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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, 2007
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 Commission File Number
001-09071
 BFC Financial Corporation
  Florida
    
    59-2022148(State of Organization)
    
    (IRS Employer Identification Number)
 2100 West Cypress Creek Road 
Fort Lauderdale, Florida
    
    33309(Address of Principal Executive Office)
    
    (Zip Code)
  Registrants telephone number, including area code
 Not Applicable
  þ o
  o þ o
  o þ




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PART I. FINANCIAL INFORMATIONItem 1. Financial Statements:Consolidated Statements of Financial Condition as of March 31, 2007 and December 31, 2006  UnauditedConsolidated Statements of Operations for the Three Months Ended March 31, 2007 and 2006  UnauditedConsolidated Statements of Comprehensive (Loss) Income for the Three Months Ended March 31, 2007 and 2006  UnauditedConsolidated Statements of Shareholders Equity for the Three Months Ended March 31, 2007  UnauditedConsolidated Statements of Cash Flows for the Three Months Ended March 31, 2007 and 2006  UnauditedNotes to Unaudited Consolidated Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures about Market RiskItem 4. Controls and ProceduresPART II. OTHER INFORMATIONItem 1. Legal ProceedingsItem 1.A Risk FactorsItem 6. ExhibitsSIGNATURESEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-31.3 Section 302 Certification of CAOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFOEX-32.2 Section 906 Certification of CAO
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BFC Financial Corporation
 
 Consolidated Statements of Financial Condition   Unaudited
(In thousands, except share data)
 March 31,
    
    
    December 31,2007
    
    
    2006ASSETSCash and cash equivalents
    
    $
    204,609
    
    
    $
    201,123Securities available for sale (at fair value)
    
    
    677,836
    
    
    
    653,659Investment
securities (approximate fair value: $291,137 in 2007 and $229,546 in 2006)
    
    
    293,560
    
    
    
    227,208Tax certificates net of allowance of $3,782 in 2007 and $3,699 in 2006
    
    
    157,062
    
    
    
    195,391Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    69,503
    
    
    
    80,217Loans receivable, net of allowance for loan losses
of $50,926 in 2007 and $44,173 in 2006
    
    
    4,619,630
    
    
    
    4,594,192Loans held for sale
    
    
    6,235
    
    
    
    9,313Real estate held for development and sale
    
    
    863,453
    
    
    
    847,492Real estate owned
    
    
    23,135
    
    
    
    21,747Investments in unconsolidated affiliates
    
    
    123,230
    
    
    
    124,521Properties and equipment, net
    
    
    317,369
    
    
    
    298,513Goodwill and other intangibles
    
    
    76,937
    
    
    
    77,324Other assets
    
    
    82,940
    
    
    
    84,303Discontinued operations assets held for sale
    
    
    
    
    
    
    190,763Total assets
    
    $
    7,515,499
    
    
    $
    7,605,766LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:DepositsNon-interest bearing
    
    $
    1,031,628
    
    
    $
    995,920Interest bearing
    
    
    3,053,394
    
    
    
    2,871,116Total deposits
    
    
    4,085,022
    
    
    
    3,867,036Customer deposits on real estate held for sale
    
    
    32,358
    
    
    
    42,696Advances from FHLB
    
    
    1,297,055
    
    
    
    1,517,058Short term borrowings
    
    
    119,513
    
    
    
    128,411Subordinated debentures, notes and bonds payable
    
    
    616,411
    
    
    
    560,624Junior subordinated debentures
    
    
    348,318
    
    
    
    348,318Deferred tax liabilities, net
    
    
    5,943
    
    
    
    10,646Other liabilities
    
    
    144,314
    
    
    
    159,823Discontinued operations liabilities held for sale
    
    
    
    
    
    
    95,246Total liabilities
    
    
    6,648,934
    
    
    
    6,729,858Noncontrolling interest
    
    
    689,758
    
    
    
    698,323Commitments and contingenciesShareholders equity:Preferred stock of $.01 par value; authorized 10,000,000 shares;
5% Cumulative Convertible Preferred Stock (5% Preferred Stock)
issued and outstanding 15,000 shares in 2007 and 2006
    
    
    
    
    
    
    Class A common stock of $.01 par value, authorized 70,000,000 shares;
issued and outstanding 28,755,904 in 2007 and 28,755,882 in 2006
    
    
    266
    
    
    
    266Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 7,090,652 in 2007 and 7,090,652 in 2006
    
    
    69
    
    
    
    69Additional paid-in capital
    
    
    93,934
    
    
    
    93,910Retained earnings
    
    
    81,295
    
    
    
    81,889Total shareholders equity before
accumulated other comprehensive income
    
    
    175,564
    
    
    
    176,134Accumulated other comprehensive income
    
    
    1,243
    
    
    
    1,451Total shareholders equity
    
    
    176,807
    
    
    
    177,585Total liabilities and shareholders equity
    
    $
    7,515,499
    
    
    $
    7,605,766
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months EndedMarch 31,2007
    
    
    2006(As adjusted)RevenuesBFC Activities:Interest and dividend income
    
    $
    499
    
    
    $
    560Other income
    
    
    951
    
    
    
    4431,450
    
    
    
    1,003Financial Services:Interest and dividend income
    
    
    93,540
    
    
    
    87,873Service charges on deposits
    
    
    24,595
    
    
    
    19,099Other service charges and fees
    
    
    7,033
    
    
    
    6,222Other income
    
    
    3,939
    
    
    
    4,122129,107
    
    
    
    117,316Homebuilding & Real Estate Development:Sales of real estate
    
    
    141,742
    
    
    
    125,543Interest and dividend income
    
    
    553
    
    
    
    643Other income
    
    
    4,117
    
    
    
    2,056146,412
    
    
    
    128,242Total revenues
    
    
    276,969
    
    
    
    246,561Costs and ExpensesBFC Activities:Interest expense
    
    
    12
    
    
    
    12Employee compensation and benefits
    
    
    2,744
    
    
    
    2,437Other expenses
    
    
    661
    
    
    
    7213,417
    
    
    
    3,170Financial Services:Interest expense, net of interest capitalized
    
    
    46,218
    
    
    
    37,200Provision of loan losses
    
    
    7,461
    
    
    
    163Employee compensation and benefits
    
    
    41,090
    
    
    
    35,836Occupancy and equipment
    
    
    15,944
    
    
    
    12,614Advertising and promotion
    
    
    5,858
    
    
    
    8,618Other expenses
    
    
    16,208
    
    
    
    12,444132,779
    
    
    
    106,875Homebuilding & Real Estate Development:Cost of sales of real estate
    
    
    112,908
    
    
    
    102,055Selling, general and administrative expenses
    
    
    32,645
    
    
    
    26,453Other expenses
    
    
    482
    
    
    
    626146,035
    
    
    
    129,134Total costs and expenses
    
    
    282,231
    
    
    
    239,179Equity in earnings from unconsolidated affiliates
    
    
    2,893
    
    
    
    771(Loss) income from continuing operations before income taxes and noncontrolling interest
    
    
    (2,369
    )
    
    
    8,153(Benefit) provision for income taxes
    
    
    (102
    )
    
    
    2,514Noncontrolling interest (loss) income
    
    
    (687
    )
    
    
    5,729(Loss) from continuing operations
    
    
    (1,580
    )
    
    
    (90
    )Discontinued operations, less income tax benefit of $3,405 in 2007 and $1,722 in 2006
and noncontrolling interest income (loss) of $6,206 in 2007 and $(1,225) in 2006
    
    
    1,053
    
    
    
    (209
    )Net (loss)
    
    
    (527
    )
    
    
    (299
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (188
    )Net (loss) allocable to common stock
    
    $
    (715
    )
    
    $
    (487
    )
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Operations  Unaudited
(In thousands, except per share data)
 For the Three Months EndedMarch 31,2007
    
    
    2006(Loss) earnings per common share:Basic (loss) per share from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )Basic earnings per share from discontinued operations
    
    
    0.03
    
    
    
    Basic (loss) per share
    
    $
    (0.02
    )
    
    $
    (0.01
    )Diluted (loss) per share from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )Diluted earnings (loss) per share from discontinued operations
    
    
    0.03
    
    
    
    (0.01
    )Diluted (loss) per share
    
    $
    (0.02
    )
    
    $
    (0.02
    )Basic weighted average number of common shares outstanding
    
    
    33,444
    
    
    
    32,692Diluted weighted average number of common and common
equivalent shares outstanding
    
    
    33,444
    
    
    
    32,692
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statements of Comprehensive (Loss) Income   Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2007
    
    
    2006Net (loss)
    
    $
    (527
    )
    
    $
    (299
    )Other comprehensive income (loss), net of tax:Unrealized gains on securities available for sale,
    
    
    36
    
    
    
    347Unrealized (losses) gains associated with investment
in unconsolidated affiliates
    
    
    (4
    )
    
    
    27Reclassification adjustments for net gain included in net income
    
    
    (240
    )
    
    
    (207
    )(208
    )
    
    
    167Comprehensive (loss)
    
    $
    (735
    )
    
    $
    (132
    )
  See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statements of Shareholders Equity  Unaudited
(In thousands)
 AccumulatedOtherCompre-Class A
    
    
    Class B
    
    
    Additional
    
    
    
    
    
    
    hensiveCommon
    
    
    Common
    
    
    Paid-in
    
    
    Retained
    
    
    IncomeStock
    
    
    Stock
    
    
    Capital
    
    
    Earnings
    
    
    (Loss)
    
    
    TotalBalance, December 31, 2006
    
    $
    266
    
    
    $
    69
    
    
    $
    93,910
    
    
    $
    81,889
    
    
    $
    1,451
    
    
    $
    177,585Cumulative effect adjustment
upon adoption of
FASB Interpretation No. 48
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    121
    
    
    
    
    
    
    
    121Net (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (527
    )
    
    
    
    
    
    
    (527
    )Other comprehensive (loss), net of taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (208
    )
    
    
    (208
    )Net effect of subsidiaries capital
transactions, net of taxes
    
    
    
    
    
    
    
    
    
    
    (234
    )
    
    
    
    
    
    
    
    
    
    
    (234
    )Cash dividends on 5% Preferred Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )Share-based compensation related
to stock options and restricted stock
    
    
    
    
    
    
    
    
    
    
    258
    
    
    
    
    
    
    
    
    
    
    
    258Balance, March 31, 2007
    
    $
    266
    
    
    $
    69
    
    
    $
    93,934
    
    
    $
    81,295
    
    
    $
    1,243
    
    
    $
    176,807
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
 
 Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2007
    
    
    2006Operating activities:Net cash used in operating activities
    
    $
    (27,069
    )
    
    $
    (119,956
    )Investing activities:Proceeds from redemption and maturities of investment
securities and tax certificates
    
    
    47,633
    
    
    
    42,124Purchase of investment securities and tax certificates
    
    
    (12,166
    )
    
    
    (20,054
    )Purchase of securities available for sale
    
    
    (45,275
    )
    
    
    (23,983
    )Proceeds from sales and maturities of securities
available for sale
    
    
    64,631
    
    
    
    29,001Purchases of FHLB stock
    
    
    (450
    )
    
    
    (2,250
    )Redemption of FHLB stock
    
    
    11,164
    
    
    
    11,381Investments in and advances to unconsolidated subsidiaries
and real estate joint venture
    
    
    (2,624
    )
    
    
    (5,483
    )Distributions from unconsolidated affiliates
    
    
    5,533
    
    
    
    4,720Net repayments (purchases and originations) of loans
    
    
    (36,678
    )
    
    
    103,209Additions to the sales of real estate owned
    
    
    (1,407
    )
    
    
    Proceeds from sales of real estate owned
    
    
    106
    
    
    
    965Additions to property and equipment
    
    
    (26,677
    )
    
    
    (23,149
    )Proceeds from sales of property and equipment
    
    
    1,056
    
    
    
    Net proceeds from the sale of Ryan Beck Holdings, Inc.
    
    
    2,628
    
    
    
    Net cash provided by investing activities
    
    
    7,474
    
    
    
    116,481Financing activities:Net increase in deposits
    
    
    217,986
    
    
    
    208,090Repayments of FHLB advances
    
    
    (925,000
    )
    
    
    (477,570
    )Proceeds from FHLB advances
    
    
    705,000
    
    
    
    280,000Net decrease in securities sold under agreements
to repurchase
    
    
    (23,623
    )
    
    
    (70,997
    )Net increase (decrease) in federal funds purchased
    
    
    14,725
    
    
    
    (21,591
    )Repayments of secured borrowings
    
    
    
    
    
    
    (26,516
    )Repayment of notes and bonds payable
    
    
    (61,621
    )
    
    
    (70,832
    )Proceeds from notes and bonds payable
    
    
    117,407
    
    
    
    141,660BankAtlantic Bancorp excess tax benefits from
share-based compensation
    
    
    963
    
    
    
    2,980Payments for debt issuance costs
    
    
    (804
    )
    
    
    Payments for offering costs
    
    
    (112
    )
    
    
    Payment by BFC of the minimum witholding tax
upon exercise of stock option
    
    
    
    
    
    
    (4,155
    )5% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Payment by BankAtlantic Bancorp of
the minimum withholding tax upon exercise of stock options
    
    
    
    
    
    
    (2,675
    )Proceeds from issuance of BankAtlantic Bancorp
Class A common stock
    
    
    698
    
    
    
    473Purchase and retirement of BankAtlantic Bancorp
subsidiary common stock
    
    
    (17,095
    )
    
    
    BankAtlantic Bancorp cash dividends
paid to non-BFC shareholders
    
    
    (1,916
    )
    
    
    (1,832
    )Levitt cash dividends paid to non-BFC shareholders
    
    
    (330
    )
    
    
    (332
    )Net cash provided by (used in) financing activities
    
    
    26,090
    
    
    
    (43,485
    )Increase (decrease) in cash and cash equivalents
    
    
    6,495
    
    
    
    (46,960
    )Cash and cash equivalents at beginning of period
    
    
    201,123
    
    
    
    305,437Cash and cash equivalents in discontinued operations assets
held for sale at the beginning of the period
    
    
    3,285
    
    
    
    Cash and cash equivalents in discontinued operations assets
held for sale at the disposal date
    
    
    (6,294
    )
    
    
    Cash and cash equivalents at end of period
    
    $
    204,609
    
    
    $
    258,477
 (Continued)
 See accompanying notes to unaudited consolidated financial statements.
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BFC Financial Corporation
Consolidated Statements of Cash Flows  Unaudited
(In thousands)
 For the Three Months EndedMarch 31,2007
    
    2006Supplemental cash flow information:Interest on borrowings and deposits, net of amounts capitalized
    
    $
    47,188
    
    
    $
    39,313Income taxes paid
    
    
    4,161
    
    
    
    32,074Supplementary disclosure of non-cash investing and financing activities:Decrease in real estate inventory to property and equipment
    
    
    93
    
    
    
    6,554(Decrease) increase in accumulated other comprehensive income,
net of taxes
    
    
    (208
    )
    
    
    167Net decrease in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    
    (234
    )
    
    
    (454
    )Issuance and retirement of BFC Common Stock accepted
as consideration for the exercise price of stock options
    
    
    
    
    
    
    4,155Effect of FASB Interpretation No. 48
    
    
    121
    
    
    
    
 See accompanying notes to unaudited consolidated financial statements.
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1. Presentation of Interim Financial Statements and Significant Accounting Policies
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PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    15.16
    %
    
    
    8.03
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    22.07
    %
    
    
    55.03
    %LevittClass A Common Stock
    
    
    2,074,243
    
    
    
    11.15
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.61
    %
    
    
    52.91
    %
    2. Segment Reporting
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BFC Activities
  Financial Services
  Homebuilding & Real Estate Development
   14




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Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2007
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    141,742
    
    
    $
    
    
    
    $
    141,742Interest and dividend
income
    
    
    509
    
    
    
    93,540
    
    
    
    719
    
    
    
    (176
    )
    
    
    94,592Other income
    
    
    1,627
    
    
    
    35,606
    
    
    
    4,117
    
    
    
    (715
    )
    
    
    40,6352,136
    
    
    
    129,146
    
    
    
    146,578
    
    
    
    (891
    )
    
    
    276,969Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    112,908
    
    
    
    
    
    
    
    112,908Interest expense, net
    
    
    12
    
    
    
    46,394
    
    
    
    
    
    
    
    (176
    )
    
    
    46,230Provision for loan losses
    
    
    
    
    
    
    7,461
    
    
    
    
    
    
    
    
    
    
    
    7,461Other expenses
    
    
    3,466
    
    
    
    79,493
    
    
    
    33,388
    
    
    
    (715
    )
    
    
    115,6323,478
    
    
    
    133,348
    
    
    
    146,296
    
    
    
    (891
    )
    
    
    282,231Equity in earnings from
Unconsolidated affiliates
    
    
    
    
    
    
    1,146
    
    
    
    1,747
    
    
    
    
    
    
    
    2,893(Loss) income before income
taxes and noncontrolling
interest
    
    
    (1,342
    )
    
    
    (3,056
    )
    
    
    2,029
    
    
    
    
    
    
    
    (2,369
    )(Benefit) provision for
income taxes
    
    
    (29
    )
    
    
    (852
    )
    
    
    779
    
    
    
    
    
    
    
    (102
    )(Loss) income before
noncontrolling interest
    
    
    (1,313
    )
    
    
    (2,204
    )
    
    
    1,250
    
    
    
    
    
    
    
    (2,267
    )Noncontrolling interest
    
    
    (3
    )
    
    
    (1,727
    )
    
    
    1,043
    
    
    
    
    
    
    
    (687
    )(Loss) income from
continuing operations
    
    $
    (1,310
    )
    
    $
    (477
    )
    
    $
    207
    
    
    $
    
    
    
    $
    (1,580
    )At March 31, 2007Total assets
    
    $
    43,984
    
    
    $
    6,380,176
    
    
    $
    1,121,192
    
    
    $
    (29,853
    )
    
    $
    7,515,499
 Homebuilding
    
    
    AdjustingBFC
    
    
    Financial
    
    
    & Real Estate
    
    
    and2006
    
    Activities
    
    
    Services
    
    
    Development
    
    
    Eliminations
    
    
    TotalRevenues:Sales of real estate
    
    $
    
    
    
    $
    
    
    
    $
    125,543
    
    
    $
    
    
    
    $
    125,543Interest and dividend
income
    
    
    570
    
    
    
    87,873
    
    
    
    785
    
    
    
    (152
    )
    
    
    89,076Other income
    
    
    1,004
    
    
    
    29,540
    
    
    
    2,055
    
    
    
    (657
    )
    
    
    31,9421,574
    
    
    
    117,413
    
    
    
    128,383
    
    
    
    (809
    )
    
    
    246,561Costs and Expenses:Cost of sale of real estate
    
    
    
    
    
    
    
    
    
    
    102,055
    
    
    
    
    
    
    
    102,055Interest expense, net
    
    
    12
    
    
    
    37,352
    
    
    
    
    
    
    
    (152
    )
    
    
    37,212Recovery for loan losses
    
    
    
    
    
    
    163
    
    
    
    
    
    
    
    
    
    
    
    163Other expenses
    
    
    3,277
    
    
    
    69,748
    
    
    
    27,381
    
    
    
    (657
    )
    
    
    99,7493,289
    
    
    
    107,263
    
    
    
    129,436
    
    
    
    (809
    )
    
    
    239,179Equity in earnings
(loss)from
unconsolidated affiliates
    
    
    
    
    
    
    820
    
    
    
    (49
    )
    
    
    
    
    
    
    771Income (loss) before income
taxes and noncontrolling
interest
    
    
    (1,715
    )
    
    
    10,970
    
    
    
    (1,102
    )
    
    
    
    
    
    
    8,153Provision (benefit) for
income taxes
    
    
    8
    
    
    
    2,948
    
    
    
    (442
    )
    
    
    
    
    
    
    2,514Income (loss) before
noncontrolling interest
    
    
    (1,723
    )
    
    
    8,022
    
    
    
    (660
    )
    
    
    
    
    
    
    5,639Noncontrolling interest
    
    
    1
    
    
    
    6,279
    
    
    
    (551
    )
    
    
    
    
    
    
    5,729Income (loss) from
continuing operations
    
    $
    (1,724
    )
    
    $
    1,743
    
    
    $
    (109
    )
    
    $
    
    
    
    $
    (90
    )At March 31, 2006Total assets
    
    $
    48,595
    
    
    $
    6,358,115
    
    
    $
    952,567
    
    
    $
    (51,274
    )
    
    $
    7,308,003
 15




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##### Table of Contents



3. Discontinued Operations
    Consideration received:Stifel common stock and Warrants
    
    $
    107,445Cash
    
    
    2,628Total consideration received
    
    
    110,073Net assets disposed:Discontinued operations assets
held for sale at disposal date
    
    
    206,763Discontinued operations liabilities
held for sale at disposal date
    
    
    (117,364
    )Net assets disposed
    
    
    89,399Transaction cost
    
    
    2,543Gain on disposal of Ryan Beck
before income taxes
    
    
    18,131Provision for income taxes
    
    
    3,026Noncontrolling interest
    
    
    12,915Net gain on sale of Ryan Beck, net of noncontrolling interest
and income taxes
    
    $
    2,190
 16




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##### Table of Contents



For the Two Months
    
    
    For the ThreeEnded February 28,
    
    
    Months Ended2007
    
    
    March 31, 2006Investment banking revenue
    
    $
    37,836
    
    
    $
    58,800Non-interest expensesEmployee compensation and benefits
    
    
    27,532
    
    
    
    44,355Occupancy and equipment
    
    
    2,984
    
    
    
    3,871Advertising and promotion
    
    
    740
    
    
    
    1,567Merger related costs (1)
    
    
    14,263
    
    
    
    Other expenses:Professional fees
    
    
    1,106
    
    
    
    1,951Communications
    
    
    2,255
    
    
    
    3,954Floor broker and clearing fees
    
    
    1,162
    
    
    
    2,719Interest expense
    
    
    985
    
    
    
    1,621Other
    
    
    1,086
    
    
    
    1,918Total non-interest expenses
    
    
    52,113
    
    
    
    61,956(Loss) from Ryan Beck discontinued
operations before noncontrolling interest and income taxes
    
    
    (14,277
    )
    
    
    (3,156
    )Income tax benefit
    
    
    (6,431
    )
    
    
    (1,722
    )Noncontrolling interest
    
    
    (6,709
    )
    
    
    (1,225
    )(Loss) from Ryan Beck discontinued operations, net of
noncontrolling interest and income taxes
    
    $
    (1,137
    )
    
    $
    (209
    )
  4. One-time Termination Benefits
  EmployeeTerminationBenefitsBalance at December 31, 2006
    
    $
    Expense incurred
    
    
    2,317Amounts paid
    
    
    (53
    )Balance at March 31, 2007
    
    $
    2,264
 17




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##### Table of Contents



5. Accounting for Income Taxes
      18




---



##### Table of Contents



6. BankAtlantic Defined Pension Plan
  For the Three MonthsEnded March 31,2007
    
    
    2006Service cost benefits earned during the period
    
    $
    
    
    
    $
    Interest cost on projected benefit obligation
    
    
    419
    
    
    
    407Expected return on plan assets
    
    
    (598
    )
    
    
    (547
    )Amortization of unrecognized net gains and
losses
    
    
    136
    
    
    
    237Net periodic pension (benefit) expense
    
    $
    (43
    )
    
    $
    97
  7. Loans Receivable
  March 31,
    
    
    December 31,2007
    
    
    2006Real estate loans:Residential (1-4 family)
    
    $
    2,198,648
    
    
    $
    2,158,506Construction and development
    
    
    822,096
    
    
    
    859,556Commercial
    
    
    1,027,214
    
    
    
    1,071,287Small business
    
    
    191,666
    
    
    
    186,833Other loans:Home equity
    
    
    582,754
    
    
    
    562,318Commercial business
    
    
    159,403
    
    
    
    157,109Small business  non-mortgage
    
    
    99,852
    
    
    
    98,225Consumer loans
    
    
    17,451
    
    
    
    17,406Deposit overdrafts
    
    
    6,949
    
    
    
    8,440Other loans
    
    
    
    
    
    
    425Total gross loans
    
    
    5,106,033
    
    
    
    5,120,105Adjustments:Undisbursed portion of loans in process
    
    
    (437,235
    )
    
    
    (482,842
    )Premiums, discounts and net deferred fees
    
    
    1,955
    
    
    
    1,306Deferred profit on commercial real estate
loans
    
    
    (197
    )
    
    
    (204
    )Allowance for loan losses
    
    
    (50,926
    )
    
    
    (44,173
    )Loans receivable  net
    
    $
    4,619,630
    
    
    $
    4,594,192
 19




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##### Table of Contents



Allowance for Loan Losses (in thousands):
 For the Three Months EndedMarch 31,2007
    
    
    2006Balance, beginning of period
    
    $
    44,173
    
    
    $
    41,830Loans charged-off
    
    
    (1,127
    )
    
    
    (366
    )Recoveries of loans previously charged-off
    
    
    419
    
    
    
    879Net (charge-offs) recoveries
    
    
    (708
    )
    
    
    513Provision for loan losses
    
    
    7,461
    
    
    
    163Balance, end of period
    
    $
    50,926
    
    
    $
    42,506
  March 31, 2007
    
    
    December 31, 2006Gross
    
    
    
    
    
    
    GrossRecorded
    
    
    Specific
    
    
    Recorded
    
    
    SpecificInvestment
    
    
    Allowances
    
    
    Investment
    
    
    AllowancesImpaired loans with specific
valuation allowances
    
    $
    12,957
    
    
    $
    5,856
    
    
    $
    325
    
    
    $
    162Impaired loans without
specific valuation allowances
    
    
    20,577
    
    
    
    
    
    
    
    10,319
    
    
    
    Total
    
    $
    33,534
    
    
    $
    5,856
    
    
    $
    10,644
    
    
    $
    162
  8. Benihana Convertible Preferred Stock Investment
  9. Real Estate Held for Development and Sale
  March 31,
    
    
    December 31,2007
    
    
    2006Land and land development costs
    
    $
    590,833
    
    
    $
    579,256Construction costs
    
    
    174,219
    
    
    
    180,005Capitalized interest and other costs
    
    
    97,161
    
    
    
    88,231Branch facilities
    
    
    1,240
    
    
    
    Total
    
    $
    863,453
    
    
    $
    847,492
  20




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##### Table of Contents



10. Investments in Unconsolidated Affiliates
  March 31,
    
    
    December 31,2007
    
    
    2006Investment in Bluegreen Corporation
    
    $
    108,615
    
    
    $
    107,063Investments in joint ventures
    
    
    4,174
    
    
    
    6,983BankAtlantic Bancorp investments in statutory
business trusts
    
    
    7,910
    
    
    
    7,910Levitt investments in statutory business trusts
    
    
    2,531
    
    
    
    2,565$
    123,230
    
    
    $
    124,521
  For the Three Months EndedMarch 31,2007
    
    
    2006Equity in Bluegreen earnings (loss)
    
    $
    1,744
    
    
    $
    (49
    )Equity in joint ventures earnings  Levitt
    
    
    3
    
    
    
    Equity in joint ventures earnings  BBX
    
    
    987
    
    
    
    670Equity in statutory trusts earnings
    
    
    159
    
    
    
    150Income from unconsolidated affiliates
    
    $
    2,893
    
    
    $
    771
  21




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##### Table of Contents



Unaudited Condensed Consolidated Balance Sheets
 March 31,
    
    
    December 31,2007
    
    
    2006Total assets
    
    $
    887,382
    
    
    $
    854,212Total liabilities
    
    $
    511,739
    
    
    $
    486,487Minority interest
    
    
    16,336
    
    
    
    14,702Total shareholders equity
    
    
    359,307
    
    
    
    353,023Total liabilities and shareholders equity
    
    $
    887,382
    
    
    $
    854,212
 Unaudited Condensed Consolidated Statements of Income
 Three Months EndedMarch 31,
    
    
    March 31,2007
    
    
    2006Revenues and other income
    
    $
    146,882
    
    
    $
    147,105Cost and other expenses
    
    
    136,646
    
    
    
    139,528Income before minority interest and
provision for income taxes
    
    
    10,236
    
    
    
    7,577Minority interest
    
    
    1,634
    
    
    
    1,022Income before provision for income taxes
    
    
    8,602
    
    
    
    6,555Provision for income taxes
    
    
    (3,269
    )
    
    
    (2,524
    )Income before cumulative effect of
change in accounting principle
    
    
    5,333
    
    
    
    4,031Cumulative effect of
change in accounting principle, net of tax
    
    
    
    
    
    
    (4,494
    )Net income (loss)
    
    $
    5,333
    
    
    $
    (463
    )
  11. Other Debt
  22




---



##### Table of Contents



12. Noncontrolling Interest
  March 31,
    
    
    December 31,2007
    
    
    2006BankAtlantic Bancorp
    
    $
    401,319
    
    
    $
    411,396Levitt
    
    
    287,745
    
    
    
    286,230Joint Venture Partnerships
    
    
    694
    
    
    
    697$
    689,758
    
    
    $
    698,323
 13. Interest Expense
  Three Months EndedMarch 31,2007
    
    
    2006Interest expense
    
    $
    59,236
    
    
    $
    45,721Interest capitalized
    
    
    (13,006
    )
    
    
    (8,509
    )Interest expense, net
    
    $
    46,230
    
    
    $
    37,212
 23




---



##### Table of Contents



Three Months EndedMarch 31,2007
    
    
    2006Interest incurred
    
    $
    13,006
    
    
    
    8,029Interest capitalized to property and equipment
    
    
    (450
    )
    
    
    Interest capitalized to inventory
    
    
    (12,556
    )
    
    
    (8,029
    )Interest expense, net
    
    $
    
    
    
    
    Interest included in cost of sales
    
    $
    4,425
    
    
    
    2,594
  14. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk
  March 31,
    
    December 31,2007
    
    2006BFC ActivitiesGuarantee agreements
    
    $
    34,322
    
    
    $
    34,396Financial ServicesCommitments to sell fixed rate residential loans
    
    
    29,228
    
    
    
    30,696Commitments to sell variable rate residential loans
    
    
    2,049
    
    
    
    2,921Commitments to purchase variable rate residential
loans
    
    
    34,587
    
    
    
    12,000Commitments to purchase commercial loans
    
    
    20,000
    
    
    
    57,525Commitments to originate loans held for sale
    
    
    27,089
    
    
    
    26,346Commitments to originate loans held to maturity
    
    
    316,067
    
    
    
    223,060Commitments to extend credit, including the
undisbursed
portion of loans in process
    
    
    1,082,757
    
    
    
    890,036Commitments to purchase branch facilities land
    
    
    5,100
    
    
    
    11,180Standby letters of credit
    
    
    55,138
    
    
    
    67,831Commercial lines of credit
    
    
    91,474
    
    
    
    86,992Homebuilding & Real Estate DevelopmentLevitts commitments to purchase properties for
development
    
    
    14,200
    
    
    
    14,200
 24




---



##### Table of Contents



BFC Activities
     Financial Services
  25




---



##### Table of Contents



Homebuilding & Real Estate Development
  Purchase
    
    
    
    
    
    ExpectedPrice
    
    Units
    
    ClosingHomebuilding Division
    
    $14.2 million
    
    690 Units
    
    
    2008
  15. Certain Relationships and Related Party Transactions
   BankAtlanticBFC
    
    Bancorp
    
    Levitt
    
    BluegreenFor the three months ended March 31, 2007 (a) (b)Shared service income (expense)
    
    $
    720
    
    
    $
    (354
    )
    
    $
    (261
    )
    
    $
    (105
    )Interest income (expense) from
cash balance/securities sold under
agreements to repurchase
    
    $
    11
    
    
    $
    (51
    )
    
    $
    40
    
    
    $
    For the three months ended March 31, 2006 (a) (b)Shared service income (expense)
    
    $
    506
    
    
    $
    (140
    )
    
    $
    (302
    )
    
    $
    (64
    )Interest income (expense) from
cash balance/securities sold under
agreements to repurchase
    
    $
    10
    
    
    $
    (152
    )
    
    $
    142
    
    
    $
    At March 31, 2007 (a) (b)Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    $
    1,256
    
    
    $
    (3,949
    )
    
    $
    2,693
    
    
    $
    Shared service receivable (payable)
    
    $
    527
    
    
    $
    (173
    )
    
    $
    (261
    )
    
    $
    (93
    )At December 31, 2006 (a) (b)Cash and cash equivalents and
(securities sold under agreements
to repurchase)
    
    $
    996
    
    
    $
    (5,547
    )
    
    $
    4,551
    
    
    $
    Shared service receivable (payable)
    
    $
    312
    
    
    $
    (142
    )
    
    $
    (107
    )
    
    $
    (63
    )
 26




---



##### Table of Contents



(a)
    
    Effective January 1, 2006, BFC maintained arrangements with
BankAtlantic Bancorp, Levitt and Bluegreen to provide shared service
operations in the areas of human resources, risk management, investor
relations and executive office administration. Pursuant to this
arrangement, certain employees from BankAtlantic were transferred to
BFC to staff BFCs shared service operations. The costs of shared
services are allocated based upon the usage of the respective
services. Also as part of the shared service arrangement, the Company
reimburses BankAtlantic Bancorp and Bluegreen for office facilities
costs relating to the Company and its shared service operations.(b)
    
    BFC and Levitt entered into securities sold under agreements to
repurchase (Repurchase Agreements) with BankAtlantic and the balance
in those accounts in the aggregate was approximately $3.9 million and
$5.5 million at March 31, 2007 and December 31, 2006, respectively.
Interest in connection with the Repurchase Agreements was
approximately $51,000 and $152,000 for the three months ended March
31, 2007 and 2006, respectively. These transactions have similar terms
as BankAtlantic repurchase agreements with unaffiliated third parties.   Class A
    
    WeightedCommon
    
    AverageStock
    
    PriceOptions outstanding
    
    
    288,536
    
    
    $
    9.62Options nonvested
    
    
    154,587
    
    
    $
    12.32
     27




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##### Table of Contents



16. (Loss) Earnings Per Common Share
   For the Three MonthsEnded March 31,(In thousands, except per share data)
    
    2007
    
    
    2006Basic (loss) earnings per common shareNumerator:(Loss) from continuing operations allocable to common stock
    
    $
    (1,768
    )
    
    $
    (278
    )Discontinued operations, net of taxes
    
    
    1,053
    
    
    
    (209
    )Net (loss) allocable to common shareholders
    
    $
    (715
    )
    
    $
    (487
    )Denominator:Weighted average number of common shares outstanding
    
    
    35,837
    
    
    
    35,085Eliminate RAG weighted average number of common shares
    
    
    (2,393
    )
    
    
    (2,393
    )Basic weighted average number of common shares outstanding
    
    
    33,444
    
    
    
    32,692Basic (loss) earnings per common share:(Loss) per share from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )Earnings (loss) per share from discontinued operations
    
    
    0.03
    
    
    
    Basic (loss) per common share
    
    $
    (0.02
    )
    
    $
    (0.01
    )Diluted (loss) earnings per common shareNumerator(Loss) from continuing operations allocable to common stock
    
    $
    (1,768
    )
    
    $
    (278
    )Effect of securities issuable by subsidiaries
    
    
    (11
    )
    
    
    (38
    )(Loss) from continuing operations allocable to common stock  diluted
    
    $
    (1,779
    )
    
    $
    (316
    )Discontinued operations, net of taxes
    
    $
    1,053
    
    
    $
    (209
    )Effect of securities issuable by subsidiaries
    
    
    
    
    
    
    Discontinued operations, net of taxes  diluted
    
    $
    1,053
    
    
    $
    (209
    )Net (loss) allocable to common shareholders  diluted
    
    $
    (726
    )
    
    $
    (525
    )DenominatorBasic weighted average number of common shares outstanding
    
    
    33,444
    
    
    
    32,692Common stock equivalents resulting from stock based compensation
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    33,444
    
    
    
    32,692Diluted (loss) earnings per common share(Loss) per share from continuing operations
    
    $
    (0.05
    )
    
    $
    (0.01
    )Earnings (loss) per share from discontinued operations
    
    
    0.03
    
    
    
    (0.01
    )Diluted (loss) per common share
    
    $
    (0.02
    )
    
    $
    (0.02
    )
  28




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##### Table of Contents



17. Parent Company Financial Information
   
 March 31,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    15,910
    
    
    $
    17,815Investment securities
    
    
    2,211
    
    
    
    2,262Investment in Benihana, Inc.
    
    
    20,000
    
    
    
    20,000Investment in venture partnerships
    
    
    904
    
    
    
    908Investment in BankAtlantic Bancorp, Inc.
    
    
    113,658
    
    
    
    113,586Investment in Levitt Corporation
    
    
    57,301
    
    
    
    57,009Investment in and advances to wholly owned subsidiaries
    
    
    2,056
    
    
    
    1,525Loans receivable
    
    
    1,987
    
    
    
    2,157Other assets
    
    
    2,516
    
    
    
    2,261Total assets
    
    $
    216,543
    
    
    $
    217,523Liabilities and Shareholders EquityAdvances from and negative basis in wholly owned
subsidiaries
    
    $
    1,373
    
    
    $
    1,290Other liabilities
    
    
    6,636
    
    
    
    7,351Deferred income taxes
    
    
    31,727
    
    
    
    31,297Total liabilities
    
    
    39,736
    
    
    
    39,938Total shareholders equity
    
    
    176,807
    
    
    
    177,585Total liabilities and shareholders equity
    
    $
    216,543
    
    
    $
    217,523
 29




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##### Table of Contents



For the Three Months Ended March 31,2007
    
    
    2006Revenues
    
    $
    559
    
    
    $
    573Expenses
    
    
    1,914
    
    
    
    2,220(Loss) before earnings (loss) from subsidiaries
    
    
    (1,355
    )
    
    
    (1,647
    )Equity from (loss) earnings in BankAtlantic Bancorp
    
    
    (477
    )
    
    
    1,404Equity from earnings (loss) in Levitt
    
    
    208
    
    
    
    (109
    )Equity from earnings (loss) in other subsidiaries
    
    
    15
    
    
    
    (32
    )Loss before income taxes
    
    
    (1,609
    )
    
    
    (384
    )Benefit for income taxes
    
    
    (29
    )
    
    
    (294
    )Loss from continuing operations
    
    
    (1,580
    )
    
    
    (90
    )Equity in subsidiaries discontinued operations, net of tax
    
    
    1,053
    
    
    
    (209
    )Net (loss)
    
    
    (527
    )
    
    
    (299
    )5% Preferred Stock dividends
    
    
    188
    
    
    
    188Net (loss) allocable to common stock
    
    $
    (715
    )
    
    $
    (487
    )
 
 For the Three Months Ended March 31,2007
    
    
    2006Operating Activities:Net (loss)
    
    $
    (527
    )
    
    $
    (299
    )Decrease in other operating activities
    
    
    (1,078
    )
    
    
    (1,577
    )Net cash used in operating activities
    
    $
    (1,605
    )
    
    $
    (1,876
    )Investing Activities:Investment in real estate limited partnership
    
    
    
    
    
    
    (1,000
    )Net cash used in investing activities
    
    
    
    
    
    
    (1,000
    )Financing Activities:Payment of the minimum withholding tax upon
the exercise of stock options
    
    
    
    
    
    
    (4,155
    )Payment for offering cost
    
    
    (112
    )
    
    
    5% Preferred Stock dividends paid
    
    
    (188
    )
    
    
    (188
    )Net cash used in financing activities
    
    
    (300
    )
    
    
    (4,343
    )Decrease in cash and cash equivalents
    
    
    (1,905
    )
    
    
    (7,219
    )Cash at beginning of period
    
    
    17,815
    
    
    
    26,683Cash at end of period
    
    $
    15,910
    
    
    $
    19,464Supplementary disclosure of non-cash investing
and financing activitiesNet decrease in shareholders equity from
the effect of subsidiaries capital transactions, net of income taxes
    
    $
    (234
    )
    
    $
    (454
    )( Increase) decrease in accumulated other comprehensive loss, net of
taxes
    
    
    (208
    )
    
    
    167Issuance and retirement of Common Stock accepted
as consideration for the exercise price of stock options
    
    
    
    
    
    
    4,155Cumulative effect adjustment upon adoption of FASB Interpretation
No. 48
    
    
    121
    
    
    
    
  30




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##### Table of Contents



18. Litigation
 th Samuel Flamholz, on behalf of
himself and all others similarly situated, v. James Blosser, Darwin Dornbush, Alan B. Levan,
William Scherer, S. Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J. Levy,
Levitt Corporation, and BFC Financial Corp. Elaine Mount, on behalf of herself and all
others similarly situated, v. James Blosser, Darwin Dornbush, Alan B. Levan, William Scherer, S.
Lawrence Kahn, III, Joel Levy, John E. Abdo, William Nicholson, Alan J. Levy, Levitt Corporation,
and BFC Financial Corp.
 19. Agreement to Acquire Levitt
  31




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##### Table of Contents



20. New Accounting Pronouncements
    21. Subsequent Events
    32




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##### Table of Contents



BFC Financial Corporation
 
 Managements Discussion and Analysis of Financial Condition
and Results of Operations
 Overview
     33




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##### Table of Contents



PercentShares
    
    Percent of
    
    ofOwned
    
    Ownership
    
    VoteBankAtlantic BancorpClass A Common Stock
    
    
    8,329,236
    
    
    
    15.16
    %
    
    
    8.03
    %Class B Common Stock
    
    
    4,876,124
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    13,205,360
    
    
    
    22.07
    %
    
    
    55.03
    %LevittClass A Common Stock
    
    
    2,074,243
    
    
    
    11.15
    %
    
    
    5.91
    %Class B Common Stock
    
    
    1,219,031
    
    
    
    100.00
    %
    
    
    47.00
    %Total
    
    
    3,293,274
    
    
    
    16.61
    %
    
    
    52.91
    %
 Forward Looking Statement
   
    
    the impact of economic, competitive and other factors affecting the Company and its
subsidiaries, and their operations, markets, products and services;
    
    that BFC may not have sufficient available cash to make desired investments or to fund
operations;
    
    that BFC shareholders interests may be diluted in transactions utilizing BFC stock for
consideration and investments in its subsidiaries may be diluted by transactions entered
into by the subsidiaries;
    
    that the performance of entities in which the Company holds interests may not be as
anticipated;
    
    that BFC will be subject to the unique business and industry risks and characteristics
of each entity in which an investment is made; and
    
    that appropriate investment opportunities on reasonable terms and at reasonable prices
may not be available.
  34




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##### Table of Contents




    
    credit risks and loan losses, and the related sufficiency of the allowance for loan
losses, including the impact on the credit quality of BankAtlantics loans, of changes in
the real estate markets in BankAtlantic trade areas, and where BankAtlantics collateral is
located;
    
    the quality of BankAtlantics loans including residential land acquisition and
development loans and other loans secured by real estate in Florida and conditions
specifically in that market sector;
    
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal
policies and laws including the impact on the BankAtlantics net interest margin;
    
    adverse conditions in the stock market, the public debt market and other capital markets
and the impact of such conditions on BankAtlantic Bancorp activities and the value of its
assets;
    
    BankAtlantics seven-day banking initiatives and other growth, marketing or advertising
initiatives not resulting in continued growth of core deposits or producing results which
do not justify their cost; the success of expenses discipline initiatives;
    
    any change in regulatory policy, specifically restrictions on transactions fees charged
to customers;
    
    BankAtlantics new store expansion program, successfully opening the anticipated number
of new stores in 2007 and achieving growth and profitability at the stores;
    
    the impact of periodic testing of goodwill and other intangible assets for impairment;
and
    
    that past performance, actual or estimated new account openings and growth rates may not
be indicative of future results.
   
    
    the impact of economic, competitive and other factors affecting Levitt and its
operations;
    
    the market for real estate in the areas where Levitt has developments, including the
impact of market conditions on Levitts margins and the fair value of Levitts real estate
inventory;
    
    the accuracy of the estimated fair value of Levitts real estate inventory and the
potential for further impairment charges;
    
    cancellations of existing sales contracts and the ability to consummate sales contracts
included in Levitts backlog;
    
    the realization of cost savings associated with reductions of workforce and the ability
to limit overhead and costs commensurate with sales;
    
    the need to offer additional incentives or discounts to buyers to generate sales;
    
    the effects of increases in interest rates;
    
    Levitts ability to timely deliver homes from backlog, shorten delivery cycles and
improve operational and construction efficiency;
    
    Levitts ability to maintain sufficient liquidity in the event of a prolonged downturn
in the housing market; and
    
    Levitts success at managing the risks involved in the foregoing.
  35




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##### Table of Contents



Critical Accounting Policies
  Accounting for Uncertain Tax Positions
  36




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##### Table of Contents



Summary of Consolidated Results of Operations by Segment
  For the Three Months EndedMarch 31,2007
    
    
    2006BFC Activities
    
    $
    (1,313
    )
    
    $
    (1,723
    )Financial Services
    
    
    (2,204
    )
    
    
    8,022Homebuilding & Real Estate Development
    
    
    1,250
    
    
    
    (660
    )(2,267
    )
    
    
    5,639Noncontrolling interest
    
    
    (687
    )
    
    
    5,729Loss from continuing operations
    
    
    (1,580
    )
    
    
    (90
    )Discontinued operations, less noncontrolling interest and income tax
    
    
    1,053
    
    
    
    (209
    )Net loss
    
    
    (527
    )
    
    
    (299
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    (188
    )Net (loss) allocable to common shareholders
    
    $
    (715
    )
    
    $
    (487
    )
    37




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##### Table of Contents



BFC Activities
    For the Three Months
    
    
    ChangeEnded March 31,
    
    
    2007 vs.(In thousands)
    
    2007
    
    
    2006
    
    
    2006RevenuesInterest and dividend income
    
    $
    509
    
    
    $
    570
    
    
    $
    (61
    )Other income, net
    
    
    1,627
    
    
    
    1,004
    
    
    
    6232,136
    
    
    
    1,574
    
    
    
    562Cost and ExpensesInterest expense
    
    
    12
    
    
    
    12
    
    
    
    Employee compensation and benefits
    
    
    2,744
    
    
    
    2,437
    
    
    
    307Other expenses
    
    
    722
    
    
    
    840
    
    
    
    (118
    )3,478
    
    
    
    3,289
    
    
    
    189Loss before income taxes
    
    
    (1,342
    )
    
    
    (1,715
    )
    
    
    373(Benefit) provision for income taxes
    
    
    (29
    )
    
    
    8
    
    
    
    (37
    )Noncontrolling interest
    
    
    (3
    )
    
    
    1
    
    
    
    (4
    )Loss from continuing operations
    
    
    (1,310
    )
    
    
    (1,724
    )
    
    
    414
    38




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##### Table of Contents



39




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##### Table of Contents



UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
AS OF MARCH 31, 2007
(In thousands, except for share data)
 Pro formaAdjustmentsConsolidated
    
    
    (a)
    
    
    Pro formaASSETSCash and cash equivalents
    
    $
    204,609
    
    
    $
    
    
    
    $
    204,609Securities available for sale (at fair value)
    
    
    677,836
    
    
    
    
    
    
    
    677,836Investment
securities (approximate fair value: $291,137)
    
    
    293,560
    
    
    
    
    
    
    
    293,560Tax certificates net of allowance of $3,782
    
    
    157,062
    
    
    
    
    
    
    
    157,062Federal Home Loan Bank stock, at cost which approximates fair value
    
    
    69,503
    
    
    
    
    
    
    
    69,503Loans receivable, net of allowance for loan losses of $50,926
    
    
    4,619,630
    
    
    
    
    
    
    
    4,619,630Residential loans held for sale
    
    
    6,235
    
    
    
    
    
    
    
    6,235Real estate held for development and sale
    
    
    863,453
    
    
    
    (79,045
    )(b)
    
    
    784,408Real estate owned
    
    
    23,135
    
    
    
    
    
    
    
    23,135Investments in unconsolidated affiliates
    
    
    123,230
    
    
    
    (13,433
    )(c)
    
    
    109,797Properties and equipment, net
    
    
    317,369
    
    
    
    (10,142
    )(d)
    
    
    307,227Goodwill and other intangibles
    
    
    76,937
    
    
    
    
    
    
    
    76,937Deferred income tax asset
    
    
    
    
    
    
    55,891
    (e)
    
    
    55,891Other assets
    
    
    82,940
    
    
    
    (6,888
    )(f)
    
    
    76,052Total assets
    
    $
    7,515,499
    
    
    $
    (53,616
    )
    
    $
    7,461,883LIABILITIES AND SHAREHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing deposits
    
    $
    1,031,628
    
    
    $
    
    
    
    $
    1,031,628Interest bearing deposits
    
    
    3,053,394
    
    
    
    
    
    
    
    3,053,394Total deposits
    
    
    4,085,022
    
    
    
    
    
    
    
    4,085,022Customer deposits on real estate held for sale
    
    
    32,358
    
    
    
    
    
    
    
    32,358Advances from FHLB
    
    
    1,297,055
    
    
    
    
    
    
    
    1,297,055Short term borrowings
    
    
    119,513
    
    
    
    
    
    
    
    119,513Subordinated debentures, notes and bonds payable
and junior subordinated debentures
    
    
    964,729
    
    
    
    485
    (g)
    
    
    965,214Deferred tax liabilities, net
    
    
    5,943
    
    
    
    (5,943
    )(e)
    
    
    (0
    )Other liabilities
    
    
    144,314
    
    
    
    
    
    
    
    144,314Total liabilities
    
    
    6,648,934
    
    
    
    (5,458
    )
    
    
    6,643,476Noncontrolling interest
    
    
    689,758
    
    
    
    (287,745
    )
    
    
    402,013Commitments 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 28,755,904 as adjusted,
66,289,857 shares issued and outstanding, pro forma
    
    
    266
    
    
    
    375
    
    
    
    641Class B common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 7,090,652
    
    
    69
    
    
    
    
    
    
    
    69Additional paid-in capital
    
    
    93,934
    
    
    
    239,212
    
    
    
    333,146Retained earnings
    
    
    81,295
    
    
    
    
    
    
    
    81,295Total shareholders equity before
accumulated other comprehensive income
    
    
    175,564
    
    
    
    239,587
    (h)
    
    
    415,151Accumulated other comprehensive income
    
    
    1,243
    
    
    
    
    
    
    
    1,243Total shareholders equity
    
    
    176,807
    
    
    
    239,587
    
    
    
    416,394Total liabilities and shareholders equity
    
    $
    7,515,499
    
    
    
    (53,616
    )
    
    $
    7,461,883
 40




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##### Table of Contents



(a)
    
    Pro forma adjustments represent BFCs acquisition of 83.4% of the difference in the estimated fair value of
Levitts net assets after allocation of negative goodwill as compared to the corresponding book value. Negative
goodwill resulted from the estimated fair value of acquired net assets exceeding the assumed purchase price (see
footnote h). Negative goodwill was allocated to various non-financial assets on a pro-rata basis to reduce the
estimated fair value of such assets. Estimated fair values of Levitts net assets upon consummation of the
merger may be different than as assumed herein due to fluctuations in the value of the net assets over time.(b)
    
    Represents a decrease of $99.9 million associated with the allocation of negative goodwill, partially offset by
an increase of approximately $20.9 million to its estimated fair value. .(c)
    
    Represents a decrease of $13.4 million associated with the allocation of $12.5 million in negative goodwill and
a decrease of approximately $971,000 based upon the estimated total market value of the investment in Bluegreen
common stock at March 30, 2007. The estimated total market value of the investment in Bluegreen was determined
by multiplying the closing price of Bluegreen common stock on March 30, 2007 by the number of shares owned.(d)
    
    Represents the allocation of negative goodwill.(e)
    
    Represents the reversal of BFCs deferred tax liability of $19.4 million associated with Levitts undistributed
earnings and the deferred tax consequences of basis differences created by purchase accounting (approximately
$42.4 million.) Basis differences arise between the historical tax basis of Levitts net assets as compared to
the book value of such assets recorded in purchase accounting which resulted in reclassifying $55.9 million from
deferred tax liability to deferred tax asset. The deferred tax asset was computed using an income tax rate of
38.575%.(f)
    
    Represents write-off of debt financing costs of $5.3 million and allocation of negative goodwill of $1.6 million.(g)
    
    Represents the estimated fair value of debt obligations based upon current borrowing rates for similar types of
borrowing arrangements.(h)
    
    The assumed purchase price of $239.6 million represents the value of consideration for the merger, including the
shares of BFCs Class A Common Stock exchanged in the merger and cash consideration paid for costs associated
with the merger. The value of BFC shares exchanged was calculated at $6.25, determined using the average of the
closing prices of BFCs Class A Common Stock for a few days prior and subsequent to January 30, 2007, the date
the terms of the merger agreement were finalized and announced. 41




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##### Table of Contents



UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2007 AND FOR THE YEAR ENDED DECEMBER 31, 2006
(In thousands, except for per share data)
 For the Three Months Ended March 31, 2007
    
    
    For the Year Ended December 31, 2006Pro forma
    
    
    
    
    
    
    
    
    
    
    Pro formaAdjust-
    
    
    
    
    
    
    
    
    
    
    Adjust-Reported
    
    
    ments
    
    
    Pro forma
    
    
    Reported
    
    
    ments
    
    
    Pro formaRevenuesBFC ActivitiesInterest and dividendincome
    
    $
    499
    
    
    
    
    
    
    $
    499
    
    
    $
    2,249
    
    
    
    
    
    
    $
    2,249Other income
    
    
    951
    
    
    
    
    
    
    
    951
    
    
    
    1,433
    
    
    
    
    
    
    
    1,4331,450
    
    
    
    
    
    
    
    1,450
    
    
    
    3,682
    
    
    
    
    
    
    
    3,682Financial ServicesInterest and dividend
income
    
    
    93,540
    
    
    
    
    
    
    
    93,540
    
    
    
    367,177
    
    
    
    
    
    
    
    367,177Service charges on deposits
    
    
    24,595
    
    
    
    
    
    
    
    24,595
    
    
    
    90,472
    
    
    
    
    
    
    
    90,472Other service charges and
fees
    
    
    7,033
    
    
    
    
    
    
    
    7,033
    
    
    
    27,542
    
    
    
    
    
    
    
    27,542Other income
    
    
    3,939
    
    
    
    
    
    
    
    3,939
    
    
    
    22,555
    
    
    
    
    
    
    
    22,555129,107
    
    
    
    
    
    
    
    129,107
    
    
    
    507,746
    
    
    
    
    
    
    
    507,746Homebuilding & Real Estate DevelopmentSales of real estate
    
    
    141,742
    
    
    
    
    
    
    
    141,742
    
    
    
    566,086
    
    
    
    
    
    
    
    566,086Interest and dividend
income
    
    
    553
    
    
    
    
    
    
    
    553
    
    
    
    2,474
    
    
    
    
    
    
    
    2,474Other income
    
    
    4,117
    
    
    
    
    
    
    
    4,117
    
    
    
    14,592
    
    
    
    
    
    
    
    14,592146,412
    
    
    
    
    
    
    
    146,412
    
    
    
    583,152
    
    
    
    
    
    
    
    583,152Total revenues
    
    
    276,969
    
    
    
    
    
    
    
    276,969
    
    
    
    1,094,580
    
    
    
    
    
    
    
    1,094,580Costs and ExpensesBFC ActivitiesInterest expense
    
    
    13
    
    
    
    
    
    
    
    13
    
    
    
    30
    
    
    
    
    
    
    
    30Employee compensation
and benefits
    
    
    2,744
    
    
    
    
    
    
    
    2,744
    
    
    
    9,407
    
    
    
    
    
    
    
    9,407Other expenses
    
    
    661
    
    
    
    
    
    
    
    661
    
    
    
    2,933
    
    
    
    
    
    
    
    2,9333,418
    
    
    
    
    
    
    
    3,418
    
    
    
    12,370
    
    
    
    
    
    
    
    12,370Financial ServicesInterest expense, net of
interest capitalized
    
    
    46,217
    
    
    
    
    
    
    
    46,217
    
    
    
    166,578
    
    
    
    
    
    
    
    166,578Provision for loan losses
    
    
    7,461
    
    
    
    
    
    
    
    7,461
    
    
    
    8,574
    
    
    
    
    
    
    
    8,574Employee compensation
and benefits
    
    
    41,090
    
    
    
    
    
    
    
    41,090
    
    
    
    150,804
    
    
    
    
    
    
    
    150,804Occupancy and equipment
    
    
    15,944
    
    
    
    
    
    
    
    15,944
    
    
    
    57,308
    
    
    
    
    
    
    
    57,308Advertising and promotion
    
    
    5,858
    
    
    
    
    
    
    
    5,858
    
    
    
    35,067
    
    
    
    
    
    
    
    35,067Other expenses
    
    
    16,208
    
    
    
    
    
    
    
    16,208
    
    
    
    55,980
    
    
    
    
    
    
    
    55,980132,778
    
    
    
    
    
    
    
    132,778
    
    
    
    474,311
    
    
    
    
    
    
    
    474,311Homebuilding & Real Estate
DevelopmentCost of sales of real estate
    
    
    112,908
    
    
    
    
    
    
    
    112,908
    
    
    
    482,961
    
    
    
    
    
    
    
    482,961Selling, general and
administrative expenses
    
    
    32,645
    
    
    
    
    
    
    
    32,645
    
    
    
    120,017
    
    
    
    
    
    
    
    120,017Other expenses
    
    
    482
    
    
    
    
    
    
    
    482
    
    
    
    3,677
    
    
    
    
    
    
    
    3,677146,035
    
    
    
    
    
    
    
    146,035
    
    
    
    606,655
    
    
    
    
    
    
    
    606,655Total costs and expenses
    
    
    282,231
    
    
    
    
    
    
    
    282,231
    
    
    
    1,093,336
    
    
    
    
    
    
    
    1,093,336Equity earnings from
unconsolidated affiliates
    
    
    2,893
    
    
    
    
    
    
    
    2,893
    
    
    
    10,935
    
    
    
    
    
    
    
    10,935(Loss) income before income taxes
and noncontrolling interest
    
    
    (2,369
    )
    
    
    
    
    
    
    (2,369
    )
    
    
    12,179
    
    
    
    
    
    
    
    12,179Benefit for income taxes
    
    
    (102
    )
    
    
    
    
    
    
    (102
    )
    
    
    (528
    )
    
    
    
    
    
    
    (528
    )Noncontrolling interest
    
    
    (687
    )
    
    
    (1,043
    )(a)
    
    
    (1,730
    )
    
    
    13,404
    
    
    
    7,643
    (a)
    
    
    21,047(Loss) from continuing operations
    
    
    (1,580
    )
    
    
    1,043
    
    
    
    (537
    )
    
    
    (697
    )
    
    
    (7,643
    )
    
    
    (8,340
    )Discontinued operation less
income tax provision (benefit) of
$3,405 in 2007 and $(8,958) in
2006 and noncontrolling interest
    
    
    1,053
    
    
    
    
    
    
    
    1,053
    
    
    
    (1,524
    )
    
    
    
    
    
    
    (1,524
    )Net (loss) income
    
    
    (527
    )
    
    
    1,043
    
    
    
    516
    
    
    
    (2,221
    )
    
    
    (7,643
    )
    
    
    (9,864
    )5% Preferred Stock dividends
    
    
    (188
    )
    
    
    
    
    
    
    (188
    )
    
    
    750
    
    
    
    
    
    
    
    750Net (loss) income allocable to common stock
    
    $
    (715
    )
    
    
    1,043
    
    
    $
    328
    
    
    $
    (2,971
    )
    
    
    (7,643
    )
    
    $
    (10,614
    )Diluted weighted average number of common shares
outstanding
    
    
    33,444
    
    
    
    37,534
    (b)
    
    
    70,978
    
    
    
    33,249
    
    
    
    37,543
    (b)
    
    
    70,783Diluted (loss) earnings per
common share
    
    $
    (0.02
    )
    
    
    
    
    
    $
    0.01
    
    
    $
    (0.10
    )
    
    
    
    
    
    $
    (0.15
    )
 
 (a)
    
    Elimination of non-controlling interest for the three months ended March 31, 2007 and for the year ended December 31, 2006.(b)
    
    Represents shares of Class A Common Stock that will be issued to Levitt shareholders if the proposed merger with Levitt is consummated. 42




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##### Table of Contents



Liquidity and Capital Resources of BFC
  For the Three Months EndedMarch 31,2007
    
    
    2006Net cash provided by (used in):Operating activities
    
    $
    (1,896
    )
    
    $
    (1,415
    )Investing activities
    
    
    607
    
    
    
    (432
    )Financing activities
    
    
    (306
    )
    
    
    (4,347
    )Decrease in cash and cash equivalents
    
    
    (1,595
    )
    
    
    (6,194
    )Cash and cash equivalents at beginning of period
    
    
    18,176
    
    
    
    26,806Cash and cash equivalents at end of period
    
    $
    16,581
    
    
    $
    20,612
  
    
    Dividends from BankAtlantic Bancorp and Levitt;
    
    Dividends from Benihana;
    
    Revenues from CCC advisory fees;
    
    Revenues from shared services activities;
    
    Principal and interest payments on loans receivable.
  
    
    Fund the payment of dividends on the Companys 5% Cumulative Convertible Preferred Stock; and
    
    Fund BFCs operating and general and administrative expenses.
     43




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44




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##### Table of Contents



Consolidated Financial Condition
 Consolidated Assets and Liabilities
  
    
    an increase in cash and cash equivalents of approximately $3.5 million was primarily
due to Levitts higher cash balances resulting from financing activities. This increase
in cash and cash equivalents was partially offset by a decline in cash and cash
equivalents at BankAtlantic Bancorp which resulted from the use of short term investments
to fund its Class A common stock repurchase program and a decrease in BFC cash balance of
$1.6 million due to the use of funds for operating activities;
    
    increase in securities available for sale at BankAtlantic Bancorp reflecting Stifel
common stock received upon the sale of Ryan Beck partially offset by the sale of equity
securities held by BankAtlantic Bancorp to fund its Class A common stock repurchase
program;
    
    increase in BankAtlantic Bancorp investment securities at cost resulting from Stifel
equity securities received as merger consideration upon the sale of Ryan Beck;
    
    decrease in BankAtlantic tax certificate balances primarily due to redemptions of
non-Florida tax certificates;
    
    lower investment in BankAtlantic FHLB stock related to repayments of FHLB advances;
    
    increase in BankAtlantic loan receivable balances associated with higher purchased
residential and home equity loan balances partially offset by lower commercial real
estate loan balances;
    
    a net increase in Levitts inventory of real estate resulting from increases in land
development and construction costs;
    
    increase in office properties and equipment associated with BankAtlantics store
expansion initiatives and Levitts investment in commercial properties under
construction, as well as an increase in Levitts master planned communities
infrastructure, and
    
    decrease in discontinued operations assets held for sale reflecting BankAtlantic
Bancorps sale of Ryan Beck to Stifel.
  
    
    higher non-interest-bearing deposit balances at BankAtlantic due to an increase in
free checking account balances associated with Floridas Most Convenient Bank
initiatives;
    
    higher interest-bearing deposit balances at BankAtlantic primarily associated with
increased higher yield saving, interest-bearing checking and certificate of deposit
balances partially offset by lower money market account balances;
    
    a decrease in FHLB advances and short term borrowings at BankAtlantic due to deposit
growth and a decline in earning assets;
    
    a net increase in Levitts notes and mortgage notes payable of $56.1 million, primarily
related to project debt associated with development activities;
    
    a decrease of $10.3 million in customer deposits associated with Levitts declining
homebuilding backlog;
    
    a net decrease in Levitts other accrued liabilities primarily attributable to
decreases in incentive, construction and professional service fees accruals;
    
    a decrease in discontinued operations liabilities held for sale reflecting the sale of
Ryan Beck to Stifel on February 28, 2007; and
    
    a decrease in deferred tax liabilities primarily resulting from BankAtlantic increase
in the allowance for loan losses.
 
 Noncontrolling Interest
  March 31,
    
    
    December 31,2007
    
    
    2006BankAtlantic Bancorp
    
    $
    401,319
    
    
    $
    411,396Levitt
    
    
    287,745
    
    
    
    286,230Joint Venture Partnerships
    
    
    694
    
    
    
    697$
    689,758
    
    
    $
    698,323
 NEW ACCOUNTING PRONOUNCEMENTS.
  45




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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, 2007 filed with the Securities and Exchange Commission. Accordingly,
references to the Company, we, us or our in the following discussion under the caption
Financial Services are references to BankAtlantic Bancorp and its subsidiaries, and are not
references to BFC Financial Corporation.
   Critical Accounting Policies
  46




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##### Table of Contents



Accounting for Uncertain Tax Positions
  Consolidated Results of Operations
 )
 For the Three Months Ended March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    ChangeBankAtlantic
    
    $
    639
    
    
    $
    10,163
    
    
    $
    (9,524
    )Parent Company
    
    
    (2,843
    )
    
    
    (2,141
    )
    
    
    (702
    )Net (loss) income
    
    $
    (2,204
    )
    
    $
    8,022
    
    
    $
    (10,226
    )
 For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
   47




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##### Table of Contents



BankAtlantic Results of Operations
 Net interest income
 Bank Operations Business SegmentAverage Balance Sheet -
Yield / Rate AnalysisFor the Three Months EndedMarch 31, 2007
    
    
    March 31, 2006(In thousands)
    
    Average
    
    
    Revenue/
    
    
    Yield/
    
    
    Average
    
    
    Revenue/
    
    
    Yield/Balance
    
    
    Expense
    
    
    Rate
    
    
    Balance
    
    
    Expense
    
    
    RateTotal loans
    
    $
    4,650,519
    
    
    
    79,587
    
    
    
    6.85
    
    
    $
    4,610,055
    
    
    
    75,386
    
    
    
    6.54Investments  tax exempt
    
    
    396,374
    
    
    
    5,802
    (1)
    
    
    5.85
    
    
    
    393,159
    
    
    
    5,731
    (1)
    
    
    5.83Investments  taxable
    
    
    619,614
    
    
    
    9,696
    
    
    
    6.26
    
    
    
    588,072
    
    
    
    8,233
    
    
    
    5.60Total interest earning assets
    
    
    5,666,507
    
    
    
    95,085
    
    
    
    6.71
    %
    
    
    5,591,286
    
    
    
    89,350
    
    
    
    6.39
    %Goodwill and core deposit intangibles
    
    
    77,138
    
    
    
    
    
    
    
    
    
    
    
    78,693Other non-interest earning assets
    
    
    426,061
    
    
    
    
    
    
    
    
    
    
    
    355,868Total Assets
    
    $
    6,169,706
    
    
    
    
    
    
    
    
    
    
    $
    6,025,847Deposits:Savings
    
    $
    529,435
    
    
    
    2,570
    
    
    
    1.97
    %
    
    $
    331,117
    
    
    
    313
    
    
    
    0.38
    %NOW
    
    
    771,017
    
    
    
    1,512
    
    
    
    0.80
    
    
    
    760,419
    
    
    
    934
    
    
    
    0.50Money market
    
    
    650,383
    
    
    
    3,938
    
    
    
    2.46
    
    
    
    829,700
    
    
    
    3,984
    
    
    
    1.95Certificates of deposit
    
    
    961,716
    
    
    
    10,982
    
    
    
    4.63
    
    
    
    843,866
    
    
    
    7,523
    
    
    
    3.62Total interest bearing deposits
    
    
    2,912,551
    
    
    
    19,002
    
    
    
    2.65
    
    
    
    2,765,102
    
    
    
    12,754
    
    
    
    1.87Short-term borrowed funds
    
    
    203,984
    
    
    
    2,633
    
    
    
    5.23
    
    
    
    245,326
    
    
    
    2,643
    
    
    
    4.37Advances from FHLB
    
    
    1,405,279
    
    
    
    18,723
    
    
    
    5.40
    
    
    
    1,164,675
    
    
    
    14,140
    
    
    
    4.92Secured borrowings
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    125,293
    
    
    
    2,401
    
    
    
    7.77Long-term debt
    
    
    29,634
    
    
    
    626
    
    
    
    8.57
    
    
    
    37,819
    
    
    
    748
    
    
    
    8.02Total interest bearing liabilities
    
    
    4,551,448
    
    
    
    40,984
    
    
    
    3.65
    
    
    
    4,338,215
    
    
    
    32,686
    
    
    
    3.06Demand deposits
    
    
    989,546
    
    
    
    
    
    
    
    
    
    
    
    1,065,909Non-interest bearing other liabilities
    
    
    56,222
    
    
    
    
    
    
    
    
    
    
    
    70,349Total Liabilities
    
    
    5,597,216
    
    
    
    
    
    
    
    
    
    
    
    5,474,473Stockholders equity
    
    
    572,490
    
    
    
    
    
    
    
    
    
    
    
    551,374Total liabilities and stockholders
equity
    
    $
    6,169,706
    
    
    
    
    
    
    
    
    
    
    $
    6,025,847Net tax equivalent interest income/
net interest spread
    
    
    
    
    
    
    54,101
    
    
    
    3.06
    %
    
    
    
    
    
    
    56,664
    
    
    
    3.33
    %Tax equivalent adjustment
    
    
    
    
    
    
    (2,031
    )
    
    
    
    
    
    
    
    
    
    
    (2,006
    )Capitalized interest from real estate
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    480Net interest income
    
    
    
    
    
    
    52,070
    
    
    
    
    
    
    
    
    
    
    
    55,138MarginInterest income/interest earning
assets
    
    
    
    
    
    
    
    
    
    
    6.71
    %
    
    
    
    
    
    
    
    
    
    
    6.39
    %Interest expense/interest earning
assets
    
    
    
    
    
    
    
    
    
    
    2.93
    
    
    
    
    
    
    
    
    
    
    
    2.37Net interest margin (tax equivalent)
    
    
    
    
    
    
    
    
    
    
    3.78
    %
    
    
    
    
    
    
    
    
    
    
    4.02
    %Net interest margin (tax equivalent)
excluding secured borrowings
    
    
    
    
    
    
    
    
    
    
    3.78
    %
    
    
    
    
    
    
    
    
    
    
    4.11
    %
 
 (1)
    
    The tax equivalent basis is computed using a 35% tax rate. 48




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For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
    Provision for Loan Losses
 For the Three Months EndedAllowance for Loan Losses
    
    March 31,(In thousands)
    
    2007
    
    
    2006Balance, beginning of period
    
    $
    43,602
    
    
    $
    41,192Loans charged-off
    
    
    (1,127
    )
    
    
    (366
    )Recoveries of loans previously charged-off
    
    
    437
    
    
    
    900Net (charge-offs) recoveries
    
    
    (690
    )
    
    
    534Provision for loan losses
    
    
    7,461
    
    
    
    163Balance, end of period
    
    $
    50,373
    
    
    $
    41,889
   49




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##### Table of Contents



March 31,
    
    
    December 31,2007
    
    
    2006NONPERFORMING ASSETSNon-accrual:Tax certificates
    
    $
    597
    
    
    $
    632Loans
    
    
    25,746
    
    
    
    4,436Total non-accrual
    
    
    26,343
    
    
    
    5,068Repossessed assets:Real estate owned
    
    
    23,135
    
    
    
    21,747Total nonperforming assets
    
    $
    49,478
    
    
    $
    26,815AllowancesAllowance for loan losses
    
    $
    50,373
    
    
    $
    43,602Allowance for tax certificate losses
    
    
    3,782
    
    
    
    3,699Total allowances
    
    $
    54,155
    
    
    $
    47,301POTENTIAL PROBLEM LOANSContractually past due 90 days or more
    
    $
    
    
    
    $
    Performing impaired loans
    
    
    7,788
    
    
    
    163Restructured loans
    
    
    
    
    
    
    TOTAL POTENTIAL PROBLEM LOANS
    
    $
    7,788
    
    
    $
    163
  50




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51




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BankAtlantics Non-Interest Income
 For Three MonthsEnded March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    ChangeService charges on deposits
    
    $
    24,595
    
    
    $
    19,099
    
    
    $
    5,496Other service charges and fees
    
    
    7,033
    
    
    
    6,222
    
    
    
    811Securities activities, net
    
    
    621
    
    
    
    (1
    )
    
    
    622Other
    
    
    2,798
    
    
    
    1,687
    
    
    
    1,111Non-interest income
    
    $
    35,047
    
    
    $
    27,007
    
    
    $
    8,040
     BankAtlantics Non-Interest Expense
 For Three MonthsEnded March 31,(In thousands)
    
    2007
    
    
    2006
    
    
    ChangeEmployee compensation and benefits
    
    $
    40,664
    
    
    $
    34,349
    
    
    $
    6,315Occupancy and equipment
    
    
    15,942
    
    
    
    12,610
    
    
    
    3,332Advertising and promotion
    
    
    5,788
    
    
    
    8,524
    
    
    
    (2,736
    )Professional fees
    
    
    1,620
    
    
    
    2,211
    
    
    
    (591
    )Check losses
    
    
    1,857
    
    
    
    1,246
    
    
    
    611Supplies and postage
    
    
    1,850
    
    
    
    1,654
    
    
    
    196Telecommunication
    
    
    1,379
    
    
    
    1,151
    
    
    
    228One-time termination benefits
    
    
    2,553
    
    
    
    
    
    
    
    2,553Other
    
    
    7,117
    
    
    
    6,054
    
    
    
    1,063Non-interest expense
    
    $
    78,770
    
    
    $
    67,799
    
    
    $
    10,971
 52




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53




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Parent Company Results of Operations
 For the Three Months(In thousands)
    
    Ended March 31,2007
    
    
    2006
    
    
    ChangeNet interest (expense)
    
    $
    (4,924
    )
    
    $
    (4,618
    )
    
    $
    (306
    )Non-interest income
    
    
    1,705
    
    
    
    3,352
    
    
    
    (1,647
    )Non-interest expense
    
    
    723
    
    
    
    1,949
    
    
    
    (1,226
    )(Loss) before income
taxes
    
    
    (3,942
    )
    
    
    (3,215
    )
    
    
    (727
    )Income tax benefit
    
    
    (1,099
    )
    
    
    (1,074
    )
    
    
    (25
    )Parent company (loss)
    
    $
    (2,843
    )
    
    $
    (2,141
    )
    
    $
    (702
    )
    BankAtlantic Bancorp Consolidated Financial Condition
  
    
    Decline in cash and cash equivalents due to the use of short term investments at the
Parent company to fund the Companys Class A common stock repurchase program;
    
    Increase in securities available for sale reflecting Stifel common stock received upon
the sale of Ryan Beck partially offset by the sale of Parent company equity securities
to fund the Companys Class A common stock repurchase program;
    
    Increase in investment securities at cost resulting from Stifel equity securities
received as merger consideration upon the sale of Ryan Beck;
    
    Decrease in tax certificate balances primarily due to redemptions of non-Florida tax certificates;
    
    Lower investment in FHLB stock related to repayments of FHLB advances;
    
    Increase in loan receivable balances associated with higher purchased residential and
home equity loan balances partially offset by lower commercial real estate loan balances;
    
    Increase in office properties and equipment associated with BankAtlantics store
expansion initiatives;
    
    Increase in deferred tax assets primarily resulting from the increase in the allowance
for loan losses; and
    
    Decrease in discontinued operations assets held for sale reflecting the sale of Ryan
Beck to Stifel.
 54




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##### Table of Contents




    
    Higher non-interest-bearing deposit balances due to an increase in free checking
account balances associated with Floridas Most Convenient Bankinitiatives;
    
    Higher interest-bearing deposit balances primarily associated with increased higher
yield saving, interest-bearing checking and certificate of deposit balances partially
offset by lower money market account balances;
    
    Decrease in FHLB advances and short term borrowings due to deposit growth and a
decline in earning assets; and
    
    Decrease in discontinued operations liabilities held for sale reflecting the sale of
Ryan Beck to Stifel on February 28, 2007.
 Liquidity and Capital Resources
 BankAtlantic Bancorp, Inc. Liquidity and Capital Resources
     BankAtlantic Liquidity and Capital Resources
  55




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56




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##### Table of Contents



Minimum RatiosAdequately
    
    WellActual
    
    Capitalized
    
    CapitalizedAmount
    
    Ratio
    
    Ratio
    
    RatioAt March 31, 2007:Total risk-based capital
    
    $
    526,725
    
    
    
    12.11
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    $
    456,426
    
    
    
    10.49
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    456,426
    
    
    
    7.51
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    456,426
    
    
    
    7.51
    %
    
    
    4.00
    %
    
    
    5.00
    %At December 31, 2006:Total risk-based capital
    
    $
    529,497
    
    
    
    12.08
    %
    
    
    8.00
    %
    
    
    10.00
    %Tier 1 risk-based
capital
    
    $
    460,359
    
    
    
    10.50
    %
    
    
    4.00
    %
    
    
    6.00
    %Tangible capital
    
    $
    460,359
    
    
    
    7.55
    %
    
    
    1.50
    %
    
    
    1.50
    %Core capital
    
    $
    460,359
    
    
    
    7.55
    %
    
    
    4.00
    %
    
    
    5.00
    %
  Off Balance Sheet Arrangements  Contractual Obligations as of March 31, 2007
 (In thousands)
    
    Payments Due by Period (1)(2)Less than
    
    
    
    
    
    
    
    
    
    
    After 5Contractual Obligations
    
    Total
    
    
    1 year
    
    
    1-3 years
    
    
    4-5 years
    
    
    yearsTime deposits
    
    $
    1,002,284
    
    
    $
    848,838
    
    
    $
    118,636
    
    
    $
    34,631
    
    
    $
    179Long-term debt
    
    
    292,920
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    292,920Advances from FHLB (1)
    
    
    1,297,055
    
    
    
    1,225,055
    
    
    
    40,000
    
    
    
    32,000
    
    
    
    Operating lease obligations
    
    
    124,414
    
    
    
    9,422
    
    
    
    19,788
    
    
    
    15,541
    
    
    
    79,663Pension obligation
    
    
    14,336
    
    
    
    938
    
    
    
    2,220
    
    
    
    2,848
    
    
    
    8,330Other obligations
    
    
    38,471
    
    
    
    17,271
    
    
    
    5,500
    
    
    
    6,100
    
    
    
    9,600Total contractual cash
obligations
    
    $
    2,769,480
    
    
    $
    2,101,524
    
    
    $
    186,144
    
    
    $
    91,120
    
    
    $
    390,692
 
 (1)
    
    Payments due by period are based on contractual maturities(2)
    
    The above table excludes interest payments on interest bearing liabilities 57




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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, 2007 filed with the Securities and Exchange
Commission. Accordingly, references to the Company, we, us or our in the following
discussion under the caption Homebuilding & Real Estate Development are references to Levitt and
its subsidiaries, and are not references to BFC Financial Corporation.
   58




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##### Table of Contents



Executive Overview
   Financial and Non-Financial Metrics
  Homebuilding Overview
   59




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##### Table of Contents



Land Division Overview
   60




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##### Table of Contents



Critical Accounting Policies and Estimates
  CONSOLIDATED RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    141,742
    
    
    
    125,543
    
    
    
    16,199Other revenues
    
    
    2,497
    
    
    
    1,951
    
    
    
    546Total revenues
    
    
    144,239
    
    
    
    127,494
    
    
    
    16,745Costs and expensesCost of sales of real estate
    
    
    112,908
    
    
    
    102,055
    
    
    
    10,853Selling, general and administrative expenses
    
    
    32,906
    
    
    
    26,755
    
    
    
    6,151Other expenses
    
    
    482
    
    
    
    626
    
    
    
    (144
    )Total costs and expenses
    
    
    146,296
    
    
    
    129,436
    
    
    
    16,860Earnings (loss) from Bluegreen Corporation
    
    
    1,744
    
    
    
    (49
    )
    
    
    1,793Earnings from joint ventures
    
    
    3
    
    
    
    
    
    
    
    3Interest and other income
    
    
    2,339
    
    
    
    889
    
    
    
    1,450Income (loss) before income taxes
    
    
    2,029
    
    
    
    (1,102
    )
    
    
    3,131(Provision) benefit for income taxes
    
    
    (779
    )
    
    
    442
    
    
    
    (1,221
    )Net income (loss)
    
    $
    1,250
    
    
    
    (660
    )
    
    
    1,910
 For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
   61




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62




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HOMEBUILDING DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(Dollars in thousands)RevenuesSales of real estate
    
    $
    134,169
    
    
    
    118,275
    
    
    
    15,894Other revenues
    
    
    722
    
    
    
    1,008
    
    
    
    (286
    )Total revenues
    
    
    134,891
    
    
    
    119,283
    
    
    
    15,608Costs and expensesCost of sales of real estate
    
    
    107,603
    
    
    
    96,497
    
    
    
    11,106Selling, general and administrative expenses
    
    
    20,305
    
    
    
    17,572
    
    
    
    2,733Other expenses
    
    
    482
    
    
    
    626
    
    
    
    (144
    )Total costs and expenses
    
    
    128,390
    
    
    
    114,695
    
    
    
    13,695Earnings from joint ventures
    
    
    16
    
    
    
    
    
    
    
    16Interest and other income
    
    
    1,654
    
    
    
    177
    
    
    
    1,477Income before income taxes
    
    
    8,171
    
    
    
    4,765
    
    
    
    3,406Provision for income taxes
    
    
    (3,211
    )
    
    
    (1,754
    )
    
    
    (1,457
    )Net income
    
    $
    4,960
    
    
    
    3,011
    
    
    
    1,949Homes delivered (units)
    
    
    362
    
    
    
    439
    
    
    
    (77
    )Construction starts (units)
    
    
    254
    
    
    
    390
    
    
    
    (136
    )Average selling price of homes delivered (a)
    
    $
    340
    
    
    
    269
    
    
    
    71Margin percentage on homes delivered (a)
    
    
    21.6
    %
    
    
    18.4
    %
    
    
    3.2
    %Net orders (units)
    
    
    159
    
    
    
    506
    
    
    
    (347
    )Net orders (value)
    
    $
    43,900
    
    
    
    169,387
    
    
    
    (125,487
    )Backlog of homes (units)
    
    
    1,045
    
    
    
    1,859
    
    
    
    (814
    )Backlog of homes (value)
    
    $
    359,029
    
    
    
    608,437
    
    
    
    (249,408
    )
 
 (a)
    
    Calculation for the three months ended March 31, 2007 excludes $11.1 million land sale,
which generated no margin. No comparable land sales occurred in the three months ended
March 31, 2006. 63




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For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
        64




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LAND DIVISION RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(Dollars in thousands)RevenuesSales of real estate (a)
    
    $
    777
    
    
    
    7,272
    
    
    
    (6,495
    )Other revenues
    
    
    1,502
    
    
    
    620
    
    
    
    882Total revenues
    
    
    2,279
    
    
    
    7,892
    
    
    
    (5,613
    )Costs and expensesCost of sales of real estate
    
    
    72
    
    
    
    5,019
    
    
    
    (4,947
    )Selling, general and administrative
expenses
    
    
    4,365
    
    
    
    2,786
    
    
    
    1,579Interest expense
    
    
    215
    
    
    
    
    
    
    
    215Total costs and expenses
    
    
    4,652
    
    
    
    7,805
    
    
    
    (3,153
    )Interest and other income
    
    
    947
    
    
    
    368
    
    
    
    579(Loss) income before income taxes
    
    
    (1,426
    )
    
    
    455
    
    
    
    (1,881
    )Benefit (provision) for income taxes
    
    
    568
    
    
    
    (137
    )
    
    
    705Net (loss) income
    
    $
    (858
    )
    
    
    318
    
    
    
    (1,176
    )Acres sold
    
    
    
    
    
    
    56
    
    
    
    (56
    )Margin percentage (a)
    
    
    90.7
    %
    
    
    31.0
    %
    
    
    59.7Unsold saleable acres
    
    
    6,871
    
    
    
    7,231
    
    
    
    (360
    )Acres subject to sales contracts 
Third parties
    
    
    74
    
    
    
    195
    
    
    
    (121
    )Aggregate sales price of acres
subject to sales contracts to third
parties
    
    $
    21,124
    
    
    
    33,717
    
    
    
    (12,593
    )
 
 (a)
    
    For the three months ended March 31, 2007, there were no land sales
recorded. Sales of real estate and margin percentage relate to revenues from look back
provisions and recognition of deferred revenue associated with sales in prior periods.   65




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For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
      66




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OTHER OPERATIONS RESULTS OF OPERATIONS
 Three MonthsEnded March 31,2007
    
    
    2006
    
    
    Change(In thousands)RevenuesSales of real estate
    
    $
    6,574
    
    
    
    
    
    
    
    6,574Other revenues
    
    
    293
    
    
    
    337
    
    
    
    (44
    )Total revenues
    
    
    6,867
    
    
    
    337
    
    
    
    6,530Costs and expensesCost of sales of real estate
    
    
    5,501
    
    
    
    642
    
    
    
    4,859Selling, general and administrative expenses
    
    
    8,236
    
    
    
    6,397
    
    
    
    1,839Total costs and expenses
    
    
    13,737
    
    
    
    7,039
    
    
    
    6,698Earnings (loss) from Bluegreen Corporation
    
    
    1,744
    
    
    
    (49
    )
    
    
    1,793Loss from real estate joint ventures
    
    
    (13
    )
    
    
    
    
    
    
    (13
    )Interest and other income
    
    
    258
    
    
    
    345
    
    
    
    (87
    )Loss before income taxes
    
    
    (4,881
    )
    
    
    (6,406
    )
    
    
    1,525Benefit for income taxes
    
    
    1,864
    
    
    
    2,364
    
    
    
    (500
    )Net loss
    
    $
    (3,017
    )
    
    
    (4,042
    )
    
    
    1,025
  For the Three Months Ended March 31, 2007 Compared to the Same 2006 Period:
   67




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FINANCIAL CONDITION
 March 31, 2007 compared to December 31, 2006
  
    
    a net increase in cash and cash equivalents of $12.2 million, which resulted from
cash provided by financing activities, offset by cash used in operations and investing
activities;
    
    a net increase in inventory of real estate of approximately $14.3 million resulting
from increases in land development and construction costs by our Homebuilding and
Land Divisions;
    
    a decrease in notes receivable of $4.1 million due to the repayment of a note
associated with a Land Division sale; and
    
    an increase of $8.8 million in property and equipment associated with increased
investment in commercial properties under construction by our Land Division, and
support for infrastructure in our master planned communities.
   
    
    a net increase in notes and mortgage notes payable of $56.1 million, primarily
related to project debt
 68




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##### Table of Contents



associated with development activities;
    
    a decrease of $10.3 million in customer deposits reflecting fewer orders for new homes;
    
    a decrease in the current tax liability of approximately $2.9 million relating to
the payment of 2006 annual taxes offset in part by our current provision for income
tax; and
    
    a net decrease in other accrued liabilities of approximately $14.1 million
attributable to decreased incentive compensation accruals, decreased construction
related accruals, and decreased professional services accruals related to the
consultants retained in 2006 for our technology updgrade.
 LIQUIDITY AND CAPITAL RESOURCES
   Operating Activities.
  69




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Investing Activities.
 Financing Activities.
   Off Balance Sheet Arrangements and Contractual Obligations
  70




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Payments due by periodLess than
    
    
    2 - 3
    
    
    4 - 5
    
    
    More thanCategory (2)
    
    Total
    
    
    1 year
    
    
    Years
    
    
    Years
    
    
    5 yearsLong-term debt obligations (1)
    
    $
    671,764
    
    
    
    22,851
    
    
    
    406,102
    
    
    
    228,976
    
    
    
    13,835Operating lease obligations
    
    
    7,661
    
    
    
    2,358
    
    
    
    2,916
    
    
    
    979
    
    
    
    1,408Purchase obligations
    
    
    14,220
    
    
    
    14,220
    
    
    
    
    
    
    
    
    
    
    
    Total Obligations
    
    $
    693,645
    
    
    
    39,429
    
    
    
    409,018
    
    
    
    229,955
    
    
    
    15,243
 
 (1)
    
    Amounts exclude interest because terms of repayment are based on construction activity and
sales volume. In addition, a large portion of our debt is based on variable rates.(2)
    
    These amounts represent scheduled principal payments and some of those borrowings require
the repayment of specified amounts upon a sale of portions of the property securing those
obligations.   71




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 BFC Equity Price Risk
   BFC Interest Rate Risk
  BankAtlantic Bancorp
    72




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Levitt
   73




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Item 4. Controls and Procedure
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  74




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors.
  
 Item 6. Exhibits
 Exhibit 31.1
    
    Chief Executive Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.2
    
    Chief Financial Officer Certification pursuant to Section
302 of the Sarbanes-Oxley Act of 2002Exhibit 31.3
    
    Chief Accounting Officer Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002Exhibit 32.1
    
    Chief Executive Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002Exhibit 32.2
    
    Chief Financial Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002Exhibit 32.3
    
    Chief Accounting Officer Certification pursuant to 18
U.S.C. Section 1350, as Adopted Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 75




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BFC FINANCIAL CORPORATIONDate: May 10, 2007
    By:
    /s/  Alan B. LevanAlan B. Levan, Chief Executive OfficerDate: May 10, 2007
    By:
    /s/  George P. ScanlonGeorge P. Scanlon, Executive Vice President,and Chief Financial OfficerDate: May 10, 2007
    By:
    /s/  Maria R. SchekerMaria R. Scheker, Chief Accounting Officer 76