##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 x
 For the Quarter Ended March 31, 2008
  o
 
 BFC Financial Corporation
  Florida
    
    59-2022148(State or other jurisdiction of 
incorporation or organization)
    
    (IRS Employer Identification Number)
 2100 West Cypress Creek Road 
Fort Lauderdale, Florida
    
    33309(Address of Principal executive office)
    
    (Zip Code)
  
  Not Applicable
  x o
  Large accelerated filer o
    
    Accelerated filer x
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o x




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##### 



PART I.
    
    FINANCIAL INFORMATION
    
    
    3Item 1.
    
    Financial Statements:
    
    
    3Consolidated Statements of Financial Condition as of March 31, 2008 and December 31, 2007 -- Unaudited
    
    
    3Consolidated Statements of Operations for the Three Months Ended March 31, 2008 and 2007 -- Unaudited
    
    
    4Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2008 and 2007 -- Unaudited
    
    
    6Consolidated Statement of Shareholders Equity as of March 31, 2008  Unaudited
    
    
    7Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2008 and 2007 -- Unaudited
    
    
    8Notes to Unaudited Consolidated Financial Statements
    
    
    10Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    40Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    79Item 4.
    
    Controls and Procedures
    
    
    80PART II.
    
    OTHER INFORMATION
    
    
    81Item 1.
    
    Legal Proceedings
    
    
    81Item 1A.
    
    Risk Factors
    
    
    82Item 6.
    
    Exhibits
    
    
    82SIGNATURESEX-31.1 Certification of Chief Executive OfficerEX-31.2 Certification of Acting CFOEX-31.3 Certification of Chief Accounting OfficerEX-32.1 Certification of Chief Executive OfficerEX-32.2 Certification of Acting CFOEX-32.3 Certification of Chief Accounting Officer
   
 2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. FINANCIAL STATEMENTS
 
 BFC Financial Corporation
Consolidated Statements of Financial Condition -Unaudited
(In thousands, except share data)
 March 31,
    
    
    December 31,2008
    
    
    2007ASSETSCash and cash equivalents
    
    $
    455,769
    
    
    
    332,155Securities available for sale and other financial instruments (at fair value)
    
    
    850,343
    
    
    
    936,968Investment securities at cost or amortized costs (approximate fair value
$23,596 and $65,244)
    
    
    23,632
    
    
    
    60,173Tax certificates, net of allowance of $3,194 in 2008 and $3,289 in 2007
    
    
    159,474
    
    
    
    188,401Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    77,557
    
    
    
    74,003Residential loans held for sale
    
    
    5,635
    
    
    
    4,087Loans receivable, net of allowance for loan losses
of $89,836 in 2008 and $94,020 in 2007
    
    
    4,481,850
    
    
    
    4,524,451Accrued interest receivable
    
    
    44,448
    
    
    
    46,271Real estate held for development and sale
    
    
    263,297
    
    
    
    256,525Real estate owned
    
    
    19,784
    
    
    
    17,216Assets held for sale
    
    
    27,968
    
    
    
    13,704Investments in unconsolidated affiliates
    
    
    127,229
    
    
    
    128,321Properties and equipment, net
    
    
    260,056
    
    
    
    276,078Goodwill and other intangibles
    
    
    75,536
    
    
    
    75,886Deferred tax asset, net
    
    
    36,224
    
    
    
    16,330Discontinued operations assets held for sale
    
    
    95,909
    
    
    
    96,348Other assets
    
    
    104,121
    
    
    
    67,516Total assets
    
    $
    7,108,832
    
    
    
    7,114,433LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:DepositsInterest bearing
    
    $
    3,082,752
    
    
    
    3,129,194Non-interest bearing
    
    
    912,862
    
    
    
    824,211Total deposits
    
    
    3,995,614
    
    
    
    3,953,405Advances from FHLB
    
    
    1,477,040
    
    
    
    1,397,044Short term borrowings
    
    
    94,598
    
    
    
    159,905Subordinated debentures, mortgage notes payable and mortgage-backed bonds
    
    
    203,561
    
    
    
    216,451Junior subordinated debentures
    
    
    379,223
    
    
    
    379,223Loss in excess of investment in Levitts subsidiary
    
    
    55,214
    
    
    
    55,214Other liabilities
    
    
    113,806
    
    
    
    130,111Discontinued operations liabilities related to assets held for sale
    
    
    81,792
    
    
    
    80,093Total liabilities
    
    
    6,400,848
    
    
    
    6,371,446Noncontrolling interest
    
    
    530,143
    
    
    
    558,950Commitments and contingenciesShareholders equity:Preferred stock of $.01 par value; authorized 10,000,000 shares;5% Cumulative Convertible Preferred Stock (5% Preferred Stock)
issued and outstanding 15,000 shares in 2008 and 2007
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 38,232,932 in 2008 and 2007
    
    
    382
    
    
    
    382Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 6,876,081 in 2008 and 2007
    
    
    69
    
    
    
    69Additional paid-in capital
    
    
    131,629
    
    
    
    131,189Retained earnings
    
    
    44,742
    
    
    
    50,801Total shareholders equity before
accumulated other comprehensive income
    
    
    176,822
    
    
    
    182,441Accumulated other comprehensive income
    
    
    1,019
    
    
    
    1,596Total shareholders equity
    
    
    177,841
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    7,108,832
    
    
    
    7,114,433
 See accompanying notes to unaudited consolidated financial statements.
 3




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##### Table of Contents



BFC Financial Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months EndedMarch 31,2008
    
    
    2007RevenuesBFC Activities:Interest and dividend income
    
    $
    415
    
    
    
    499Other income
    
    
    1,258
    
    
    
    9511,673
    
    
    
    1,450Financial Services:Interest and dividend income
    
    
    83,732
    
    
    
    93,540Service charges on deposits
    
    
    24,014
    
    
    
    24,595Other service charges and fees
    
    
    7,433
    
    
    
    7,033(Loss) income from securities activities, net
    
    
    (4,738
    )
    
    
    1,555Other income
    
    
    2,602
    
    
    
    2,384113,043
    
    
    
    129,107Real Estate Development:Sales of real estate
    
    
    154
    
    
    
    141,298Interest and dividend income
    
    
    1,455
    
    
    
    551Other income
    
    
    867
    
    
    
    3,5322,476
    
    
    
    145,381Total revenues
    
    
    117,192
    
    
    
    275,938Costs and ExpensesBFC Activities:Interest expense
    
    
    
    
    
    
    12Employee compensation and benefits
    
    
    3,160
    
    
    
    2,744Other expenses
    
    
    927
    
    
    
    6614,087
    
    
    
    3,417Financial Services:Interest expense, net of interest capitalized
    
    
    41,075
    
    
    
    46,218Provision for (recovery of) loan losses
    
    
    42,888
    
    
    
    7,461Employee compensation and benefits
    
    
    35,155
    
    
    
    41,090Occupancy and equipment
    
    
    16,386
    
    
    
    15,944Advertising and promotion
    
    
    4,895
    
    
    
    5,858Restructuring charges and exit activities
    
    
    (115
    )
    
    
    2,553Other expenses
    
    
    13,448
    
    
    
    13,655153,732
    
    
    
    132,779Real Estate Development:Cost of sales of real estate
    
    
    88
    
    
    
    112,908Interest expense, net of interest capitalized
    
    
    2,606
    
    
    
    Selling, general and administrative expenses
    
    
    11,899
    
    
    
    32,053Other expenses
    
    
    
    
    
    
    48214,593
    
    
    
    145,443Total costs and expenses
    
    
    172,412
    
    
    
    281,639Equity in earnings from unconsolidated
affiliates
    
    
    1,803
    
    
    
    2,893Loss from continuing operations before income taxes
and noncontrolling interest
    
    
    (53,417
    )
    
    
    (2,808
    )Benefit for income taxes
    
    
    (19,062
    )
    
    
    (270
    )Noncontrolling interest
    
    
    (28,149
    )
    
    
    (913
    )Loss from continuing operations
    
    
    (6,206
    )
    
    
    (1,625
    )Discontinued operations, less noncontrolling interest and
income tax provision (benefit) of $814 in 2008 and
$(3,406) in 2007
    
    
    335
    
    
    
    1,052Net loss
    
    
    (5,871
    )
    
    
    (573
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (188
    )Net loss allocable to common stock
    
    $
    (6,059
    )
    
    
    (761
    )
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months EndedMarch 31,2008
    
    
    2007(Loss) earnings per common share:Basic loss per share from continuing operations
    
    $
    (0.14
    )
    
    
    (0.05
    )Basic earnings per share from discontinued operations
    
    
    0.01
    
    
    
    0.03Basic loss per share
    
    $
    (0.13
    )
    
    
    (0.02
    )Diluted loss per share from continuing operations
    
    $
    (0.14
    )
    
    
    (0.05
    )Diluted earnings per share from discontinued operations
    
    
    0.01
    
    
    
    0.03Diluted loss per share
    
    $
    (0.13
    )
    
    
    (0.02
    )Basic weighted average number of common shares
outstanding
    
    
    45,103
    
    
    
    33,444Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    45,103
    
    
    
    33,444
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Comprehensive Loss  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2008
    
    
    2007Net loss
    
    $
    (5,871
    )
    
    
    (573
    )Other comprehensive income (loss), net of tax:Unrealized (losses) gains on securities available for sale
    
    
    (1,330
    )
    
    
    58Provision (benefit) for income taxes
    
    
    (513
    )
    
    
    22Unrealized gains (loss) on securities available for sale, net of tax
    
    
    (817
    )
    
    
    36Unrealized losses associated with investment in
unconsolidated affiliates
    
    
    (88
    )
    
    
    (6
    )Benefit for income taxes
    
    
    (34
    )
    
    
    (2
    )Unrealized losses associated with investment in
unconsolidated affiliates, net of tax
    
    
    (54
    )
    
    
    (4
    )Reclassification adjustments of net realized losses (gains)
included in net loss
    
    
    479
    
    
    
    (388
    )Less: provision (benefit) for income taxes
    
    
    185
    
    
    
    (148
    )Net realized gains reclassified into net loss, net of tax
    
    
    294
    
    
    
    (240
    )Total other comprehensive loss
    
    
    (577
    )
    
    
    (208
    )Comprehensive loss
    
    $
    (6,448
    )
    
    
    (781
    )
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Shareholders Equity  Unaudited
For the Three Months Ended March 31, 2008
(In thousands)
 Unearned
    
    
    
    
    
    
    AccumulatedCompen-
    
    
    
    
    
    
    Othersation
    
    
    
    
    
    
    Compre-Shares of Common
    
    
    Class A
    
    
    Class B
    
    
    Additional
    
    
    Restricted
    
    
    
    
    
    
    hensiveStock Outstanding
    
    
    Common
    
    
    Common
    
    
    Paid-in
    
    
    Stock
    
    
    Retained
    
    
    IncomeClass A
    
    
    Class B
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Grants
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance, December 31, 2007
    
    
    38,233
    
    
    
    6,876
    
    
    $
    382
    
    
    $
    69
    
    
    $
    131,189
    
    
    $
    
    
    
    $
    50,801
    
    
    $
    1,596
    
    
    $
    184,037Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,871
    )
    
    
    
    
    
    
    (5,871
    )Other comprehensive loss,
net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (577
    )
    
    
    (577
    )Net effect of
subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    170Cash dividends on
5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )Share-based compensation
related to stock options
and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    270
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -      270Balance, March 31, 2008
    
    
    38,233
    
    
    
    6,876
    
    
    $
    382
    
    
    $
    69
    
    
    $
    131,629
    
    
    $
    
    
    
    $
    44,742
    
    
    $
    1,019
    
    
    $
    177,841
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2008
    
    
    2007Net cash (used in) operating activities
    
    $
    (27,462
    )
    
    
    (27,069
    )Investing activities:Proceeds from redemption and maturities of investment
securities and tax certificates
    
    
    40,953
    
    
    
    47,633Purchase of investment securities and tax certificates
    
    
    (11,912
    )
    
    
    (12,166
    )Purchase of securities available for sale
    
    
    (101,954
    )
    
    
    (45,275
    )Proceeds from sales and maturities of securities
available for sale
    
    
    187,498
    
    
    
    64,631Purchases of FHLB stock
    
    
    (8,325
    )
    
    
    (450
    )Redemption of FHLB stock
    
    
    4,771
    
    
    
    11,164Investments in unconsolidated subsidiaries
    
    
    (198
    )
    
    
    (2,624
    )Distributions from unconsolidated subsidiaries
    
    
    1,889
    
    
    
    5,533Net increase in loans
    
    
    (13,323
    )
    
    
    (36,678
    )Proceeds from the sale of loans receivable
    
    
    10,100
    
    
    
    Improvements to real estate owned
    
    
    (11
    )
    
    
    (1,407
    )Proceeds from sales of real estate owned
    
    
    756
    
    
    
    106Net additions to office properties and equipment
    
    
    (4,120
    )
    
    
    (25,621
    )Ne proceeds from the sale of Ryan Beck Holdings, Inc.
    
    
    
    
    
    
    2,628Net cash provided by investing activities
    
    
    106,124
    
    
    
    7,474Financing activities:Net increase in deposits
    
    
    42,209
    
    
    
    217,986Repayments of FHLB advances
    
    
    (1,750,000
    )
    
    
    (925,000
    )Proceeds from FHLB advances
    
    
    1,830,000
    
    
    
    705,000Decrease in securities sold under agreements
to repurchase
    
    
    (2,818
    )
    
    
    (23,623
    )(Decrease) increase in federal funds purchased
    
    
    (62,489
    )
    
    
    14,725Repayment of notes and bonds payable
    
    
    (16,316
    )
    
    
    (61,621
    )Proceeds from notes and bonds payable
    
    
    4,667
    
    
    
    117,407Payments for offering costs
    
    
    
    
    
    
    (916
    )Excess tax benefits from share-based compensation
    
    
    
    
    
    
    9635% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Proceeds from issuance of BankAtlantic Bancorp Class A common stock
    
    
    93
    
    
    
    698Purchase and retirement of BankAtlantic Bancorp Class A common stock
    
    
    
    
    
    
    (17,095
    )Levitt cash dividends paid to non-BFC shareholders
    
    
    
    
    
    
    (330
    )BankAtlantic Bancorp cash dividends paid to non-BFC shareholders
    
    
    (216
    )
    
    
    (1,916
    )Net cash provided by financing activities
    
    
    44,942
    
    
    
    26,090Increase in cash and cash equivalents
    
    
    123,604
    
    
    
    6,495Cash and cash equivalents in discontinued operations
assets held for sale at beginning of period
    
    
    
    
    
    
    3,285Cash and cash equivalents in discontinued operations
assets held for sale at disposal date
    
    
    
    
    
    
    (6,294
    )Cash and cash equivalents at the beginning of period
    
    
    332,165
    
    
    
    201,123Cash and cash equivalents at end of period
    
    $
    455,769
    
    
    
    204,609
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2008
    
    
    2007Supplemental cash flow information:Interest on borrowings and deposits
    
    $
    45,568
    
    
    
    47,188Income taxes paid
    
    
    
    
    
    
    4,161Supplementary disclosure of non-cash investing and financing activities:Decrease in inventory from the reclassification to property and equipment
    
    
    
    
    
    
    93Increase (decrease) in accumulated other comprehensive income,
net of taxes
    
    
    (577
    )
    
    
    (208
    )Net increase (decrease) in shareholders equity from the effect of
subsidiaries
capital transactions, net of income taxes
    
    
    170
    
    
    
    (234
    )Effects of FASB interpretation No. 48
    
    
    
    
    
    
    121
 See accompanying notes to unaudited consolidated financial statements.
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##### Table of Contents



BFC Financial Corporation
Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements
      10




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##### Table of Contents



PercentShares
    
    
    Percent of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    16.26
    %
    
    
    8.62
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    23.54
    %
    
    
    55.62
    %LevittClass A Common Stock (1)
    
    
    18,676,955
    
    
    
    19.65
    %
    
    
    6.99
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    19,895,986
    
    
    
    20.67
    %
    
    
    53.99
    %
 
 (1)
    
    BFCs percent of ownership includes, but BFCs percent of vote excludes, 6,145,582
shares of Levitts Class A Common Stock which are subject to the letter agreement described
below (Letter Agreement).  11




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##### Table of Contents



2. Fair Value Measurement
     Market approach
 Income approach
 12




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Cost approach
      Fair Value Measurements at March 31, 2008 Using:Quoted prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableMarch 31,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Securities Available for Sale and OtherFinancial Instruments:Mortgage-backed securities
    
    $
    600,505
    
    
    
    
    
    
    
    600,505
    
    
    
    REMICS
    
    
    188,803
    
    
    
    
    
    
    
    188,803
    
    
    
    Bonds
    
    
    481
    
    
    
    
    
    
    
    
    
    
    
    481Other equity securities
    
    
    6,069
    
    
    
    1,721
    
    
    
    
    
    
    
    4,348Stifel common stock
    
    
    12,528
    
    
    
    12,528
    
    
    
    
    
    
    
    Stifel warrants
    
    
    8,805
    
    
    
    
    
    
    
    
    
    
    
    8,805Office Depot common stock
    
    
    33,152
    
    
    
    33,152
    
    
    
    
    
    
    
    Total securities available for sale
and other financial instruments at
fair value
    
    $
    850,343
    
    
    
    47,401
    
    
    
    789,308
    
    
    
    13,634
  13




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Stifel
    
    
    EquityBonds
    
    
    Warrants
    
    
    Securities
    
    
    TotalBeginning Balance
    
    $
    681
    
    
    
    10,661
    
    
    
    5,133
    
    
    
    16,475Total gains and losses (realized/unrealized)Loss included in earnings (or changes in net assets)
    
    
    
    
    
    
    (1,856
    )
    
    
    
    
    
    
    (1,856
    )Unrealized loss included in other comprehensive loss
    
    
    
    
    
    
    
    
    
    
    (785
    )
    
    
    (785
    )Purchases, issuances, and settlements
    
    
    (200
    )
    
    
    
    
    
    
    
    
    
    
    (200
    )Transfers in and/or out of Level 3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ending balance
    
    $
    481
    
    
    
    8,805
    
    
    
    4,348
    
    
    
    13,634
  Mortgage-Backed Securities and REMICs
  Bonds and Other Equity Securities
  Stifel common stock
  Stifel Warrants
  14




---



##### Table of Contents



Office Depot common stock
  Major Categories of Assets Measured at Fair Value on a Non-Recurring Basis
  Fair Value Measurements at March 31, 2008 Using:Quoted prices inActive Markets
    
    
    Significant Other
    
    
    Significantfor Identical
    
    
    Observable
    
    
    UnobservableMarch 31,
    
    
    Assets
    
    
    Inputs
    
    
    InputsDescription
    
    2008
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Loans measured for impairment using
the fair value of the collateral
    
    $
    90,106
    
    
    
    
    
    
    
    
    
    
    
    90,106
  Measurement of BankAtlantics Loans for Impairment
  3. Segment Reporting
    15




---



##### Table of Contents



BFC Activities
   Financial Services
  Primary Homebuilding
  Tennessee Homebuilding
  Land Division
  Levitt Other Operations
    16




---



##### Table of Contents



Levitt
    
    
    AdjustmentBFC
    
    
    Financial
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2008Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    154
    
    
    
    
    
    
    
    
    
    
    
    154Interest and dividend income
    
    
    420
    
    
    
    83,732
    
    
    
    189
    
    
    
    1,287
    
    
    
    (26
    )
    
    
    85,602Other income
    
    
    1,689
    
    
    
    29,364
    
    
    
    1,195
    
    
    
    314
    
    
    
    (1,126
    )
    
    
    31,4362,109
    
    
    
    113,096
    
    
    
    1,538
    
    
    
    1,601
    
    
    
    (1,152
    )
    
    
    117,192Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    88
    
    
    
    
    
    
    
    
    
    
    
    88Interest expense, net
    
    
    
    
    
    
    41,101
    
    
    
    688
    
    
    
    2,560
    
    
    
    (668
    )
    
    
    43,681Provision for loan losses
    
    
    
    
    
    
    42,888
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,888Other expenses
    
    
    4,158
    
    
    
    70,033
    
    
    
    4,979
    
    
    
    7,069
    
    
    
    (484
    )
    
    
    85,7554,158
    
    
    
    154,022
    
    
    
    5,755
    
    
    
    9,629
    
    
    
    (1,152
    )
    
    
    172,412Equity in earnings from
unconsolidated affiliates
    
    
    2
    
    
    
    1,275
    
    
    
    
    
    
    
    526
    
    
    
    
    
    
    
    1,803(Loss) income from
continuing operations before
income taxes and
noncontrolling interest
    
    
    (2,047
    )
    
    
    (39,651
    )
    
    
    (4,217
    )
    
    
    (7,502
    )
    
    
    
    
    
    
    (53,417
    )Benefit for income taxes
    
    
    (3,975
    )
    
    
    (15,087
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19,062
    )Noncontrolling interest
    
    
    (12
    )
    
    
    (18,779
    )
    
    
    (3,368
    )
    
    
    (5,990
    )
    
    
    
    
    
    
    (28,149
    )(Loss) income from continuing operations
    
    $
    1,940
    
    
    
    (5,785
    )
    
    
    (849
    )
    
    
    (1,512
    )
    
    
    
    
    
    
    (6,206
    )At March 31, 2008Total assets
    
    $
    31,948
    
    
    
    6,390,690
    
    
    
    328,255
    
    
    
    365,699
    
    
    
    (7,760
    )
    
    
    7,108,832
 Adjust-Levitt
    
    
    mentBFC
    
    
    Financial
    
    
    Homebuilding
    
    
    Land
    
    
    Other
    
    
    andActivities
    
    
    Services
    
    
    Primary
    
    
    Tennessee
    
    
    Division
    
    
    Operations
    
    
    Eliminations
    
    
    Total2007Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    112,512
    
    
    
    21,657
    
    
    
    777
    
    
    
    6,574
    
    
    
    (222
    )
    
    
    141,298Interest and dividend income
    
    
    509
    
    
    
    93,540
    
    
    
    172
    
    
    
    20
    
    
    
    841
    
    
    
    203
    
    
    
    (695
    )
    
    
    94,590Other income
    
    
    1,627
    
    
    
    35,606
    
    
    
    2,175
    
    
    
    9
    
    
    
    1,021
    
    
    
    348
    
    
    
    (736
    )
    
    
    40,0502,136
    
    
    
    129,146
    
    
    
    114,859
    
    
    
    21,686
    
    
    
    2,639
    
    
    
    7,125
    
    
    
    (1,653
    )
    
    
    275,938Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    86,952
    
    
    
    20,651
    
    
    
    72
    
    
    
    5,501
    
    
    
    (268
    )
    
    
    112,908Interest expense, net
    
    
    12
    
    
    
    46,394
    
    
    
    
    
    
    
    
    
    
    
    215
    
    
    
    
    
    
    
    (391
    )
    
    
    46,230Provision for loan losses
    
    
    
    
    
    
    7,461
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,461Other expenses
    
    
    3,466
    
    
    
    79,493
    
    
    
    18,903
    
    
    
    1,884
    
    
    
    3,773
    
    
    
    8,236
    
    
    
    (715
    )
    
    
    115,0403,478
    
    
    
    133,348
    
    
    
    105,855
    
    
    
    22,535
    
    
    
    4,060
    
    
    
    13,737
    
    
    
    (1,374
    )
    
    
    281,639Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    1,146
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    1,731
    
    
    
    
    
    
    
    2,893(Loss) income from
continuing operations
before
income taxes and
noncontrolling interest
    
    
    (1,342
    )
    
    
    (3,056
    )
    
    
    9,020
    
    
    
    (849
    )
    
    
    (1,421
    )
    
    
    (4,881
    )
    
    
    (279
    )
    
    
    (2,808
    )(Benefit) provision for
income taxes
    
    
    (29
    )
    
    
    (852
    )
    
    
    3,539
    
    
    
    (328
    )
    
    
    (566
    )
    
    
    (1,864
    )
    
    
    (170
    )
    
    
    (270
    )Noncontrolling interest
    
    
    (3
    )
    
    
    (1,727
    )
    
    
    4,574
    
    
    
    (435
    )
    
    
    (714
    )
    
    
    (2,518
    )
    
    
    (91
    )
    
    
    (913
    )(Loss) income from
continuing operations
    
    $
    (1,310
    )
    
    
    (477
    )
    
    
    907
    
    
    
    (86
    )
    
    
    (141
    )
    
    
    (499
    )
    
    
    (18
    )
    
    
    (1,625
    )At March 31, 2007Total assets
    
    $
    43,984
    
    
    
    6,380,176
    
    
    
    651,569
    
    
    
    46,850
    
    
    
    286,431
    
    
    
    173,657
    
    
    
    (58,873
    )
    
    
    7,523,794
 17




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##### Table of Contents



4. Discontinued Operations
 Sale of Ryan Beck
  Planned Sale of Two Core Communities Commercial Leasing Projects
 Accounting for the Impairment or Disposal of Long-Lived Assets
   March 31,
    
    
    December 31,2008
    
    
    2007Property and equipment, net
    
    $
    84,316
    
    
    
    84,811Other assets
    
    
    11,593
    
    
    
    11,537Assets held for sale
    
    $
    95,909
    
    
    
    96,348Accounts payable, accrued liabilities and other
    
    $
    1,413
    
    
    
    1,123Notes and mortgage payable
    
    
    80,379
    
    
    
    78,970Liabilities related to assets held for sale
    
    $
    81,792
    
    
    
    80,093
 18




---



##### Table of Contents



For the Three Months EndedMarch 31,2008
    
    
    2007Revenue
    
    $
    2,223
    
    
    
    587Costs and expenses
    
    
    857
    
    
    
    592Income (loss) before income taxes
    
    
    1,366
    
    
    
    (5
    )Provision (benefit) for income taxes
    
    
    109
    
    
    
    (2
    )Noncontrolling interest
    
    
    1,084
    
    
    
    (2
    )Income (loss) from discontinued operations
    
    $
    173
    
    
    
    (1
    )
 5. Restructuring Charges and Exit Activities
 BankAtlantic Bancorp and BankAtlantic
  EmployeeTerminationBenefits
    
    
    Contract
    
    
    TotalLiability
    
    
    Liability
    
    
    LiabilityBalance at January 1, 2007
    
    $
    Expense incurred
    
    
    2,317
    
    
    
    
    
    
    
    2,317Amount paid
    
    
    (53
    )
    
    
    
    
    
    
    (53
    )Balance at March 31, 2007
    
    $
    2,264
    
    
    
    
    
    
    
    2,264Balance at January 1, 2008
    
    $
    102
    
    
    
    990
    
    
    
    1,092Amounts paid or amortized
    
    
    (88
    )
    
    
    (203
    )
    
    
    (291
    )Balance at March 31, 2008
    
    $
    14
    
    
    
    787
    
    
    
    801
    19




---



##### Table of Contents



Levitt Corporation and Levitt and Sons
   Severance
    
    
    
    
    
    
    Independent
    
    
    SuretyRelated and
    
    
    
    
    
    
    Contractor
    
    
    BondBenefits
    
    
    Facilities
    
    
    Agreements
    
    
    Accrual
    
    
    TotalBalance at December 31, 2007
    
    $
    1,954
    
    
    
    1,010
    
    
    
    1,421
    
    
    
    1,826
    
    
    
    6,211Restructuring charges (credits)
    
    
    1,207
    
    
    
    
    
    
    
    (42
    )
    
    
    
    
    
    
    1,165Cash payments
    
    
    (1,527
    )
    
    
    (86
    )
    
    
    (206
    )
    
    
    (165
    )
    
    
    (1,984
    )Balance at March 31, 2008
    
    $
    1,634
    
    
    
    924
    
    
    
    1,173
    
    
    
    1,661
    
    
    
    5,392
     20




---



##### Table of Contents



6. Securities Activities, Net
  For The Three Months EndedMarch 31,2008
    
    
    2007Loss on sale of Stifel common stock
    
    $
    (4,658
    )
    
    
    Gains from managed investment
funds
    
    
    130
    
    
    
    2,447Gain on sale of private investment
securities
    
    
    1,305
    
    
    
    481Gain on sale of agency securities
    
    
    341
    
    
    
    140Unrealized loss on Stifel warrants
    
    
    (1,856
    )
    
    
    (1,513
    )Securities activities, net
    
    $
    (4,738
    )
    
    
    1,555
  7. Benihana Convertible Preferred Stock Investment
   21




---



##### Table of Contents



8. Loans Receivable
  March 31,
    
    
    December 31,2008
    
    
    2007Real estate loans:Residential
    
    $
    2,119,695
    
    
    
    2,155,752Builder land loans
    
    
    111,247
    
    
    
    149,564Land acquisition and development
    
    
    195,103
    
    
    
    202,177Land acquisition, development and construction
    
    
    126,074
    
    
    
    151,321Construction and development  non-residential
    
    
    290,214
    
    
    
    265,163Commercial  non-residential
    
    
    552,619
    
    
    
    534,916Consumer  home equity
    
    
    699,962
    
    
    
    676,262Small business
    
    
    213,128
    
    
    
    211,797Other loans:Commercial business
    
    
    130,450
    
    
    
    131,044Small business  non-mortgage
    
    
    105,427
    
    
    
    105,867Consumer loans
    
    
    14,117
    
    
    
    15,667Deposit overdrafts
    
    
    9,864
    
    
    
    15,005Total gross loans
    
    
    4,567,900
    
    
    
    4,614,535Adjustments:Premiums, discounts and net deferred fees
    
    
    3,786
    
    
    
    3,936Allowance for loan losses
    
    
    (89,836
    )
    
    
    (94,020
    )Loans receivable  net
    
    $
    4,481,850
    
    
    
    4,524,451
   For The Three Months EndedMarch 31,2008
    
    
    2007Balance, beginning of period
    
    $
    94,020
    
    
    
    44,173Loans charged-off
    
    
    (47,247
    )
    
    
    (1,127
    )Recoveries of loans previously charged-off
    
    
    175
    
    
    
    437Net (charge-offs)
    
    
    (47,072
    )
    
    
    (690
    )Provision for loan losses
    
    
    42,888
    
    
    
    7,443Balance, end of period
    
    $
    89,836
    
    
    
    50,926
 22




---



##### Table of Contents



March 31, 2008
    
    
    December 31, 2007Gross
    
    
    
    
    
    
    GrossRecorded
    
    
    Specific
    
    
    Recorded
    
    
    SpecificInvestment
    
    
    Allowances
    
    
    Investment
    
    
    AllowancesImpaired loans with specific
valuation allowances
    
    $
    26,871
    
    
    
    6,640
    
    
    
    113,955
    
    
    
    17,809Impaired loans without
specific
valuation allowances
    
    
    138,041
    
    
    
    
    
    
    
    67,124
    
    
    
    Total
    
    $
    164,912
    
    
    
    6,640
    
    
    
    181,079
    
    
    
    17,809
  9. Real Estate Held for Development and Sale
  March 31,
    
    
    December 31,2008
    
    
    2007Land and land development costs
    
    $
    219,035
    
    
    
    216,090Construction costs
    
    
    6,197
    
    
    
    5,426Capitalized interest and other costs
    
    
    38,065
    
    
    
    35,009Total
    
    $
    263,297
    
    
    
    256,525
  10. Assets Held for Sale
  March 31,
    
    
    December 31,2008
    
    
    2007Branch facilities held for sale
    
    $
    27,968
    
    
    
    13,704
  23




---



##### Table of Contents



11. Investments in Unconsolidated Affiliates
  March 31,
    
    
    December 31,2008
    
    
    2007Investment in Bluegreen Corporation
    
    $
    111,647
    
    
    
    111,321Investments in joint ventures
    
    
    4,197
    
    
    
    5,615BankAtlantic Bancorp investments in statutory
business trusts
    
    
    8,820
    
    
    
    8,820Levitt investments in statutory business trusts
    
    
    2,565
    
    
    
    2,565$
    127,229
    
    
    
    128,321
  For the Three Months EndedMarch 31,2008
    
    
    2007Equity in Bluegreen earnings
    
    $
    526
    
    
    
    1,744Equity in joint ventures earnings
    
    
    1,115
    
    
    
    990Earnings from business statutory trusts
    
    
    162
    
    
    
    159Income from unconsolidated affiliates
    
    $
    1,803
    
    
    
    2,893
   24




---



##### Table of Contents



Unaudited Condensed Consolidated Balance Sheets
 March 31,
    
    
    December 31,2008
    
    
    2007Total assets
    
    $
    1,015,881
    
    
    
    1,039,578Total liabilities
    
    $
    606,684
    
    
    
    632,047Minority interest
    
    
    23,261
    
    
    
    22,423Total shareholders equity
    
    
    385,936
    
    
    
    385,108Total liabilities and shareholders equity
    
    $
    1,015,881
    
    
    
    1,039,578
 Unaudited Condensed Consolidated Statements of Income
 For the Three Months EndedMarch 31,2008
    
    
    2007Revenues and other income
    
    $
    139,352
    
    
    
    146,658Cost and other expenses
    
    
    136,263
    
    
    
    136,422Income before minority interest and
provision for income taxes
    
    
    3,089
    
    
    
    10,236Minority interest
    
    
    838
    
    
    
    1,634Income before provision for income taxes
    
    
    2,251
    
    
    
    8,602Provision for income taxes
    
    
    (855
    )
    
    
    (3,269
    )Net income
    
    $
    1,396
    
    
    
    5,333
  12. Other Debt and Development Bonds Payable
   25




---



##### Table of Contents



13. Noncontrolling Interest
  March 31,
    
    
    December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    331,770
    
    
    
    351,148Levitt
    
    
    197,710
    
    
    
    207,138Joint Venture Partnership
    
    
    663
    
    
    
    664$
    530,143
    
    
    
    558,950
 26




---



##### Table of Contents



14. Interest Expense
  For the Three Months Ended,March 31,2008
    
    
    2007Interest expense
    
    $
    46,001
    
    
    
    58,556Interest capitalized
    
    
    (2,320
    )
    
    
    (12,326
    )Interest expense, net
    
    $
    43,681
    
    
    
    46,230
  Three Months EndedMarch 31,2008
    
    
    2007Interest incurred
    
    $
    5,039
    
    
    
    12,326Interest capitalized
    
    
    (2,320
    )
    
    
    (12,326
    )Interest expense, net
    
    $
    2,719
    
    
    
    Interest included in cost of sales
    
    $
    
    
    
    
    4,425
  27




---



##### Table of Contents



15. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk
  March 31,
    
    
    December 31,2008
    
    
    2007BFC ActivitiesGuarantee agreements
    
    $
    38,000
    
    
    
    59,112Financial ServicesCommitments to sell fixed rate residential loans
    
    $
    24,854
    
    
    
    21,029Commitments to sell variable rate residential loans
    
    
    2,607
    
    
    
    1,518Commitments to purchase variable rate residential loans
    
    
    
    
    
    
    39,921Commitments to purchase fixed rate residential loans
    
    
    
    
    
    
    21,189Commitments to purchase commercial loans
    
    
    14,000
    
    
    
    Commitments to originate loans held for sale
    
    
    21,826
    
    
    
    18,344Commitments to originate loans held to maturity
    
    
    154,868
    
    
    
    158,589Commitments to extend credit, including the undisbursed
portion of loans in process
    
    
    874,874
    
    
    
    992,838Standby letters of credit
    
    
    37,215
    
    
    
    41,151Commercial lines of credit
    
    
    87,719
    
    
    
    96,786
 BFC Activities
   28




---



##### Table of Contents



Financial Services
  29




---



##### Table of Contents



Real Estate Development
   16. Certain Relationships and Related Party and Affiliate Transactions
   BankAtlantic(In thousands)
    
    
    
    
    
    BFC
    
    
    Bancorp
    
    
    Levitt
    
    
    BluegreenFor the three months ended March 31, 2008Shared service income (expense)
    
    
    (a
    )
    
    $
    498
    
    
    
    (264
    )
    
    
    (146
    )
    
    
    (88
    )Facilities cost
    
    
    
    
    
    
    (63
    )
    
    
    50
    
    
    
    
    
    
    
    13Interest income (expense) from
cash balance/securities sold under
agreements to repurchase
    
    
    (b
    )
    
    $
    5
    
    
    
    (26
    )
    
    
    21
    
    
    
    For the three months ended March 31, 2007Shared service income (expense)
    
    
    (a
    )
    
    $
    773
    
    
    
    (394
    )
    
    
    (261
    )
    
    
    (118
    )Facilities cost
    
    
    
    
    
    
    (53
    )
    
    
    40
    
    
    
    
    
    
    
    13Interest income (expense) from
cash balance/securities sold under
agreements to repurchase
    
    
    (b
    )
    
    $
    11
    
    
    
    (51
    )
    
    
    40
    
    
    
    At March 31, 2008Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    
    (b
    )
    
    $
    1,041
    
    
    
    (2,433
    )
    
    
    1,392
    
    
    
    Shared service receivable (payable)
    
    
    (a
    )
    
    $
    104
    
    
    
    (14
    )
    
    
    (15
    )
    
    
    (75
    )At December 31, 2007Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    
    (b
    )
    
    $
    1,217
    
    
    
    (7,335
    )
    
    
    6,118Shared service receivable (payable)
    
    
    (a
    )
    
    $
    312
    
    
    
    (89
    )
    
    
    (119
    )
    
    
    (104
    )
 30




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##### Table of Contents



(a)
    
    Effective January 1, 2006, BFC maintained arrangements with
BankAtlantic Bancorp and Levitt Corporation to provide shared service
operations in the areas of human resources, risk management, investor
relations and executive office administration. Pursuant to these
arrangements, certain employees from BankAtlantic were transferred to
BFC to staff BFCs shared service operations. Additionally, BFC
provides certain risk management and administrative services to
Bluegreen. The costs of shared services are allocated based upon the
estimated usage of the respective services. Also, as part of the
shared service arrangement, the Company reimburses BankAtlantic
Bancorp and Bluegreen for office facilities costs relating to the
Company and its shared service operations.(b)
    
    BFC and Levitt Corporation entered into securities sold under
agreements to repurchase (Repurchase Agreements) with BankAtlantic
and the balance in those accounts in the aggregate was approximately
$2.4 million and $7.3 million at March 31, 2008 and December 31, 2007,
respectively. Interest in connection with the Repurchase Agreements
was approximately $26,000 and $51,000 for the three months ended March
31, 2008 and 2007, respectively. These transactions have similar terms
as BankAtlantic repurchase agreements with unaffiliated third parties.   BankAtlantic BancorpClass A
    
    
    Weightedcommon
    
    
    Averagestock
    
    
    PriceOptions outstanding
    
    
    268,943
    
    
    $
    9.90Options nonvested
    
    
    154,587
    
    
    $
    12.32
      31




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17. (Loss) Earnings Per Common Share
    32




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##### Table of Contents



For the Three Months EndedMarch 31,(In thousands, except per share data)
    
    2008
    
    
    2007Basic (loss) earnings per shareNumerator:Loss from continuing operations allocable to common stock
    
    $
    (6,394
    )
    
    
    (1,813
    )Discontinued operations, net of taxes
    
    
    335
    
    
    
    1,052Net loss allocable to common shareholders
    
    $
    (6,059
    )
    
    
    (761
    )Denominator:Basic weighted average number of common shares outstanding
    
    
    45,103
    
    
    
    33,444Basic (loss) earnings per share:Loss per share from continuing operations
    
    $
    (0.14
    )
    
    
    (0.05
    )Earnings per share from discontinued operations
    
    
    0.01
    
    
    
    0.03Basic loss per share
    
    $
    (0.13
    )
    
    
    (0.02
    )Diluted (loss) earnings per shareNumeratorLoss from continuing operations allocable to common stock
    
    $
    (6,394
    )
    
    
    (1,813
    )Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    (13
    )Loss allocable to common stock after assumed dilution
    
    $
    (6,394
    )
    
    
    (1,826
    )Discontinued operations, net of taxes
    
    $
    335
    
    
    
    1,052Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    Discontinued operations, net of taxes after assumed dilution
    
    $
    335
    
    
    
    1,052Net loss allocable to common stock after assumed dilution
    
    $
    (6,059
    )
    
    
    (774
    )DenominatorBasic weighted average number of common shares outstanding
    
    
    45,103
    
    
    
    33,444Common stock equivalents resulting from stock-based
compensation
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    45,103
    
    
    
    33,444Diluted (loss) earnings per share(Loss) earnings per share from continuing operations
    
    $
    (0.14
    )
    
    
    (0.05
    )Earnings (loss) per share from discontinued operations
    
    
    0.01
    
    
    
    0.03Diluted loss per share
    
    $
    (0.13
    )
    
    
    (0.02
    )
  18. Parent Company Financial Information
  33




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##### Table of Contents



Parent Company Condensed Statements of Financial Condition  Unaudited
(In thousands)
 March 31,
    
    
    December 31,2008
    
    
    2007AssetsCash and cash equivalents
    
    $
    14,986
    
    
    
    17,999Investment securities
    
    
    859
    
    
    
    862Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    864
    
    
    
    864Investment in BankAtlantic Bancorp, Inc.
    
    
    102,126
    
    
    
    108,173Investment in Levitt Corporation
    
    
    52,357
    
    
    
    54,637Investment in and advances to wholly owned subsidiaries
    
    
    1,592
    
    
    
    1,578Loans receivable
    
    
    4,038
    
    
    
    3,782Other assets
    
    
    882
    
    
    
    906Total assets
    
    $
    197,704
    
    
    
    208,801Liabilities and Shareholders EquityAdvances from and negative basis in wholly owned
subsidiaries
    
    $
    3,114
    
    
    
    3,174Other liabilities
    
    
    6,902
    
    
    
    7,722Deferred income taxes
    
    
    9,847
    
    
    
    13,868Total liabilities
    
    
    19,863
    
    
    
    24,764Total shareholders equity
    
    
    177,841
    
    
    
    184,037Total liabilities and shareholders equity
    
    $
    197,704
    
    
    
    208,801
 Parent Company Condensed Statements of Operations  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2008
    
    
    2007Revenues
    
    $
    522
    
    
    
    559Expenses
    
    
    2,644
    
    
    
    1,914(Loss) before earnings (loss) from subsidiaries
    
    
    (2,122
    )
    
    
    (1,355
    )Equity from loss in BankAtlantic Bancorp
    
    
    (5,785
    )
    
    
    (477
    )Equity from (loss) earnings in Levitt
    
    
    (2,360
    )
    
    
    162Equity from earnings in other subsidiaries
    
    
    86
    
    
    
    15Loss before income taxes
    
    
    (10,181
    )
    
    
    (1,655
    )Benefit for income taxes
    
    
    (3,975
    )
    
    
    (30
    )Loss from continuing operations
    
    
    (6,206
    )
    
    
    (1,625
    )Equity in subsidiaries discontinued operations, net of tax
    
    
    335
    
    
    
    1,052Net loss
    
    
    (5,871
    )
    
    
    (573
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (188
    )Net loss allocable to common stock
    
    $
    (6,059
    )
    
    
    (761
    )
 34




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##### Table of Contents



Parent Company Statements of Cash Flow  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2008
    
    
    2007Operating Activities:Net cash used in operating activities
    
    $
    (2,825
    )
    
    
    (1,605
    )Financing Activities:Payment for offering cost
    
    
    
    
    
    
    (112
    )5% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Net cash used in financing activities
    
    
    (188
    )
    
    
    (300
    )Decrease in cash and cash equivalents
    
    
    (3,013
    )
    
    
    (1,905
    )Cash at beginning of period
    
    
    17,999
    
    
    
    17,815Cash at end of period
    
    $
    14,986
    
    
    
    15,910Supplementary disclosure of non-cash investing and financing
activitiesNet decrease (increase) in shareholders equity from the effect
of subsidiaries
Capital transactions, net of income taxes
    
    $
    170
    
    
    
    (234
    )Decrease in accumulated other comprehensive income, net of taxes
    
    
    (577
    )
    
    
    (208
    )Cumulative effect adjustment upon adoption of FASB
Interpretation No. 48
    
    
    
    
    
    
    121
  19. New Accounting Pronouncements
   35




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##### Table of Contents



20. Income Taxes
     Accounting for Uncertainty in Income Taxes  an interpretation of FASB
No. 109
 36




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##### Table of Contents



21. Litigation
  22. Financial Information of Levitt and Sons
     37




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##### Table of Contents



Levitt and Sons
Condensed Consolidated Statements of Financial Condition  Unaudited
(In thousands)
 March 31,
    
    
    December 31,2008
    
    
    2007AssetsCash
    
    $
    5,516
    
    
    
    5,365Inventory
    
    
    207,090
    
    
    
    208,686Property and equipment
    
    
    55
    
    
    
    55Other assets
    
    
    22,215
    
    
    
    23,810Total assets
    
    $
    234,876
    
    
    
    237,916Liabilities and Shareholders EquityAccounts payable and other accrued liabilities
    
    $
    449
    
    
    
    469Due to Levitt Corporation
    
    
    1,900
    
    
    
    748Liabilities subject to compromise (A)
    
    
    353,347
    
    
    
    354,748Shareholders deficit
    
    $
    (120,820
    )
    
    
    (118,049
    )Total liabilities and shareholders equity
    
    $
    234,876
    
    
    
    237,916
 (A) Liabilities Subject to Compromise
   Accounts payable and other accrued liabilities
    
    $
    70,385Customer deposits
    
    
    16,427Due to Levitt Corporation
    
    
    87,182Deficiency claim associated with secured debt
    
    
    38,522Notes and mortgage payable
    
    
    140,831Total liabilities subject to compromise
    
    $
    353,347
 38




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##### Table of Contents



Levitt and Sons
Condensed Consolidated Statements of Operations  Unaudited
(In thousands)
 March 31,
    
    
    March 31,2008
    
    
    2007Revenues:Sales of real estate
    
    $
    2,284
    
    
    
    134,169Other revenues
    
    
    2
    
    
    
    722Total revenues
    
    
    2,286
    
    
    
    134,891Costs and expenses:Cost of sales of real estate
    
    
    1,925
    
    
    
    107,603Selling, general and administrative expenses
    
    
    1,933
    
    
    
    20,305Total costs and expenses
    
    
    3,858
    
    
    
    127,908Reorganization items, net
    
    
    (1,985
    )
    
    
    Other income, net of other expense
    
    
    786
    
    
    
    1,188(Loss) income before income taxes
    
    
    (2,771
    )
    
    
    8,171Provision for income taxes
    
    
    
    
    
    
    (3,211
    )Net (loss) income
    
    $
    (2,771
    )
    
    
    4,960
 39




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
      40




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##### Table of Contents



PercentShares
    
    
    Percent of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    16.26
    %
    
    
    8.62
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    23.54
    %
    
    
    55.62
    %LevittClass A Common Stock (1)
    
    
    18,676,955
    
    
    
    19.65
    %
    
    
    6.99
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    19,895,986
    
    
    
    20.67
    %
    
    
    53.99
    %
 
 (1)
    
    BFCs percent of ownership includes, but BFCs percent of vote excludes, 6,145,582
shares of Levitts Class A Common Stock which are subject to the letter agreement described
below (Letter Agreement).  41




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##### Table of Contents



Forward Looking Statements
   
    
    the impact of economic, competitive and other factors affecting the Company and its
subsidiaries, and their operations, markets, products and services;
    
    that the performance of entities in which the Company has made investments may not be as
anticipated;
    
    that BFC will be subject to the unique business and industry risks and characteristics
of each entity in which an investment is made;
    
    that the Companys effort to align its staffing will not be successful; and
    
    that 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;
    
    credit risks and loan losses, and the related sufficiency of the allowance for loan
losses, including the impact on the performance of BankAtlantics loan portfolio of a
sustained downturn in the real estate and credit markets where BankAtlantics borrowers and
collateral are located;
    
    the quality of BankAtlantics residential land acquisition and development loans
(including Builder land bank loans) and home equity loans, and conditions in that market
sector;
    
    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 banks net interest margin;
    
    adverse conditions in the stock market, the public debt market and other capital markets
and the impact of such conditions on our activities,
    
    the value of BankAtlantic Bancorps assets and the ability of BankAtlantics borrowers
to service their debt obligations;
    
    BankAtlantics seven-day banking initiatives and other growth, marketing or advertising
initiatives not resulting in continued growth of core deposits or results which justify
their costs;
    
    the success of BankAtlantic Bancorps expense discipline initiative and the ability to
achieve additional cost savings;
    
    the success of BankAtlantics new stores in achieving growth and profitability in the
time frames anticipated, if at all;
    
    the impact of periodic testing of goodwill, deferred tax assets, and other intangible
assets for impairment;
    
    past performance, actual or estimated new account openings and growth rate may not be
achieved;
 42




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##### Table of Contents




    
    BankAtlantic Bancorp holds a significant investment in the equity securities of Stifel
Financial Corp. (Stifel) as a result of the sale of Ryan Beck Holdings, Inc. subjecting
it to the risks associated with the value of Stifel shares and warrants, and the risk that
no gain on these securities may be realized. The earn-out amounts payable under the
agreement with Stifel are contingent upon the performance of individuals and divisions of
Ryan Beck which are now under the exclusive control and direction of Stifel, and there is
no assurance that BankAtlantic Bancorp will be entitled to receive any earn-out payments;
and
    
    BankAtlantic Bancorps success at managing the risks involved in the foregoing.
  
    
    the impact of economic, competitive and other factors affecting Levitt and its
operations;
    
    the market for real estate in the areas where Levitt has developments, including the
impact of market conditions on Levitts margins;
    
    the risk that the value of the property held by Core Communities may decline, including
as a result of a sustained downturn in the residential real estate and homebuilding
industries;
    
    the impact of market conditions for commercial property and whether the factors
negatively impacting the homebuilding and residential real estate industries will impact
the market for commercial property;
    
    the risk that the development of parcels and master-planned communities will not be
completed as anticipated;
    
    the effects of increases in interest rates and availability of credit to buyers of
Levitts inventory;
    
    the risk that accelerated principal payments of debt obligations may result from
re-margining or curtailment payment requirements;
    
    the ability to obtain financing and to renew existing credit facilities on acceptable
terms, if at all;
    
    the risk that Levitt may be required to adjust the carrying value of its investment in
Bluegreen and incur an impairment charge during the second quarter of 2008 or other future
period if the trading price of Bluegreens common stock does not increase from current
levels;
    
    the risks and uncertainties inherent in bankruptcy proceedings and the inability to
predict the possible effect of Levitt and Sons reorganization and/or liquidation process
on Levitt Corporation and its results of operation and financial condition;
    
    equity risks associated with a decline in the trading prices of Levitts equity securities;
    
    the risk that creditors of Levitt and Sons may be successful in asserting claims
against Levitt Corporation;
    
    the risk that any of Levitt Corporations assets may become subject to or included in
Levitt and Sons bankruptcy case; and
    
    Levitts success at managing the risks involved in the foregoing.
  Critical Accounting Policies
  43




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##### Table of Contents



Summary of Consolidated Results of Operations by Segment
  For the Three Months EndedMarch 31,2008
    
    
    2007BFC Activities
    
    $
    1,928
    
    
    
    (1,313
    )Financial Services
    
    
    (24,564
    )
    
    
    (2,204
    )Real Estate Development
    
    
    (11,719
    )
    
    
    979(34,355
    )
    
    
    (2,538
    )Noncontrolling interest
    
    
    (28,149
    )
    
    
    (913
    )Loss from continuing operations
    
    
    (6,206
    )
    
    
    (1,625
    )Discontinued operations, less noncontrolling interest and income tax
    
    
    335
    
    
    
    1,052Net loss
    
    
    (5,871
    )
    
    
    (573
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (188
    )Net loss allocable to common shareholders
    
    $
    (6,059
    )
    
    
    (761
    )
    44




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##### Table of Contents



Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    An increase in cash and cash equivalents of approximately $123.6 million which
resulted from: i) approximately $146 million from federal funds sold by BankAtlantic
Bancorp; ii) an increase of approximately $30 million in cash letter balances associated
with daily cash management activities at BankAtlantic; offset by iii) $34 million used by
Levitt in connection with its acquisition of equity securities;
    
    A decrease in securities available for sale reflecting BankAtlantic Bancorps sale of
Stifel common stock and the liquidation of managed fund equity investments, offset in
part by Levitts purchase of $34.0 million in equity securities;
    
    A decrease in investment securities at cost reflecting BankAtlantic Bancorps sale of
Stifel common stock and certain private equity investments;
    
    A decrease in BankAtlantics tax certificate balances primarily due to redemptions of
certificates outside of Florida;
    
    An increase in BankAtlantics FHLB stock related to increases in FHLB advance
borrowings;
    
    A decline in BankAtlantics loan receivable balances associated with lower purchased
residential loan balances, significant charge-offs of commercial loans and reductions in
commercial loan originations partially offset by higher home equity loan balances;
    
    An increase in inventory of real estate held for development and sale primarily
associated with an increase in Levitts inventory of real estate;
    
    An increase in assets held for sale and a decrease in properties and equipment due to
the transfer of Orlando stores long-lived assets to assets held for sale associated with
the pending branch sales purchase contract with an unrelated financial institution
expected to close during the 2008 second quarter;
    
    An increase in deferred tax asset, net reflecting BankAtlantics operating loss during
the three months ended March 31, 2008; and
    
    An increase in other assets primarily resulting from BankAtlantics sales of agency
and equity securities pending settlement.
  
    
    Lower BankAtlantic interest-bearing deposit balances primarily associated with the
migration to checking accounts and the availability of higher rate products at competing
financial institutions;
    
    Higher BankAtlantic non-interest-bearing deposit balances reflecting customer deposits
of income tax refunds and higher average customer balances in checking accounts
associated with lower short-term interest rates;
    
    An increase in BankAtlantic FHLB advance borrowings due to lower short term borrowing
as rates on advances were lower than alternative borrowings;
    
    A decrease in BankAtlantic short term borrowing due to higher rates associated with
FHLB borrowings;
    
    A decrease in Levitts notes and mortgage notes payable of $12.7 million primarily due
to a curtailment payment made in connection with a development loan in Tradition Hilton
Head; and
    
    A decrease in other liabilities primarily due to BankAtlantics December 2007 purchase
of $18.9 million of securities pending settlement in January 2008.
 Noncontrolling Interest
  March 31,
    
    
    December 31,2008
    
    
    2007BankAtlantic Bancorp
    
    $
    331,770
    
    
    
    351,148Levitt
    
    
    197,710
    
    
    
    207,138Joint Venture Partnership
    
    
    663
    
    
    
    664$
    530,143
    
    
    
    558,950
 45




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NEW ACCOUNTING PRONOUNCEMENTS.
     46




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BFC Activities
    For the Three Months Ended
    
    
    ChangeMarch 31,
    
    
    2008 vs.(In thousands)
    
    2008
    
    
    2007
    
    
    2007RevenuesInterest and dividend income
    
    $
    420
    
    
    $
    509
    
    
    $
    (89
    )Other income
    
    
    1,689
    
    
    
    1,627
    
    
    
    622,109
    
    
    
    2,136
    
    
    
    (27
    )Cost and ExpensesInterest expense
    
    
    
    
    
    
    12
    
    
    
    (12
    )Employee compensation and benefits
    
    
    3,160
    
    
    
    2,744
    
    
    
    416Other expenses
    
    
    998
    
    
    
    722
    
    
    
    2764,158
    
    
    
    3,478
    
    
    
    680Equity earnings from unconsolidated
subsidiaries
    
    
    2
    
    
    
    
    
    
    
    2Loss before income taxes
    
    
    (2,047
    )
    
    
    (1,342
    )
    
    
    (705
    )Benefit for income taxes
    
    
    (3,975
    )
    
    
    (29
    )
    
    
    (3,946
    )Noncontrolling interest
    
    
    (12
    )
    
    
    (3
    )
    
    
    (9
    )Income (loss) from continuing operations
    
    $
    1,940
    
    
    
    (1,310
    )
    
    
    3,250
       47




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##### Table of Contents



Liquidity and Capital Resources of BFC
  For the Three Months EndedMarch 31,2008
    
    
    2007Net cash provided by (used in):Operating activities
    
    $
    (3,264
    )
    
    
    (1,289
    )Investing activities
    
    
    139
    
    
    
    Financing activities
    
    
    (193
    )
    
    
    (306
    )Increase (decrease) in cash and cash equivalents
    
    
    (3,318
    )
    
    
    (1,595
    )Cash and cash equivalents at beginning of period
    
    
    18,898
    
    
    
    18,176Cash and cash equivalents at end of period
    
    $
    15,580
    
    
    
    16,581
  
    
    Revenues from shared services activities for affiliated companies;
    
    Dividends from BankAtlantic Bancorp;
    
    Dividends from Benihana; and
    
    Revenues from CCC advisory fees.
  
    
    Pay dividends on the Companys 5% Cumulative Convertible Preferred Stock; and
    
    Fund BFCs operating and general and administrative expenses, including shared services
costs.
     48




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49




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##### Table of Contents



50




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##### Table of Contents



Financial Services
 Our Financial Services segment consists of BankAtlantic Bancorp, which is consolidated with
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 Quarterly Report on Form 10-Q for the three months
ended March 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.
   51




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Critical Accounting Policies
  Consolidated Results of Operations
  For the Three Months Ended March 31,(in thousands)
    
    2008
    
    
    2007
    
    
    ChangeBankAtlantic
    
    $
    (16,981
    )
    
    
    639
    
    
    
    (17,620
    )Parent Company
    
    
    (7,583
    )
    
    
    (2,843
    )
    
    
    (4,740
    )Net loss
    
    $
    (24,564
    )
    
    
    (2,204
    )
    
    
    (22,360
    )
 For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
   52




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BankAtlantic Results of Operations
 Net interest income
 Bank Operations Business SegmentAverage Balance Sheet - Yield / Rate AnalysisFor the Three Months EndedMarch 31, 2008
    
    
    March 31, 2007(In thousands)
    
    Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateTotal loans
    
    $
    4,637,747
    
    
    
    68,136
    
    
    
    5.88
    
    
    $
    4,650,519
    
    
    
    79,587
    
    
    
    6.85Investments  tax exempt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    396,374
    
    
    
    5,802
    (1)
    
    
    5.85Investments  taxable
    
    
    1,031,714
    
    
    
    15,222
    
    
    
    5.90
    
    
    
    619,614
    
    
    
    9,696
    
    
    
    6.26Total interest earning assets
    
    
    5,669,461
    
    
    
    83,358
    
    
    
    5.88
    %
    
    
    5,666,507
    
    
    
    95,085
    
    
    
    6.71
    %Goodwill and core deposit intangibles
    
    
    75,718
    
    
    
    
    
    
    
    
    
    
    
    77,138Other non-interest earning assets
    
    
    416,496
    
    
    
    
    
    
    
    
    
    
    
    426,061Total Assets
    
    $
    6,161,675
    
    
    
    
    
    
    
    
    
    
    $
    6,169,706Deposits:Savings
    
    $
    566,448
    
    
    
    2,018
    
    
    
    1.43
    %
    
    $
    529,435
    
    
    
    2,570
    
    
    
    1.97
    %NOW
    
    
    926,381
    
    
    
    2,683
    
    
    
    1.16
    
    
    
    771,017
    
    
    
    1,512
    
    
    
    0.80Money market
    
    
    609,062
    
    
    
    3,158
    
    
    
    2.09
    
    
    
    650,383
    
    
    
    3,938
    
    
    
    2.46Certificates of deposit
    
    
    992,078
    
    
    
    10,734
    
    
    
    4.35
    
    
    
    961,716
    
    
    
    10,982
    
    
    
    4.63Total interest bearing deposits
    
    
    3,093,969
    
    
    
    18,593
    
    
    
    2.42
    
    
    
    2,912,551
    
    
    
    19,002
    
    
    
    2.65Short-term borrowed funds
    
    
    168,742
    
    
    
    1,325
    
    
    
    3.16
    
    
    
    203,984
    
    
    
    2,633
    
    
    
    5.23Advances from FHLB
    
    
    1,423,746
    
    
    
    14,946
    
    
    
    4.22
    
    
    
    1,405,279
    
    
    
    18,723
    
    
    
    5.40Long-term debt
    
    
    26,456
    
    
    
    489
    
    
    
    7.43
    
    
    
    29,634
    
    
    
    626
    
    
    
    8.57Total interest bearing liabilities
    
    
    4,712,913
    
    
    
    35,353
    
    
    
    3.02
    
    
    
    4,551,448
    
    
    
    40,984
    
    
    
    3.65Demand deposits
    
    
    854,761
    
    
    
    
    
    
    
    
    
    
    
    989,546Non-interest bearing other liabilities
    
    
    48,823
    
    
    
    
    
    
    
    
    
    
    
    56,222Total Liabilities
    
    
    5,616,497
    
    
    
    
    
    
    
    
    
    
    
    5,597,216Stockholders equity
    
    
    545,178
    
    
    
    
    
    
    
    
    
    
    
    572,490Total liabilities and stockholders
equity
    
    $
    6,161,675
    
    
    
    
    
    
    
    
    
    
    $
    6,169,706Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    
    48,005
    
    
    
    2.86
    %
    
    
    
    
    
    
    54,101
    
    
    
    3.06
    %Tax equivalent adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,031
    )Net interest income
    
    
    
    
    
    
    48,005
    
    
    
    
    
    
    
    
    
    
    
    52,070MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    5.88
    %
    
    
    
    
    
    
    
    
    
    
    6.71
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.51
    
    
    
    
    
    
    
    
    
    
    
    2.93Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    3.37
    %
    
    
    
    
    
    
    
    
    
    
    3.78
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. 53




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##### Table of Contents



For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
    Allowance for Loan Losses (in thousands):
 For Three Months EndedMarch 31,2008
    
    
    2007Balance, beginning of period
    
    $
    94,020
    
    
    
    43,602Charge-offsResidential
    
    
    (624
    )
    
    
    (151
    )Commercial
    
    
    (40,591
    )
    
    
    Consumer
    
    
    (4,836
    )
    
    
    (538
    )Small business
    
    
    (1,196
    )
    
    
    (438
    )Total Charge-offs
    
    
    (47,247
    )
    
    
    (1,127
    )Recoveries of loans previously charged-off
    
    
    175
    
    
    
    437Net (charge-offs)
    
    
    (47,072
    )
    
    
    (690
    )Transfer of specific reserves to a subsidiary
of the Parent Company
    
    
    (6,440
    )
    
    
    Provision for loan losses
    
    
    42,888
    
    
    
    7,461Balance, end of period
    
    $
    83,396
    
    
    
    50,373
  For Three Months EndedMarch 31,(in thousands)
    
    2008
    
    
    2007Builder land bank loans
    
    $
    18,912
    
    
    
    Land acquisition and development loans
    
    
    2,220
    
    
    
    Land acquisition, development and
construction loans
    
    
    19,459
    
    
    
    Total commercial residential real
estate charge-downs
    
    $
    40,591
    
    
    
    
 54




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##### Table of Contents



Number of(in thousands)
    
    Loans
    
    
    Amount (1)Builder land bank loans
    
    
    7
    
    
    $
    79,209Land acquisition and development loans
    
    
    27
    
    
    
    175,294Land acquisition, development and
construction loans
    
    
    19
    
    
    
    91,158Total commercial residential loans
    
    
    53
    
    
    $
    345,661
 
 (1)
    
    Excluded from the above table were $86.8 million of
commercial residential real estate loans transferred to a subsidiary of the
Parent Company on March 31, 2008.   March 31,
    
    
    December 31,2008
    
    
    2007NONPERFORMING ASSETS (1)Nonaccrual:Tax certificates
    
    $
    2,013
    
    
    
    2,094Loans
    
    
    55,790
    
    
    
    178,591Total nonaccrual
    
    
    57,803
    
    
    
    180,685Repossessed assets:Real estate owned
    
    
    19,784
    
    
    
    17,216Total nonperforming assets
    
    $
    77,587
    
    
    
    197,901AllowancesAllowance for loan losses
    
    $
    83,396
    
    
    
    94,020Allowance for tax certificate losses
    
    
    3,194
    
    
    
    3,289Total allowances
    
    $
    86,590
    
    
    
    97,309POTENTIAL PROBLEM LOANSContractually past due 90 days or more
    
    $
    19,648
    
    
    
    Restructured loans
    
    
    2,449
    
    
    
    2,488TOTAL POTENTIAL PROBLEM LOANS
    
    $
    22,097
    
    
    
    2,488
 
 (1)
    
    Excluded from the above table at March 31, 2008 were
$101.5 million of non-performing loans transferred to a subsidiary of the
Parent Company on March 31, 2008. 55




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##### Table of Contents



NetBalance
    
    
    Additional
    
    
    
    
    
    
    Transfers
    
    
    Parent
    
    
    BalanceDecember 31,
    
    
    Non-accrual
    
    
    Charge-
    
    
    to
    
    
    Company
    
    
    March 31,(in thousands)
    
    2007
    
    
    Loans
    
    
    offs
    
    
    REO
    
    
    Transfer
    
    
    2008Residential
    
    $
    8,678
    
    
    
    8,500
    
    
    
    (624
    )
    
    
    (1,413
    )
    
    
    
    
    
    
    15,141Commercial
    
    
    165,818
    
    
    
    13,548
    
    
    
    (40,591
    )
    
    
    (1,900
    )
    
    
    (101,493
    )
    
    
    35,382Small business
    
    
    877
    
    
    
    1,212
    
    
    
    (1,196
    )
    
    
    
    
    
    
    
    
    
    
    893Consumer
    
    
    3,218
    
    
    
    5,992
    
    
    
    (4,836
    )
    
    
    
    
    
    
    
    
    
    
    4,374Total non-accrual
loans
    
    $
    178,591
    
    
    
    29,252
    
    
    
    (47,247
    )
    
    
    (3,313
    )
    
    
    (101,493
    )
    
    
    55,790
       56




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##### Table of Contents



BankAtlantics Non-Interest Income
 For the Three MonthsEnded March 31,(in thousands)
    
    2008
    
    
    2007
    
    
    ChangeService charges on deposits
    
    $
    24,014
    
    
    
    24,595
    
    
    
    (581
    )Other service charges and fees
    
    
    7,433
    
    
    
    7,033
    
    
    
    400Securities activities, net
    
    
    341
    
    
    
    621
    
    
    
    (280
    )Income from unconsolidated
subsidiaries
    
    
    1,113
    
    
    
    365
    
    
    
    748Other
    
    
    2,652
    
    
    
    2,433
    
    
    
    219Non-interest income
    
    $
    35,553
    
    
    
    35,047
    
    
    
    506
      57




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##### Table of Contents



BankAtlantics Non-Interest Expense
 For the Three MonthsEnded March 31,(in thousands)
    
    2008
    
    
    2007
    
    
    ChangeEmployee compensation and benefits
    
    $
    34,243
    
    
    
    40,664
    
    
    
    (6,421
    )Occupancy and equipment
    
    
    16,383
    
    
    
    15,942
    
    
    
    441Advertising and business promotion
    
    
    4,861
    
    
    
    5,788
    
    
    
    (927
    )Check losses
    
    
    2,718
    
    
    
    1,857
    
    
    
    861Professional fees
    
    
    2,260
    
    
    
    1,620
    
    
    
    640Supplies and postage
    
    
    1,003
    
    
    
    1,850
    
    
    
    (847
    )Telecommunication
    
    
    1,496
    
    
    
    1,379
    
    
    
    117Restructuring charges
and exit activities
    
    
    (115
    )
    
    
    2,553
    
    
    
    (2,668
    )Other
    
    
    5,777
    
    
    
    7,117
    
    
    
    (1,340
    )Total non-interest expense
    
    $
    68,626
    
    
    
    78,770
    
    
    
    (10,144
    )
        58




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##### Table of Contents



Parent Company Results of Operations
 For the Three Months(in thousands)
    
    Ended March 31,2008
    
    
    2007
    
    
    ChangeNet interest expense
    
    $
    (5,374
    )
    
    
    (4,924
    )
    
    
    (450
    )Non-interest (expense) income
    
    
    (4,646
    )
    
    
    1,894
    
    
    
    (6,540
    )Non-interest expense
    
    
    1,675
    
    
    
    912
    
    
    
    763Loss before income taxes
    
    
    (11,695
    )
    
    
    (3,942
    )
    
    
    (7,753
    )Income tax benefit
    
    
    (4,112
    )
    
    
    (1,099
    )
    
    
    (3,013
    )Parent company loss
    
    $
    (7,583
    )
    
    
    (2,843
    )
    
    
    (4,740
    )
     59




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##### Table of Contents



March 31,(in thousands)
    
    2008Nonaccrual loans:Commercial residential real estate:Builder land loans
    
    $
    32,039Land acquisition and development
    
    
    19,809Land acquisition, development and
construction
    
    
    34,915Total commercial real estate
    
    
    86,763Commercial non-residential real estate
    
    
    14,731Total non-accrual loans
    
    
    101,494Allowance for loan losses  specific reserves
    
    
    6,440Non-accrual loans, net
    
    $
    95,054
 BankAtlantic Bancorp, Inc. Consolidated Financial Condition
  
    
    Increase in cash and cash equivalents primarily due to $146 million and $30 million of
higher federal funds sold and cash letter balances associated with daily cash management
activities;
    
    Decrease in securities available for sale reflecting the sale of Stifel common stock
and the liquidation of managed fund equity investments held by the Parent Company;
    
    Decrease in investment securities at cost resulting from the sale of Stifel common
stock and certain private equity investments;
    
    Decrease in tax certificate balances primarily due to redemptions of non-Florida tax
certificates;
    
    Higher investment in FHLB stock related to increases in FHLB advance borrowings;
    
    Decrease in loan receivable balances associated with lower purchased residential loan
balances, significant charge-offs of commercial loans and reductions in commercial loan
originations partially offset by higher home equity loan balances;
    
    Increase in assets held for sale and decrease in office properties and equipment due
to the transfer of Orlando stores long-lived assets to held for sale associated with the
pending branch sales purchase contract with an unrelated financial institution expected
to close during the 2008 second quarter;
    
    Increase in deferred tax assets primarily resulting from the operating losses during
the three months ended March 31, 2008; and
    
    Increase in other assets reflecting $30 million of sales of agency and equity
securities pending settlement.
  
    
    Higher non-interest-bearing deposit balances primarily due to customer income tax
refunds and higher average customer balances in checking accounts;
 60




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##### Table of Contents




    
    Lower interest-bearing deposit balances primarily associated with the migration to
checking accounts;
    
    Increase in FHLB advances due to lower short term borrowings as rates on advances were
lower than alternative borrowings; and
    
    Decrease in other liabilities primarily resulting from $18.9 million of securities
purchased in December 2007 pending settlement in January 2008.
 Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
    61




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##### Table of Contents



As of March 31, 2008Gross
    
    
    GrossCarrying
    
    
    Unrealized
    
    
    Unrealized
    
    
    Estimated(in thousands)
    
    Value
    
    
    Appreciation
    
    
    Depreciation
    
    
    Fair ValueStifel common stock
    
    $
    11,970
    
    
    
    558
    
    
    
    
    
    
    
    12,528Stifel warrants
    
    
    8,805
    
    
    
    
    
    
    
    
    
    
    
    8,805Equity securities
    
    
    5,014
    
    
    
    
    
    
    
    667
    
    
    
    4,347Private Investment
securities
    
    
    3,184
    
    
    
    
    
    
    
    657
    
    
    
    2,527Total
    
    $
    28,973
    
    
    
    558
    
    
    
    1,324
    
    
    
    28,207
    BankAtlantic Liquidity and Capital Resources
   62




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##### Table of Contents



Minimum RatiosAdequately
    
    
    WellActual
    
    
    Capitalized
    
    
    CapitalizedAmount
    
    
    Ratio
    
    
    Ratio
    
    
    RatioAt March 31, 2008:Total risk-based capital
    
    $
    492,705
    
    
    
    11.83
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    
    418,233
    
    
    
    10.04
    
    
    
    4.00
    
    
    
    6.00Tangible capital
    
    
    418,233
    
    
    
    6.87
    
    
    
    1.50
    
    
    
    1.50Core capital
    
    
    418,233
    
    
    
    6.87
    
    
    
    4.00
    
    
    
    5.00At December 31, 2007:Total risk-based capital
    
    
    495,668
    
    
    
    11.63
    
    
    
    8.00
    
    
    
    10.00Tier 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
  Off Balance Sheet Arrangements  Contractual Obligations as of March 31, 2008 (in thousands):
 Payments Due by Period (2)Less than
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    yearsTime deposits
    
    $
    964,976
    
    
    
    866,036
    
    
    
    66,315
    
    
    
    32,540
    
    
    
    85Long-term debt
    
    
    320,662
    
    
    
    
    
    
    
    
    
    
    
    22,000
    
    
    
    298,662Advances from FHLB (1)
    
    
    1,477,040
    
    
    
    955,040
    
    
    
    522,000
    
    
    
    
    
    
    
    Operating lease obligations held
for sublease
    
    
    43,974
    
    
    
    864
    
    
    
    5,181
    
    
    
    3,497
    
    
    
    34,432Operating lease obligations held
for use
    
    
    88,181
    
    
    
    8,003
    
    
    
    23,226
    
    
    
    9,532
    
    
    
    47,420Pension obligation
    
    
    15,041
    
    
    
    983
    
    
    
    2,588
    
    
    
    2,873
    
    
    
    8,597Other obligations
    
    
    22,919
    
    
    
    4,419
    
    
    
    7,300
    
    
    
    6,400
    
    
    
    4,800Total contractual cash obligations
    
    $
    2,932,793
    
    
    
    1,835,345
    
    
    
    626,610
    
    
    
    76,842
    
    
    
    393,996
 
 (1)
    
    Payments due by period are based on contractual maturities(2)
    
    The above table excludes interest payments on interest bearing liabilities 63




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##### Table of Contents



Real Estate Development
 The Real Estate Development activities of BFC are comprised of the operations of Levitt
Corporation. Levitt 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 Levitt. Levitt is a separate public company
and its management prepared the following discussion regarding Levitt which was included in
Levitts Quarterly Report on Form 10-Q for the three months ended March 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 Levitt
and its subsidiaries, and are not references to BFC Financial Corporation.
     64




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##### Table of Contents



Executive Overview
   65




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##### Table of Contents



Financial and Non-Financial Metrics
  Other Operations Overview
    Land Division Overview
   66




---



##### Table of Contents



Critical Accounting Policies and Estimates
  Investments in Unconsolidated Subsidiaries  Cost Method
    67




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##### Table of Contents



CONSOLIDATED RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2008
    
    
    2007
    
    
    Change(In thousands)Revenues:Sales of real estate
    
    $
    154
    
    
    
    141,298
    
    
    
    (141,144
    )Other revenues
    
    
    746
    
    
    
    1,912
    
    
    
    (1,166
    )Total revenues
    
    
    900
    
    
    
    143,210
    
    
    
    (142,310
    )Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    112,908
    
    
    
    (112,880
    )Selling, general and administrative expenses
    
    
    12,075
    
    
    
    32,314
    
    
    
    (20,239
    )Interest expense
    
    
    2,719
    
    
    
    
    
    
    
    2,719Other expenses
    
    
    
    
    
    
    482
    
    
    
    (482
    )Total costs and expenses
    
    
    14,822
    
    
    
    145,704
    
    
    
    (130,882
    )Earnings from Bluegreen Corporation
    
    
    526
    
    
    
    1,744
    
    
    
    (1,218
    )Interest and other income
    
    
    1,599
    
    
    
    2,340
    
    
    
    (741
    )(Loss) income from continuing operations
before income taxes
    
    
    (11,797
    )
    
    
    1,590
    
    
    
    (13,387
    )Provision for income taxes
    
    
    
    
    
    
    (611
    )
    
    
    611(Loss) income from continuing operations
    
    
    (11,797
    )
    
    
    979
    
    
    
    (12,776
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )
    
    
    1,369Net (loss) income
    
    $
    (10,431
    )
    
    
    976
    
    
    
    (11,407
    )
 For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
    68




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##### Table of Contents



69




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##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)Revenues:Sales of real estate
    
    $
    154
    
    
    
    777
    
    
    
    (623
    )Other revenues
    
    
    487
    
    
    
    917
    
    
    
    (430
    )Total revenues
    
    
    641
    
    
    
    1,694
    
    
    
    (1,053
    )Costs and expenses:Cost of sales of real estate
    
    
    28
    
    
    
    72
    
    
    
    (44
    )Selling, general and administrative
expenses
    
    
    4,979
    
    
    
    3,773
    
    
    
    1,206Interest expense
    
    
    688
    
    
    
    215
    
    
    
    473Total costs and expenses
    
    
    5,695
    
    
    
    4,060
    
    
    
    1,635Interest and other income
    
    
    899
    
    
    
    945
    
    
    
    (46
    )Loss from continuing operations before
income taxes
    
    
    (4,155
    )
    
    
    (1,421
    )
    
    
    (2,734
    )Benefit for income taxes
    
    
    
    
    
    
    566
    
    
    
    (566
    )Loss from continuing operations
    
    
    (4,155
    )
    
    
    (855
    )
    
    
    (3,300
    )Discontinued operations:Income (loss) from discontinued operations
    
    
    1,366
    
    
    
    (3
    )
    
    
    1,369Net loss
    
    $
    (2,789
    )
    
    
    (858
    )
    
    
    (1,931
    )Acres sold
    
    
    
    
    
    
    
    
    
    
    Margin percentage (a)
    
    
    81.8
    %
    
    
    90.7
    %
    
    
    (8.9
    )%Unsold saleable acres
    
    
    6,679
    
    
    
    6,871
    
    
    
    (192
    )Acres subject to sales contracts  Third
parties
    
    
    260
    
    
    
    74
    
    
    
    186Aggregate sales price of acres subject to
sales contracts to third parties
    
    $
    78,488
    
    
    
    21,124
    
    
    
    57,364
 
 (a)
    
    Sales of real estate and margin percentage include revenues from look back
provisions and recognition of deferred revenue associated with sales in prior
periods. One lot was sold in the three months ended March 31, 2008 compared to no
lot sales in the same period in 2007.  70




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For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
        71




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OTHER OPERATIONS RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2008
    
    
    2007
    
    
    Change(In thousands)Revenues:Sales of real estate
    
    $
    
    
    
    
    6,574
    
    
    
    (6,574
    )Other revenues
    
    
    259
    
    
    
    293
    
    
    
    (34
    )Total revenues
    
    
    259
    
    
    
    6,867
    
    
    
    (6,608
    )Costs and expenses:Cost of sales of real estate
    
    
    
    
    
    
    5,501
    
    
    
    (5,501
    )Selling, general and administrative expenses
    
    
    7,096
    
    
    
    8,236
    
    
    
    (1,140
    )Interest expense
    
    
    2,673
    
    
    
    
    
    
    
    2,673Total costs and expenses
    
    
    9,769
    
    
    
    13,737
    
    
    
    (3,968
    )Earnings from Bluegreen Corporation
    
    
    526
    
    
    
    1,744
    
    
    
    (1,218
    )Interest and other income
    
    
    1,342
    
    
    
    245
    
    
    
    1,097Loss before income taxes
    
    
    (7,642
    )
    
    
    (4,881
    )
    
    
    (2,761
    )Benefit for income taxes
    
    
    
    
    
    
    1,864
    
    
    
    (1,864
    )Net loss
    
    $
    (7,642
    )
    
    
    (3,017
    )
    
    
    (4,625
    )
 For the Three Months Ended March 31, 2008 Compared to the Same 2007 Period:
       72




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PRIMARY HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    
    
    
    
    112,512
    
    
    
    (112,512
    )Other revenues
    
    
    
    
    
    
    722
    
    
    
    (722
    )Total revenues
    
    
    
    
    
    
    113,234
    
    
    
    (113,234
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    86,952
    
    
    
    (86,952
    )Selling, general and administrative expenses
    
    
    
    
    
    
    18,421
    
    
    
    (18,421
    )Other expenses
    
    
    
    
    
    
    482
    
    
    
    (482
    )Total costs and expenses
    
    
    
    
    
    
    105,855
    
    
    
    (105,855
    )Interest and other income
    
    
    
    
    
    
    1,641
    
    
    
    (1,641
    )Income before income taxes
    
    
    
    
    
    
    9,020
    
    
    
    (9,020
    )Provision for income taxes
    
    
    
    
    
    
    (3,539
    )
    
    
    3,539Net income
    
    $
    
    
    
    
    5,481
    
    
    
    (5,481
    )Homes delivered (units)
    
    
    
    
    
    
    315
    
    
    
    (315
    )Construction starts (units)
    
    
    
    
    
    
    202
    
    
    
    (202
    )Average selling price of homes delivered (a)
    
    $
    
    
    
    
    357,000
    
    
    
    (357,000
    )Margin percentage on homes delivered (a)
    
    
    
    
    
    
    22.7
    %
    
    
    (22.7
    )%Net orders (units)
    
    
    
    
    
    
    101
    
    
    
    (101
    )Net orders (value)
    
    $
    
    
    
    
    33,156
    
    
    
    (33,156
    )Backlog of homes (units)
    
    
    
    
    
    
    912
    
    
    
    (912
    )Backlog of homes (value)
    
    $
    
    
    
    
    332,196
    
    
    
    (332,196
    )
   73




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TENNESSEE HOMEBUILDING SEGMENT RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2008
    
    
    2007
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    
    
    
    
    21,657
    
    
    
    (21,657
    )Total revenues
    
    
    
    
    
    
    21,657
    
    
    
    (21,657
    )Costs and expensesCost of sales of real estate
    
    
    
    
    
    
    20,651
    
    
    
    (20,651
    )Selling, general and administrative expenses
    
    
    
    
    
    
    1,884
    
    
    
    (1,884
    )Total costs and expenses
    
    
    
    
    
    
    22,535
    
    
    
    (22,535
    )Interest and other income
    
    
    
    
    
    
    29
    
    
    
    (29
    )Loss before income taxes
    
    
    
    
    
    
    (849
    )
    
    
    849Benefit for income taxes
    
    
    
    
    
    
    328
    
    
    
    (328
    )Net loss
    
    $
    
    
    
    
    (521
    )
    
    
    521Homes delivered (units)
    
    
    
    
    
    
    47
    
    
    
    (47
    )Construction starts (units)
    
    
    
    
    
    
    52
    
    
    
    (52
    )Average selling price of homes delivered (a)
    
    $
    
    
    
    
    225,000
    
    
    
    (225,000
    )Margin percentage on homes delivered (a)
    
    
    
    
    
    
    9.5
    %
    
    
    (9.5
    )%Net orders (units)
    
    
    
    
    
    
    58
    
    
    
    (58
    )Net orders (value)
    
    $
    
    
    
    
    10,744
    
    
    
    (10,744
    )Backlog of homes (units)
    
    
    
    
    
    
    133
    
    
    
    (133
    )Backlog of homes (value)
    
    $
    
    
    
    
    26,833
    
    
    
    (26,833
    )
 
 (a)
    
    Calculation for the three months ended March 31, 2007 excludes an $11.1 million land sale,
which generated no margin.  74




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FINANCIAL CONDITION
 March 31, 2008 compared to December 31, 2007
  
    
    a net decrease in cash and cash equivalents of $64.0 million, which resulted from
cash used in operations of $17.8 million, cash used in investing activities of $34.7
million and cash used in financing activities of $11.4 million. Cash used in investing
activities included $34.0 million used for the acquisition of Office Depot common
stock, which offset the decrease in cash by increasing the investment in other equity
securities; and
    
    The above decrease was partially offset by an increase in inventory of real estate
mainly due to the land development activities of the Land Division.
  
    
    a net decrease in notes and mortgage notes payable of $12.7 million, primarily due
to a curtailment payment made in connection with a development loan in Tradition Hilton
Head; and
    
    A decrease in accounts payable, accrued liabilities and other liabilities of
approximately $1.4 million attributable to decreased severance and construction related
accruals.
 LIQUIDITY AND CAPITAL RESOURCES
   Levitt Corporation (Parent Company level)
   75




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Core Communities
    76




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Off Balance Sheet Arrangements and Contractual Obligations
  Accounting for Contingencies
 Accounting for Special
Assessments and Tax Increment Financing
 77




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##### Table of Contents



Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations(1)(2)
    
    $
    262,119
    
    
    
    29,938
    
    
    
    46,963
    
    
    
    78,279
    
    
    
    106,939Long-term debt obligations
associated with assets held for
sale
    
    
    80,379
    
    
    
    8,904
    
    
    
    5,902
    
    
    
    62,519
    
    
    
    3,054Operating lease obligations
    
    
    4,515
    
    
    
    1,278
    
    
    
    1,502
    
    
    
    508
    
    
    
    1,227Total Obligations
    
    $
    347,013
    
    
    
    40,120
    
    
    
    54,367
    
    
    
    141,306
    
    
    
    111,220
 
 (1)
    
    Amounts exclude interest because terms of repayment are based on construction activity and
sales volume. In addition, a large portion of our debt is based on variable rates.(2)
    
    These amounts represent scheduled principal payments and some of those borrowings require
the repayment of specified amounts upon a sale of portions of the property collateralizing those
obligations, as well as curtailment repayments prior to scheduled maturity pursuant to
re-margining requirements. Accounting for Uncertainty in Income Taxes  an interpretation of FASB No. 109
    78




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  BFC
    BankAtlantic Bancorp
  Levitt
   79




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##### Table of Contents



Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  80




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  81




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Item 1A. Risk Factors
  
 Item 6. Exhibits
 Exhibit 31.1 *
    
    Chief Executive Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2 *
    
    Acting Chief Financial Officer Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 31.3 *
    
    Chief Accounting Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1 **
    
    Chief Executive Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002Exhibit 32.2 **
    
    Acting Chief Financial Officer Certification pursuant to
18 U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002Exhibit 32.3 **
    
    Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
 
 *
    
    Exhibits filed with this Form 10-Q**
    
    Exhibits furnished with this Form 10-Q 82




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##### Table of Contents



BFC FINANCIAL CORPORATIONDate: May 12, 2008
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive Officer Date: May 12, 2008
    By:
    /s/  John K. GrelleJohn K. Grelle, Acting Chief Financial Officer Date: May 12, 2008
    By:
    /s/  Maria R. SchekerMaria R. Scheker, Chief Accounting Officer