woodbridge
    
    BluegreenShared service receivable (payable)
    
    
    (a
    )
    
    $
    398
    
    
    
    (175
    )
    
    
    (115
    )
    
    
    (108
    )Shared service income (expense)
    
    
    (a
    )
    
    $
    3,157
    
    
    
    (1,593
    )
    
    
    (1,135
    )
    
    
    (429
    )Facilities cost
    
    
    (a
    )
    
    $
    (245
    )
    
    
    271
    
    
    
    (101
    )
    
    
    75Interest income (expense) from cash
balance/securities sold under agreements to
repurchase
    
    
    (b
    )
    
    $
    8
    
    
    
    (80
    )
    
    
    72
    
    
    
    Cash and cash equivalents and (securities sold under
agreements to repurchase)
    
    
    (b
    )
    
    $
    263
    
    
    
    (4,696
    )
    
    
    4,433
    
    
    
    
 At December 31, 2007 andFor the Year Ended December 31, 2007BankAtlantic(in thousands)
    
    
    
    
    
    BFC
    
    Bancorp
    
    Woodbridge
    
    BluegreenShared service receivable (payable)
    
    
    (a
    )
    
    $
    312
    
    
    
    (89
    )
    
    
    (119
    )
    
    
    (104
    )Shared service income (expense)
    
    
    (a
    )
    
    $
    2,855
    
    
    
    (1,406
    )
    
    
    (1,006
    )
    
    
    (443
    )Facilities cost
    
    
    (a
    )
    
    $
    (272
    )
    
    
    220
    
    
    
    
    
    
    
    52Interest income (expense) from cash
balance/securities sold under agreements to
repurchase
    
    
    (b
    )
    
    $
    38
    
    
    
    (185
    )
    
    
    147
    
    
    
    Cash and cash equivalents and (securities sold under
agreements to repurchase)
    
    
    (b
    )
    
    $
    1,217
    
    
    
    (7,335
    )
    
    
    6,118
    
    
    
    
 At December 31, 2006 andFor the Year Ended December 31, 2006BankAtlantic(in thousands)
    
    
    
    
    
    BFC
    
    Bancorp
    
    Woodbridge
    
    BluegreenShared service receivable (payable)
    
    
    (a
    )
    
    $
    312
    
    
    
    (142
    )
    
    
    (107
    )
    
    
    (63
    )Shared service income (expense)
    
    
    (a
    )
    
    $
    2,495
    
    
    
    (1,053
    )
    
    
    (1,134
    )
    
    
    (308
    )Office facilities cost
    
    
    (a
    )
    
    $
    (460
    )
    
    
    406
    
    
    
    
    
    
    
    54Interest income (expense) from cash
balance/securities sold under agreements to
repurchase
    
    
    (b
    )
    
    $
    43
    
    
    
    (479
    )
    
    
    436
    
    
    
    Cash and cash equivalents and (securities sold under
agreements to repurchase)
    
    
    (b
    )
    
    $
    996
    
    
    
    (5,547
    )
    
    
    4,551
    
    
    
    
 
 (a)
    
    Pursuant to the terms of shared service agreements between BFC, BankAtlantic Bancorp and
Woodbridge, subsidiaries of BFC provide shared service operations in the areas of human resources,
risk management, investor relations, executive office administration and other services to
BankAtlantic Bancorp and Woodbridge. Additionally, BFC provides certain risk management and
administrative services to Bluegreen. The costs of shared services are allocated based upon the usage of the respective services. Also, as part of the shared service arrangement, the
Company pays BankAtlantic Bancorp and Bluegreen for office facilities costs relating to the Company
and its shared service operations.In May 2008, BFC and BFC Shared Service Corporation (BFC Shared Service), a wholly-owned
subsidiary of BFC, entered into office lease agreements with BankAtlantic under which BFC and BFC
Shared Service pay BankAtlantic an annual rent of approximately $294,000 for office space in
BankAtlantics corporate headquarters. In May 2008, BFC also entered into an office sub-lease
agreement with Woodbridge for office space in BankAtlantics corporate headquarters pursuant to
which Woodbridge will pay BFC an annual rent of approximately $152,000.(b)
    
    BFC and Woodbridge entered into securities sold under agreements to repurchase transactions
with BankAtlantic in the aggregate of approximately $4.7 million, $7.3 million and $5.5 million at
December 31, 2008, 2007 and 2006, respectively. Interest was recognized in connection with the
above was approximately $80,000, $185,000 and $479,000 for the years ended December 31, 2008, 2007
and 2006, respectively. These transactions have similar terms as BankAtlantic agreements with
unaffiliated parties. Additionally, at December 31, 2008, BankAtlantic facilitated the placement of
$49.9 million of FDIC insured certificates of deposits with other insured depository institutions
on Woodbridges behalf through the Certificate of Deposit Account Registry Service (CDARS) program. The
CDARS program facilitates the placement of funds into certificates of deposits issued by other
financial institutions in increments of less than the standard FDIC insurance maximum to insure
that both principal and interest are eligible for full FDIC insurance coverage 237




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
     Class A
    
    WeightedCommon
    
    AverageStock
    
    PriceOptions outstanding
    
    
    53,789
    
    
    $
    48.46Options non-vested
    
    
    13,610
    
    
    $
    92.85
      238




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  33. Earnings (Loss) per Share
    For the Years Ended December 31,(In thousands, except per share data)
    
    2008
    
    
    2007
    
    
    2006Basic (loss) earnings per shareNumerator:Loss from continuing operations allocable to common stock
    
    $
    (73,255
    )
    
    
    (34,650
    )
    
    
    (1,447
    )Discontinued operations, net of taxes
    
    
    4,461
    
    
    
    1,038
    
    
    
    (1,524
    )Extraordinary gain, net of taxes
    
    
    9,145
    
    
    
    2,403
    
    
    
    Net loss allocable to common shareholders
    
    $
    (59,649
    )
    
    
    (31,209
    )
    
    
    (2,971
    )Denominator:Basic weighted average number of common shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249Basic (loss) earnings per share:Loss per share from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.04
    )Earnings (loss) per share from discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )Earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    0.06
    
    
    
    Basic loss per share
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.09
    )Diluted (loss) earnings per shareNumeratorLoss from continuing operations allocable to common stock
    
    $
    (73,255
    )
    
    
    (34,650
    )
    
    
    (1,447
    )Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    
    
    
    
    (93
    )Loss allocable to common stock after assumed dilution
    
    $
    (73,255
    )
    
    
    (34,650
    )
    
    
    (1,540
    )Discontinued operations, net of taxes
    
    $
    4,461
    
    
    
    1,038
    
    
    
    (1,524
    )Extraordinary gain, net of taxes
    
    $
    9,145
    
    
    
    2,403
    
    
    
    Net loss allocable to common stock after assumed dilution
    
    $
    (59,649
    )
    
    
    (31,209
    )
    
    
    (3,064
    )DenominatorDiluted weighted average shares outstanding
    
    
    45,097
    
    
    
    38,778
    
    
    
    33,249Diluted (loss) earnings per shareLoss per share from continuing operations
    
    $
    (1.62
    )
    
    
    (0.90
    )
    
    
    (0.05
    )Earnings (loss) per share from discontinued operations
    
    
    0.10
    
    
    
    0.03
    
    
    
    (0.05
    )Earnings per share from extraordinary gain
    
    
    0.20
    
    
    
    0.06
    
    
    
    Diluted loss per share
    
    $
    (1.32
    )
    
    
    (0.81
    )
    
    
    (0.10
    )
  239




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 34. Redeemable 5% Cumulative Preferred Stock
   Accounting Series Release No. 268 (ASR 268)
  35. Common Stock, Preferred Stock and Dividends
 Common Stock
  240




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   Preferred Stock
  Amended Articles and By-Laws
    Dividends
  241




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 36. Selected Quarterly Results (Unaudited)
  First
    
    
    Second
    
    
    Third
    
    
    Fourth2008
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    TotalRevenues
    
    $
    119,415
    
    
    
    129,881
    
    
    
    134,713
    
    
    
    103,461
    
    
    
    487,470Costs and expenses
    
    
    173,269
    
    
    
    173,392
    
    
    
    158,536
    
    
    
    214,663
    
    
    
    719,860(53,854
    )
    
    
    (43,511
    )
    
    
    (23,823
    )
    
    
    (111,202
    )
    
    
    (232,390
    )Equity in earnings from unconsolidated affiliates
    
    
    1,803
    
    
    
    1,443
    
    
    
    7,178
    
    
    
    4,640
    
    
    
    15,064Impairment of unconsolidated affiliates
    
    
    
    
    
    
    
    
    
    
    (53,583
    )
    
    
    (42,996
    )
    
    
    (96,579
    )Impairment of investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,548
    )
    
    
    (15,548
    )Loss from continuing operations before income taxes
and noncontrolling interest
    
    
    (52,051
    )
    
    
    (42,068
    )
    
    
    (70,228
    )
    
    
    (165,106
    )
    
    
    (329,453
    )(Benefit) provision for income taxes
    
    
    (18,953
    )
    
    
    (15,326
    )
    
    
    (12,401
    )
    
    
    62,443
    
    
    
    15,763Noncontrolling interest
    
    
    (27,065
    )
    
    
    (21,826
    )
    
    
    (52,453
    )
    
    
    (171,367
    )
    
    
    (272,711
    )Loss from continuing operations
    
    
    (6,033
    )
    
    
    (4,916
    )
    
    
    (5,374
    )
    
    
    (56,182
    )
    
    
    (72,505
    )Discontinued operations, less noncontrolling
interest and income tax
    
    
    162
    
    
    
    
    
    
    
    1,438
    
    
    
    2,861
    
    
    
    4,461Extraordinary gain
    
    
    
    
    
    
    
    
    
    
    9,145
    
    
    
    
    
    
    
    9,145Net (loss) income
    
    
    (5,871
    )
    
    
    (4,916
    )
    
    
    5,209
    
    
    
    (53,321
    )
    
    
    (58,899
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (187
    )
    
    
    (187
    )
    
    
    (188
    )
    
    
    (750
    )Net (loss) income allocable to common shareholders
    
    $
    (6,059
    )
    
    
    (5,103
    )
    
    
    5,022
    
    
    
    (53,509
    )
    
    
    (59,649
    )Basic loss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.11
    )
    
    
    (0.12
    )
    
    
    (1.25
    )
    
    
    (1.62
    )Basic earnings per share from discontinued operations
    
    
    
    
    
    
    
    
    
    
    0.03
    
    
    
    0.06
    
    
    
    0.10Basic earnings per share from extraordinary gain
    
    
    
    
    
    
    
    
    
    
    0.20
    
    
    
    
    
    
    
    0.20Basic earnings (loss) per share
    
    $
    (0.13
    )
    
    
    (0.11
    )
    
    
    0.11
    
    
    
    (1.19
    )
    
    
    (1.32
    )Diluted loss per share from continuing operations
    
    $
    (0.13
    )
    
    
    (0.11
    )
    
    
    (0.12
    )
    
    
    (1.25
    )
    
    
    (1.62
    )Diluted earnings per share from discontinued
operations
    
    
    
    
    
    
    
    
    
    
    0.03
    
    
    
    0.06
    
    
    
    0.10Diluted earnings per share from extraordinary gain
    
    
    
    
    
    
    
    
    
    
    0.20
    
    
    
    
    
    
    
    0.20Diluted earnings (loss) per share
    
    $
    (0.13
    )
    
    
    (0.11
    )
    
    
    0.11
    
    
    
    (1.19
    )
    
    
    (1.32
    )Basic weighted average number of common
shares outstanding
    
    
    45,103
    
    
    
    45,112
    
    
    
    45,102
    
    
    
    45,069
    
    
    
    45,097Diluted weighted average number of common
shares outstanding
    
    
    45,103
    
    
    
    45,112
    
    
    
    45,102
    
    
    
    45,069
    
    
    
    45,097
 (see Note 12).
 242




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 First
    
    
    Second
    
    
    Third
    
    
    Fourth2007
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    Quarter
    
    
    TotalRevenues
    
    $
    276,525
    
    
    
    272,543
    
    
    
    261,012
    
    
    
    148,487
    
    
    
    958,567Costs and expenses
    
    
    282,231
    
    
    
    334,549
    
    
    
    493,490
    
    
    
    182,098
    
    
    
    1,292,368(5,706
    )
    
    
    (62,006
    )
    
    
    (232,478
    )
    
    
    (33,611
    )
    
    
    (333,801
    )Equity in earnings from unconsolidated affiliates
    
    
    2,893
    
    
    
    2,026
    
    
    
    4,763
    
    
    
    3,042
    
    
    
    12,724Loss from continuing operations before income taxes
and noncontrolling interest
    
    
    (2,813
    )
    
    
    (59,980
    )
    
    
    (227,715
    )
    
    
    (30,569
    )
    
    
    (321,077
    )Benefit for income taxes
    
    
    (272
    )
    
    
    (17,774
    )
    
    
    (38,757
    )
    
    
    (12,209
    )
    
    
    (69,012
    )Noncontrolling interest
    
    
    (915
    )
    
    
    (39,307
    )
    
    
    (163,711
    )
    
    
    (14,232
    )
    
    
    (218,165
    )Loss from continuing operations
    
    
    (1,626
    )
    
    
    (2,899
    )
    
    
    (25,247
    )
    
    
    (4,128
    )
    
    
    (33,900
    )Discontinued operations, less noncontrolling
interest and income tax
    
    
    1,053
    
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    1,038Extraordinary gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,403
    
    
    
    2,403Net loss
    
    
    (573
    )
    
    
    (2,914
    )
    
    
    (25,247
    )
    
    
    (1,725
    )
    
    
    (30,459
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (187
    )
    
    
    (187
    )
    
    
    (188
    )
    
    
    (750
    )Net loss allocable to common shareholders
    
    $
    (761
    )
    
    
    (3,101
    )
    
    
    (25,434
    )
    
    
    (1,913
    )
    
    
    (31,209
    )Basic loss per share from continuing operations
    
    $
    (0.05
    )
    
    
    (0.09
    )
    
    
    (0.59
    )
    
    
    (0.10
    )
    
    
    (0.90
    )Basic earnings per share from discontinued operations
    
    
    0.03
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.03Basic earnings per share from extraordinary gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.05
    
    
    
    0.06Basic earnings (loss) per share
    
    $
    (0.02
    )
    
    
    (0.09
    )
    
    
    (0.59
    )
    
    
    (0.05
    )
    
    
    (0.81
    )Diluted loss per share from continuing operations
    
    $
    (0.05
    )
    
    
    (0.09
    )
    
    
    (0.60
    )
    
    
    (0.10
    )
    
    
    (0.90
    )Diluted earnings per share from
discontinued operations
    
    
    0.03
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.03Diluted earnings per share from extraordinary gain
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.05
    
    
    
    0.06Diluted earnings (loss) per share
    
    $
    (0.02
    )
    
    
    (0.09
    )
    
    
    (0.60
    )
    
    
    (0.05
    )
    
    
    (0.81
    )Basic weighted average number of common
shares outstanding
    
    
    33,444
    
    
    
    33,451
    
    
    
    42,942
    
    
    
    45,096
    
    
    
    38,778Diluted weighted average number of common
shares outstanding
    
    
    33,444
    
    
    
    33,451
    
    
    
    42,942
    
    
    
    45,096
    
    
    
    38,778
    37. Financial Information of Levitt and Sons
  243




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BFC Financial Corporation
Notes to Consolidated Financial Statements
    November 9,2007Cash
    
    $
    6,387Inventory
    
    
    356,294Property and equipment
    
    
    1,681Other assets
    
    
    8,974Assets deconsolidated
    
    
    373,336Accounts payable and other accrued liabilities
    
    
    50,709Customer deposits
    
    
    18,007Notes and mortgage payable
    
    
    344,052Due to Woodbridge
    
    
    67,831Liabilities deconsolidated
    
    $
    480,599Net equity/negative investment
    
    $
    (107,263
    )The loss in excess of investment in subsidiary is comprised of:Net equity/negative investment
    
    
    (107,263
    )Due to Woodbridge
    
    
    67,831Deferred revenue (a)
    
    
    (15,780
    )$
    (55,212
    )
 
 (a)
    
    During the fourth quarter of 2008, deferred revenue was adjusted by $2.3 million due to a
reclassification on intercompany land sales between Core and Carolina Oak that had been
inadvertently recorded against the negative investment. As a result of this reclassification
the net negative investment was reduced from $55.2 million to $52.9 million as of December 31,
2008.  Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code
 244




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
  Levitt and Sons
Condensed Consolidated Statements of Financial Condition
As of December 31, 2008 and 2007
(In thousands)
 2008
    
    
    2007AssetsCash
    
    $
    4,712
    
    
    
    5,365Restricted cash
    
    
    885
    
    
    
    Inventory
    
    
    166,358
    
    
    
    208,686Property and equipment
    
    
    
    
    
    
    55Other assets
    
    
    19,657
    
    
    
    23,810Total assets
    
    $
    191,612
    
    
    
    237,916Liabilities and Shareholders EquityAccounts payable and other accrued liabilities
    
    $
    719
    
    
    
    469Due to Woodbridge
    
    
    2,870
    
    
    
    748Liabilities subject to compromise (A)
    
    
    327,707
    
    
    
    354,748Shareholders deficit
    
    $
    (139,684
    )
    
    
    (118,049
    )Total liabilities and shareholders equity
    
    $
    191,612
    
    
    
    237,916
 (A) Liabilities Subject to Compromise
   Accounts payable and other accrued liabilities
    
    $
    54,954Customer deposits
    
    
    15,754Due to Woodbridge
    
    
    87,182Deficiency claim associated with secured debt
    
    
    45,458Notes and mortgage payable
    
    
    124,359Total liabilities subject to compromise
    
    $
    327,707
 245




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
 Levitt and Sons
Condensed Consolidated Statements of Operations
Years Ended December 31, 2008, 2007 and 2006
(In thousands)
 2008
    
    
    2007
    
    
    2006RevenuesSales of real estate
    
    $
    32,505
    
    
    
    397,561
    
    
    
    500,719Other revenues
    
    
    2
    
    
    
    2,245
    
    
    
    4,070Total revenues
    
    
    32,507
    
    
    
    399,806
    
    
    
    504,789Costs and expensesCost of sales of real estate
    
    
    42,864
    
    
    
    562,763
    
    
    
    440,059Selling, general and administrative expenses
    
    
    4,340
    
    
    
    70,848
    
    
    
    77,858Total costs and expenses
    
    
    47,204
    
    
    
    633,611
    
    
    
    517,917Bankruptcy related items, net
    
    
    (7,049
    )
    
    
    (3,525
    )
    
    
    Other income, net of interest and other expense
    
    
    111
    
    
    
    (1,928
    )
    
    
    (560
    )Loss before income taxes
    
    
    (21,635
    )
    
    
    (239,258
    )
    
    
    (13,688
    )(Provision) benefit for income taxes
    
    
    
    
    
    
    (303
    )
    
    
    4,749Net loss
    
    $
    (21,635
    )
    
    
    (239,561
    )
    
    
    (8,939
    )
 38. Subsequent Events
 Bankruptcy of Levitt and Sons
  Executive Compensation Program
   246




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##### Table of Contents



BFC Financial Corporation
Notes to Consolidated Financial Statements
   247




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##### Table of Contents



ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Managements Report on Internal Control over Financial Reporting
 Internal Control  Integrated Framework
 248




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  /s/ Alan B. Levan
 /s/ John K. Grelle
 /s/
Maria R. Scheker
 249




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##### Table of Contents



ITEM 9B. OTHER INFORMATION
  
 PART III
  250




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Documents Filed as Part of this Report:
 (1)
    
    Financial StatementsThe following consolidated financial statements of BFC Financial Corporation and its
subsidiaries are included herein under Part II, Item 8 of this Report.
 Report of Independent Registered Certified Public Accounting Firm of
PricewaterhouseCoopers LLP dated March 31, 2009.Consolidated Statements of Financial Condition as of December 31,
2008 and 2007.Consolidated Statements of Operations for each of the years in the
three year period ended December 31, 2008.Consolidated Statements of Comprehensive Loss for each of
the years in the three year period ended December 31, 2008.Consolidated Statements of Shareholders Equity for each of the years
in the three year period ended December 31, 2008.Consolidated Statements of Cash Flows for each of the years in the
three year period ended December 31, 2008.Notes to Consolidated Financial Statements
 (2)
    
    Financial Statement SchedulesAudited Financial Statements of Bluegreen Corporation for the three years ended
December 31, 2008 (See Exhibit 99.1)Schedules not listed above are omitted as the required information is either not
applicable or is presented in the financial statements or related notes.
 251




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##### Table of Contents



(3)
    
    ExhibitsThe following exhibits are either filed as a part of or furnished with this report or are
incorporated herein by reference to documents previously filed as indicated below:
 ExhibitNumber
    
    Description
    
    Reference3.1
    
    Articles of Incorporation, as amended and restated
    
    Exhibit 3.1 of
Registrants Registration
Statement on Form 8-A
filed October 16, 19973.2
    
    Amendment to Articles of Incorporation, as
amended and restated
    
    Exhibit 4 of Registrants
Current Report on Form
8-K filed June 27, 2002
and Appendix A of
Registrants Schedule 14C
filed January 18, 20053.3
    
    Amended and Restated By-laws, as amended
    
    Exhibit 3.3 to the
Registrants Annual
Report on Form 10-K for
the year ended December
31, 2007, filed on March
17, 20083.4
    
    Amendment to Articles of Incorporation, as
amended and restated
    
    Exhibit 3.1 of the
Registrants Current
Report on Form 8-K filed
December 18, 2008.10.1
    
    BFC Financial Corporation 2005 Stock Incentive
Plan
    
    Appendix A to the
Registrants Definitive
Proxy Statement filed
April 18, 200510.2
    
    Executive Services Agreement by and among BFC
Financial Corporation and Tatum, LLC, dated as of
December 5, 2007, relating to the employment of
John K. Grelle
    
    Exhibit 10.2 to the
Registrants Annual
Report on Form 10-K for
the year ended December
31, 2007, filed on March
17, 200812.1
    
    Ratio of earnings to fixed charges
    
    Filed with this Report14.1
    
    Code of Business Conduct and Ethics
    
    Exhibit 14.1 to the
Registrants Annual
Report on Form 10-K for
the year ended December
31, 2007, filed on March
17, 200821.1
    
    Subsidiaries of the registrant
    
    Filed with this Report23.1
    
    Consent of PricewaterhouseCoopers LLP
    
    Filed with this Report23.2
    
    Consent of Ernst & Young LLP
    
    Filed with this Report31.1
    
    Certification of Chief Executive Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed with this Report31.2
    
    Certification of Chief Financial Officer pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002
    
    Filed with this Report31.3
    
    Certification of Chief Accounting Officer
pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002
    
    Filed with this Report32.1
    
    Certification of Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
    
    Furnished with this Report32.2
    
    Certification of Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
    
    Furnished with this Report32.3
    
    Certification of Chief Accounting Officer
pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
    
    Furnished with this Report99.1
    
    Audited financial statements of Bluegreen
Corporation for the three years ended December
31, 2008
    
    Filed with this Report
 252




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##### Table of Contents



SIGNATURES
  BFC FINANCIAL CORPORATIONMarch 31, 2009
    By:
    /s/ Alan B. LevanAlan B. Levan, Chairman of the Board,President and Chief Executive Officer  Signature
    
    Title
    
    Date/s/ Alan B. Levan
    
    
    
    March 31, 2009Alan B. Levan
    
    Chairman of the Board, President
and Chief Executive
Officer/s/ John E. Abdo
    
    
    
    March 31, 2009John E. Abdo
    
    Vice Chairman of the Board/s/ John K. Grelle
    
    
    
    March 31, 2009John K. Grelle
    
    Chief Financial Officer/s/ Maria R. Scheker
    
    
    
    March 31, 2009Maria R. Scheker
    
    Chief Accounting Officer/s/ D. Keith Cobb
    
    
    
    March 31, 2009D. Keith Cobb
    
    Director/s/ Oscar J. Holzmann
    
    
    
    March 31, 2009Oscar J. Holzmann
    
    Director/s/ Neil A. Sterling
    
    
    
    March 31, 2009Neil A. Sterling
    
    Director
 253