##### 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 June 30, 2006
  o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
 BFC Financial Corporation
  Florida
    
    59-2022148(State of Organization)
    
    (IRS Employer Identification Number)2100 West Cypress Creek Road
Fort Lauderdale, Florida
    
    33309(Address of Principal Executive Office)
    
    (Zip Code)
  
  Not Applicable
  x o
  o x o
  o x




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2




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##### 



PART I.
    
    FINANCIAL INFORMATION
    
    
    4Item 1.
    
    Financial Statements:
    
    
    4Consolidated Statements of Financial Condition as of June 30, 2006 and December 31, 2005  Unaudited
    
    
    4Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2006 and 2005  Unaudited
    
    
    5Consolidated Statements of Comprehensive Income for the Three and Six Month Periods Ended June 30, 2006 and 2005  Unaudited
    
    
    7Consolidated Statements of Shareholders Equity as of June 30, 2006 and December 31, 2005  Unaudited
    
    
    8Consolidated Statements of Cash Flows for the Six Month Periods Ended June 30, 2006 and 2005  Unaudited
    
    
    9Notes to Unaudited Consolidated Financial Statements
    
    
    12Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    48Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    98Item 4.
    
    Controls and Procedures
    
    
    102PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    103Item 1.A
    
    Risk Factors
    
    
    103Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    104Item 6.
    
    Exhibits
    
    
    104SIGNATURES
    
    
    105EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
  3




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BFC Financial Corporation
 
 Consolidated Statements of Financial Condition  Unaudited
 (In thousands, except share data)
 June 30,
    
    
    December 31,2006
    
    
    2005ASSETSCash and due from depository institutions
    
    $
    244,544
    
    
    $
    302,208Federal funds sold and other short-term investments
    
    
    1,263
    
    
    
    3,229Securities owned (at fair value)
    
    
    174,657
    
    
    
    180,292Securities available for sale (at fair value)
    
    
    664,509
    
    
    
    676,660Investment securities and tax certificates (approximate fair value:$431,649 in 2006 and $384,646 in 2005)
    
    
    435,659
    
    
    
    384,968Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    62,667
    
    
    
    69,931Loans receivable, net of allowance for loan losses
of $42,618 in 2006 and $41,830 in 2005
    
    
    4,484,717
    
    
    
    4,629,566Residential loans held for sale
    
    
    6,337
    
    
    
    2,538Real estate held for development and sale
    
    
    778,359
    
    
    
    632,597Investments in unconsolidated affiliates
    
    
    112,077
    
    
    
    110,124Property and equipment, net
    
    
    250,227
    
    
    
    198,433Accrued interest receivable
    
    
    42,672
    
    
    
    41,496Goodwill
    
    
    76,674
    
    
    
    77,981Core deposit intangible asset
    
    
    7,608
    
    
    
    8,395Due from clearing agent
    
    
    3,963
    
    
    
    Other assets
    
    
    70,955
    
    
    
    65,608Total assets
    
    $
    7,416,888
    
    
    $
    7,384,026LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:DepositsDemand
    
    $
    1,119,604
    
    
    $
    1,019,949NOW
    
    
    747,437
    
    
    
    755,708Savings
    
    
    372,212
    
    
    
    313,889Money market
    
    
    740,192
    
    
    
    846,441Certificates of deposits
    
    
    855,561
    
    
    
    816,689Total deposits
    
    
    3,835,006
    
    
    
    3,752,676Customer deposits on real estate held for sale
    
    
    56,796
    
    
    
    51,686Advances from FHLB
    
    
    1,127,065
    
    
    
    1,283,532Securities sold under agreements to repurchase
    
    
    183,119
    
    
    
    109,788Federal funds purchased and other short term borrowings
    
    
    224,322
    
    
    
    139,475Secured borrowings
    
    
    
    
    
    
    138,270Subordinated debentures, notes and bonds payable
    
    
    491,502
    
    
    
    392,784Junior subordinated debentures
    
    
    332,854
    
    
    
    317,390Securities sold not yet purchased
    
    
    39,173
    
    
    
    35,177Due to clearing agent
    
    
    38,730
    
    
    
    24,486Deferred tax liabilities, net
    
    
    1,938
    
    
    
    10,692Other liabilities
    
    
    208,946
    
    
    
    248,468Total liabilities
    
    
    6,539,451
    
    
    
    6,504,424Noncontrolling interest
    
    
    699,894
    
    
    
    696,522Commitments 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 2006 and 2005
    
    
    
    
    
    
    Class A Common Stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 28,680,398 in 2006 and 29,949,612 in 2005
    
    
    265
    
    
    
    278Class B Common Stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 7,136,103 in 2006 and 4,285,413 in 2005
    
    
    69
    
    
    
    41Additional paid-in capital
    
    
    93,088
    
    
    
    97,223Unearned compensation  restricted stock grants
    
    
    
    
    
    
    (100
    )Retained earnings
    
    
    84,400
    
    
    
    85,113Total shareholders equity before
accumulated other comprehensive income (loss)
    
    
    177,822
    
    
    
    182,555Accumulated other comprehensive income (loss)
    
    
    (279
    )
    
    
    525Total shareholders equity
    
    
    177,543
    
    
    
    183,080Total liabilities and shareholders equity
    
    $
    7,416,888
    
    
    $
    7,384,026
 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 Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005RevenuesBFC ActivitiesInterest and dividend income
    
    $
    535
    
    
    $
    238
    
    
    $
    1,095
    
    
    $
    474Other income
    
    
    459
    
    
    
    206
    
    
    
    902
    
    
    
    326994
    
    
    
    444
    
    
    
    1,997
    
    
    
    800Financial ServicesInterest and dividend income
    
    
    92,328
    
    
    
    90,333
    
    
    
    184,439
    
    
    
    174,068Broker/dealer revenue
    
    
    51,381
    
    
    
    82,727
    
    
    
    105,943
    
    
    
    137,407Other income
    
    
    37,246
    
    
    
    24,930
    
    
    
    66,689
    
    
    
    48,539180,955
    
    
    
    197,990
    
    
    
    357,071
    
    
    
    360,014Homebuilding & Real Estate DevelopmentSales of real estate
    
    
    130,658
    
    
    
    107,094
    
    
    
    256,201
    
    
    
    305,960Interest and dividend income
    
    
    591
    
    
    
    590
    
    
    
    1,234
    
    
    
    966Other income
    
    
    3,488
    
    
    
    1,711
    
    
    
    5,544
    
    
    
    3,464134,737
    
    
    
    109,395
    
    
    
    262,979
    
    
    
    310,390Total revenues
    
    
    316,686
    
    
    
    307,829
    
    
    
    622,047
    
    
    
    671,204Costs and ExpensesBFC ActivitiesInterest expense
    
    
    4
    
    
    
    192
    
    
    
    16
    
    
    
    312Employee compensation and benefits
    
    
    2,299
    
    
    
    1,224
    
    
    
    4,736
    
    
    
    2,820Other expenses
    
    
    799
    
    
    
    788
    
    
    
    1,520
    
    
    
    1,4563,102
    
    
    
    2,204
    
    
    
    6,272
    
    
    
    4,588Financial ServicesInterest expense, net of interest capitalized
    
    
    39,245
    
    
    
    36,038
    
    
    
    78,066
    
    
    
    67,339(Recovery from) provision for loan losses
    
    
    (20
    )
    
    
    820
    
    
    
    143
    
    
    
    (3,096
    )Employee compensation and benefits
    
    
    80,011
    
    
    
    78,391
    
    
    
    160,211
    
    
    
    144,186Occupancy and equipment
    
    
    17,516
    
    
    
    13,953
    
    
    
    33,763
    
    
    
    27,190Advertising and promotion
    
    
    8,644
    
    
    
    8,069
    
    
    
    18,601
    
    
    
    14,367Impairment of property and equipment
    
    
    
    
    
    
    3,706
    
    
    
    
    
    
    
    3,706Cost associated with debt redemption
    
    
    1,034
    
    
    
    
    
    
    
    1,457
    
    
    
    Other expenses
    
    
    24,317
    
    
    
    20,024
    
    
    
    46,922
    
    
    
    39,479170,747
    
    
    
    161,001
    
    
    
    339,163
    
    
    
    293,171Homebuilding & Real Estate DevelopmentCost of sales of real estate
    
    
    100,910
    
    
    
    84,340
    
    
    
    202,965
    
    
    
    214,316Employee compensation and benefits
    
    
    13,045
    
    
    
    9,179
    
    
    
    25,290
    
    
    
    20,960Selling, general and administrative expenses
    
    
    17,113
    
    
    
    10,151
    
    
    
    31,321
    
    
    
    21,365Other expenses
    
    
    6,665
    
    
    
    626
    
    
    
    7,291
    
    
    
    1,942137,733
    
    
    
    104,296
    
    
    
    266,867
    
    
    
    258,583Total costs and expenses
    
    
    311,582
    
    
    
    267,501
    
    
    
    612,302
    
    
    
    556,342Equity earnings from unconsolidated affiliates
    
    
    2,353
    
    
    
    4,908
    
    
    
    3,124
    
    
    
    7,267Income before income taxes and noncontrolling interest
    
    
    7,457
    
    
    
    45,236
    
    
    
    12,869
    
    
    
    122,129Provision for income taxes
    
    
    1,777
    
    
    
    18,707
    
    
    
    2,751
    
    
    
    50,726Noncontrolling interest
    
    
    5,753
    
    
    
    23,708
    
    
    
    10,456
    
    
    
    64,074(Loss) income from continuing operations
    
    
    (73
    )
    
    
    2,821
    
    
    
    (338
    )
    
    
    7,329Loss from discontinued operations less income
tax benefit of $57 and $125 for the three and
six months ended June 30, 2005
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (198
    )Net (loss) income
    
    
    (73
    )
    
    
    2,731
    
    
    
    (338
    )
    
    
    7,1315% Preferred Stock dividends
    
    
    187
    
    
    
    187
    
    
    
    375
    
    
    
    375Net (loss) income allocable to common stock
    
    $
    (260
    )
    
    $
    2,544
    
    
    $
    (713
    )
    
    $
    6,756
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
 5




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BFC Financial Corporation
 
 Consolidated Statements of Operations  Unaudited
 (In thousands, except per share data)
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005(Loss) earnings per share of common stock:Basic (loss) earnings per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.10
    
    
    $
    (0.02
    )
    
    $
    0.27Basic loss per share from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )Basic (loss) earnings per share
    
    $
    (0.01
    )
    
    $
    0.10
    
    
    $
    (0.02
    )
    
    $
    0.26Diluted (loss) earnings per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.08
    
    
    $
    (0.02
    
    
    $
    0.23Diluted loss per share from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )Diluted (loss) earnings per share
    
    $
    (0.01
    )
    
    $
    0.08
    
    
    $
    (0.02
    )
    
    $
    0.22Basic weighted average number of common shares outstanding
    
    
    33,422
    
    
    
    26,381
    
    
    
    33,057
    
    
    
    26,067Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    33,422
    
    
    
    28,902
    
    
    
    33,057
    
    
    
    28,624
 See accompanying notes to unaudited consolidated financial statements.
 6




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BFC Financial Corporation
 
 Consolidated Statements of Comprehensive Income (Loss)  Unaudited
 (In thousands)
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Net (loss) income
    
    $
    (73
    )
    
    $
    2,731
    
    
    $
    (338
    )
    
    $
    7,131Other comprehensive (loss) income, net of tax:Unrealized (loss) gain on securities available for sale,
net of income tax
    
    
    (697
    )
    
    
    711
    
    
    
    (350
    )
    
    
    5Unrealized (loss) gain associated with investment in
unconsolidated real estate affiliates, net of income tax
    
    
    (50
    )
    
    
    7
    
    
    
    (23
    )
    
    
    16Reclassification adjustment for net gain included
in net income
    
    
    (224
    )
    
    
    (9
    )
    
    
    (431
    )
    
    
    (17
    )(971
    )
    
    
    709
    
    
    
    (804
    )
    
    
    4Comprehensive (loss) income
    
    $
    (1,044
    )
    
    $
    3,440
    
    
    $
    (1,142
    )
    
    $
    7,135
  See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statements of Shareholders Equity  Unaudited
 (In thousands)
 Unearned
    
    
    
    
    
    
    AccumulatedCompen-
    
    
    
    
    
    
    Othersation
    
    
    
    
    
    
    Compre-Class A
    
    
    Class B
    
    
    Additional
    
    
    Restricted
    
    
    
    
    
    
    hensiveCommon
    
    
    Common
    
    
    Paid-in
    
    
    Stock
    
    
    Retained
    
    
    IncomeStock
    
    
    Stock
    
    
    Capital
    
    
    Grants
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance, December 31, 2005
    
    $
    278
    
    
    $
    41
    
    
    $
    97,223
    
    
    $
    (100
    )
    
    $
    85,113
    
    
    $
    525
    
    
    $
    183,080Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (338
    )
    
    
    
    
    
    
    (338
    )Other comprehensive loss, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (804
    )
    
    
    (804
    )Issuance of Class B Common Stock,
upon exercise of stock options
    
    
    
    
    
    
    39
    
    
    
    9,076
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,115Retirement of Common Stock relating to
exercise of stock options (1)
    
    
    (13
    )
    
    
    (11
    )
    
    
    (13,246
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,270
    )Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    (313
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (313
    )Cash dividends on 5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (375
    )
    
    
    
    
    
    
    (375
    )Share-based compensation related
to stock option and restricted stock
    
    
    
    
    
    
    
    
    
    
    448
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    448Adoption of FAS 123R
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    Balance, June 30, 2006
    
    $
    265
    
    
    $
    69
    
    
    $
    93,088
    
    
    $
    
    
    
    $
    84,400
    
    
    $
    (279
    )
    
    $
    177,543
 
 (1)
    
    Retirement of shares delivered to the Company as consdieration for the exercise price and minimum withholding tax amounts upon the exercise of options. See accompanying notes to unaudited consolidated financial statements.
 8




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##### Table of Contents



BFC Financial Corporation
 
 Consolidated Statements of Cash Flows  Unaudited
 (In thousands)
 For the Six MonthsEnded June 30,2006
    
    
    2005Operating activities:(Loss) income from continuing operations
    
    $
    (338
    )
    
    $
    7,329Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (198
    )Adjustment to reconcile net income to net cash
(used in) provided by operating activities:Noncontrolling interest in income of consolidated subsidiaries
    
    
    10,456
    
    
    
    64,074Provision (recovery from) loan losses, REO and
and tax certificates and valuation allowances, net
    
    
    293
    
    
    
    (3,046
    )Depreciation, amortization and accretion, net
    
    
    11,337
    
    
    
    9,948Amortization of deferred rent
    
    
    3,344
    
    
    
    1,568Amortization of intangible assets
    
    
    787
    
    
    
    825BFC share based compensation expense related
to stock option and restricted stock
    
    
    448
    
    
    
    Controlling subsidiaries share based compensation expense
related to stock options and restricted stock
    
    
    3,619
    
    
    
    BankAtlantic Bancorp excess tax benefits from share-based compensation
    
    
    (3,553
    )
    
    
    Securities activities, net
    
    
    (5,371
    )
    
    
    (192
    )Net gains on sale of real estate owned
    
    
    (724
    )
    
    
    (882
    )Net gains on sales of loans held for sale
    
    
    (294
    )
    
    
    (226
    )Gains on sales of property and equipment
    
    
    (3,107
    )
    
    
    (293
    )Gain on sale of branch
    
    
    
    
    
    
    (922
    )Decrease (increase) in deferred tax liabilities
    
    
    (3,874
    )
    
    
    2,567Equity earnings of unconsolidated affiliates
    
    
    (2,026
    )
    
    
    (6,999
    )Net gains associated with debt redemptions
    
    
    (71
    )
    
    
    Impairment of inventory and long lived assets
    
    
    6,049
    
    
    
    Impairment of office properties and equipment
    
    
    
    
    
    
    3,706Issuance of forgivable notes receivable
    
    
    (2,332
    )
    
    
    (2,675
    )Originations of loans held for sale, net
    
    
    (44,081
    )
    
    
    (35,109
    )Proceeds from sales of loans held for sale
    
    
    41,281
    
    
    
    32,766Increase in real estate held for development and sale
    
    
    (159,205
    )
    
    
    (36,008
    )Decrease in securities owned, net
    
    
    5,635
    
    
    
    16,348Increase (decrease) in securities sold but not yet purchased
    
    
    3,996
    
    
    
    (11,278
    )Increase in accrued interest receivable
    
    
    (1,153
    )
    
    
    (5,288
    )Increase in other assets
    
    
    (3,505
    )
    
    
    (28,065
    )Increase (decrease) in due to clearing agent
    
    
    10,281
    
    
    
    (5,472
    )Increase in customer deposits
    
    
    5,110
    
    
    
    2,816Decrease in other liabilities
    
    
    (37,444
    )
    
    
    (4,223
    )Net cash (used in) provided by operating activities
    
    $
    (164,442
    )
    
    $
    1,071
 (continued)
 See accompanying notes to unaudited consolidated financial statements.
 9




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##### Table of Contents



BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Six MonthsEnded June 30,2006
    
    
    2005Investing activities:Proceeds from redemption and maturities of investment
securities and tax certificates
    
    $
    84,669
    
    
    $
    96,204Purchase of investment securities and tax certificates
    
    
    (135,145
    )
    
    
    (191,761
    )Purchase of securities available for sale
    
    
    (86,820
    )
    
    
    (177,631
    )Proceeds from sales and maturities of securities
available for sale
    
    
    93,641
    
    
    
    175,839Purchases of FHLB stock
    
    
    (15,075
    )
    
    
    (21,725
    )Redemption of FHLB stock
    
    
    22,339
    
    
    
    11,982Investments in unconsolidated affiliates
    
    
    (6,025
    )
    
    
    (1,649
    )Distributions from unconsolidated subsidiaries
    
    
    4,766
    
    
    
    291Net repayments (purchases and originations) of loans
    
    
    30,156
    
    
    
    (273,481
    )Proceeds from sales of real estate owned
    
    
    1,708
    
    
    
    2,189Proceeds from the sale of property and equipment
    
    
    1,951
    
    
    
    664Purchases of office property and equipment
    
    
    (52,057
    )
    
    
    (23,858
    )Cash outflows from the sale of branch
    
    
    
    
    
    
    (13,605
    )Net cash used in investing activities
    
    
    (55,892
    )
    
    
    (416,541
    )Financing activities:Net increase in deposits
    
    
    82,330
    
    
    
    252,332Repayments of FHLB advances
    
    
    (1,436,344
    )
    
    
    (689,166
    )Proceeds from FHLB advances
    
    
    1,280,000
    
    
    
    840,000Increase (decrease) in securities sold under agreements
to repurchase
    
    
    73,331
    
    
    
    (23,648
    )Increase in federal funds purchased
    
    
    84,847
    
    
    
    4,500Proceeds from secured borrowings
    
    
    
    
    
    
    30,364Repayments of secured borrowings
    
    
    (26,516
    )
    
    
    Repayment of notes and bonds payable
    
    
    (118,520
    )
    
    
    (170,261
    )Proceeds from notes payable
    
    
    217,240
    
    
    
    145,406Proceeds from junior subordinated debentures
    
    
    15,464
    
    
    
    54,124Payment of debt issuance costs
    
    
    (576
    )
    
    
    (1,887
    )Payment by BFC of minimum withholding tax upon
the exercise of stock options
    
    
    (4,155
    )
    
    
    Proceeds from the issuance of BFC common stock
    
    
    
    
    
    
    46,325BFC issuance costs
    
    
    
    
    
    
    (3,790
    )BFC issuance of common stock upon exercise of stock options
    
    
    
    
    
    
    1725% Preferred Stock dividends paid
    
    
    (375
    )
    
    
    (375
    )BankAtlantic Bancorp excess tax benefits from share-based compensation
    
    
    3,553
    
    
    
    Proceeds from the issuance of BankAtlantic Bancorp Class A common stock
    
    
    1,053
    
    
    
    809Payment by BankAtlantic Bancorp of minimum withholding tax
upon the exercise of stock options
    
    
    (2,675
    )
    
    
    (3,519
    )BankAtlantic Bancorp purchase and retirement of its Class A common stock
    
    
    (3,631
    )
    
    
    Purchase by BankAtlantic Bancorp of its subsidiary common stock
    
    
    
    
    
    
    (491
    )BankAtlantic Bancorp common stock dividends paid to non-BFC shareholders
    
    
    (3,660
    )
    
    
    (3,317
    )Change in noncontrolling interest
    
    
    
    
    
    
    546Levitt common stock dividends paid to non-BFC shareholders
    
    
    (662
    )
    
    
    (660
    )Net cash provided by financing activities
    
    
    160,704
    
    
    
    477,464(Decrease) increase in cash and cash equivalents
    
    
    (59,630
    )
    
    
    61,994Cash and cash equivalents at the beginning of period
    
    
    305,437
    
    
    
    224,720Cash and cash equivalents at end of period
    
    $
    245,807
    
    
    $
    286,714
 (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 Six MonthsEnded June 30,2006
    
    
    2005Cash paid forInterest on borrowings and deposits, net of amounts capitalized
    
    $
    79,190
    
    
    $
    61,308Income taxes paid
    
    
    36,423
    
    
    
    27,710Supplemental disclosure of non-cash operating, investing and
financing activities:Loans transferred to REO
    
    
    1,924
    
    
    
    1,793Decreases in current income taxes payable from the tax
effect of fair value of employee stock options
    
    
    
    
    
    
    4,178Reduction in loans participations sold accounted for
as secured borrowings
    
    
    111,754
    
    
    
    Exchange of branch facilities
    
    
    2,350
    
    
    
    (Decrease) increase in accumulated other comprehensive income, net of taxes
    
    
    (804
    )
    
    
    4Net (decrease) increase in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    
    (313
    )
    
    
    441Securities purchased pending settlement
    
    
    
    
    
    
    3,557Issuance and retirement of BFC Common Stock accepted
as consideration for the exercise price of stock options
    
    
    4,155
    
    
    
    Increase in property and equipment reclassified from inventory
    
    
    7,987
    
    
    
    
 See accompanying notes to unaudited consolidated financial statements.
 11




---



##### Table of Contents



1. Presentation of Interim Financial Statements and Significantly Accounting Policies
      Accounting for the Impairment of Disposal of
Long-Lived Assets
 12




---



##### Table of Contents



PercentShares
    
    
    Percent of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    14.78
    %
    
    
    7.84
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    21.57
    %
    
    
    54.84
    %LevittClass A Common Stock
    
    
    2,074,243
    
    
    
    11.15
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.61
    %
    
    
    52.91
    %
    13




---



##### Table of Contents



Allowance for Loan Losses
   
    
    Delinquency and charge-off levels and trends;
    
    Problem loans and non-accrual levels and trends;
    
    Lending policy and underwriting procedures;
    
    Lending management and staff;
    
    Nature and volume of portfolio;
    
    Economic and business conditions;
    
    Concentration of credit;
    
    Quality of loan review system; and
    
    External factors
   2. Segment Reporting
   14




---



##### Table of Contents



BFC Activities
  Financial Services
  Homebuilding & Real Estate Development
   15




---



##### Table of Contents



Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2006
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    130,658
    
    
    $
    
    
    
    $
    130,658Interest and dividend income
    
    
    546
    
    
    
    92,328
    
    
    
    727
    
    
    
    (147
    )
    
    
    93,454Broker/dealer revenue
    
    
    
    
    
    
    51,381
    
    
    
    
    
    
    
    
    
    
    
    51,381Other income
    
    
    1,027
    
    
    
    37,345
    
    
    
    3,489
    
    
    
    (668
    )
    
    
    41,1931,573
    
    
    
    181,054
    
    
    
    134,874
    
    
    
    (815
    )
    
    
    316,686Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    100,910
    
    
    
    
    
    
    
    100,910Interest expense, net
    
    
    4
    
    
    
    39,392
    
    
    
    
    
    
    
    (147
    )
    
    
    39,249Provision for loan losses
    
    
    
    
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    (20
    )Other expenses
    
    
    3,217
    
    
    
    131,763
    
    
    
    37,131
    
    
    
    (668
    )
    
    
    171,4433,221
    
    
    
    171,135
    
    
    
    138,041
    
    
    
    (815
    )
    
    
    311,582Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    278
    
    
    
    2,075
    
    
    
    
    
    
    
    2,353(Loss) income before income taxes
    
    
    (1,648
    )
    
    
    10,197
    
    
    
    (1,092
    )
    
    
    
    
    
    
    7,457Provision (benefit) for income taxes
    
    
    57
    
    
    
    2,075
    
    
    
    (355
    )
    
    
    
    
    
    
    1,777(Loss) income
before noncontrolling interest
    
    
    (1,705
    )
    
    
    8,122
    
    
    
    (737
    )
    
    
    
    
    
    
    5,680Noncontrolling interest
    
    
    (5
    )
    
    
    6,372
    
    
    
    (614
    )
    
    
    
    
    
    
    5,753Net (loss) income
    
    $
    (1,700
    )
    
    $
    1,750
    
    
    $
    (123
    )
    
    $
    
    
    
    $
    (73
    )At June 30, 2006Total assets
    
    $
    47,122
    
    
    $
    6,402,357
    
    
    $
    1,018,416
    
    
    $
    (51,007
    )
    
    $
    7,416,888
 Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2005
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    107,094                  $
    
    
    
    
    
    
    $
    107,094Interest and dividend income
    
    
    245
    
    
    
    90,540
    
    
    
    689
    
    
    
    (313
    )
    
    
    91,161Broker/dealer revenue
    
    
    
    
    
    
    83,915
    
    
    
    
    
    
    
    (1,188
    )
    
    
    82,727Other income
    
    
    228
    
    
    
    25,151
    
    
    
    1,711
    
    
    
    (243
    )
    
    
    26,847473
    
    
    
    199,606
    
    
    
    109,494
    
    
    
    (1,744
    )
    
    
    307,829Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    84,547
    
    
    
    (207
    )
    
    
    84,340Interest expense, net
    
    
    192
    
    
    
    36,145
    
    
    
    
    
    
    
    (107
    )
    
    
    36,230Recovery for loan losses
    
    
    
    
    
    
    820
    
    
    
    -                         -
    
    
    
    
    
    
    
    820Other expenses
    
    
    2,120
    
    
    
    124,143
    
    
    
    20,085
    
    
    
    (237
    )
    
    
    146,1112,312
    
    
    
    161,108
    
    
    
    104,632
    
    
    
    (551
    )
    
    
    267,501Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    137
    
    
    
    4,771                     -
    
    
    
    
    
    
    
    4,908aaaaaa(Loss) income before income taxes
    
    
    (1,839
    )
    
    
    38,635
    
    
    
    9,633
    
    
    
    (1,193
    )
    
    
    45,236Provision (benefit) for income taxes
    
    
    1,522
    
    
    
    14,098
    
    
    
    3,581
    
    
    
    (494
    )
    
    
    18,707(Loss) income
before noncontrolling interest
    
    
    (3,361
    )
    
    
    24,537
    
    
    
    6,052
    
    
    
    (699
    )
    
    
    26,529Noncontrolling interest
    
    
    24
    
    
    
    19,184
    
    
    
    5,047
    
    
    
    (547
    )
    
    
    23,708(Loss) income from continuing
operations
    
    
    (3,385
    )
    
    
    5,353
    
    
    
    1,005
    
    
    
    (152
    )
    
    $
    2,821At June 30, 2005Total assets
    
    $
    55,536
    
    
    $
    6,883,051
    
    
    $
    716,206
    
    
    $
    (40,850
    )
    
    $
    7,613,943
 16




---



##### Table of Contents



Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2006
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    256,201
    
    
    $
    
    
    
    $
    256,201Interest and dividend income
    
    
    1,116
    
    
    
    184,439
    
    
    
    1,512
    
    
    
    (299
    )
    
    
    186,768Broker/dealer revenue
    
    
    
    
    
    
    105,943
    
    
    
    
    
    
    
    
    
    
    
    105,943Other income
    
    
    2,031
    
    
    
    66,885
    
    
    
    5,544
    
    
    
    (1,325
    )
    
    
    73,1353,147
    
    
    
    357,267
    
    
    
    263,257
    
    
    
    (1,624
    )
    
    
    622,047Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    202,965
    
    
    
    
    
    
    
    202,965Interest expense, net
    
    
    16
    
    
    
    78,365
    
    
    
    
    
    
    
    (299
    )
    
    
    78,082Provision for loan losses
    
    
    
    
    
    
    143
    
    
    
    
    
    
    
    
    
    
    
    143Other expenses
    
    
    6,494
    
    
    
    261,431
    
    
    
    64,512
    
    
    
    (1,325
    )
    
    
    331,1126,510
    
    
    
    339,939
    
    
    
    267,477
    
    
    
    (1,624
    )
    
    
    612,302Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    1,098
    
    
    
    2,026
    
    
    
    
    
    
    
    3,124(Loss) income before income taxes
    
    
    (3,363
    )
    
    
    18,426
    
    
    
    (2,194
    )
    
    
    
    
    
    
    12,869(Benefit) provision for income taxes
    
    
    (44
    )
    
    
    3,592
    
    
    
    (797
    )
    
    
    
    
    
    
    2,751(Loss) income
before noncontrolling interest
    
    
    (3,319
    )
    
    
    14,834
    
    
    
    (1,397
    )
    
    
    
    
    
    
    10,118Noncontrolling interest
    
    
    (4
    )
    
    
    11,625
    
    
    
    (1,165
    )
    
    
    
    
    
    
    10,456Net (loss) income
    
    $
    (3,315
    )
    
    $
    3,209
    
    
    $
    (232
    )
    
    $
    
    
    
    $
    (338
    )At June 30, 2006Total assets
    
    $
    47,122
    
    
    $
    6,402,357
    
    
    $
    1,018,416
    
    
    $
    (51,007
    )
    
    $
    7,416,888
 Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2005
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    305,960
    
    
    $
    
    
    
    $
    305,960Interest and dividend income
    
    
    488
    
    
    
    174,888
    
    
    
    1,207
    
    
    
    (1,075
    )
    
    
    175,508Broker/dealer revenue
    
    
    
    
    
    
    138,601
    
    
    
    
    
    
    
    (1,194
    )
    
    
    137,407Other income
    
    
    370
    
    
    
    49,004
    
    
    
    3,463
    
    
    
    (508
    )
    
    
    52,329858
    
    
    
    362,493
    
    
    
    310,630
    
    
    
    (2,777
    )
    
    
    671,204Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    215,136
    
    
    
    (820
    )
    
    
    214,316Interest expense, net
    
    
    312
    
    
    
    67,595
    
    
    
    
    
    
    
    (256
    )
    
    
    67,651Recovery for loan losses
    
    
    
    
    
    
    (3,096
    )
    
    
    
    
    
    
    
    
    
    
    (3,096
    )Other expenses
    
    
    4,504
    
    
    
    228,928
    
    
    
    44,547
    
    
    
    (508
    )
    
    
    277,4714,816
    
    
    
    293,427
    
    
    
    259,683
    
    
    
    (1,584
    )
    
    
    556,342Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    268
    
    
    
    6,999
    
    
    
    
    
    
    
    7,267(Loss) income before income
taxes
    
    
    (3,958
    )
    
    
    69,334
    
    
    
    57,946
    
    
    
    (1,193
    )
    
    
    122,129Provision for income taxes
    
    
    4,225
    
    
    
    24,919
    
    
    
    22,076
    
    
    
    (494
    )
    
    
    50,726(Loss) income
before noncontrolling interest
    
    
    (8,183
    )
    
    
    44,415
    
    
    
    35,870
    
    
    
    (699
    )
    
    
    71,403Noncontrolling interest
    
    
    18
    
    
    
    34,694
    
    
    
    29,909
    
    
    
    (547
    )
    
    
    64,074(Loss) income from
continuing operations
    
    
    (8,201
    )
    
    
    9,721
    
    
    
    5,961
    
    
    
    (152
    )
    
    $
    7,329At June 30, 2005Total assets
    
    $
    55,536
    
    
    $
    6,883,051
    
    
    $
    716,206
    
    
    $
    (40,850
    )
    
    $
    7,613,943
 17




---



##### Table of Contents



HomebuildingFinancial
    
    
    & Real EstateServices
    
    
    Development
    
    
    TotalBalance as of December 31, 2005
    
    $
    76,674
    
    
    $
    1,307
    
    
    $
    77,981Impairment of goodwill (a)
    
    
    
    
    
    
    (1,307
    )
    
    
    (1,307
    )Balance as of June 30, 2006
    
    $
    76,674
    
    
    $
    
    
    
    $
    76,674
 
 (a)
    
    In the three months ended June 30, 2006, the Companys Homebuilding & Real Estate
Development segment recognized an impairment charge of $1.3 million in goodwill associated
with Levitts Tennessee operations (see note 8). 3. Stock Based Compensation
 BFC
     18




---



##### Table of Contents



Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2005
    
    
    June 30, 2005Net income allocable to common stock, as reported
    
    $
    2,544
    
    
    $
    6,756Add: Stock-based employee compensation
expense included in reported net income, net of
related tax effects and noncontrolling interest
    
    
    9
    
    
    
    19Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related income tax
effects and noncontrolling interest
    
    
    (203
    )
    
    
    (411
    )Pro forma net income
    
    $
    2,350
    
    
    $
    6,364Earnings per share:Basic as reported
    
    $
    0.10
    
    
    $
    0.26Basic pro forma
    
    $
    0.09
    
    
    $
    0.24Diluted as reported
    
    $
    0.08
    
    
    $
    0.22Diluted pro forma
    
    $
    0.07
    
    
    $
    0.21
   19




---



##### Table of Contents



Stock Price
    
    $
    6.36Exercise Price
    
    $
    6.36Interest Rate
    
    
    5.01
    %Dividend Rate
    
    
    0.00
    %Volatility
    
    
    44.22
    %Option Life (years)
    
    
    7.5Option Value
    
    $
    3.54Annual Forfeiture Rate
    
    
    0.00
    %
  Three Months Ended
    
    
    Six Months EndedJune 30, 2006
    
    
    June 30, 2006Outstanding Options at Beginning of Period
    
    
    1,370,587
    
    
    
    5,299,569Granted
    
    
    236,500
    
    
    
    236,500Exercised
    
    
    
    
    
    
    (3,928,982
    )Forfeited
    
    
    
    
    
    
    Outstanding Options at June 30, 2006
    
    
    1,607,087
    
    
    
    1,607,087Exercisable at June 30, 2006
    
    
    
    
    
    
    364,527Available for grant at June 30, 2006
    
    
    
    
    
    
    2,509,476
  For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Weighted average exercise price of options
outstanding
    
    $
    4.88
    
    
    $
    2.64
    
    
    $
    4.88
    
    
    $
    2.64Weighted average exercise price of options granted
    
    $
    6.36
    
    
    $
    
    
    
    $
    6.36
    
    
    $
    Weighted average exercise price of options exercised
    
    $
    
    
    
    $
    1.49
    
    
    $
    2.32
    
    
    $
    1.53Weighted average price of options forfeited
    
    $
    
    
    
    $
    3.86
    
    
    $
    
    
    
    $
    3.74
   20




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted AverageRemainingRange of Exercise
    
    
    
    
    
    
    
    
    
    Weighted Average
    
    
    Contractual Life
    
    
    
    
    
    
    Weighted AveragePrices
    
    Vested
    
    
    Unvested
    
    
    Exercise price
    
    
    (years)
    
    
    Shares
    
    
    Exercise Price$0.00-$3.00
    
    
    192,120
    
    
    
    498,383
    
    
    $
    1.77
    
    
    
    5.45
    
    
    
    192,120
    
    
    $
    1.61$3.01-$6.00
    
    
    147,407
    
    
    
    
    
    
    $
    3.68
    
    
    
    1.54
    
    
    
    147,407
    
    
    $
    3.68$6.01-$9.00
    
    
    25,000
    
    
    
    744,177
    
    
    $
    7.90
    
    
    
    8.92
    
    
    
    25,000
    
    
    $
    8.40364,527
    
    
    
    1,242,560
    
    
    $
    4.88
    
    
    
    6.75
    
    
    
    364,527
    
    
    $
    2.91
  Options Outstanding
    
    
    Options ExercisableWeighted AverageRemainingRange of Exercise
    
    
    
    
    
    
    
    
    
    Weighted Average
    
    
    Contractual Life
    
    
    
    
    
    
    Weighted AveragePrices
    
    Vested
    
    
    Unvested
    
    
    Exercise price
    
    
    (years)
    
    
    Shares
    
    
    Exercise Price$0.00-$3.00
    
    
    2,857,668
    
    
    
    498,383
    
    
    $
    1.69
    
    
    
    3.15
    
    
    
    2,857,668
    
    
    $
    1.67$3.01-$6.00
    
    
    1,410,841
    
    
    
    
    
    
    $
    3.68
    
    
    
    2.54
    
    
    
    1,410,841
    
    
    $
    3.68$6.01-$9.00
    
    
    25,000
    
    
    
    276,177
    
    
    $
    8.33
    
    
    
    9.03
    
    
    
    25,000
    
    
    $
    8.404,293,509
    
    
    
    774,560
    
    
    $
    2.64
    
    
    
    3.33
    
    
    
    4,293,509
    
    
    $
    2.37
  Class A
    
    
    WeightedNonvested
    
    
    AverageRestricted
    
    
    Grant dateStock
    
    
    Fair ValueOutstanding at December 31, 2005
    
    
    11,262
    
    
    $
    100,007Vested
    
    
    (11,262
    )
    
    $
    (100,007
    )Forfeited
    
    
    
    
    
    
    Issued
    
    
    
    
    
    
    Outstanding at June 30, 2006
    
    
    
    
    
    $
    
  21




---



##### Table of Contents



BankAtlantic Bancorp
    22




---



##### Table of Contents



For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,(in thousands, except share data)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005BankAtlantic Bancorp net income, as
reported
    
    $
    8,122
    
    
    $
    24,537
    
    
    $
    14,834
    
    
    $
    44,415Add: Stock-based employee compensation
expense included in reported net income,
net of related income tax effects
    
    
    1,177
    
    
    
    41
    
    
    
    2,246
    
    
    
    85Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related income tax effects
    
    
    (1,177
    )
    
    
    (505
    )
    
    
    (2,246
    )
    
    
    (1,021
    )BankAtlantic Bancorp pro forma net income
    
    $
    8,122
    
    
    $
    24,073
    
    
    $
    14,834
    
    
    $
    43,479BankAtlantic Bancorp Earnings per share:Basic as reported
    
    $
    0.13
    
    
    $
    0.41
    
    
    $
    0.24
    
    
    $
    0.74Basic pro forma
    
    $
    N/A
    
    
    $
    0.40
    
    
    $
    N/A
    
    
    $
    0.72Diluted as reported
    
    $
    0.13
    
    
    $
    0.38
    
    
    $
    0.24
    
    
    $
    0.69Diluted pro forma
    
    $
    N/A
    
    
    $
    0.37
    
    
    $
    N/A
    
    
    $
    0.68
  Class A
    
    
    WeightedNonvested
    
    
    AverageRestricted
    
    
    Grant dateStock
    
    
    Fair ValueOutstanding at December 31,
2004
    
    
    147,500
    
    
    $
    7.54Vested
    
    
    (19,500
    )
    
    
    7.17Forfeited
    
    
    
    
    
    
    Issued
    
    
    
    
    
    
    Outstanding at June 30, 2005
    
    
    128,000
    
    
    $
    7.60Outstanding at December 31,
2005
    
    
    132,634
    
    
    $
    8.00Vested
    
    
    (24,134
    )
    
    
    9.42Forfeited
    
    
    
    
    
    
    Issued
    
    
    10,000
    
    
    
    14.26Outstanding at June 30, 2006
    
    
    118,500
    
    
    $
    8.23
   23




---



##### Table of Contents



Employees
    
    
    DirectorsStock Price
    
    $
    13.60
    
    
    $
    13.95Exercise Price
    
    $
    13.60
    
    
    $
    13.95Interest Rate
    
    
    4.66
    %
    
    
    4.66
    %Dividend Rate
    
    
    1.12
    %
    
    
    1.09
    %Volatility
    
    
    33.00
    %
    
    
    33.00
    %Option Life (years)
    
    
    7.50
    
    
    
    5.00Option Value
    
    $
    5.47
    
    
    $
    4.66Annual Forfeiture Rate
    
    
    3.00
    %
    
    
    0
    %
  Class AOutstandingOptionsOutstanding at December 31, 2004
    
    
    6,174,845Exercised
    
    
    (813,770
    )Forfeited
    
    
    (25,785
    )Issued
    
    
    Outstanding at June 30, 2005
    
    
    5,335,290Outstanding at December 31, 2005
    
    
    6,039,253Exercised
    
    
    (1,324,281
    )Forfeited
    
    
    (148,816
    )Issued
    
    
    37,408Outstanding at June 30, 2006
    
    
    4,603,564Available for grant at June 30, 2006
    
    
    5,126,253
 24




---



##### Table of Contents



For the Six MonthsEnded June 30,2006
    
    
    2005Weighted average exercise price of options
outstanding
    
    $
    10.43
    
    
    $
    7.45Weighted average exercise price of options exercised
    
    $
    4.07
    
    
    $
    2.38Weighted average price of options forfeited
    
    $
    13.74
    
    
    $
    10.35
   Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Class of
    
    Range of
    
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageCommon
    
    Exercise
    
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExerciseStock
    
    Prices
    
    
    at 06/30/06
    
    
    Contractual Life
    
    
    Price
    
    
    at 06/30/06
    
    
    PriceA
    
    $1.90 to  $3.83
    
    
    589,118
    
    
    4.1 years
    
    $
    2.98
    
    
    
    589,118
    
    
    $
    2.98A
    
    $3.84 to  $6.70
    
    
    676,057
    
    
    2.1 years
    
    
    4.87
    
    
    
    676,057
    
    
    
    4.87A
    
    $6.71 to  $9.36
    
    
    1,741,166
    
    
    6.2 years
    
    
    7.98
    
    
    
    61,920
    
    
    
    7.97A
    
    $9.37 to  $18.19
    
    
    114,952
    
    
    7.4 years
    
    
    12.68
    
    
    
    37,452
    
    
    
    10.27A
    
    $
    18.20 to $19.02
    
    
    
    1,482,271
    
    
    8.5 years
    
    
    18.62
    
    
    
    59,371
    
    
    
    18.484,603,564
    
    
    6.1 years
    
    $
    10.43
    
    
    
    1,423,918
    
    
    $
    4.93
  Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Class of
    
    Range of
    
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageCommon
    
    Exercise
    
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExerciseStock
    
    Prices
    
    
    at 06/30/05
    
    
    Contractual Life
    
    
    Price
    
    
    at 06/30/05
    
    
    PriceA
    
    $1.90 to  $3.83
    
    
    1,468,963
    
    
    3.9 years
    
    $
    3.21
    
    
    
    771,526
    
    
    $
    3.40A
    
    $3.84 to  $6.70
    
    
    1,227,779
    
    
    2.9 years
    
    
    4.96
    
    
    
    1,227,779
    
    
    
    4.96A
    
    $6.71 to  $9.36
    
    
    1,839,904
    
    
    6.9 years
    
    
    7.98
    
    
    
    65,310
    
    
    
    8.01A
    
    $9.37 to  $18.19
    
    
    30,044
    
    
    2.8 years
    
    
    9.36
    
    
    
    30,044
    
    
    
    9.36A
    
    $
    18.20 to $19.02
    
    
    
    768,600
    
    
    8.4 years
    
    
    18.20
    
    
    
    35,000
    
    
    
    18.205,335,290
    
    
    5.3 years
    
    $
    7.45
    
    
    
    2,129,659
    
    
    $
    4.77
  25




---



##### Table of Contents



Ryan Beck Stock Option Plan:
   Ryan BeckOutstandingOptionsOutstanding at December 31, 2004
    
    
    2,245,500Exercised
    
    
    Forfeited
    
    
    (7,500
    )Issued
    
    
    22,000Outstanding at June 30, 2005
    
    
    2,260,000Outstanding at December 31, 2005
    
    
    2,069,000Exercised
    
    
    Forfeited
    
    
    (22,500
    )Issued
    
    
    377,500Outstanding at June 30, 2006
    
    
    2,424,000Available for grant at June 30, 2006
    
    
    13,500
   For the Six MonthsEnded June 30,2006
    
    
    2005Stock Price
    
    $
    8.74
    
    
    $
    5.46Exercise Price
    
    $
    8.74
    
    
    $
    5.46Interest Rate
    
    
    4.55
    %
    
    
    4.39
    %Dividend Rate
    
    
    0.82
    %
    
    
    0.83
    %Volatility
    
    
    38.25
    %
    
    
    40.90
    %Option Life (years)
    
    
    7.00
    
    
    
    6.00Option Value
    
    $
    3.86
    
    
    $
    2.33Annual Forfeiture Rate
    
    
    9.32
    %
    
    
    0
    %
 26




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageExercise
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExercisePrices
    
    at 06/30/06
    
    
    Contractual Life
    
    
    Price
    
    
    at 06/30/06
    
    
    Price$1.60 to $1.68
    
    
    1,320,000
    
    
    5.8 years
    
    $
    1.62
    
    
    
    1,252,500
    
    
    $
    1.61$5.26 to $5.46
    
    
    726,500
    
    
    7.7 years
    
    
    5.27
    
    
    
    
    
    
    
    $5.50 to $8.74
    
    
    377,500
    
    
    9.6 years
    
    
    8.74
    
    
    
    
    
    
    
    2,424,000
    
    
    7.0 years
    
    $
    3.82
    
    
    
    1,252,500
    
    
    $
    1.61
  Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageExercise
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExercisePrices
    
    at 06/30/05
    
    
    Contractual Life
    
    
    Price
    
    
    at 06/30/05
    
    
    Price$1.60 to $1.68
    
    
    1,365,000
    
    
    6.6 years
    
    $
    1.62
    
    
    
    1,065,000
    
    
    $
    1.60$1.70 to $3.50
    
    
    75,000
    
    
    8.2 years
    
    
    3.36
    
    
    
    
    
    
    
    $5.26 to $5.46
    
    
    820,000
    
    
    8.1 years
    
    
    5.27
    
    
    
    
    
    
    
    2,260,000
    
    
    7.2 years
    
    $
    3.00
    
    
    
    1,065,000
    
    
    $
    1.60
  Levitt
    27




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2005
    
    
    2005Levitt pro forma net incomeLevitt net income, as reported
    
    $
    6,052
    
    
    $
    35,870Deduct: total stock-based employee compensation
expense determined under fair value based method
for all awards, net of related income tax effect
    
    
    (154
    )
    
    
    (306
    )Levitt pro forma net income
    
    $
    5,898
    
    
    $
    35,564Levitt basic earnings per share:As reported
    
    $
    0.31
    
    
    $
    1.81Pro forma
    
    $
    0.30
    
    
    $
    1.79Levitt diluted earnings per share:As reported
    
    $
    0.30
    
    
    $
    1.79Pro forma
    
    $
    0.29
    
    
    $
    1.78
   Expected volatility
    
    
    37.5023% - 37.5037
    %Weighted-average volatility
    
    
    37.50
    %Expected dividend yield
    
    
    .39% - .54
    %Weighted-average dividend yield
    
    
    .42
    %Risk-free interest rate
    
    
    5.02% - 5.13
    %Weighted-average risk-free rate
    
    
    5.05
    %Expected life
    
    7.5 yearsForfeiture rate  executives
    
    
    5.0
    %Forfeiture rate  non-executives
    
    
    10.0
    %
 28




---



##### Table of Contents



Weighted
    
    
    Weighted Average
    
    
    AggregateAverage
    
    
    Remaining
    
    
    IntrinsicNumber
    
    
    Exercise
    
    
    Contractual
    
    
    Valueof Options
    
    
    Price
    
    
    Term
    
    
    (thousands)Options outstanding at December 31,
2005
    
    
    1,305,176
    
    
    $
    25.59
    
    
    
    
    
    
    $
    0Granted
    
    
    37,500
    
    
    
    19.40
    
    
    
    
    
    
    $
    6Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    96,250
    
    
    $
    26.03
    
    
    
    
    
    
    $
    0Options outstanding at June 30, 2006
    
    
    1,246,426
    
    
    $
    25.37
    
    
    8.27 years
    
    $
    6Vested and expected to vest
in the future at June 30, 2006
    
    
    1,031,239
    
    
    $
    25.37
    
    
    8.27 years
    
    $
    5Options exercisable at June 30, 2006
    
    
    55,176
    
    
    $
    22.33
    
    
    7.79 years
    
    
    Stock available for equity
compensation
grants at June 30, 2006
    
    
    1,746,687
  Weighted Average
    
    
    Weighted Average
    
    
    Aggregate IntrinsicGrant Date
    
    
    Remaining
    
    
    Value (inShares
    
    
    Fair Value
    
    
    Contractual Term
    
    
    thousands)Non-vested at December 31, 2005
    
    
    1,250,000
    
    
    $
    13.44
    
    
    
    
    
    
    $
    0Grants
    
    
    37,500
    
    
    $
    9.38
    
    
    
    
    
    
    $
    6Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    96,250
    
    
    $
    13.01
    
    
    
    
    
    
    $
    0Non-vested at June 30, 2006
    
    
    1,191,250
    
    
    $
    13.35
    
    
    8.30 years
    
    $
    6
 29




---



##### Table of Contents



4. Discontinued Operations
   Three Months
    
    
    Six MonthsEnded
    
    
    EndedJune 30, 2005
    
    
    June 30, 2005BFC Activities  RevenuesOther income
    
    $
    44
    
    
    $
    57BFC Activities  ExpensesInterest expense
    
    
    191
    
    
    
    380Loss from discontinued operations
    
    
    (147
    )
    
    
    (323
    )Benefit for income taxes
    
    
    (57
    )
    
    
    (125
    )Loss from discontinued operations, net of tax
    
    $
    (90
    )
    
    $
    (198
    )
 5. Securities Owned
  30




---



##### Table of Contents



June 30,
    
    
    December 31,2006
    
    
    2005States and municipal obligations
    
    $
    55,117
    
    
    $
    76,568Corporate debt
    
    
    4,771
    
    
    
    3,410Obligations of U.S. Government
agencies
    
    
    56,509
    
    
    
    45,827Equity securities
    
    
    30,400
    
    
    
    23,645Mutual funds and other
    
    
    22,468
    
    
    
    28,359Certificates of deposit
    
    
    5,392
    
    
    
    2,483$
    174,657
    
    
    $
    180,292
   June 30,
    
    
    December 31,2006
    
    
    2005Equity securities
    
    $
    2,904
    
    
    $
    3,780Corporate debt
    
    
    1,146
    
    
    
    1,332State and municipal obligations
    
    
    107
    
    
    
    41Obligations of U.S. Government
agencies
    
    
    34,793
    
    
    
    29,653Certificates of deposits
    
    
    223
    
    
    
    371$
    39,173
    
    
    $
    35,177
   6. Benihana Convertible Preferred Stock Investment
  31




---



##### Table of Contents



7. Loans Receivable
  June 30,
    
    
    December 31,2006
    
    
    2005Real estate loans:Residential
    
    $
    2,060,161
    
    
    $
    2,043,055Construction and development
    
    
    928,215
    
    
    
    1,339,576Commercial
    
    
    1,071,760
    
    
    
    1,066,598Small business
    
    
    174,018
    
    
    
    151,924Other loans:Home equity
    
    
    524,735
    
    
    
    513,813Commercial business
    
    
    148,730
    
    
    
    89,752Small business  non-mortgage
    
    
    89,094
    
    
    
    83,429Consumer loans
    
    
    15,489
    
    
    
    21,469Deposit overdrafts
    
    
    6,458
    
    
    
    5,694Other loans
    
    
    1,000
    
    
    
    2,071Discontinued loans products (1)
    
    
    593
    
    
    
    1,207Total gross loans
    
    
    5,020,253
    
    
    
    5,318,588Adjustments:Undisbursed portion of loans in process
    
    
    (493,274
    )
    
    
    (649,296
    )Premiums related to purchased loans
    
    
    3,303
    
    
    
    5,566Deferred fees
    
    
    (2,729
    )
    
    
    (3,231
    )Deferred profit on commercial real estate loans
    
    
    (218
    )
    
    
    (231
    )Allowance for loan and lease losses
    
    
    (42,618
    )
    
    
    (41,830
    )Loans receivable  net
    
    $
    4,484,717
    
    
    $
    4,629,566
 
 (1)
    
    Discontinued loan products consist of lease financings and indirect
consumer loans. These loan products were discontinued during prior periods.  8. Real Estate Held for Development and Sale
  June 30,
    
    
    December 31,2006
    
    
    2005Land and land development costs
    
    $
    557,836
    
    
    $
    467,747Construction costs
    
    
    156,208
    
    
    
    120,830Capitalized costs
    
    
    64,196
    
    
    
    43,860Other
    
    
    119
    
    
    
    160Total
    
    $
    778,359
    
    
    $
    632,597
 32




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##### Table of Contents



9. Investments in Unconsolidated Affiliates
  June 30,
    
    
    December 31,2006
    
    
    2005Investment in Bluegreen
    
    $
    97,555
    
    
    $
    95,828Investment in real estate joint ventures
    
    
    4,511
    
    
    
    4,749Investment in statutory business trusts
    
    
    10,011
    
    
    
    9,547$
    112,077
    
    
    $
    110,124
  For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Equity in Bluegreen earnings
    
    $
    2,152
    
    
    $
    4,729
    
    
    $
    2,103
    
    
    $
    6,867Equity in joint ventures earnings
    
    
    45
    
    
    
    42
    
    
    
    715
    
    
    
    132Equity in statutory trusts earnings
    
    
    156
    
    
    
    137
    
    
    
    306
    
    
    
    268Income from unconsolidated
affiliates
    
    $
    2,353
    
    
    $
    4,908
    
    
    $
    3,124
    
    
    $
    7,267
  33




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##### Table of Contents



Unaudited Condensed Consolidated Balance Sheets
 June 30,
    
    
    December 31,2006
    
    
    2005Total assets
    
    $
    846,893
    
    
    $
    694,243Total liabilities
    
    $
    516,187
    
    
    $
    371,069Minority interest
    
    
    11,043
    
    
    
    9,508Total shareholders equity
    
    
    319,663
    
    
    
    313,666Total liabilities and shareholders equity
    
    $
    846,893
    
    
    $
    694,243
 Unaudited Condensed Consolidated Statements of Income
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,
    
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues and other income
    
    $
    165,481
    
    
    
    191,136
    
    
    
    312,218
    
    
    
    325,787Cost and other expenses
    
    
    153,105
    
    
    
    165,944
    
    
    
    292,265
    
    
    
    289,416Income before minority interest and
provision for income taxes
    
    
    12,376
    
    
    
    25,192
    
    
    
    19,953
    
    
    
    36,371Minority interest
    
    
    1,677
    
    
    
    948
    
    
    
    2,699
    
    
    
    1,721Income before provision for income taxes
    
    
    10,699
    
    
    
    24,244
    
    
    
    17,254
    
    
    
    34,650Provision for income taxes
    
    
    4,119
    
    
    
    9,334
    
    
    
    6,643
    
    
    
    13,340Income before cumulative effect of
change in accounting principle
    
    
    6,580
    
    
    
    14,910
    
    
    
    10,611
    
    
    
    21,310Cumulative effect of
change in accounting principle, net of tax
    
    
    
    
    
    
    
    
    
    
    (5,678
    )
    
    
    Minority interest in cumulative effect of
change in accounting principle
    
    
    
    
    
    
    
    
    
    
    1,184
    
    
    
    Net income
    
    $
    6,580
    
    
    
    14,910
    
    
    
    6,117
    
    
    
    21,310
  34




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##### Table of Contents



10. Impairment of Goodwill and Property and Equipment
 Impairment of Goodwill
  Impairment of Property and Equipment
  11. Defined Benefit Pension Plan
  For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Service cost benefits earned during the period
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest cost on projected benefit obligation
    
    
    407
    
    
    
    388
    
    
    
    814
    
    
    
    776Expected return on plan assets
    
    
    (547
    )
    
    
    (525
    )
    
    
    (1,094
    )
    
    
    (1,050
    )Amortization of unrecognized net gains and
losses
    
    
    237
    
    
    
    168
    
    
    
    474
    
    
    
    336Net periodic pension expense
    
    $
    97
    
    
    $
    31
    
    
    $
    194
    
    
    $
    62
  35




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##### Table of Contents



12. Advances from the Federal Home Loan Bank
    13. Other Debt
      36




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##### Table of Contents



14. Noncontrolling Interest
  June 30,
    
    
    December 31,2006
    
    
    2005BankAtlantic Bancorp
    
    $
    408,375
    
    
    $
    404,118Levitt
    
    
    290,801
    
    
    
    291,675Joint Venture Partnerships
    
    
    718
    
    
    
    729$
    699,894
    
    
    $
    696,522
   37




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##### Table of Contents



15. BankAtlantic Branch Sale
   AmountAssets sold:Loans
    
    $
    2,235Property and equipment
    
    
    733Liabilities transferred:Deposits
    
    
    (17,716
    )Accrued interest payable
    
    
    (27
    )Net assets sold
    
    
    (14,775
    )Write-off of core deposit intangible assets
    
    
    248Gain on sale of branch (a)
    
    
    922Net cash outflows from sale of branch
    
    $
    (13,605
    )
 
 (a)
    
    The gain on sale of the branch is included in Financial Services other income in the
Consolidated Statement of Operations. 16. Interest Expense
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Interest expense
    
    $
    49,071
    
    
    $
    40,766
    
    
    $
    96,413
    
    
    $
    76,135Interest capitalized
    
    
    (9,822
    )
    
    
    (4,536
    )
    
    
    (18,331
    )
    
    
    (8,484
    )Interest expense, net
    
    $
    39,249
    
    
    $
    36,230
    
    
    $
    78,082
    
    
    $
    67,651
 38




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##### Table of Contents



17. Commitments, Contingencies and Financial Instruments with off-Balance Sheet Risk
  June 30,
    
    
    December 31,2006
    
    
    2005BFC ActivitiesGuaranty agreements
    
    $
    21,528
    
    
    $
    21,660Financial ServicesCommitments to sell fixed rate residential loans
    
    
    24,575
    
    
    
    13,634Commitments to sell variable rate residential loans
    
    
    4,518
    
    
    
    4,438Commitments to sell variable rate commercial loans
    
    
    33,399
    
    
    
    0Commitments to purchase variable rate residential loans
    
    
    144,576
    
    
    
    6,689Commitments to originate loans held for sale
    
    
    29,952
    
    
    
    16,220Commitments to originate loans
    
    
    320,132
    
    
    
    311,081Commitments to extend credit, including the undisbursed
portion of loans in process
    
    
    965,098
    
    
    
    1,151,054Commitments to purchase branch facilities land
    
    
    6,199
    
    
    
    5,334Standby letters of credit
    
    
    70,013
    
    
    
    67,868Commercial lines of credit
    
    
    104,443
    
    
    
    119,639Homebuilding & Real Estate DevelopmentLevitts commitments to purchase properties for
development
    
    
    178,800
    
    
    
    186,200
 BFC Activities
    Financial Services
  39




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##### Table of Contents



Homebuilding & Real Estate Development
  Purchase
    
    
    
    
    
    
    ExpectedPrice
    
    
    Units
    
    
    ClosingHomebuilding Division
    
    $175.3 million
    
    5,078 units
    
    
    2006-2007Other Operations
    
    3.5 million
    
    90 units
    
    
    2006
   18. Certain Relationships and Related Party Transactions
  40




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##### Table of Contents



BankAtlantic(In thousands)
    
    
    
    
    
    BFC
    
    
    Bancorp
    
    
    Levitt
    
    
    BluegreenFor the three months ended June 30, 2006Shared service income (expense)
    
    
    (a
    )
    
    $
    525
    
    
    $
    (142
    )
    
    $
    (308
    )
    
    $
    (75
    )Interest income (expense) from cash balance/securities
sold under
agreements to repurchase
    
    
    
    
    
    $
    11
    
    
    $
    (147
    )
    
    $
    136
    
    
    $
    For the three months ended June 30, 2005Shared service income (expense)
    
    
    (b
    )
    
    $
    (96
    )
    
    $
    259
    
    
    $
    (199
    )
    
    $
    36Interest income (expense) from notes receivable/payable
    
    
    
    
    
    $
    
    
    
    $
    207
    
    
    $
    (207
    )
    
    $
    Interest income (expense) from cash balance/securities
sold under agreements to repurchase
    
    
    
    
    
    $
    7
    
    
    $
    (106
    )
    
    $
    99
    
    
    $
    For the six months ended June 30, 2006Shared service income (expense)
    
    
    (a
    )
    
    $
    1,031
    
    
    $
    (282
    )
    
    $
    (610
    )
    
    $
    (139
    )Interest income (expense) from cash balance/securities
sold under agreements to repurchase
    
    
    
    
    
    $
    21
    
    
    $
    (299
    )
    
    $
    278
    
    
    $
    For the six months ended June 30, 2005Shared service income (expense)
    
    
    (b
    )
    
    $
    (176
    )
    
    $
    340
    
    
    $
    (348
    )
    
    $
    184Interest income (expense) from notes receivable/payable
    
    
    
    
    
    $
    
    
    
    $
    820
    
    
    $
    (820
    )
    
    $
    Interest income (expense) from cash balance/securities
sold under agreements to repurchase
    
    
    
    
    
    $
    14
    
    
    $
    (255
    )
    
    $
    241
    
    
    $
    Fees income (expense) relating to the underwritten public
offering
    
    
    
    
    
    $
    (1,195
    )
    
    $
    1,195
    
    
    $
    
    
    
    $
    At June 30, 2006Cash and cash equivalents and (securities sold under
agreements to repurchase)
    
    
    
    
    
    $
    1,377
    
    
    $
    (12,980
    )
    
    $
    11,603
    
    
    $
    At December 31, 2005Cash and cash equivalents and (securities sold under
agreements to repurchase)
    
    
    
    
    
    $
    1,115
    
    
    $
    (6,238
    )
    
    $
    5,123
    
    
    $
    Notes receivable (payable)
    
    
    
    
    
    $
    
    
    
    $
    223
    
    
    $
    (223
    )
    
    $
    
 
 (a)
    
    Effective January 1, 2006, BFC maintained arrangements with BankAtlantic Bancorp,
Levitt and Bluegreen to provide shared service operations in the areas of human resources,
risk management, investor relations and executive office administration. This arrangement
provided that certain employees from BankAtlantic were transferred to BFC to staff BFCs
shared service operations and such costs are allocated based upon the usage by 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)
    
    In 2005, BankAtlantic Bancorp maintained service arrangements with BFC and Levitt,
pursuant to which BankAtlantic Bancorp provided certain human resources, risk management,
project planning, system support and investor and public relations services. For such
services BankAtlantic Bancorp was compensated on a cost plus 5% basis. Additionally, in
2005 Levitt reimbursed BankAtlantic for office facilities costs.  41




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42




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19. (Loss) Earnings Per Share
   For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Basic (loss) earnings per shareNumerator:(Loss) income from continuing operations
allocable to common stock
    
    $
    (260
    )
    
    $
    2,634
    
    
    $
    (713
    )
    
    $
    6,954Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (198
    )Net (loss) income allocable to common stock
    
    $
    (260
    )
    
    $
    2,544
    
    
    $
    (713
    )
    
    $
    6,756Denominator:Weighted average number of common shares outstanding
    
    
    35,815
    
    
    
    28,774
    
    
    
    35,450
    
    
    
    28,460Eliminate RAG weighted average number of common shares
    
    
    (2,393
    )
    
    
    (2,393
    )
    
    
    (2,393
    )
    
    
    (2,393
    )Basic weighted average number of common shares outstanding
    
    
    33,422
    
    
    
    26,381
    
    
    
    33,057
    
    
    
    26,067Basic (loss) earnings per share:(Loss) earnings per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.10
    
    
    $
    (0.02
    )
    
    $
    0.27Loss per share from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )Basic (loss) earnings per share
    
    $
    (0.01
    )
    
    $
    0.10
    
    
    $
    (0.02
    )
    
    $
    0.26Diluted (loss) earnings per shareNumeratorNet (loss) income allocable to common stock
    
    $
    (260
    )
    
    $
    2,544
    
    
    $
    (713
    )
    
    $
    6,756Effect of securities issuable by subsidiaries
    
    
    (6
    )
    
    
    (236
    )
    
    
    (23
    )
    
    
    (402
    )Net (loss) income allocable to common stock
after assumed dilution
    
    $
    (266
    )
    
    $
    2,308
    
    
    $
    (736
    )
    
    $
    6,354DenominatorBasic weighted average number of common shares outstanding
    
    
    33,422
    
    
    
    26,381
    
    
    
    33,057
    
    
    
    26,067Common stock equivalents resulting from
stock-based compensation
    
    
    
    
    
    
    2,521
    
    
    
    
    
    
    
    2,557Diluted weighted average shares outstanding
    
    
    33,422
    
    
    
    28,902
    
    
    
    33,057
    
    
    
    28,624Diluted (loss) earnings per share:(Loss) earnings per share from continuing operations
    
    $
    (0.01
    )
    
    $
    0.08
    
    
    $
    (0.02
    )
    
    $
    0.23Loss per share from discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )Diluted (loss) earnings per share
    
    $
    (0.01
    )
    
    $
    0.08
    
    
    $
    (0.02
    )
    
    $
    0.22
  43




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20. Parent Company Financial Information
   
 June 30,
    
    
    December 31,2006
    
    
    2005AssetsCash and cash equivalents
    
    $
    18,891
    
    
    $
    26,683Investment securities
    
    
    2,123
    
    
    
    2,034Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    935
    
    
    
    950Investment in BankAtlantic Bancorp, Inc.
    
    
    112,326
    
    
    
    112,218Investment in Levitt Corporation
    
    
    57,937
    
    
    
    58,111Investment in and advances to wholly owned subsidiaries
    
    
    1,439
    
    
    
    1,631Loans receivable
    
    
    1,000
    
    
    
    2,071Other assets
    
    
    3,249
    
    
    
    960Total assets
    
    $
    217,900
    
    
    $
    224,658Liabilities and Shareholders EquityAdvances from wholly owned subsidiaries
    
    $
    582
    
    
    $
    462Other liabilities
    
    
    6,824
    
    
    
    7,417Deferred income taxes
    
    
    32,951
    
    
    
    33,699Total liabilities
    
    
    40,357
    
    
    
    41,578Total shareholders equity
    
    
    177,543
    
    
    
    183,080Total liabilities and shareholders equity
    
    $
    217,900
    
    
    $
    224,658
 44




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##### Table of Contents



For the Three Months Ended
    
    
    For the Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Revenues
    
    $
    603
    
    
    $
    332
    
    
    $
    1,176
    
    
    $
    632Expenses
    
    
    2,141
    
    
    
    1,977
    
    
    
    4,361
    
    
    
    4,142(Loss) before undistributed earnings from
subsidiaries
    
    
    (1,538
    )
    
    
    (1,645
    )
    
    
    (3,185
    )
    
    
    (3,510
    )Equity from earnings in BankAtlantic Bancorp
    
    
    1,749
    
    
    
    5,200
    
    
    
    3,208
    
    
    
    9,568Equity from (loss) earnings in Levitt
    
    
    (123
    )
    
    
    1,006
    
    
    
    (232
    )
    
    
    5,961Equity from (loss) in other subsidiaries
    
    
    (143
    )
    
    
    (106
    )
    
    
    (175
    )
    
    
    (245
    )(Loss) income before income taxes
    
    
    (55
    )
    
    
    4,455
    
    
    
    (384
    )
    
    
    11,774Provision (benefit) for income taxes
    
    
    18
    
    
    
    1,634
    
    
    
    (46
    )
    
    
    4,445(Loss) income from continuing operations
    
    
    (73
    )
    
    
    2,821
    
    
    
    (338
    )
    
    
    7,329Loss from discontinued operations, net of tax
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (198
    )Net (loss) income
    
    
    (73
    )
    
    
    2,731
    
    
    
    (338
    )
    
    
    7,1315% Preferred Stock dividends
    
    
    187
    
    
    
    187
    
    
    
    375
    
    
    
    375Net (loss) income allocable to common stock
    
    $
    (260
    )
    
    $
    2,544
    
    
    $
    (713
    )
    
    $
    6,756
 
 For the six MonthsEnded June 30,2006
    
    
    2005Operating Activities:Net cash used in operating activities
    
    $
    (3,397
    )
    
    $
    (953
    )Investing Activities:Dividends from subsidiaries
    
    
    1,135
    
    
    
    1,056Investment in real estate limited partnership
    
    
    (1,000
    )
    
    
    Net cash provided by investing activities
    
    
    135
    
    
    
    1,056Financing Activities:Issuance of common stock net of issuance costs
    
    
    
    
    
    
    42,383Repayments of borrowing
    
    
    
    
    
    
    (11,483
    )Proceeds from the issuance of Class B Common Stock upon exercise of stock
options
    
    
    
    
    
    
    172Borrowings
    
    
    
    
    
    
    1,000Payment of the minimum withholding tax upon the exercise of stock option
    
    
    (4,155
    )
    
    
    5% Preferred Stock dividends paid
    
    
    (375
    )
    
    
    (375
    )Net cash used in (provided by) financing activities
    
    
    (4,530
    )
    
    
    31,697(Decrease) increase in cash and cash equivalents
    
    
    (7,792
    )
    
    
    31,800Cash at beginning of period
    
    
    26,683
    
    
    
    1,520Cash at end of period
    
    $
    18,891
    
    
    $
    33,320Supplementary disclosure of non-cash investing
and financing activitiesInterest paid on borrowings
    
    $
    
    
    
    $
    234Net (decrease) increase in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    
    (313
    )
    
    
    441(Decrease) increase in accumulated other comprehensive income, net of taxes
    
    
    (804
    )
    
    
    4Decrease in shareholders equity for the tax effect related
to the exercise of employee stock options
    
    
    
    
    
    
    (12
    )Issuance and retirement of Common Stock accepted
as consideration for the exercise price of stock options
    
    
    4,156
    
    
    
    
 45




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##### Table of Contents



21. Nonmonetary Transactions
   22. Settlement of Compliance Matter
  23. New Accounting Pronouncements
   46




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##### Table of Contents



24 Litigation
  47




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##### Table of Contents



BFC Financial Corporation and Subsidiaries
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
      48




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PercentShares
    
    
    Percent of
    
    
    ofOwned
    
    
    Ownership
    
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    14.78
    %
    
    
    7.84
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    21.57
    %
    
    
    54.84
    %LevittClass A Common Stock
    
    
    2,074,243
    
    
    
    11.15
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.61
    %
    
    
    52.91
    %
 Forward Looking Statement
   
    
    the impact of economic, competitive and other factors affecting the Company and its
subsidiaries, and their operations, markets, products and services;
    
    that BFC may not have sufficient available cash to make desired investments or to fund operations;
    
    that BFC shareholders interests may be diluted in transactions utilizing BFC stock for consideration;
    
    that the performance of entities in which the Company holds interests may not be as anticipated; and
    
    that BFC will be subject to the unique business and industry risks and characteristics
of each entity in which an investment is made.
  
    
    credit risks and loan losses and the related sufficiency of the allowance for loan
losses; including the impact on the credit quality of BankAtlantic loans from changes in
the real estate market in its trade area;
    
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal
policies and laws including the impact on the BankAtlantic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 BankAtlantic Bancorp activities and the value of its
assets;
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
    
    BankAtlantics seven-day banking initiative, new store expansion program and other
growth, marketing or advertising initiatives not resulting in continued growth of low cost
deposits or producing results which justify their costs;
    
    successfully opening the anticipated number of new stores in 2006 and 2007 and achieving
growth and profitability at the stores; and
    
    the impact of periodic testing of goodwill and other intangible assets for impairment;
and
    
    that past performance, actual or estimated new account openings and growth rates may not
be indicative of future results.
  
    
    operations, products and services, changes in economic or regulatory policies;
    
    its ability to recruit and retain financial consultants;
    
    the volatility of the stock market and fixed income markets, as well as its finance,
investment banking and capital markets areas, including that the associated increased
headcount will produce results which justify the increased expenses; and
    
    additional risks and uncertainties that are subject to change and may be outside of Ryan
Becks control.
   
    
    the impact of economic, competitive and other factors affecting Levitt and its
operations;
    
    the market for real estate generally and in the areas where Levitt has developments,
including the impact of market conditions in Levitts margins;
    
    delays in opening planned new communities and completing developments as currently anticipated;
    
    shortages and increased costs of construction materials and labor;
    
    the need to offer additional incentives to buyers to generate sales;
    
    the effects of increases in interest rates;
    
    Levitts ability to consummate sales contracts included in Levitts backlog;
    
    Levitts ability to realize the expected benefits of its expanded platform, technology
investments, growth initiatives and strategic objectives;
    
    Levitts ability to timely close on land sales and to deliver homes from backlog,
shorten delivery cycles and improve operational and construction efficiency;
    
    the realization of cost saving associated with reductions of workforce and the ability
to limit overhead and costs commensurate with sales;
    
    the actual costs of disposition of Levitts assets in the Tennessee operations may
exceed current estimates; and
    
    Levitts success at managing the risks involved in the foregoing.
  50




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Critical Accounting Policies
  Share-Based Compensation
    51




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Summary of Consolidated Results of Operations by Segment
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In thousands)
    
    2006
    
    
    2005
    
    
    2006
    
    
    2005BFC Activities
    
    $
    (1,705
    )
    
    $
    (3,361
    )
    
    $
    (3,319
    )
    
    $
    (8,183
    )Financial Services
    
    
    8,122
    
    
    
    24,537
    
    
    
    14,834
    
    
    
    44,415Homebuilding & Real Estate Development
    
    
    (737
    )
    
    
    6,052
    
    
    
    (1,397
    )
    
    
    35,870Eliminations
    
    
    
    
    
    
    (699
    )
    
    
    
    
    
    
    (699
    )5,680
    
    
    
    26,529
    
    
    
    10,118
    
    
    
    71,403Noncontrolling interest
    
    
    5,753
    
    
    
    23,708
    
    
    
    10,456
    
    
    
    64,074(Loss) income from continuing operations
    
    
    (73
    )
    
    
    2,821
    
    
    
    (338
    )
    
    
    7,329Discontinued operations, less income taxes
    
    
    
    
    
    
    (90
    )
    
    
    
    
    
    
    (198
    )Net (loss) income
    
    
    (73
    )
    
    
    2,731
    
    
    
    (338
    )
    
    
    7,1315% Preferred Stock dividends
    
    
    187
    
    
    
    187
    
    
    
    375
    
    
    
    375Net (loss) income allocable to common stock
    
    $
    (260
    )
    
    $
    2,544
    
    
    $
    (713
    )
    
    $
    6,756
 Accounting for the Impairment of Disposal of Long-Lived Assets
  52




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BFC Activities
    For the Three Months
    
    
    
    
    
    
    For the Six MonthsEnded June 30,
    
    
    Change
    
    
    Ended June 30,
    
    
    Change2006 vs.
    
    
    
    
    
    
    
    
    
    
    2006 vs.(In thousands)
    
    2006
    
    
    2005
    
    
    2005
    
    
    2006
    
    
    2005
    
    
    2005RevenuesInterest and
dividend income
    
    $
    546
    
    
    $
    245
    
    
    $
    301
    
    
    $
    1,116
    
    
    $
    488
    
    
    $
    628Other income, net
    
    
    1,027
    
    
    
    228
    
    
    
    799
    
    
    
    2,031
    
    
    
    370
    
    
    
    1,6611,573
    
    
    
    473
    
    
    
    1,100
    
    
    
    3,147
    
    
    
    858
    
    
    
    2,289Cost and ExpensesInterest expense
    
    
    4
    
    
    
    192
    
    
    
    (188
    )
    
    
    16
    
    
    
    312
    
    
    
    (296
    )Employee compensation
and benefits
    
    
    2,299
    
    
    
    1,224
    
    
    
    1,075
    
    
    
    4,736
    
    
    
    2,820
    
    
    
    1,916Other expenses
    
    
    918
    
    
    
    896
    
    
    
    22
    
    
    
    1,758
    
    
    
    1,684
    
    
    
    743,221
    
    
    
    2,312
    
    
    
    909
    
    
    
    6,510
    
    
    
    4,816
    
    
    
    1,694Loss before income taxes
    
    
    (1,648
    )
    
    
    (1,839
    )
    
    
    191
    
    
    
    (3,363
    )
    
    
    (3,958
    )
    
    
    595Provision (benefit) for
income taxes
    
    
    57
    
    
    
    1,522
    
    
    
    (1,465
    )
    
    
    (44
    )
    
    
    4,225
    
    
    
    (4,269
    )Noncontrolling interest
    
    
    (5
    )
    
    
    24
    
    
    
    (29
    )
    
    
    (4
    )
    
    
    18
    
    
    
    (22
    )Loss from continuing
operations
    
    
    (1,700
    )
    
    
    (3,385
    )
    
    
    1,685
    
    
    
    (3,315
    )
    
    
    (8,201
    )
    
    
    4,886Discontinued operations,
less income taxes
    
    
    
    
    
    
    (90
    )
    
    
    90
    
    
    
    
    
    
    
    (198
    )
    
    
    198Net loss
    
    $
    (1,700
    )
    
    $
    (3,475
    )
    
    $
    1,775
    
    
    $
    (3,315
    )
    
    $
    (8,399
    )
    
    $
    5,084
  53




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Liquidity and Capital Resources of BFC
  For the Six Months EndedJune 30,2006
    
    
    2005Net cash provided by (used in):Operating activities
    
    $
    (2,684
    )
    
    $
    (1,357
    )Investing activities
    
    
    135
    
    
    
    1,026Financing activities
    
    
    (4,539
    )
    
    
    31,650(Decrease) increase in cash and cash equivalents
    
    
    (7,088
    )
    
    
    31,319Cash and cash equivalents at beginning of period
    
    
    26,806
    
    
    
    2,227Cash and cash equivalents at end of period
    
    $
    19,718
    
    
    $
    33,546
  
    
    Dividends from BankAtlantic Bancorp and Levitt;
    
    Dividends from Benihana;
    
    Revenues from CCC advisory fees;
    
    Revenues from shared services activities in 2006;
    
    In 2005, the Company sold 5,957,555 shares of its Class A Common Stock, net proceeds
from the sale totaled approximately $46.4 million, after underwriting discounts,
commissions and offering expenses; and
    
    Principal and interest payments on loans receivable.Funds were primarily utilized by BFC to:
    
    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;
    
    Repayment of $10.5 million outstanding under the Companys revolving line of credit
during 2005 and payment of mortgage payables;
    
    Fund a $1.0 million investment in a real estate limited partnership during 2006;
    
    Fund BFCs operating and general and administrative expenses; and
    
    Fund the payment of dividends on the Companys 5% Cumulative Convertible Preferred Stock.
  55




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Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    Decrease in securities owned associated with Ryan Becks trading activities;
    
    Decline in securities available for sale reflecting BankAtlantic Bancorps investment
strategy to limit asset growth in response to the relatively flat yield curve during the
period;
    
    Higher investment securities balances at BankAtlantic due to purchases of tax
certificates at annual auctions;
    
    Lower investment in FHLB stock related to repayments of FHLB advances;
    
    Decline in loan receivable balances associated with lower commercial real estate loan
balances primarily resulting from a decision to cease condominium lending, and $112
million of participations sold being treated as loan sales instead of secured borrowings
as a result of BankAtlantic Bancorps decisions to amend the related participation
agreements;
    
    Net increase in inventory of real estate was primarily due to land acquisitions by
Levitt;
    
    Increase in investment in unconsolidated subsidiaries primarily associated with
Bluegreens equity earnings. This increase was partially offset with capital distribution
from an investment in a rental real estate joint venture and by a $4.1 million investment
in another rental real estate joint venture during the first quarter of 2006 by
BankAtlantic Bancorp;
    
    Increase in property and equipment is primarily due BankAtlantics branch expansion
initiatives, Levitts increase of approximately $18.6 million associated with investment
in commercial properties under construction at Core Communities, and Levitts technology
infrastructure system development;
    
    Increase in accrued interest receivable at BankAtlantic resulting from higher rates on
earning assets during the period partially offset by lower earning asset balances;
    
    Decrease in goodwill is due to Levitts impairment charge on its Tennessee operations
(see note 10); and
    
    Increase in other assets from higher accrued revenues at Ryan Beck as well as higher
prepaid expenses and leasehold improvement allowances.
  
    
    Higher deposit account balances resulting from growth in low-cost deposits at
BankAtlantic;
    
    Increase in customer deposits on real estate held for sale at Levitt associated with
Levitts homebuilding backlog;
    
    Decrease in FHLB advances balances at BankAtlantic reflecting redemptions of long term
advances as part of a strategy to reduce asset sensitivity in our net interest margin;
    
    Increase in short-term borrowings at BankAtlantic to fund redemptions of FHLB advances
and the purchase of tax certificates;
    
    Decrease in secured borrowings (associated with loan participations sold without
recourse that were previously accounted for as secured borrowings) at BankAtlantic due to
loan repayments and BankAtlantics decision to amend participation sold agreements to
qualify as loan sales instead of secured borrowing arrangements;
    
    Increase in subordinated debentures, notes and bonds payable primarily related to
project debt associated with 2006 land acquisitions and land development activities at
Levitt;
    
    Increase in Ryan Beck securities sold but not yet purchased and due to clearing
agents relating to Ryan Becks trading activities;
    
    Increase of $15.4 million in junior subordinated debentures associated with Levitt;
    
    Declines in other liabilities primarily associated with a reduction in accrued
employee compensation and benefits reflecting the payout of 2005 annual bonuses during
the first quarter of 2006 as well as the reduction in a $10 million reserve for the
AML/BSA compliance matters based on payment made by
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BankAtlantic of that amount, as well as lower current tax liability at Levitt, partially
offset with an increase in Levitts accounts payable and accrued liabilities relating to
selling, general and administrative and construction costs; and
 
    
    Decline in deferred tax liability primarily due to BankAtlantic Bancorps increase in
deferred tax assets resulting from a decline in other comprehensive income.
 Noncontrolling Interest
  June 30,
    
    
    December 31,2006
    
    
    2005BankAtlantic Bancorp
    
    $
    408,375
    
    
    $
    404,118Levitt
    
    
    290,801
    
    
    
    291,675Joint Venture Partnerships
    
    
    718
    
    
    
    729$
    699,894
    
    
    $
    696,522
   Shareholders Equity
  58




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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 June 30, 2006 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.
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Critical Accounting Policies
  Share-based Compensation
    60




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Summary Consolidated Results of Operations by Segment
 For the Three Months Ended June 30,
    
    
    For the Six Months Ended June 30,(in thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeBankAtlantic
    
    $
    12,752
    
    
    $
    14,771
    
    
    $
    (2,019
    )
    
    $
    23,170
    
    
    $
    35,632
    
    
    $
    (12,462
    )Ryan Beck
    
    
    (2,367
    )
    
    
    13,031
    
    
    
    (15,398
    )
    
    
    (3,932
    )
    
    
    15,561
    
    
    
    (19,493
    )Parent Company
    
    
    (2,263
    )
    
    
    (3,265
    )
    
    
    1,002
    
    
    
    (4,404
    )
    
    
    (6,778
    )
    
    
    2,374Net income
    
    $
    8,122
    
    
    $
    24,537
    
    
    $
    (16,415
    )
    
    $
    14,834
    
    
    $
    44,415
    
    
    $
    (29,581
    )
 For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
     For the Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
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BankAtlantic Results of Operations
 Net interest income
 Bank Operations Business Segment
Average Balance Sheet  Yield / Rate Analysis
 For the Three Months EndedJune 30, 2006
    
    
    June 30, 2005(in thousands)
    
    Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateLoans:Residential real estate
    
    $
    2,047,430
    
    
    
    26,288
    
    
    
    5.14
    %
    
    $
    2,262,214
    
    
    
    27,597
    
    
    
    4.88
    %Commercial real estate
    
    
    1,480,314
    
    
    
    30,965
    
    
    
    8.37
    
    
    
    1,726,861
    
    
    
    30,298
    
    
    
    7.02Loan participations sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,778
    
    
    
    2,483
    
    
    
    6.04Consumer
    
    
    546,624
    
    
    
    10,175
    
    
    
    7.45
    
    
    
    505,338
    
    
    
    7,595
    
    
    
    6.01Lease financing
    
    
    173
    
    
    
    4
    
    
    
    9.25
    
    
    
    4,710
    
    
    
    131
    
    
    
    11.13Commercial business
    
    
    148,604
    
    
    
    3,239
    
    
    
    8.72
    
    
    
    85,778
    
    
    
    1,598
    
    
    
    7.45Small business
    
    
    255,701
    
    
    
    5,093
    
    
    
    7.97
    
    
    
    206,272
    
    
    
    3,788
    
    
    
    7.35Total loans
    
    
    4,478,846
    
    
    
    75,764
    
    
    
    6.77
    
    
    
    4,955,951
    
    
    
    73,490
    
    
    
    5.93Investments  tax exempt
    
    
    398,404
    
    
    
    5,817
    (1)
    
    
    5.84
    
    
    
    368,264
    
    
    
    5,329
    (1)
    
    
    5.79Investments  taxable
    
    
    583,026
    
    
    
    8,197
    
    
    
    5.62
    
    
    
    722,628
    
    
    
    9,520
    
    
    
    5.27Total interest earning assets
    
    
    5,460,276
    
    
    
    89,778
    
    
    
    6.58
    %
    
    
    6,046,843
    
    
    
    88,339
    
    
    
    5.84
    %Goodwill and core deposit intangibles
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    78,301
    
    
    
    79,910Other non-interest earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366,784
    
    
    
    298,018Total Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,905,361
    
    
    $
    6,424,771Deposits:Savings
    
    $
    364,946
    
    
    
    523
    
    
    
    0.57
    %
    
    $
    301,331
    
    
    
    209
    
    
    
    0.28
    %NOW
    
    
    764,738
    
    
    
    1,023
    
    
    
    0.54
    
    
    
    685,769
    
    
    
    723
    
    
    
    0.42Money market
    
    
    765,805
    
    
    
    3,974
    
    
    
    2.08
    
    
    
    906,514
    
    
    
    3,295
    
    
    
    1.46Certificate of deposit
    
    
    844,318
    
    
    
    8,331
    
    
    
    3.96
    
    
    
    782,335
    
    
    
    5,307
    
    
    
    2.72Total interest bearing deposits
    
    
    2,739,807
    
    
    
    13,851
    
    
    
    2.03
    
    
    
    2,675,949
    
    
    
    9,534
    
    
    
    1.43Short-term borrowed funds
    
    
    402,390
    
    
    
    5,001
    
    
    
    4.98
    
    
    
    364,575
    
    
    
    2,681
    
    
    
    2.95Advances from FHLB
    
    
    1,010,459
    
    
    
    13,007
    
    
    
    5.16
    
    
    
    1,615,310
    
    
    
    15,604
    
    
    
    3.87Secured borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164,778
    
    
    
    2,483
    
    
    
    6.04Long-term debt
    
    
    36,665
    
    
    
    916
    
    
    
    10.02
    
    
    
    35,810
    
    
    
    578
    
    
    
    6.47Total interest bearing liabilities
    
    
    4,189,321
    
    
    
    32,775
    
    
    
    3.14
    
    
    
    4,856,422
    
    
    
    30,880
    
    
    
    2.55Demand deposits
    
    
    1,109,361
    
    
    
    
    
    
    
    
    
    
    
    982,332Non-interest bearing other liabilities
    
    
    51,442
    
    
    
    
    
    
    
    
    
    
    
    48,459Total Liabilities
    
    
    5,350,124
    
    
    
    
    
    
    
    
    
    
    
    5,887,213Stockholders equity
    
    
    555,237
    
    
    
    
    
    
    
    
    
    
    
    537,558Total liabilities and stockholders
equity
    
    $
    5,905,361
    
    
    
    
    
    
    
    
    
    
    $
    6,424,771Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    $
    57,003
    
    
    
    3.44
    %
    
    
    
    
    
    $
    57,459
    
    
    
    3.29
    %Tax equivalent adjustment
    
    
    
    
    
    
    (2,035
    )
    
    
    
    
    
    
    
    
    
    
    (1,866
    )Capitalized interest from real estate operations
    
    
    
    
    
    
    289
    
    
    
    
    
    
    
    
    
    
    
    438Net interest income
    
    
    
    
    
    
    55,257
    
    
    
    
    
    
    
    
    
    
    
    56,031MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    6.58
    %
    
    
    
    
    
    
    
    
    
    
    5.84
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.41
    
    
    
    
    
    
    
    
    
    
    
    2.05Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    4.17
    %
    
    
    
    
    
    
    
    
    
    
    3.79
    %Net interest margin (tax equivalent) excluding secured borrowings
    
    
    
    
    
    
    
    
    
    
    4.17
    %
    
    
    
    
    
    
    
    
    
    
    3.90
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
   62




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Bank Operations Business Segment
Average Balance Sheet  Yield / Rate Analysis
 For the Six Months EndedJune 30, 2006
    
    
    June 30, 2005Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateLoans:Residential real estate
    
    $
    2,045,381
    
    
    
    52,000
    
    
    
    5.08
    %
    
    $
    2,174,332
    
    
    
    53,106
    
    
    
    4.88
    %Commercial real estate
    
    
    1,518,882
    
    
    
    61,792
    
    
    
    8.14
    
    
    
    1,743,213
    
    
    
    58,621
    
    
    
    6.73Loan participations sold
    
    
    62,301
    
    
    
    2,401
    
    
    
    7.71
    
    
    
    168,152
    
    
    
    4,645
    
    
    
    5.52Consumer
    
    
    543,299
    
    
    
    19,652
    
    
    
    7.23
    
    
    
    496,591
    
    
    
    14,371
    
    
    
    5.79Lease financing
    
    
    319
    
    
    
    20
    
    
    
    12.54
    
    
    
    5,472
    
    
    
    298
    
    
    
    10.89Commercial business
    
    
    125,464
    
    
    
    5,485
    
    
    
    8.74
    
    
    
    90,007
    
    
    
    3,222
    
    
    
    7.16Small business
    
    
    248,442
    
    
    
    9,801
    
    
    
    7.89
    
    
    
    201,031
    
    
    
    7,279
    
    
    
    7.24Total loans
    
    
    4,544,088
    
    
    
    151,151
    
    
    
    6.65
    
    
    
    4,878,798
    
    
    
    141,542
    
    
    
    5.80Investments  tax exempt
    
    
    395,796
    
    
    
    11,548
    (1)
    
    
    5.84
    
    
    
    351,241
    
    
    
    10,158
    (1)
    
    
    5.78Investments  taxable
    
    
    585,535
    
    
    
    16,430
    
    
    
    5.61
    
    
    
    727,755
    
    
    
    19,075
    
    
    
    5.24Total interest earning assets
    
    
    5,525,419
    
    
    
    179,129
    
    
    
    6.48
    %
    
    
    5,957,794
    
    
    
    170,775
    
    
    
    5.73
    %Goodwill and core deposit intangibles
    
    
    78,496
    
    
    
    
    
    
    
    
    
    
    
    80,141Other non-interest earning assets
    
    
    361,343
    
    
    
    
    
    
    
    
    
    
    
    290,560Total Assets
    
    $
    5,965,258
    
    
    
    
    
    
    
    
    
    
    $
    6,328,495Deposits:Savings
    
    $
    348,125
    
    
    
    836
    
    
    
    0.48
    %
    
    $
    291,476
    
    
    
    399
    
    
    
    0.28
    %NOW
    
    
    762,590
    
    
    
    1,957
    
    
    
    0.52
    
    
    
    675,100
    
    
    
    1,324
    
    
    
    0.40Money market
    
    
    797,576
    
    
    
    7,958
    
    
    
    2.01
    
    
    
    913,907
    
    
    
    5,998
    
    
    
    1.32Certificate of deposit
    
    
    844,093
    
    
    
    15,855
    
    
    
    3.79
    
    
    
    779,858
    
    
    
    10,108
    
    
    
    2.61Total interest bearing deposits
    
    
    2,752,384
    
    
    
    26,606
    
    
    
    1.95
    
    
    
    2,660,341
    
    
    
    17,829
    
    
    
    1.35Short-term borrowed funds
    
    
    324,292
    
    
    
    7,644
    
    
    
    4.75
    
    
    
    360,832
    
    
    
    4,804
    
    
    
    2.68Advances from FHLB
    
    
    1,087,141
    
    
    
    27,146
    
    
    
    5.04
    
    
    
    1,576,090
    
    
    
    29,278
    
    
    
    3.75Secured borrowings
    
    
    62,301
    
    
    
    2,401
    
    
    
    7.77
    
    
    
    168,152
    
    
    
    4,645
    
    
    
    5.57Long-term debt
    
    
    37,238
    
    
    
    1,664
    
    
    
    9.01
    
    
    
    36,504
    
    
    
    1,178
    
    
    
    6.51Total interest bearing liabilities
    
    
    4,263,356
    
    
    
    65,461
    
    
    
    3.10
    
    
    
    4,801,919
    
    
    
    57,734
    
    
    
    2.42Demand deposits
    
    
    1,087,755
    
    
    
    
    
    
    
    
    
    
    
    948,214Non-interest bearing other liabilities
    
    
    60,831
    
    
    
    
    
    
    
    
    
    
    
    46,349Total Liabilities
    
    
    5,411,942
    
    
    
    
    
    
    
    
    
    
    
    5,796,482Stockholders equity
    
    
    553,316
    
    
    
    
    
    
    
    
    
    
    
    532,013Total liabilities and stockholders equity
    
    $
    5,965,258
    
    
    
    
    
    
    
    
    
    
    $
    6,328,495Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    $
    113,668
    
    
    
    3.39
    %
    
    
    
    
    
    $
    113,041
    
    
    
    3.31
    %Tax equivalent adjustment
    
    
    
    
    
    
    (4,042
    )
    
    
    
    
    
    
    
    
    
    
    (3,554
    )Capitalized interest from real estate
operations
    
    
    
    
    
    
    769
    
    
    
    
    
    
    
    
    
    
    
    889Net interest income
    
    
    
    
    
    
    110,395
    
    
    
    
    
    
    
    
    
    
    
    110,376MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    6.48
    %
    
    
    
    
    
    
    
    
    
    
    5.73
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.39
    
    
    
    
    
    
    
    
    
    
    
    1.95Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    4.09
    %
    
    
    
    
    
    
    
    
    
    
    3.78
    %Net interest margin (tax equivalent)
excluding secured borrowings
    
    
    
    
    
    
    
    
    
    
    4.14
    %
    
    
    
    
    
    
    
    
    
    
    3.89
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate.  64




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##### Table of Contents



Provision for Loan Losses
 For Three Months Ended
    
    
    For Six Months Ended(in thousands)
    
    June 30,
    
    
    June 30,2006
    
    
    2005
    
    
    2006
    
    
    2005Balance, beginning of period
    
    $
    41,889
    
    
    $
    43,042
    
    
    $
    41,192
    
    
    $
    46,010Charge-offs:Consumer loans
    
    
    (12
    )
    
    
    (42
    )
    
    
    (157
    )
    
    
    (110
    )Residential real estate loans
    
    
    (60
    )
    
    
    (56
    )
    
    
    (128
    )
    
    
    (254
    )Small business
    
    
    (229
    )
    
    
    (467
    )
    
    
    (315
    )
    
    
    (595
    )Continuing loan products
    
    
    (301
    )
    
    
    (565
    )
    
    
    (600
    )
    
    
    (959
    )Discontinued loan products
    
    
    (49
    )
    
    
    (511
    )
    
    
    (116
    )
    
    
    (835
    )Total charge-offs
    
    
    (350
    )
    
    
    (1,076
    )
    
    
    (716
    )
    
    
    (1,794
    )Recoveries:Commercial business loans
    
    
    160
    
    
    
    121
    
    
    
    280
    
    
    
    1,231Commercial real estate loans
    
    
    
    
    
    
    6
    
    
    
    10
    
    
    
    6Small business
    
    
    119
    
    
    
    219
    
    
    
    258
    
    
    
    404Consumer loans
    
    
    33
    
    
    
    39
    
    
    
    114
    
    
    
    83Residential real estate loans
    
    
    
    
    
    
    
    
    
    
    178
    
    
    
    1Continuing loan products
    
    
    312
    
    
    
    385
    
    
    
    840
    
    
    
    1,725Discontinued loan products
    
    
    181
    
    
    
    479
    
    
    
    553
    
    
    
    805Total recoveries
    
    
    493
    
    
    
    864
    
    
    
    1,393
    
    
    
    2,530Net (charge-offs) recoveries
    
    
    143
    
    
    
    (212
    )
    
    
    677
    
    
    
    736Provision for (recovery from)
loan losses
    
    
    (20
    )
    
    
    820
    
    
    
    143
    
    
    
    (3,096
    )Balance, end of period
    
    $
    42,012
    
    
    $
    43,650
    
    
    $
    42,012
    
    
    $
    43,650
     65




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##### Table of Contents



June 30,
    
    
    December 31,
    
    
    June 30,2006
    
    
    2005
    
    
    2005NONPERFORMING ASSETSNonaccrual:Tax certificates
    
    $
    857
    
    
    $
    388
    
    
    $
    562Loans
    
    
    5,349
    
    
    
    6,801
    
    
    
    5,785Total nonaccrual
    
    
    6,206
    
    
    
    7,189
    
    
    
    6,347Repossessed assets:Real estate owned
    
    
    1,907
    
    
    
    967
    
    
    
    1,178Other
    
    
    
    
    
    
    
    
    
    
    328Total nonperforming assets, net
    
    $
    8,113
    
    
    $
    8,156
    
    
    $
    7,853AllowancesAllowance for loan losses
    
    $
    42,012
    
    
    $
    41,192
    
    
    $
    43,650Allowance for tax certificate losses
    
    
    3,511
    
    
    
    3,271
    
    
    
    3,553Total allowances
    
    $
    45,523
    
    
    $
    44,463
    
    
    $
    47,203Contractually past due 90 days or
more
    
    $
    
    
    
    $
    
    
    
    $
    Performing impaired loans, net
    
    
    178
    
    
    
    193
    
    
    
    216Restructured loans
    
    
    2
    
    
    
    77
    
    
    
    85TOTAL
    
    $
    180
    
    
    $
    270
    
    
    $
    301
  BankAtlantics Non-Interest Income
 For Three Months
    
    
    For Six MonthsEnded June 30,
    
    
    Ended June 30,(in thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeOther service charges and fees
    
    $
    7,353
    
    
    $
    5,849
    
    
    $
    1,504
    
    
    $
    13,575
    
    
    $
    11,087
    
    
    $
    2,488Service charges on deposits
    
    
    21,274
    
    
    
    14,744
    
    
    
    6,530
    
    
    
    40,373
    
    
    
    27,733
    
    
    
    12,640Income (loss) from
real estate operations
    
    
    114
    
    
    
    1,655
    
    
    
    (1,541
    )
    
    
    (982
    )
    
    
    3,896
    
    
    
    (4,878
    )Securities activities, net
    
    
    458
    
    
    
    87
    
    
    
    371
    
    
    
    457
    
    
    
    94
    
    
    
    363Gain associated with
debt redemption
    
    
    1,092
    
    
    
    
    
    
    
    1,092
    
    
    
    1,528
    
    
    
    
    
    
    
    1,528Gain on sales of office
properties
and equipment, net
    
    
    1,806
    
    
    
    293
    
    
    
    1,513
    
    
    
    1,778
    
    
    
    293
    
    
    
    1,485Other
    
    
    2,863
    
    
    
    2,337
    
    
    
    526
    
    
    
    5,238
    
    
    
    5,403
    
    
    
    (165
    )Non-interest income
    
    $
    34,960
    
    
    $
    24,965
    
    
    $
    9,995
    
    
    $
    61,967
    
    
    $
    48,506
    
    
    $
    13,461
  66




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##### Table of Contents



67




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##### Table of Contents



BankAtlantics Non-Interest Expense
 For Three Months
    
    
    For Six MonthsEnded June 30,
    
    
    Ended June 30,(in thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeEmployee compensation and benefits
    
    $
    36,517
    
    
    $
    27,577
    
    
    $
    8,940
    
    
    $
    70,874
    
    
    $
    53,975
    
    
    $
    16,899Occupancy and equipment
    
    
    13,584
    
    
    
    10,165
    
    
    
    3,419
    
    
    
    25,956
    
    
    
    19,282
    
    
    
    6,674Advertising and promotion
    
    
    7,123
    
    
    
    5,965
    
    
    
    1,158
    
    
    
    15,419
    
    
    
    11,133
    
    
    
    4,286Amortization of intangible assets
    
    
    387
    
    
    
    401
    
    
    
    (14
    )
    
    
    788
    
    
    
    826
    
    
    
    (38
    )Cost associated with debt redemption
    
    
    1,034
    
    
    
    
    
    
    
    1,034
    
    
    
    1,457
    
    
    
    
    
    
    
    1,457Professional fees
    
    
    2,020
    
    
    
    2,638
    
    
    
    (618
    )
    
    
    4,213
    
    
    
    4,533
    
    
    
    (320
    )Impairment of office
properties and equipment
    
    
    
    
    
    
    3,706
    
    
    
    (3,706
    )
    
    
    
    
    
    
    3,706
    
    
    
    (3,706
    )Check losses
    
    
    1,875
    
    
    
    545
    
    
    
    1,330
    
    
    
    3,121
    
    
    
    1,115
    
    
    
    2,006Other
    
    
    9,644
    
    
    
    7,319
    
    
    
    2,325
    
    
    
    17,739
    
    
    
    14,010
    
    
    
    3,729Non-interest expense
    
    $
    72,184
    
    
    $
    58,316
    
    
    $
    13,868
    
    
    $
    139,567
    
    
    $
    108,580
    
    
    $
    30,987
  .
   68




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##### Table of Contents



For the Three Months Ended June 30,
    
    
    For the Six Months Ended June 30,(in thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeIncome before
income taxes
    
    $
    18,053
    
    
    $
    21,860
    
    
    $
    (3,807
    )
    
    $
    32,653
    
    
    $
    53,398
    
    
    $
    (20,745
    )Provision for
income taxes
    
    
    5,301
    
    
    
    7,089
    
    
    
    (1,788
    )
    
    
    9,483
    
    
    
    17,766
    
    
    
    (8,283
    )BankAtlantic net
income
    
    $
    12,752
    
    
    $
    14,771
    
    
    $
    (2,019
    )
    
    $
    23,170
    
    
    $
    35,632
    
    
    $
    (12,462
    )Effective tax rate
    
    
    29.36
    %
    
    
    32.43
    %
    
    
    -3.07
    %
    
    
    29.04
    %
    
    
    33.27
    %
    
    
    -4.23
    %
  69




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##### Table of Contents



Ryan Beck Holdings, Inc. Results of Operations
 For the Three Months
    
    
    For the Six MonthsEnded June 30,
    
    
    Ended June 30,(in thousands)
    
    2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeNet interest income:Broker dealer interest
and dividends
    
    $
    3,991
    
    
    $
    3,489
    
    
    $
    502
    
    
    $
    8,229
    
    
    $
    6,436
    
    
    $
    1,793Interest expense
    
    
    (1,514
    )
    
    
    (968
    )
    
    
    (546
    )
    
    
    (3,135
    )
    
    
    (1,470
    )
    
    
    (1,665
    )Net interest income
    
    
    2,477
    
    
    
    2,521
    
    
    
    (44
    )
    
    
    5,094
    
    
    
    4,966
    
    
    
    128Non-interest income:Principal transactions
    
    
    23,368
    
    
    
    36,690
    
    
    
    (13,322
    )
    
    
    48,088
    
    
    
    56,492
    
    
    
    (8,404
    )Investment banking
    
    
    3,317
    
    
    
    25,394
    
    
    
    (22,077
    )
    
    
    7,019
    
    
    
    37,276
    
    
    
    (30,257
    )Commissions
    
    
    21,869
    
    
    
    19,478
    
    
    
    2,391
    
    
    
    44,797
    
    
    
    39,793
    
    
    
    5,004Other
    
    
    2,827
    
    
    
    2,353
    
    
    
    474
    
    
    
    6,039
    
    
    
    5,040
    
    
    
    999Non-interest income
    
    
    51,381
    
    
    
    83,915
    
    
    
    (32,534
    )
    
    
    105,943
    
    
    
    138,601
    
    
    
    (32,658
    )Non-interest expense:Employee compensation
and benefits
    
    
    42,433
    
    
    
    49,766
    
    
    
    (7,333
    )
    
    
    86,788
    
    
    
    88,203
    
    
    
    (1,415
    )Occupancy and
equipment
    
    
    3,927
    
    
    
    3,786
    
    
    
    141
    
    
    
    7,798
    
    
    
    7,904
    
    
    
    (106
    )Advertising and
promotion
    
    
    1,326
    
    
    
    1,940
    
    
    
    (614
    )
    
    
    2,893
    
    
    
    3,013
    
    
    
    (120
    )Professional fees
    
    
    1,905
    
    
    
    1,591
    
    
    
    314
    
    
    
    3,856
    
    
    
    3,008
    
    
    
    848Communications
    
    
    3,930
    
    
    
    3,508
    
    
    
    422
    
    
    
    7,884
    
    
    
    6,713
    
    
    
    1,171Floor broker and
clearing fees
    
    
    2,142
    
    
    
    2,012
    
    
    
    130
    
    
    
    4,861
    
    
    
    4,380
    
    
    
    481Other
    
    
    2,086
    
    
    
    1,825
    
    
    
    261
    
    
    
    4,004
    
    
    
    3,772
    
    
    
    232Non-interest expense
    
    
    57,749
    
    
    
    64,428
    
    
    
    (6,679
    )
    
    
    118,084
    
    
    
    116,993
    
    
    
    1,091Income (loss) before
income taxes
    
    
    (3,891
    )
    
    
    22,008
    
    
    
    (25,899
    )
    
    
    (7,047
    )
    
    
    26,574
    
    
    
    (33,621
    )Income taxes
    
    
    (1,524
    )
    
    
    8,977
    
    
    
    (10,501
    )
    
    
    (3,115
    )
    
    
    11,013
    
    
    
    (14,128
    )Net (loss) income
    
    $
    (2,367
    )
    
    $
    13,031
    
    
    $
    (15,398
    )
    
    $
    (3,932
    )
    
    $
    15,561
    
    
    $
    (19,493
    )Effective tax rate
    
    
    39.17
    %
    
    
    40.79
    %
    
    
    -1.62
    %
    
    
    44.20
    %
    
    
    41.44
    %
    
    
    2.76
    %
 For the Three and Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
   70




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##### Table of Contents



71




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##### Table of Contents



Parent Company Results of Operations
 For the Three Months
    
    
    For the Six Months(in thousands)
    
    Ended June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    ChangeNet interest income:Interest and dividend
income
    
    $
    662
    
    
    $
    613
    
    
    $
    49
    
    
    $
    1,259
    
    
    $
    1,291
    
    
    $
    (32
    )Interest expense
    
    
    (5,460
    )
    
    
    (4,770
    )
    
    
    (690
    )
    
    
    (10,675
    )
    
    
    (9,340
    )
    
    
    (1,335
    )Net interest expense
    
    
    (4,798
    )
    
    
    (4,157
    )
    
    
    (641
    )
    
    
    (9,416
    )
    
    
    (8,049
    )
    
    
    (1,367
    )Non-interest income:Income from unconsolidated
subsidiaries
    
    
    278
    
    
    
    137
    
    
    
    141
    
    
    
    1,098
    
    
    
    268
    
    
    
    830Securities activities, net
    
    
    2,372
    
    
    
    
    
    
    
    2,372
    
    
    
    4,913
    
    
    
    
    
    
    
    4,913Other
    
    
    
    
    
    
    205
    
    
    
    (205
    )
    
    
    
    
    
    
    606
    
    
    
    (606
    )Non-interest income
    
    
    2,650
    
    
    
    342
    
    
    
    2,308
    
    
    
    6,011
    
    
    
    874
    
    
    
    5,137Non-interest expense:Employee compensation
and benefits
    
    
    1,061
    
    
    
    1,048
    
    
    
    13
    
    
    
    2,548
    
    
    
    2,008
    
    
    
    540Professional fees
    
    
    264
    
    
    
    106
    
    
    
    158
    
    
    
    370
    
    
    
    965
    
    
    
    (595
    )Other
    
    
    492
    
    
    
    264
    
    
    
    228
    
    
    
    857
    
    
    
    490
    
    
    
    367Non-interest expense
    
    
    1,817
    
    
    
    1,418
    
    
    
    399
    
    
    
    3,775
    
    
    
    3,463
    
    
    
    312Loss before income taxes
    
    
    (3,965
    )
    
    
    (5,233
    )
    
    
    1,268
    
    
    
    (7,180
    )
    
    
    (10,638
    )
    
    
    3,458Income taxes
    
    
    (1,702
    )
    
    
    (1,968
    )
    
    
    266
    
    
    
    (2,776
    )
    
    
    (3,860
    )
    
    
    1,084Net loss
    
    $
    (2,263
    )
    
    $
    (3,265
    )
    
    $
    1,002
    
    
    $
    (4,404
    )
    
    $
    (6,778
    )
    
    $
    2,374
      72




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73




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BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Decrease in securities owned associated with Ryan Becks trading activities;
    
    Decline in securities available for sale reflecting an investment strategy to limit
asset growth in response to the relatively flat yield curve during the period;
    
    Higher investment securities balances due to purchases of tax certificates at annual auctions;
    
    Lower investment in FHLB stock related to repayments of FHLB advances;
    
    Decline in loan receivable balances associated with lower commercial real estate loan
balances primarily resulting from a decision to cease condominium lending, and $112
million of participations sold being treated as loan sales instead of secured borrowings
as a result of managements decision to amend the related participation agreements;
    
    Increase in accrued interest receivable resulting from higher rates on earning assets
during the period partially offset by lower earning asset balances;
    
    Decline in investment in unconsolidated subsidiaries due to a capital distribution
from an investment in a rental real estate joint venture partially offset by a $4.1
million investment in another rental real estate joint venture during the first quarter
of 2006;
    
    Increase in office properties and equipment associated with BankAtlantics branch
expansion initiatives;
    
    Increase in deferred tax asset primarily resulting from a decline in other
comprehensive income; and
    
    Increase in other assets from higher accrued revenues at Ryan Beck as well as higher
prepaid expenses and leasehold improvement allowances.
  
    
    Higher deposit account balances resulting from growth in low-cost deposits;
    
    Decrease in FHLB advances balances reflecting redemptions of long term advances as
part of a strategy to reduce asset sensitivity in our net interest margin;
    
    Decrease in secured borrowings (associated with loan participations sold without
recourse that are accounted for as secured borrowings) due to loan repayments and a
management decision to amend participation sold agreements to qualify as loan sales
instead of secured borrowing arrangements;
    
    Increase in short-term borrowings to fund redemptions of FHLB advances and the
purchase of tax certificates;
    
    Increase in securities sold but not yet purchased and due to clearing agents relating
to Ryan Becks trading activities;
    
    Declines in other liabilities associated with a reduction in Ryan Becks accrued
employee compensation and benefits reflecting the payout of 2005 annual bonuses during
the first quarter of 2006 as well as the reduction in a $10 million reserve for the
AML/BSA compliance matters based on payment of that amount.
  74




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Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
       BankAtlantic Liquidity and Capital Resources
  75




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76




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##### Table of Contents



Minimum RatiosActual
    
    
    Adequately
    
    
    WellCapitalized
    
    
    CapitalizedAmount
    
    
    Ratio
    
    
    Ratio
    
    
    RatioAt June 30, 2006:Total risk-based capital
    
    $
    528,582
    
    
    
    12.28
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    $
    461,237
    
    
    
    10.71
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    461,237
    
    
    
    7.74
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    461,237
    
    
    
    7.74
    %
    
    
    4.00
    %
    
    
    5.00
    %At December 31, 2005:Total risk-based capital
    
    $
    512,664
    
    
    
    11.50
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    $
    446,419
    
    
    
    10.02
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    446,419
    
    
    
    7.42
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    446,419
    
    
    
    7.42
    %
    
    
    4.00
    %
    
    
    5.00
    %
  Ryan Beck & Co., Inc. Liquidity and Capital Resources
     77




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##### Table of Contents



Homebuilding & Real Estate Development
 Our Homebuilding & Real Estate Development segment consists of Levitt, which is
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 June 30, 2006 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 and
its subsidiaries, and are not references to BFC Financial Corporation.
   79




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.
 Executive Overview
  Homebuilding Overview
   80




---



##### Table of Contents



Land Development Overview
   81




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##### Table of Contents



Critical Accounting Policies and Estimates
  Stock-based Compensation
    82




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CONSOLIDATED RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    Change(In thousands)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    130,658
    
    
    
    107,094
    
    
    
    23,564
    
    
    
    256,201
    
    
    
    305,960
    
    
    
    (49,759
    )Title and mortgage operations
    
    
    1,018
    
    
    
    947
    
    
    
    71
    
    
    
    2,026
    
    
    
    1,895
    
    
    
    131Total revenues
    
    
    131,676
    
    
    
    108,041
    
    
    
    23,635
    
    
    
    258,227
    
    
    
    307,855
    
    
    
    (49,628
    )Costs and expensesCost of sales of real estate
    
    
    100,910
    
    
    
    84,547
    
    
    
    16,363
    
    
    
    202,965
    
    
    
    215,136
    
    
    
    (12,171
    )Selling, general and administrative expenses
    
    
    30,466
    
    
    
    19,459
    
    
    
    11,007
    
    
    
    57,221
    
    
    
    42,605
    
    
    
    14,616Other expenses
    
    
    6,665
    
    
    
    626
    
    
    
    6,039
    
    
    
    7,291
    
    
    
    1,942
    
    
    
    5,349Total costs and expenses
    
    
    138,041
    
    
    
    104,632
    
    
    
    33,409
    
    
    
    267,477
    
    
    
    259,683
    
    
    
    7,794Earnings from Bluegreen Corporation
    
    
    2,152
    
    
    
    4,729
    
    
    
    (2,577
    )
    
    
    2,103
    
    
    
    6,867
    
    
    
    (4,764
    )(Loss) earnings from real estate joint
ventures
    
    
    (77
    )
    
    
    42
    
    
    
    (119
    )
    
    
    (77
    )
    
    
    132
    
    
    
    (209
    )Interest and other income
    
    
    3,198
    
    
    
    1,453
    
    
    
    1,745
    
    
    
    5,030
    
    
    
    2,775
    
    
    
    2,255(Loss) income before income taxes
    
    
    (1,092
    )
    
    
    9,633
    
    
    
    (10,725
    )
    
    
    (2,194
    )
    
    
    57,946
    
    
    
    (60,139
    )(Benefit) provision for income taxes
    
    
    (355
    )
    
    
    3,581
    
    
    
    (3,936
    )
    
    
    (797
    )
    
    
    22,076
    
    
    
    (22,873
    )Net (loss) income
    
    $
    (737
    )
    
    
    6,052
    
    
    
    (6,789
    )
    
    
    (1,397
    )
    
    
    35,870
    
    
    
    (37,266
    )
 For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
    83




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For the Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
  84




---



##### Table of Contents



85




---



##### Table of Contents



86




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HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    116,574
    
    
    
    107,095
    
    
    
    9,479
    
    
    
    234,849
    
    
    
    225,082
    
    
    
    9,767Title and mortgage operations
    
    
    1,018
    
    
    
    947
    
    
    
    71
    
    
    
    2,026
    
    
    
    1,895
    
    
    
    131Total revenues
    
    
    117,592
    
    
    
    108,042
    
    
    
    9,550
    
    
    
    236,875
    
    
    
    226,977
    
    
    
    9,898Costs and expensesCost of sales of real estate
    
    
    92,619
    
    
    
    84,273
    
    
    
    8,346
    
    
    
    189,116
    
    
    
    177,852
    
    
    
    11,264Selling, general and administrative expenses
    
    
    20,568
    
    
    
    13,732
    
    
    
    6,836
    
    
    
    38,140
    
    
    
    28,340
    
    
    
    9,800Other expenses
    
    
    6,665
    
    
    
    626
    
    
    
    6,039
    
    
    
    7,291
    
    
    
    1,265
    
    
    
    6,026Total costs and expenses
    
    
    119,852
    
    
    
    98,631
    
    
    
    21,221
    
    
    
    234,547
    
    
    
    207,457
    
    
    
    27,090Earnings from real estate joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    (104
    )Interest and other income
    
    
    248
    
    
    
    199
    
    
    
    49
    
    
    
    425
    
    
    
    413
    
    
    
    12(Loss) income before income taxes
    
    
    (2,011
    )
    
    
    9,610
    
    
    
    (11,621
    )
    
    
    2,753
    
    
    
    20,037
    
    
    
    (17,284
    )(Benefit) provision for income taxes
    
    
    (85
    )
    
    
    3,653
    
    
    
    (3,738
    )
    
    
    1,669
    
    
    
    7,554
    
    
    
    (5,885
    )Net (loss) income
    
    $
    (1,926
    )
    
    
    5,957
    
    
    
    (7,883
    )
    
    
    1,084
    
    
    
    12,483
    
    
    
    (11,399
    )Homes delivered (units)
    
    
    392
    
    
    
    448
    
    
    
    (56
    )
    
    
    831
    
    
    
    949
    
    
    
    (118
    )Construction starts (units)
    
    
    532
    
    
    
    478
    
    
    
    54
    
    
    
    922
    
    
    
    825
    
    
    
    97Average selling price of homes delivered
    
    $
    297
    
    
    
    239
    
    
    
    58
    
    
    
    283
    
    
    
    237
    
    
    
    46Margin percentage on homes delivered
    
    
    20.5
    %
    
    
    21.3
    %
    
    
    0.8
    %
    
    
    19.5
    %
    
    
    21.0
    %
    
    
    (1.5
    %)New sales contracts (units)
    
    
    332
    
    
    
    429
    
    
    
    (97
    )
    
    
    838
    
    
    
    1,034
    
    
    
    (196
    )New sales contracts (value)
    
    $
    117,304
    
    
    
    133,874
    
    
    
    (16,570
    )
    
    
    286,691
    
    
    
    299,155
    
    
    
    (12,464
    )Backlog of homes (units)
    
    
    1,799
    
    
    
    1,899
    
    
    
    (100
    )
    
    
    1,799
    
    
    
    1,899
    
    
    
    (100
    )Backlog of homes (value)
    
    $
    609,167
    
    
    
    522,785
    
    
    
    (86,382
    )
    
    
    609,167
    
    
    
    522,785
    
    
    
    86,382
 For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
   87




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##### Table of Contents



Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
  88




---



##### Table of Contents



89




---



##### Table of Contents



LAND DIVISION RESULTS OF OPERATIONS
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    Change(In thousands, except unit information)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    14,086
    
    
    
    149
    
    
    
    13,937
    
    
    
    21,358
    
    
    
    66,700
    
    
    
    (45,342
    )Total revenues
    
    
    14,086
    
    
    
    149
    
    
    
    13,937
    
    
    
    21,358
    
    
    
    66,700
    
    
    
    (45,342
    )Costs and expensesCost of sales of real estate
    
    
    7,718
    
    
    
    182
    
    
    
    7,536
    
    
    
    12,737
    
    
    
    27,272
    
    
    
    (14,535
    )Selling, general and administrative
expenses
    
    
    3,034
    
    
    
    1,949
    
    
    
    1,085
    
    
    
    5,820
    
    
    
    6,395
    
    
    
    (575
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    677
    
    
    
    (677
    )Total costs and expenses
    
    
    10,752
    
    
    
    2,131
    
    
    
    8,621
    
    
    
    18,557
    
    
    
    34,344
    
    
    
    (15,787
    )Interest and other income
    
    
    2,111
    
    
    
    425
    
    
    
    1,686
    
    
    
    3,099
    
    
    
    846
    
    
    
    2,253Income(Loss) before income taxes
    
    
    5,445
    
    
    
    (1,557
    )
    
    
    7,002
    
    
    
    5,900
    
    
    
    33,202
    
    
    
    (27,302
    )Provision(Benefit) for income taxes
    
    
    2,068
    
    
    
    (624
    )
    
    
    2,692
    
    
    
    2,205
    
    
    
    12,812
    
    
    
    (10,607
    )Net income(loss)
    
    $
    3,377
    
    
    
    (933
    )
    
    
    4,310
    
    
    
    3,695
    
    
    
    20,390
    
    
    
    (16,695
    )Acres sold
    
    
    48.5
    
    
    
    
    
    
    
    48.5
    
    
    
    105
    
    
    
    1,304
    
    
    
    (1,199
    )Margin percentage
    
    
    45.2
    %
    
    
    (22.1
    %)
    
    
    67.4
    %
    
    
    40.4
    %
    
    
    59.1
    %
    
    
    (18.7
    %)Unsold saleable acres
    
    
    7,138
    
    
    
    4,657
    
    
    
    2,481
    
    
    
    7,138
    
    
    
    4,657
    
    
    
    2,481Acres subject to sales contracts
    
    
    84
    
    
    
    545
    
    
    
    (461
    )
    
    
    84
    
    
    
    545
    
    
    
    (461
    )Acres subject to sales contracts (value)
    
    $
    15,387
    
    
    
    59,884
    
    
    
    (44,497
    )
    
    
    15,387
    
    
    
    59,884
    
    
    
    (44,497
    )
   For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
  90




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Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
     91




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##### Table of Contents



OTHER OPERATIONS RESULTS OF OPERATIONS
 Three Months
    
    
    Six MonthsEnded June 30,
    
    
    Ended June 30,2006
    
    
    2005
    
    
    Change
    
    
    2006
    
    
    2005
    
    
    Change(In thousands)
    
    (Unaudited)
    
    
    (Unaudited)RevenuesSales of real estate
    
    $
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,709
    
    
    
    (14,709
    )Total revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,709
    
    
    
    (14,709
    )Costs and expensesCost of sales of real estate
    
    
    656
    
    
    
    624
    
    
    
    32
    
    
    
    1,298
    
    
    
    11,950
    
    
    
    (10,652
    )Selling, general and administrative expenses
    
    
    6,863
    
    
    
    3,778
    
    
    
    3,085
    
    
    
    13,260
    
    
    
    7,870
    
    
    
    5,390Other expenses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total costs and expenses
    
    
    7,519
    
    
    
    4,402
    
    
    
    3,117
    
    
    
    14,558
    
    
    
    19,820
    
    
    
    (5,262
    )Earnings from Bluegreen Corporation
    
    
    2,152
    
    
    
    4,729
    
    
    
    (2,577
    )
    
    
    2,103
    
    
    
    6,867
    
    
    
    (4,764
    )(Loss) earnings from real
estate joint ventures
    
    
    (77
    )
    
    
    42
    
    
    
    (119
    )
    
    
    (77
    )
    
    
    28
    
    
    
    (105
    )Interest and other income
    
    
    859
    
    
    
    829
    
    
    
    (30
    )
    
    
    1,541
    
    
    
    1,516
    
    
    
    25Income before income taxes
    
    
    (4,585
    )
    
    
    1,198
    
    
    
    (5,783
    )
    
    
    (10,991
    )
    
    
    3,300
    
    
    
    (14,291
    )Provision for income taxes
    
    
    (2,371
    )
    
    
    392
    
    
    
    (2,763
    )
    
    
    (4,735
    )
    
    
    1,155
    
    
    
    (5,890
    )Net income
    
    $
    (2,214
    )
    
    
    806
    
    
    
    (3,020
    )
    
    
    (6,256
    )
    
    
    2,145
    
    
    
    (8,401
    )
  For the Three Months Ended June 30, 2006 Compared to the Same 2005 Period:
  92




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Six Months Ended June 30, 2006 Compared to the Same 2005 Period:
     93




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##### Table of Contents



94




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##### Table of Contents



FINANCIAL CONDITION
 June 30, 2006 compared to December 31, 2005
   
    
    a net decrease in cash and cash equivalents of $40.3 million, which resulted from
cash used in operations and investing activities of $155 million, partially offset by
an increase in cash provided by financing activities of $114 million;
    
    a net increase in inventory of real estate of approximately $143.4 million which
includes approximately $64.2 million in land acquisitions by our Homebuilding
Division; and
    
    an increase of $18.6 million in property and equipment associated with increased
investment in commercial properties under construction at Core Communities, and
hardware and software acquired for our systems upgrade.
   
    
    a net increase in notes and mortgage notes payable of $100.4 million, primarily
related to project debt associated with 2006 land acquisitions and land development
activities;
    
    an increase of $5.1 million in customer deposits associated with our larger homebuilding backlog;
    
    an increase of $15.4 million in junior subordinated debentures ;
    
    an increase of $17.9 million in accounts payable and accrued liabilities, relating
to accruals for increased selling general and administrative costs, certain
construction related accruals, and the timing of invoices processed; and
    
    a decrease in the current tax liability of approximately $12.6 million relating
primarily to the decrease in our taxable income to a loss position and the timing of
estimated tax payments.
 LIQUIDITY AND CAPITAL RESOURCES
    95




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96




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Off Balance Sheet Arrangements and Contractual Obligations
   Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations(1)
    
    $
    523,654
    
    
    
    39,565
    
    
    
    328,872
    
    
    
    40,520
    
    
    
    114,697Operating lease obligations
    
    
    11,940
    
    
    
    2,868
    
    
    
    3,532
    
    
    
    2,247
    
    
    
    3,294Purchase obligations
    
    
    72,359
    
    
    
    72,359
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    607,953
    
    
    
    114,792
    
    
    
    332,404
    
    
    
    42,767
    
    
    
    117,991
 
 (1)
    
    Amounts exclude interest   97




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   BFC Interest Rate Risk
  BankAtlantic Bancorp Consolidated Interest Rate Risk
 BankAtlantic Interest Rate Risk
  BankAtlantic Repricing Gap TableAs of June 30, 20061 Year
    
    
    3 Years
    
    
    5 Years
    
    
    More Thanor Less
    
    
    or Less
    
    
    or Less
    
    
    5 Years
    
    
    TotalInterest earning assets:Loans:Residential loans (1)Fixed rate
    
    $
    85,245
    
    
    
    147,259
    
    
    
    127,506
    
    
    
    339,677
    
    
    
    699,687Hybrids ARM less than 5 years
    
    
    212,869
    
    
    
    157,584
    
    
    
    47,867
    
    
    
    1,091
    
    
    
    419,411Hybrids ARM more than 5 years
    
    
    182,166
    
    
    
    239,567
    
    
    
    221,690
    
    
    
    284,807
    
    
    
    928,230Commercial loans
    
    
    1,461,712
    
    
    
    111,089
    
    
    
    79,005
    
    
    
    15,034
    
    
    
    1,666,840Small business loans
    
    
    160,603
    
    
    
    73,778
    
    
    
    24,677
    
    
    
    10,386
    
    
    
    269,444Consumer
    
    
    516,649
    
    
    
    5,196
    
    
    
    4,218
    
    
    
    17,101
    
    
    
    543,164Total loans
    
    
    2,619,244
    
    
    
    734,473
    
    
    
    504,963
    
    
    
    668,096
    
    
    
    4,526,776Investment securitiesTax exempt securities
    
    
    
    
    
    
    5,404
    
    
    
    23,028
    
    
    
    369,924
    
    
    
    398,356Taxable investment securities
    
    
    224,330
    
    
    
    80,403
    
    
    
    63,924
    
    
    
    66,820
    
    
    
    435,477Tax certificates
    
    
    208,042
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    208,042Total investment securities
    
    
    432,372
    
    
    
    85,807
    
    
    
    86,952
    
    
    
    436,744
    
    
    
    1,041,875Total interest earning assets
    
    
    3,051,616
    
    
    
    820,280
    
    
    
    591,915
    
    
    
    1,104,840
    
    
    
    5,568,651Total non-earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    479,745
    
    
    
    479,745Total assets
    
    $
    3,051,616
    
    
    
    820,280
    
    
    
    591,915
    
    
    
    1,584,585
    
    
    
    6,048,396Total interest bearing liabilities
    
    $
    3,143,617
    
    
    
    398,501
    
    
    
    282,872
    
    
    
    1,605,029
    
    
    
    5,430,019Non-interest bearing liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    618,377
    
    
    
    618,377Total non-interest bearing liabilities
and equity
    
    $
    3,143,617
    
    
    
    398,501
    
    
    
    282,872
    
    
    
    2,223,406
    
    
    
    6,048,396GAP (repricing difference)
    
    $
    (92,001
    )
    
    
    421,779
    
    
    
    309,043
    
    
    
    (500,189
    )Cumulative GAP
    
    $
    (92,001
    )
    
    
    329,778
    
    
    
    638,821
    
    
    
    138,632Repricing Percentage
    
    
    -1.52
    %
    
    
    6.97
    %
    
    
    5.11
    %
    
    
    -8.27
    %Cumulative Percentage
    
    
    -1.52
    %
    
    
    5.45
    %
    
    
    10.56
    %
    
    
    2.29
    %
 
 (1)
    
    Hybrid adjustable rate mortgages (ARM) earn fixed rates for designated periods and
adjust annually thereafter based on the one year U.S. Treasury note rate. 98




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i.
    
    Calculating interest income and interest expense from existing assets and liabilities
using current repricing, prepayment and volume assumptions,ii.
    
    Estimating the change in expected net interest income based on instantaneous and
parallel shifts in the yield curve to determine the effect on net interest income; andiii.
    
    Calculating the percentage change in net interest income calculated in (i) and (ii).
   
    
    Interest rates,
    
    Loan prepayment rates,
    
    Deposit decay rates,
    
    Re-pricing of certain borrowings, and
    
    Reinvestment in earning assets.
  As of June 30, 2006NetChanges
    
    Interest
    
    Percentin Rate
    
    Income
    
    Change+200 bp
    
    $
    250,501
    
    
    
    -2.92
    %+100 bp
    
    $
    257,152
    
    
    
    -0.34
    %0
    
    $
    258,041
    
    
    
    0.00
    %-100 bp
    
    $
    257,936
    
    
    
    -0.04
    %-200 bp
    
    $
    253,124
    
    
    
    -1.91
    %
  99




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Consolidated Equity Price Risk
  AvailablePercent
    
    for SaleChange in
    
    Securities
    
    DollarFair Value
    
    Fair Value
    
    Change20%
    
    $
    113,834
    
    
    $
    18,97210%
    
    $
    104,348
    
    
    $
    9,4860%
    
    $
    94,862
    
    
    $
    -10%
    
    $
    85,376
    
    
    $
    (9,486
    )-20%
    
    $
    75,890
    
    
    $
    (18,972
    )
  Ryan Beck Market Risk
     High
    
    
    Low
    
    
    AverageVaR
    
    $
    415,528
    
    
    $
    94,069
    
    
    $
    214,023Aggregate Long Value
    
    
    202,976
    
    
    
    90,909
    
    
    
    148,846Aggregate Short Value
    
    $
    148,920
    
    
    $
    35,063
    
    
    $
    82,821
 100




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Levitt
   101




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Item 4. Controls and Procedure
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
    102




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors.
  103




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  Director
    
    For
    
    
    WithheldD. Keith Cobb
    
    
    127,216,934
    
    
    
    1,035,382Earl Pertnoy
    
    
    127,216,972
    
    
    
    1,035,345
  Votes
    
    
    Votes
    
    
    VotesFor
    
    
    Against
    
    
    Abstaining2006 Performance-Based Annual
Incentive Plan
    
    
    127,174,555
    
    
    
    1,051,540
    
    
    
    26,220
 
 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 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 2002
 104




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BFC FINANCIAL CORPORATIONDate: August 9, 2006
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: August 9, 2006
    By:
    /s/  Glen R. GilbertGlen R. Gilbert, Executive Vice President,and Chief Financial Officer 105