##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarter Ended September 30, 2007
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission
File Number 001-09071
 BFC Financial Corporation
  Florida
    
    59-2022148(State or other jurisdiction of
    
    (IRS Employer Identification Number)incorporation or organization)2100 West Cypress Creek RoadFort Lauderdale, Florida
    
    33309(Address of Principal Executive Office)
    
    (Zip Code)
  (Registrants telephone number, including area code)
 Not Applicable
  þ o
  o þ o
  o þ




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PART I. FINANCIAL INFORMATIONItem 1. Financial Statements:Consolidated Statements of Financial Condition as of
September 30, 2007 and December 31, 2006  UnauditedConsolidated Statements of Operations for the Three and
Nine Months Ended September 30, 2007 and 2006  UnauditedConsolidated Statements of Comprehensive Loss for the Three
and Nine Months Ended September 30, 2007 and 2006 
UnauditedConsolidated Statement of Shareholders Equity as of
September 30, 2007  UnauditedConsolidated Statements of Cash Flows for the Nine Months
Ended September 30, 2007 and 2006  UnauditedNotes to Unaudited Consolidated Financial StatementsItem 2. Managements Discussion and Analysis of
Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 3. Defaults Upon Senior SecuritiesItem 6. ExhibitsSIGNATURESEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-31.3 Section 302 Certification of CAOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFOEX-32.3 Section 906 Certification of CAO
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PART I  FINANCIAL INFORMATION
 
 Item I. Financial Statements
 BFC Financial Corporation
 
 Consolidated Statements of Financial Condition   Unaudited
 (In thousands, except share data)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCash and cash equivalents
    
    $
    191,856
    
    
    
    201,123Securities available for sale and financial instruments (at fair value)
    
    
    729,935
    
    
    
    653,659Securities
held to maturity, at cost (approximate fair value:  $215,035 and $209,020)
    
    
    214,517
    
    
    
    206,682Investment
securities at cost: (approximate fair value $57,871 in 2007 and 20,526 in 2006)
    
    
    51,998
    
    
    
    20,526Tax certificates, net of allowance of $3,894 in 2007 and $3,699 in 2006
    
    
    204,746
    
    
    
    195,391Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    74,903
    
    
    
    80,217Loans receivable, net of allowance for loan losses
of $92,712 in 2007 and $44,173 in 2006
    
    
    4,582,853
    
    
    
    4,594,192Loans held for sale
    
    
    5,751
    
    
    
    9,313Real estate held for development and sale
    
    
    602,208
    
    
    
    847,492Real estate owned
    
    
    17,159
    
    
    
    21,747Investments in unconsolidated affiliates
    
    
    131,874
    
    
    
    125,287Properties and equipment, net
    
    
    287,104
    
    
    
    252,215Goodwill and other intangibles
    
    
    76,236
    
    
    
    77,324Other assets
    
    
    135,973
    
    
    
    81,813Deposit on Levitt Corporations Rights Offering
    
    
    33,205
    
    
    
    Deferred tax asset, net
    
    
    19,840
    
    
    
    Discontinued operations assets held for sale
    
    
    85,727
    
    
    
    238,785Total assets
    
    $
    7,445,885
    
    
    
    7,605,766LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:DepositsNon-interest bearing
    
    $
    895,263
    
    
    
    995,920Interest bearing
    
    
    3,072,714
    
    
    
    2,871,116Total deposits
    
    
    3,967,977
    
    
    
    3,867,036Customer deposits on real estate held for sale
    
    
    19,469
    
    
    
    42,571Advances from FHLB
    
    
    1,417,047
    
    
    
    1,517,058Short term borrowings
    
    
    236,915
    
    
    
    128,411Subordinated debentures, notes and bonds payable
    
    
    553,256
    
    
    
    533,583Junior subordinated debentures
    
    
    379,247
    
    
    
    348,318Deferred tax liabilities, net
    
    
    
    
    
    
    10,646Other liabilities
    
    
    158,279
    
    
    
    159,024Discontinued operations liabilities related to assets held for sale
    
    
    66,217
    
    
    
    123,211Total liabilities
    
    
    6,798,407
    
    
    
    6,729,858Noncontrolling interest
    
    
    460,989
    
    
    
    698,323Commitments 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 2007 and 2006
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 40,395,280 in 2007 and 28,755,882 in 2006
    
    
    382
    
    
    
    266Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 7,103,753 in 2007 and 7,090,652 in 2006
    
    
    69
    
    
    
    69Additional paid-in capital
    
    
    131,185
    
    
    
    93,910Retained earnings
    
    
    52,714
    
    
    
    81,889Total shareholders equity before
accumulated other comprehensive income
    
    
    184,350
    
    
    
    176,134Accumulated other comprehensive income
    
    
    2,139
    
    
    
    1,451Total shareholders equity
    
    
    186,489
    
    
    
    177,585Total liabilities and shareholders equity
    
    $
    7,445,885
    
    
    
    7,605,766
 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
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(As adjusted)
    
    
    
    
    
    
    (As adjusted)RevenuesBFC Activities:Interest and dividend income
    
    $
    855
    
    
    
    623
    
    
    
    1,838
    
    
    
    1,718Other income
    
    
    146
    
    
    
    162
    
    
    
    3,375
    
    
    
    1,0641,001
    
    
    
    785
    
    
    
    5,213
    
    
    
    2,782Financial Services:Interest and dividend income
    
    
    94,896
    
    
    
    95,116
    
    
    
    282,211
    
    
    
    271,326Service charges on deposits
    
    
    25,894
    
    
    
    24,008
    
    
    
    76,297
    
    
    
    64,381Other service charges and fees
    
    
    7,222
    
    
    
    6,779
    
    
    
    21,779
    
    
    
    20,354Securities activities, net
    
    
    1,207
    
    
    
    2,243
    
    
    
    11,575
    
    
    
    7,614Other income
    
    
    1,909
    
    
    
    2,792
    
    
    
    6,918
    
    
    
    10,162131,128
    
    
    
    130,938
    
    
    
    398,780
    
    
    
    373,837Homebuilding & Real Estate Development:Sales of real estate
    
    
    122,824
    
    
    
    130,939
    
    
    
    389,486
    
    
    
    387,140Interest and dividend income
    
    
    671
    
    
    
    665
    
    
    
    2,014
    
    
    
    1,881Other income
    
    
    3,830
    
    
    
    2,651
    
    
    
    11,713
    
    
    
    7,967127,325
    
    
    
    134,255
    
    
    
    403,213
    
    
    
    396,988Total revenues
    
    
    259,454
    
    
    
    265,978
    
    
    
    807,206
    
    
    
    773,607Costs and ExpensesBFC Activities:Interest expense
    
    
    5
    
    
    
    1
    
    
    
    33
    
    
    
    17Employee compensation and benefits
    
    
    2,633
    
    
    
    2,339
    
    
    
    8,127
    
    
    
    7,075Other expenses
    
    
    1,456
    
    
    
    716
    
    
    
    2,972
    
    
    
    2,2364,094
    
    
    
    3,056
    
    
    
    11,132
    
    
    
    9,328Financial Services:Interest expense, net of interest capitalized
    
    
    51,095
    
    
    
    44,974
    
    
    
    145,121
    
    
    
    119,905Provision for loan losses
    
    
    48,949
    
    
    
    271
    
    
    
    61,327
    
    
    
    414Employee compensation and benefits
    
    
    34,258
    
    
    
    38,619
    
    
    
    113,256
    
    
    
    112,045Occupancy and equipment
    
    
    16,954
    
    
    
    15,018
    
    
    
    48,825
    
    
    
    41,061Advertising and promotion
    
    
    4,276
    
    
    
    8,649
    
    
    
    14,343
    
    
    
    24,667Impairment of real estate held for sale
    
    
    3,655
    
    
    
    
    
    
    
    4,711
    
    
    
    Impairment of real estate owned
    
    
    7,233
    
    
    
    
    
    
    
    7,299
    
    
    
    One-time termination benefits
    
    
    
    
    
    
    
    
    
    
    2,553
    
    
    
    Other expenses
    
    
    14,988
    
    
    
    14,008
    
    
    
    42,296
    
    
    
    41,883181,408
    
    
    
    121,539
    
    
    
    439,731
    
    
    
    339,975Homebuilding & Real Estate Development:Cost of sales of real estate
    
    
    275,340
    
    
    
    104,520
    
    
    
    559,842
    
    
    
    312,228Selling, general and administrative expenses
    
    
    31,229
    
    
    
    31,364
    
    
    
    96,066
    
    
    
    87,781Other expenses
    
    
    1,112
    
    
    
    615
    
    
    
    2,007
    
    
    
    3,164307,681
    
    
    
    136,499
    
    
    
    657,915
    
    
    
    403,173Total costs and expenses
    
    
    493,183
    
    
    
    261,094
    
    
    
    1,108,778
    
    
    
    752,476Equity in earnings from unconsolidated affiliates
    
    
    4,763
    
    
    
    7,061
    
    
    
    9,632
    
    
    
    10,185(Loss) income from continuing operations before income taxes and
and noncontrolling interest
    
    
    (228,966
    )
    
    
    11,945
    
    
    
    (291,940
    )
    
    
    31,316(Benefit) provision for income taxes
    
    
    (39,248
    )
    
    
    4,188
    
    
    
    (57,377
    )
    
    
    10,143Noncontrolling interest (loss) income
    
    
    (164,388
    )
    
    
    8,259
    
    
    
    (204,698
    )
    
    
    21,534Loss from continuing operations
    
    
    (25,330
    )
    
    
    (502
    )
    
    
    (29,865
    )
    
    
    (361
    )Discontinued operations, less income tax provision (benefit)
in the three months ended September 30, 2007 and 2006
of $491 and $(3,512), respectively, and
in the nine months ended September 30, 2007 and 2006
of $(2,896)and $(6,934), respectively
    
    
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Net loss
    
    
    (25,247
    )
    
    
    (1,143
    )
    
    
    (28,734
    )
    
    
    (1,521
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net loss allocable to common stock
    
    $
    (25,434
    )
    
    
    (1,330
    )
    
    
    (29,296
    )
    
    
    (2,083
    )
 (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
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(Loss) earnings per common share:Basic loss per share from continuing operations
    
    $
    (0.59
    )
    
    
    (0.02
    )
    
    
    (0.83
    )
    
    
    (0.03
    )Basic (loss) earnings per share from discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    0.03
    
    
    
    (0.03
    )Basic loss per share
    
    $
    (0.59
    )
    
    
    (0.04
    )
    
    
    (0.80
    )
    
    
    (0.06
    )Diluted loss per share from continuing operations
    
    $
    (0.59
    )
    
    
    (0.02
    )
    
    
    (0.83
    )
    
    
    (0.03
    )Diluted (loss) earnings per share from discontinued operations
    
    
    
    
    
    
    (0.02
    )
    
    
    0.03
    
    
    
    (0.03
    )Diluted loss per share
    
    $
    (0.59
    )
    
    
    (0.04
    )
    
    
    (0.80
    )
    
    
    (0.06
    )Basic weighted average number of common shares outstanding
    
    
    42,942
    
    
    
    33,427
    
    
    
    36,649
    
    
    
    33,181Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    42,942
    
    
    
    33,427
    
    
    
    36,649
    
    
    
    33,181
 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
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (25,247
    )
    
    
    (1,143
    )
    
    
    (28,734
    )
    
    
    (1,521
    )Other comprehensive income (loss), net of tax:Unrealized gains on securities available for sale
    
    
    1,647
    
    
    
    1,647
    
    
    
    3,399
    
    
    
    1,077Provision for income taxes
    
    
    635
    
    
    
    635
    
    
    
    1,311
    
    
    
    415Unrealized gains on securities available for sale, net of tax
    
    
    1,012
    
    
    
    1,012
    
    
    
    2,088
    
    
    
    662Unrealized (losses) gains associated with investment in
unconsolidated affiliates
    
    
    (51
    )
    
    
    141
    
    
    
    (106
    )
    
    
    103(Benefit) provision for income taxes
    
    
    (20
    )
    
    
    55
    
    
    
    (41
    )
    
    
    40Unrealized (losses) gains associated with investment in
unconsolidated affiliates, net of tax
    
    
    (31
    )
    
    
    86
    
    
    
    (65
    )
    
    
    63Net realized gains reclassified into net loss
    
    
    (15
    )
    
    
    (304
    )
    
    
    (2,150
    )
    
    
    (1,010
    )(Benefit) provision for income taxes
    
    
    9
    
    
    
    (116
    )
    
    
    (815
    )
    
    
    (391
    )Net realized gains reclassified into net loss, net of tax
    
    
    (24
    )
    
    
    (188
    )
    
    
    (1,335
    )
    
    
    (619
    )957
    
    
    
    910
    
    
    
    688
    
    
    
    106Comprehensive loss
    
    $
    (24,290
    )
    
    
    (233
    )
    
    
    (28,046
    )
    
    
    (1,415
    )
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statement of Shareholders Equity  Unaudited
 (In thousands)
 AccumulatedOtherShares of Common
    
    
    Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    Compre-Stock Outstanding
    
    
    Common
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    hensiveClass A
    
    
    Class B
    
    
    Stock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance, December 31, 2006
    
    
    28,756
    
    
    
    7,091
    
    
    $
    266
    
    
    $
    69
    
    
    $
    93,910
    
    
    $
    81,889
    
    
    $
    1,451
    
    
    $
    177,585Cumulative effect adjustment
upon adoption of
FASB Interpretation No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    121Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,734
    )
    
    
    
    
    
    
    (28,734
    )Other comprehensive income, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    688
    
    
    
    688Transfer of shares of Common Stock
    
    
    (13
    )
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Issuance of common stock,
net of issuance costs
    
    
    11,500
    
    
    
    
    
    
    
    115
    
    
    
    
    
    
    
    36,006
    
    
    
    
    
    
    
    
    
    
    
    36,121Issuance of common stock
upon exercise of stock options and
restricted stock
    
    
    152
    
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    187
    
    
    
    
    
    
    
    
    
    
    
    188Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    183Cash dividends on 5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (562
    )
    
    
    
    
    
    
    (562
    )Share-based compensation related
to stock options and restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    899
    
    
    
    
    
    
    
    
    
    
    
    899Balance, September 30, 2007
    
    
    40,395
    
    
    
    7,104
    
    
    $
    382
    
    
    $
    69
    
    
    $
    131,185
    
    
    $
    52,714
    
    
    $
    2,139
    
    
    $
    186,489
 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 Nine MonthsEnded September 30,2007
    
    
    2006Net cash used in operating activities
    
    $
    (8,015
    )
    
    $
    (222,673
    )Investing activities:Proceeds from redemption and maturities of investment
securities and tax certificates
    
    
    161,332
    
    
    
    149,232Purchase of investment securities and tax certificates
    
    
    (178,932
    )
    
    
    (182,994
    )Purchase of securities available for sale
    
    
    (238,549
    )
    
    
    (121,619
    )Proceeds from sales and maturities of securities
available for sale
    
    
    243,564
    
    
    
    140,011Purchases of FHLB stock
    
    
    (10,575
    )
    
    
    (41,850
    )Redemption of FHLB stock
    
    
    15,889
    
    
    
    23,914Investments in unconsolidated subsidiaries
    
    
    (6,188
    )
    
    
    (7,872
    )Distributions from unconsolidated subsidiaries
    
    
    8,094
    
    
    
    4,775Net increase in loans
    
    
    (54,802
    )
    
    
    (113,861
    )Improvements to real estate owned
    
    
    (1,963
    )
    
    
    Proceeds from sales of real estate owned
    
    
    1,253
    
    
    
    3,338Net additions to office properties and equipment
    
    
    (82,465
    )
    
    
    (77,253
    )Deposit on Levitt Corporations Rights Offering
    
    
    (33,205
    )
    
    
    Net proceeds from the sale of Ryan Beck Holdings, Inc.
    
    
    2,628
    
    
    
    Net cash used in investing activities
    
    
    (173,919
    )
    
    
    (224,179
    )Financing activities:Net increase (decrease) in deposits
    
    
    100,941
    
    
    
    (77,218
    )Repayments of FHLB advances
    
    
    (2,530,000
    )
    
    
    (1,826,344
    )Proceeds from FHLB advances
    
    
    2,430,000
    
    
    
    2,230,000Decrease in securities sold under agreements
to repurchase
    
    
    (34,470
    )
    
    
    (24,937
    )Increase (decrease) in federal funds purchased
    
    
    142,974
    
    
    
    (88,040
    )Repayments of secured borrowings
    
    
    
    
    
    
    (26,516
    )Repayment of notes and bonds payable
    
    
    (156,845
    )
    
    
    (162,445
    )Proceeds from notes and bonds payable
    
    
    214,057
    
    
    
    317,855Proceeds from issuance of junior subordinated debentures
    
    
    30,929
    
    
    
    30,928Payments for debt issuance costs
    
    
    (1,656
    )
    
    
    (2,475
    )Capital contributions in managed fund by investors
    
    
    
    
    
    
    2,200Proceeds from exercise of BFC stock options
    
    
    187
    
    
    
    Excess tax benefits from share-based compensation
    
    
    1,264
    
    
    
    3,6645% Preferred Stock dividends paid
    
    
    (562
    )
    
    
    (562
    )Payment of the minimum withholding tax upon the exercise
of stock options
    
    
    
    
    
    
    (6,872
    )Proceeds from issuance of BFC Class A Common Stock,
net of issuance cost
    
    
    36,121
    
    
    
    Proceeds from issuance of BankAtlantic Bancorp
Class A common stock
    
    
    2,369
    
    
    
    1,324Purchase and retirement of BankAtlantic Bancorp Class A common stock
    
    
    (53,769
    )
    
    
    (7,833
    )Cash dividends paid to non-BFC shareholders
    
    
    (5,864
    )
    
    
    (6,617
    )Net cash provided by financing activities
    
    
    175,676
    
    
    
    356,112Decrease in cash and cash equivalents
    
    
    (6,258
    )
    
    
    (90,740
    )Cash and cash equivalents in discontinued operations
assets held for sale at beginning of period
    
    
    3,285
    
    
    
    Cash and cash equivalents in discontinued operations
assets held for sale at disposal date
    
    
    (6,294
    )
    
    
    Cash and cash equivalents at the beginning of period
    
    
    201,123
    
    
    
    305,437Cash and cash equivalents at end of period
    
    $
    191,856
    
    
    $
    214,697
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
 10




---



##### Table of Contents



BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Nine MonthsEnded September 30,2007
    
    2006Supplemental cash flow information:Interest on borrowings and deposits, net of amounts capitalized
    
    $
    142,420
    
    
    $
    126,218Income taxes paid
    
    
    4,556
    
    
    
    38,973Supplementary disclosure of non-cash investing and financing activities:Loans transferred to real estate owned
    
    
    1,617
    
    
    
    2,755Reduction in loan participations sold accounted for as secured borrowings
    
    
    
    
    
    
    111,754Exchange of branch facilities
    
    
    
    
    
    
    2,350Transfers of office properties and equipment to
real estate held for development and sale
    
    
    1,239
    
    
    
    Increase in investments of unconsolidated subsidiaries associated
with the issuance of trust preferred securities
    
    
    774
    
    
    
    Decrease in accumulated other comprehensive income,
net of taxes
    
    
    688
    
    
    
    106Net decrease in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    
    183
    
    
    
    (267
    )Securities sold pending settlement
    
    
    23,896
    
    
    
    Securities purchased pending settlement
    
    
    
    
    
    
    680Issuance and retirement of BFC Common Stock accepted
as consideration for the exercise price of stock options
    
    
    
    
    
    
    4,155Effect of FASB Interpretation No. 48
    
    
    121
    
    
    
    Decrease in inventory from reclassification to property and equipment
    
    
    1,148
    
    
    
    7,978
 See accompanying notes to unaudited consolidated financial statements.
 11




---



##### Table of Contents



BFC
Financial Corporation
 
 Notes to Unaudited Consolidated Financial Statements
 1. Presentation of Interim Financial Statements
    12




---



##### Table of Contents



PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    16.28
    %
    
    
    8.63
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    23.56
    %
    
    
    55.63
    %Levitt (a)Class A Common Stock
    
    
    2,074,243
    
    
    
    11.14
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.60
    %
    
    
    52.91
    %
 
 (a)
    
    BFCs percent of ownership and percent of vote in Levitt
presented above does not include BFCs purchase in Levitts
Rights Offering on October 1, 2007 of approximately 16.6 million shares of Levitts Class A
common stock which increased BFCs economic
ownership interest in Levitt to 20.7% and percent of vote to
54.0% (see note 20). 13




---



##### Table of Contents



2. Segment Reporting
     BFC Activities
  14




---



##### Table of Contents



Financial Services
  Primary Homebuilding
  Tennessee Homebuilding
  Land Division
  Levitt Other Operations
    15




---



##### Table of Contents



BFC
    
    
    Financial
    
    
    Primary
    
    
    TennesseeActivities
    
    
    Services
    
    
    Homebuilding
    
    
    HomebuildingFor the
Three Months
Ended September 30, 2007Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    112,885
    
    
    
    9,339Interest and dividend income
    
    
    864
    
    
    
    94,896
    
    
    
    276
    
    
    
    9Other income
    
    
    809
    
    
    
    36,274
    
    
    
    2,588
    
    
    
    161,673
    
    
    
    131,170
    
    
    
    115,749
    
    
    
    9,364Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    247,388
    
    
    
    19,822Interest expense, net
    
    
    5
    
    
    
    51,137
    
    
    
    
    
    
    
    Provision for loan losses
    
    
    
    
    
    
    48,949
    
    
    
    
    
    
    
    Other expenses
    
    
    4,152
    
    
    
    81,679
    
    
    
    19,827
    
    
    
    1,5524,157
    
    
    
    181,765
    
    
    
    267,215
    
    
    
    21,374Equity in (loss) earnings from
unconsolidated affiliates
    
    
    (27
    )
    
    
    348
    
    
    
    24
    
    
    
    (Loss) income before income taxes
    
    
    (2,511
    )
    
    
    (50,247
    )
    
    
    (151,442
    )
    
    
    (12,010
    )(Benefit) provision for income taxes
    
    
    (12,383
    )
    
    
    (20,637
    )
    
    
    (1,866
    )
    
    
    100(Loss) income before noncontrolling interest
    
    
    9,872
    
    
    
    (29,610
    )
    
    
    (149,576
    )
    
    
    (12,110
    )Noncontrolling interest
    
    
    (5
    )
    
    
    (22,624
    )
    
    
    (124,743
    )
    
    
    (10,099
    )(Loss) income from continuing operations
    
    $
    9,877
    
    
    
    (6,986
    )
    
    
    (24,833
    )
    
    
    (2,011
    )At September 30, 2007Total assets
    
    $
    78,700
    
    
    
    6,485,593
    
    
    
    405,553
    
    
    
    37,172
 Levitt
    
    
    AdjustingLand
    
    
    Other
    
    
    andDivision
    
    
    Operations
    
    
    Eliminations
    
    
    TotalFor the
Three Months
Ended September 30, 2007Revenues:Sales of real estate
    
    $
    757
    
    
    
    
    
    
    
    (157
    )
    
    
    122,824Interest and dividend income
    
    
    1,016
    
    
    
    231
    
    
    
    (870
    )
    
    
    96,422Other income
    
    
    1,049
    
    
    
    312
    
    
    
    (840
    )
    
    
    40,2082,822
    
    
    
    543
    
    
    
    (1,867
    )
    
    
    259,454Costs and Expenses:Cost of sales of real estate
    
    
    256
    
    
    
    10,259
    
    
    
    (2,385
    )
    
    
    275,340Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (42
    )
    
    
    51,100Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,949Other expenses
    
    
    4,981
    
    
    
    7,312
    
    
    
    (1,709
    )
    
    
    117,7945,237
    
    
    
    17,571
    
    
    
    (4,136
    )
    
    
    493,183Equity in (loss) earnings from
unconsolidated affiliates
    
    
    
    
    
    
    4,418
    
    
    
    
    
    
    
    4,763(Loss) income before income taxes
    
    
    (2,415
    )
    
    
    (12,610
    )
    
    
    2,269
    
    
    
    (228,966
    )(Benefit) provision for income taxes
    
    
    (728
    )
    
    
    (4,594
    )
    
    
    860
    
    
    
    (39,248
    )(Loss) income before noncontrolling interest
    
    
    (1,687
    )
    
    
    (8,016
    )
    
    
    1,409
    
    
    
    (189,718
    )Noncontrolling interest
    
    
    (1,407
    )
    
    
    (6,686
    )
    
    
    1,176
    
    
    
    (164,388
    )(Loss) income from continuing operations
    
    $
    (280
    )
    
    
    (1,330
    )
    
    
    233
    
    
    
    (25,330
    )At September 30, 2007Total assets
    
    $
    329,538
    
    
    
    146,083
    
    
    
    (36,754
    )
    
    
    7,445,885
 16




---



##### Table of Contents



BFC
    
    
    Financial
    
    
    Primary
    
    
    TennesseeActivities
    
    
    Services
    
    
    Homebuilding
    
    
    HomebuildingFor the
Three Months
Ended September 30, 2006Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    104,538
    
    
    
    18,099Interest and dividend income
    
    
    634
    
    
    
    95,116
    
    
    
    111
    
    
    
    25Other income
    
    
    709
    
    
    
    35,942
    
    
    
    1,719
    
    
    
    201,343
    
    
    
    131,058
    
    
    
    106,368
    
    
    
    18,144Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    83,062
    
    
    
    16,007Interest expense, net
    
    
    1
    
    
    
    45,128
    
    
    
    
    
    
    
    Provision for loan losses
    
    
    
    
    
    
    271
    
    
    
    
    
    
    
    Other expenses
    
    
    3,197
    
    
    
    76,507
    
    
    
    19,214
    
    
    
    2,7363,198
    
    
    
    121,906
    
    
    
    102,276
    
    
    
    18,743Equity in (loss) earnings from
unconsolidated affiliates
    
    
    
    
    
    
    266
    
    
    
    (154
    )
    
    
    (Loss) income before income taxes
    
    
    (1,855
    )
    
    
    9,418
    
    
    
    3,938
    
    
    
    (599
    )Provision (benefit) for income taxes
    
    
    734
    
    
    
    2,052
    
    
    
    1,519
    
    
    
    (276
    )(Loss) income before noncontrolling interest
    
    
    (2,589
    )
    
    
    7,366
    
    
    
    2,419
    
    
    
    (323
    )Noncontrolling interest
    
    
    (4
    )
    
    
    5,778
    
    
    
    1,997
    
    
    
    (267
    )(Loss) income from continuing operations
    
    $
    (2,585
    )
    
    
    1,588
    
    
    
    422
    
    
    
    (56
    )At September 30, 2006Total assets
    
    $
    46,049
    
    
    
    6,570,220
    
    
    
    619,715
    
    
    
    62,132
 Levitt
    
    
    AdjustingLand
    
    
    Other
    
    
    andDivision
    
    
    Operations
    
    
    Eliminations
    
    
    TotalFor the
Three Months
Ended September 30, 2006Revenues:Sales of real estate
    
    $
    8,302
    
    
    
    
    
    
    
    
    
    
    
    130,939Interest and dividend income
    
    
    272
    
    
    
    399
    
    
    
    (153
    )
    
    
    96,404Other income
    
    
    555
    
    
    
    404
    
    
    
    (714
    )
    
    
    38,6359,129
    
    
    
    803
    
    
    
    (867
    )
    
    
    265,978Costs and Expenses:Cost of sales of real estate
    
    
    4,760
    
    
    
    749
    
    
    
    (58
    )
    
    
    104,520Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (154
    )
    
    
    44,975Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271Other expenses
    
    
    3,273
    
    
    
    7,070
    
    
    
    (669
    )
    
    
    111,3288,033
    
    
    
    7,819
    
    
    
    (881
    )
    
    
    261,094Equity in (loss) earnings from
unconsolidated affiliates
    
    
    
    
    
    
    6,923
    
    
    
    26
    
    
    
    7,061(Loss) income before income taxes
    
    
    1,096
    
    
    
    (93
    )
    
    
    40
    
    
    
    11,945Provision (benefit) for income taxes
    
    
    427
    
    
    
    (271
    )
    
    
    3
    
    
    
    4,188(Loss) income before noncontrolling interest
    
    
    669
    
    
    
    178
    
    
    
    37
    
    
    
    7,757Noncontrolling interest
    
    
    552
    
    
    
    147
    
    
    
    55
    
    
    
    8,259(Loss) income from continuing operations
    
    $
    117
    
    
    
    31
    
    
    
    (18
    )
    
    
    (502
    )At September 30, 2006Total assets
    
    $
    249,794
    
    
    
    195,791
    
    
    
    (49,045
    )
    
    
    7,694,656
 17




---



##### Table of Contents



BFC
    
    
    Financial
    
    
    Primary
    
    
    TennesseeActivities
    
    
    Services
    
    
    Homebuilding
    
    
    HomebuildingFor the
Nine Months
Ended September 30, 2007Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    340,202
    
    
    
    39,844Interest and dividend income
    
    
    1,868
    
    
    
    282,211
    
    
    
    524
    
    
    
    37Other income
    
    
    5,326
    
    
    
    116,695
    
    
    
    8,174
    
    
    
    407,194
    
    
    
    398,906
    
    
    
    348,900
    
    
    
    39,921Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    496,663
    
    
    
    49,156Interest expense, net
    
    
    33
    
    
    
    145,253
    
    
    
    
    
    
    
    Provision for loan losses
    
    
    
    
    
    
    61,327
    
    
    
    
    
    
    
    Other expenses
    
    
    11,289
    
    
    
    234,349
    
    
    
    59,818
    
    
    
    5,41611,322
    
    
    
    440,929
    
    
    
    556,481
    
    
    
    54,572Equity in (loss) earnings from
unconsolidated affiliates
    
    
    (27
    )
    
    
    2,163
    
    
    
    (10
    )(Loss) income before income taxes
    
    
    (4,155
    )
    
    
    (39,860
    )
    
    
    (207,591
    )
    
    
    (14,651
    )(Benefit) provision for income taxes
    
    
    (16,874
    )
    
    
    (19,774
    )
    
    
    (11,680
    )
    
    
    (824
    )(Loss) income before noncontrolling interest
    
    
    12,719
    
    
    
    (20,086
    )
    
    
    (195,911
    )
    
    
    (13,827
    )Noncontrolling interest
    
    
    (13
    )
    
    
    (15,211
    )
    
    
    (163,383
    )
    
    
    (11,531
    )(Loss) income from continuing operations
    
    $
    12,732
    
    
    
    (4,875
    )
    
    
    (32,528
    )
    
    
    (2,296
    )At September 30, 2007Total assets
    
    $
    78,700
    
    
    
    6,485,593
    
    
    
    405,553
    
    
    
    37,172
 Levitt
    
    
    AdjustingLand
    
    
    Other
    
    
    andDivision
    
    
    Operations
    
    
    Eliminations
    
    
    TotalFor the
Nine Months
Ended September 30, 2007Revenues:Sales of real estate
    
    $
    3,451
    
    
    
    6,574
    
    
    
    (585
    )
    
    
    389,486Interest and dividend income
    
    
    2,929
    
    
    
    781
    
    
    
    (2,287
    )
    
    
    286,063Other income
    
    
    2,979
    
    
    
    858
    
    
    
    (2,415
    )
    
    
    131,6579,359
    
    
    
    8,213
    
    
    
    (5,287
    )
    
    
    807,206Costs and Expenses:Cost of sales of real estate
    
    
    811
    
    
    
    16,778
    
    
    
    (3,566
    )
    
    
    559,842Interest expense, net
    
    
    1,022
    
    
    
    
    
    
    
    (1,154
    )
    
    
    145,154Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    61,327Other expenses
    
    
    12,250
    
    
    
    22,476
    
    
    
    (3,143
    )
    
    
    342,45514,083
    
    
    
    39,254
    
    
    
    (7,863
    )
    
    
    1,108,778Equity in (loss) earnings from
unconsolidated affiliates
    
    
    
    
    
    
    7,506
    
    
    
    
    
    
    
    9,632(Loss) income before income taxes
    
    
    (4,724
    )
    
    
    (23,535
    )
    
    
    2,576
    
    
    
    (291,940
    )(Benefit) provision for income taxes
    
    
    (1,701
    )
    
    
    (7,500
    )
    
    
    976
    
    
    
    (57,377
    )(Loss) income before noncontrolling interest
    
    
    (3,023
    )
    
    
    (16,035
    )
    
    
    1,600
    
    
    
    (234,563
    )Noncontrolling interest
    
    
    (2,521
    )
    
    
    (13,373
    )
    
    
    1,334
    
    
    
    (204,698
    )(Loss) income from continuing operations
    
    $
    (502
    )
    
    
    (2,662
    )
    
    
    266
    
    
    
    (29,865
    )At September 30, 2007Total assets
    
    $
    329,538
    
    
    
    146,083
    
    
    
    (36,754
    )
    
    
    7,445,885
 18




---



##### Table of Contents



BFC
    
    
    Financial
    
    
    Primary
    
    
    TennesseeActivities
    
    
    Services
    
    
    Homebuilding
    
    
    HomebuildingFor the
Nine Months
Ended September 30, 2006Revenues:Sales of real estate
    
    $
    
    
    
    
    
    
    
    
    297,670
    
    
    
    59,816Interest and dividend income
    
    
    1,750
    
    
    
    271,326
    
    
    
    330
    
    
    
    95Other income
    
    
    2,740
    
    
    
    102,827
    
    
    
    3,893
    
    
    
    84,490
    
    
    
    374,153
    
    
    
    301,893
    
    
    
    59,919Costs and Expenses:Cost of sales of real estate
    
    
    
    
    
    
    
    
    
    
    235,430
    
    
    
    57,497Interest expense, net
    
    
    17
    
    
    
    120,358
    
    
    
    
    
    
    
    Provision for loan losses
    
    
    
    
    
    
    414
    
    
    
    
    
    
    
    Other expenses
    
    
    9,691
    
    
    
    220,345
    
    
    
    51,662
    
    
    
    10,9779,708
    
    
    
    341,117
    
    
    
    287,092
    
    
    
    68,474Equity in earnings from unconsolidated
affiliates
    
    
    
    
    
    
    1,364
    
    
    
    (154
    )
    
    
    (Loss) income before income taxes
    
    
    (5,218
    )
    
    
    34,400
    
    
    
    14,647
    
    
    
    (8,555
    )Provision (benefit) for income taxes
    
    
    991
    
    
    
    8,566
    
    
    
    5,650
    
    
    
    (2,738
    )(Loss) income before noncontrolling interest
    
    
    (6,209
    )
    
    
    25,834
    
    
    
    8,997
    
    
    
    (5,817
    )Noncontrolling interest
    
    
    (8
    )
    
    
    20,249
    
    
    
    7,491
    
    
    
    (4,843
    )(Loss) income from continuing operations
    
    $
    (6,201
    )
    
    
    5,585
    
    
    
    1,506
    
    
    
    (974
    )At September 30, 2006Total assets
    
    $
    46,049
    
    
    
    6,570,220
    
    
    
    619,715
    
    
    
    62,132
 Levitt
    
    
    AdjustingLand
    
    
    Other
    
    
    andDivision
    
    
    Operations
    
    
    Eliminations
    
    
    TotalFor the
Nine Months
Ended September 30, 2006Revenues:Sales of real estate
    
    $
    29,660
    
    
    
    
    
    
    
    (6
    )
    
    
    387,140Interest and dividend income
    
    
    805
    
    
    
    1,071
    
    
    
    (452
    )
    
    
    274,925Other income
    
    
    2,876
    
    
    
    1,247
    
    
    
    (2,049
    )
    
    
    111,54233,341
    
    
    
    2,318
    
    
    
    (2,507
    )
    
    
    773,607Costs and Expenses:Cost of sales of real estate
    
    
    17,497
    
    
    
    2,047
    
    
    
    (243
    )
    
    
    312,228Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (453
    )
    
    
    119,922Provision for loan losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    414Other expenses
    
    
    8,898
    
    
    
    20,330
    
    
    
    (1,991
    )
    
    
    319,91226,395
    
    
    
    22,377
    
    
    
    (2,687
    )
    
    
    752,476Equity in earnings from unconsolidated
affiliates
    
    
    
    
    
    
    8,975
    
    
    
    
    
    
    
    10,185(Loss) income before income taxes
    
    
    6,946
    
    
    
    (11,084
    )
    
    
    180
    
    
    
    31,316Provision (benefit) for income taxes
    
    
    2,613
    
    
    
    (5,006
    )
    
    
    67
    
    
    
    10,143(Loss) income before noncontrolling interest
    
    
    4,333
    
    
    
    (6,078
    )
    
    
    113
    
    
    
    21,173Noncontrolling interest
    
    
    3,608
    
    
    
    (5,060
    )
    
    
    98
    
    
    
    21,534(Loss) income from continuing operations
    
    $
    725
    
    
    
    (1,018
    )
    
    
    15
    
    
    
    (361
    )At September 30, 2006Total assets
    
    $
    249,794
    
    
    
    195,791
    
    
    
    (49,045
    )
    
    
    7,694,656
 19




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##### Table of Contents



3. Discontinued Operations
 Sale of Ryan Beck
    Consideration received:Stifel common stock and Warrants
    
    $
    107,445Cash
    
    
    2,628Total consideration received
    
    
    110,073Net assets disposed:Discontinued operations assets held for sale at disposal date
    
    
    206,763Discontinued operations liabilities held for sale at disposal
date
    
    
    (117,364
    )Net assets available for sale at disposal date
    
    
    89,399Transaction cost
    
    
    2,709Gain on disposal of Ryan Beck
before income taxes and noncontrolling interest
    
    
    17,965Provision for income taxes
    
    
    2,959Noncontrolling interest
    
    
    12,831Net gain on sale of Ryan Beck
    
    $
    2,175
 20




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##### Table of Contents



For the Nine
    
    
    For the Three
    
    
    For the NineMonths Ended
    
    
    Months Ended
    
    
    Months EndedSeptember 30, 2007
    
    
    September 30, 2006
    
    
    September 30, 2006Financial Services:Investment banking revenue
    
    $
    37,836
    
    
    
    49,061
    
    
    
    163,233Expenses:Employee compensation and
benefits
    
    
    27,532
    
    
    
    40,943
    
    
    
    127,731Occupancy and equipment
    
    
    2,984
    
    
    
    4,369
    
    
    
    12,167Advertising and promotion
    
    
    740
    
    
    
    1,479
    
    
    
    4,372Merger related costs (1)
    
    
    14,263
    
    
    
    
    
    
    
    Other expenses:Professional fees
    
    
    1,106
    
    
    
    2,888
    
    
    
    6,744Communications
    
    
    2,255
    
    
    
    3,472
    
    
    
    11,356Floor broker and clearing fees
    
    
    1,162
    
    
    
    1,823
    
    
    
    6,684Interest expense
    
    
    985
    
    
    
    1,436
    
    
    
    4,571Other
    
    
    1,086
    
    
    
    598
    
    
    
    4,602Total expenses
    
    
    52,113
    
    
    
    57,008
    
    
    
    178,227Loss from Ryan Beck discontinued
operations before income taxes and
noncontrolling interest
    
    
    (14,277
    )
    
    
    (7,947
    )
    
    
    (14,994
    )Income tax (benefit)
    
    
    (6,431
    )
    
    
    (3,508
    )
    
    
    (6,951
    )Noncontrolling interest
    
    
    (6,709
    )
    
    
    (3,799
    )
    
    
    (6,881
    )Loss from Ryan Beck discontinued
operations, net of income taxes
and
noncontrolling interest
    
    $
    (1,137
    )
    
    
    (640
    )
    
    
    (1,163
    )
 
 (1)
    
    Merger related costs include $9.3 million of change in control payments, $3.5 million of
one-time employee termination benefits and $1.5 million of share-based compensation. Planned Sale of Two Core Communities Commercial Leasing Projects
   21




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##### Table of Contents



September 30,
    
    
    December 31,2007
    
    
    2006Property and equipment, net
    
    $
    76,715
    
    
    
    46,298Other assets
    
    
    9,012
    
    
    
    1,724Assets held for sale
    
    $
    85,727
    
    
    
    48,022Accounts payable, accrued liabilities and
other
    
    $
    1,637
    
    
    
    924Notes and mortgage payable
    
    
    64,580
    
    
    
    27,041Liabilities related to assets held for sale
    
    $
    66,217
    
    
    
    27,965
  Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenue
    
    $
    1,551
    
    
    
    494
    
    
    
    2,910
    
    
    
    1,268Costs and expenses
    
    
    307
    
    
    
    512
    
    
    
    1,491
    
    
    
    1,2531,244
    
    
    
    (18
    )
    
    
    1,419
    
    
    
    15Other Income
    
    
    7
    
    
    
    7
    
    
    
    14
    
    
    
    24Income before income taxes
    
    
    1,251
    
    
    
    (11
    )
    
    
    1,433
    
    
    
    39Provision for income taxes
    
    
    491
    
    
    
    (4
    )
    
    
    576
    
    
    
    17Noncontrolling interest
    
    
    677
    
    
    
    (6
    )
    
    
    765
    
    
    
    20Net income
    
    $
    83
    
    
    
    (1
    )
    
    
    93
    
    
    
    2
 4. BankAtlantic Bancorp One-time Termination Benefits
  EmployeeTerminationBenefitsBalance at December 31, 2006
    
    $
    Expense incurred
    
    
    2,317Amounts paid
    
    
    (1,923
    )Balance at September 30, 2007
    
    $
    394
  22




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5. Income Taxes
       23




---



##### Table of Contents



6. Stock-Based Compensation
 BFC
     Employees
 Weighted Average2007
    
    2006Expected volatility
    
    
    43.05
    %
    
    
    44.22
    %Expected dividends
    
    
    0
    %
    
    
    0
    %Expected term (in years)
    
    
    7.5
    
    
    
    7.5Average risk-free interest rate
    
    
    4.94
    %
    
    
    5.01
    %Option value
    
    $
    2.43
    
    
    $
    3.54
 Non-Employee Directors
 Weighted Average2007Volatility
    
    
    43.05
    %Expected dividends
    
    
    0
    %Expected term (in years)
    
    
    5Risk-free rate
    
    
    4.89
    %Option value
    
    $
    1.99
  24




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##### Table of Contents



WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicOutstanding
    
    
    Exercise
    
    
    Contractual
    
    
    ValueOptions
    
    
    Price
    
    
    Term
    
    
    ($000)Outstanding at December 31, 2006
    
    
    1,607,087
    
    
    $
    4.88
    
    
    
    6.25
    
    
    $
    7,844Exercised
    
    
    (129,769
    )
    
    
    1.45Forfeited
    
    
    250
    
    
    
    4.44Expired
    
    
    
    
    
    
    Granted
    
    
    264,296
    
    
    
    4.44Outstanding at September 30, 2007
    
    
    1,741,614
    
    
    $
    5.07
    
    
    
    6.56
    
    
    $
    8,828Exercisable at September 30, 2007
    
    
    285,054
    
    
    $
    3.85
    
    
    
    3.36
    
    
    $
    1,097
    BankAtlantic Bancorp
  25




---



##### Table of Contents



Employees
    
    DirectorsStock Price
    
    $
    9.35
    
    
    $
    9.38Exercise Price
    
    $
    9.35
    
    
    $
    9.38Interest Rate
    
    
    4.95
    %
    
    
    4.63
    %Dividend Rate
    
    
    1.76
    %
    
    
    1.75
    %Volatility
    
    
    29.63
    %
    
    
    27.80
    %Option Life (years)
    
    
    7.50
    
    
    
    5.00Option Value
    
    $
    3.28
    
    
    $
    2.58Annual Forfeiture Rate
    
    
    3.60
    %
    
    
    0
    %
  Employees
    
    DirectorsStock Price
    
    $
    14.76
    
    
    $
    14.53Exercise Price
    
    $
    14.76
    
    
    $
    14.53Interest Rate
    
    
    5.19
    %
    
    
    4.94
    %Dividend Rate
    
    
    1.03
    %
    
    
    1.05
    %Volatility
    
    
    31.43
    %
    
    
    31.83
    %Option Life (years)
    
    
    7.50
    
    
    
    5.00Option Value
    
    $
    6.02
    
    
    $
    4.84Annual Forfeiture Rate
    
    
    3.00
    %
    
    
    0
    %
  Outstanding at December 31, 2005
    
    
    6,039,253Exercised
    
    
    (1,422,261
    )Forfeited
    
    
    (201,839
    )Issued
    
    
    951,268Outstanding at September 30, 2006
    
    
    5,366,421Outstanding at December 31, 2006
    
    
    5,238,905Exercised
    
    
    (415,827
    )Forfeited or expired
    
    
    (358,938
    )Issued
    
    
    981,247Outstanding at September 30, 2007
    
    
    5,445,387Exercisable at September 30, 2007
    
    
    1,748,845
 26




---



##### Table of Contents



For the Nine MonthsEnded September 30,2007
    
    2006Weighted average exercise price of options outstanding
    
    $
    11.16
    
    
    
    11.22Weighted average exercise price of options exercised
    
    $
    5.69
    
    
    
    4.13Weighted average price of options forfeited or expired
    
    $
    14.36
    
    
    
    14.14
  Levitt
  For the Three Months Ended
    
    For the Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    2007
    
    2006Expected volatility
    
    52.59%
    
    37.72%
    
    40.05% - 52.59%
    
    37.37% - 37.72%Expected dividend yield
    
    0.00%
    
    .50% - .61%
    
    0.00% - .83%
    
    .39% - .61%Risk-free interest rate
    
    4.57%
    
    4.99% - 5.06%
    
    4.57% - 5.14%
    
    4.99% - 5.06%Expected life
    
    7.5 years
    
    7.5 years
    
    7.5 years
    
    7.5 yearsForfeiture
rate  executives
    
    5.0%
    
    5.0%
    
    5.0%
    
    5.0%Forfeiture
rate 
non-executives
    
    10.0%
    
    10.0%
    
    10.0%
    
    10.0%
    27




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##### Table of Contents



7. Benihana Convertible Preferred Stock Investment
  8. Loans Receivable
  September 30,
    
    
    December 31,2007
    
    
    2006Real estate loans:Residential (1-4 family)
    
    $
    2,217,305
    
    
    
    2,150,626Construction and development
    
    
    459,053
    
    
    
    475,041Commercial
    
    
    883,913
    
    
    
    980,840Small business
    
    
    203,559
    
    
    
    186,833Other loans:Home equity
    
    
    647,481
    
    
    
    562,318Commercial business
    
    
    136,950
    
    
    
    157,109Small business  non-mortgage
    
    
    99,932
    
    
    
    98,225Consumer loans
    
    
    14,990
    
    
    
    17,406Deposit overdrafts
    
    
    9,252
    
    
    
    8,440Other loans
    
    
    
    
    
    
    425Total gross loans
    
    
    4,672,435
    
    
    
    4,637,263Adjustments:Premiums discounts and deferred fees
    
    
    3,244
    
    
    
    1,306Deferred profit on commercial real estate loans
    
    
    (114
    )
    
    
    (204
    )Allowance for loan losses
    
    
    (92,712
    )
    
    
    (44,173
    )Loans receivable  net
    
    $
    4,582,853
    
    
    
    4,594,192
  Allowance for Loan Losses (in thousands):
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    55,108
    
    
    
    42,618
    
    
    
    44,173
    
    
    
    41,830Loans charged-off
    
    
    (11,717
    )
    
    
    (436
    )
    
    
    (14,641
    )
    
    
    (1,152
    )Recoveries of loans
previously charged-off
    
    
    372
    
    
    
    652
    
    
    
    1,853
    
    
    
    2,013Net (charge-offs) recoveries
    
    
    (11,345
    )
    
    
    216
    
    
    
    (12,788
    )
    
    
    861Provision for loan losses
    
    
    48,949
    
    
    
    271
    
    
    
    61,327
    
    
    
    414Balance, end of period
    
    $
    92,712
    
    
    
    43,105
    
    
    
    92,712
    
    
    
    43,105
 28




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##### Table of Contents



September 30, 2007
    
    
    December 31, 2006Gross
    
    
    
    
    
    
    GrossRecorded
    
    
    Specific
    
    
    Recorded
    
    
    SpecificInvestment
    
    
    Reserves
    
    
    Investment
    
    
    ReservesImpaired loans
with specific
reserves
    
    $
    105,102
    
    
    $
    27,885
    
    
    $
    325
    
    
    $
    162Impaired loans
without specific
reserves
    
    
    67,575
    
    
    
    
    
    
    
    10,319
    
    
    
    Total
    
    $
    172,677
    
    
    $
    27,885
    
    
    $
    10,644
    
    
    $
    162
  9. Real Estate Held for Development and Sale
  September 30,
    
    
    December 31,2007
    
    
    2006Land and land development costs
    
    $
    427,730
    
    
    
    579,256Construction costs
    
    
    90,418
    
    
    
    180,005Capitalized interest and other costs
    
    
    84,060
    
    
    
    88,231Total
    
    $
    602,208
    
    
    
    847,492
    Ø
    
    For projects representing land investments, where homebuilding activity has not
yet begun (which consisted of seven projects in the Primary Homebuilding segment),
valuation models were used. Management believes that these valuation models are
the best evidence of fair value and were used as the basis for the measurement.
The projects were analyzed and valued from the perspective of what a land developer
would pay to acquire the projects. The analysis included an
 29




---



##### Table of Contents



evaluation of the type of units that could be constructed and the selling price for such units. The
projected land acquisition price was assumed to be financed with debt amounting to
75% of the purchase price at interest rates ranging from 10%  15%. A 25% internal
rate of return was assumed on the equity portion of the investment. If the
suggested project fair value was lower than the carrying value of the real estate
inventory at September 30, 2007, an impairment charge was recognized to reduce the
carrying value of the project to the fair value.Ø
    
    For projects with homes under construction, where construction had ceased as of
September 30, 2007 (which consisted of twelve projects in the Primary Homebuilding
segment) cash flow models were used. These cash flows were determined based on the
assumption of a third party completing these projects and achieving a reasonable
expected rate of return on this inventory. The related unleveraged cash flow
models projected future revenues and costs-to-complete and the sale of the
remaining inventory based on the current status of each project. Many of these
projects are in the early stages of development and, accordingly, the projections
extend for four to seven years into the future, thereby increasing the inherent
uncertainty in the projections. The cash flows used were updated in the third
quarter of 2007 to reflect current market trends, current pricing strategies and
cancellation trends. If the carrying amount of the project exceeded the present
value of the cash flows from the project discounted using the weighted average cost
of capital, an impairment charge was recognized to reduce the carrying value of the
project to fair
market value. Specific assumptions for projected unit sales and margin percentages
in these cash flows include:
 o
    
    a 25% internal rate of return is assumed on the equity
portion of the investment with a weighted average cost of capital of 15.4%;o

    
    for projects with single family or a mix of single
family and townhome products (representing ten projects), the estimated
average future sales prices were based on current sales prices with
significant discounts and incentives continuing through 2009. Discounting
activity is assumed to gradually diminish beginning in the second half of
2009 followed by average sales price increases ranging up to 4% in 2010
through 2012. All sales price increases are assumed to cease after 2012;o

    
    for projects with townhomes (representing two
projects), no sales price increases or elimination of discounts were
assumed due to market saturation in Florida;o

    
    estimated future construction and land development
costs were kept relatively consistent with the level of projected
deliveries throughout the entire project; ando

    
    estimates of average gross margin percentages ranged
between 10% and 17% through 2010 and 17% and 21% in 2011 and beyond
depending on the specific location of the project and the current backlog.
 Ø

    
    Six projects in the Tennessee Homebuilding segment were under a letter of intent
or draft contract at September 30, 2007. The fair values of such projects were
assumed to be the contract price contemplated in the letters of intent or draft
contracts. In calculating the fair market value, Levitt estimated selling and
closing costs of 2.5% to sell these properties.Ø

    
    For the remaining 86 lots in backlog at September 30, 2007 in the Tennessee
Homebuilding segment, any lots with projected losses were fully reserved.
  30




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10. Investments in Unconsolidated Affiliates
  September 30,
    
    
    December 31,2007
    
    
    2006Investment in Bluegreen Corporation
    
    $
    115,408
    
    
    
    107,063Investments in joint ventures and limited partnerships
    
    
    5,026
    
    
    
    7,749BankAtlantic Bancorp investment in statutory business
trusts
    
    
    8,840
    
    
    
    7,910Levitt investment in statutory business trusts
    
    
    2,600
    
    
    
    2,565$
    131,874
    
    
    
    125,287
  For the Three Months
    
    
    For the Nine Months EndedEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Equity in earnings of Bluegreen
    
    $
    4,418
    
    
    
    6,923
    
    
    
    7,519
    
    
    
    9,026Equity in earnings of other
unconsolidated affiliates
    
    
    345
    
    
    
    138
    
    
    
    2,113
    
    
    
    1,159$
    4,763
    
    
    
    7,061
    
    
    
    9,632
    
    
    
    10,185
   Unaudited Condensed Consolidated Balance Sheets
 September 30,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    1,001,351
    
    
    
    854,212Total liabilities
    
    $
    605,706
    
    
    
    486,487Minority interest
    
    
    20,013
    
    
    
    14,702Total shareholders equity
    
    
    375,632
    
    
    
    353,023Total liabilities and shareholders equity
    
    $
    1,001,351
    
    
    
    854,212
 31




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##### Table of Contents



Unaudited Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,
    
    
    September 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues and other income
    
    $
    206,161
    
    
    
    207,569
    
    
    
    523,943
    
    
    
    519,787Cost and other expenses
    
    
    181,612
    
    
    
    170,134
    
    
    
    480,925
    
    
    
    462,399Income before minority interest and
provision for income taxes
    
    
    24,549
    
    
    
    37,435
    
    
    
    43,018
    
    
    
    57,388Minority interest
    
    
    2,044
    
    
    
    2,241
    
    
    
    5,311
    
    
    
    4,940Income before provision for income taxes
    
    
    22,505
    
    
    
    35,194
    
    
    
    37,707
    
    
    
    52,448Provision for income taxes
    
    
    8,552
    
    
    
    13,287
    
    
    
    14,329
    
    
    
    19,930Income before cumulative effect of
change in accounting principle
    
    
    13,983
    
    
    
    21,907
    
    
    
    23,378
    
    
    
    32,518Cumulative effect of change
in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,678
    )Minority interest in cumulative effect of
change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,184Net income
    
    $
    13,983
    
    
    
    21,907
    
    
    
    23,378
    
    
    
    28,024
  11. Other Debt
   32




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33




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##### Table of Contents



12. Noncontrolling Interest
  September 30,
    
    
    December 31,2007
    
    
    2006BankAtlantic Bancorp
    
    $
    360,701
    
    
    
    411,396Levitt
    
    
    99,604
    
    
    
    286,230Joint Venture Partnerships
    
    
    684
    
    
    
    697$
    460,989
    
    
    
    698,323
 13. Interest Expense
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest expense
    
    $
    64,270
    
    
    
    56,583
    
    
    
    183,991
    
    
    
    149,861Interest capitalized
    
    
    (13,170
    )
    
    
    (11,608
    )
    
    
    (38,837
    )
    
    
    (29,939
    )Interest expense, net
    
    $
    51,100
    
    
    
    44,975
    
    
    
    145,154
    
    
    
    119,922
 34




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##### Table of Contents



For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Interest incurred to non-affiliates
    
    $
    13,170
    
    
    
    11,534
    
    
    
    38,837
    
    
    
    29,095Interest capitalized to inventory
    
    
    (13,170
    )
    
    
    (11,534
    )
    
    
    (38,837
    )
    
    
    (29,095
    )Interest expense, net
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    Interest expensed in cost of sales
    
    $
    7,563
    
    
    
    3,975
    
    
    
    17,550
    
    
    
    9,659
   35




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##### Table of Contents



14. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk
  September 30,
    
    December 31,2007
    
    2006BFC ActivitiesGuarantee agreements
    
    $
    59,185
    
    
    
    34,396Financial ServicesCommitments to sell fixed rate residential loans
    
    
    20,260
    
    
    
    30,696Commitments to sell variable rate residential loans
    
    
    1,526
    
    
    
    2,921Commitments to purchase variable rate residential
loans
    
    
    1,895
    
    
    
    12,000Commitments to purchase commercial loans
    
    
    28,300
    
    
    
    57,525Commitments to originate loans held for sale
    
    
    17,916
    
    
    
    26,346Commitments to originate loans held to maturity
    
    
    185,644
    
    
    
    223,060Commitments to extend credit, including the
undisbursed
portion of loans in process
    
    
    1,056,346
    
    
    
    890,036Commitments to purchase branch facilities land
    
    
    4,771
    
    
    
    11,180Standby letters of credit
    
    
    49,813
    
    
    
    67,831Commercial lines of credit
    
    
    113,617
    
    
    
    86,992Homebuilding & Real Estate DevelopmentLevitt and Sons commitments to purchase
properties for development
    
    
    14,200
    
    
    
    14,200
 BFC Activities
    36




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##### Table of Contents



Financial Services
  Homebuilding & Real Estate Development
  37




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##### Table of Contents



15. Certain Relationships and Related Party Transactions
  38




---



##### Table of Contents



BankAtlantic
    
    Levitt(in thousands)
    
    
    
    
    
    BFC
    
    Bancorp
    
    Corporation
    
    BluegreenFor the three months ended September 30, 2007Shared service income (expense)
    
    
    (a
    )
    
    $
    688
    
    
    
    (291
    )
    
    
    (327
    )
    
    
    (70
    )Interest income (expense) from
cash balance/securities sold  under
agreements to repurchase
    
    
    
    
    
    $
    10
    
    
    
    (42
    )
    
    
    32
    
    
    
    For the three months ended September 30, 2006Shared service income (expense)
    
    
    (a
    )
    
    $
    452
    
    
    
    (91
    )
    
    
    (312
    )
    
    
    (49
    )Interest income (expense) from
cash balance/securities sold  under
agreements to repurchase
    
    
    
    
    
    $
    11
    
    
    
    (154
    )
    
    
    143
    
    
    
    For the nine months ended September 30, 2007Shared service income (expense)
    
    
    (a
    )
    
    $
    2,066
    
    
    
    (958
    )
    
    
    (821
    )
    
    
    (287
    )Interest income (expense) from
cash balance/securities sold  under
agreements to repurchase
    
    
    
    
    
    $
    31
    
    
    
    (132
    )
    
    
    101
    
    
    
    For the nine months ended September 30, 2006Shared service income (expense)
    
    
    (a
    )
    
    $
    1,483
    
    
    
    (373
    )
    
    
    (922
    )
    
    
    (188
    )Interest income (expense) from
cash balance/securities sold  under
agreements to repurchase
    
    
    
    
    
    $
    32
    
    
    
    (453
    )
    
    
    421
    
    
    
    At September 30, 2007Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    
    (b
    )
    
    $
    964
    
    
    
    (2,923
    )
    
    
    1,959
    
    
    
    Shared service receivable (payable)
    
    
    
    
    
    $
    240
    
    
    
    (85
    )
    
    
    (85
    )
    
    
    (70
    )At December 31, 2006Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    
    (b
    )
    
    $
    996
    
    
    
    (5,547
    )
    
    
    4,551
    
    
    
    Shared service receivable (payable)
    
    
    
    
    
    $
    312
    
    
    
    (142
    )
    
    
    (107
    )
    
    
    (63
    )
 
 (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
$2.9 million and $5.5 million at September 30, 2007 and December 31,
2006, respectively. Interest in connection with the Repurchase
Agreements was approximately $42,000 and $132,000 for the three and
nine months ended September 30, 2007, respectively, compared to
$154,000 and $453,000 during the same 2006 periods, respectively.
These transactions have similar terms as BankAtlantic repurchase
agreements with unaffiliated third parties.  39




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##### Table of Contents



Class A
    
    WeightedCommon
    
    AverageStock
    
    PriceOptions outstanding
    
    
    282,005
    
    
    $
    9.84Options nonvested
    
    
    154,587
    
    
    $
    12.32
      16. (Loss) Earnings Per Common Share
  40




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##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Basic (loss) earnings per common shareNumerator:Loss from continuing operations allocable to common stock
    
    $
    (25,517
    )
    
    
    (689
    )
    
    
    (30,427
    )
    
    
    (923
    )Discontinued operations, net of taxes
    
    
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Net loss allocable to common shareholders
    
    $
    (25,434
    )
    
    
    (1,330
    )
    
    
    (29,296
    )
    
    
    (2,083
    )Denominator:Weighted average number of common shares outstanding
    
    
    45,335
    
    
    
    35,820
    
    
    
    39,042
    
    
    
    35,574Eliminate RAG weighted average number of common shares
    
    
    (2,393
    )
    
    
    (2,393
    )
    
    
    (2,393
    )
    
    
    (2,393
    )Basic weighted average number of common shares outstanding
    
    
    42,942
    
    
    
    33,427
    
    
    
    36,649
    
    
    
    33,181Basic (loss) earnings per share:Loss per share from continuing operations
    
    $
    (0.59
    )
    
    
    (0.02
    )
    
    
    (0.83
    )
    
    
    (0.03
    )(Loss) earnings per share from discontinued operations
    
    
    0.00
    
    
    
    (0.02
    )
    
    
    0.03
    
    
    
    (0.03
    )Basic loss per common share
    
    $
    (0.59
    )
    
    
    (0.04
    )
    
    
    (0.80
    )
    
    
    (0.06
    )Diluted (loss) earnings per shareNumeratorLoss from continuing operations allocable to common stock
    
    $
    (25,517
    )
    
    
    (689
    )
    
    
    (30,427
    )
    
    
    (923
    )Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    (32
    )
    
    
    
    
    
    
    (98
    )Loss from continuing operations allocable to common stock 
diluted
    
    $
    (25,517
    )
    
    
    (721
    )
    
    
    (30,427
    )
    
    
    (1,021
    )Discontinued operations, net of taxes
    
    $
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Discontinued operations, net of taxes  diluted
    
    $
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Net loss allocable to common shareholders  diluted
    
    $
    (25,434
    )
    
    
    (1,362
    )
    
    
    (29,296
    )
    
    
    (2,181
    )DenominatorBasic weighted average number of common shares outstanding
    
    
    42,942
    
    
    
    33,427
    
    
    
    36,649
    
    
    
    33,181Common stock equivalents resulting from stock-based compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    42,942
    
    
    
    33,427
    
    
    
    36,649
    
    
    
    33,181Diluted (loss) earnings per shareLoss per share from continuing operations
    
    $
    (0.59
    )
    
    
    (0.02
    )
    
    
    (0.83
    )
    
    
    (0.03
    )(Loss) earnings per share from discontinued operations
    
    
    0.00
    
    
    
    (0.02
    )
    
    
    0.03
    
    
    
    (0.03
    )Diluted loss per common share
    
    $
    (0.59
    )
    
    
    (0.04
    )
    
    
    (0.80
    )
    
    
    (0.06
    )
  41




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##### Table of Contents



17. Parent Company Financial Information
    September 30,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    18,897
    
    
    
    17,815Investment securities
    
    
    1,007
    
    
    
    2,262Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    891
    
    
    
    908Investment in BankAtlantic Bancorp, Inc.
    
    
    111,188
    
    
    
    113,586Investment in Levitt
    
    
    20,009
    
    
    
    57,009Deposit in Levitt Corporations Rights Offering
    
    
    33,025
    
    
    
    Investment in and advances to wholly owned subsidiaries
    
    
    1,631
    
    
    
    1,525Loans receivable
    
    
    3,134
    
    
    
    2,157Other assets
    
    
    1,670
    
    
    
    2,261Total assets
    
    $
    211,452
    
    
    
    217,523Liabilities and Shareholders EquityAdvances from and negative basis in wholly owned
subsidiaries
    
    $
    2,427
    
    
    
    1,290Other liabilities
    
    
    7,202
    
    
    
    7,351Deferred income taxes
    
    
    15,335
    
    
    
    31,297Total liabilities
    
    
    24,964
    
    
    
    39,938Total
shareholders equity
    
    
    186,488
    
    
    
    177,585Total liabilities and shareholders equity
    
    $
    211,452
    
    
    
    217,523
 42




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##### Table of Contents



For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues
    
    $
    935
    
    
    
    526
    
    
    
    3,376
    
    
    
    1,702Expenses
    
    
    2,805
    
    
    
    2,063
    
    
    
    6,995
    
    
    
    6,424Loss before earnings (loss) from subsidiaries
    
    
    (1,870
    )
    
    
    (1,537
    )
    
    
    (3,619
    )
    
    
    (4,722
    )Equity from (loss) earnings in BankAtlantic Bancorp
    
    
    (6,986
    )
    
    
    1,590
    
    
    
    (4,875
    )
    
    
    5,583Equity from (loss) earnings in Levitt
    
    
    (28,221
    )
    
    
    493
    
    
    
    (37,722
    )
    
    
    258Equity from loss in other subsidiaries
    
    
    (636
    )
    
    
    (314
    )
    
    
    (523
    )
    
    
    (489
    )(Loss) income before income taxes
    
    
    (37,713
    )
    
    
    232
    
    
    
    (46,739
    )
    
    
    630(Benefit) provision for income taxes
    
    
    (12,383
    )
    
    
    734
    
    
    
    (16,874
    )
    
    
    991Loss from continuing operations
    
    
    (25,330
    )
    
    
    (502
    )
    
    
    (29,865
    )
    
    
    (361
    )Equity in subsidiaries discontinued operations,
net of tax
    
    
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Net loss
    
    
    (25,247
    )
    
    
    (1,143
    )
    
    
    (28,734
    )
    
    
    (1,521
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net loss allocable to common stock
    
    $
    (25,434
    )
    
    
    (1,330
    )
    
    
    (29,296
    )
    
    
    (2,083
    )
  For the Nine MonthsEnded September 30,2007
    
    
    2006Operating Activities:Net cash used in operating activities
    
    $
    (3,795
    )
    
    
    (2,427
    )Investing Activities:Proceeds from sale of investment in real estate limited partnership
    
    
    1,000
    
    
    
    Proceeds from the sale of securities
    
    
    1,336
    
    
    
    Investment in real estate limited partnership
    
    
    
    
    
    
    (972
    )Deposit in Levitt Corporations Rights Offering
    
    
    (33,205
    )
    
    
    Net cash used in investing activities
    
    
    (30,869
    )
    
    
    (972
    )Financing Activities:Proceeds from the issuance of Common Stock, net of issuance costs
    
    
    36,121
    
    
    
    Proceeds from issuance of Common Stock upon exercise of stock option
    
    
    187
    
    
    
    Payment of the minimum withholding tax upon the exercise of stock options
    
    
    
    
    
    
    (4,155
    )5% Preferred Stock dividends paid
    
    
    (562
    )
    
    
    (562
    )Net cash provided by (used in) financing activities
    
    
    35,746
    
    
    
    (4,717
    )Increase (decrease) in cash and cash equivalents
    
    
    1,082
    
    
    
    (8,116
    )Cash at beginning of period
    
    
    17,815
    
    
    
    26,683Cash at end of period
    
    $
    18,897
    
    
    $
    18,567Supplementary disclosure of non-cash investing and financing activitiesNet decrease (increase) in shareholders equity from the effect of
subsidiaries capital transactions, net of income taxes
    
    $
    183
    
    
    $
    (267
    )Decrease (increase) in accumulated other comprehensive income, net of taxes
    
    
    688
    
    
    
    106Issuance and retirement of Common Stock accepted as consideration
for the exercise price of stock options
    
    
    
    
    
    
    4,155Cumulative effect adjustment upon adoption of FASB Interpretation No. 48
    
    
    121
    
    
    
    
  43




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##### Table of Contents



18. Public Offering
  19. Other Matters
 BFC and Levitt Corporation Merger
  I.R.E. RAG Merger
   20. Subsequent Events
 Subscription of Rights Offering
   44




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##### Table of Contents



s
  Bankruptcy of Levitt and Sons
   Reorganization Plan
 Chapter 7; Dismissal of the Bankruptcy Cases
 45




---



##### Table of Contents



Accounting Impact
 Levitt and Sons Reduction in Force
  Levitt Corporation  Acquisition of Carolina Oaks Home, LLC
  BankAtlantic Restructure of its Investment Portfolio
  46




---



##### Table of Contents



21. New Accounting Pronouncements
    47




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
 Overview
    Homebuilding & Real Estate Developments Executive Overview and Part II Item 1. Legal
Proceedings.
 48




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##### Table of Contents



PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    16.28
    %
    
    
    8.63
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    23.56
    %
    
    
    55.63
    %Levitt (a)Class A Common Stock
    
    
    2,074,243
    
    
    
    11.14
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.60
    %
    
    
    52.91
    %
 
 (a)
    
    BFCs percent of ownership and percent of vote in Levitt presented above does not include
BFCs purchase in Levitts Rights Offering of approximately 16.6 million shares of Levitts Class A common
stock on October 1, 2007, which increased BFCs economic ownership interest in Levitt to 20.7% and
percent of vote to 54.0% (see note 20).  49




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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 BFC will be subject to the unique business and industry risks and characteristics
of each entity in which an investment is made;
    
    that the performance of entities in which the Company holds interests may not be as
anticipated;
    
    adverse conditions in the stock market subject the Companys investments to equity
pricing risks and impact the value of its investments;
    
    that available cash may not be sufficient to make desired investments or pursue growth;
and
    
    that BFC shareholders interests may be diluted in transactions utilizing BFC stock for
consideration for additional investments and acquisitions, and investment interests in its
subsidiaries may be diluted by transactions entered into by the subsidiaries.The risks and uncertainties that may specifically affect BankAtlantic Bancorp are:
    
    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 credit quality of BankAtlantics loans, a sustained
downturn in the real estate market and other changes in the real estate markets in our
trade area and where BankAtlantics collateral is located; the quality of BankAtlantics
residential land acquisition and development loans (including builder land bank loans,
land acquisition and development loans, and land acquisition, development and
construction loans) and conditions specifically 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 on the ability of its 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 deposits or producing results which do not
justify their costs;
 50




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##### Table of Contents




    
    the success of BankAtlantic Bancorps expense discipline initiatives and the ability to
achieve additional cost savings;
    
    the success of BankAtlantics new store expansion program and achieving growth and
profitability at the stores in the time frames anticipated, if at all; and the impact of
the adoption of new accounting standards and the periodic testing of goodwill and other
intangible assets for impairment; and
    
    past performance, actual or estimated new account openings and growth rates of deposit
accounts and fee income generated as a result of these deposit accounts may not be
indicative of future results.
  The risks and uncertainties that may specifically affect Levitt are:
    
    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 and the fair value of Levitts real estate
inventory;
    
    the impact of market conditions for commercial property and whether the factors
negatively impacting the homebuilding industry and residential real estate will impact the
market for commercial property;
    
    effects of increases in interest rates and availability of credit to buyers of Levitts
real estate inventory;
    
    the realization of cost savings associated with reductions of workforce and the ability
to limit overhead and costs commensurate with sales;
    
    the ability to obtain financing and to renew existing credit facilities on acceptable
terms, if at all;
    
    the risk and uncertainties inherent in bankruptcy proceedings and the inability to
predict the effect of Levitt and Sons reorganization and/or liquidation process on Levitt
Corporation and its results of operation and financial condition;
    
    Levitt and Sons ability to develop, prosecute, confirm and consummate a plan of
reorganization or liquidation, and Levitt and Sons ability, through the Chapter 11
process, to reach agreement with its lenders or other third parties to complete unfinished
projects, home and amenities, to consummate delayed closings or to otherwise maximize
recovery for Levitt and Sons customers and creditors; and
    
    Levitts success at managing the risks involved in the foregoing.
  51




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##### Table of Contents



Critical Accounting Policies
  Accounting for Uncertain Tax Positions
  52




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##### Table of Contents



Summary of Consolidated Results of Operations by Segment
  For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006(as adjusted)
    
    
    
    
    
    
    (as adjusted)BFC Activities
    
    $
    9,872
    
    
    
    (2,589
    )
    
    
    12,719
    
    
    
    (6,209
    )Financial Services
    
    
    (29,610
    )
    
    
    7,366
    
    
    
    (20,086
    )
    
    
    25,831Homebuilding & Real Estate Development
    
    
    (169,980
    )
    
    
    2,980
    
    
    
    (227,196
    )
    
    
    1,551(189,718
    )
    
    
    7,757
    
    
    
    (234,563
    )
    
    
    21,173Noncontrolling interest
    
    
    (164,388
    )
    
    
    8,259
    
    
    
    (204,698
    )
    
    
    21,534Loss from continuing operations
    
    
    (25,330
    )
    
    
    (502
    )
    
    
    (29,865
    )
    
    
    (361
    )Discontinued operations, less income tax
    
    
    83
    
    
    
    (641
    )
    
    
    1,131
    
    
    
    (1,160
    )Net loss
    
    
    (25,247
    )
    
    
    (1,143
    )
    
    
    (28,734
    )
    
    
    (1,521
    )5% Preferred Stock dividends
    
    
    (187
    )
    
    
    (187
    )
    
    
    (562
    )
    
    
    (562
    )Net loss allocable to common shareholders
    
    $
    (25,434
    )
    
    
    (1,330
    )
    
    
    (29,296
    )
    
    
    (2,083
    )
    53




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BFC Activities
      For the Three Months
    
    
    Change
    
    
    For the Nine Months
    
    
    ChangeEnded September 30,
    
    
    2007 vs.
    
    
    Ended September 30,
    
    
    2007 vs.(In thousands)
    
    2007
    
    
    2006
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2006RevenuesInterest and dividend
income
    
    $
    864
    
    
    
    634
    
    
    
    230
    
    
    
    1,868
    
    
    
    1,750
    
    
    
    118Other income
    
    
    809
    
    
    
    709
    
    
    
    100
    
    
    
    5,326
    
    
    
    2,740
    
    
    
    2,5861,673
    
    
    
    1,343
    
    
    
    330
    
    
    
    7,194
    
    
    
    4,490
    
    
    
    2,704Cost and ExpensesInterest expense
    
    
    5
    
    
    
    1
    
    
    
    4
    
    
    
    33
    
    
    
    17
    
    
    
    16Employee compensation
and benefits
    
    
    2,633
    
    
    
    2,339
    
    
    
    294
    
    
    
    8,127
    
    
    
    7,075
    
    
    
    1,052Other expenses
    
    
    1,519
    
    
    
    858
    
    
    
    661
    
    
    
    3,162
    
    
    
    2,616
    
    
    
    5464,157
    
    
    
    3,198
    
    
    
    959
    
    
    
    11,322
    
    
    
    9,708
    
    
    
    1,614Equity in earnings
from unconsolidated
affiliates
    
    
    (27
    )
    
    
    
    
    
    
    (27
    )
    
    
    (27
    )
    
    
    
    
    
    
    (27
    )Loss before
income taxes
    
    
    (2,511
    )
    
    
    (1,855
    )
    
    
    (656
    )
    
    
    (4,155
    )
    
    
    (5,218
    )
    
    
    1,063(Benefit) provision
for income taxes
    
    
    (12,383
    )
    
    
    734
    
    
    
    (13,117
    )
    
    
    (16,874
    )
    
    
    991
    
    
    
    (17,865
    )Noncontrolling interest
    
    
    (5
    )
    
    
    (4
    )
    
    
    (1
    )
    
    
    (13
    )
    
    
    (8
    )
    
    
    (5
    )Income (loss) from
continuing operations
    
    $
    9,877
    
    
    
    (2,585
    )
    
    
    12,462
    
    
    
    12,732
    
    
    
    (6,201
    )
    
    
    18,933
 54




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Unaudited Pro Forma Financial Information
    55




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56




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UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(In thousands, except share data)
 September 30,
    
    
    Pro forma2007
    
    
    Adjustments (a)
    
    
    
    
    
    
    Pro formaASSETSCash and cash equivalents
    
    $
    191,856
    
    
    
    119,643
    
    
    
    (b
    )
    
    
    311,499Securities available for sale and financial instruments (at fair value)
    
    
    729,935
    
    
    
    
    
    
    
    
    
    
    
    729,935Securities held to maturity, at cost (approximates fair value $215,035
    
    
    214,517
    
    
    
    
    
    
    
    
    
    
    
    214,517Investment securities at cost
    
    
    51,998
    
    
    
    
    
    
    
    
    
    
    
    51,998Tax certificates net of allowance of $3,894
    
    
    204,746
    
    
    
    
    
    
    
    
    
    
    
    204,746Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    74,903
    
    
    
    
    
    
    
    
    
    
    
    74,903Loans receivable, net of allowance for loan losses of $92,712
    
    
    4,582,853
    
    
    
    
    
    
    
    
    
    
    
    4,582,853Residential loans held for sale
    
    
    5,751
    
    
    
    
    
    
    
    
    
    
    
    5,751Real estate held for development and sale
    
    
    602,208
    
    
    
    4,066
    
    
    
    (c
    )
    
    
    606,274Real estate owned
    
    
    17,159
    
    
    
    
    
    
    
    
    
    
    
    17,159Investments in unconsolidated affiliates
    
    
    131,874
    
    
    
    (4,196
    )
    
    
    (d
    )
    
    
    127,678Properties and equipment, net
    
    
    287,104
    
    
    
    (1,184
    )
    
    
    (e
    )
    
    
    285,920Goodwill and other intangibles
    
    
    76,236
    
    
    
    
    
    
    
    
    
    
    
    76,236Other assets
    
    
    135,973
    
    
    
    (529
    )
    
    
    (f
    )
    
    
    135,444Deposit on Levitt Corporations Rights Offering
    
    
    33,205
    
    
    
    
    
    
    
    
    
    
    
    33,205Deferred income tax asset
    
    
    19,840
    
    
    
    (1,866
    )
    
    
    (g
    )
    
    
    17,974Discontinued operations assets held for sale
    
    
    85,727
    
    
    
    61
    
    
    
    (h
    )
    
    
    85,788Total assets
    
    $
    7,445,885
    
    
    
    115,995
    
    
    
    
    
    
    
    7,561,880LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing deposits
    
    $
    895,263
    
    
    $
    
    
    
    
    
    
    
    
    895,263Interest bearing deposits
    
    
    3,072,714
    
    
    
    
    
    
    
    
    
    
    
    3,072,714Total deposits
    
    
    3,967,977
    
    
    
    
    
    
    
    
    
    
    
    3,967,977Customer deposits on real estate held for sale
    
    
    19,469
    
    
    
    
    
    
    
    
    
    
    
    19,469Advances from FHLB
    
    
    1,417,047
    
    
    
    
    
    
    
    
    
    
    
    1,417,047Short term borrowings
    
    
    236,915
    
    
    
    
    
    
    
    
    
    
    
    236,915Subordinated debentures, notes and bonds payable and junior
subordinatedDebentures
    
    
    932,503
    
    
    
    (24
    )
    
    
    (i
    )
    
    
    932,479Other liabilities
    
    
    158,279
    
    
    
    (380
    )
    
    
    (j
    )
    
    
    157,899Discontinued operations liabilities related to assets held for sale
    
    
    66,217
    
    
    
    
    
    
    
    
    
    
    
    66,217Total liabilities
    
    
    6,798,407
    
    
    
    (404
    )
    
    
    
    
    
    
    6,798,003Noncontrolling interest
    
    
    460,989
    
    
    
    116,399
    
    
    
    (b
    )
    
    
    577,388Commitments 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 40,395,280
    
    
    382
    
    
    
    
    
    
    
    
    
    
    
    382Class B
common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 7,103,753
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    69Additional
paid-in capital
    
    
    131,185
    
    
    
    
    
    
    
    
    
    
    
    131,185Retained earnings
    
    
    52,714
    
    
    
    
    
    
    
    
    
    
    
    52,714Total shareholders equity before
accumulated other comprehensive income
    
    
    184,350
    
    
    
    
    
    
    
    
    
    
    
    184,350Accumulated other comprehensive income
    
    
    2,139
    
    
    
    
    
    
    
    
    
    
    
    2,139Total shareholders equity
    
    
    186,489
    
    
    
    
    
    
    
    
    
    
    
    186,489Total liabilities and shareholders equity
    
    $
    7,445,885
    
    
    
    115,995
    
    
    
    
    
    
    
    7,561,880
 57




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##### Table of Contents



(a)
    
    BFC acquired an additional 4.1% economic interest in Levitt
which is being accounted for as a step acquisition under the purchase
method of accounting. The estimated fair value of the net assets
acquired exceeded the purchase price and resulted in negative
goodwill. Pro forma adjustments represent the difference in the
estimated fair value of BFCs portion of Levitts net
assets acquired, after allocation of negative goodwill, as compared
to the corresponding book value.(b)
    
    Levitt Corporation received $119.6 million of net
proceeds from participating shareholders in connection with the
rights offering, excluding
approximately $33.2 million in proceeds received from BFC and offering expenses. The net proceeds are reflected as the increase to
noncontrolling interest, offset by a reduction of approximately $3.2 million associated with BFCs increase in ownership interest as
discussed in footnote (a) above.(c)
    
    Represents an increase of approximately $4.1 million to
its estimated fair value for real estate in the land division.(d)
    
    Represents a decrease of $4.2 million associated with
the pro-rata allocation of $2.5 million in negative goodwill and a decrease of
approximately $1.7 million based upon the estimated total market value of the investment in Bluegreen common stock at September 30, 2007. The
estimated total market value of the investment in Bluegreen was determined by multiplying the closing price of Bluegreen common stock on
September 28, 2007 by the number of shares owned.(e)
    
    Represents a decrease of $1.2 million associated with
the pro-rata allocation of negative goodwill of $1.3 million and an increase of
approximately $136,000 to its estimated fair value.(f)
    
    Represents a decrease of $529,000 associated with the
pro-rata allocation of negative goodwill of $288,000 and write-off of deferred debt
financing costs of approximately $241,000.(g)
    
    Represents the deferred tax consequences of basis differences created by purchase accounting. Basis differences arise between the historical
tax basis of Levitts net assets as compared to the book value of such assets recorded in purchase accounting. The deferred tax asset was
computed using an income tax rate of 38.575%.(h)
    
    Represents an increase of estimated fair value of approximately $61,000 associated with commercial properties held for sale.(i)
    
    Represents the estimated fair value of debt obligations based upon current borrowing rates for similar types of borrowing arrangements.(j)
    
    Represents the elimination of the portion of deferred revenue that does not represent a legal obligation to perform services or provide goods. 58




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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
(In thousands, except for per share data)
 For the Nine Months Ended
    
    
    For the Year EndedSeptember 30, 2007
    
    
    December 31, 2006Pro forma
    
    
    
    
    
    
    
    
    
    
    Pro formaAdjustments
    
    
    Pro forma
    
    
    
    
    
    
    Adjustments
    
    
    Pro formaRevenuesBFC ActivitiesInterest and dividend income
    
    $
    1,838
    
    
    
    
    
    
    
    1,838
    
    
    
    2,249
    
    
    
    
    
    
    
    2,249Other income, net
    
    
    3,375
    
    
    
    
    
    
    
    3,375
    
    
    
    1,433
    
    
    
    
    
    
    
    1,4335,213
    
    
    
    
    
    
    
    5,213
    
    
    
    3,682
    
    
    
    
    
    
    
    3,682Financial ServicesInterest and dividend income
    
    
    282,211
    
    
    
    
    
    
    
    282,211
    
    
    
    367,177
    
    
    
    
    
    
    
    367,177Service charges on deposits
    
    
    76,297
    
    
    
    
    
    
    
    76,297
    
    
    
    90,472
    
    
    
    
    
    
    
    90,472Other service charges and fees
    
    
    21,779
    
    
    
    
    
    
    
    21,779
    
    
    
    27,542
    
    
    
    
    
    
    
    27,542Other income
    
    
    18,493
    
    
    
    
    
    
    
    18,493
    
    
    
    22,555
    
    
    
    
    
    
    
    22,555398,780
    
    
    
    
    
    
    
    398,780
    
    
    
    507,746
    
    
    
    
    
    
    
    507,746Homebuilding & Real Estate DevelopmentSales of real estate
    
    
    389,486
    
    
    
    
    
    
    
    389,486
    
    
    
    566,086
    
    
    
    
    
    
    
    566,086Interest and dividend income
    
    
    2,014
    
    
    
    
    
    
    
    2,014
    
    
    
    2,474
    
    
    
    
    
    
    
    2,474Other income
    
    
    11,713
    
    
    
    
    
    
    
    11,713
    
    
    
    14,592
    
    
    
    
    
    
    
    14,592403,213
    
    
    
    
    
    
    
    403,213
    
    
    
    583,152
    
    
    
    
    
    
    
    583,152Total revenues
    
    
    807,206
    
    
    
    
    
    
    
    807,206
    
    
    
    1,094,580
    
    
    
    
    
    
    
    1,094,580Costs and ExpensesBFC ActivitiesInterest expense
    
    
    33
    
    
    
    
    
    
    
    33
    
    
    
    30
    
    
    
    
    
    
    
    30Employee compensation and
benefits
    
    
    8,127
    
    
    
    
    
    
    
    8,127
    
    
    
    9,407
    
    
    
    
    
    
    
    9,407Other expenses
    
    
    2,972
    
    
    
    
    
    
    
    2,972
    
    
    
    2,933
    
    
    
    
    
    
    
    2,93311,132
    
    
    
    
    
    
    
    11,132
    
    
    
    12,370
    
    
    
    
    
    
    
    12,370Financial ServicesInterest expense, net of interest
capitalized
    
    
    145,121
    
    
    
    
    
    
    
    145,121
    
    
    
    166,578
    
    
    
    
    
    
    
    166,578Provision for loan losses
    
    
    61,327
    
    
    
    
    
    
    
    61,327
    
    
    
    8,574
    
    
    
    
    
    
    
    8,574Employee compensation and
benefits
    
    
    113,256
    
    
    
    
    
    
    
    113,256
    
    
    
    150,804
    
    
    
    
    
    
    
    150,804Occupancy and equipment
    
    
    48,825
    
    
    
    
    
    
    
    48,825
    
    
    
    57,308
    
    
    
    
    
    
    
    57,308Advertising and promotion
    
    
    14,343
    
    
    
    
    
    
    
    14,343
    
    
    
    35,067
    
    
    
    
    
    
    
    35,067Other expenses
    
    
    56,859
    
    
    
    
    
    
    
    56,859
    
    
    
    55,980
    
    
    
    
    
    
    
    55,980439,731
    
    
    
    
    
    
    
    439,731
    
    
    
    474,311
    
    
    
    
    
    
    
    474,311Homebuilding & Real Estate DevelopmentCost of sales of real estate
    
    
    559,842
    
    
    
    
    
    
    
    559,842
    
    
    
    482,961
    
    
    
    
    
    
    
    482,961Selling, general and administrative
expenses
    
    
    96,066
    
    
    
    
    
    
    
    96,066
    
    
    
    120,017
    
    
    
    
    
    
    
    120,017Other expenses
    
    
    2,007
    
    
    
    
    
    
    
    2,007
    
    
    
    3,677
    
    
    
    
    
    
    
    3,677657,915
    
    
    
    
    
    
    
    657,915
    
    
    
    606,655
    
    
    
    
    
    
    
    606,655Total costs and expenses
    
    
    1,108,778
    
    
    
    
    
    
    
    1,108,778
    
    
    
    1,093,336
    
    
    
    
    
    
    
    1,093,336Equity earnings from
unconsolidated affiliates
    
    
    9,632
    
    
    
    
    
    
    
    9,632
    
    
    
    10,935
    
    
    
    
    
    
    
    10,935(Loss) income before income taxes
and noncontrolling interest
    
    
    (291,940
    )
    
    
    
    
    
    
    (291,940
    )
    
    
    12,179
    
    
    
    
    
    
    
    12,179Benefit for income taxes
    
    
    (57,377
    )
    
    
    (3,570
    ) (a)
    
    
    (60,947
    )
    
    
    (528
    )
    
    
    (144
    ) (a)
    
    
    (672
    )Noncontrolling interest
    
    
    (204,698
    )
    
    
    9,250
    (b)
    
    
    (195,448
    )
    
    
    13,404
    
    
    
    608
    (b)
    
    
    14,012Loss from continuing operations
    
    $
    (29,865
    )
    
    
    (5,680
    )
    
    
    (35,545
    )
    
    
    (697
    )
    
    
    (464
    )
    
    
    (1,161
    )Basic loss per common share from
continuing operations
    
    $
    (0.80
    )
    
    
    
    
    
    $
    (0.99
    )
    
    $
    (0.04
    )
    
    
    
    
    
    $
    (0.06
    )Diluted loss per common share from
continuing operations
    
    $
    (0.80
    )
    
    
    
    
    
    $
    (0.99
    )
    
    $
    (0.05
    )
    
    
    
    
    
    $
    (0.06
    )Diluted weighted average number of
common shares outstanding
    
    
    36,649
    
    
    
    
    
    
    
    36,649
    
    
    
    33,249
    
    
    
    
    
    
    
    33,249
 
 (a)
    
    Represents the income tax benefit associated with BFCs increase in its equity loss in Levitt. The income tax was computed using an income tax rate of 38.575%.(b)
    
    Represents the elimination of noncontrolling interest of approximately 4.1% for the nine months ended September 30, 2007 and year ended December 31, 2006. 59




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Liquidity and Capital Resources of BFC
  For the Nine MonthsEnded September 30,2007
    
    
    2006Net cash provided by (used in):Operating activities
    
    $
    (4,198
    )
    
    
    (3,934
    )Investing activities
    
    
    (29,842
    )
    
    
    743Financing activities
    
    
    35,730
    
    
    
    (4,731
    )Increase (decrease) in cash and cash equivalents
    
    
    1,690
    
    
    
    (7,922
    )Cash and cash equivalents at beginning of period
    
    
    18,176
    
    
    
    26,806Cash and cash equivalents at end of period
    
    $
    19,866
    
    
    
    18,884
  
    
    Proceeds from the sale of 11,500,000 shares of the Companys Class A Common Stock in a
public offering;
    
    Dividends from BankAtlantic Bancorp;
    
    Dividends from Benihana;
    
    Revenues from CCC advisory fees;
    
    Revenues from shared services activities;
    
    Sales of real estate investments;
    
    Sale of investment securities;
    
    Proceeds from the exercise of stock options; and
    
    Principal and interest payments on loans receivable.
  
    
    Purchase an aggregate of 16,602,712 shares of Levitts Class A common stock in the
Rights Offering (such shares were subsequently issued to BFC on October 1, 2007);
    
    Fund minimum withholding tax liability of approximately $4.2 million upon exercise of
options in 2006. The Company retired shares of the Companys common stock delivered by the
option holders as consideration for the option holders minimum tax withholding;
    
    Fund the payment of dividends on the Companys 5% Cumulative Convertible Preferred
Stock;
    
    Fund investments in real estate, and
    
    Fund BFC operating and general and administrative expenses, including shared services
costs reimbursed by affiliated companies.
    60




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Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    A net decrease in cash and cash equivalents of $9.3 million resulting from cash used
in operations of approximately $8.0 million, cash used in investing activities of $173.9
million, partially offset by an increase in cash provided by financing activities of
$175.7 million;
    
    An increase in securities available for sale at BankAtlantic Bancorp reflecting Stifel
common stock received upon the sale of Ryan Beck and the purchase of agency securities
partially offset by the sale of BankAtlantic tax exempt securities and the sale of
BankAtlantic Bancorp equity securities to fund BankAtlantic Bancorps Class A common
stock repurchase program;
    
    An increase in BankAtlantic Bancorp investment securities at cost reflecting Stifel
equity securities received upon the sale of Ryan Beck which are subject to contractual
restrictions limiting sales;
    
    An increase in BankAtlantic tax certificate balances primarily due to purchases of
Florida tax certificates;
    
    A lower investment in BankAtlantic FHLB stock related to repayments of FHLB advances;
    
    A decline in real estate held for development and sale due to recognition of $226.9
million of impairment charges at Levitt primarily in the Primary Homebuilding segment
and a $4.7 million impairment related to a real estate project acquired by BankAtlantic;
    
    A decline in real estate owned resulting from a $7.2 million impairment on one
residential development property that was repossessed by BankAtlantic during the fourth
quarter of 2006;
    
    A decrease in BankAtlantic loan receivable balances associated with a $48.8 million
increase in the allowance for loan losses and lower commercial loan balances partially
offset by higher purchased residential, small business and home equity loan balances;
    
    An increase in properties and equipment associated with BankAtlantics store expansion
initiatives and Levitt Corporations investment in commercial properties under
construction at Core Communities;
    
    An increase to deferred tax asset, net primarily due to an increase in BankAtlantic
Bancorps deferred tax assets resulting from the increase in the allowance for loan
losses, and BFCs equity losses in Levitt and BankAtlantic Bancorp; and
    
    An increase in discontinued operations assets held for sale at September 30, 2007
and December 31, 2006 was associated with two commercial projects currently held for sale
at Levitt of approximately $85.7 million and $48.0 million, respectively. Discontinued
operations assets held for sale also includes approximately $190.8 million at December
31, 2006 reflecting the sale of the assets of Ryan Beck to Stifel.
  
    
    Lower non-interest-bearing deposit balances at BankAtlantic reflecting the migration
of deposits to higher yielding products as a result of the higher interest rate
environment and competition;
    
    Higher interest-bearing deposit balances at BankAtlantic primarily associated with
increased high yield savings, checking and certificates of deposit balances primarily
reflecting transfers of customer deposit balances to higher yielding products;
    
    A decrease of $23.1 million in customer deposits on real estate held for sale due to
the decline in real estate homebuilding customer backlog;
    
    A decrease in FHLB advances at BankAtlantic due to deposit growth;
    
    A net increase in Levitts notes and mortgage notes payable of $20.5 million, primarily
related to project debt associated with 2006 land acquisitions and land development
activities;
    
    An increase in BankAtlantic Bancorp subordinated debentures and bonds payable primarily
associated with an issuance of $31 million of junior subordinated debentures; and
    
    An increase in Discontinued operations liabilities related to assets held for sale
at September 30, 2007 and December 31, 2006 was associated with two commercial projects
currently held for sale at Levitt.
 64




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##### Table of Contents



Noncontrolling Interest
  September 30,
    
    
    December 31,2007
    
    
    2006BankAtlantic Bancorp
    
    $
    360,701
    
    
    
    411,396Levitt
    
    
    99,604
    
    
    
    286,230Joint Venture Partnerships
    
    
    684
    
    
    
    697$
    460,989
    
    
    
    698,323
 NEW ACCOUNTING PRONOUNCEMENTS.
    65




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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 quarter ended
September 30, 2007 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.
 66




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##### Table of Contents



Critical Accounting Policies
  67




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##### Table of Contents



Accounting for Uncertain Tax Positions
  Impaired and Non-accrual Loans
  Consolidated Results of Operations
  For the Three Months Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    ChangeBankAtlantic
    
    $
    (27,112
    )
    
    $
    9,837
    
    
    $
    (36,949
    )Parent Company
    
    
    (2,498
    )
    
    
    (2,471
    )
    
    
    (27
    )Net (loss) income
    
    $
    (29,610
    )
    
    $
    7,366
    
    
    $
    (36,976
    )
 For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
  68




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For the Nine Months Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    ChangeBankAtlantic
    
    $
    (16,068
    )
    
    $
    32,706
    
    
    $
    (48,774
    )Parent Company
    
    
    (4,018
    )
    
    
    (6,875
    )
    
    
    2,857Segment net (loss)
income
    
    $
    (20,086
    )
    
    $
    25,831
    
    
    $
    (45,917
    )
 For the Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
  69




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##### Table of Contents



BankAtlantic Results of Operations
 Net interest income
 For the Three Months EndedSeptember 30, 2007
    
    
    
    
    
    
    September 30, 2006Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/
    
    
    
    
    
    
    Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/(in thousands)
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    Rate
    
    
    
    
    
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    RateTotal loans
    
    $
    4,693,078
    
    
    $
    80,082
    
    
    
    
    
    
    
    6.83
    
    
    
    
    
    
    $
    4,611,329
    
    
    $
    80,790
    
    
    
    
    
    
    
    7.01Investments  tax exempt
    
    
    390,906
    
    
    
    5,765
    
    
    
    (1
    )
    
    
    5.90
    
    
    
    
    
    
    
    397,436
    
    
    
    5,807
    
    
    
    (1
    )
    
    
    5.84Investments  taxable
    
    
    666,208
    
    
    
    10,580
    
    
    
    
    
    
    
    6.35
    
    
    
    
    
    
    
    660,785
    
    
    
    9,993
    
    
    
    
    
    
    
    6.05Total interest earning assets
    
    
    5,750,192
    
    
    
    96,427
    
    
    
    
    
    
    
    6.71
    %
    
    
    
    
    
    
    5,669,550
    
    
    
    96,590
    
    
    
    
    
    
    
    6.81
    %Goodwill and core deposit intangibles
    
    
    76,419
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,913Other non-interest earning assets
    
    
    444,357
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    371,752Total Assets
    
    $
    6,270,968
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,119,215Deposits:Savings
    
    $
    611,862
    
    
    
    3,642
    
    
    
    
    
    
    
    2.36
    %
    
    
    
    
    
    $
    367,829
    
    
    
    721
    
    
    
    
    
    
    
    0.78
    %NOW
    
    
    792,462
    
    
    
    2,356
    
    
    
    
    
    
    
    1.18
    
    
    
    
    
    
    
    727,517
    
    
    
    1,149
    
    
    
    
    
    
    
    0.63Money market
    
    
    660,925
    
    
    
    4,881
    
    
    
    
    
    
    
    2.93
    
    
    
    
    
    
    
    733,058
    
    
    
    4,019
    
    
    
    
    
    
    
    2.18Certificates of deposit
    
    
    996,415
    
    
    
    11,679
    
    
    
    
    
    
    
    4.65
    
    
    
    
    
    
    
    858,688
    
    
    
    9,206
    
    
    
    
    
    
    
    4.25Total interest bearing deposits
    
    
    3,061,664
    
    
    
    22,558
    
    
    
    
    
    
    
    2.92
    
    
    
    
    
    
    
    2,687,092
    
    
    
    15,095
    
    
    
    
    
    
    
    2.23Short-term borrowed funds
    
    
    229,366
    
    
    
    2,998
    
    
    
    
    
    
    
    5.19
    
    
    
    
    
    
    
    378,063
    
    
    
    5,117
    
    
    
    
    
    
    
    5.37Advances from FHLB
    
    
    1,398,245
    
    
    
    18,987
    
    
    
    
    
    
    
    5.39
    
    
    
    
    
    
    
    1,354,944
    
    
    
    18,509
    
    
    
    
    
    
    
    5.42Long-term debt
    
    
    29,106
    
    
    
    631
    
    
    
    
    
    
    
    8.61
    
    
    
    
    
    
    
    37,283
    
    
    
    805
    
    
    
    
    
    
    
    8.57Total interest bearing liabilities
    
    
    4,718,381
    
    
    
    45,174
    
    
    
    
    
    
    
    3.80
    
    
    
    
    
    
    
    4,457,382
    
    
    
    39,526
    
    
    
    
    
    
    
    3.52Demand deposits
    
    
    922,452
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,043,574Non-interest bearing other liabilities
    
    
    54,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    53,567Total Liabilities
    
    
    5,695,043
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,554,523Stockholders equity
    
    
    575,925
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    564,692Total liabilities and stockholders equity
    
    $
    6,270,968
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,119,215Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    $
    51,253
    
    
    
    
    
    
    
    2.91
    %
    
    
    
    
    
    
    
    
    
    $
    57,064
    
    
    
    
    
    
    
    3.29
    %Tax equivalent adjustment
    
    
    
    
    
    
    (2,018
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,032
    )Capitalized interest from real estate
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Net interest income
    
    
    
    
    
    $
    49,235
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    55,107MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.71
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.81
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.77Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.59
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.04
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
     70




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71




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##### Table of Contents



For the Nine Months EndedSeptember 30, 2007
    
    
    September 30, 2006Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    
    
    
    
    Yield/(in thousands)
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    
    
    
    
    RateTotal loans
    
    $
    4,673,985
    
    
    
    239,583
    
    
    
    
    
    
    
    6.83
    
    
    $
    4,566,748
    
    
    
    231,941
    
    
    
    
    
    
    
    6.77Investments  tax exempt
    
    
    395,218
    
    
    
    17,412
    
    
    
    (1
    )
    
    
    5.87
    
    
    
    396,348
    
    
    
    17,355
    
    
    
    (1
    )
    
    
    5.84Investments  taxable
    
    
    633,499
    
    
    
    29,782
    
    
    
    
    
    
    
    6.27
    
    
    
    610,894
    
    
    
    26,422
    
    
    
    
    
    
    
    5.77Total interest earning assets
    
    
    5,702,702
    
    
    
    286,777
    
    
    
    
    
    
    
    6.71
    %
    
    
    5,573,990
    
    
    
    275,718
    
    
    
    
    
    
    
    6.60
    %Goodwill and core deposit intangibles
    
    
    76,778
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,300Other non-interest earning assets
    
    
    435,863
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    364,851Total Assets
    
    $
    6,215,343
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,017,141Deposits:Savings
    
    $
    582,714
    
    
    
    9,613
    
    
    
    
    
    
    
    2.21
    %
    
    $
    354,765
    
    
    
    1,557
    
    
    
    
    
    
    
    0.59
    %NOW
    
    
    781,911
    
    
    
    5,616
    
    
    
    
    
    
    
    0.96
    
    
    
    750,771
    
    
    
    3,106
    
    
    
    
    
    
    
    0.55Money market
    
    
    662,990
    
    
    
    13,608
    
    
    
    
    
    
    
    2.74
    
    
    
    775,833
    
    
    
    11,977
    
    
    
    
    
    
    
    2.06Certificates of deposit
    
    
    983,990
    
    
    
    34,196
    
    
    
    
    
    
    
    4.65
    
    
    
    849,011
    
    
    
    25,061
    
    
    
    
    
    
    
    3.95Total deposits
    
    
    3,011,605
    
    
    
    63,033
    
    
    
    
    
    
    
    2.80
    
    
    
    2,730,380
    
    
    
    41,701
    
    
    
    
    
    
    
    2.04Short-term borrowed funds
    
    
    196,953
    
    
    
    7,722
    
    
    
    
    
    
    
    5.24
    
    
    
    342,413
    
    
    
    12,760
    
    
    
    
    
    
    
    4.98Advances from FHLB
    
    
    1,382,768
    
    
    
    55,813
    
    
    
    
    
    
    
    5.40
    
    
    
    1,177,389
    
    
    
    45,655
    
    
    
    
    
    
    
    5.18Secured borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,306
    
    
    
    2,401
    
    
    
    
    
    
    
    7.75Long-term debt
    
    
    29,369
    
    
    
    1,896
    
    
    
    
    
    
    
    8.64
    
    
    
    37,253
    
    
    
    2,469
    
    
    
    
    
    
    
    8.86Total interest bearing liabilities
    
    
    4,620,695
    
    
    
    128,464
    
    
    
    
    
    
    
    3.72
    
    
    
    4,328,741
    
    
    
    104,986
    
    
    
    
    
    
    
    3.24Demand deposits
    
    
    966,898
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,072,867Non-interest bearing other liabilities
    
    
    53,738
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58,383Total Liabilities
    
    
    5,641,331
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,459,991Stockholders equity
    
    
    574,012
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    557,150Total liabilities and stockholders
equity
    
    $
    6,215,343
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    6,017,141Net interest income/net
interest spread
    
    
    
    
    
    $
    158,313
    
    
    
    
    
    
    
    2.99
    %
    
    
    
    
    
    $
    170,732
    
    
    
    
    
    
    
    3.35
    %Tax equivalent adjustment
    
    
    
    
    
    
    (6,094
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,074
    )Capitalized interest from
real estate operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    844Net interest income
    
    
    
    
    
    
    152,219
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    165,502MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.71
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6.60
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.01
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.52Net interest margin
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.70
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.08
    %Net interest margin (tax equivalent)
excluding secured borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3.70
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4.11
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. For the Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
   72




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Provision for Loan Losses
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    54,754
    
    
    $
    42,012
    
    
    $
    43,602
    
    
    $
    41,192Loans charged-off
    
    
    (11,717
    )
    
    
    (436
    )
    
    
    (14,641
    )
    
    
    (1,152
    )Recoveries of loans
previously charged-off
    
    
    372
    
    
    
    670
    
    
    
    2,070
    
    
    
    2,063Net (charge-offs) recoveries
    
    
    (11,345
    )
    
    
    234
    
    
    
    (12,571
    )
    
    
    911Provision for loan losses
    
    
    48,949
    
    
    
    271
    
    
    
    61,327
    
    
    
    414Balance, end of period
    
    $
    92,358
    
    
    $
    42,517
    
    
    $
    92,358
    
    
    $
    42,517
    73




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74




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##### Table of Contents



September 30,
    
    
    December 31,(in thousands)
    
    2007
    
    
    2006NONPERFORMING ASSETSNon-accrual:Tax certificates
    
    $
    1,140
    
    
    $
    632LoansCommercial real estate
    
    
    156,300
    
    
    
    Residential
    
    
    5,332
    
    
    
    2,629Small business
    
    
    532
    
    
    
    244Consumer
    
    
    3,205
    
    
    
    1,563Total loans
    
    
    165,369
    
    
    
    4,436Total non-accrual
    
    
    166,509
    
    
    
    5,068Repossessed assets:Real estate owned
    
    
    17,159
    
    
    
    21,747Total nonperforming assets, net
    
    $
    183,668
    
    
    $
    26,815AllowancesAllowance for loan losses
    
    $
    92,358
    
    
    $
    43,602Allowance for tax certificate losses
    
    
    3,894
    
    
    
    3,699Total allowances
    
    $
    96,252
    
    
    $
    47,301POTENTIAL PROBLEM LOANSContractually past due 90 days or more
    
    $
    44
    
    
    $
    Performing impaired loans
    
    
    269
    
    
    
    162Troubled debt restructured loans
    
    
    7,039
    
    
    
    TOTAL POTENTIAL PROBLEM LOANS
    
    $
    7,352
    
    
    $
    162
     75




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##### Table of Contents



BankAtlantics Non-Interest Income
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeService charges on deposits
    
    $
    25,894
    
    
    $
    24,008
    
    
    $
    1,886
    
    
    $
    76,297
    
    
    $
    64,381
    
    
    $
    11,916Other service charges and fees
    
    
    7,222
    
    
    
    6,779
    
    
    
    443
    
    
    
    21,779
    
    
    
    20,354
    
    
    
    1,425Securities activities, net
    
    
    613
    
    
    
    
    
    
    
    613
    
    
    
    1,446
    
    
    
    457
    
    
    
    989Gain associated with
debt redemption
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,528
    
    
    
    (1,528
    )(Loss) gain on the sale of office
properties, net
    
    
    (362
    )
    
    
    (3
    )
    
    
    (359
    )
    
    
    (557
    )
    
    
    1,775
    
    
    
    (2,332
    )Other
    
    
    2,494
    
    
    
    2,925
    
    
    
    (431
    )
    
    
    8,629
    
    
    
    7,181
    
    
    
    1,448Non-interest income
    
    $
    35,861
    
    
    $
    33,709
    
    
    $
    2,152
    
    
    $
    107,594
    
    
    $
    95,676
    
    
    $
    11,918
       76




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##### Table of Contents



BankAtlantics Non-Interest Expense
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeEmployee compensation
and benefits
    
    $
    34,244
    
    
    $
    37,512
    
    
    $
    (3,268
    )
    
    $
    111,536
    
    
    $
    108,390
    
    
    $
    3,146Occupancy and equipment
    
    
    16,951
    
    
    
    15,015
    
    
    
    1,936
    
    
    
    48,817
    
    
    
    41,049
    
    
    
    7,768Advertising and promotion
    
    
    4,221
    
    
    
    8,599
    
    
    
    (4,378
    )
    
    
    14,088
    
    
    
    24,328
    
    
    
    (10,240
    )Impairment of real estate
held for sale
    
    
    3,655
    
    
    
    
    
    
    
    3,655
    
    
    
    4,711
    
    
    
    
    
    
    
    4,711Impairment of real estate owned
    
    
    7,233
    
    
    
    
    
    
    
    7,233
    
    
    
    7,299
    
    
    
    
    
    
    
    7,299Professional fees
    
    
    2,444
    
    
    
    1,756
    
    
    
    688
    
    
    
    5,297
    
    
    
    6,076
    
    
    
    (779
    )Cost associated with
debt redemption
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,457
    
    
    
    (1,457
    )Check losses
    
    
    3,341
    
    
    
    2,855
    
    
    
    486
    
    
    
    7,929
    
    
    
    5,976
    
    
    
    1,953Supplies and postage
    
    
    1,158
    
    
    
    1,716
    
    
    
    (558
    )
    
    
    4,637
    
    
    
    5,098
    
    
    
    (461
    )Telecommunication
    
    
    1,283
    
    
    
    1,238
    
    
    
    45
    
    
    
    4,211
    
    
    
    3,544
    
    
    
    667One-time termination benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,553
    
    
    
    
    
    
    
    2,553Other
    
    
    6,965
    
    
    
    6,216
    
    
    
    749
    
    
    
    20,711
    
    
    
    19,047
    
    
    
    1,664Non-interest expense
    
    $
    81,495
    
    
    $
    74,907
    
    
    $
    6,588
    
    
    $
    231,789
    
    
    $
    214,965
    
    
    $
    16,824
     77




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##### Table of Contents



BankAtlantics Provision for Income Taxes
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(Loss) income before
income taxes
    
    $
    (45,348
    )
    
    $
    13,639
    
    
    $
    (58,987
    )
    
    $
    (33,303
    )
    
    $
    45,798
    
    
    $
    (79,101
    )(Benefit) provision for
income taxes
    
    
    (18,236
    )
    
    
    3,801
    
    
    
    (22,037
    )
    
    
    (17,235
    )
    
    
    13,094
    
    
    
    (30,329
    )Net (loss) income
    
    $
    (27,112
    )
    
    $
    9,838
    
    
    $
    (36,950
    )
    
    $
    (16,068
    )
    
    $
    32,704
    
    
    $
    (48,772
    )Effective tax rate
    
    
    40.21
    %
    
    
    27.87
    %
    
    
    12.34
    %
    
    
    51.75
    %
    
    
    28.59
    %
    
    
    23.16
    %
  78




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##### Table of Contents



Parent Company Results of Operations
 For the Three Months
    
    
    For the Nine MonthsEnded September 30,
    
    
    Ended September 30,(in thousands)
    
    2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeNet interest expense
    
    $
    (5,476
    )
    
    $
    (5,118
    )
    
    $
    (358
    )
    
    $
    (15,261
    )
    
    $
    (14,534
    )
    
    $
    (727
    )Non-interest income
    
    
    972
    
    
    
    2,509
    
    
    
    (1,537
    )
    
    
    11,931
    
    
    
    8,545
    
    
    
    3,386Non-interest expense
    
    
    395
    
    
    
    1,610
    
    
    
    (1,215
    )
    
    
    3,227
    
    
    
    5,410
    
    
    
    (2,183
    )Loss before income taxes
    
    
    (4,899
    )
    
    
    (4,219
    )
    
    
    (680
    )
    
    
    (6,557
    )
    
    
    (11,399
    )
    
    
    4,842Income tax benefit
    
    
    (2,401
    )
    
    
    (1,748
    )
    
    
    (653
    )
    
    
    (2,539
    )
    
    
    (4,524
    )
    
    
    1,985Parent company loss
    
    $
    (2,498
    )
    
    $
    (2,471
    )
    
    $
    (27
    )
    
    $
    (4,018
    )
    
    $
    (6,875
    )
    
    $
    2,857
    BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Increase in securities available for sale reflecting Stifel common stock received upon
the sale of Ryan Beck and the purchase of agency securities partially offset by the sale
of tax exempt securities, and the sale of Parent Company equity securities to fund the
Companys Class A common stock repurchase program;
    
    Increase in investment securities at cost reflecting Stifel equity securities received
upon the sale of Ryan Beck which are subject to contractual restrictions limiting sales;
    
    Increase in tax certificate balances primarily due to acquisitions of tax liens;
    
    Lower investment in FHLB stock related to repayments of FHLB advances;
    
    Decrease in loan receivable balances associated with a $48.8 million increase in the
allowance for loan losses and lower commercial loan balances partially offset by higher
purchased residential, small business and home equity loan balances;
    
    Decline in real estate held for development and sale due to recognition of a $4.7
million impairment on a real estate project acquired in connection with a financial
institution acquisition;
    
    Decline in real estate owned resulting from a $7.2 million impairment on one
residential development property that was repossessed during the fourth quarter of 2006;
 79




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##### Table of Contents




    
    Increase in office properties and equipment associated with BankAtlantics store
expansion initiatives;
    
    Increase in deferred tax assets primarily resulting from the increase in the allowance
for loan losses and real estate impairments;
    
    Increase in other assets associated with the sale of securities pending settlement;
and
    
    Decrease in discontinued operations assets held for sale reflecting the sale of Ryan
Beck to Stifel.
  
    
    Lower non-interest-bearing deposit balances reflecting the migration of deposits to
higher yielding products as a result of a higher interest rate environment and
competition;
    
    Higher interest-bearing deposit balances primarily associated with increased high
yield savings, checking and certificates of deposit balances primarily reflecting
transfers of customer deposit balances to higher yielding products;
    
    Decrease in FHLB advances due to deposit growth;
    
    Increase in short-term borrowings to fund growth in non-earning assets;
    
    Increase in subordinated debentures and bonds payable primarily associated with the
Parent Companys issuance of $31 million of junior subordinated debentures; and
    
    Decrease in discontinued operations liabilities held for sale reflecting the sale of
Ryan Beck to Stifel.
 Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
     80




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BankAtlantic Liquidity and Capital Resources
       81




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##### Table of Contents



Minimum RatiosAdequately
    
    WellActual
    
    Capitalized
    
    CapitalizedAmount
    
    Ratio
    
    Ratio
    
    RatioAt September 30, 2007:Total risk-based capital
    
    $
    521,578
    
    
    
    11.93
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based capital
    
    $
    444,763
    
    
    
    10.17
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    444,763
    
    
    
    7.20
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    444,763
    
    
    
    7.20
    %
    
    
    4.00
    %
    
    
    5.00
    %At December 31, 2006:Total risk-based capital
    
    $
    529,497
    
    
    
    12.08
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based capital
    
    $
    460,359
    
    
    
    10.50
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    460,359
    
    
    
    7.55
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    460,359
    
    
    
    7.55
    %
    
    
    4.00
    %
    
    
    5.00
    %
   Off Balance Sheet Arrangements and Contractual Obligations as of September 30, 2007
 (in thousands)
    
    Payments Due by Period (2)Less than
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    yearsTime deposits
    
    $
    1,002,197
    
    
    $
    843,047
    
    
    $
    125,141
    
    
    $
    33,957
    
    
    $
    52Long-term debt
    
    
    323,320
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323,320Advances from FHLB (1)
    
    
    1,417,047
    
    
    
    1,235,047
    
    
    
    152,000
    
    
    
    30,000
    
    
    
    Operating lease obligations
    
    
    147,772
    
    
    
    2,356
    
    
    
    21,995
    
    
    
    18,365
    
    
    
    105,056Pension obligation
    
    
    14,336
    
    
    
    938
    
    
    
    2,220
    
    
    
    2,848
    
    
    
    8,330Other obligations
    
    
    37,329
    
    
    
    12,210
    
    
    
    10,869
    
    
    
    6,250
    
    
    
    8,000Total contractual cash obligations
    
    $
    2,942,001
    
    
    $
    2,093,598
    
    
    $
    312,225
    
    
    $
    91,420
    
    
    $
    444,758
 
 (1)
    
    Payments due by period are based on contractual maturities(2)
    
    The above table excludes interest payments on interest bearing liabilities 82




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##### Table of Contents



Homebuilding & Real Estate Development
 Our Homebuilding & Real Estate Development activities are comprised of the operations of
Levitt. Levitt present its results in four 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 quarter ended September 30, 2007 filed with the Securities and Exchange
Commission. Accordingly, references to the Company, we, us or our in the following
discussion under the caption Homebuilding & Real Estate Development are references to Levitt
Corporation and its subsidiaries, and are not references to BFC Financial Corporation.
  See Executive Overview and Part II. Item 1.
Legal Proceedings.
   83




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##### Table of Contents



Executive Overview
   Levitt and Sons
     84




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##### Table of Contents



Core Communities
  85




---



##### Table of Contents



86




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##### Table of Contents



Other Operations
   Financial and Non-Financial Metrics
  Critical Accounting Policies and Estimates
  87




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##### Table of Contents



Inventory of real estate
   Ø
    
    For projects representing land investments, where homebuilding activity has not
yet begun (which consisted of seven projects in the Primary Homebuilding segment)
valuation models were used. Management believes that these valuation models are
the best evidence of fair value and were used as the basis for the measurement.
The projects were analyzed and valued from the perspective of what a land
developer would pay to acquire the projects. The analysis included an evaluation
of the type of units that could be constructed and the selling price for such
units. The projected land acquisition price was assumed to be financed with debt
amounting to 75% of the purchase price at interest rates ranging from 10-15%. A
25% internal rate of return was assumed on the equity portion of the investment.
If the suggested project fair value was lower than the carrying value of the real
estate inventory at September 30, 2007, an impairment charge was recognized to
reduce the carrying value of the project to the fair value.Ø
    

    For projects with homes under construction, where development had ceased as of
September 30, 2007 (which consisted of twelve projects in the Primary Homebuilding
segment) cash flow models were used. These cash flows were determined based on
the assumption of a third party completing these projects and achieving a
reasonable
expected rate of return on this inventory. The related unleveraged cash flow
models projected future revenues and costs-to-complete and the sale of the
remaining inventory based on the current status of each project. Many of these
projects are in the early stages of development and, accordingly, the projections
extend for four to seven years into the future, thereby increasing the inherent
uncertainty in the projections. The cash flows used were updated in the third
quarter of 2007 to reflect current market trends, current pricing strategies and
cancellation trends. If the carrying amount of the project exceeded the present
value of the cash flows from the project discounted using the weighted average cost
of capital, an impairment charge was recognized to reduce the carrying value of the
project to fair market value. Specific assumptions for projected unit sales and
margin percentage in these cash flows include:
 o
    
    A 25% internal rate of return is assumed on the
equity portion of the investment with a weighted average cost of capital
of 15.4%;o
    
    for projects with single family or a mix of single
family and townhome products (representing ten projects) the estimated
average future sales prices was based on current sales prices with
significant discounts and incentives continuing through 2009. Discounting
activity is assumed to gradually diminish beginning in the second half of
2009 followed by average sales price increases ranging up to 4% in 2010
through 2012. All sales price increases are assumed to cease after 2012;
 88




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##### Table of Contents



o
    
    for projects with townhomes (representing two
projects) no sales price increases or elimination of discounts were
assumed due to market saturation in Florida;o
    
    estimated future construction and land development
costs were kept relatively consistent with the level of projected
deliveries throughout the entire project; ando
    
    estimates of average gross margin percentages ranged
between 10% and 17% through 2010 and 17% and 21% in 2011 and beyond
depending on the specific location of the project and the current backlog.
 Ø
    

    Six projects in the Tennessee Homebuilding segment were under a letter of
intent or draft contract at September 30, 2007. The fair value of such projects
were assumed to be the contract price contemplated in the letters of intent or
draft contracts. In calculating the fair market value, we estimated selling and
closing costs of 2.5% to sell these properties.Ø
    

    For the remaining 86 lots in backlog at September 30, 2007 in the Tennessee
Homebuilding segment, any lots with projected losses were fully reserved.
  CONSOLIDATED RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    122,824
    
    
    
    130,939
    
    
    
    (8,115
    )
    
    
    389,486
    
    
    
    387,140
    
    
    
    2,346Other revenues
    
    
    1,449
    
    
    
    1,782
    
    
    
    (333
    )
    
    
    5,063
    
    
    
    5,515
    
    
    
    (452
    )Total revenues
    
    
    124,273
    
    
    
    132,721
    
    
    
    (8,448
    )
    
    
    394,549
    
    
    
    392,655
    
    
    
    1,894Costs and expensesCost of sales of real estate
    
    
    275,340
    
    
    
    104,520
    
    
    
    170,820
    
    
    
    559,842
    
    
    
    312,228
    
    
    
    247,614Selling, general and administrative expenses
    
    
    31,556
    
    
    
    31,678
    
    
    
    (122
    )
    
    
    96,887
    
    
    
    88,703
    
    
    
    8,184Other expenses
    
    
    1,112
    
    
    
    615
    
    
    
    497
    
    
    
    2,007
    
    
    
    3,164
    
    
    
    (1,157
    )Total costs and expenses
    
    
    308,008
    
    
    
    136,813
    
    
    
    171,195
    
    
    
    658,736
    
    
    
    404,095
    
    
    
    254,641Earnings from Bluegreen Corporation
    
    
    4,418
    
    
    
    6,923
    
    
    
    (2,505
    )
    
    
    7,519
    
    
    
    9,026
    
    
    
    (1,507
    )Interest and other income
    
    
    3,109
    
    
    
    1,548
    
    
    
    1,561
    
    
    
    8,743
    
    
    
    4,549
    
    
    
    4,194(Loss) income from continuing
operations before income taxes
    
    
    (176,208
    )
    
    
    4,379
    
    
    
    (180,587
    )
    
    
    (247,925
    )
    
    
    2,135
    
    
    
    (250,060
    )Benefit (provision) for income taxes
    
    
    6,228
    
    
    
    (1,399
    )
    
    
    7,627
    
    
    
    20,729
    
    
    
    (583
    )
    
    
    21,312(Loss) income from continuing operations
    
    
    (169,980
    )
    
    
    2,980
    
    
    
    (172,960
    )
    
    
    (227,196
    )
    
    
    1,552
    
    
    
    (228,748
    )Discontinued operations:Income (loss) from discontinued operations,
net of tax
    
    
    812
    
    
    
    (7
    )
    
    
    819
    
    
    
    917
    
    
    
    24
    
    
    
    893Net (loss) income
    
    $
    (169,168
    )
    
    
    2,973
    
    
    
    (172,141
    )
    
    
    (226,279
    )
    
    
    1,576
    
    
    
    (227,855
    )
 89




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For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
       90




---



##### Table of Contents



For the Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
  91




---



##### Table of Contents



92




---



##### Table of Contents



93




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PRIMARY HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    112,885
    
    
    
    104,538
    
    
    
    8,347
    
    
    
    340,202
    
    
    
    297,670
    
    
    
    42,532Other revenues
    
    
    614
    
    
    
    936
    
    
    
    (322
    )
    
    
    2,213
    
    
    
    2,962
    
    
    
    (749
    )Total revenues
    
    
    113,499
    
    
    
    105,474
    
    
    
    8,025
    
    
    
    342,415
    
    
    
    300,632
    
    
    
    41,783Costs and expensesCost of sales of real estate
    
    
    247,388
    
    
    
    83,062
    
    
    
    164,326
    
    
    
    496,663
    
    
    
    235,430
    
    
    
    261,233Selling, general and administrative expenses
    
    
    19,252
    
    
    
    18,599
    
    
    
    653
    
    
    
    58,348
    
    
    
    49,805
    
    
    
    8,543Other expenses
    
    
    575
    
    
    
    615
    
    
    
    (40
    )
    
    
    1,470
    
    
    
    1,857
    
    
    
    (387
    )Total costs and expenses
    
    
    267,215
    
    
    
    102,276
    
    
    
    164,939
    
    
    
    556,481
    
    
    
    287,092
    
    
    
    269,389Interest and other income
    
    
    2,274
    
    
    
    740
    
    
    
    1,534
    
    
    
    6,475
    
    
    
    1,107
    
    
    
    5,368(Loss) income before income taxes
    
    
    (151,442
    )
    
    
    3,938
    
    
    
    (155,380
    )
    
    
    (207,591
    )
    
    
    14,647
    
    
    
    (222,238
    )Benefit (provision) for income taxes
    
    
    1,866
    
    
    
    (1,519
    )
    
    
    3,385
    
    
    
    11,680
    
    
    
    (5,650
    )
    
    
    17,330Net (loss) income
    
    $
    (149,576
    )
    
    
    2,419
    
    
    
    (151,995
    )
    
    
    (195,911
    )
    
    
    8,997
    
    
    
    (204,908
    )Homes delivered (units)
    
    
    332
    
    
    
    324
    
    
    
    8
    
    
    
    982
    
    
    
    958
    
    
    
    24Construction starts (units)
    
    
    181
    
    
    
    432
    
    
    
    (251
    )
    
    
    558
    
    
    
    1,218
    
    
    
    (660
    )Average selling price of homes delivered
    
    $
    316
    
    
    
    323
    
    
    
    (7
    )
    
    
    338
    
    
    
    311
    
    
    
    27Margin percentage
    
    
    (119.2
    %)
    
    
    20.5
    %
    
    
    (139.7
    %)
    
    
    (46.0
    %)
    
    
    20.9
    %
    
    
    (66.9
    %)Gross orders (units)
    
    
    159
    
    
    
    215
    
    
    
    (56
    )
    
    
    753
    
    
    
    969
    
    
    
    (216
    )Gross orders (value)
    
    $
    47,037
    
    
    
    68,497
    
    
    
    (21,460
    )
    
    
    219,687
    
    
    
    312,024
    
    
    
    (92,337
    )Cancellations (units)
    
    
    102
    
    
    
    81
    
    
    
    21
    
    
    
    352
    
    
    
    166
    
    
    
    186Net orders (units)
    
    
    57
    
    
    
    134
    
    
    
    (77
    )
    
    
    401
    
    
    
    803
    
    
    
    (402
    )Backlog of homes (units)
    
    
    545
    
    
    
    1,444
    
    
    
    (899
    )
    
    
    545
    
    
    
    1,444
    
    
    
    (899
    )Backlog of homes (value)
    
    $
    179,796
    
    
    
    521,844
    
    
    
    (342,048
    )
    
    
    179,796
    
    
    
    521,844
    
    
    
    (342,048
    )
 For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
   94




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Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
  95




---



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96




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##### Table of Contents



TENNESSEE HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    9,339
    
    
    
    18,099
    
    
    
    (8,760
    )
    
    
    39,844
    
    
    
    59,816
    
    
    
    (19,972
    )Total revenues
    
    
    9,339
    
    
    
    18,099
    
    
    
    (8,760
    )
    
    
    39,844
    
    
    
    59,816
    
    
    
    (19,972
    )Costs and expensesCost of sales of real estate
    
    
    19,822
    
    
    
    16,007
    
    
    
    3,815
    
    
    
    49,156
    
    
    
    57,497
    
    
    
    (8,341
    )Selling, general and administrative expenses
    
    
    1,552
    
    
    
    2,736
    
    
    
    (1,184
    )
    
    
    5,416
    
    
    
    9,670
    
    
    
    (4,254
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,307
    
    
    
    (1,307
    )Total costs and expenses
    
    
    21,374
    
    
    
    18,743
    
    
    
    2,631
    
    
    
    54,572
    
    
    
    68,474
    
    
    
    (13,902
    )Interest and other income
    
    
    25
    
    
    
    45
    
    
    
    (20
    )
    
    
    77
    
    
    
    103
    
    
    
    (26
    )Loss before income taxes
    
    
    (12,010
    )
    
    
    (599
    )
    
    
    (11,411
    )
    
    
    (14,651
    )
    
    
    (8,555
    )
    
    
    (6,096
    )(Provision) benefit for income taxes
    
    
    (100
    )
    
    
    276
    
    
    
    (376
    )
    
    
    824
    
    
    
    2,738
    
    
    
    (1,914
    )Net loss
    
    $
    (12,110
    )
    
    
    (323
    )
    
    
    (11,787
    )
    
    
    (13,827
    )
    
    
    (5,817
    )
    
    
    (8,010
    )Homes delivered (units)
    
    
    43
    
    
    
    79
    
    
    
    (36
    )
    
    
    134
    
    
    
    276
    
    
    
    (142
    )Construction starts (units)
    
    
    55
    
    
    
    51
    
    
    
    4
    
    
    
    167
    
    
    
    187
    
    
    
    (20
    )Average selling price of homes delivered
    
    $
    196
    
    
    
    229
    
    
    
    (33
    )
    
    
    207
    
    
    
    217
    
    
    
    (10
    )Margin percentage
    
    
    (112.2
    %)
    
    
    11.6
    %
    
    
    (123.8
    %)
    
    
    (23.4
    %)
    
    
    3.9
    %
    
    
    (27.2
    %)Gross orders (units)
    
    
    47
    
    
    
    93
    
    
    
    (46
    )
    
    
    216
    
    
    
    347
    
    
    
    (131
    )Gross orders (value)
    
    $
    10,649
    
    
    
    19,535
    
    
    
    (8,886
    )
    
    
    47,283
    
    
    
    70,892
    
    
    
    (23,609
    )Cancellations (units)
    
    
    55
    
    
    
    31
    
    
    
    24
    
    
    
    118
    
    
    
    116
    
    
    
    2Net orders (units)
    
    
    (8
    )
    
    
    62
    
    
    
    (70
    )
    
    
    98
    
    
    
    231
    
    
    
    (133
    )Backlog of homes (units)
    
    
    86
    
    
    
    148
    
    
    
    (62
    )
    
    
    86
    
    
    
    148
    
    
    
    (62
    )Backlog of homes (value)
    
    $
    17,608
    
    
    
    32,745
    
    
    
    (15,137
    )
    
    
    17,608
    
    
    
    32,745
    
    
    
    (15,137
    )
 For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
  97




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For the Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
   98




---



##### Table of Contents



99




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##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands, except acres information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    757
    
    
    
    8,302
    
    
    
    (7,545
    )
    
    
    3,451
    
    
    
    29,660
    
    
    
    (26,209
    )Other revenues
    
    
    711
    
    
    
    543
    
    
    
    168
    
    
    
    2,494
    
    
    
    1,490
    
    
    
    1,004Total revenues
    
    
    1,468
    
    
    
    8,845
    
    
    
    (7,377
    )
    
    
    5,945
    
    
    
    31,150
    
    
    
    (25,205
    )Costs and expensesCost of sales of real estate
    
    
    256
    
    
    
    4,760
    
    
    
    (4,504
    )
    
    
    811
    
    
    
    17,497
    
    
    
    (16,686
    )Selling, general and administrative
expenses
    
    
    4,152
    
    
    
    3,273
    
    
    
    879
    
    
    
    11,421
    
    
    
    8,898
    
    
    
    2,523Interest expense
    
    
    829
    
    
    
    
    
    
    
    829
    
    
    
    1,851
    
    
    
    
    
    
    
    1,851Total costs and expenses
    
    
    5,237
    
    
    
    8,033
    
    
    
    (2,796
    )
    
    
    14,083
    
    
    
    26,395
    
    
    
    (12,312
    )Interest and other income
    
    
    1,354
    
    
    
    284
    
    
    
    1,070
    
    
    
    3,414
    
    
    
    2,191
    
    
    
    1,223(Loss) income from continuing
operations before income taxes
    
    
    (2,415
    )
    
    
    1,096
    
    
    
    (3,511
    )
    
    
    (4,724
    )
    
    
    6,946
    
    
    
    (11,670
    )Benefit (provision) for income taxes
    
    
    728
    
    
    
    (427
    )
    
    
    1,155
    
    
    
    1,701
    
    
    
    (2,613
    )
    
    
    4,314(Loss) income from continuing
operations
    
    
    (1,687
    )
    
    
    669
    
    
    
    (2,356
    )
    
    
    (3,023
    )
    
    
    4,333
    
    
    
    (7,356
    )Discontinued operations:Income (loss) from discontinued
operations, net of tax
    
    
    812
    
    
    
    (7
    )
    
    
    819
    
    
    
    917
    
    
    
    24
    
    
    
    893Net (loss) income
    
    $
    (875
    )
    
    
    662
    
    
    
    (1,537
    )
    
    
    (2,106
    )
    
    
    4,357
    
    
    
    (6,463
    )Acres sold
    
    
    1
    
    
    
    29
    
    
    
    (28
    )
    
    
    2
    
    
    
    134
    
    
    
    (132
    )Margin percentage
    
    
    66.2
    %
    
    
    42.7
    %
    
    
    23.5
    %
    
    
    76.5
    %
    
    
    41.0
    %
    
    
    35.5
    %Unsold saleable acres (a)
    
    
    6,717
    
    
    
    7,109
    
    
    
    (392
    )
    
    
    6,717
    
    
    
    7,109
    
    
    
    (392
    )Acres subject to sales contracts 
third parties
    
    
    291
    
    
    
    69
    
    
    
    222
    
    
    
    291
    
    
    
    69
    
    
    
    222Aggregate sales price of acres
subject to sales contracts to third
parties
    
    $
    92,451
    
    
    
    20,281
    
    
    
    72,170
    
    
    
    92,451
    
    
    
    20,281
    
    
    
    72,170
 
 (a)
    
    Includes approximately 62 acres related to assets held for sale as of September 30, 2007 For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
  100




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101




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##### Table of Contents



For the Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
        102




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OTHER OPERATIONS RESULTS OF OPERATIONS
 Three Months
    
    
    Nine MonthsEnded September 30,
    
    
    Ended September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    Change(In thousands)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    6,574
    
    
    
    
    
    
    
    6,574Other revenues
    
    
    258
    
    
    
    325
    
    
    
    (67
    )
    
    
    693
    
    
    
    1,121
    
    
    
    (428
    )Total revenues
    
    
    258
    
    
    
    325
    
    
    
    (67
    )
    
    
    7,267
    
    
    
    1,121
    
    
    
    6,146Costs and expensesCost of sales of real estate
    
    
    10,259
    
    
    
    749
    
    
    
    9,510
    
    
    
    16,778
    
    
    
    2,047
    
    
    
    14,731Selling, general and administrative
expenses
    
    
    6,776
    
    
    
    7,070
    
    
    
    (294
    )
    
    
    21,940
    
    
    
    20,330
    
    
    
    1,610Other expenses
    
    
    536
    
    
    
    
    
    
    
    536
    
    
    
    536
    
    
    
    
    
    
    
    536Total costs and expenses
    
    
    17,571
    
    
    
    7,819
    
    
    
    9,752
    
    
    
    39,254
    
    
    
    22,377
    
    
    
    16,877Earnings from Bluegreen Corporation
    
    
    4,418
    
    
    
    6,923
    
    
    
    (2,505
    )
    
    
    7,519
    
    
    
    9,026
    
    
    
    (1,507
    )Interest and other income
    
    
    285
    
    
    
    478
    
    
    
    (193
    )
    
    
    933
    
    
    
    1,146
    
    
    
    (213
    )Loss before income taxes
    
    
    (12,610
    )
    
    
    (93
    )
    
    
    (12,517
    )
    
    
    (23,535
    )
    
    
    (11,084
    )
    
    
    (12,451
    )Benefit for income taxes
    
    
    4,594
    
    
    
    271
    
    
    
    4,323
    
    
    
    7,500
    
    
    
    5,006
    
    
    
    2,494Net (loss) income
    
    $
    (8,016
    )
    
    
    178
    
    
    
    (8,194
    )
    
    
    (16,035
    )
    
    
    (6,078
    )
    
    
    (9,957
    )
  For the Three Months Ended September 30, 2007 Compared to the Same 2006 Period:
   103




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Nine Months Ended September 30, 2007 Compared to the Same 2006 Period:
    104




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105




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##### Table of Contents



FINANCIAL CONDITION
 September 30, 2007 compared to December 31, 2006
   
    
    a net decrease in cash and cash equivalents of $12.6 million, which resulted from
cash used in operations of $34.5 million, cash used in investing activities of $34.2
million offset by an increase in cash provided by financing activities of $56.0
million;
    
    a net decrease in inventory of real estate of approximately $241.9 million primarily
due to impairment charges of approximately $226.9 million;
    
    an increase of $3.2 million in property and equipment associated with increased
investment in commercial properties under construction at Core Communities;
    
    an increase of $37.7 million in assets held for sale related to the development of
two commercial projects which were previously included in property and equipment; and
    
    an increase in other assets of $16.3 million related to current and deferred taxes
from operating losses at Levitt and Sons partially offset by payment received on notes
receivable related to land sales.
   
    
    a net increase in notes and mortgage notes payable of $20.5 million, primarily
related to project debt associated with 2006 land acquisitions and land development
activities;
    
    a decrease of $23.1 million in customer deposits reflecting the decline in customer
backlog;
    
    an increase of $1.8 million in accounts payable and accrued liabilities, relating to
accruals for certain construction related activity, and the timing of invoices
processed; and
    
    an increase of $38.3 million in liabilities related to assets held for sale.
 LIQUIDITY AND CAPITAL RESOURCES
   Levitt Corporation (Parent level)
  106




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Core Communities
   107




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##### Table of Contents



Levitt and Sons
      Facility Size
    
    Type
    
    Lender
    
    Balance at 9/30/07$30.0 Million
    
    Acquisition, Development & Construction
    
    Wachovia
    
    $9.5 million$12.0 Million
    
    Construction
    
    Ohio Savings
    
    $1.1 million$26.5 Million
    
    Acquisition, Development & Construction
    
    Wachovia
    
    $8.6 million$125.0 Million
    
    Acquisition, Development & Construction
    
    Key Bank
    
    $95.2 million$125.0 Million
    
    Acquisition, Development & Construction
    
    Bank of America
    
    $102.5 million$75.0 Million
    
    Acquisition, Development & Construction
    
    Regions
    
    $24.4 million$125.0 Million
    
    Acquisition, Development & Construction
    
    Wachovia
    
    $102.4 million
 108




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##### Table of Contents



Off Balance Sheet Arrangements and Contractual Obligations
    Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory (2)
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1)
    
    $
    230,673
    
    
    
    3,960
    
    
    
    38,736
    
    
    
    79,863
    
    
    
    108,114Operating lease obligations
    
    
    4,393
    
    
    
    1,133
    
    
    
    1,390
    
    
    
    557
    
    
    
    1,313Purchase Obligations
    
    
    14,220
    
    
    
    14,220
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    249,286
    
    
    
    19,313
    
    
    
    40,126
    
    
    
    80,420
    
    
    
    109,427
 
 (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 securing
those obligations.  109




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110




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Item 3. Quantitative and Qualitative Disclosures About Market Risk
  BFC
    BankAtlantic Bancorp
   111




---



##### Table of Contents



Levitt
   112




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##### Table of Contents



Item 4. Controls and Procedure
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  113




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Joseph C. Hubbard, individually and on behalf of all others similarly situated, vs.
BankAtlantic Bancorp, Inc., James A. White, Valerie C. Toalson, Jarrett S. Levan and Alan B. Levan
  Bankruptcy of Levitt and Sons
   Reorganization Plan
 Chapter 7; Dismissal of the Bankruptcy Cases.




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##### Table of Contents



Accounting Impact.




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##### Table of Contents



Item 1A. Risk Factors
  Levitt Corporation and Levitt and Sons are subject to various risks associated with Levitt and
Sons bankruptcy filing.
  
 Item 3. Defaults Upon Senior Securities
  
 Item 6. Exhibits
 Exhibit 31.1 *
    
    Chief Executive Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2 *
    
    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 **
    
    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




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##### Table of Contents



BFC FINANCIAL CORPORATIONDate:      November 14, 2007
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate:      November 14, 2007
    By:
    /s/  George P. ScanlonGeorge P. Scanlon, Executive Vice Presidentand Chief Financial OfficerDate:      November 14, 2007
    By:
    /s/  Maria R. SchekerMaria R. Scheker, Chief Accounting Officer