##### 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 March 31, 2006
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number
333-72213
 BFC Financial Corporation
  Florida
    
    59-2022148(State of Organization)
    
    (IRS Employer Identification Number)2100 West Cypress Creek RoadFort Lauderdale, Florida
    
    33309(Address of Principal Executive Office)
    
    (Zip Code)
  
  Not Applicable
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
  o þ




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2




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##### 



PART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements:Consolidated Statements of Financial Condition as of March 31, 2006 and December 31, 2005 - UnauditedConsolidated Statements of Operations for the three months ended March 31, 2006 and 2005 - UnauditedConsolidated Statements of Comprehensive Income for the three months ended March 31,  2006 and 2005 - UnauditedConsolidated Statements of Shareholders' Equity for the three months ended March 31, 2006 - UnauditedConsolidated Statements of Cash Flows for the three months ended March 31, 2006 and 2005 - UnauditedNotes to Unaudited Consolidated Financial StatementsItem 2.
    
    Management's Discussion and Analysis of Financial Condition and Results of OperationsItem 3.
    
    Quantitative and Qualitative Disclosures about Market RiskItem 4.
    
    Controls and ProceduresPART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal ProceedingsItem 1.A
    
    Risk FactorsItem 2.
    
    Unregistered Sales of Equity Securities and Use of ProceedsItem 6.
    
    ExhibitsSIGNATURESSection 302 CEO CertificationSection 302 CFO CertificationSection 906 CEO CertificationSection 906 CFO Certification
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BFC Financial Corporation
 
 Consolidated Statements of Financial Condition   Unaudited
 (In thousands, except share data)
 March 31,
    
    
    December 31,2006
    
    
    2005ASSETSCash and due from depository institutions
    
    $
    240,014
    
    
    $
    302,208Federal funds sold and other short-term investments
    
    
    18,463
    
    
    
    3,229Securities owned (at fair value)
    
    
    169,570
    
    
    
    180,292Securities available for sale (at fair value)
    
    
    673,199
    
    
    
    676,660Investment securities and tax certificates
(approximate fair value: $360,611 in
2006 and $384,646 in 2005)
    
    
    362,748
    
    
    
    384,968Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    60,800
    
    
    
    69,931Loans receivable, net of allowance for loan losses
of $42,506 in 2006 and $41,830 in 2005
    
    
    4,531,548
    
    
    
    4,632,104Accrued interest receivable
    
    
    42,264
    
    
    
    41,496Real estate held for development and sale
    
    
    721,276
    
    
    
    632,597Investments in unconsolidated affiliates
    
    
    110,039
    
    
    
    110,124Property and equipment, net
    
    
    223,644
    
    
    
    198,433Goodwill
    
    
    77,981
    
    
    
    77,981Core deposit intangible asset
    
    
    7,995
    
    
    
    8,395Due from clearing agent
    
    
    2,672
    
    
    
    Other assets
    
    
    65,277
    
    
    
    65,608Total assets
    
    $
    7,307,490
    
    
    $
    7,384,026LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:DepositsDemand
    
    $
    1,152,361
    
    
    $
    1,019,949NOW
    
    
    790,225
    
    
    
    755,708Savings
    
    
    351,839
    
    
    
    313,889Money market
    
    
    806,871
    
    
    
    846,441Certificates of deposits
    
    
    859,470
    
    
    
    816,689Total deposits
    
    
    3,960,766
    
    
    
    3,752,676Customer deposits on real estate held for sale
    
    
    57,080
    
    
    
    51,686Advances from FHLB
    
    
    1,085,914
    
    
    
    1,283,532Securities sold under agreements to repurchase
    
    
    75,478
    
    
    
    109,788Federal funds purchased and other short term borrowings
    
    
    81,197
    
    
    
    139,475Secured borrowings
    
    
    111,754
    
    
    
    138,270Subordinated debentures, notes and bonds payable
    
    
    463,610
    
    
    
    392,784Junior subordinated debentures
    
    
    317,390
    
    
    
    317,390Securities sold not yet purchased
    
    
    41,828
    
    
    
    35,177Due to clearing agent
    
    
    32,206
    
    
    
    24,486Deferred tax liabilities, net
    
    
    8,475
    
    
    
    10,692Other liabilities
    
    
    191,603
    
    
    
    248,468Total liabilities
    
    
    6,427,301
    
    
    
    6,504,424Noncontrolling interest
    
    
    701,787
    
    
    
    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 28,680,315 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 7,136,135 in 2006 and 4,285,413 in 2005
    
    
    69
    
    
    
    41Additional paid-in capital
    
    
    92,716
    
    
    
    97,223Unearned compensation  restricted stock grants
    
    
    
    
    
    
    (100
    )Retained earnings
    
    
    84,660
    
    
    
    85,113Total shareholders equity before
accumulated other comprehensive income
    
    
    177,710
    
    
    
    182,555Accumulated other comprehensive income
    
    
    692
    
    
    
    525Total shareholders equity
    
    
    178,402
    
    
    
    183,080Total liabilities and shareholders equity
    
    $
    7,307,490
    
    
    $
    7,384,026
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation and Subsidiaries
 
 Consolidated Statements of Operations  Unaudited
 (In thousands, except per share data)
 Three Months EndedMarch 31,2006
    
    
    2005RevenuesBFC ActivitiesInterest and dividend income
    
    $
    560
    
    
    $
    236Other income, net
    
    
    443
    
    
    
    1201,003
    
    
    
    356Financial ServicesInterest and dividend income
    
    
    92,111
    
    
    
    83,735Broker/dealer revenue
    
    
    54,562
    
    
    
    54,680Other income, net
    
    
    29,443
    
    
    
    23,609176,116
    
    
    
    162,024Homebuilding & Real Estate DevelopmentSales of real estate
    
    
    125,543
    
    
    
    198,866Interest and dividend income
    
    
    643
    
    
    
    376Other income, net
    
    
    2,056
    
    
    
    1,753128,242
    
    
    
    200,995Total revenues
    
    
    305,361
    
    
    
    363,375Costs and ExpensesBFC ActivitiesInterest expense
    
    
    12
    
    
    
    120Employee compensation and benefits
    
    
    2,437
    
    
    
    1,596Other expenses
    
    
    721
    
    
    
    6683,170
    
    
    
    2,384Financial ServicesInterest expense, net of interest capitalized
    
    
    38,821
    
    
    
    31,301Provision for (recovery from) loan losses
    
    
    163
    
    
    
    (3,916
    )Employee compensation and benefits
    
    
    80,200
    
    
    
    65,795Occupancy and equipment
    
    
    16,247
    
    
    
    13,237Advertising and promotion
    
    
    9,957
    
    
    
    6,298Other expenses
    
    
    23,028
    
    
    
    19,455168,416
    
    
    
    132,170Homebuilding & Real Estate DevelopmentCost of sales of real estate
    
    
    102,055
    
    
    
    129,976Employee compensation and benefits
    
    
    12,245
    
    
    
    11,781Selling, general and administrative expenses
    
    
    14,208
    
    
    
    11,214Other expenses
    
    
    626
    
    
    
    1,316129,134
    
    
    
    154,287Total costs and expenses
    
    
    300,720
    
    
    
    288,841Equity in earnings from unconsolidated affiliates
    
    
    771
    
    
    
    2,359Income before income taxes and noncontrolling interest
    
    
    5,412
    
    
    
    76,893Provision for income taxes
    
    
    974
    
    
    
    32,019Noncontrolling interest
    
    
    4,703
    
    
    
    40,366(Loss) income from continuing operations
    
    
    (265
    )
    
    
    4,508(Loss) from discontinued operations less income tax benefit of $68 in 2005
    
    
    
    
    
    
    (108
    )Net (loss) income
    
    
    (265
    )
    
    
    4,4005% Preferred Stock dividends
    
    
    188
    
    
    
    188Net (loss) income available to common shareholders
    
    $
    (453
    )
    
    $
    4,212
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation and Subsidiaries
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 Three Months EndedMarch 31,2006
    
    
    2005(Loss) earnings per share of common stock:Basic (loss) earnings per share from continuing operations
    
    
    (0.01
    )
    
    
    0.16Basic (loss) earnings per share from discontinued operations
    
    
    
    
    
    
    Basic (loss) earnings per share
    
    
    (0.01
    )
    
    
    0.16Diluted (loss) earnings per share from continuing operations
    
    
    (0.01
    )
    
    
    0.14Diluted (loss) earnings per share from discontinued operations
    
    
    
    
    
    
    Diluted (loss) earnings per share
    
    
    (0.01
    )
    
    
    0.14Basic weighted average number of common shares outstanding
    
    
    32,692
    
    
    
    25,750Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    32,692
    
    
    
    28,336
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation and Subsidiaries
 
 Consolidated Statements of Comprehensive (Loss) Income  Unaudited
 (In thousands)
 Three Months EndedMarch 31,2006
    
    
    2005Net (loss) income
    
    $
    (265
    )
    
    $
    4,400Other comprehensive income (loss), net of tax (1):Unrealized gain (loss) on securities available for sale, net of income tax
    
    
    347
    
    
    
    (706
    )Unrealized gain associated with investment in unconsolidated
real estate affiliate, net of income tax
    
    
    27
    
    
    
    9Reclassification for realized net gain included in net income
    
    
    (207
    )
    
    
    (8
    )167
    
    
    
    (705
    )Comprehensive (loss) income
    
    $
    (98
    )
    
    $
    3,695
 
 (1)
    
    The components of other comprehensive (loss) income relate to the
Companys net unrealized gains (losses) on securities available
for sale and the Companys proportionate shares of net unrealized
gains (losses) on securities available for sale, net of income tax
provision (benefit) of $218 in 2006 and $(443) in 2005; and
unrealized gains associated with investments in unconsolidated
real estate affiliates, net of income tax provision of $17 in 2006
and $6 in 2005. 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (265
    )
    
    
    
    
    
    
    (265
    )Other comprehensive income, net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    167
    
    
    
    167Issuance 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
    
    
    
    
    
    
    
    
    
    
    (454
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (454
    )Cash dividends on 5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )Share-based compensation expense
    
    
    
    
    
    
    
    
    
    
    217
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    217Adoption of FAS 123R
    
    
    
    
    
    
    
    
    
    
    (100
    )
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    Balance, March 31, 2006
    
    $
    265
    
    
    $
    69
    
    
    $
    92,716
    
    
    $
    
    
    
    $
    84,660
    
    
    $
    692
    
    
    $
    178,402
 
 (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.
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Three Months EndedMarch 31,2006
    
    
    2005(Loss) income from continuing operations
    
    $
    (265
    )
    
    
    4,508Loss from discontinued operations
    
    
    
    
    
    
    (108
    )Adjustments to reconcile net (loss) income to net cash (used in)
provided by operating activities:Noncontrolling interest in income of consolidated subsidiaries
    
    
    4,703
    
    
    
    40,366Provision (recovery) of loan losses, REO and tax certificates
    
    
    238
    
    
    
    (4,016
    )Depreciation, amortization and accretion, net
    
    
    5,544
    
    
    
    4,924Amortization of deferred revenue
    
    
    3,027
    
    
    
    1,510Amortization of intangible assets
    
    
    400
    
    
    
    425BFC shared based compensation expense related to stock option and restricted stock
    
    
    217
    
    
    
    Controlling subsidiaries share based compensation expense
related to stock options and restricted stock
    
    
    1,775
    
    
    
    BankAtlantic Bancorp excess tax benefits from share-based compensation
    
    
    (2,980
    )
    
    
    Gains on securities activities, net
    
    
    (2,541
    )
    
    
    (102
    )Gain on sales of real estate owned
    
    
    (381
    )
    
    
    (137
    )Gain on sale of loans
    
    
    (94
    )
    
    
    (110
    )Gain on sale of property and equipment
    
    
    28
    
    
    
    Gain on sale of branch
    
    
    
    
    
    
    (935
    )Equity in earnings from unconsolidated affiliates
    
    
    (771
    )
    
    
    (2,359
    )Distributions of earnings of unconsolidated affiliates
    
    
    820
    
    
    
    131Net gains associated with debt redemptions
    
    
    (13
    )
    
    
    Originations
and repayments of loans held for sale, net
    
    
    (19,627
    )
    
    
    (28,185
    )Proceeds from sales of loans held for sale
    
    
    15,450
    
    
    
    29,412(Increase) decrease in real estate inventory
    
    
    (94,830
    )
    
    
    14,538Decrease (increase) in securities owned activities, net
    
    
    10,722
    
    
    
    (16,851
    )Increase in securities sold but not yet purchased
    
    
    6,651
    
    
    
    20,814(Decrease) increase in deferred tax liabilities, net
    
    
    (1,490
    )
    
    
    3,358Increase in accrued interest receivable
    
    
    (754
    )
    
    
    (2,889
    )Decrease (increase) in other assets
    
    
    693
    
    
    
    (9,055
    )Decrease in due to clearing agent
    
    
    5,048
    
    
    
    15,499Decrease in other liabilities
    
    
    (51,526
    )
    
    
    (27,549
    )Net cash (used in) provided by operating activities
    
    
    (119,956
    )
    
    
    43,189Investing activities:Proceeds from redemption and maturities of investment
securities and tax certificates
    
    
    42,124
    
    
    
    55,989Purchase of investment securities and tax certificates
    
    
    (20,054
    )
    
    
    (35,496
    )Purchases of securities available for sale
    
    
    (23,983
    )
    
    
    (97,669
    )Proceeds from sales and maturities of securities available for sale
    
    
    29,001
    
    
    
    72,404Purchases of FHLB stock
    
    
    (2,250
    )
    
    
    (10,381
    )Redemption of FHLB stock
    
    
    11,381
    
    
    
    8,400Investments in unconsolidated affiliates
    
    
    (4,483
    )
    
    
    (696
    )Investment in real estate partnership
    
    
    (1,000
    )
    
    
    Distributions from unconsolidated affiliates
    
    
    4,720
    
    
    
    223Net repayments (purchases and originations) of loans
    
    
    103,209
    
    
    
    (43,520
    )Proceeds from sales of real estate owned
    
    
    965
    
    
    
    500Proceeds from sales of property and equipment
    
    
    8
    
    
    
    Additions to property and equipment
    
    
    (23,157
    )
    
    
    (10,902
    )Net cash outflows from the sale of branch
    
    
    
    
    
    
    (13,592
    )Net cash provided by (used in) investing activities
    
    
    116,481
    
    
    
    (74,740
    )
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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Three Months EndedMarch 31,2006
    
    
    2005Financing activities:Net increase in deposits
    
    $
    208,090
    
    
    $
    204,369Repayments of FHLB advances
    
    
    (477,570
    )
    
    
    (259,583
    )Proceeds from FHLB advances
    
    
    280,000
    
    
    
    240,000Decrease in securities sold under agreements to repurchase
    
    
    (70,997
    )
    
    
    (88,881
    )Decrease in federal funds purchased
    
    
    (21,591
    )
    
    
    (30,000
    )Proceeds from secured borrowings
    
    
    
    
    
    
    16,101Repayment of secured borrowings
    
    
    (26,516
    )
    
    
    (26,822
    )Proceeds from notes and bonds payable
    
    
    141,660
    
    
    
    74,984Repayment of notes and bonds payable
    
    
    (70,832
    )
    
    
    (115,183
    )Proceeds from junior subordinated debentures
    
    
    
    
    
    
    23,196Payments of debt offering costs
    
    
    
    
    
    
    (926
    )Payment by BFC of minimum withholding tax upon the exercise of stock options
    
    
    (4,155
    )
    
    
    Payment by BankAtlantic Bancorp of minimum withholding tax
upon the exercise of stock options
    
    
    (2,675
    )
    
    
    (3,519
    )BankAtlantic Bancorp excess tax benefits from share-based compensation
    
    
    2,980
    
    
    
    Proceeds from the issuance of BFC common stock upon exercise of stock options
    
    
    
    
    
    
    115% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Purchase by BankAtlantic Bancorp of its subsidiary common stock
    
    
    
    
    
    
    (491
    )Proceeds from the issuance of BankAtlantic Bancorp Class A common stock
    
    
    473
    
    
    
    422Levitt common stock dividends paid to non-BFC shareholders
    
    
    (332
    )
    
    
    (330
    )BankAtlantic Bancorp common stock dividends paid to non-BFC shareholders
    
    
    (1,832
    )
    
    
    (1,657
    )Net cash
(used in) provided by financing activities
    
    
    (43,485
    )
    
    
    31,503Decrease in cash and cash equivalents
    
    
    (46,960
    )
    
    
    (48
    )Cash and cash equivalents at beginning of period
    
    
    305,437
    
    
    
    224,720Cash and cash equivalents at end of period
    
    $
    258,477
    
    
    $
    224,672Supplemental cash flow information:Interest paid, net of amounts capitalized
    
    $
    39,313
    
    
    $
    28,727Income taxes paid
    
    
    32,074
    
    
    
    4,534Supplemental disclosure of non-cash operating, investing
and financing activities:Loans transferred to real estate owned
    
    
    1,264
    
    
    
    1,109Net loan recoveries
    
    
    534
    
    
    
    948Tax certificate net recoveries
    
    
    168
    
    
    
    255Securities purchased pending settlement
    
    
    
    
    
    
    15,873Net decrease in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    
    (454
    )
    
    
    (419
    )Increase (decrease) in accumulated other comprehensive income, net of taxes
    
    
    167
    
    
    
    (705
    )Increase (decrease) in shareholders equity for the tax effect related to the
exercise of employee stock options
    
    
    
    
    
    
    (262
    )Tax effect related to the exercise of BankAtlantic Bancorp employee stock option
    
    
    
    
    
    
    3,953Issuance and retirement of BankAtlantic Bancorp Class A common stock
    
    
    4,334
    
    
    
    Issuance and retirement of Common Stock accepted
as consideration for the exercise price of stock options
    
    
    4,155
    
    
    
    Decrease in inventory from reclassification as property and equipment
    
    
    (6,554
    )
    
    
    Increase in property and equipment reclassified from inventory
    
    
    6,554
    
    
    
    
 See accompanying notes to unaudited consolidated financial statements.
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##### Table of Contents



1.
Presentation of Interim Financial Statements and Significant Accounting Policies
     Accounting for the Impairment of Disposal of
Long-Lived Assets
  11




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Percent of
    
    PercentShares
    
    Economic
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    14.73
    %
    
    
    7.81
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    21.50
    %
    
    
    54.81
    %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
    
    
    
    16.62
    %
    
    
    52.91
    %
  Allowance
for Loan Losses
   12




---



##### Table of Contents




    
    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
     BFC Activities
  13




---



##### Table of Contents



Financial Services
  Homebuilding & Real Estate Development
   14




---



##### Table of Contents



Homebuilding
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2006
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    125,543
    
    
    $
    
    
    
    $
    125,543Interest and dividend income
    
    
    570
    
    
    
    92,111
    
    
    
    785
    
    
    
    (152
    )
    
    
    93,314Broker/dealer revenue
    
    
    
    
    
    
    54,562
    
    
    
    
    
    
    
    
    
    
    
    54,562Other income
    
    
    1,004
    
    
    
    29,540
    
    
    
    2,055
    
    
    
    (657
    )
    
    
    31,9421,574
    
    
    
    176,213
    
    
    
    128,383
    
    
    
    (809
    )
    
    
    305,361Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    102,055
    
    
    
    
    
    
    
    102,055Interest expense, net
    
    
    12
    
    
    
    38,973
    
    
    
    
    
    
    
    (152
    )
    
    
    38,833Provision for loan losses
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    163Other expenses
    
    
    3,277
    
    
    
    129,668
    
    
    
    27,381
    
    
    
    (657
    )
    
    
    159,6693,289
    
    
    
    168,804
    
    
    
    129,436
    
    
    
    (809
    )
    
    
    300,720Equity in earnings (loss) from
unconsolidated affiliates
    
    
    
    
    
    
    820
    
    
    
    (49
    )
    
    
    
    
    
    
    771Income (loss) before income taxes
    
    
    (1,715
    )
    
    
    8,229
    
    
    
    (1,102
    )
    
    
    
    
    
    
    5,412(Benefit) provision for income taxes
    
    
    (101
    )
    
    
    1,517
    
    
    
    (442
    )
    
    
    
    
    
    
    974Income (loss)
before noncontrolling interest
    
    
    (1,614
    )
    
    
    6,712
    
    
    
    (660
    )
    
    
    
    
    
    
    4,438Noncontrolling interest
    
    
    1
    
    
    
    5,253
    
    
    
    (551
    )
    
    
    
    
    
    
    4,703(Loss) income from
continuing operations
    
    $
    (1,615
    )
    
    $
    1,459
    
    
    $
    (109
    )
    
    $
    
    
    
    $
    (265
    )Total assets at March 31, 2006
    
    $
    48,595
    
    
    $
    6,357,602
    
    
    $
    952,567
    
    
    $
    (51,274
    )
    
    $
    7,307,490
 Homebuilding
    
    
    AdjustmentsBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2005
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    198,866
    
    
    $
    
    
    
    $
    198,866Interest and dividend income
    
    
    243
    
    
    
    84,348
    
    
    
    518
    
    
    
    (762
    )
    
    
    84,347Broker/dealer revenue
    
    
    
    
    
    
    54,686
    
    
    
    
    
    
    
    (6
    )
    
    
    54,680Other income
    
    
    142
    
    
    
    23,853
    
    
    
    1,752
    
    
    
    (265
    )
    
    
    25,482385
    
    
    
    162,887
    
    
    
    201,136
    
    
    
    (1,033
    )
    
    
    363,375Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    130,589
    
    
    
    (613
    )
    
    
    129,976Interest expense, net
    
    
    120
    
    
    
    31,450
    
    
    
    
    
    
    
    (149
    )
    
    
    31,421Recovery for loan losses
    
    
    
    
    
    
    (3,916
    )
    
    
    
    
    
    
    
    
    
    
    (3,916
    )Other expenses
    
    
    2,384
    
    
    
    104,785
    
    
    
    24,462
    
    
    
    (271
    )
    
    
    131,3602,504
    
    
    
    132,319
    
    
    
    155,051
    
    
    
    (1,033
    )
    
    
    288,841Equity in earnings from
unconsolidated affiliates
    
    
    
    
    
    
    131
    
    
    
    2,228
    
    
    
    
    
    
    
    2,359Income (loss) before income
taxes
    
    
    (2,119
    )
    
    
    30,699
    
    
    
    48,313
    
    
    
    
    
    
    
    76,893Provision for income taxes
    
    
    2,703
    
    
    
    10,821
    
    
    
    18,495
    
    
    
    
    
    
    
    32,019Income (loss)
before noncontrolling interest
    
    
    (4,822
    )
    
    
    19,878
    
    
    
    29,818
    
    
    
    
    
    
    
    44,874Noncontrolling interest
    
    
    (6
    )
    
    
    15,510
    
    
    
    24,862
    
    
    
    
    
    
    
    40,366Income (loss) from
continuing operations
    
    $
    (4,816
    )
    
    $
    4,368
    
    
    $
    4,956
    
    
    $
    
    
    
    $
    4,508Total assets at March 31, 2005
    
    $
    23,536
    
    
    $
    6,582,531
    
    
    $
    683,543
    
    
    $
    (96,380
    )
    
    $
    7,193,230
 15




---



##### Table of Contents



3. Share-Based Compensation
 BFC
     16




---



##### Table of Contents



(Pro forma)Net income available to common shareholders, as reported
    
    $
    4,212Add: Stock-based employee compensation
expense included in reported net income, net of
related tax effects and noncontrolling interest
    
    
    9Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related income tax
effects and noncontrolling interest
    
    
    (209
    )Pro forma net income
    
    $
    4,012Earnings per share:Basic as reported
    
    $
    0.16Basic pro forma
    
    $
    0.16Diluted as reported
    
    $
    0.14Diluted pro forma
    
    $
    0.14
  WeightedNonvested
    
    
    AverageRestricted
    
    
    Grant dateStock
    
    
    Fair ValueOutstanding at December 31, 2005
    
    
    11,262
    
    
    $
    100,007Vested
    
    
    (5,631
    )
    
    $
    (50,003
    )Forfeited
    
    
    
    
    
    
    Issued
    
    
    
    
    
    
    Outstanding at March 31, 2006
    
    
    5,631
    
    
    $
    50,004
   17




---



##### Table of Contents



OutstandingOptionsOutstanding at December 31, 2005
    
    
    5,299,569Granted
    
    
    Exercised
    
    
    (3,928,982
    )Forfeited
    
    
    Outstanding at March 31, 2006
    
    
    1,370,587Exercisable at March 31, 2006
    
    
    364,527Available for grant at March 31, 2006
    
    
    2,745,976
  For the Three MonthsEnded March 31,2006
    
    2005Weighted average exercise price of options outstanding
    
    $
    4.63
    
    
    $
    2.62Weighted average exercise price of options exercised
    
    $
    2.32
    
    
    $
    2.14Weighted average price of options forfeited
    
    $
    n/a
    
    
    $
    3.72
  18




---



##### Table of Contents



Options Outstanding
    
    Options ExercisableWeighted AverageWeightedRemaining
    
    Number
    
    AverageExercise Prices
    
    Vested
    
    Unvested
    
    Exercise price
    
    Contractual Life
    
    Exercisable
    
    Exercise price$0.00$3.00
    
    
    192,120
    
    
    
    498,383
    
    
    $
    1.77
    
    
    
    5.69
    
    
    
    192,120
    
    
    $
    1.61$3.01$6.00
    
    
    147,407
    
    
    
    
    
    
    $
    3.68
    
    
    
    1.79
    
    
    
    147,407
    
    
    $
    3.68$6.01$9.00
    
    
    25,000
    
    
    
    507,677
    
    
    $
    8.59
    
    
    
    8.72
    
    
    
    25,000
    
    
    $
    8.40364,527
    
    
    
    1,006,060
    
    
    $
    4.63
    
    
    
    6.45
    
    
    
    364,527
    
    
    $
    2.91
  Options Outstanding
    
    Options ExercisableWeighted AverageRemaining
    
    
    
    
    
    Weighted AverageExercise Prices
    
    Vested
    
    Unvested
    
    Exercise price
    
    Contractual Life
    
    Number Exercisable
    
    Exercise price$0.00$3.00
    
    
    2,965,362
    
    
    
    505,405
    
    
    $
    1.69
    
    
    
    3.38
    
    
    
    2,965,362
    
    
    $
    1.66$3.01$6.00
    
    
    1,410,841
    
    
    
    0
    
    
    $
    3.68
    
    
    
    2.79
    
    
    
    1,410,841
    
    
    $
    3.68$6.01$9.00
    
    
    25,000
    
    
    
    279,302
    
    
    $
    8.33
    
    
    
    9.28
    
    
    
    25,000
    
    
    $
    8.404,401,203
    
    
    
    784,707
    
    
    $
    2.62
    
    
    
    3.56
    
    
    
    4,401,203
    
    
    $
    2.35
 BankAtlantic Bancorp
     19




---



##### Table of Contents



For the Three MonthsEnded March 31,2006
    
    
    2005(in thousands, except share data)
    
    
    
    
    
    (Proforma)Net income, as reported
    
    $
    6,712
    
    
    $
    19,878Add: Stock-based employee compensation
expense included in reported net
income,
net of related income tax effects
    
    
    1,069
    
    
    
    44Deduct: Total stock-based employee
compensation expense determined under
fair value based method for all awards,
net of related income tax effects
    
    
    (1,069
    )
    
    
    (517
    )Net income
    
    $
    6,712
    
    
    $
    19,405Earnings per share:Basic as reported
    
    $
    0.11
    
    
    $
    0.33Basic pro forma
    
    $
    N/A
    
    
    $
    0.32Diluted as reported
    
    $
    0.11
    
    
    $
    0.31Diluted pro forma
    
    $
    N/A
    
    
    $
    0.31
  Class A
    
    
    WeightedNonvested
    
    
    AverageRestricted
    
    
    Grant dateStock
    
    
    Fair ValueOutstanding at December 31, 2004
    
    
    147,500
    
    
    $
    1,112,795Vested
    
    
    
    
    
    
    Forfeited
    
    
    
    
    
    
    Issued
    
    
    
    
    
    
    Outstanding at March 31, 2005
    
    
    147,500
    
    
    $
    1,112,795Outstanding at December 31, 2005
    
    
    132,634
    
    
    $
    1,060,470Vested
    
    
    (2,317
    )
    
    
    (43,745
    )Forfeited
    
    
    
    
    
    
    Issued
    
    
    
    
    
    
    Outstanding at March 31, 2006
    
    
    130,317
    
    
    $
    1,016,725
   20




---



##### 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
    
    
    (713,085
    )Forfeited
    
    
    (22,979
    )Issued
    
    
    Outstanding at March 31, 2005
    
    
    5,438,781Outstanding at December 31, 2005
    
    
    6,039,253Exercised
    
    
    (1,174,744
    )Forfeited
    
    
    (117,867
    )Issued
    
    
    37,408Outstanding at March 31, 2006
    
    
    4,784,050Available for grant at March 31, 2006
    
    
    5,127,253
 21




---



##### Table of Contents



For the Three MonthsEnded March 31,2006
    
    2005Weighted average exercise price of options
outstanding
    
    $
    10.25
    
    
    $
    7.39Weighted average exercise price of options exercised
    
    $
    4.10
    
    
    $
    2.17Weighted average price of options forfeited
    
    $
    13.42
    
    
    $
    10.00
    Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Class of
    
    Range of
    
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageCommon
    
    Exercise
    
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExerciseStock
    
    Prices
    
    
    at 03/31/06
    
    
    Contractual Life
    
    
    Price
    
    
    at 03/31/06
    
    
    PriceA
    
    $1.92 to  $3.83
    
    
    670,026
    
    
    4.2 years
    
    $
    3.00
    
    
    
    670,026
    
    
    $
    3.00A
    
    $3.84 to  $6.70
    
    
    741,296
    
    
    2.2 years
    
    
    4.83
    
    
    
    739,794
    
    
    
    4.83A
    
    $6.71 to  $9.36
    
    
    1,755,005
    
    
    6.5 years
    
    
    7.98
    
    
    
    65,310
    
    
    
    8.01A
    
    $9.37 to  $18.19
    
    
    114,952
    
    
    7.7 years
    
    
    12.68
    
    
    
    37,452
    
    
    
    10.27A
    
    $
    18.20 to $19.02
    
    
    
    1,502,771
    
    
    8.7 years
    
    
    18.62
    
    
    
    59,371
    
    
    
    18.484,784,050
    
    
    6.3 years
    
    $
    10.25
    
    
    
    1,571,953
    
    
    $
    4.83
 22




---



##### Table of Contents



Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Class of
    
    Range of
    
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageCommon
    
    Exercise
    
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExerciseStock
    
    Prices
    
    
    at 03/31/05
    
    
    Contractual Life
    
    
    Price
    
    
    at 03/31/05
    
    
    PriceA
    
    $1.92 to  $3.83
    
    
    1,520,499
    
    
    4.2 years
    
    $
    3.19
    
    
    
    485,478
    
    
    $
    3.71A
    
    $3.84 to  $6.70
    
    
    1,276,928
    
    
    3.1 years
    
    
    4.96
    
    
    
    1,275,426
    
    
    
    4.96A
    
    $6.71 to  $9.36
    
    
    1,841,210
    
    
    7.2 years
    
    
    7.98
    
    
    
    65,310
    
    
    
    8.01A
    
    $9.37 to  $18.19
    
    
    30,044
    
    
    3.0 years
    
    
    9.36
    
    
    
    30,044
    
    
    
    9.36A
    
    $
    18.20 to $19.02
    
    
    
    770,100
    
    
    8.7 years
    
    
    18.20
    
    
    
    35,000
    
    
    
    18.205,438,781
    
    
    5.6 years
    
    $
    7.39
    
    
    
    1,891,258
    
    
    $
    5.06
 Ryan Beck Stock Option Plan:
  Ryan BeckOutstandingOptionsOutstanding at December 31, 2004
    
    
    2,245,500Exercised
    
    
    Forfeited
    
    
    (7,000
    )Issued
    
    
    22,000Outstanding at March 31, 2005
    
    
    2,260,000Outstanding at December 31, 2005
    
    
    2,069,000Exercised
    
    
    Forfeited
    
    
    (22,500
    )Issued
    
    
    377,500Outstanding at March 31, 2006
    
    
    2,424,000Available for grant at March 31, 2006
    
    
    13,500
  23




---



##### Table of Contents



For the Three MonthsEnded March 31,2006
    
    2005Stock Price
    
    $
    8.74
    
    
    $
    5.46Exercise Price
    
    $
    8.74
    
    
    $
    5.46Interest Rate
    
    
    4.55
    %
    
    
    4.39
    %Dividend Rate
    
    
    0.82
    %
    
    
    0.83
    %Volatility
    
    
    18.36
    %
    
    
    21.97
    %Option Life (years)
    
    
    7.00
    
    
    
    6.00Option Value
    
    $
    2.32
    
    
    $
    1.57Annual Forfeiture
Rate
    
    
    9.32
    %
    
    
    
    %
   Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageExercise
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExercisePrices
    
    at 03/31/06
    
    
    Contractual Life
    
    
    Price
    
    
    at 03/31/06
    
    
    Price$1.60 to $1.68
    
    
    1,320,000
    
    
    6.1 years
    
    $
    1.62
    
    
    
    1,065,000
    
    
    $
    1.60$5.26 to $5.46
    
    
    726,500
    
    
    7.9 years
    
    
    5.27
    
    
    
    
    
    
    
    $5.50 to $8.74
    
    
    377,500
    
    
    9.8 years
    
    
    8.74
    
    
    
    
    
    
    
    2,424,000
    
    
    7.2 years
    
    $
    3.82
    
    
    
    1,065,000
    
    
    $
    1.60
  Options Outstanding
    
    
    Options ExercisableWeighted-
    
    
    Weighted-
    
    
    
    
    
    
    Weighted-Range of
    
    Number
    
    
    Average
    
    
    Average
    
    
    Number
    
    
    AverageExercise
    
    Outstanding
    
    
    Remaining
    
    
    Exercise
    
    
    Exercisable
    
    
    ExercisePrices
    
    at 03/31/05
    
    
    Contractual Life
    
    
    Price
    
    
    at 03/31/05
    
    
    Price$1.60 to $1.68
    
    
    1,365,000
    
    
    6.9 years
    
    $
    1.62
    
    
    
    1,065,000
    
    
    $
    1.60$1.70 to $3.50
    
    
    75,000
    
    
    8.5 years
    
    
    3.36
    
    
    
    
    
    
    
    $5.26 to $5.46
    
    
    820,000
    
    
    8.4 years
    
    
    5.27
    
    
    
    
    
    
    
    2,260,000
    
    
    7.5 years
    
    $
    3.00
    
    
    
    1,065,000
    
    
    $
    1.60
  24




---



##### Table of Contents



Levitt
   March 31,2005Pro forma net incomeNet income, as reported
    
    $
    29,818Deduct: Total stock-based employee compensation
expense determined under fair value based
method for all awards, net of related income tax effect
    
    
    (223
    )Pro forma net income
    
    $
    29,595Basic earnings per share:As reported
    
    $
    1.50Pro forma
    
    $
    1.49Diluted earnings per share:As reported
    
    $
    1.49Pro forma
    
    $
    1.49
 25




---



##### Table of Contents



Expected volatility
    
    
    37.99% - 50.35
    %Weighted-average volatility
    
    
    44.64
    %Expected dividend yield
    
    
    0.00% - 0.33
    %Weighted-average dividend yield
    
    
    0.13
    %Risk-free interest rate
    
    
    4.02% - 4.40
    %Weighted-average risk-free rate
    
    
    4.30
    %Expected life
    
    7.5  yearsForfeiture rate  executives
    
    
    5.0
    %Forfeiture rate  non-executives
    
    
    10.0
    %
  26




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##### 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
    
    
    
    
    
    
    $
    1,189Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    39,500
    
    
    $
    25.31
    
    
    
    
    
    
    
    6Options outstanding at March 31, 2006
    
    
    1,265,676
    
    
    $
    25.60
    
    
    8.48 years
    
    $
    1,183Vested and expected to vest in the
future at March 31, 2006
    
    
    943,759
    
    
    $
    25.60
    
    
    8.48 years
    
    $
    882Options exercisable at March 31, 2006
    
    
    55,176
    
    
    $
    22.33
    
    
    8.04 years
    
    $
    85Stock available for equity compensation
grants at March 31, 2006
    
    
    227,437
  WeightedWeighted
    
    
    AverageAverage
    
    
    Remaining
    
    
    AggregateGrant Date
    
    
    Contractual
    
    
    Intrinsic ValueShares
    
    
    Fair Value
    
    
    Term
    
    
    (in thousands)Non-vested at December 31, 2005
    
    
    1,250,000
    
    
    $
    13.44
    
    
    
    
    
    
    $
    1,104Grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    39,500
    
    
    $
    12.23
    
    
    
    
    
    
    
    6Non-vested at March 31, 2006
    
    
    1,210,500
    
    
    $
    13.48
    
    
    $
    8.50
    
    
    $
    1,098
   27




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##### Table of Contents



4. Discontinued Operations
   BFC Activities  RevenuesOther income
    
    $
    13BFC Activities  ExpensesInterest expense
    
    
    189Loss from discontinued operations
    
    
    (176
    )Benefit for income taxes
    
    
    (68
    )Loss from discontinued operations, net
of tax
    
    $
    (108
    )
 5. Securities Owned
   March 31,
    
    
    December 31,2006
    
    
    2005States and municipal obligations
    
    $
    49,019
    
    
    $
    76,568Corporate debt
    
    
    6,075
    
    
    
    3,410Obligations of U.S. Government
agencies
    
    
    59,139
    
    
    
    45,827Equity securities
    
    
    26,846
    
    
    
    23,645Mutual funds and other
    
    
    22,629
    
    
    
    28,359Certificates of deposit
    
    
    5,862
    
    
    
    2,483$
    169,570
    
    
    $
    180,292
  28




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##### Table of Contents



March 31,
    
    
    December 31,2006
    
    
    2005Equity securities
    
    $
    8,917
    
    
    $
    3,780Corporate debt
    
    
    1,248
    
    
    
    1,332State and municipal obligations
    
    
    227
    
    
    
    41Obligations of U.S. Government
agencies
    
    
    30,827
    
    
    
    29,653Certificates of deposits
    
    
    609
    
    
    
    371$
    41,828
    
    
    $
    35,177
   6. Loans Receivable
  March 31,
    
    
    December 31,2006
    
    
    2005Real estate loans:Residential
    
    $
    2,058,607
    
    
    $
    2,043,055Construction and development
    
    
    1,076,049
    
    
    
    1,339,576Commercial
    
    
    1,089,362
    
    
    
    1,066,598Small business
    
    
    164,307
    
    
    
    151,924Other loans:Home equity
    
    
    511,715
    
    
    
    513,813Commercial business
    
    
    128,279
    
    
    
    89,752Small business  non-mortgage
    
    
    83,956
    
    
    
    83,429Consumer loans
    
    
    14,359
    
    
    
    21,469Deposit overdrafts
    
    
    5,406
    
    
    
    5,694Residential loans held for sale
    
    
    6,810
    
    
    
    2,538Other loans
    
    
    1,500
    
    
    
    2,071Discontinued loan products (1)
    
    
    729
    
    
    
    1,207Total gross loans
    
    
    5,141,079
    
    
    
    5,321,126Adjustments:Undisbursed portion of loans in process
    
    
    (568,056
    )
    
    
    (649,296
    )Premiums related to purchased loans
    
    
    4,556
    
    
    
    5,566Deferred fees
    
    
    (3,302
    )
    
    
    (3,231
    )Deferred profit on commercial real estate loans
    
    
    (223
    )
    
    
    (231
    )Allowance for loan and lease losses
    
    
    (42,506
    )
    
    
    (41,830
    )Loans receivable  net
    
    $
    4,531,548
    
    
    $
    4,632,104
 
 (1)
    
    Discontinued loan products consist of lease financings and indirect
consumer loans. These loan products were discontinued during prior periods. 29




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##### Table of Contents



7. Defined Benefit Pension Plan
  For the Three MonthsEnded March 31,2006
    
    
    2005Service cost benefits earned during the period
    
    $
    
    
    
    $
    Interest cost on projected benefit obligation
    
    
    407
    
    
    
    376Expected return on plan assets
    
    
    (547
    )
    
    
    (500
    )Amortization of unrecognized net gains and
losses
    
    
    237
    
    
    
    181Net periodic pension expense
    
    $
    97
    
    
    $
    57
  8. Real Estate Held for Development and Sale
  March 31,
    
    
    December 31,2006
    
    
    2005Land and land development costs
    
    $
    539,604
    
    
    $
    467,747Construction costs
    
    
    128,449
    
    
    
    120,830Capitalized costs
    
    
    53,105
    
    
    
    43,860Other
    
    
    118
    
    
    
    160$
    721,276
    
    
    $
    632,597
  30




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##### Table of Contents



9. Investments in Unconsolidated Affiliates
  March 31,
    
    
    December 31,2006
    
    
    2005Investment in Bluegreen
    
    $
    95,948
    
    
    $
    95,828Investment in real estate joint ventures
    
    
    4,544
    
    
    
    4,749Investment in statutory business trusts
    
    
    9,547
    
    
    
    9,547$
    110,039
    
    
    $
    110,124
  For the Three Months EndedMarch 31,2006
    
    
    2005Equity in (loss) earnings of Bluegreen
    
    $
    (49
    )
    
    $
    2,138Equity in earnings of joint ventures
    
    
    670
    
    
    
    90Equity in earnings of statutory trusts
    
    
    150
    
    
    
    131Equity in earnings from
unconsolidated affiliates
    
    $
    771
    
    
    $
    2,359
   31




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##### Table of Contents



Unaudited Condensed Consolidated Balance Sheets
 March 31,
    
    
    December 31,2006
    
    
    2005Total assets
    
    $
    733,391
    
    
    $
    694,243Total liabilities
    
    $
    409,509
    
    
    $
    371,069Minority interest
    
    
    9,366
    
    
    
    9,508Total shareholders equity
    
    
    314,516
    
    
    
    313,666Total liabilities and shareholders equity
    
    $
    733,391
    
    
    $
    694,243
 Unaudited Condensed Consolidated Statements of Income
 Three Months EndedMarch 31,
    
    
    March 31,2006
    
    
    2005(Restated)Revenues and other income
    
    $
    148,379
    
    
    $
    134,651Cost and other expenses
    
    
    140,802
    
    
    
    123,472Income before minority interest and
provision for income taxes
    
    
    7,577
    
    
    
    11,179Minority interest
    
    
    1,022
    
    
    
    773Income before provision for income taxes
    
    
    6,555
    
    
    
    10,406Provision for income taxes
    
    
    2,524
    
    
    
    4,006Income before cumulative effect of
change in accounting principle
    
    
    4,031
    
    
    
    6,400Cumulative effect of change in accounting principle, net of tax
    
    
    (4,494
    )
    
    
    Net (loss) income
    
    $
    (463
    )
    
    $
    6,400
  10. Advances from the Federal Home Loan Bank
  32




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##### Table of Contents



11. Other Debt
   12. Noncontrolling Interest
  March 31,
    
    
    December 31,2006
    
    
    2005BankAtlantic Bancorp
    
    $
    409,596
    
    
    $
    404,118Levitt
    
    
    291,469
    
    
    
    291,675Joint Venture Partnerships
    
    
    722
    
    
    
    729$
    701,787
    
    
    $
    696,522
 13. BankAtlantic Branch Sale
  33




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##### Table of Contents



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 (1)
    
    
    935Net cash outflows from sale of branch
    
    $
    (13,592
    )
 
 (1)
    
    The gain on sale of the branch is included in Financial Services  other income in
the Companys Consolidated Statements of Operations. 14. Interest Expense
  Three Months EndedMarch 31,2006
    
    
    2005Interest expense
    
    $
    47,342
    
    
    $
    35,367Interest capitalized
    
    
    (8,509
    )
    
    
    (3,946
    )Interest expense, net
    
    $
    38,833
    
    
    $
    31,421
 34




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##### Table of Contents



15. Commitments, Contingencies and Financial Instruments with off-Balance Sheet Risk
  March 31,
    
    
    December 31,2006
    
    
    2005BFC ActivitiesGuaranty agreements
    
    $
    29,600
    
    
    $
    21,660Financial ServicesCommitments to sell fixed rate residential loans
    
    
    25,685
    
    
    
    13,634Commitments to sell variable rate residential loans
    
    
    2,147
    
    
    
    4,438Commitments to purchase fixed rate residential loans
    
    
    2,480
    
    
    
    Commitments to purchase variable rate residential loans
    
    
    26,540
    
    
    
    6,689Commitments to originate loans held for sale
    
    
    33,093
    
    
    
    16,220Commitments to originate loans held to maturity
    
    
    435,973
    
    
    
    311,081Commitments to extend credit, including the undisbursed
portion of loans in process
    
    
    1,075,854
    
    
    
    1,151,054Commitments to purchase branch facilities land
    
    
    5,225
    
    
    
    5,334Standby letters of credit
    
    
    68,155
    
    
    
    67,868Commercial lines of credit
    
    
    125,195
    
    
    
    119,639Homebuilding & Real Estate DevelopmentLevitts commitments to purchase properties for
development
    
    
    163,100
    
    
    
    186,200
 BFC Activities
    Financial Services
  35




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##### Table of Contents



Homebuilding & Real Estate Development
  Purchase
    
    
    
    
    
    
    ExpectedPrice
    
    
    Units
    
    
    ClosingHomebuilding Division
    
    $159.6 million
    
    4,192 units
    
    
    2006-2007Other Operations
    
    3.5 million
    
    90 units
    
    
    2006
     36




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##### Table of Contents



16. Certain Relationships and Related Party Transactions
   BankAtlantic(In thousands)
    
    
    
    
    
    BFC
    
    
    Bancorp
    
    
    Levitt
    
    
    BluegreenFor the three months ended March 31, 2006Shared service income (expense)
    
    
    (a
    )
    
    $
    506
    
    
    $
    (140
    )
    
    $
    (302
    )
    
    $
    (64
    )Interest income (expense) from
cash balance/securities sold
under agreements to repurchase
    
    
    
    
    
    $
    10
    
    
    $
    (152
    )
    
    $
    142
    
    
    $
    For the three months ended March 31, 2005Shared service income (expense)
    
    
    (b
    )
    
    $
    (80
    )
    
    $
    80
    
    
    $
    (148
    )
    
    $
    148Interest income (expense) from
notes receivable/payable
    
    
    
    
    
    $
    
    
    
    $
    613
    
    
    $
    (613
    )
    
    $
    Interest income (expense) from
cash balance/securities sold
under agreements to repurchase
    
    
    
    
    
    $
    7
    
    
    $
    (149
    )
    
    $
    142
    
    
    $
    At March 31, 2006Cash and cash equivalents and
(securities sold under
agreement to repurchase)
    
    
    
    
    
    $
    1,916
    
    
    $
    (18,955
    )
    
    $
    17,039
    
    
    $
    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 service 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 entities. Also as part of the shared service arrangement, the Company
reimburses BankAtlantic Bancorp and Bluegreen for office facilities overhead 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 human resources, risk management, project
planning, system support and investor and public relations services. For such services
BankAtlantic Bancorp was compensated on a costs plus 5% basis. Additionally, BankAtlantic
Bancorp provided office space to Levitt and BFC on a month-to-month basis and received
reimbursements for overhead.  37




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##### Table of Contents



17. (Loss) Earnings Per Share
  38




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##### Table of Contents



For the Three MonthsEnded March 31,(In thousands, except per share data)
    
    2006
    
    
    2005Basic (loss) earnings per shareNumerator:(Loss) income from continuing operations
    
    $
    (265
    )
    
    $
    4,508Less: Preferred stock dividends
    
    
    188
    
    
    
    188(Loss) income from continuing operations available to common shareholders
    
    
    (453
    )
    
    
    4,320Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    (108
    )Net (loss) income available to common shareholders
    
    $
    (453
    )
    
    $
    4,212Denominator:Weighted average number of common shares outstanding
    
    
    35,085
    
    
    
    28,143Eliminate RAG weighted average number of common shares
    
    
    (2,393
    )
    
    
    (2,393
    )Basic weighted average number of common shares outstanding
    
    
    32,692
    
    
    
    25,750Basic (loss) earnings per share:(Loss) earnings per share from continuing operations
    
    
    (0.01
    )
    
    
    0.16(Loss) earnings per share from discontinued operations
    
    
    
    
    
    
    Basic (loss) earnings per share
    
    
    (0.01
    )
    
    
    0.16Diluted (loss) earnings per shareNumeratorNet (loss) income available to common shareholders
    
    $
    (453
    )
    
    $
    4,212Effect of securities issuable by subsidiaries
    
    
    (29
    )
    
    
    (174
    )Net (loss) income available after assumed dilution
    
    $
    (481
    )
    
    $
    4,038DenominatorBasic weighted average number of common shares outstanding
    
    
    32,692
    
    
    
    25,750Common stock equivalents resulting from stock-based compensation
    
    
    
    
    
    
    2,586Diluted weighted average shares outstanding
    
    
    32,692
    
    
    
    28,336Diluted (loss) earnings per share:(Loss) earnings per share from continuing operations
    
    
    (0.01
    )
    
    
    0.14(Loss) earnings per share from discontinued operations
    
    
    
    
    
    
    Diluted (loss) earnings per share
    
    
    (0.01
    )
    
    
    0.14
 39




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##### Table of Contents



18. Parent Company Financial Information
  
 March 31,
    
    
    December 31,2006
    
    
    2005AssetsCash and cash equivalents
    
    $
    19,464
    
    
    $
    26,683Investment securities
    
    
    2,434
    
    
    
    2,034Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    941
    
    
    
    950Investment in BankAtlantic Bancorp, Inc.
    
    
    112,174
    
    
    
    112,218Investment in Levitt Corporation
    
    
    58,070
    
    
    
    58,111Investment in and advances to wholly owned subsidiaries
    
    
    1,612
    
    
    
    1,631Loans receivable
    
    
    1,500
    
    
    
    2,071Other assets
    
    
    2,821
    
    
    
    960Total assets
    
    $
    219,016
    
    
    $
    224,658Liabilities and Shareholders EquityAdvances from wholly owned subsidiaries
    
    $
    544
    
    
    $
    462Other liabilities
    
    
    6,615
    
    
    
    7,417Deferred income taxes
    
    
    33,455
    
    
    
    33,699Total liabilities
    
    
    40,614
    
    
    
    41,578Total shareholders equity
    
    
    178,402
    
    
    
    183,080Total liabilities and shareholders equity
    
    $
    219,016
    
    
    $
    224,658
 40




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##### Table of Contents



For the Three Months Ended March 31,2006
    
    
    2005Revenues
    
    $
    573
    
    
    $
    300Expenses
    
    
    2,220
    
    
    
    2,165Loss before undistributed earnings from subsidiaries
    
    
    (1,647
    )
    
    
    (1,865
    )Equity in earnings of BankAtlantic Bancorp
    
    
    1,459
    
    
    
    4,368Equity in (loss) earnings of Levitt
    
    
    (109
    )
    
    
    4,955Equity in loss of other subsidiaries
    
    
    (32
    )
    
    
    (139
    )(Loss) income before income taxes
    
    
    (329
    )
    
    
    7,319(Benefit) provision for income taxes
    
    
    (64
    )
    
    
    2,811(Loss) income from continuing operations
    
    
    (265
    )
    
    
    4,508Discontinued operations, net of tax
    
    
    
    
    
    
    (108
    )Net (loss) income
    
    
    (265
    )
    
    
    4,4005% Preferred Stock dividends
    
    
    188
    
    
    
    188Net (loss) income available to common shareholders
    
    $
    (453
    )
    
    $
    4,212
 
 For the Three Months Ended March 31,2006
    
    
    2005Operating Activities:Net cash used in operating activities
    
    
    (2,444
    )
    
    
    (178
    )Investing Activities:Dividends from subsidiaries
    
    
    568
    
    
    
    528Investment in real estate limited partnership
    
    
    (1,000
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (432
    )
    
    
    528Financing Activities:Repayment of borrowing
    
    
    
    
    
    
    (1,000
    )Proceeds from the issuance of common stock upon
exercise of stock options
    
    
    
    
    
    
    11Payment of the minimum withholding tax upon the exercise of
stock options
    
    
    (4,155
    )
    
    
    5% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Net cash used in financing activities
    
    
    (4,343
    )
    
    
    (1,177
    )Decrease in cash and cash equivalents
    
    
    (7,219
    )
    
    
    (827
    )Cash at beginning of period
    
    
    26,683
    
    
    
    1,520Cash at end of period
    
    $
    19,464
    
    
    $
    693Supplementary disclosure of non-cash investing
and financing activitiesInterest paid on borrowings
    
    $
    
    
    
    $
    92Net decrease in shareholders equity from the effect
of subsidiaries capital transactions, net of income taxes
    
    
    (454
    )
    
    
    (419
    )(Decrease) increase in accumulated other comprehensive income,
Net of taxes
    
    
    167
    
    
    
    (705
    )Decrease in shareholders equity for the tax effect
related to the exercise of employee stock options
    
    
    
    
    
    
    (262
    )Issuance and retirement of Common Stock accepted
as consideration for the exercise price of stock options
    
    
    4,155
    
    
    
    
 41




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##### Table of Contents



19. Benihana Convertible Preferred Stock Investment
  20. New Accounting Pronouncements
    22. Litigation
  42




---



##### Table of Contents



23. Subsequent Events
      43




---



##### Table of Contents



BFC Financial Corporation and Subsidiaries
 
 Managements Discussion and Analysis of Financial Condition
 and Results of Operations
 Overview
     44




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##### Table of Contents



Percent of
    
    PercentShares
    
    Economic
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    14.73
    %
    
    
    7.81
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    21.50
    %
    
    
    54.81
    %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
    
    
    
    16.62
    %
    
    
    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;
    
    that BFC shareholders interests may be diluted in transactions utilizing BFC stock for consideration;
    
    that appropriate investment opportunities on reasonable terms and at reasonable prices
may not be available;
    
    that the performance of those entities in which investments are made 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;
    
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal
policies and laws including the impact on the Banks net interest margin;
 45




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##### Table of Contents




    
    adverse conditions in the stock market, the public debt market and other capital markets
and the impact of such conditions on our activities and the value of our assets;
    
    BankAtlantics seven-day banking initiative, marketing initiatives, branch expansion,
branch renovation and other growth initiatives not resulting in continued growth of low
cost deposits or otherwise not producing results which justify their costs;
    
    the impact of periodic testing of goodwill and other intangible assets for impairment;
    
    the results or performance derived or implied, directly or indirectly from the estimates
and assumptions, are based on our beliefs and may not be accurate; and
    
    past performance, actual or estimated new account openings and growth rates may not be
indicative of future results.
  
    
    its growth and investment in new products will not prove profitable,
    
    its 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 and its effects on the
volume of its business and the value of its securities positions and portfolio, as well as
its revenue mix, and the success of new lines of business; 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, and the impact of hurricanes and tropical storms in the areas in which it
operates;
    
    the market for real estate generally and in the areas where Levitt has developments,
including the impact of market conditions on the Levitts margins;
    
    delays in opening planned new communities;
    
    the availability and price of land suitable for development in our current markets and
in markets where we intend to expand;
    
    shortages and increased costs of construction materials and labor;
    
    the effects of increases in interest rates;
    
    our ability to successfully expand into new markets and the demand in those markets
meeting Levitts expectations;
    
    Levitts ability to realize the expected benefits of its expanded platform
organizational, infrastructure and growth initiatives and strategic objectives;
    
    Levitts ability to timely deliver homes from backlog,
shorten delivery cycles and improve construction efficiency; and
    
    Levitts success at managing the risks involved in the foregoing.
  46




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Critical Accounting Policies
  Share-Based Compensation
    47




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##### Table of Contents



Consolidated Financial Summary
  For the Three Months EndedMarch 31,2006
    
    
    2005BFC Activities
    
    $
    (1,614
    )
    
    $
    (4,822
    )Financial Services
    
    
    6,712
    
    
    
    19,878Homebuilding & Real Estate Development
    
    
    (660
    )
    
    
    29,8184,438
    
    
    
    44,874Noncontrolling interest
    
    
    4,703
    
    
    
    40,366(Loss) income from continuing operations
    
    
    (265
    )
    
    
    4,508Discontinued operations, less income taxes
    
    
    
    
    
    
    (108
    )Net (loss) income
    
    
    (265
    )
    
    
    4,4005% Preferred Stock dividends
    
    
    188
    
    
    
    188Net (loss) income available to common shareholders
    
    $
    (453
    )
    
    $
    4,212
 Accounting for the Impairment of Disposal of Long-Lived Assets
  48




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BFC Activities
    For the Three Months
    
    
    ChangeEnded March 31,
    
    
    2006 vs.(In thousands)
    
    2006
    
    
    2005
    
    
    2005RevenuesInterest and dividend income
    
    $
    570
    
    
    $
    243
    
    
    $
    327Other income, net
    
    
    1,004
    
    
    
    142
    
    
    
    8621,574
    
    
    
    385
    
    
    
    1,189Cost and ExpensesInterest expense
    
    
    12
    
    
    
    120
    
    
    
    (108
    )Employee compensation and benefits
    
    
    2,437
    
    
    
    1,596
    
    
    
    841Other expenses
    
    
    840
    
    
    
    788
    
    
    
    523,289
    
    
    
    2,504
    
    
    
    785Loss before income taxes
    
    
    (1,715
    )
    
    
    (2,119
    )
    
    
    404(Benefit) provision for income taxes
    
    
    (101
    )
    
    
    2,703
    
    
    
    (2,804
    )Noncontrolling interest
    
    
    1
    
    
    
    (6
    )
    
    
    7Loss from continuing operations
    
    
    (1,615
    )
    
    
    (4,816
    )
    
    
    3,201Discontinued operations, less income taxes
    
    
    
    
    
    
    (108
    )
    
    
    108Net loss
    
    $
    (1,615
    )
    
    $
    (4,924
    )
    
    $
    3,309
  49




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Liquidity and Capital Resources of BFC
  For the Three Months EndedMarch 31,2006
    
    
    2005Net cash provided by (used in):Operating activities
    
    $
    (1,415
    )
    
    $
    (556
    )Investing activities
    
    
    (432
    )
    
    
    501Financing activities
    
    
    (4,347
    )
    
    
    (1,202
    )Decrease in cash and cash equivalents
    
    
    (6,194
    )
    
    
    (1,257
    )Cash and cash equivalents at beginning of period
    
    
    26,806
    
    
    
    2,227Cash and cash equivalents at end of period
    
    $
    20,612
    
    
    $
    970
 50




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##### Table of Contents




    
    Dividends from BankAtlantic Bancorp and Levitt;
    
    Dividends from Benihana;
    
    Revenues from CCC advisory fees;
    
    Revenues from shared services activities in 2006 and
    
    Principal and interest payments on loans receivable.
  
    
    Fund minimum withholding tax liability of approximately $4.2 million upon exercise of
options. The Company retired shares of the Companys common stock delivered by the option
holders as consideration for the option holders minimum tax withholding;
    
    Pay $1.0 million on the 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.
      51




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52




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Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    A net decrease in cash and cash equivalents of $47.0 million resulted primarily from
cash used in operations and in financing activities which included the repayments of
borrowings. This decrease was partially offset with an increase in investing activities
which included net repayments of loans receivable;
    
    Higher federal funds sold resulting from discretionary short term investments at period end;
    
    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;
    
    Lower investment securities balances associated with accelerated redemptions of tax
certificates associated with appreciation of real estate;
    
    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;
    
    Net increase in inventory of real estate resulted primarily from
land acquisitions by Levitt and increases in Levitts land development and construction
costs;
    
    Increase in accrued interest receivable resulting from higher earning asset rates
during the period;
    
    Decline in investment in unconsolidated affiliates at BankAtlantic Bancorp primarily
due to a capital distribution from an investment in a rental real estate joint venture
during 2005 partially offset by a $4.1 million investment in another rental real estate
joint venture;
    
    Increase in property and equipment associated with BankAtlantics branch expansion
initiatives and an increase of $8.0 million associated with increased investment in an
irrigation facility and commercial properties under construction in Tradition, and
Levitts technology infrastructure development; and
    
    Decrease in deferred tax liability primarily resulting from an increase in
BankAtlantic Bancorp other comprehensive loss.
  
    
    Higher deposit account balances resulting from the growth in low-cost deposits
associated with Floridas Most Convenient Bank and totally free checking account
initiatives;
    
    Higher certificate of deposit balances associated with high yield certificate
promotions at store grand openings;
    
    Decrease in advance borrowings from the FHLB, securities sold under agreements to
repurchase and federal funds purchased and other short term borrowings due to deposit
growth and a decline in earning assets;
    
    Decrease in secured borrowings associated with loan participations sold without
recourse that are accounted for as borrowings due to loan repayments and a management
decision to discontinue secured borrowing arrangements;
    
    Increase in notes payable associated with BankAtlantic Bancorp revolving line of
credit borrowings to invest in a rental real estate joint venture and borrowings at
Levitt associated with 2006 land acquisitions;
    
    Declines in securities sold but not yet purchased and an increase in due from clearing
agent resulting from Ryan Becks trading activities; and
    
    Declines in other liabilities associated with a reduction in accrued employee
compensation and benefits reflecting the payout of 2005 annual bonuses during the first
quarter of 2006 and a decrease in current income tax liability at Levitt.
 53




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Noncontrolling Interest
  March 31,
    
    
    December 31,2006
    
    
    2005BankAtlantic Bancorp
    
    $
    409,596
    
    
    $
    404,118Levitt
    
    
    291,469
    
    
    
    291,675Joint Venture Partnerships
    
    
    722
    
    
    
    729$
    701,787
    
    
    $
    696,522
   Shareholders Equity
  54




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##### Table of Contents



Financial Services
 Our Financial Services segment consists of BankAtlantic Bancorp, which is consolidated
with BFC Financial Corporation. The only assets available to BFC Financial Corporation from
BankAtlantic Bancorp are dividends when and if paid by BankAtlantic Bancorp. BankAtlantic Bancorp
is a separate public company and its management prepared the following discussion regarding
BankAtlantic Bancorp which was included in BankAtlantic Bancorps Quarterly Report on Form 10-Q for
the quarter ended March 31, 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.
   Critical Accounting Policies
  55




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Stock-Based Compensation
    56




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For the Three Months Ended March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeBankAtlantic
    
    $
    10,418
    
    
    $
    20,861
    
    
    $
    (10,443
    )Ryan Beck
    
    
    (1,565
    )
    
    
    2,530
    
    
    
    (4,095
    )Parent Company
    
    
    (2,141
    )
    
    
    (3,513
    )
    
    
    1,372Net income
    
    $
    6,712
    
    
    $
    19,878
    
    
    $
    (13,166
    )
 For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
    57




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BankAtlantic Results of Operations
 Net interest income
 Bank Operations Business SegmentAverage Balance Sheet - Yield / Rate AnalysisFor the Three Months EndedMarch 31, 2006
    
    
    March 31, 2005Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    Rate( in thousands)Loans:Residential real estate
    
    $
    2,043,309
    
    
    $
    25,712
    
    
    
    5.03
    %
    
    $
    2,085,473
    
    
    $
    25,509
    
    
    
    4.89
    %Commercial real estate
    
    
    1,557,880
    
    
    
    30,827
    
    
    
    7.92
    
    
    
    1,759,747
    
    
    
    28,323
    
    
    
    6.44Loan participations sold
    
    
    125,293
    
    
    
    2,401
    
    
    
    7.77
    
    
    
    169,541
    
    
    
    2,162
    
    
    
    5.17Consumer
    
    
    539,937
    
    
    
    9,477
    
    
    
    7.02
    
    
    
    487,746
    
    
    
    6,776
    
    
    
    5.56Lease financing
    
    
    467
    
    
    
    15
    
    
    
    12.85
    
    
    
    6,242
    
    
    
    151
    
    
    
    9.68Commercial business
    
    
    102,066
    
    
    
    2,246
    
    
    
    8.80
    
    
    
    94,283
    
    
    
    1,640
    
    
    
    6.96Small business
    
    
    241,103
    
    
    
    4,708
    
    
    
    7.81
    
    
    
    195,733
    
    
    
    3,491
    
    
    
    7.13Total loans
    
    
    4,610,055
    
    
    
    75,386
    
    
    
    6.54
    
    
    
    4,798,765
    
    
    
    68,052
    
    
    
    5.67Investments  tax exempt
    
    
    393,159
    
    
    
    5,731
    (1)
    
    
    5.83
    
    
    
    334,029
    
    
    
    4,829
    (1)
    
    
    5.78Investments  taxable
    
    
    588,072
    
    
    
    8,233
    
    
    
    5.60
    
    
    
    732,939
    
    
    
    9,555
    
    
    
    5.21Total interest earning assets
    
    
    5,591,286
    
    
    
    89,350
    
    
    
    6.39
    %
    
    
    5,865,733
    
    
    
    82,436
    
    
    
    5.62
    %Goodwill and core deposit intangibles
    
    
    78,693
    
    
    
    
    
    
    
    
    
    
    
    80,375Other non-interest earning assets
    
    
    355,868
    
    
    
    
    
    
    
    
    
    
    
    283,019Total Assets
    
    $
    6,025,847
    
    
    
    
    
    
    
    
    
    
    $
    6,229,127Deposits:Savings
    
    $
    331,117
    
    
    
    313
    
    
    
    0.38
    %
    
    $
    281,512
    
    
    
    189
    
    
    
    0.27
    %NOW
    
    
    760,419
    
    
    
    934
    
    
    
    0.50
    
    
    
    664,313
    
    
    
    602
    
    
    
    0.37Money market
    
    
    829,700
    
    
    
    3,984
    
    
    
    1.95
    
    
    
    921,382
    
    
    
    2,704
    
    
    
    1.19Certificate of deposit
    
    
    843,866
    
    
    
    7,523
    
    
    
    3.62
    
    
    
    777,353
    
    
    
    4,800
    
    
    
    2.50Total interest bearing deposits
    
    
    2,765,102
    
    
    
    12,754
    
    
    
    1.87
    
    
    
    2,644,560
    
    
    
    8,295
    
    
    
    1.27Short-term borrowed funds
    
    
    245,326
    
    
    
    2,643
    
    
    
    4.37
    
    
    
    357,047
    
    
    
    2,122
    
    
    
    2.41Advances from FHLB
    
    
    1,164,675
    
    
    
    14,140
    
    
    
    4.92
    
    
    
    1,536,434
    
    
    
    13,674
    
    
    
    3.61Secured borrowings
    
    
    125,293
    
    
    
    2,401
    
    
    
    7.77
    
    
    
    169,541
    
    
    
    2,162
    
    
    
    5.17Other borrowings
    
    
    37,819
    
    
    
    748
    
    
    
    8.02
    
    
    
    37,206
    
    
    
    600
    
    
    
    6.54Total interest bearing liabilities
    
    
    4,338,215
    
    
    
    32,686
    
    
    
    3.06
    
    
    
    4,744,788
    
    
    
    26,853
    
    
    
    2.30Demand deposits
    
    
    1,065,909
    
    
    
    
    
    
    
    
    
    
    
    913,717Non-interest bearing other liabilities
    
    
    70,349
    
    
    
    
    
    
    
    
    
    
    
    44,216Total Liabilities
    
    
    5,474,473
    
    
    
    
    
    
    
    
    
    
    
    5,702,721Stockholders equity
    
    
    551,374
    
    
    
    
    
    
    
    
    
    
    
    526,406Total liabilities and stockholders equity
    
    $
    6,025,847
    
    
    
    
    
    
    
    
    
    
    $
    6,229,127Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    
    56,664
    
    
    
    3.33
    %
    
    
    
    
    
    
    55,583
    
    
    
    3.32
    %Tax equivalent adjustment
    
    
    
    
    
    
    (2,006
    )
    
    
    
    
    
    
    
    
    
    
    (1,690
    )Capitalized interest from real estate
operations
    
    
    
    
    
    
    480
    
    
    
    
    
    
    
    
    
    
    
    452Net interest income
    
    
    
    
    
    $
    55,138
    
    
    
    
    
    
    
    
    
    
    $
    54,345MarginInterest income/interest earning assets
    
    
    
    
    
    
    
    
    
    
    6.39
    %
    
    
    
    
    
    
    
    
    
    
    5.62
    %Interest expense/interest earning assets
    
    
    
    
    
    
    
    
    
    
    2.37
    
    
    
    
    
    
    
    
    
    
    
    1.86Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    4.02
    %
    
    
    
    
    
    
    
    
    
    
    3.76
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. 58




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##### Table of Contents



For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
      59




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Provision for Loan Losses
 For Three Months EndedMarch 31,(in thousands)
    
    2006
    
    
    2005Balance, beginning of period
    
    $
    41,192
    
    
    $
    46,010Charge-offs:Consumer loans
    
    
    (145
    )
    
    
    (68
    )Residential real estate loans
    
    
    (68
    )
    
    
    (198
    )Small business
    
    
    (86
    )
    
    
    (128
    )Continuing loan products
    
    
    (299
    )
    
    
    (394
    )Discontinued loan products
    
    
    (67
    )
    
    
    (324
    )Total charge-offs
    
    
    (366
    )
    
    
    (718
    )Recoveries:Commercial business loans
    
    
    120
    
    
    
    1,110Commercial real estate loans
    
    
    43
    
    
    
    Small business
    
    
    106
    
    
    
    185Consumer loans
    
    
    81
    
    
    
    44Residential real estate loans
    
    
    178
    
    
    
    1Continuing loan products
    
    
    528
    
    
    
    1,340Discontinued loan products
    
    
    372
    
    
    
    326Total recoveries
    
    
    900
    
    
    
    1,666Net recoveries
    
    
    534
    
    
    
    948Provision for (recovery from) loan
losses
    
    
    163
    
    
    
    (3,916
    )Balance, end of period
    
    $
    41,889
    
    
    $
    43,042
    60




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##### Table of Contents



March 31,
    
    
    December 31,
    
    
    March 31,2006
    
    
    2005
    
    
    2005NONPERFORMING ASSETSNonaccrual:Tax certificates
    
    $
    685
    
    
    $
    388
    
    
    $
    418Loans
    
    
    6,101
    
    
    
    6,801
    
    
    
    6,504Total nonaccrual
    
    
    6,786
    
    
    
    7,189
    
    
    
    6,922Repossessed assets:Real estate owned
    
    
    1,647
    
    
    
    967
    
    
    
    1,438Total nonperforming assets, net
    
    $
    8,433
    
    
    $
    8,156
    
    
    $
    8,360AllowancesAllowance for loan losses
    
    $
    41,889
    
    
    $
    41,192
    
    
    $
    43,042Allowance for tax certificate losses
    
    
    3,513
    
    
    
    3,271
    
    
    
    3,453Total allowances
    
    $
    45,402
    
    
    $
    44,463
    
    
    $
    46,495POTENTIAL PROBLEM LOANSContractually past due 90 days or more
    
    $
    
    
    
    $
    
    
    
    $
    7,032Performing impaired loans
    
    
    184
    
    
    
    193
    
    
    
    216Restructured loans
    
    
    5
    
    
    
    77
    
    
    
    20TOTAL POTENTIAL PROBLEM LOANS
    
    $
    189
    
    
    $
    270
    
    
    $
    7,268
   BankAtlantics Non-Interest Income
 For Three MonthsEnded March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeOther service charges and fees
    
    $
    6,222
    
    
    $
    5,238
    
    
    $
    984Service charges on deposits
    
    
    19,099
    
    
    
    12,989
    
    
    
    6,110Income (loss) from real estate
operations
    
    
    (1,096
    )
    
    
    2,241
    
    
    
    (3,337
    )Securities activities, net
    
    
    (1
    )
    
    
    7
    
    
    
    (8
    )Gain associated with debt redemption
    
    
    436
    
    
    
    
    
    
    
    436Other
    
    
    2,347
    
    
    
    3,066
    
    
    
    (719
    )Non-interest income
    
    $
    27,007
    
    
    $
    23,541
    
    
    $
    3,466
 61




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BankAtlantics Non-Interest Expense
 For Three MonthsEnded March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeEmployee compensation and
benefits
    
    $
    34,357
    
    
    $
    26,398
    
    
    $
    7,959Occupancy and equipment
    
    
    12,372
    
    
    
    9,117
    
    
    
    3,255Advertising and promotion
    
    
    8,296
    
    
    
    5,168
    
    
    
    3,128Amortization of intangible assets
    
    
    401
    
    
    
    425
    
    
    
    (24
    )Cost associated with debt
redemption
    
    
    423
    
    
    
    
    
    
    
    423Professional fees
    
    
    2,193
    
    
    
    1,895
    
    
    
    298Other
    
    
    9,341
    
    
    
    7,261
    
    
    
    2,080Non-interest expense
    
    $
    67,383
    
    
    $
    50,264
    
    
    $
    17,119
  .
 62




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Provision for Income Taxes
 For the Three MonthsEnded March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeIncome before income taxes
    
    $
    14,600
    
    
    $
    31,538
    
    
    $
    (16,938
    )Provision for income taxes
    
    
    4,182
    
    
    
    10,677
    
    
    
    (6,495
    )BankAtlantic net income
    
    $
    10,418
    
    
    $
    20,861
    
    
    $
    (10,443
    )Effective tax rate
    
    
    28.64
    %
    
    
    33.85
    %
    
    
    -5.21
    %
  63




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##### Table of Contents



Ryan Beck Results of Operations
 For the Three MonthsEnded March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeNet interest income:Broker dealer interest and dividends
    
    $
    4,238
    
    
    $
    2,947
    
    
    $
    1,291Interest expense
    
    
    (1,621
    )
    
    
    (502
    )
    
    
    (1,119
    )Net interest income
    
    
    2,617
    
    
    
    2,445
    
    
    
    172Non-interest income:Principal transactions
    
    
    24,720
    
    
    
    19,802
    
    
    
    4,918Investment banking
    
    
    3,702
    
    
    
    11,882
    
    
    
    (8,180
    )Commissions
    
    
    22,928
    
    
    
    20,315
    
    
    
    2,613Other
    
    
    3,212
    
    
    
    2,687
    
    
    
    525Non-interest income
    
    
    54,562
    
    
    
    54,686
    
    
    
    (124
    )Non-interest expense:Employee compensation and benefits
    
    
    44,355
    
    
    
    38,437
    
    
    
    5,918Occupancy and equipment
    
    
    3,871
    
    
    
    4,118
    
    
    
    (247
    )Advertising and promotion
    
    
    1,567
    
    
    
    1,073
    
    
    
    494Professional fees
    
    
    1,951
    
    
    
    1,417
    
    
    
    534Communications
    
    
    3,954
    
    
    
    3,205
    
    
    
    749Floor broker and clearing fees
    
    
    2,719
    
    
    
    2,368
    
    
    
    351Other
    
    
    1,918
    
    
    
    1,947
    
    
    
    (29
    )Non-interest expense
    
    
    60,335
    
    
    
    52,565
    
    
    
    7,770Income (loss) before income taxes
    
    
    (3,156
    )
    
    
    4,566
    
    
    
    (7,722
    )Income taxes
    
    
    (1,591
    )
    
    
    2,036
    
    
    
    (3,627
    )Net (loss) income
    
    $
    (1,565
    )
    
    $
    2,530
    
    
    $
    (4,095
    )
     64




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Parent Company Results of Operations
 For the Three MonthsEnded March 31,(in thousands)
    
    2006
    
    
    2005
    
    
    ChangeNet interest income:Interest and dividend income
    
    $
    597
    
    
    $
    678
    
    
    $
    (81
    )Interest expense
    
    
    (5,215
    )
    
    
    (4,570
    )
    
    
    (645
    )Net interest expense
    
    
    (4,618
    )
    
    
    (3,892
    )
    
    
    (726
    )Non-interest income:Income from unconsolidated
subsidiaries
    
    
    820
    
    
    
    131
    
    
    
    689Securities activities, net
    
    
    2,541
    
    
    
    95
    
    
    
    2,446Other
    
    
    
    
    
    
    306
    
    
    
    (306
    )Non-interest income
    
    
    3,361
    
    
    
    532
    
    
    
    2,829Non-interest expense:Employee compensation and benefits
    
    
    1,487
    
    
    
    960
    
    
    
    527Professional fees
    
    
    106
    
    
    
    859
    
    
    
    (753
    )Other
    
    
    365
    
    
    
    226
    
    
    
    139Non-interest expense
    
    
    1,958
    
    
    
    2,045
    
    
    
    (87
    )Loss before income taxes
    
    
    (3,215
    )
    
    
    (5,405
    )
    
    
    2,190Income taxes
    
    
    (1,074
    )
    
    
    (1,892
    )
    
    
    818Net loss
    
    $
    (2,141
    )
    
    $
    (3,513
    )
    
    $
    1,372
  65




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BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Higher federal funds sold resulting from discretionary short term investments at period end;
    
    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;
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
    
    Lower investment securities balances due to accelerated redemptions of tax
certificates associated with the appreciation of real estate;
    
    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;
    
    Increase in accrued interest receivable resulting from higher rates on earning asset
during the period;
    
    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.
  
    
    Higher deposit account balances resulting from the growth in low-cost deposits
associated with Floridas Most Convenient Bank and free checking account initiatives;
    
    Higher certificate of deposit balances associated with higher yield certificate
promotions at store grand openings;
    
    Decrease in FHLB advances, securities sold under agreements to repurchase, federal
funds purchased and other short term borrowings due to deposit growth and a decline in
earning assets;
    
    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 discontinue secured borrowing arrangements;
    
    Increase in notes payable associated with Parent Company revolving line of credit
borrowings used to invest in a rental real estate joint venture;
    
    Increase in securities sold but not yet purchased and due from 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.
  Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
   67




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BankAtlantic Liquidity and Capital Resources
   68




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##### Table of Contents



Minimum RatiosAdequately
    
    WellActual
    
    Capitalized
    
    CapitalizedAmount
    
    Ratio
    
    Ratio
    
    RatioAt March 31, 2006:Total risk-based capital
    
    $
    525,304
    
    
    
    12.21
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    $
    458,086
    
    
    
    10.65
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    458,086
    
    
    
    7.75
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    458,086
    
    
    
    7.75
    %
    
    
    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
    %
  69




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Ryan Beck & Co., Inc. Liquidity and Capital Resources
     70




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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 March 31, 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.
   71




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Executive Overview
  Overview
   Future prospects based on continued expansion
  72




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Critical Accounting Policies and Estimates
  Stock-based Compensation
    73




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CONSOLIDATED RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2006
    
    
    2005
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    125,543
    
    
    
    198,866
    
    
    
    (73,323
    )Title and mortgage operations
    
    
    1,008
    
    
    
    948
    
    
    
    60Total revenues
    
    
    126,551
    
    
    
    199,814
    
    
    
    (73,263
    )Costs and expensesCost of sales of real estate
    
    
    102,055
    
    
    
    130,589
    
    
    
    (28,534
    )Selling, general and administrative expenses
    
    
    26,755
    
    
    
    23,146
    
    
    
    3,609Other expenses
    
    
    626
    
    
    
    1,316
    
    
    
    (690
    )Total costs and expenses
    
    
    129,436
    
    
    
    155,051
    
    
    
    (25,615
    )(Loss) earnings from Bluegreen Corporation
    
    
    (49
    )
    
    
    2,138
    
    
    
    (2,187
    )Earnings from joint ventures
    
    
    
    
    
    
    90
    
    
    
    (90
    )Interest and other income
    
    
    1,832
    
    
    
    1,322
    
    
    
    510(Loss) income before income taxes
    
    
    (1,102
    )
    
    
    48,313
    
    
    
    (49,415(Benefit) provision from income taxes
    
    
    (442
    )
    
    
    18,495
    
    
    
    (18,937
    )Net (loss) income
    
    $
    (660
    )
    
    
    29,818
    
    
    
    (30,478
    )
 For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
    74




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75




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HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2006
    
    
    2005
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    118,275
    
    
    
    117,987
    
    
    
    288Title and mortgage operations
    
    
    1,008
    
    
    
    948
    
    
    
    60Total revenues
    
    
    119,283
    
    
    
    118,935
    
    
    
    348Costs and expensesCost of sales of real estate
    
    
    96,497
    
    
    
    93,579
    
    
    
    2,918Selling, general and administrative expenses
    
    
    17,572
    
    
    
    14,608
    
    
    
    2,964Other expenses
    
    
    626
    
    
    
    639
    
    
    
    (13
    )Total costs and expenses
    
    
    114,695
    
    
    
    108,826
    
    
    
    5,869Earnings from joint ventures
    
    
    
    
    
    
    104
    
    
    
    (104
    )Interest and other income
    
    
    177
    
    
    
    214
    
    
    
    (37
    )Income before income taxes
    
    
    4,765
    
    
    
    10,427
    
    
    
    (5,662
    )Provision for income taxes
    
    
    1,754
    
    
    
    3,901
    
    
    
    (2,147
    )Net income
    
    $
    3,011
    
    
    
    6,526
    
    
    
    (3,515
    )Homes delivered (units)
    
    
    439
    
    
    
    501
    
    
    
    (62
    )Construction starts (units)
    
    
    390
    
    
    
    347
    
    
    
    43Average selling price of homes delivered
    
    $
    269
    
    
    
    236
    
    
    
    33Margin percentage on homes delivered
    
    
    18.4
    %
    
    
    20.7
    %
    
    
    (2.3
    %)New orders (units)
    
    
    506
    
    
    
    605
    
    
    
    (99
    )New orders (value)
    
    $
    169,387
    
    
    
    165,346
    
    
    
    4,041Backlog of homes (units)
    
    
    1,859
    
    
    
    1,918
    
    
    
    (59
    )Backlog of homes (value)
    
    $
    608,437
    
    
    
    496,006
    
    
    
    112,431
 For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
   76




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77




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LAND DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2006
    
    
    2005
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    7,272
    
    
    
    66,551
    
    
    
    (59,279
    )Total revenues
    
    
    7,272
    
    
    
    66,551
    
    
    
    (59,279
    )Costs and expensesCost of sales of real estate
    
    
    5,019
    
    
    
    27,090
    
    
    
    (22,071
    )Selling, general and
administrative expenses
    
    
    2,786
    
    
    
    4,446
    
    
    
    (1,660
    )Other expense
    
    
    
    
    
    
    677
    
    
    
    (677
    )Total costs and expenses
    
    
    7,805
    
    
    
    32,213
    
    
    
    (24,408
    )Interest and other income
    
    
    988
    
    
    
    421
    
    
    
    567Income before income taxes
    
    
    455
    
    
    
    34,759
    
    
    
    (34,304
    )Provision for income taxes
    
    
    137
    
    
    
    13,436
    
    
    
    (13,299
    )Net income
    
    $
    318
    
    
    
    21,323
    
    
    
    (21,005
    )Acres sold
    
    
    56
    
    
    
    1,304
    
    
    
    (1,248
    )Margin percentage
    
    
    31.0
    %
    
    
    59.3
    %
    
    
    (28.3
    %)Unsold saleable acres (estimate)
    
    
    7,231
    
    
    
    4,657
    
    
    
    2,574Backlog of land (acres)
    
    
    195
    
    
    
    543
    
    
    
    (348
    )Backlog of land (value)
    
    $
    33,717
    
    
    
    59,624
    
    
    
    (25,907
    )
     78




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For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
       79




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OTHER OPERATIONS RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2006
    
    
    2005
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    
    
    
    
    14,709
    
    
    
    (14,709
    )Total revenues
    
    
    
    
    
    
    14,709
    
    
    
    (14,709
    )Costs and expensesCost of sales of real estate
    
    
    642
    
    
    
    11,326
    
    
    
    (10,684
    )Selling, general and administrative expenses
    
    
    6,397
    
    
    
    4,092
    
    
    
    2,305Total costs and expenses
    
    
    7,039
    
    
    
    15,418
    
    
    
    (8,379
    )(Loss) earnings from Bluegreen Corporation
    
    
    (49
    )
    
    
    2,138
    
    
    
    (2,187
    )(Loss) earnings from real estate joint ventures
    
    
    
    
    
    
    (14
    )
    
    
    14Interest and other income
    
    
    682
    
    
    
    687
    
    
    
    5(Loss) income before income taxes
    
    
    (6,406
    )
    
    
    2,102
    
    
    
    (8,508
    )(Benefit) provision for income taxes
    
    
    (2,364
    )
    
    
    763
    
    
    
    (3,127
    )Net (loss) income
    
    $
    (4,042
    )
    
    
    1,339
    
    
    
    (5,381
    )
  For the Three Months Ended March 31, 2006 Compared to the Same 2005 Period:
    80




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FINANCIAL CONDITION
 March 31, 2006 compared to December 31, 2005
   
    
    a net decrease in cash and cash equivalents of $37.8 million, which resulted from
cash used in operations and investing activities, partially offset by an increase in
cash provided by financing activities;
    
    a net increase in inventory of real estate of approximately $87.5 million resulting
from land acquisitions by our Homebuilding Division and increases in land development
and construction costs; and
    
    an increase of $8.0 million in property and equipment associated with increased
investment in commercial properties under construction in Tradition, and hardware and
software acquired for our technology infrastructure upgrade.
   
    
    a net increase in notes and mortgage notes payable of $67.9 million, primarily
related to project debt associated with 2006 land acquisitions;
 81




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##### Table of Contents




    
    an increase of $5.4 million in customer deposits associated with our larger
homebuilding backlog;
    
    a decrease in the current tax liability of approximately $13.0 million relating
primarily to the decrease in our taxable income to a loss position and the timing of
estimate tax payments; and
    
    a net decrease in other accrued liabilities of approximately $3.0 million.
 LIQUIDITY AND CAPITAL RESOURCES
      Off Balance Sheet Arrangements and Contractual Obligations
  82




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Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1)
    
    $
    475,839
    
    
    
    41,033
    
    
    
    301,528
    
    
    
    32,817
    
    
    
    100,461Operating lease obligations
    
    
    7,000
    
    
    
    1,657
    
    
    
    2,559
    
    
    
    1,189
    
    
    
    1,595Purchase obligations
    
    
    97,047
    
    
    
    88,150
    
    
    
    8,897
    
    
    
    
    
    
    
    Total Obligations
    
    $
    579,886
    
    
    
    130,840
    
    
    
    312,984
    
    
    
    34,006
    
    
    
    102,056
 
 (1)
    
    Amounts exclude interest   83




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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 March 31, 20061 Year
    
    
    3 Years
    
    
    5 Years
    
    
    More ThanOr Less
    
    
    or Less
    
    
    or Less
    
    
    5 Years
    
    
    TotalInterest earning assets:Loans:Residential loans (1)Fixed rate
    
    $
    104,928
    
    
    
    157,354
    
    
    
    115,116
    
    
    
    335,910
    
    
    
    713,308Hybrid ARMs less than 5 years
    
    
    177,835
    
    
    
    188,513
    
    
    
    61,383
    
    
    
    1,377
    
    
    
    429,108Hybrid ARMs more than 5 years
    
    
    192,572
    
    
    
    221,791
    
    
    
    197,194
    
    
    
    302,738
    
    
    
    914,295Commercial loans
    
    
    1,563,169
    
    
    
    114,313
    
    
    
    44,545
    
    
    
    714
    
    
    
    1,722,741Small business loans
    
    
    153,664
    
    
    
    69,009
    
    
    
    20,975
    
    
    
    9,100
    
    
    
    252,748Consumer loans
    
    
    508,187
    
    
    
    4,710
    
    
    
    3,806
    
    
    
    14,711
    
    
    
    531,414Total loans
    
    
    2,700,355
    
    
    
    755,690
    
    
    
    443,019
    
    
    
    664,550
    
    
    
    4,563,614Investment securitiesTax exempt securities
    
    
    143
    
    
    
    4,989
    
    
    
    21,488
    
    
    
    371,817
    
    
    
    398,437Taxable investment securities
    
    
    245,516
    
    
    
    86,218
    
    
    
    55,846
    
    
    
    59,060
    
    
    
    446,640Tax certificates
    
    
    135,114
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    135,114Total investment securities
    
    
    380,773
    
    
    
    91,207
    
    
    
    77,334
    
    
    
    430,877
    
    
    
    980,191Total interest earning assets
    
    
    3,081,128
    
    
    
    846,897
    
    
    
    520,353
    
    
    
    1,095,427
    
    
    
    5,543,805Total non-earning assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    456,295
    
    
    
    456,295Total assets
    
    $
    3,081,128
    
    
    
    846,897
    
    
    
    520,353
    
    
    
    1,551,722
    
    
    
    6,000,100Total interest bearing liabilities
    
    $
    2,581,665
    
    
    
    759,068
    
    
    
    330,826
    
    
    
    1,703,943
    
    
    
    5,375,502Non-interest bearing liabilities
and stockholders equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    624,598
    
    
    
    624,598
 84




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BankAtlantic Repricing Gap TableAs of March 31, 20061 Year
    
    
    3 Years
    
    
    5 Years
    
    
    More ThanOr Less
    
    
    or Less
    
    
    or Less
    
    
    5 Years
    
    
    TotalTotal non-interest bearing liabilities
and equity
    
    $
    2,581,665
    
    
    
    759,068
    
    
    
    330,826
    
    
    
    2,328,541
    
    
    
    6,000,100GAP (repricing difference)
    
    $
    499,463
    
    
    
    87,829
    
    
    
    189,527
    
    
    
    (608,516
    )Cumulative GAP
    
    $
    499,463
    
    
    
    587,292
    
    
    
    776,819
    
    
    
    168,303Repricing Percentage of Total Assets
    
    
    8.32
    %
    
    
    1.46
    %
    
    
    3.16
    %
    
    
    -10.14
    %Cumulative Percentage of Total Assets
    
    
    8.32
    %
    
    
    9.79
    %
    
    
    12.95
    %
    
    
    2.81
    %
 
 (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.    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.
 85




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##### Table of Contents



As of March 31, 2006NetChanges
    
    Interest
    
    Percentin Rate
    
    Income
    
    Change+200 bp
    
    $
    261,447
    
    
    
    0.23
    %+100 bp
    
    $
    264,114
    
    
    
    1.27
    %0
    
    $
    260,871
    
    
    
    -100 bp
    
    $
    255,597
    
    
    
    -2.07
    %-200 bp
    
    $
    242,966
    
    
    
    -7.03
    %
  Consolidated Equity Price Risk
  AvailablePercent

    for SaleChange in

    Securities
    
    
    DollarFair Value

    Fair Value
    
    
    Change20
    %
    $
    121,445
    
    
    $
    20,24110
    %
    $
    111,324
    
    
    $
    10,1200
    %
    $
    101,204
    
    
    $
    -10
    %
    $
    91,084
    
    
    $
    (10,120
    )-20
    %
    $
    80,963
    
    
    $
    (20,241
    )
  Ryan Beck Market Risk
  86




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##### Table of Contents



High
    
    Low
    
    AverageVaR
    
    $
    354,915
    
    
    $
    139,141
    
    
    $
    212,910Aggregate Long Value
    
    
    189,720
    
    
    
    93,813
    
    
    
    130,966Aggregate Short Value
    
    
    100,643
    
    
    
    35,517
    
    
    
    62,317
 Levitt
   87




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##### Table of Contents



Item 4. Controls and Procedure
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
    88




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors.
  BankAtlantic has entered into a Deferred Prosecution Agreement with the Department of Justice and a
Cease and Desist Order with the OTS.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  89




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##### Table of Contents



Total Number of
    
    
    Maximum Number ofShares Purchased as
    
    
    shares thatPart of Publicly
    
    
    May Yet Be PurchasedTotal Number of
    
    
    Average price
    
    
    Announced Plans
    
    
    Under the Plans orPeriod
    
    Shares Purchased (1)
    
    
    per share
    
    
    or Programs (2)
    
    
    ProgramsJanuary 1, 2006 through
January 31, 2006
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    February 1, 2006 through
February 28, 2006
    
    
    2,347,557
    
    
    
    5.65
    
    
    
    
    
    
    
    March 1, 2006 through
March 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    2,347,557
    
    
    $
    5.65
    
    
    
    
    
    
    
    
 
 (1)
    
    The number represents 1,278,985 shares of the Companys Class A Common Stock and 1,068,572 shares of the Companys Class B
Common Stock delivered as consideration for the exercise price and minimum withholding amounts upon the exercise of options.(2)
    
    The Company currently has no Plan or program to repurchase its equity securities. 
 Item 6. Exhibits
 Exhibit 31.1
    
    Chief Executive Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Chief Financial Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 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
 90




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##### Table of Contents



BFC FINANCIAL CORPORATIONDate: May 10, 2006
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive Officer Date: May 10, 2006
    By:
    /s/  Glen R. GilbertGlen R. Gilbert, Executive Vice President,and Chief Financial Officer 91