##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q







|x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ---------------------------------------------------------------------------------------

For the Quarter Ended June 30, 2012

OR



| ̈ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
|- | ----------------------------------------------------------------------------------------

Commission File Number

001-09071





BFC Financial
Corporation

(Exact name of registrant as specified in its charter)







|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Florida                                                        |  | 59-2022148                          
|(State or other jurisdiction of
incorporation or organization) |  | (IRS Employer Identification Number)



|                                        |  |           
|--------------------------------------- |  | ----------
|2100 West Cypress Creek Road            |  |           
|Fort Lauderdale, Florida                |  | 33309     
|(Address of Principal executive office) |  | (Zip Code)

(954) 940-4900

(Registrants telephone number, including area code)

Not
Applicable

(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90
days.    YES  x    NO   ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files).    YES  x    NO   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated filer         |  |  ̈
|                        |  |   | 
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).    YES   ̈    NO  x

The number of shares outstanding of each of the registrants classes of common stock as of August 10, 2012 is as follows:

Class A Common Stock of $.01 par value, 70,275,222 shares outstanding.

Class
B Common Stock of $.01 par value, 6,859,501 shares outstanding.









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##### Table of Contents

BFC Financial Corporation

TABLE OF CONTENTS



|         |  |                       |  |                                                                                                                               |     |  |     | 
|-------- |  | --------------------- |  | ----------------------------------------------------------------------------------------------------------------------------- | --- |  | --- | 
|         |  |                       |  | Page                                                                                                                          |    
|PART I.  |  | FINANCIAL INFORMATION |  |                                                                                                                               |     | 
|         |  |                       | 
|         |  | Item 1.               |  | Financial Statements:                                                                                                         |     |  |     | 
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Financial Condition as of June 30, 2012 and December 31, 2011  Unaudited                          |     |  | 3   | 
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2012 and 2011  Unaudited                   |     |  | 4   | 
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2012 and
 2011  Unaudited |     |  | 6   | 
|         |  |                       | 
|         |  |                       |  | Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2012 
Unaudited                                |     |  | 7   | 
|         |  |                       | 
|         |  |                       |  | Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011 
Unaudited                             |     |  | 8   | 
|         |  |                       | 
|         |  |                       |  | Notes to Unaudited Consolidated Financial Statements                                                                          |     |  | 10  | 
|         |  |                       | 
|         |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                         |     |  | 66  | 
|         |  |                       | 
|         |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risk                                                                    |     |  | 119 | 
|         |  |                       | 
|         |  | Item 4.               |  | Controls and Procedures                                                                                                       |     |  | 119 | 
|         |  |                      
|PART II. |  | OTHER INFORMATION     |  |                                                                                                                               |     | 
|         |  |                       | 
|         |  | Item 1.               |  | Legal Proceedings                                                                                                             |     |  | 120 | 
|         |  |                       | 
|         |  | Item 1A.              |  | Risk Factors                                                                                                                  |     |  | 122 | 
|         |  |                       | 
|         |  | Item 6.               |  | Exhibits                                                                                                                      |     |  | 122 | 
|         |  |                      
|         |  | SIGNATURES            |  |                                                                                                                               | 124 | 



2



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##### Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BFC Financial Corporation

Consolidated Statements of Financial Condition - Unaudited

(In thousands, except share data)



|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | -------- | --------- | - | ------------ |  | --------- | -
|                                                                                                                                                                   |  | June 30, |           |   | December 31, | 
|                                                                                                                                                                   |  | 2012     |           |   | 2011         | 
|ASSETS                                                                                                                                                             |  |          |           |   |              |  |           |  
|Cash and interest bearing deposits in other banks                                                                                                                  |  | $        | 1,261,284 |   |              |  | 858,789   |  
|Restricted cash ($39,823 in 2012 and $38,913 in 2011 held by variable interest entities (VIEs)                                                                   |  |          | 59,414    |   |              |  | 62,727    |  
|Securities available for sale at fair value                                                                                                                        |  |          | 25,591    |   |              |  | 62,803    |  
|Tax certificates, net of allowance of $3,519 in 2012 and $7,488 in 2011                                                                                            |  |          | 5,293     |   |              |  | 46,488    |  
|Federal Home Loan Bank (FHLB) stock, at cost which approximates fair value                                                                                       |  |          |          |   |              |  | 18,308    |  
|Loans held for sale                                                                                                                                                |  |          | 47,029    |   |              |  | 55,601    |  
|Loans receivable, net of allowance for loan losses of $7,153 in 2012 and $129,887 in 2011                                                                          |  |          | 355,794   |   |              |  | 2,442,236 |  
|Notes receivable, including gross securitized notes of $353,631 in 2012 and $375,904 in                                                                            |  |          |          |   |              |  |           |  
|2011, net of allowance of $67,743 in 2012 and $73,260 in 2011                                                                                                      |  |          | 496,875   |   |              |  | 517,836   |  
|Accrued interest receivable                                                                                                                                        |  |          | 1,862     |   |              |  | 18,432    |  
|Inventory                                                                                                                                                          |  |          | 210,517   |   |              |  | 213,325   |  
|Real estate owned                                                                                                                                                  |  |          | 86,195    |   |              |  | 87,174    |  
|Investments in unconsolidated affiliates                                                                                                                           |  |          | 12,690    |   |              |  | 12,343    |  
|Properties and equipment, net                                                                                                                                      |  |          | 60,078    |   |              |  | 191,568   |  
|Goodwill                                                                                                                                                           |  |          |          |   |              |  | 12,241    |  
|Intangible assets, net                                                                                                                                             |  |          | 64,484    |   |              |  | 72,804    |  
|Assets held for sale                                                                                                                                               |  |          | 2,120,873 |   |              |  | 35,035    |  
|Prepaid Federal Deposit Insurance Corporation (FDIC) deposit insurance assessment                                                                                |  |          |          |   |              |  | 12,715    |  
|Other assets                                                                                                                                                       |  |          | 58,961    |   |              |  | 57,730    |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total assets                                                                                                                                                       |  | $        | 4,866,940 |   |              |  | 4,778,155 |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|LIABILITIES AND EQUITY                                                                                                                                             |  |          |           |   |              |  |           |  
|Liabilities:                                                                                                                                                       |  |          |           |   |              |  |           |  
|Interest bearing deposits                                                                                                                                          |  | $        |          |   |              |  | 2,433,216 |  
|Non-interest bearing deposits                                                                                                                                      |  |          |          |   |              |  | 846,636   |  
|Deposits held for sale                                                                                                                                             |  |          | 3,448,884 |   |              |  |          |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total deposits                                                                                                                                                     |  |          | 3,448,884 |   |              |  | 3,279,852 |  
|Receivable-backed notes payable, (including $352,457 in 2012 and $385,140 in 2011 held by VIEs                                                                     |  |          | 437,895   |   |              |  | 478,098   |  
|Notes and mortgage notes payable and other borrowings                                                                                                              |  |          | 32,284    |   |              |  | 108,533   |  
|Junior subordinated debentures                                                                                                                                     |  |          | 485,992   |   |              |  | 477,316   |  
|Deferred income taxes                                                                                                                                              |  |          | 41,839    |   |              |  | 24,645    |  
|Deferred gain on settlement of investment in subsidiary                                                                                                            |  |          |          |   |              |  | 29,875    |  
|Liabilities related to assets held for sale                                                                                                                        |  |          | 58,199    |   |              |  | 11,156    |  
|Shares subject to mandatory redemption (See Note 11)                                                                                                               |  |          | 12,177    |   |              |  |          |  
|Other liabilities                                                                                                                                                  |  |          | 140,352   |   |              |  | 174,634   |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total liabilities                                                                                                                                                  |  |          | 4,657,622 |   |              |  | 4,584,109 |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Commitments and contingencies (See Note 14)                                                                                                                        |  |          |           |   |              |  |           |  
|Preferred stock of $.01 par value; authorized - 10,000,000 shares: (See Note 11)                                                                                   |  |          |           |   |              |  |           |  
|Redeemable 5% Cumulative Preferred Stock - $.01 par value; authorized 15,000 shares issued and outstanding 15,000 shares with
redemption value of $1,000 per share |  |          |          |   |              |  | 11,029    |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Equity:                                                                                                                                                            |  |          |           |   |              |  |           |  
|Class A common stock of $.01 par value, authorized 150,000,000 shares; issued and outstanding 70,275,222 in 2012 and
70,274,972 in 2011                            |  |          | 703       |   |              |  | 703       |  
|Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,859,501 in 2012 and 6,859,751 in
2011                               |  |          | 69        |   |              |  | 69        |  
|Additional paid-in capital                                                                                                                                         |  |          | 230,330   |   |              |  | 232,705   |  
|Accumulated deficit                                                                                                                                                |  |          | (78,102   | ) |              |  | (100,873  | )
|Accumulated other comprehensive loss                                                                                                                               |  |          | (3,926    | ) |              |  | (12,863   | )
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total BFC Financial Corporation (BFC) shareholders' equity                                                                                                       |  |          | 149,074   |   |              |  | 119,741   |  
|Noncontrolling interests                                                                                                                                           |  |          | 60,244    |   |              |  | 63,276    |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total equity                                                                                                                                                       |  |          | 209,318   |   |              |  | 183,017   |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  
|Total liabilities and equity                                                                                                                                       |  | $        | 4,866,940 |   |              |  | 4,778,155 |  
|                                                                                                                                                                   |  |          |           |   |              |  |           |  

See Notes to Unaudited Consolidated Financial Statements.



3



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##### Table of Contents

BFC Financial Corporation

Consolidated Statements of Operations - Unaudited

(In thousands, except per share data)



|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------- | ------- | - | -------------------------------- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                                                                                                                                                                                             |  | For the Three Months EndedJune 30, |         |   | For the Six Months EndedJune 30, | 
|                                                                                                                                                                                                                             |  | 2012                               |         |   | 2011                             |  |         | 2012 |  |  | 2011    |  
|Revenues                                                                                                                                                                                                                     |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Real Estate and Other:                                                                                                                                                                                                       |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Sales of VOIs                                                                                                                                                                                                                |  | $                                  | 52,215  |   |                                  |  | 45,344  |      |  |  | 95,812  |   |  |  | 81,678  |  
|Fee-based sales commission and other revenues                                                                                                                                                                                |  |                                    | 25,703  |   |                                  |  | 18,607  |      |  |  | 38,481  |   |  |  | 29,642  |  
|Other fee-based services revenue                                                                                                                                                                                             |  |                                    | 18,875  |   |                                  |  | 17,287  |      |  |  | 37,690  |   |  |  | 34,487  |  
|Interest income                                                                                                                                                                                                              |  |                                    | 20,913  |   |                                  |  | 21,974  |      |  |  | 42,077  |   |  |  | 44,407  |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                                                                                                                                                                                             |  |                                    | 117,706 |   |                                  |  | 103,212 |      |  |  | 214,060 |   |  |  | 190,214 |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Financial Services:                                                                                                                                                                                                          |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Interest income                                                                                                                                                                                                              |  |                                    | 7,287   |   |                                  |  | 11,167  |      |  |  | 15,622  |   |  |  | 23,005  |  
|Securities activities, net                                                                                                                                                                                                   |  |                                    |        |   |                                  |  | (1,500  | )    |  |  |        |   |  |  | (1,500  | )
|Gain (loss) on sale of loans                                                                                                                                                                                                 |  |                                    |        |   |                                  |  | 10      |      |  |  | 3       |   |  |  | (89     | )
|Other non-interest income                                                                                                                                                                                                    |  |                                    | 12      |   |                                  |  | 6       |      |  |  | 96      |   |  |  | 19      |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                                                                                                                                                                                             |  |                                    | 7,299   |   |                                  |  | 9,683   |      |  |  | 15,721  |   |  |  | 21,435  |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Total revenues                                                                                                                                                                                                               |  |                                    | 125,005 |   |                                  |  | 112,895 |      |  |  | 229,781 |   |  |  | 211,649 |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Costs and Expenses                                                                                                                                                                                                           |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Real Estate and Other:                                                                                                                                                                                                       |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Cost of VOIs sold                                                                                                                                                                                                            |  |                                    | 6,308   |   |                                  |  | 6,703   |      |  |  | 10,670  |   |  |  | 13,928  |  
|Cost of other resort operations                                                                                                                                                                                              |  |                                    | 11,951  |   |                                  |  | 12,156  |      |  |  | 24,937  |   |  |  | 25,237  |  
|Interest expense                                                                                                                                                                                                             |  |                                    | 12,507  |   |                                  |  | 16,378  |      |  |  | 25,219  |   |  |  | 34,082  |  
|Selling, general and administrative expenses                                                                                                                                                                                 |  |                                    | 63,609  |   |                                  |  | 54,451  |      |  |  | 117,818 |   |  |  | 103,740 |  
|Other expenses                                                                                                                                                                                                               |  |                                    |        |   |                                  |  | 1,239   |      |  |  |        |   |  |  | 915     |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                                                                                                                                                                                             |  |                                    | 94,375  |   |                                  |  | 90,927  |      |  |  | 178,644 |   |  |  | 177,902 |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Financial Services:                                                                                                                                                                                                          |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Interest expense                                                                                                                                                                                                             |  |                                    | 4,161   |   |                                  |  | 3,885   |      |  |  | 8,359   |   |  |  | 7,700   |  
|(Recovery from) provision for loan losses                                                                                                                                                                                    |  |                                    | (627    | ) |                                  |  | 4,313   |      |  |  | (1,392  | ) |  |  | 11,140  |  
|Employee compensation and benefits                                                                                                                                                                                           |  |                                    | 4,269   |   |                                  |  | 6,303   |      |  |  | 9,528   |   |  |  | 11,826  |  
|Occupancy and equipment                                                                                                                                                                                                      |  |                                    | 1,779   |   |                                  |  | 2,794   |      |  |  | 4,026   |   |  |  | 5,938   |  
|Advertising and promotion                                                                                                                                                                                                    |  |                                    | 130     |   |                                  |  | 145     |      |  |  | 283     |   |  |  | 258     |  
|Professional fees                                                                                                                                                                                                            |  |                                    | 3,239   |   |                                  |  | 658     |      |  |  | 9,436   |   |  |  | 2,786   |  
|Recovery on assets held for sale                                                                                                                                                                                             |  |                                    | (1,165  | ) |                                  |  |        |      |  |  | (1,165  | ) |  |  |        |  
|Impairments on loans held for sale                                                                                                                                                                                           |  |                                    | 196     |   |                                  |  | 754     |      |  |  | 459     |   |  |  | 1,382   |  
|Impairment of real estate owned                                                                                                                                                                                              |  |                                    | 1,793   |   |                                  |  | 5,826   |      |  |  | 3,534   |   |  |  | 7,514   |  
|Other expenses                                                                                                                                                                                                               |  |                                    | 1,790   |   |                                  |  | 2,697   |      |  |  | 3,852   |   |  |  | 4,902   |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                                                                                                                                                                                             |  |                                    | 15,565  |   |                                  |  | 27,375  |      |  |  | 36,920  |   |  |  | 53,446  |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Total costs and expenses                                                                                                                                                                                                     |  |                                    | 109,940 |   |                                  |  | 118,302 |      |  |  | 215,564 |   |  |  | 231,348 |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Gain on settlement of investment in subsidiary                                                                                                                                                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  | 11,305  |  
|Gain on extinguishment of debt                                                                                                                                                                                               |  |                                    | 29,875  |   |                                  |  |        |      |  |  | 29,875  |   |  |  |        |  
|Equity in earnings from unconsolidated affiliates                                                                                                                                                                            |  |                                    | 154     |   |                                  |  | 475     |      |  |  | 312     |   |  |  | 2,252   |  
|Other income                                                                                                                                                                                                                 |  |                                    | 419     |   |                                  |  | 403     |      |  |  | 1,005   |   |  |  | 977     |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Income (loss) from continuing operations before income taxes                                                                                                                                                                 |  |                                    | 45,513  |   |                                  |  | (4,529  | )    |  |  | 45,409  |   |  |  | (5,165  | )
|Less: Provision for income taxes                                                                                                                                                                                             |  |                                    | 10,813  |   |                                  |  | 6,520   |      |  |  | 16,014  |   |  |  | 8,665   |  
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Income (loss) from continuing operations                                                                                                                                                                                     |  |                                    | 34,700  |   |                                  |  | (11,049 | )    |  |  | 29,395  |   |  |  | (13,830 | )
|(Loss) income from discontinued operations, net of income tax benefit of $1,328 and $20,634 during the three months ended
June 30, 2012 and 2011; and $1,797 and $20,986 during the six months ended June 30, 2012 and 2011. |  |                                    | (5,324  | ) |                                  |  | 8,066   |      |  |  | (2,380  | ) |  |  | (1,479  | )
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss)                                                                                                                                                                                                            |  |                                    | 29,376  |   |                                  |  | (2,983  | )    |  |  | 27,015  |   |  |  | (15,309 | )
|Less: Net income (loss) attributable to noncontrolling interests                                                                                                                                                             |  |                                    | 3,697   |   |                                  |  | 3,955   |      |  |  | 4,056   |   |  |  | (5,760  | )
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss) attributable to BFC                                                                                                                                                                                        |  |                                    | 25,679  |   |                                  |  | (6,938  | )    |  |  | 22,959  |   |  |  | (9,549  | )
|Preferred stock dividends                                                                                                                                                                                                    |  |                                    |        |   |                                  |  | (187    | )    |  |  | (188    | ) |  |  | (375    | )
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss) to common shareholders                                                                                                                                                                                     |  | $                                  | 25,679  |   |                                  |  | (7,125  | )    |  |  | 22,771  |   |  |  | (9,924  | )
|                                                                                                                                                                                                                             |  |                                    |         |   |                                  |  |         |      |  |  |         |   |  |  |         |  





(CONTINUED)

See Notes to Unaudited Consolidated Financial Statements.



4



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##### Table of Contents

BFC Financial Corporation

Consolidated Statements of Operations - Unaudited

(In thousands, except per share data)



|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|----------------------------------------------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------- | ---- |  |  | ------ |  |  |  | ------ | -
|                                                                                    |  | For the Three Months EndedJune 30, |        |   | For the Six Months EndedJune 30, | 
|                                                                                    |  | 2012                               |        |   | 2011                             |  |         | 2012 |  |  | 2011   | 
|Basic and Diluted Earnings (Loss) Per Common Share Attributable to BFC(Note 16):    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Basic Earnings (Loss) Per Common Share                                              |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Earnings (loss) per share from continuing operations (1)                            |  | $                                  | 0.36   |   |                                  |  | (0.15   | )    |  |  | 0.28   |  |  |  | (0.12  | )
|(Loss) earnings per share from discontinued operations                              |  |                                    | (0.04  | ) |                                  |  | 0.05    |      |  |  | 0.01   |  |  |  | (0.01  | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Net earnings (loss) per common share (1)                                            |  | $                                  | 0.32   |   |                                  |  | (0.10   | )    |  |  | 0.29   |  |  |  | (0.13  | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Diluted Earnings (Loss) Per Common Share                                            |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Earnings (loss) per share from continuing operations (1)                            |  | $                                  | 0.36   |   |                                  |  | (0.15   | )    |  |  | 0.28   |  |  |  | (0.12  | )
|(Loss) earnings per share from discontinued operations                              |  |                                    | (0.04  | ) |                                  |  | 0.05    |      |  |  | 0.01   |  |  |  | (0.01  | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Net earnings (loss) per common share (1)                                            |  | $                                  | 0.32   |   |                                  |  | (0.10   | )    |  |  | 0.29   |  |  |  | (0.13  | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Basic weighted average number of common shares outstanding                          |  |                                    | 77,135 |   |                                  |  | 75,381  |      |  |  | 77,135 |  |  |  | 75,381 |  
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Diluted weighted average number of common and common equivalent shares outstanding  |  |                                    | 78,820 |   |                                  |  | 75,381  |      |  |  | 78,267 |  |  |  | 75,381 |  
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Amounts attributable to BFC common shareholders:                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Income (loss) from continuing operations, net of tax and noncontrolling interests   |  | $                                  | 28,513 |   |                                  |  | (11,119 | )    |  |  | 22,038 |  |  |  | (9,410 | )
|(Loss) income from discontinued operations, net of tax and noncontrolling interests |  |                                    | (2,834 | ) |                                  |  | 3,994   |      |  |  | 733    |  |  |  | (514   | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  
|Net income (loss) to common shareholders                                            |  | $                                  | 25,679 |   |                                  |  | (7,125  | )    |  |  | 22,771 |  |  |  | (9,924 | )
|                                                                                    |  |                                    |        |   |                                  |  |         |      |  |  |        |  |  |  |        |  



|(1) | In accordance with the applicable accounting guidance, upon reclassification of mandatorily redeemable preferred stock to a liability, the difference between the fair
value of the liability and its carrying amount results in an adjustment to paid in capital, which adjustment is added to or deducted from net earnings available to common shareholders in the calculation of earnings per share. As such, earnings per
share for the three and six months ended June 30, 2012 was adjusted to reflect the decrease in equity of approximately $0.5 million. See Note 11 for additional information regarding the Companys shares subject to mandatory redemption.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Unaudited Consolidated Financial Statements.



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##### Table of Contents

BFC Financial Corporation

Consolidated Statements of Comprehensive Income (Loss) - Unaudited

(In thousands)



|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|-------------------------------------------------------------------------- |  | ---------------------------------- | ------ |  | -------------------------------- |  | ------- | ---- |  |  | ------ |  |  |  | ------- | -
|                                                                           |  | For the Three Months EndedJune 30, |        |  | For the Six Months EndedJune 30, | 
|                                                                           |  | 2012                               |        |  | 2011                             |  |         | 2012 |  |  | 2011   | 
|Net income (loss)                                                          |  | $                                  | 29,376 |  |                                  |  | (2,983  | )    |  |  | 27,015 |  |  |  | (15,309 | )
|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|Other comprehensive income (loss), net of tax:                             |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|Unrealized gains (loss) on securities available for sale                   |  |                                    | 4,785  |  |                                  |  | (4,053  | )    |  |  | 8,614  |  |  |  | (4,917  | )
|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|Other comprehensive income (loss), net of tax                              |  |                                    | 4,785  |  |                                  |  | (4,053  | )    |  |  | 8,614  |  |  |  | (4,917  | )
|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|Comprehensive income (loss)                                                |  |                                    | 34,161 |  |                                  |  | (7,036  | )    |  |  | 35,629 |  |  |  | (20,226 | )
|Less: Comprehensive income (loss) attributable to noncontrolling interests |  |                                    | 3,670  |  |                                  |  | 4,738   |      |  |  | 3,733  |  |  |  | (5,390  | )
|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  
|Comprehensive income (loss) attributable to BFC                            |  | $                                  | 30,491 |  |                                  |  | (11,774 | )    |  |  | 31,896 |  |  |  | (14,836 | )
|                                                                           |  |                                    |        |  |                                  |  |         |      |  |  |        |  |  |  |         |  



See Notes to Unaudited
Consolidated Financial Statements.



6



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##### Table of Contents

BFC Financial Corporation

Consolidated Statement of Changes in Equity - Unaudited

For the Six Months Ended June 30, 2012

(In thousands)



|                                                                                             |  |                   |        |  |         |  |       |         |  |   |            |  |  |             |    |  |         |   |         |               |  |   |             |   |  |              |         |   |        |   |         |   |  |   |        |   |  |   |         |  
|-------------------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ------- |  | ----- | ------- |  | - | ---------- |  |  | ----------- | -- |  | ------- | - | ------- | ------------- |  | - | ----------- | - |  | ------------ | ------- | - | ------ | - | ------- | - |  | - | ------ | - |  | - | ------- | -
|                                                                                             |  |                   |        |  |         |  |       |         |  |   |            |  |  |             |    |  |         |   |         | Accumulated   |  |   |             |   |  |              |         |   |        |  
|                                                                                             |  |                   |        |  |         |  |       |         |  |   |            |  |  |             |    |  |         |   |         | Other         |  |   | Total       |   |  | Non-         |         |   |        |  
|                                                                                             |  | Shares of Common  |        |  | Class A |  |       | Class B |  |   | Additional |  |  |             |    |  | Compre- |   |         | BFC           |  |   | controlling |   |  |              |        
|                                                                                             |  | Stock Outstanding |        |  | Common  |  |       | Common  |  |   | Paid-in    |  |  | Accumulated |    |  | hensive |   |         | Shareholders |  |   | Interest in |   |  | Total        |        
|                                                                                             |  | Class A           |        |  | Class B |  |       | Stock   |  |   | Stock      |  |  | Capital     |    |  | Deficit |   |         | Loss          |  |   | Equity      |   |  | Subsidiaries |         |   | Equity |  
|Balance, December 31, 2011                                                                   |  |                   | 70,275 |  |         |  | 6,860 |         |  | $ | 703        |  |  | $           | 69 |  |         | $ | 232,705 |               |  | $ | (100,873    | ) |  | $            | (12,863 | ) |        | $ | 119,741 |   |  | $ | 63,276 |   |  | $ | 183,017 |  
|Net income                                                                                   |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   |        |               |  |   | 22,959      |   |  |              |        |   |        |   | 22,959  |   |  |   | 4,056  |   |  |   | 27,015  |  
|Other comprehensive income (loss)                                                            |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   |        |               |  |   |            |   |  |              | 8,937   |   |        |   | 8,937   |   |  |   | (323   | ) |  |   | 8,614   |  
|Net effect of subsidiaries capital transactions attributable to BFC                         |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   | 738     |               |  |   |            |   |  |              |        |   |        |   | 738     |   |  |   |       |   |  |   | 738     |  
|Noncontrolling interest net effect of subsidiaries capital transactions                     |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   |        |               |  |   |            |   |  |              |        |   |        |   |        |   |  |   | (6,765 | ) |  |   | (6,765  | )
|Decrease in equity due to the change in fair value of shares subject to mandatory redemption |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   | (472    | )             |  |   |            |   |  |              |        |   |        |   | (472    | ) |  |   |       |   |  |   | (472    | )
|Dividends on 5% Preferred Stock                                                              |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   |        |               |  |   | (188        | ) |  |              |        |   |        |   | (188    | ) |  |   |       |   |  |   | (188    | )
|Share-based compensation                                                                     |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   | 205     |               |  |   |            |   |  |              |        |   |        |   | 205     |   |  |   |       |   |  |   | 205     |  
|Decrease in equity attributable to Woodbridges dissenting holders                           |  |                   |       |  |         |  |      |         |  |   |           |  |  |             |   |  |         |   | (2,846  | )             |  |   |            |   |  |              |        |   |        |   | (2,846  | ) |  |   |       |   |  |   | (2,846  | )
|                                                                                             |  |                   |        |  |         |  |       |         |  |   |            |  |  |             |    |  |         |   |         |               |  |   |             |   |  |              |         |   |        |   |         |   |  |   |        |   |  |   |         |  
|Balance, June 30, 2012                                                                       |  |                   | 70,275 |  |         |  | 6,860 |         |  | $ | 703        |  |  | $           | 69 |  |         | $ | 230,330 |               |  | $ | (78,102     | ) |  | $            | (3,926  | ) |        | $ | 149,074 |   |  | $ | 60,244 |   |  | $ | 209,318 |  
|                                                                                             |  |                   |        |  |         |  |       |         |  |   |            |  |  |             |    |  |         |   |         |               |  |   |             |   |  |              |         |   |        |   |         |   |  |   |        |   |  |   |         |  

See Notes to Unaudited Consolidated Financial Statements.



7



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##### Table of Contents

BFC Financial Corporation

Consolidated Statements of Cash Flows - Unaudited

(In thousands)



|                                                                             |  |                          |           |   |      |  |          |  
|---------------------------------------------------------------------------- |  | ------------------------ | --------- | - | ---- |  | -------- | -
|                                                                             |  | For the Six Months Ended |          
|                                                                             |  | June 30,                 |          
|                                                                             |  | 2012                     |           |   | 2011 | 
|Net cash provided by operating activities                                    |  | $                        | 73,680    |   |      |  | 111,895  |  
|                                                                             |  |                          |           |   |      |  |          |  
|Investing activities:                                                        |  |                          |           |   |      |  |          |  
|Proceeds from redemption of tax certificates                                 |  |                          | 22,526    |   |      |  | 40,459   |  
|Purchase of investment securities and tax certificates                       |  |                          | (765      | ) |      |  | (18,567  | )
|Proceeds from the maturities of interest bearing deposits                    |  |                          | 5,655     |   |      |  | 25,283   |  
|Proceeds from sales of securities available for sale                         |  |                          |          |   |      |  | 9,597    |  
|Proceeds from maturities of securities available for sale                    |  |                          | 12,287    |   |      |  | 126,679  |  
|Purchase of securities available for sale                                    |  |                          |          |   |      |  | (9,932   | )
|Cash paid in settlement of liabilities held for sale                         |  |                          | (668      | ) |      |  |         |  
|Redemption of FHLB stock                                                     |  |                          | 9,980     |   |      |  | 11,943   |  
|Distributions from unconsolidated affiliates                                 |  |                          | 82        |   |      |  | 139      |  
|Net repayments of loans                                                      |  |                          | 230,632   |   |      |  | 232,518  |  
|Proceeds from the sales of loans transferred to held for sale                |  |                          | 1,000     |   |      |  | 27,793   |  
|Proceeds from sales of real estate owned                                     |  |                          | 20,553    |   |      |  | 10,197   |  
|Purchases of office property and equipment, net                              |  |                          | (1,185    | ) |      |  | (2,429   | )
|Proceeds from the sale of communities division, net                          |  |                          | 27,750    |   |      |  |         |  
|Net cash outflow from sale of Tampa branches                                 |  |                          |          |   |      |  | (257,221 | )
|                                                                             |  |                          |           |   |      |  |          |  
|Net cash provided by investing activities                                    |  |                          | 327,847   |   |      |  | 196,459  |  
|                                                                             |  |                          |           |   |      |  |          |  
|Financing activities:                                                        |  |                          |           |   |      |  |          |  
|Net increase (decrease) in deposits                                          |  |                          | 170,677   |   |      |  | (144,400 | )
|Net repayments of FHLB advances                                              |  |                          |          |   |      |  | (170,020 | )
|Net decrease in securities sold under agreements to repurchase               |  |                          |          |   |      |  | (21,524  | )
|Net decrease in short term borrowings and federal funds purchased            |  |                          |          |   |      |  | (220     | )
|Repayment of notes, mortgage notes payable and other borrowings              |  |                          | (126,602  | ) |      |  | (103,933 | )
|Proceeds from notes, mortgage notes payable and other borrowings             |  |                          | 29,824    |   |      |  | 25,301   |  
|Payments for debt issuance costs                                             |  |                          | (990      | ) |      |  | (1,090   | )
|Preferred stock dividends paid                                               |  |                          |          |   |      |  | (375     | )
|Proceeds from issuance of subsidiaries' common stock to non-BFC shareholders |  |                          |          |   |      |  | 1,001    |  
|Distributions to non-controlling interest                                    |  |                          | (7,350    | ) |      |  | (4,142   | )
|                                                                             |  |                          |           |   |      |  |          |  
|Net cash provided by (used in) financing activities                          |  |                          | 65,559    |   |      |  | (419,402 | )
|                                                                             |  |                          |           |   |      |  |          |  
|Increase (decrease) in cash and cash equivalents                             |  |                          | 467,086   |   |      |  | (111,048 | )
|Cash and cash equivalents at beginning of period (1)                         |  |                          | 853,132   |   |      |  | 588,846  |  
|Cash and cash equivalents held for sale                                      |  |                          | (59,431   | ) |      |  | 5,850    |  
|                                                                             |  |                          |           |   |      |  |          |  
|Cash and cash equivalents at end of period (2)                               |  | $                        | 1,260,787 |   |      |  | 483,648  |  
|                                                                             |  |                          |           |   |      |  |          |  

(CONTINUED)

See Notes to Unaudited Consolidated Financial Statements.



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##### Table of Contents

BFC Financial Corporation

Consolidated Statements of Cash Flows - Unaudited

(In thousands)



|                                                                                                                        |  |                          |         |   |      |  |        |  
|----------------------------------------------------------------------------------------------------------------------- |  | ------------------------ | ------- | - | ---- |  | ------ | -
|                                                                                                                        |  | For the Six Months Ended |        
|                                                                                                                        |  | June 30,                 |        
|                                                                                                                        |  | 2012                     |         |   | 2011 | 
|Supplemental cash flow information:                                                                                     |  |                          |         |   |      |  |        |  
|Interest paid on borrowings and deposits                                                                                |  | $                        | 30,305  |   |      |  | 39,024 |  
|Income taxes paid                                                                                                       |  |                          | 3,170   |   |      |  | 4,488  |  
|Income tax refunded                                                                                                     |  |                          | (51     | ) |      |  | (3,164 | )
|                                                                                                                        |  |                         
|Supplementary disclosure of non-cash investing and financing activities:                                                |  |                          |         |   |      |  |        |  
|Loans and tax certificates transferred to real estate owned                                                             |  |                          | 21,887  |   |      |  | 25,074 |  
|Loans receivable transferred to loans held-for-sale                                                                     |  |                          | 16,140  |   |      |  | 55,966 |  
|Inventory acquired through financing                                                                                    |  |                          | 1,270   |   |      |  |       |  
|Increase (decrease) in accumulated other comprehensive income (loss), net of taxes                                      |  |                          | 8,614   |   |      |  | (4,917 | )
|Net increase (decrease) in BFC shareholders equity from the effect of subsidiaries capital transactions, net of
taxes |  |                          | 738     |   |      |  | (1,088 | )
|Decrease in equity attributable to Woodbridges dissenting holders                                                      |  |                          | (2,846  | ) |      |  |       |  
|Decrease in equity due to the change in fair value of shares subject to mandatory redemption                            |  |                          | (472    | ) |      |  |       |  
|Change due to the re-classification of redeemable preferred stock to shares subject to mandatory redemption             |  |                          | (11,029 | ) |      |  |       |  



|(1) | Included in cash and interest bearing deposits in other banks on the balance sheet as of December 31, 2011 and 2010 was $5.7 million and $45.6 million,
respectively, of time deposits. These time deposits had original maturities of greater than 90 days and are not considered cash equivalents.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Included in cash and interest bearing deposits in other banks on the balance sheet as of June 30, 2012 and 2011 was $0.5 million and $20.3 million, respectively,
of time deposits. These time deposits had original maturities of greater than 90 days and are not considered cash equivalents.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

See Notes to Unaudited Consolidated Financial Statements.



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BFC Financial Corporation

Notes to Unaudited Consolidated Financial Statements

1.     Presentation of Interim Financial Statements

BFC Financial Corporation (BFC or, unless otherwise indicated or the context otherwise requires, we,
us, our or the Company) is a holding company whose principal holdings include controlling interests in BBX Capital Corporation (formerly BankAtlantic Bancorp, Inc.) and its subsidiaries (BBX Capital)
and Bluegreen Corporation and its subsidiaries (Bluegreen), and a non-controlling interest in Benihana Inc. (Benihana). BBX Capitals principal asset until July 31, 2012 was its investment in BankAtlantic and its
subsidiaries (BankAtlantic). BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, provides traditional retail banking services and a wide range of commercial banking products and related financial services
through a broad network of community branches located in Florida. On July 31, 2012, BBX Capital completed its previously announced sale to BB&T Corporation (BB&T) of all of the issued and outstanding shares of capital stock of
BankAtlantic (the stock sale and related transactions described herein are collectively referred to as the Transaction). As a result of their respective historic direct and indirect ownership interests in BankAtlantic, both BBX Capital
and BFC are currently unitary savings and loan holding companies subject to examination and regulation by the Board of Governors of the Federal Reserve System (the Federal Reserve). In connection with the closing of the Transaction with
BB&T, each of BBX Capital and BFC has requested from the Federal Reserve deregistration as a savings and loan holding company and, pending approval by the Federal Reserve, both BBX Capital and BFC expect upon such deregistration to no longer be
subject to regulation by the Federal Reserve or to be subject to restrictions applicable to savings and loan holding companies.

As a holding
company with controlling positions in BBX Capital and Bluegreen, generally accepted accounting principles (GAAP) require the consolidation of the financial results of both entities. As a consequence, the assets and liabilities of both
entities are presented on a consolidated basis in BFCs financial statements. However, except as otherwise noted, the debts and obligations of BBX Capital and Bluegreen as well as BFCs other consolidated entities, including BFCs
wholly owned subsidiary, Woodbridge Holdings, LLC (Woodbridge), are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent a dividend or distribution. The
recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At June 30, 2012, BFC had an approximately 53% economic ownership interest in BBX Capital and an
approximately 54% economic ownership interest in Bluegreen.

The Companys business activities currently consist of (i) Real Estate
and Other business activities and (ii) Financial Services. We currently report the results of our business activities through five segments. Three of the segments relate to our Real Estate and Other business activities. These segments are: BFC
Activities; Real Estate Operations; and Bluegreen Resorts. Our other two segments  BankAtlantics commercial lending reporting unit (CLRU) and BBX Capital Parent Company (which represents the operations of BBX Capital at its
parent company level)  relate to our Financial Services business activities. As discussed below, discontinued operations include the results of Bluegreen Communities and BankAtlantics community banking, investment, capital services and
tax certificate reporting units. Cypress Creek Holdings, LLC (Cypress Creek Holdings) is also reported as a discontinued operation. See Note 3 for additional information regarding discontinued operations.

On November 11, 2011, BFC entered into a definitive merger agreement with Bluegreen. Pursuant to the terms of the merger agreement, if the merger is
consummated, Bluegreen will become a wholly-owned subsidiary of BFC, and Bluegreens shareholders (other than BFC) will be entitled to receive eight shares of BFCs Class A Common Stock for each share of Bluegreens common stock
that they hold at the effective time of the merger (as adjusted in connection with the reverse stock split expected to be effected by BFC prior to the consummation of the merger). The merger agreement was approved by BFCs and Bluegreens
respective shareholders on June 19, 2012. At that time, BFCs shareholders also approved an amendment of BFCs Articles of Incorporation relating to the contemplated reverse stock split and a reduction in the authorized number of shares of
BFCs common stock. However, consummation of the merger remains subject to certain closing conditions, including the listing of BFCs Class A Common Stock on a national securities exchange at the effective time of the merger. The
merger agreement provides for the transaction to be consummated by September 30, 2012. BFC and Bluegreen are working to satisfy the conditions required to consummate the merger, including BFCs pursuit of the listing of its Class A Common
Stock. The transaction will close when all conditions in the merger agreement have been met. There is no assurance that the conditions for the consummation of the merger will be met or that the merger will be consummated.



10



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##### Table of Contents

Following the announcement of our entry into the merger agreement, purported class action lawsuits seeking
to enjoin the merger or, if it is completed, to recover relief as determined by the presiding court to be appropriate were filed. See Note 14 for further information regarding this litigation.

On May 4, 2012, Bluegreen sold substantially all of the assets that comprised its Bluegreen Communities business to Southstar Development Partners,
Inc. (Southstar) for a purchase price of $29.0 million in cash. Southstar also agreed to pay an amount equal to 20% of the net proceeds (as calculated in accordance with the terms of the agreement) it receives upon its sale, if any, of
two specified parcels of real estate purchased by Southstar under the agreement. Assets excluded from the sale included primarily Bluegreens Communities notes receivable portfolio. See Note 3 for additional information. Bluegreen Communities
was previously reported as a separate segment in our Real Estate and Other business activities and has been classified as a discontinued operation in all periods presented in the accompanying consolidated financial statements.

As indicated above, on July 31, 2012, BBX Capital completed the sale of BankAtlantic to BB&T pursuant to the terms of the Stock Purchase
Agreement between BBX Capital and BB&T dated November 1, 2011, as amended (the BB&T Agreement). Under the terms of the BB&T Agreement, prior to the closing of the Transaction, BankAtlantic formed two subsidiaries,
BBX Capital Asset Management, LLC (CAM) and Florida Asset Resolution Group, LLC (FAR). BankAtlantic contributed to FAR certain performing and non-performing loans, tax certificates, and real estate owned that had an aggregate
carrying value on BankAtlantics balance sheet of approximately $358 million as of June 30, 2012. FAR assumed all liabilities related to these assets. BankAtlantic also contributed approximately $37 million in cash to FAR and thereafter
distributed all of the membership interests in FAR to BBX Capital. At the closing of the Transaction, BBX Capital transferred to BB&T 95% of the outstanding preferred membership interests in FAR in connection with BB&Ts assumption of
BBX Capitals outstanding TruPs obligations, as described in further detail below. BBX Capital continues to hold the remaining 5% of FARs preferred membership interests. Under the terms of the Amended and Restated Limited Liability
Company of FAR, which was entered into by BBX Capital and BB&T at the closing, BB&T will hold its 95% preferred interest in the net cash flows of FAR until such time as it has recovered $285 million in preference amount plus a priority
return of LIBOR + 200 basis points per annum on any unpaid preference amount. At that time, BB&Ts interest in FAR will terminate, and BBX Capital will thereafter be entitled to any and all residual proceeds from FAR through its ownership
of FARs Class R units. It is expected that the assets (other than cash) contributed to FAR will be monetized over a period of seven years, or longer provided BB&Ts preference amount is repaid within such seven-year period. BBX
Capital entered into an incremental $35 million guarantee in BB&Ts favor to further assure BB&Ts recovery of the $285 million preference amount within seven years.

Prior to the closing of the Transaction, BankAtlantic contributed to CAM, certain non-performing commercial loans, commercial real estate owned and previously written off assets that had an aggregate
carrying value on BankAtlantics balance sheet of $126 million as of June 30, 2012. CAM assumed all liabilities related to these assets. BankAtlantic also contributed approximately $81 million in cash to CAM. Prior to the closing of the
Transaction, BankAtlantic distributed all of the membership interests in CAM to BBX Capital. CAM remains a wholly owned subsidiary of BBX Capital.

Pursuant to the BB&T Agreement, the cash consideration exchanged by the parties at the closing of the Transaction in connection with the sale of BankAtlantics stock was based on the deposit
premium and the net asset value of BankAtlantic, in each case as calculated pursuant to the terms of the BB&T Agreement, including, with respect to the net asset value of BankAtlantic, after giving effect to the asset contributions and
membership interest distributions by BankAtlantic described above. Based on financial information as of June 30, 2012 and the preliminary calculations of the deposit premium (which was estimated to be $315.9 million) and the net asset value of
BankAtlantic, BBX Capital received from BB&T a cash payment related to the sale of BankAtlantics stock of approximately $6.4 million. However, the deposit premium and net asset value of BankAtlantic as well as the resulting cash payment
made to BBX Capital are all estimates based on available financial information as of June 30, 2012. Under the terms of the BB&T Agreement, these amounts are subject to adjustment post-closing as all relevant financial information is
reviewed and approved by the parties, and the cash payment made to BBX Capital may be less than the amount indicated above or BBX Capital may be required to make a net cash payment to BB&T. BBX Capital expects to recognize a $307 million gain in
connection with the Transaction, and



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based on the Companys approximately 53% ownership interest in BBX Capital, BFC expects to recognize a gain of approximately $165.7 million in connection with the Transaction, including
approximately $2.7 million related to purchase accounting adjustments. However, the amount of gain recognized by BBX Capital and BFC is subject to adjustment based on the final balance sheet reconciliation procedures described above

Under the terms of the BB&T Agreement, at the closing of the Transaction, BB&T assumed the obligations with respect to BBX Capitals
approximately $285 million in principal amount of outstanding trust preferred securities (TruPs), and BBX Capital paid BB&T approximately $51.3 million, representing all accrued and unpaid interest on the TruPs through closing. BBX
Capital also paid approximately $2.3 million for certain legal fees and expenses incurred by trustees with respect to the previously disclosed litigation relating to the Transaction brought by certain trustees and holders of the TruPs.

Based on the probable sale of BankAtlantic to BB&T, as of March 31, 2012, the assets and liabilities then anticipated to be transferred to
BB&T were reclassified as Assets held for sale, Deposits held for sale and Other liabilities held for sale. As such, the assets and liabilities transferred to BB&T, consisting of all of BankAtlantics
assets and liabilities less the assets and liabilities to be retained in CAM and FAR, are presented as Assets held for sale and Liabilities held for sale in the unaudited Consolidated Statement of Financial Condition as of
June 30, 2012. While the majority of cash and interest bearing deposits in other banks were transferred to BB&T upon closing of the Transaction, with the exception of cash at BankAtlantics branches and automated teller machines, the
cash and interest bearing deposits transferred to BB&T are not presented as Assets held for sale as of June 30, 2012. The assets and liabilities transferred to BB&T were measured as of June 30, 2012 on a combined basis
as a single disposal group at the lower of cost or fair value less costs to sell. Accordingly, the assets and liabilities held for sale are presented in the unaudited Consolidated Statement of Financial Condition as of June 30, 2012 based on
their carrying value as the Company recorded a gain associated with the Transaction.

BankAtlantics community banking, investment,
capital services and tax certificate reporting units are reflected as Discontinued Operations in the unaudited Consolidated Statements of Operations for all periods presented. BBX Capital is continuing to service and manage and may
originate commercial loans in the future and as a result, the results of operations for the Commercial Lending reporting unit are included in the unaudited Consolidated Statement of Operations as continuing operations for all periods presented. The
assets and liabilities transferred to BB&T were not reclassified to assets and liabilities held for sale in the Consolidated Statement of Financial Condition as of December 31, 2011. The Consolidated Statement of Stockholders
(Deficit) Equity, Consolidated Statements of Comprehensive (Loss) Income and Consolidated Statement of Cash Flows remain unchanged from prior period historical presentation for all periods presented. Additionally, pursuant to the Agreement, BBX
Capital agreed to sell to BB&T certain assets and liabilities associated with its Commercial Lending reporting unit and these assets and liabilities are included in assets and liabilities held for sale in the Consolidated Statement of Financial
Condition as of June 30, 2012. Similarly, BBX Capital will retain certain assets and liabilities associated with the disposed reporting units and these assets and liabilities are included in the Consolidated Statement of Financial Condition in
their respective line items as of June 30, 2012.

The accompanying unaudited consolidated financial statements have been prepared in
accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In management's opinion, the accompanying unaudited consolidated
financial statements contain all adjustments, which include normal recurring adjustments, as are necessary for a fair statement of the Company's consolidated financial condition at June 30, 2012; the consolidated results of operations and
comprehensive income (loss) for the three and six months ended June 30, 2012 and 2011; cash flows for the six months ended June 30, 2012 and 2011; and the changes in consolidated equity for the six months ended June 30, 2012.
Operating results for the three and six months ended June 30, 2012 are not necessarily indicative of the results that may be expected for the year ending December 31, 2012. These unaudited consolidated financial statements and related
notes are presented as permitted by Form 10-Q and should be read in conjunction with the Companys audited consolidated financial statements and footnotes thereto included in Amendment No.1 to the Companys Annual Report on Form 10-K/A for
the year ended December 31, 2011. All significant inter-company balances and transactions have been eliminated in consolidation. As used throughout this document, the term fair value reflects the Companys estimate of fair
value as discussed herein. Certain amounts for prior periods have been reclassified to conform to the current periods presentation.

During the quarter ended March 31, 2012, management identified an error in its cost of sales and other miscellaneous accounts and recorded an out of
period adjustment related to prior quarters and years. The impact of the errors was: an understatement of cost of sales of VOIs sold of $1.3 million; an overstatement of other expenses



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of $300,000; an understatement of net loss from continuing operations of $1.0 million; an overstatement of net income attributable to noncontrolling interest of $608,000; an overstatement of
provision for income taxes of $402,000; and an understatement of net loss attributable to BFC of $22,000. Management determined, after evaluating the quantitative and qualitative aspects of these corrections, that our current and prior period
financial statements were not materially misstated. Furthermore, management does not believe that these adjustments will be material to its estimated results of operations for the year ended December 31, 2012.

2.    Liquidity and Regulatory Considerations

BFC

Regulatory Considerations

As a
result of its position as the controlling shareholder of BBX Capital, BFC is currently a unitary savings and loan holding company subject to examination and regulation by the Federal Reserve. Effective July 21, 2011, pursuant to the
Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), the Federal Reserve succeeded to the supervisory authority previously held by the Office of Thrift Supervision (OTS).

BFC, on a parent company only basis, previously committed that it will not, without the prior written non-objection of its primary regulator,
(i) incur or issue any additional debt or debt securities, increase lines of credit or guarantee the debt of any other entity or (ii) make dividend payments on its stock. BFC has determined not to seek the Federal Reserves written
non-objection to the dividend payments on its preferred stock for each of the quarters ended December 31, 2011, March 31, 2012 and June 30, 2012 and, therefore, has not yet made the dividend payments. Unpaid dividends on
BFCs outstanding preferred stock will cumulate, and it is anticipated that payment of unpaid cumulative dividends will be made following BFCs deregistration as a unitary savings and loan holding company. As described in Note 1, BFC has
requested deregistration as a result of BBX Capitals sale of BankAtlantic to BB&T on July 31, 2012. If such request is approved, then upon deregistration, dividend payments by BFC, including with respect to its outstanding preferred
stock, will no longer require the prior written non-objection of the Federal Reserve. As of June 30, 2012, unpaid dividend payments totaled approximately $563,000, and such amount is included in shares subject to mandatory redemption in the
accompanying consolidated statement of financial condition as of June 30, 2012.

Liquidity Considerations

Except as otherwise noted, the debts and obligations of BBX Capital, Bluegreen and Woodbridge are not direct obligations of BFC and generally are
non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution from those entities. BFCs principal sources of liquidity are its available cash and short-term investments.

We expect to use our available funds to fund operations and meet our obligations. We may also use available funds to make additional investments in the
companies within our consolidated group, invest in equity securities and other investments, or repurchase shares of our common stock pursuant to our share repurchase program. On September 21, 2009, our board of directors approved a share
repurchase program which authorizes the repurchase of up to 20,000,000 shares of Class A Common Stock and Class B Common Stock at an aggregate cost of up to $10 million. The share repurchase program replaced our $10 million repurchase program
that our board of directors approved in October 2006 which placed a limitation on the number of shares which could be repurchased under the program at 1,750,000 shares of Class A Common Stock. The current program, like the prior program,
authorizes management, at its discretion, to repurchase shares from time to time subject to market conditions and other factors. No shares were repurchased during the three or six months ended June 30, 2012, or during the years ended
December 31, 2011 or 2010.

BFC has not received cash dividends from BBX Capital since March 2009. BBX Capital may only pay dividends if
and when declared by its board of directors, a majority of whom are independent directors under the listing standards of the New York Stock Exchange (the NYSE). In addition, pending approval of its request for deregistration as a unitary
savings and loan holding company, BBX Capitals payment of dividends is subject to the oversight of the Federal Reserve.

BFC has never
received cash dividends from Bluegreen. Certain of Bluegreens credit facilities contain terms which prohibit the payment of cash dividends, and Bluegreen may only pay dividends subject to such restrictions and declaration by its board of
directors, a majority of whom are independent directors under the listing standards of the NYSE.



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During March 2012, a registration statement on Form S-3 was filed by Benihana and declared effective by the
SEC, under which we may sell any and all of the shares of Benihanas Common Stock that we own. As of June 30, 2012, we owned 1,582,577 shares of Benihanas Common Stock. On July 13, 2012, we entered into a Rule 10b5-1 Trading
Plan providing for the sale of up to an aggregate of 150,000 shares of Benihanas Common Stock from time to time until January 28, 2013 at a minimum predetermined price per share. Sales commenced under the plan on July 30, 2012. The
proceeds we receive from sales of Benihanas Common Stock will depend on the timing of the sale and the market price of Benihanas Common Stock.

On May 22, 2012, Benihana entered into an Agreement and Plan of Merger with Safflower Holdings Corp. which provides for Safflowers acquisition of Benihana for a purchase price of $16.30 per
share of Benihanas Common Stock. The proceeds that we receive in connection with the merger, if consummated, will depend on the number of shares of Benihanas Common Stock that we own at the effective time of the merger. Consummation of
the merger is subject to certain closing conditions, including the approval of Benihanas stockholders and regulatory clearance. Benihana has indicated that, assuming the satisfaction of all closing conditions, this merger is expected to close
during August 2012.

We believe that our current financial condition and credit relationships, together with anticipated cash flows from other
sources of funds, including the sale of Benihanas Common Stock and/or the proceeds we receive in exchange for such stock upon the consummation, if any, of Benihanas currently proposed merger, and, to the extent determined to be
advisable, proceeds from the disposition of properties or investments, will allow us to meet our anticipated near-term liquidity needs. With respect to long-term liquidity requirements, in addition to the foregoing, we may also, subject to the
receipt of any regulatory approval or non-objection (to the extent required), seek to raise funds through the incurrence of long-term secured or unsecured indebtedness, or the issuance of equity and/or debt securities. However, these alternatives
may not be available to us on attractive terms, or at all. The inability to raise funds through the sources discussed above would have a material adverse effect on the Companys business, results of operations and financial condition.

Woodbridge

On
September 21, 2009, BFC consummated its merger with Woodbridge Holdings Corporation (WHC). Pursuant to the merger, WHC became a wholly owned subsidiary of BFC, Woodbridge and the shareholders of WHC at the effective time of the
merger (other than BFC) were entitled to receive in exchange for each share of WHCs Class A Common Stock that they owned, 3.47 shares of BFCs Class A Common Stock. Under Florida law, holders of WHCs Class A Common
Stock who did not vote to approve the merger and properly asserted and exercised their appraisal rights with respect to their shares (Dissenting Holders) are entitled to receive a cash payment in an amount equal to the fair value of
their shares as determined in accordance with the provisions of Florida law in lieu of the shares of BFCs Class A Common Stock that they would otherwise have been entitled to receive. Dissenting Holders, who collectively held
approximately 4.2 million shares of WHCs Class A Common Stock, rejected Woodbridges offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of WHCs Class A
Common Stock. In accordance with Florida law, Woodbridge thereafter commenced legal proceedings relating to the appraisal process. In December 2009, a $4.6 million liability was recorded with a corresponding reduction to additional paid-in capital,
which is reflected in the Companys consolidated statements of financial condition representing in the aggregate Woodbridges offer to the Dissenting Holders. On July 5, 2012, the presiding court in the appraisal rights action
determined the fair value of the Dissenting Holders shares to be $1.78 per share and awarded legal and other costs in favor of the Dissenting Holders. As a result, the $4.6 million liability was increased (with a corresponding reduction to
additional paid in capital of $2.8 million) to approximately $7.5 million as of June 30, 2012 to account for the per share value awarded, however, any award for legal and other costs that may be paid could not be reasonably estimated.
Woodbridge has appealed the courts decision regarding the per share value and the award to the Dissenting Holders of legal fees and costs. The outcome of the appeal is uncertain.

Core Communities

In early 2010, Woodbridge made the decision to pursue an
orderly liquidation of Core Communities LLC, Woodbridges wholly owned subsidiary (Core or Core Communities) and worked cooperatively with the various



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lenders to achieve that objective. During November 2010, Core entered into a settlement agreement with one of its lenders, which had previously commenced actions seeking foreclosure of properties
in Florida and South Carolina which served as collateral under mortgage loans totaling approximately $113.9 million. Under the terms of the agreement, Core pledged additional collateral to the lender consisting of membership interests in five of
Cores subsidiaries and granted security interests in the real property owned by such subsidiaries in Port St. Lucie, Florida, substantially all of which was undeveloped raw land. Core also agreed to an amendment of the complaint related to the
Florida foreclosure action to include this additional collateral and an entry into consensual judgments of foreclosure in both the Florida and South Carolina foreclosure actions. As of November 30, 2010, Core deconsolidated the five
subsidiaries, the membership interests in which were transferred to the lender upon entry into the consensual judgments of foreclosure. In turn, the lender agreed not to enforce a deficiency judgment against Core and, in February 2011, released Core
from any other claims arising from or relating to the loans. In connection therewith, a deferred gain on settlement of investment in subsidiary of $11.3 million was recognized into income during the three months ended March 31, 2011.

Carolina Oak

In 2007, WHC acquired from Levitt and Sons, LLC (Levitt and Sons), WHCs wholly-owned subsidiary at the time, all of the outstanding
membership interests in Carolina Oak, LLC (Carolina Oak), which engaged in homebuilding activities in South Carolina prior to the suspension of the activities in the fourth quarter of 2008. In the fourth quarter of 2009, the inventory of
real estate at Carolina Oak was reviewed for impairment and a $16.7 million impairment charge was recorded to adjust the carrying amount of Carolina Oaks inventory to its fair value of $10.8 million.

Woodbridge was the obligor under a $37.2 million loan collateralized by the Carolina Oak property. During 2009, the lender declared the loan to be in
default and filed an action for foreclosure. On April 26, 2011, a settlement agreement was entered into to resolve the disputes and ligation relating to the loan. Under the terms and subject to the conditions of the settlement agreement,
(i) Woodbridge paid $2.5 million to the note holder, (ii) Carolina Oak conveyed to the note holder the real property securing the loan and (iii) the note holder agreed not to pursue certain remedies, including a deficiency judgment,
and after the expiration of an agreed-upon time period (which expired during April 2012), to fully release Woodbridge and Carolina Oak. In accordance with applicable accounting guidance, a deferred gain on debt settlement of $29.9 million was
recorded in the Companys consolidated statement of financial condition as of December 31, 2011 and was recognized as income in the quarter ended June 30, 2012 as a result of the full release of Woodbridge and Carolina Oak during
April 2012.

Cypress Creek Holdings

Cypress Creek Holdings owned an 80,000 square foot office building in Fort Lauderdale, Florida. As of December 31, 2011, the building, which had an estimated carrying value of approximately $6.4
million, served as collateral for an approximately $11.2 million mortgage loan.

The building was previously 50% occupied by an unaffiliated
third party pursuant to a lease which expired in March 2010. The tenant opted not to renew the lease and vacated the space as of March 31, 2010. After efforts to lease the space proved unsuccessful, the lender with respect to the loan secured
by the office building agreed to permit Cypress Creek Holdings to pursue a short sale of the building. During January 2012, the building was sold for approximately $10.8 million. The proceeds of the sale plus a $668,000 payment made by Cypress Creek
Holdings were paid to the lender in full satisfaction of the loan. During the first quarter of 2012, the Company recognized a gain of approximately $4.4 million in connection with the sale.

Cypress Creek Holdings results of operations are reported as a discontinued operation in the Companys consolidated financial statements and its assets, which were sold during the first quarter
of 2012, were classified as assets held for sale as of December 31, 2011.

BBX Capital

BBX Capital had cash of $4.0 million and current liabilities of $5.8 million as of June 30, 2012. In connection with the consummation of the
Transaction, on July 31, 2012, BBX Capital received net cash proceeds of approximately $29.0 million, consisting of a $6.4 million cash payment from BB&T and approximately $22.5 million of cash held in its wholly-owned subsidiary, CAM, net
of transaction costs, trustee fees and costs associated with the TruPs related litigation and payments to BB&T of accrued and unpaid TruPs interest. BBX Capitals liquidity is primarily dependent upon the repayments of loans, sales of real
estate, and obtaining funds from its 5% preferred interest in FAR. Based on the current and expected liquidity needs and sources, BBX Capital expects to be able to meet its liquidity needs over the next 12 months.



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|3. | Assets and Liabilities Held for Sale
|-- | ------------------------------------

Bluegreen Communities

On May 4, 2012, Bluegreen sold substantially all of the assets that comprised Bluegreen Communities to Southstar for a purchase price of $29.0 million in cash. Additionally, Southstar agreed to pay
an amount equal to 20% of the net proceeds (as calculated in accordance with the terms of the agreement) it receives upon its sale, if any, of two specified parcels of real estate purchased by Southstar under the agreement. Certain assets including
Bluegreen Communities notes receivable portfolio were not sold to Southstar.

The assets sold to Southstar were accounted for as assets
held for sale and had been previously written down to their fair value less costs to sell. The fair value of the assets held for sale was derived from the sale price under the agreement with Southstar. Therefore, Bluegreen did not incur a
significant gain or loss upon the closing of the transaction.

Also included in results of discontinued operations in each of the periods
presented is interest expense primarily on the H4BG Communities Facility as certain of the assets classified as held for sale (and which were sold to Southstar as part of the Bluegreen Communities sale) served as collateral under this facility. The
entire amount of the debt outstanding under the H4BG Communities Facility and a $2.0 million deferred fee were repaid upon the sale of the assets on May 4, 2012.

Cypress Creek Holdings

During January 2012, Cypress Creek Holdings sold the
office building it owned for approximately $10.8 million. The building served as collateral for an approximately $11.2 million mortgage loan. Accordingly, the proceeds of the sale plus a $668,000 payment made by Cypress Creek Holdings were paid to
the lender in full satisfaction of the loan. The Company recognized a gain of approximately $4.4 million in connection with the sale during the first quarter of 2012. Cypress Creek Holdings results of operations are reported as a discontinued
operation in the accompanying consolidated financial statements and its assets, which were sold during January 2012, were classified as assets held for sale as of December 31, 2011.

The following
tables summarize the discontinued operations for Bluegreen Communities for the three and six months ended June 30, 2012 and 2011 and Cypress Creek Holdings for the three months ended June 30, 2011 and the six months ended June 30,
2012 and 2011 (in thousands):



|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|----------------------------------------------- |  | --------------------------------------- | ------ | - | ---------------------------------------- |  | ------- | -------------------- |  |  | ----- | - |  |  | ------- | -
|                                                |  | For the ThreeMonths 
EndedJune 30, 2012 |        |   | For the Three Months Ended June 30, 2011 | 
|                                                |  | BluegreenCommunities                    |        |   | BluegreenCommunities                     |  |         | CypressCreekHoldings |  |  | Total |  
|Revenues                                        |  | $                                       | 1,017  |   |                                          |  | 4,170   |                      |  |  | 4     |   |  |  | 4,174   |  
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|                                                |  |                                         | 1,017  |   |                                          |  | 4,170   |                      |  |  | 4     |   |  |  | 4,174   |  
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|Cost and Expenses:                              |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|Cost of discontinued operations                 |  |                                         | 3,053  |   |                                          |  | 4,271   |                      |  |  | 265   |   |  |  | 4,536   |  
|(Gain) loss on assets held for sale             |  |                                         | (59    | ) |                                          |  | 52,733  |                      |  |  |      |   |  |  | 52,733  |  
|Interest expense                                |  |                                         | 744    |   |                                          |  | 772     |                      |  |  | 160   |   |  |  | 932     |  
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|                                                |  |                                         | 3,738  |   |                                          |  | 57,776  |                      |  |  | 425   |   |  |  | 58,201  |  
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|Loss from discontinued operations, before taxes |  |                                         | (2,721 | ) |                                          |  | (53,606 | )                    |  |  | (421  | ) |  |  | (54,027 | )
|Benefit for income taxes                        |  |                                         | 1,328  |   |                                          |  | 20,634  |                      |  |  |      |   |  |  | 20,634  |  
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  
|Loss from discontinued operations, net          |  | $                                       | (1,393 | ) |                                          |  | (32,972 | )                    |  |  | (421  | ) |  |  | (33,393 | )
|                                                |  |                                         |        |   |                                          |  |         |                      |  |  |       |   |  |  |         |  



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|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|-------------------------------------------------------- |  | -------------------------------------- | ------ | - | -------------------------------------- |  | ----- | ----- |  |  | -------------------- |  |  | -------------------- | ------- | - | ----- |  | ---- | - |  |  | ------- | -
|                                                         |  | For the Six Months Ended June 30, 2012 |        |   | For the Six Months Ended June 30, 2011 | 
|                                                         |  | BluegreenCommunities                   |        |   | CypressCreekHoldings                   |  |       | Total |  |  | BluegreenCommunities |  |  | CypressCreekHoldings |         |   | Total | 
|Revenues                                                 |  | $                                      | 3,815  |   |                                        |  | 3     |       |  |  | 3,818                |  |  |                      | 9,893   |   |       |  | 4    |   |  |  | 9,897   |  
|Gain on sale of asset                                    |  |                                        |       |   |                                        |  | 4,446 |       |  |  | 4,446                |  |  |                      |        |   |       |  |     |   |  |  |        |  
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|                                                         |  |                                        | 3,815  |   |                                        |  | 4,449 |       |  |  | 8,264                |  |  |                      | 9,893   |   |       |  | 4    |   |  |  | 9,897   |  
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|Cost and Expenses:                                       |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|Cost of discontinued operations                          |  |                                        | 5,717  |   |                                        |  | 52    |       |  |  | 5,769                |  |  |                      | 10,169  |   |       |  | 536  |   |  |  | 10,705  |  
|Loss on assets held for sale                             |  |                                        | 205    |   |                                        |  |      |       |  |  | 205                  |  |  |                      | 52,733  |   |       |  |     |   |  |  | 52,733  |  
|Interest expense                                         |  |                                        | 1,386  |   |                                        |  |      |       |  |  | 1,386                |  |  |                      | 1,532   |   |       |  | 321  |   |  |  | 1,853   |  
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|                                                         |  |                                        | 7,308  |   |                                        |  | 52    |       |  |  | 7,360                |  |  |                      | 64,434  |   |       |  | 857  |   |  |  | 65,291  |  
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|(Loss) income from discontinued operations, before taxes |  |                                        | (3,493 | ) |                                        |  | 4,397 |       |  |  | 904                  |  |  |                      | (54,541 | ) |       |  | (853 | ) |  |  | (55,394 | )
|Benefit for income taxes                                 |  |                                        | 1,797  |   |                                        |  |      |       |  |  | 1,797                |  |  |                      | 20,986  |   |       |  |     |   |  |  | 20,986  |  
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  
|(Loss) income from discontinued operations, net          |  | $                                      | (1,696 | ) |                                        |  | 4,397 |       |  |  | 2,701                |  |  |                      | (33,555 | ) |       |  | (853 | ) |  |  | (34,408 | )
|                                                         |  |                                        |        |   |                                        |  |       |       |  |  |                      |  |  |                      |         |   |       |  |      |   |  |  |         |  



17



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##### Table of Contents

The following table summarizes the assets held
for sale and liabilities related to the assets held for sale for Bluegreen Communities and Cypress Creek Holdings as of December 31, 2011 (in thousands):



|                                            |  |                   |        |  |          |  |        |       |  |  |        | 
|------------------------------------------- |  | ----------------- | ------ |  | -------- |  | ------ | ----- |  |  | ------ | 
|                                            |  | December 31, 2011 |       
|                                            |  |                   |        |  | Cypress  |  |        |       | 
|                                            |  | Bluegreen         |        |  | Creek    |  |        |       | 
|                                            |  | Communities       |        |  | Holdings |  |        | Total | 
|Inventory                                   |  | $                 | 23,264 |  |          |  |       |       |  |  | 23,264 | 
|Property and equipment, net                 |  |                   | 5,361  |  |          |  | 6,410  |       |  |  | 11,771 | 
|                                            |  |                   |        |  |          |  |        |       |  |  |        | 
|Assets held for sale                        |  | $                 | 28,625 |  |          |  | 6,410  |       |  |  | 35,035 | 
|                                            |  |                   |        |  |          |  |        |       |  |  |        | 
|Notes and mortgage payable                  |  | $                 |       |  |          |  | 11,156 |       |  |  | 11,156 | 
|                                            |  |                   |        |  |          |  |        |       |  |  |        | 
|Liabilities related to assets held for sale |  | $                 |       |  |          |  | 11,156 |       |  |  | 11,156 | 
|                                            |  |                   |        |  |          |  |        |       |  |  |        | 

BBX Capital

The following table summarizes the assets and liabilities held for sale related to the
BBX Capital transaction (as discussed in Note 1) as of June 30, 2012 (in thousands):



|                                             |  |              |           | 
|-------------------------------------------- |  | ------------ | --------- | 
|                                             |  | As of        |          
|                                             |  | June 30,2012 |          
|Cash and due from banks                      |  | $            | 59,431    | 
|Securities available for sale, at fair value |  |              | 33,550    | 
|Tax certificates                             |  |              | 17,736    | 
|Federal Home Loan Bank stock                 |  |              | 8,328     | 
|Loans receivable (1)                         |  |              | 1,828,485 | 
|Accrued interest receivable                  |  |              | 11,347    | 
|Office properties and equipment (1)          |  |              | 123,683   | 
|Goodwill (1)                                 |  |              | 12,241    | 
|Other assets (1)                             |  |              | 26,072    | 
|                                             |  |              |           | 
|Total assets held for sale                   |  | $            | 2,120,873 | 
|                                             |  |              |           | 
|Deposits                                     |  |              |           | 
|Interest free checking                       |  | $            | 926,892   | 
|Insured money fund savings                   |  |              | 699,169   | 
|Now accounts                                 |  |              | 1,114,360 | 
|Savings accounts                             |  |              | 424,848   | 
|                                             |  |              |           | 
|Total non-certificate accounts               |  |              | 3,165,269 | 
|Certificate accounts                         |  |              | 283,615   | 
|                                             |  |              |           | 
|Total deposits held for sale (2)             |  |              | 3,448,884 | 
|                                             |  |              |           | 
|Subordinated debentures                      |  |              | 22,000    | 
|Other liabilities                            |  |              | 36,199    | 
|                                             |  |              |           | 
|Total other liabilities held for sale (2)    |  |              | 58,199    | 
|                                             |  |              |           | 
|Total liabilities held for sale              |  | $            | 3,507,083 | 
|                                             |  |              |           | 



|(1) | Loans receivable, office properties and equipment and goodwill amounts were reduced by approximately $5.3 million, $6.0 million and $0.8 million, respectively, and
other assets increased by $6.7 million, in each case as a result of purchase accounting adjustments in connection with BFC's purchase of shares of BBX Capitals Class A Common Stock during 2008, which were accounted for as step
acquisitions under the purchase method of accounting then in effect.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Total deposits held for sale includes the elimination of $1.6 million of cash held at BankAtlantic by BFC. Total other liabilities held for sale includes the
elimination of $0.2 million of shared service accruals between BankAtlantic and BFC.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



18



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##### Table of Contents

The majority of the cash and interest bearing deposits in other banks on BBX Capitals consolidated
statement of financial condition were also transferred to BB&T in the Transaction.

BankAtlantics five reporting units each reflect
a component of the BankAtlantic entity and each is the lowest level for which cash flows can be clearly distinguished, operationally and for financial reporting purposes. These five components are Community Banking, Commercial Lending, Tax
Certificates, Investments, and Capital Services. Based on its agreement with BB&T, BBX Capital determined that its Community Banking, Investments, Capital Services and Tax Certificates reporting units should be treated as discontinued
operations. BBX Capital sold all operations and the majority of the assets and liabilities of these discontinued reporting units to BB&T as of July 31, 2012. Management does not intend to continue in any material respect any activities of
or have any continuing involvement with these reporting units. BBX Capital intends to continue Commercial Lending reporting unit activities after the closing of the Transaction. Therefore, although certain assets of this reporting unit were sold to
BB&T and are presented as assets and liabilities held for sale in the Consolidated Statement of Financial Condition as of June 30, 2012, the Commercial Lending reporting unit was not reported as discontinued operations.

Pursuant to the Agreement, FAR will retain in addition to certain assets associated with BBX Capitals continuing Commercial Lending reporting unit,
certain assets and liabilities that were associated with BBX Capitals disposed reporting units (Community Banking, Tax Certificates, Investments, and Capital Services reporting units). BBX Capital determined that the ongoing cash flows of the
disposed reporting units were not significant relative to the historical cash flows of each reporting unit; therefore the income and expenses associated with the disposed reporting units are reported in discontinued operations for each period
presented. The carrying value of the disposed reporting units net assets anticipated to be included in FARs total assets discussed above was $120 million as of June 30, 2012. The assets held by FAR are expected to be monetized in
accordance with the terms of such assets or through orderly transactions over a seven year period. Ninety-five percent of the cash flows from these assets net of operating expenses and a stated preferred return will be applied toward the repayment
of BB&Ts preferred interest in FAR.

The (loss) income from Community Banking, Investments, Capital Services and Tax Certificates reporting units included in discontinued operations in the accompanying Consolidated Statement of Operations
was as follows (in thousands):



|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|---------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------ | ---- |  |  | ------ | - |  |  | ------- | -
|                                               |  | For the Three MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, | 
|                                               |  | 2012                               |        |   | 2011                             |  |        | 2012 |  |  | 2011   |  
|Revenues:                                      |  |                                    |        |   |                                  |  |        |      |  |  |        |   | 
|Interest income                                |  | $                                  | 18,349 |   |                                  |  | 26,402 |      |  |  | 39,365 |   |  |  | 54,628  |  
|Service charges on deposits                    |  |                                    | 7,491  |   |                                  |  | 11,226 |      |  |  | 15,342 |   |  |  | 23,258  |  
|Other service charges and fees                 |  |                                    | 5,958  |   |                                  |  | 6,886  |      |  |  | 11,896 |   |  |  | 14,077  |  
|Securities activities, net                     |  |                                    | (99    | ) |                                  |  |       |      |  |  | (99    | ) |  |  | (24     | )
|Gain on sale of Tampa branches                 |  |                                    |       |   |                                  |  | 38,656 |      |  |  |       |   |  |  | 38,656  |  
|Other non-interest income                      |  |                                    | 1,383  |   |                                  |  | 2,878  |      |  |  | 5,118  |   |  |  | 6,172   |  
|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|                                               |  |                                    | 33,082 |   |                                  |  | 86,048 |      |  |  | 71,622 |   |  |  | 136,767 |  
|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|Costs and Expenses:                            |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|Interest expense                               |  |                                    | 3,248  |   |                                  |  | 4,242  |      |  |  | 6,502  |   |  |  | 8,954   |  
|Provision for loan losses                      |  |                                    | 7,301  |   |                                  |  | 6,396  |      |  |  | 16,518 |   |  |  | 27,381  |  
|Employee compensation and benefits(1)          |  |                                    | 10,456 |   |                                  |  | 13,428 |      |  |  | 22,146 |   |  |  | 27,195  |  
|Occupancy and equipment(1)                     |  |                                    | 7,159  |   |                                  |  | 8,380  |      |  |  | 14,431 |   |  |  | 17,502  |  
|Advertising and promotion(1)                   |  |                                    | 919    |   |                                  |  | 1,378  |      |  |  | 1,935  |   |  |  | 2,961   |  
|Professional fees(1)                           |  |                                    | 395    |   |                                  |  | 637    |      |  |  | 2,218  |   |  |  | 1,869   |  
|Other expenses(1)                              |  |                                    | 7,535  |   |                                  |  | 10,128 |      |  |  | 12,953 |   |  |  | 17,976  |  
|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|                                               |  |                                    | 37,013 |   |                                  |  | 44,589 |      |  |  | 76,703 |   |  |  | 103,838 |  
|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  
|Net (loss) income from discontinued operations |  | $                                  | (3,931 | ) |                                  |  | 41,459 |      |  |  | (5,081 | ) |  |  | 32,929  |  
|                                               |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |         |  



|(1) | Pursuant to applicable accounting rules, all general corporate overhead was allocated to continuing operations.
|--- | ---------------------------------------------------------------------------------------------------------------



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##### Table of Contents

4.    Fair Value Measurement

Assets on a recurring basis

The following tables present major categories
of the Companys assets measured at fair value on a recurring basis as of June 30, 2012 (in thousands):



|                        |  |                                                            |        |  |                                            |  |        |                                        |  |  |   |  |  |  |   | 
|----------------------- |  | ---------------------------------------------------------- | ------ |  | ------------------------------------------ |  | ------ | -------------------------------------- |  |  | - |  |  |  | - | 
|Description             |  | June 30,2012                                               |        |  | Fair Value Measurements Using              | 
|                        |  | Quoted prices inActive Marketsfor IdenticalAssets(Level 1) |        |  | Significant OtherObservableInputs(Level 2) |  |        | SignificantUnobservableInputs(Level 3) | 
|Benihanas Common Stock |  | $                                                          | 25,368 |  |                                            |  | 25,368 |                                        |  |  |  |  |  |  |  | 
|Other equity securities |  |                                                            | 223    |  |                                            |  | 223    |                                        |  |  |  |  |  |  |  | 
|                        |  |                                                            |        |  |                                            |  |        |                                        |  |  |   |  |  |  |   | 
|Total                   |  | $                                                          | 25,591 |  |                                            |  | 25,591 |                                        |  |  |  |  |  |  |  | 
|                        |  |                                                            |        |  |                                            |  |        |                                        |  |  |   |  |  |  |   | 

The following tables present major categories
of the Companys assets measured at fair value on a recurring basis as of December 31, 2011 (in thousands):



|                           |  |                                                            |        |  |                                            |  |        |                                        |  |  |        |  |  |  |   | 
|-------------------------- |  | ---------------------------------------------------------- | ------ |  | ------------------------------------------ |  | ------ | -------------------------------------- |  |  | ------ |  |  |  | - | 
|Description                |  | December 31,2011                                           |        |  | Fair Value Measurements Using              | 
|                           |  | Quoted prices inActive Marketsfor IdenticalAssets(Level 1) |        |  | Significant OtherObservableInputs(Level 2) |  |        | SignificantUnobservableInputs(Level 3) | 
|Mortgage-backed securities |  | $                                                          | 13,418 |  |                                            |  |       |                                        |  |  | 13,418 |  |  |  |  | 
|REMICS (1)                 |  |                                                            | 31,690 |  |                                            |  |       |                                        |  |  | 31,690 |  |  |  |  | 
|Benihanas Common Stock    |  |                                                            | 16,190 |  |                                            |  | 16,190 |                                        |  |  |       |  |  |  |  | 
|Other equity securities    |  |                                                            | 1,505  |  |                                            |  | 1,005  |                                        |  |  | 500    |  |  |  |  | 
|                           |  |                                                            |        |  |                                            |  |        |                                        |  |  |        |  |  |  |   | 
|Total                      |  | $                                                          | 62,803 |  |                                            |  | 17,195 |                                        |  |  | 45,608 |  |  |  |  | 
|                           |  |                                                            |        |  |                                            |  |        |                                        |  |  |        |  |  |  |   | 



|(1) | Real estate mortgage investment conduits (REMICs) are pass-through entities that hold residential loans, and investors are issued ownership interests in the
entities in the form of a bond. The securities were issued by government agencies.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

The following table presents major categories of assets
measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2011 (in thousands):



|                                                    |  |                    |         |  
|--------------------------------------------------- |  | ------------------ | ------- | -
|                                                    |  | Benihana           |        
|                                                    |  | Convertible        |        
|For the three months ended June 30, 2011:           |  | PreferredStock (1) |        
|Beginning Balance at March 31, 2011                 |  | $                  | 20,951  |  
|Total gains and losses (realized/unrealized)        |  |                    |         |  
|Included in earnings (or changes in net assets)     |  |                    |        |  
|Cumulative effect of change in accounting principle |  |                    |        |  
|Included in other comprehensive loss                |  |                    |        |  
|Purchases, issuances, and settlements               |  |                    | (5,238  | )
|Transfers in and/or out of Level 3                  |  |                    | (15,713 | )
|                                                    |  |                    |         |  
|Balance at June 30, 2011                            |  | $                  |        |  
|                                                    |  |                    |         |  
|                                                    | 
|                                                    |  | Benihana           |        
|                                                    |  | Convertible        |        
|For the six months ended June 30, 2011:             |  | PreferredStock (1) |        
|Beginning Balance January 1, 2011                   |  | $                  | 21,106  |  
|Total gains and losses (realized/unrealized)        |  |                    |         |  
|Included in earnings                                |  |                    |        |  
|Cumulative effect of change in accounting principle |  |                    |        |  
|Included in other comprehensive loss                |  |                    | (155    | )
|Purchases, issuances, and settlements               |  |                    | (5,238  | )
|Transfers in and/or out of Level 3                  |  |                    | (15,713 | )
|                                                    |  |                    |         |  
|Balance at June 30, 2011                            |  | $                  |        |  
|                                                    |  |                    |         |  



| | (1) | During May and July 2011, BFC converted an aggregate of 300,000 shares of Convertible Preferred Stock of Benihana into shares of Benihanas Common Stock. In
connection with the May 2011 conversion, effective for the quarter ended June 30, 2011, we began to assess the value of our investment in Benihanas Convertible Preferred Stock, as if converted, by using the market approach with Level 2
measurements instead of the income approach with Level 3 measurements which we historically used. During October 2011, BFC converted its remaining 500,000 shares of Convertible Preferred Stock of Benihana into shares of Benihanas Common Stock.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

There were no assets measured at fair value on a recurring basis using significant unobservable inputs (level 3) in the Companys
financial statements for the three or six months ended June 30, 2012.

The valuation techniques and the inputs used in our financial
statements to measure the fair value of our recurring financial instruments are described below.

The fair values of mortgage-backed
securities and REMICs are estimated using independent pricing sources and matrix pricing. Matrix pricing uses a market approach valuation technique and Level 2 valuation inputs as quoted market prices are not available for the specific securities
that BBX Capital owns. The independent pricing sources value these securities using observable market inputs including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads and other reference data in the secondary institutional
market which is the principal market for these types of assets. To validate fair values obtained from the pricing sources, BBX Capital reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness
of the fair values obtained from independent pricing sources. BBX Capital reviews any price that it determines may not be reasonable and requires the pricing sources to explain the differences in fair value or re-evaluate its estimated fair value.

Equity securities are generally fair valued using the market approach and quoted market prices (Level 1) or matrix pricing (Level 2) with
inputs obtained from independent pricing sources, if available. At June 30, 2012 and December 31, 2011, the estimated fair value of Benihanas Common Stock was obtained by using the quoted market price using Level 1 inputs. We also
obtain non-binding broker quotes to validate fair values obtained from matrix pricing. BBX Capital also invests in private limited partnerships that do not have readily determinable fair values. BBX Capital uses the net asset value per share as
provided by the partnership to estimate the fair value of these investments. The net asset value of the partnership is a Level 2 input since BBX Capital has the ability to require the redemption of its investment at its net asset value.



21



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##### Table of Contents

Liabilities on a recurring basis

There were no liabilities measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011.

Assets on a non-recurring basis

The following table presents major categories of assets measured at fair value on a non-recurring basis as of June 30, 2012 (in thousands):



|                             |  |                               |        |  |                                                            |  |   |                                            |  |  |                                        |  |  |                                                         |        |  |  |  |       | 
|---------------------------- |  | ----------------------------- | ------ |  | ---------------------------------------------------------- |  | - | ------------------------------------------ |  |  | -------------------------------------- |  |  | ------------------------------------------------------- | ------ |  |  |  | ----- | 
|                             |  | Fair Value Measurements Using |        |  |                                                            | 
|Description                  |  | June 30,2012                  |        |  | Quoted prices inActive Marketsfor IdenticalAssets(Level 1) |  |   | SignificantOther ObservableInputs(Level 2) |  |  | SignificantUnobservableInputs(Level 3) |  |  | TotalImpairmentsFor the SixMonths EndedJune 30,2012 (1) |       
|Impaired real estate owned   |  | $                             | 27,288 |  |                                                            |  |  |                                            |  |  |                                       |  |  |                                                         | 27,288 |  |  |  | 3,534 | 
|Impaired loans held for sale |  |                               | 9,397  |  |                                                            |  |  |                                            |  |  |                                       |  |  |                                                         | 9,397  |  |  |  | 459   | 
|                             |  |                               |        |  |                                                            |  |   |                                            |  |  |                                        |  |  |                                                         |        |  |  |  |       | 
|Total                        |  | $                             | 36,685 |  |                                                            |  |  |                                            |  |  |                                       |  |  |                                                         | 36,685 |  |  |  | 3,993 | 
|                             |  |                               |        |  |                                                            |  |   |                                            |  |  |                                        |  |  |                                                         |        |  |  |  |       | 



|(1) | Total impairments represent the amount recognized during the six months ended June 30, 2012 on assets that were held and measured at fair value as of June 30,
2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------

Quantitative information about significant unobservable inputs within Level 3
non-recurring major categories of assets is as follows (dollars in thousands):



|                                |  |            |        |  |                     |                          |                    |           |                     |                                 
|------------------------------- |  | ---------- | ------ |  | ------------------- | ------------------------ | ------------------ | --------- | ------------------- | --------------------------------
|As of June 30, 2012 Description |  | Fair Value |        |  | Valuation Technique |                          | UnobservableInputs |           | Range (Average) (1)
|Impaired real estate owned      |  | $          | 27,288 |  |                     | Fair Value of Property   |                    | Appraisal |                     | $0.4 - 6.5 million (3.0 million)
|Impaired loans held for sale    |  |            | 9,397  |  |                     | Fair Value of Collateral |                    | Appraisal |                     | $0.9 -3.6 million (1.9 million) 
|                                |  |            |        |  |                     |                          |                    |           |                     |                                 
|Total                           |  | $          | 36,685 |  |                     |                          |                    |           |                     |                                 
|                                |  |            |        |  |                     |                          |                    |           |                     |                                 



|(1) | Range and average appraised values were reduced by costs to sell.
|--- | -----------------------------------------------------------------

The following table presents major categories of assets measured at fair value on a
non-recurring basis as of June 30, 2011 (in thousands):



|                                                                                |  |                               |         |  |                                                            |  |   |                                             |  |  |                                         |  |  |                                                         |         |  |  |  |        | 
|------------------------------------------------------------------------------- |  | ----------------------------- | ------- |  | ---------------------------------------------------------- |  | - | ------------------------------------------- |  |  | --------------------------------------- |  |  | ------------------------------------------------------- | ------- |  |  |  | ------ | 
|                                                                                |  | Fair Value Measurements Using |         |  |                                                            | 
|Description                                                                     |  | June 30,2011                  |         |  | Quoted prices inActive
Marketsfor IdenticalAssets(Level 1) |  |   | SignificantOther ObservableInputs (Level 2) |  |  | SignificantUnobservableInputs(Level
 3) |  |  | TotalImpairmentsFor the SixMonths EndedJune 30,2011 (1) |        
|Loans measured for impairment using the fair value of the underlying collateral |  | $                             | 265,245 |  |                                                            |  |  |                                             |  |  |                                        |  |  |                                                         | 265,245 |  |  |  | 24,624 | 
|Impaired loans held for sale                                                    |  |                               | 27,463  |  |                                                            |  |  |                                             |  |  |                                        |  |  |                                                         | 27,463  |  |  |  | 6,335  | 
|Impaired real estate owned                                                      |  |                               | 36,044  |  |                                                            |  |  |                                             |  |  |                                        |  |  |                                                         | 36,044  |  |  |  | 8,830  | 
|                                                                                |  |                               |         |  |                                                            |  |   |                                             |  |  |                                         |  |  |                                                         |         |  |  |  |        | 
|Total                                                                           |  | $                             | 328,752 |  |                                                            |  |  |                                             |  |  |                                        |  |  |                                                         | 328,752 |  |  |  | 39,789 | 
|                                                                                |  |                               |         |  |                                                            |  |   |                                             |  |  |                                         |  |  |                                                         |         |  |  |  |        | 



|(1) | Total impairments represent the amount recognized during the six months ended June 30, 2011 on assets that were measured at fair value as of June 30, 2011.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



22



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##### Table of Contents

Liabilities on a non-recurring basis

The following table presents major categories of
liabilities measured at fair value on a non-recurring basis using significant unobservable inputs (Level 3) as of June 30, 2012 (in thousands):



|                                       |  |              |        |  |                                                           |  |   |                                           |  |  |                                         |  |  |  |        | 
|-------------------------------------- |  | ------------ | ------ |  | --------------------------------------------------------- |  | - | ----------------------------------------- |  |  | --------------------------------------- |  |  |  | ------ | 
|                                       |  |              |        |  | Fair Value Measurements Using                             | 
|Description                            |  | June 30,2012 |        |  | Quoted pricesin ActiveMarkets
forIdenticalAssets(Level 1) |  |   | SignificantOtherObservableInputs(Level 2) |  |  | SignificantUnobservableInputs(Level
 3) | 
|Shares subject to mandatory redemption |  | $            | 11,501 |  |                                                           |  |  |                                           |  |  |                                        |  |  |  | 11,501 | 

The fair value of the shares subject to mandatory redemption has been calculated using the discounted cash flow method of the income
approach.

Loans Measured For Impairment

Impaired loans are generally valued based on the fair value of the underlying collateral less cost to sell. BBX Capital primarily uses third party appraisals to assist in measuring non-homogenous impaired
loans. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the fair value of the loans collateral. However, the appraiser uses professional judgment in
determining the fair value of the collateral or properties, and BBX Capital may also adjust these values for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, BBX Capital uses
its judgment on market conditions to adjust the most current appraisal. The sales prices may reflect prices of sales contracts not closed, and the amount of time required to sell out the real estate project may be derived from current appraisals of
similar projects. As a consequence, the calculation of the fair value of the collateral are considered Level 3 inputs. BBX Capital generally recognizes impairment losses when impaired homogenous loans become 120 days delinquent based on third party
broker price opinions or an automated valuation service to obtain the fair value of the collateral less cost to sell. These third party valuations from real estate professionals also use Level 3 inputs in determining fair values. The observable
market inputs used to fair value loans are comparable property sales, rent rolls, market capitalization rates on income producing properties, risk adjusted discounts rates and foreclosure period and exposure periods. The fair value of BBX Capital
loans may significantly increase or decrease based on property values as its loans are primarily real estate loans.

Loans Held for Sale

Loans held for sale are valued using an income approach with Level 3 inputs as market quotes or sale transactions of similar loans are
generally not available. The fair value is estimated by discounting forecasted cash flows, using a discount rate that reflects the risks inherent in the loans held for sale portfolio. For non-performing loans held for sale, the forecasted cash flows
are based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure or sale.



23



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##### Table of Contents

Impaired Real Estate Owned

Real estate is generally valued using third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an
opinion of the fair value of the properties. The market observable data was generally comparable property sales, rent rolls, market capitalization rates on income producing properties and risk adjusted discount rates. However, the appraisers or
brokers use professional judgments in determining the fair value of the properties and we may also adjust these values for changes in market conditions subsequent to the valuation date. As a consequence of using appraisals, broker price opinions and
adjustments to appraisals, the fair values of the properties are considered Level 3 inputs.

Financial Disclosures about Fair Value of
Financial Instruments

The following tables present information for financial instruments at June 30, 2012 and
December 31, 2011 (in thousands):



|                                                      |  |                                  |           |  |                               |  |           |                                                           |  |  |                                           |  |  |                                         |         |  |  |  |         | 
|----------------------------------------------------- |  | -------------------------------- | --------- |  | ----------------------------- |  | --------- | --------------------------------------------------------- |  |  | ----------------------------------------- |  |  | --------------------------------------- | ------- |  |  |  | ------- | 
|                                                      |  |                                  |           |  | Fair Value Measurements Using | 
|                                                      |  | CarryingAmount Asof June 30,2012 |           |  | As ofJune 30,2012             |  |           | Quoted pricesinActive Marketsfor IdenticalAssets(Level 1) |  |  | SignificantOtherObservableInputs(Level 2) |  |  | SignificantUnobservableInputs(Level
 3) |        
|Financial assets:                                     |  |                                  |           |  |                               |  |           |                                                           |  |  |                                           |  |  |                                         |         |  |  |  |         | 
|Cash and interest bearing deposits in other banks     |  | $                                | 1,261,284 |  |                               |  | 1,261,284 |                                                           |  |  | 1,261,284                                 |  |  |                                         |        |  |  |  |        | 
|Restricted cash                                       |  |                                  | 59,414    |  |                               |  | 59,414    |                                                           |  |  | 59,414                                    |  |  |                                         |        |  |  |  |        | 
|Securities available for sale                         |  |                                  | 25,591    |  |                               |  | 25,591    |                                                           |  |  | 25,591                                    |  |  |                                         |        |  |  |  |        | 
|Tax certificates                                      |  |                                  | 5,293     |  |                               |  | 5,346     |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 5,346   | 
|Loans receivable including loans held for sale, net   |  |                                  | 402,823   |  |                               |  | 405,300   |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 405,300 | 
|Notes receivable, net                                 |  |                                  | 496,875   |  |                               |  | 542,000   |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 542,000 | 
|                                                      |  |                                  |           |  |                              
|Financial liabilities:                                |  |                                  |           |  |                               |  |           |                                                           |  |  |                                           |  |  |                                         |         |  |  |  |         | 
|Receivable-backed notes payable                       |  | $                                | 437,895   |  |                               |  | 425,900   |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 425,900 | 
|Notes and mortgage notes payable and other borrowings |  |                                  | 32,284    |  |                               |  | 31,700    |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 31,700  | 
|Junior subordinated debentures                        |  |                                  | 485,992   |  |                               |  | 419,921   |                                                           |  |  |                                          |  |  |                                         | 304,921 |  |  |  | 115,000 | 
|Shares subject to mandatory redemption                |  |                                  | 12,177    |  |                               |  | 12,177    |                                                           |  |  |                                          |  |  |                                         |        |  |  |  | 12,177  | 



|                                                      |  |                   |           |  |            |  |           | 
|----------------------------------------------------- |  | ----------------- | --------- |  | ---------- |  | --------- | 
|                                                      |  | December 31, 2011 |          
|                                                      |  | CarryingAmount    |           |  | Fair Value | 
|Financial assets:                                     |  |                   |           |  |            |  |           | 
|Cash and interest bearing deposits in other banks     |  | $                 | 858,789   |  |            |  | 858,789   | 
|Restricted cash                                       |  |                   | 62,727    |  |            |  | 62,727    | 
|Securities available for sale                         |  |                   | 62,803    |  |            |  | 62,803    | 
|Tax certificates                                      |  |                   | 46,488    |  |            |  | 45,562    | 
|Federal Home Loan Bank stock                          |  |                   | 18,308    |  |            |  | 18,308    | 
|Loans receivable including loans held for sale, net   |  |                   | 2,497,837 |  |            |  | 2,311,177 | 
|Notes receivable, net                                 |  |                   | 517,836   |  |            |  | 558,000   | 
|                                                      |  |                  
|Financial liabilities:                                |  |                   |           |  |            |  |           | 
|Deposits                                              |  | $                 | 3,279,852 |  |            |  | 3,279,331 | 
|Receivable-backed notes payable                       |  |                   | 478,098   |  |            |  | 468,000   | 
|Notes and mortgage notes payable and other borrowings |  |                   | 108,533   |  |            |  | 107,989   | 
|Junior subordinated debentures                        |  |                   | 477,316   |  |            |  | 336,221   | 



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Management has made estimates of fair value that it believes to be reasonable. However, because there is no
active market for many of these financial instruments and management has derived the fair value of certain of these financial instruments using the income approach technique with Level 3 unobservable inputs, it is possible that the Company or its
subsidiaries may not receive the estimated value upon sale or disposition of the asset or pay the estimated value upon disposition of the liability in advance of its scheduled maturity. Management estimates used in its net present value financial
models rely on assumptions and judgments regarding issues where the outcome is unknown and actual results or values may differ significantly from these estimates. These fair value estimates do not consider the tax effect that would be associated
with the disposition of the assets or liabilities at their fair value estimates.

The fair value of tax certificates is calculated using the
income approach with Level 3 inputs. The fair value is based on discounted expected cash flows using discount rates that take into account the risk of the cash flows of tax certificates relative to alternative investments.

The fair value of FHLB stock is its carrying amount as the FHLB redeems its stock at par.

As permitted by applicable accounting guidance, the fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings and NOW accounts, and money market and checking
accounts, is shown in the above table at book value. The fair value of certificates of deposit is based on an income approach with Level 3 inputs. The fair value is calculated by the discounted value of contractual cash flows with the discount rate
estimated using then-current rates offered by BankAtlantic for similar remaining maturities.

Fair values are estimated for BBX Capitals
loan portfolios with similar financial characteristics. Loans are segregated by category, and each loan category is further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories.

The fair value of BBX Capitals performing loans is calculated by using an income approach with Level 3 inputs. The fair value of performing loans
is estimated by discounting forecasted cash flows through the estimated maturity using estimated market discount rates that reflect the interest rate risk inherent in the loan portfolio. The estimate of



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average maturity is based on historical experience with prepayments for each loan classification, modified as required, by an estimate of the effect of current economic and lending conditions.
Management of BBX Capital assigns a credit risk premium and an illiquidity adjustment to these loans based on risk grades and delinquency status. The fair value of non-performing collateral dependent loans is estimated using an income approach with
level 3 inputs. The fair value of non-performing loans utilizes the fair value of the collateral adjusted for operating and selling expenses and discounted over the estimated holding period based on the market risk inherent in the property.

The fair value of BankAtlantics subordinated debentures was based on discounted values of contractual cash flows at a market discount
rate adjusted for non-performance risk (Level 3 inputs).

In determining the fair value of BBX Capitals junior subordinated debentures,
BBX Capital used NASDAQ price quotes available with respect to its $76.6 million of publicly traded TruPs related to its junior subordinated debentures (public debentures). However, $268.5 million of BBX Capitals outstanding TruPS
related to its junior subordinated debentures are not traded, but are privately held in pools (private debentures) and with no liquidity or readily determinable source for valuation. BBX Capital has deferred the payment of interest with
respect to all of its junior subordinated debentures as permitted by the terms of these securities. Based on the deferral status and the lack of liquidity and ability of a holder to actively sell the private debentures, the fair value of the private
debentures may be subject to a greater discount to par and have a lower fair value than indicated by the public debenture price quotes. However, due to their private nature and the lack of a trading market, fair value of the private debentures was
not readily determinable at June 30, 2012 or December 31, 2011, and as a practical alternative, BBX Capital used the NASDAQ price quotes of the public debentures to value its remaining outstanding junior subordinated debentures whether
privately held or publicly traded. As such, the private debentures were valued using Level 2 inputs.

The fair value of Bluegreens notes
receivable is estimated using Level 3 inputs and is based on estimated future cash flows considering contractual payments and estimates of prepayments and defaults, discounted at a market rate.

The estimated fair values of notes and mortgage notes payable and other borrowings, including receivable-backed notes payable, were determined by
discounting the net cash flows to be used to repay the debt (Level 3 inputs).

The estimated fair value of Woodbridges and
Bluegreens junior subordinated debentures are estimated using Level 3 inputs based on the contractual cash flows discounted at a market rate or based on market price quotes from the over-the-counter bond market.

There were no transfers between Level 1 and Level 2 for the three or six months ended June 30, 2012.



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|5. | Securities Available for Sale
|-- | -----------------------------

The following tables summarize securities available for sale as of June 30, 2012 and
December 31, 2011 (in thousands):



|                            |  |                     |        |  |                      |  |       |                       |  |  |                      |  |  |  |        | 
|--------------------------- |  | ------------------- | ------ |  | -------------------- |  | ----- | --------------------- |  |  | -------------------- |  |  |  | ------ | 
|                            |  | As of June 30, 2012 |       
|                            |  | AmortizedCost       |        |  | GrossUnrealizedGains |  |       | GrossUnrealizedLosses |  |  | EstimatedFair 
Value | 
|Benihanas Common Stock     |  | $                   | 16,477 |  |                      |  | 8,891 |                       |  |  |                     |  |  |  | 25,368 | 
|Other equity securities     |  |                     | 75     |  |                      |  | 148   |                       |  |  |                     |  |  |  | 223    | 
|                            |  |                     |        |  |                      |  |       |                       |  |  |                      |  |  |  |        | 
|Total investment securities |  | $                   | 16,552 |  |                      |  | 9,039 |                       |  |  |                     |  |  |  | 25,591 | 
|                            |  |                     |        |  |                      |  |       |                       |  |  |                      |  |  |  |        | 



|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|---------------------------------- |  | ----------------------- | ------ |  | -------------------- |  | ----- | --------------------- |  |  | ------------------- |  |  |  | ------ | 
|                                   |  | As of December 31, 2011 |       
|                                   |  | AmortizedCost           |        |  | GrossUnrealizedGains |  |       | GrossUnrealizedLosses |  |  | EstimatedFair Value | 
|Government agency securities:      |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Mortgage-backed securities         |  | $                       | 12,533 |  |                      |  | 885   |                       |  |  |                    |  |  |  | 13,418 | 
|Real estate mortgage conduits      |  |                         | 30,561 |  |                      |  | 1,129 |                       |  |  |                    |  |  |  | 31,690 | 
|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Total government agency securities |  |                         | 43,094 |  |                      |  | 2,014 |                       |  |  |                    |  |  |  | 45,108 | 
|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Investment securities:             |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Benihanas Common Stock            |  |                         | 16,477 |  |                      |  |      |                       |  |  | 287                 |  |  |  | 16,190 | 
|Other equity securities            |  |                         | 1,326  |  |                      |  | 179   |                       |  |  |                    |  |  |  | 1,505  | 
|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Total investment securities        |  |                         | 17,803 |  |                      |  | 179   |                       |  |  | 287                 |  |  |  | 17,695 | 
|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 
|Total                              |  | $                       | 60,897 |  |                      |  | 2,193 |                       |  |  | 287                 |  |  |  | 62,803 | 
|                                   |  |                         |        |  |                      |  |       |                       |  |  |                     |  |  |  |        | 

The following table shows the gross unrealized loss and fair value of the
Companys securities available for sale, all of which were in a continuous unrealized loss position for less than 12 months (in thousands):



|                      |  |                         |        |  |                  |  |      |  
|--------------------- |  | ----------------------- | ------ |  | ---------------- |  | ---- | -
|                      |  | As of December 31, 2011 |       
|                      |  | Less Than 12 Months     |       
|                      |  | FairValue               |        |  | UnrealizedLosses | 
|Benihana Common Stock |  | $                       | 16,190 |  |                  |  | (287 | )
|                      |  |                         |        |  |                  |  |      |  

As of June 30, 2012, there were no unrealized losses associated with the Companys securities available for sale.

As of June 30, 2012, BFC owned an aggregate of 1,582,577 shares of Benihanas Common Stock, representing an approximately 9% ownership and
voting interest in Benihana. At June 30, 2012 and December 31, 2011, the estimated fair value of our investment in Benihanas Common Stock was approximately $25.4 million and $16.2 million, respectively, based on the closing price of
Benihanas Common Stock on the NASDAQ on June 30, 2012 and December 31, 2011 of $16.03 per share and $10.23 per share, respectively.

During March 2012, a registration statement on Form S-3 was filed by Benihana and declared effective by the SEC, under which BFC may sell any and all of the shares of Benihanas Common Stock that BFC
owns. On July 13, 2012, BFC entered into a Rule 10b5-1 Trading Plan providing for the sale of up to an aggregate of 150,000 shares of Benihanas Common Stock from time to time until January 28, 2013 at a minimum predetermined price
per share. Sales commenced under the plan on July 30, 2012. The proceeds that BFC receives from sales of Benihanas Common Stock will depend on the timing of the sale and the market price of Benihanas Common Stock.



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On May 22, 2012, Benihana entered into an Agreement and Plan of Merger with Safflower Holdings Corp.
which provides for Safflowers acquisition of Benihana for a purchase price of $16.30 per share of Benihanas Common Stock. The proceeds that BFC receives in connection with the merger, if consummated, will depend on the number of shares
of Benihanas Common Stock that BFC owns at the effective time of the merger. Consummation of the merger is subject to certain closing conditions, including the approval of Benihanas stockholders and regulatory clearance. Benihana has
indicated that, assuming the satisfaction of all closing conditions, the merger is expected to close during August 2012.



|6. | Loans Receivable
|-- | ----------------

The loan disclosure below, as of June 30, 2012, includes loans in BBX Capitals asset workout subsidiary and only those loans
which were to be transferred to FAR or CAM in connection with the Transaction and excludes $1.8 billion of loans transferred to BB&T under the terms of the Agreement. The loans transferred to BB&T are included in assets held for sale as of
June 30, 2012.

The loan portfolio consisted of the following (in thousands):



|                                          |  |          |         |   |              |  |           |  
|----------------------------------------- |  | -------- | ------- | - | ------------ |  | --------- | -
|                                          |  | June 30, |         |   | December 31, | 
|                                          |  | 2012     |         |   | 2011         | 
|Commercial non-real estate                |  | $        | 28,167  |   |              |  | 118,145   |  
|Commercial real estate:                   |  |          |         |   |              |  |           |  
|Residential                               |  |          | 60,894  |   |              |  | 104,593   |  
|Land                                      |  |          | 3,496   |   |              |  | 24,202    |  
|Owner occupied                            |  |          | 8,100   |   |              |  | 86,809    |  
|Other                                     |  |          | 161,180 |   |              |  | 464,902   |  
|Small Business:                           |  |          |         |   |              |  |           |  
|Real estate                               |  |          | 19,963  |   |              |  | 184,919   |  
|Non-real estate                           |  |          | 11,755  |   |              |  | 99,835    |  
|Consumer:                                 |  |          |         |   |              |  |           |  
|Consumer - home equity                    |  |          | 19,958  |   |              |  | 545,908   |  
|Consumer other                            |  |          | 30      |   |              |  | 10,704    |  
|Deposit overdrafts                        |  |          |        |   |              |  | 1,971     |  
|Residential:                              |  |          |         |   |              |  |           |  
|Residential-interest only                 |  |          | 18,077  |   |              |  | 369,531   |  
|Residential-amortizing                    |  |          | 31,065  |   |              |  | 558,026   |  
|                                          |  |          |         |   |              |  |           |  
|Total gross loans                         |  |          | 362,685 |   |              |  | 2,569,545 |  
|                                          |  |          |         |   |              |  |           |  
|Adjustments:                              |  |          |         |   |              |  |           |  
|Premiums, discounts and net deferred fees |  |          | 262     |   |              |  | 2,578     |  
|Allowance for loan losses                 |  |          | (7,153  | ) |              |  | (129,887  | )
|                                          |  |          |         |   |              |  |           |  
|Loans receivable - net                    |  | $        | 355,794 |   |              |  | 2,442,236 |  
|                                          |  |          |         |   |              |  |           |  
|Loans held for sale                       |  | $        | 47,029  |   |              |  | 55,601    |  
|                                          |  |          |         |   |              |  |           |  

Loans held for sale -Loans held for sale as of June 30, 2012 consisted of $30.9 million of commercial real estate
loans and $16.1 million of residential loans. Loans held for sale as of December 31, 2011 consisted of $35.8 million of commercial real estate loans and $19.8 million of residential loans. BBX Capital transfers loans to held-for-sale when,
based on the current economic environment and related market conditions, it does not have the intent to hold those loans for the foreseeable future.



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The recorded investment (unpaid principal balance less
charge-offs and deferred fees) of non-accrual loans receivable and loans held for sale as of June 30, 2012 and December 31, 2011 was as follows (in thousands):



|                           |  |          |         |  |              |  |         | 
|-------------------------- |  | -------- | ------- |  | ------------ |  | ------- | 
|                           |  | June 30, |         |  | December 31, | 
|Loan Class                 |  | 2012     |         |  | 2011         | 
|Commercial non-real estate |  | $        | 5,607   |  |              |  | 19,172  | 
|Commercial real estate:    |  |          |         |  |              |  |         | 
|Residential                |  |          | 63,381  |  |              |  | 71,719  | 
|Land                       |  |          | 12,888  |  |              |  | 14,839  | 
|Owner occupied             |  |          | 3,140   |  |              |  | 4,168   | 
|Other                      |  |          | 91,590  |  |              |  | 123,396 | 
|Small business:            |  |          |         |  |              |  |         | 
|Real estate                |  |          | 4,887   |  |              |  | 10,265  | 
|Non-real estate            |  |          | 1,380   |  |              |  | 1,751   | 
|Consumer                   |  |          | 8,261   |  |              |  | 14,134  | 
|Residential:               |  |          |         |  |              |  |         | 
|Interest only              |  |          | 22,085  |  |              |  | 33,202  | 
|Amortizing                 |  |          | 35,005  |  |              |  | 52,653  | 
|                           |  |          |         |  |              |  |         | 
|Total nonaccrual loans     |  | $        | 248,224 |  |              |  | 345,299 | 
|                           |  |          |         |  |              |  |         | 

An age analysis of the past due recorded investment in loans receivable and loans held for sale
as of June 30, 2012 and December 31, 2011 was as follows (in thousands):



|                           |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 
|-------------------------- |  | ------------------ | ----- |  | ------------------ |  | ----- | -------------- |  |  | ------------- |  |  | ------- | ------- |  | -------------------- |  | ------- |  |  |  | ------- | 
|June 30, 2012              |  | 31-59 DaysPast Due |       |  | 60-89 DaysPast Due |  |       | 90 Daysor More |  |  | TotalPast Due |  |  | Current |         |  | TotalLoansReceivable | 
|Commercial non-real estate |  | $                  | 2,500 |  |                    |  | 1,093 |                |  |  | 1,381         |  |  |         | 4,974   |  |                      |  | 23,193  |  |  |  | 28,167  | 
|Commercial real estate:    |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 
|Residential                |  |                    |      |  |                    |  |      |                |  |  | 46,328        |  |  |         | 46,328  |  |                      |  | 18,590  |  |  |  | 64,918  | 
|Land                       |  |                    |      |  |                    |  |      |                |  |  | 12,888        |  |  |         | 12,888  |  |                      |  |        |  |  |  | 12,888  | 
|Owner occupied             |  |                    |      |  |                    |  | 138   |                |  |  | 3,002         |  |  |         | 3,140   |  |                      |  | 6,242   |  |  |  | 9,382   | 
|Other                      |  |                    |      |  |                    |  |      |                |  |  | 42,149        |  |  |         | 42,149  |  |                      |  | 135,085 |  |  |  | 177,234 | 
|Small business:            |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 
|Real estate                |  |                    | 893   |  |                    |  |      |                |  |  | 4,127         |  |  |         | 5,020   |  |                      |  | 15,092  |  |  |  | 20,112  | 
|Non-real estate            |  |                    | 20    |  |                    |  |      |                |  |  |              |  |  |         | 20      |  |                      |  | 11,735  |  |  |  | 11,755  | 
|Consumer                   |  |                    | 719   |  |                    |  | 1,134 |                |  |  | 8,261         |  |  |         | 10,114  |  |                      |  | 10,003  |  |  |  | 20,117  | 
|Residential:               |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 
|Residential-interest only  |  |                    | 397   |  |                    |  |      |                |  |  | 21,779        |  |  |         | 22,176  |  |                      |  | 1,286   |  |  |  | 23,462  | 
|Residential-amortizing     |  |                    | 1,358 |  |                    |  | 779   |                |  |  | 32,292        |  |  |         | 34,429  |  |                      |  | 7,512   |  |  |  | 41,941  | 
|                           |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 
|Total                      |  | $                  | 5,887 |  |                    |  | 3,144 |                |  |  | 172,207       |  |  |         | 181,238 |  |                      |  | 228,738 |  |  |  | 409,976 | 
|                           |  |                    |       |  |                    |  |       |                |  |  |               |  |  |         |         |  |                      |  |         |  |  |  |         | 



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##### Table of Contents

|                           |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 
|-------------------------- |  | ------------------ | ------ |  | ------------------ |  | ------ | ------------------ |  |  | ------------- |  |  | ------- | ------- |  | ----------------------- |  | --------- |  |  |  | --------- | 
|December 31, 2011          |  | 31-59 DaysPast Due |        |  | 60-89 DaysPast Due |  |        | 90 Days orMore (1) |  |  | TotalPast Due |  |  | Current |         |  | TotalLoansReceivable(2) | 
|Commercial non-real estate |  | $                  |       |  |                    |  | 2,248  |                    |  |  | 13,292        |  |  |         | 15,540  |  |                         |  | 102,605   |  |  |  | 118,145   | 
|Commercial real estate:    |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 
|Residential                |  |                    |       |  |                    |  |       |                    |  |  | 44,633        |  |  |         | 44,633  |  |                         |  | 64,134    |  |  |  | 108,767   | 
|Land                       |  |                    | 681    |  |                    |  |       |                    |  |  | 14,839        |  |  |         | 15,520  |  |                         |  | 18,070    |  |  |  | 33,590    | 
|Owner occupied             |  |                    | 2,008  |  |                    |  |       |                    |  |  | 4,031         |  |  |         | 6,039   |  |                         |  | 82,102    |  |  |  | 88,141    | 
|Other                      |  |                    |       |  |                    |  | 5,467  |                    |  |  | 47,841        |  |  |         | 53,308  |  |                         |  | 431,399   |  |  |  | 484,707   | 
|Small business:            |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 
|Real estate                |  |                    | 2,089  |  |                    |  | 372    |                    |  |  | 9,449         |  |  |         | 11,910  |  |                         |  | 173,009   |  |  |  | 184,919   | 
|Non-real estate            |  |                    |       |  |                    |  | 462    |                    |  |  | 76            |  |  |         | 538     |  |                         |  | 99,187    |  |  |  | 99,725    | 
|Consumer                   |  |                    | 5,339  |  |                    |  | 3,996  |                    |  |  | 14,134        |  |  |         | 23,469  |  |                         |  | 538,569   |  |  |  | 562,038   | 
|Residential:               |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 
|Residential-interest only  |  |                    | 2,656  |  |                    |  | 3,488  |                    |  |  | 32,317        |  |  |         | 38,461  |  |                         |  | 343,958   |  |  |  | 382,419   | 
|Residential-amortizing     |  |                    | 3,968  |  |                    |  | 4,513  |                    |  |  | 48,189        |  |  |         | 56,670  |  |                         |  | 514,570   |  |  |  | 571,240   | 
|                           |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 
|Total                      |  | $                  | 16,741 |  |                    |  | 20,546 |                    |  |  | 228,801       |  |  |         | 266,088 |  |                         |  | 2,367,603 |  |  |  | 2,633,691 | 
|                           |  |                    |        |  |                    |  |        |                    |  |  |               |  |  |         |         |  |                         |  |           |  |  |  |           | 



|(1) | Includes an $80,000 commercial loan that was past due greater than 90 days and still accruing.
|--- | ----------------------------------------------------------------------------------------------



|(2) | At December 31, 2011, total loans receivable excluded purchase accounting of $6.0 million in connection with BFCs share acquisitions of BBX Capital in 2008.
The 2008 share acquisitions were accounted for as step acquisitions under the purchase method of accounting then in effect.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The activity in the allowance for loan losses by portfolio segment for
the three months ended June 30, 2012 was as follows (in thousands):



|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|---------------------------------------------------- |  | ------------------------ | ------ | - | --------------------- |  | ------- | ------------- |  |  | -------- | - |  | ----------- | ------ | - | ----- |  | ------ | - |  |  | ------- | -
|                                                     |  | CommercialNon-RealEstate |        |   | CommercialReal Estate |  |         | SmallBusiness |  |  | Consumer |   |  | Residential |        |   | Total | 
|Allowance for Loan Losses:                           |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Beginning balance                                    |  | $                        | 1,359  |   |                       |  | 4,212   |               |  |  | 1,020    |   |  |             | 366    |   |       |  | 210    |   |  |  | 7,167   |  
|Charge-off :                                         |  |                          |       |   |                       |  | (1,778  | )             |  |  | (748     | ) |  |             | (849   | ) |       |  | (1,547 | ) |  |  | (4,922  | )
|Recoveries :                                         |  |                          | 386    |   |                       |  | 1,631   |               |  |  | 128      |   |  |             | 236    |   |       |  | 281    |   |  |  | 2,662   |  
|Provision :                                          |  |                          | (945   | ) |                       |  | 318     |               |  |  |         |   |  |             |       |   |       |  |       |   |  |  | (627    | )
|Discontinued operations provision:                   |  |                          |       |   |                       |  |        |               |  |  | 926      |   |  |             | 654    |   |       |  | 1,293  |   |  |  | 2,873   |  
|Transfer to assets held for sale:                    |  |                          |       |   |                       |  |        |               |  |  |         |   |  |             |       |   |       |  |       |   |  |  |        |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Ending balance                                       |  | $                        | 800    |   |                       |  | 4,383   |               |  |  | 1,326    |   |  |             | 407    |   |       |  | 237    |   |  |  | 7,153   |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Ending balance individually evaluated for impairment |  | $                        | 237    |   |                       |  | 1,265   |               |  |  | 790      |   |  |             |       |   |       |  |       |   |  |  | 2,292   |  
|Ending balance collectively evaluated for impairment |  |                          | 563    |   |                       |  | 3,118   |               |  |  | 536      |   |  |             | 407    |   |       |  | 237    |   |  |  | 4,861   |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Total                                                |  | $                        | 800    |   |                       |  | 4,383   |               |  |  | 1,326    |   |  |             | 407    |   |       |  | 237    |   |  |  | 7,153   |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Loans receivable:                                    |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Ending balance individually evaluated for impairment |  | $                        | 7,361  |   |                       |  | 194,168 |               |  |  | 957      |   |  |             | 7,907  |   |       |  | 40,331 |   |  |  | 250,724 |  
|Ending balance collectively evaluated for impairment |  | $                        | 20,806 |   |                       |  | 39,502  |               |  |  | 30,761   |   |  |             | 12,081 |   |       |  | 8,811  |   |  |  | 111,961 |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Total                                                |  | $                        | 28,167 |   |                       |  | 233,670 |               |  |  | 31,718   |   |  |             | 19,988 |   |       |  | 49,142 |   |  |  | 362,685 |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Purchases of loans                                   |  | $                        |       |   |                       |  |        |               |  |  |         |   |  |             |       |   |       |  |       |   |  |  |        |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Proceeds from loan sales                             |  | $                        |       |   |                       |  |        |               |  |  |         |   |  |             |       |   |       |  |       |   |  |  |        |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  
|Transfer to loans held for sale                      |  | $                        |       |   |                       |  |        |               |  |  |         |   |  |             |       |   |       |  |       |   |  |  |        |  
|                                                     |  |                          |        |   |                       |  |         |               |  |  |          |   |  |             |        |   |       |  |        |   |  |  |         |  



30



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##### Table of Contents

The activity in the allowance for loan losses by portfolio segment for
the three months ended June 30, 2011 was as follows (in thousands):



|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|---------------------------------------------------- |  | ------------------------- | ------- | - | --------------------- |  | ------- | ------------- |  |  | -------- | - |  | ----------- | ------- | - | ----- |  | --------- | - |  |  | --------- | -
|                                                     |  | CommercialNon-Real Estate |         |   | CommercialReal Estate |  |         | SmallBusiness |  |  | Consumer |   |  | Residential |         |   | Total | 
|Allowance for Loan Losses:                           |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Beginning balance                                    |  | $                         | 10,708  |   |                       |  | 79,142  |               |  |  | 10,125   |   |  |             | 27,511  |   |       |  | 27,565    |   |  |  | 155,051   |  
|Charge-offs:                                         |  |                           | (124    | ) |                       |  | (15,100 | )             |  |  | (2,010   | ) |  |             | (6,379  | ) |       |  | (5,767    | ) |  |  | (29,380   | )
|Recoveries :                                         |  |                           | 57      |   |                       |  | 75      |               |  |  | 203      |   |  |             | 492     |   |       |  | 435       |   |  |  | 1,262     |  
|Provision :                                          |  |                           | 376     |   |                       |  | 3,937   |               |  |  |         |   |  |             |        |   |       |  |          |   |  |  | 4,313     |  
|Discontinued operations provision:                   |  |                           |        |   |                       |  |        |               |  |  | 1,535    |   |  |             | 3,375   |   |       |  | 1,487     |   |  |  | 6,397     |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Ending balance                                       |  | $                         | 11,017  |   |                       |  | 68,054  |               |  |  | 9,853    |   |  |             | 24,999  |   |       |  | 23,720    |   |  |  | 137,643   |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Ending balance individually evaluated for impairment |  | $                         | 9,618   |   |                       |  | 47,638  |               |  |  | 1,595    |   |  |             | 1,671   |   |       |  | 4,555     |   |  |  | 65,077    |  
|Ending balance collectively evaluated for impairment |  |                           | 1,399   |   |                       |  | 20,416  |               |  |  | 8,258    |   |  |             | 23,328  |   |       |  | 19,165    |   |  |  | 72,566    |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Total                                                |  | $                         | 11,017  |   |                       |  | 68,054  |               |  |  | 9,853    |   |  |             | 24,999  |   |       |  | 23,720    |   |  |  | 137,643   |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Loans receivable: (1)                                |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Ending balance individually evaluated for impairment |  | $                         | 34,569  |   |                       |  | 285,325 |               |  |  | 10,370   |   |  |             | 24,576  |   |       |  | 57,740    |   |  |  | 412,580   |  
|Ending balance collectively evaluated for impairment |  | $                         | 90,261  |   |                       |  | 466,287 |               |  |  | 282,388  |   |  |             | 568,561 |   |       |  | 982,126   |   |  |  | 2,389,623 |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Total                                                |  | $                         | 124,830 |   |                       |  | 751,612 |               |  |  | 292,758  |   |  |             | 593,137 |   |       |  | 1,039,866 |   |  |  | 2,802,203 |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Purchases of loans                                   |  | $                         |        |   |                       |  |        |               |  |  |         |   |  |             |        |   |       |  | 9,816     |   |  |  | 9,816     |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Proceeds from loan sales                             |  | $                         |        |   |                       |  | 24,693  |               |  |  |         |   |  |             |        |   |       |  | 4,983     |   |  |  | 29,676    |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  
|Transfer to loans held for sale                      |  | $                         |        |   |                       |  | 28,444  |               |  |  |         |   |  |             |        |   |       |  |          |   |  |  | 28,444    |  
|                                                     |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |           |   |  |  |           |  



|(1) | Total loans receivable exclude purchase accounting adjustments of $7.6 million as of June 30, 2011, in connection with BFCs acquisitions of shares of BBX
Capitals Class A Common Stock during 2008. The 2008 share acquisitions were accounted for as step acquisitions under the purchase method of accounting then in effect.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31



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##### Table of Contents

The activity in the allowance for loan losses by portfolio segment for
the six months ended June 30, 2012 was as follows (in thousands):



|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|---------------------------------- |  | ------------------------- | ------- | - | --------------------- |  | ------- | ------------- |  |  | -------- | - |  | ----------- | ------- | - | ----- |  | ------- | - |  |  | ------- | -
|                                   |  | CommercialNon-Real Estate |         |   | CommercialReal Estate |  |         | SmallBusiness |  |  | Consumer |   |  | Residential |         |   | Total | 
|Allowance for Loan Losses:         |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Beginning balance                  |  | $                         | 16,407  |   |                       |  | 67,054  |               |  |  | 7,168    |   |  |             | 22,554  |   |       |  | 16,704  |   |  |  | 129,887 |  
|Charge-off :                       |  |                           | (14,615 | ) |                       |  | (53,281 | )             |  |  | (2,372   | ) |  |             | (7,413  | ) |       |  | (11,756 | ) |  |  | (89,437 | )
|Recoveries :                       |  |                           | 440     |   |                       |  | 1,631   |               |  |  | 270      |   |  |             | 1,031   |   |       |  | 1,277   |   |  |  | 4,649   |  
|Provision :                        |  |                           | 465     |   |                       |  | (1,857  | )             |  |  |         |   |  |             |        |   |       |  |        |   |  |  | (1,392  | )
|Transfer to held for sale:         |  |                           | (1,897  | ) |                       |  | (9,164  | )             |  |  | (4,454   | ) |  |             | (20,639 | ) |       |  | (12,491 | ) |  |  | (48,645 | )
|Discontinued operations Provision: |  |                           |        |   |                       |  |        |               |  |  | 714      |   |  |             | 4,874   |   |       |  | 6,503   |   |  |  | 12,091  |  
|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Ending balance                     |  | $                         | 800     |   |                       |  | 4,383   |               |  |  | 1,326    |   |  |             | 407     |   |       |  | 237     |   |  |  | 7,153   |  
|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Purchases of loans                 |  | $                         |        |   |                       |  |        |               |  |  |         |   |  |             |        |   |       |  |        |   |  |  |        |  
|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Proceeds from loan sales           |  | $                         |        |   |                       |  | 1,000   |               |  |  |         |   |  |             |         |   |       |  |        |   |  |  | 1,000   |  
|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Transfer to held for sale          |  | $                         |        |   |                       |  | 16,140  |               |  |  |         |   |  |             |        |   |       |  |        |   |  |  | 16,140  |  
|                                   |  |                           |         |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  

The activity in the allowance for loan losses by portfolio segment for
the six months ended June 30, 2011 was as follows (in thousands):



|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|---------------------------------- |  | ------------------------- | ------ | - | --------------------- |  | ------- | ------------- |  |  | -------- | - |  | ----------- | ------- | - | ----- |  | ------- | - |  |  | ------- | -
|                                   |  | CommercialNon-Real Estate |        |   | CommercialReal Estate |  |         | SmallBusiness |  |  | Consumer |   |  | Residential |         |   | Total | 
|Allowance for Loan Losses:         |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Beginning balance                  |  | $                         | 10,786 |   |                       |  | 83,859  |               |  |  | 11,514   |   |  |             | 32,043  |   |       |  | 23,937  |   |  |  | 162,139 |  
|Charge-off :                       |  |                           | (588   | ) |                       |  | (26,152 | )             |  |  | (4,621   | ) |  |             | (14,193 | ) |       |  | (13,778 | ) |  |  | (59,332 | )
|Recoveries :                       |  |                           | 848    |   |                       |  | 793     |               |  |  | 513      |   |  |             | 900     |   |       |  | 566     |   |  |  | 3,620   |  
|Provision :                        |  |                           | (29    | ) |                       |  | 11,169  |               |  |  |         |   |  |             |        |   |       |  |        |   |  |  | 11,140  |  
|Transfer to held for sale:         |  |                           |       |   |                       |  | (1,615  | )             |  |  |         |   |  |             |        |   |       |  | (5,691  | ) |  |  | (7,306  | )
|Discontinued operations Provision: |  |                           |       |   |                       |  |        |               |  |  | 2,447    |   |  |             | 6,249   |   |       |  | 18,686  |   |  |  | 27,382  |  
|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Ending balance                     |  | $                         | 11,017 |   |                       |  | 68,054  |               |  |  | 9,853    |   |  |             | 24,999  |   |       |  | 23,720  |   |  |  | 137,643 |  
|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Purchases of loans                 |  | $                         |       |   |                       |  |        |               |  |  |         |   |  |             |        |   |       |  | 13,680  |   |  |  | 13,680  |  
|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Proceeds from loan sales           |  | $                         |       |   |                       |  | 27,793  |               |  |  |         |   |  |             |         |   |       |  | 12,601  |   |  |  | 40,394  |  
|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  
|Transfer to held for sale          |  | $                         |       |   |                       |  | 30,894  |               |  |  |         |   |  |             |        |   |       |  | 25,072  |   |  |  | 55,966  |  
|                                   |  |                           |        |   |                       |  |         |               |  |  |          |   |  |             |         |   |       |  |         |   |  |  |         |  

As part of the transition of the regulation of OTS savings associations to the OCC, the OCC provided guidance to thrifts related to
their transition to OCC regulatory reporting, which was to be implemented no later than March 31, 2012, including guidance surrounding specific valuation allowances on collateral dependent loans. Under OCC guidance where the appraised value of
collateral on a collateral dependent loan is less than the recorded investment of the loan, a charge-off of the amount of the deficiency rather than a specific valuation allowance is now generally required. Management considered the appraisals on
its impaired collateral dependent loans, including appraised values and appraisal dates and during the first quarter of 2012, BBX Capital charged down the recorded investment of loans by $66.5 million to the fair value of the collateral less cost to
sell. This charge down consisted entirely of the charging off of existing specific valuation allowances. As a specific valuation allowance was previously established for these loans, the charge-offs did not impact the provision for loan losses or
the net loss during the three months ended March 31, 2012, but did reduce BBX Capitals allowance for loan losses and recorded investment in the loans.



32



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##### Table of Contents

Impaired Loans - Loans are considered impaired when, based on current information and events,
BBX Capital believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. For a loan that has been restructured, the contractual terms of the loan agreement refer to the
contractual terms specified by the original loan agreement, not the contractual terms specified by the restructured agreement. Impairment is evaluated based on past due status for consumer and residential loans. Impairment is evaluated as part of
BBX Capitals on-going credit monitoring process for commercial and small business loans which results in the evaluation for impairment of all substandard loans. Factors considered in determining if a loan is impaired are past payment history,
strength of the borrower or guarantors, and cash flow associated with the collateral or business. If a loan is impaired, a specific valuation allowance is allocated, if necessary, based on the present value of estimated future cash flows using the
loans existing interest rate or based on the fair value of the loan. Collateral dependent impaired loans are charged down to the fair value of collateral less cost to sell. Interest payments on impaired loans for all loan classes are
recognized on a cash basis, unless collectability of the principal and interest amount is probable, in which case interest is recognized on an accrual basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Impaired
loans held for sale are measured for impairment based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure and sale.

Impaired loans as of June 30, 2012 and December 31, 2011 were as follows (in
thousands):



|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|----------------------------------- |  | ------------------- | ------- |  | ----------------------- |  | ------- | ---------------- |  |  | ------------------ |  |  | ---------------------- | ------- |  | ---------------- |  | ------- |  |  |  | ------ | 
|                                    |  | As of June 30, 2012 |         |  | As of December 31, 2011 | 
|                                    |  | RecordedInvestment  |         |  | UnpaidPrincipalBalance  |  |         | RelatedAllowance |  |  | RecordedInvestment |  |  | UnpaidPrincipalBalance |         |  | RelatedAllowance | 
|With a related allowance recorded:  |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Commercial non-real estate          |  | $                   | 1,174   |  |                         |  | 1,174   |                  |  |  | 237                |  |  |                        | 17,792  |  |                  |  | 17,792  |  |  |  | 15,408 | 
|Commercial real estate:             |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Residential                         |  |                     | 7,544   |  |                         |  | 12,411  |                  |  |  | 67                 |  |  |                        | 64,841  |  |                  |  | 70,780  |  |  |  | 20,986 | 
|Land                                |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 5,451   |  |                  |  | 5,451   |  |  |  | 1,765  | 
|Owner occupied                      |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 1,715   |  |                  |  | 1,715   |  |  |  | 100    | 
|Other                               |  |                     | 35,307  |  |                         |  | 50,429  |                  |  |  | 1,198              |  |  |                        | 130,771 |  |                  |  | 149,742 |  |  |  | 29,731 | 
|Small business:                     |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Real estate                         |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 6,499   |  |                  |  | 6,499   |  |  |  | 85     | 
|Non-real estate                     |  |                     | 957     |  |                         |  | 957     |                  |  |  | 790                |  |  |                        | 1,339   |  |                  |  | 1,339   |  |  |  | 776    | 
|Consumer                            |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 15,951  |  |                  |  | 17,502  |  |  |  | 1,454  | 
|Residential:                        |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Residential-interest only           |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 15,441  |  |                  |  | 20,667  |  |  |  | 2,982  | 
|Residential-amortizing              |  |                     |        |  |                         |  |        |                  |  |  |                   |  |  |                        | 20,554  |  |                  |  | 24,545  |  |  |  | 3,960  | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Total with allowance recorded       |  | $                   | 44,982  |  |                         |  | 64,971  |                  |  |  | 2,292              |  |  |                        | 280,354 |  |                  |  | 316,032 |  |  |  | 77,247 | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|With no related allowance recorded: |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Commercial non-real estate          |  | $                   | 6,933   |  |                         |  | 7,059   |                  |  |  |                   |  |  |                        | 5,922   |  |                  |  | 5,922   |  |  |  |       | 
|Commercial real estate:             |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Residential                         |  |                     | 56,297  |  |                         |  | 122,432 |                  |  |  |                   |  |  |                        | 26,735  |  |                  |  | 71,759  |  |  |  |       | 
|Land                                |  |                     | 12,887  |  |                         |  | 35,768  |                  |  |  |                   |  |  |                        | 9,388   |  |                  |  | 30,314  |  |  |  |       | 
|Owner occupied                      |  |                     | 4,549   |  |                         |  | 6,523   |                  |  |  |                   |  |  |                        | 3,882   |  |                  |  | 4,872   |  |  |  |       | 
|Other                               |  |                     | 108,901 |  |                         |  | 147,666 |                  |  |  |                   |  |  |                        | 63,024  |  |                  |  | 86,052  |  |  |  |       | 
|Small business:                     |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Real estate                         |  |                     | 10,566  |  |                         |  | 12,167  |                  |  |  |                   |  |  |                        | 10,265  |  |                  |  | 12,007  |  |  |  |       | 
|Non-real estate                     |  |                     | 744     |  |                         |  | 868     |                  |  |  |                   |  |  |                        | 792     |  |                  |  | 1,107   |  |  |  |       | 
|Consumer                            |  |                     | 18,723  |  |                         |  | 22,966  |                  |  |  |                   |  |  |                        | 9,719   |  |                  |  | 13,246  |  |  |  |       | 
|Residential:                        |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Residential-interest only           |  |                     | 22,085  |  |                         |  | 38,244  |                  |  |  |                   |  |  |                        | 17,761  |  |                  |  | 28,042  |  |  |  |       | 
|Residential-amortizing              |  |                     | 37,075  |  |                         |  | 53,254  |                  |  |  |                   |  |  |                        | 34,494  |  |                  |  | 45,680  |  |  |  |       | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Total with no allowance recorded    |  | $                   | 278,760 |  |                         |  | 446,947 |                  |  |  |                   |  |  |                        | 181,982 |  |                  |  | 299,001 |  |  |  |       | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Commercial non-real estate          |  | $                   | 8,107   |  |                         |  | 8,233   |                  |  |  | 237                |  |  |                        | 23,714  |  |                  |  | 23,714  |  |  |  | 15,408 | 
|Commercial real estate              |  |                     | 225,485 |  |                         |  | 375,229 |                  |  |  | 1,265              |  |  |                        | 305,807 |  |                  |  | 420,685 |  |  |  | 52,582 | 
|Small business                      |  |                     | 12,267  |  |                         |  | 13,992  |                  |  |  | 790                |  |  |                        | 18,895  |  |                  |  | 20,952  |  |  |  | 861    | 
|Consumer                            |  |                     | 18,723  |  |                         |  | 22,966  |                  |  |  |                   |  |  |                        | 25,670  |  |                  |  | 30,748  |  |  |  | 1,454  | 
|Residential                         |  |                     | 59,160  |  |                         |  | 91,498  |                  |  |  |                   |  |  |                        | 88,250  |  |                  |  | 118,934 |  |  |  | 6,942  | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 
|Total                               |  | $                   | 323,742 |  |                         |  | 511,918 |                  |  |  | 2,292              |  |  |                        | 462,336 |  |                  |  | 615,033 |  |  |  | 77,247 | 
|                                    |  |                     |         |  |                         |  |         |                  |  |  |                    |  |  |                        |         |  |                  |  |         |  |  |  |        | 



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Average recorded investment and
interest income recognized on impaired loans as of June 30, 2012 were (in thousands):



|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|----------------------------------- |  | --------------------------------------- | ------- |  | ------------------------------------- |  | ----- | -------------------------- |  |  | ------------------------- |  |  |  | ----- | 
|                                    |  | For the Three Months Ended June 30,2012 |         |  | For the Six Months Ended June 30,2012 | 
|                                    |  | Average RecordedInvestment              |         |  | Interest IncomeRecognized             |  |       | Average RecordedInvestment |  |  | Interest IncomeRecognized | 
|With an allowance recorded:         |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 1,187   |  |                                       |  |      |                            |  |  | 1,183                     |  |  |  |      | 
|Commercial real estate:             |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Residential                         |  |                                         | 8,136   |  |                                       |  | 73    |                            |  |  | 10,309                    |  |  |  | 150   | 
|Land                                |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|Owner occupied                      |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|Other                               |  |                                         | 35,361  |  |                                       |  | 251   |                            |  |  | 35,447                    |  |  |  | 503   | 
|Small business:                     |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Real estate                         |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|Non-real estate                     |  |                                         | 958     |  |                                       |  |      |                            |  |  | 959                       |  |  |  |      | 
|Consumer                            |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|Residential:                        |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Residential-interest only           |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|Residential-amortizing              |  |                                         |        |  |                                       |  |      |                            |  |  |                          |  |  |  |      | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Total with allowance recorded       |  | $                                       | 45,642  |  |                                       |  | 324   |                            |  |  | 47,898                    |  |  |  | 653   | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|With no related allowance recorded: |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 6,954   |  |                                       |  | 62    |                            |  |  | 6,413                     |  |  |  | 80    | 
|Commercial real estate:             |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Residential                         |  |                                         | 59,357  |  |                                       |  | 139   |                            |  |  | 68,429                    |  |  |  | 365   | 
|Land                                |  |                                         | 13,301  |  |                                       |  |      |                            |  |  | 14,165                    |  |  |  |      | 
|Owner occupied                      |  |                                         | 5,618   |  |                                       |  | 22    |                            |  |  | 5,671                     |  |  |  | 36    | 
|Other                               |  |                                         | 112,515 |  |                                       |  | 582   |                            |  |  | 123,108                   |  |  |  | 1,169 | 
|Small business:                     |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Real estate                         |  |                                         | 10,659  |  |                                       |  | 109   |                            |  |  | 10,693                    |  |  |  | 215   | 
|Non-real estate                     |  |                                         | 752     |  |                                       |  | 10    |                            |  |  | 760                       |  |  |  | 22    | 
|Consumer                            |  |                                         | 19,140  |  |                                       |  | 82    |                            |  |  | 19,340                    |  |  |  | 163   | 
|Residential:                        |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Residential-interest only           |  |                                         | 22,812  |  |                                       |  |      |                            |  |  | 21,128                    |  |  |  |      | 
|Residential-amortizing              |  |                                         | 39,030  |  |                                       |  | 32    |                            |  |  | 38,877                    |  |  |  | 64    | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Total with no allowance recorded    |  | $                                       | 290,138 |  |                                       |  | 1,038 |                            |  |  | 308,584                   |  |  |  | 2,114 | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 8,141   |  |                                       |  | 62    |                            |  |  | 7,596                     |  |  |  | 80    | 
|Commercial real estate              |  |                                         | 234,288 |  |                                       |  | 1,067 |                            |  |  | 257,129                   |  |  |  | 2,223 | 
|Small business                      |  |                                         | 12,369  |  |                                       |  | 119   |                            |  |  | 12,412                    |  |  |  | 237   | 
|Consumer                            |  |                                         | 19,140  |  |                                       |  | 82    |                            |  |  | 19,340                    |  |  |  | 163   | 
|Residential                         |  |                                         | 61,842  |  |                                       |  | 32    |                            |  |  | 60,005                    |  |  |  | 64    | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 
|Total                               |  | $                                       | 335,780 |  |                                       |  | 1,362 |                            |  |  | 356,482                   |  |  |  | 2,767 | 
|                                    |  |                                         |         |  |                                       |  |       |                            |  |  |                           |  |  |  |       | 



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Average recorded
investment and interest income recognized on impaired loans as of June 30, 2011 were (in thousands):



|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|----------------------------------- |  | --------------------------------------- | ------- |  | -------------------------------------- |  | ----- | ------------------------- |  |  | ------------------------ |  |  |  | ----- | 
|                                    |  | For the Three Months EndedJune 30, 2011 |         |  | For the Six Months 
EndedJune 30, 2011 | 
|                                    |  | AverageRecordedInvestment               |         |  | InterestIncomeRecognized               |  |       | AverageRecordedInvestment |  |  | InterestIncomeRecognized | 
|With an allowance recorded:         |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 15,404  |  |                                        |  | 168   |                           |  |  | 15,872                   |  |  |  | 184   | 
|Commercial real estate:             |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Residential                         |  |                                         | 91,127  |  |                                        |  | 841   |                           |  |  | 87,995                   |  |  |  | 1,251 | 
|Land                                |  |                                         | 5,369   |  |                                        |  | 25    |                           |  |  | 8,649                    |  |  |  | 50    | 
|Owner occupied                      |  |                                         | 3,028   |  |                                        |  |      |                           |  |  | 2,583                    |  |  |  |      | 
|Other                               |  |                                         | 100,280 |  |                                        |  | 388   |                           |  |  | 98,751                   |  |  |  | 682   | 
|Small business:                     |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Real estate                         |  |                                         | 8,209   |  |                                        |  |      |                           |  |  | 6,340                    |  |  |  |      | 
|Non-real estate                     |  |                                         | 1,941   |  |                                        |  |      |                           |  |  | 1,887                    |  |  |  |      | 
|Consumer                            |  |                                         | 17,675  |  |                                        |  |      |                           |  |  | 13,026                   |  |  |  |      | 
|Residential:                        |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Residential-interest only           |  |                                         | 14,413  |  |                                        |  |      |                           |  |  | 20,210                   |  |  |  |      | 
|Residential-amortizing              |  |                                         | 15,342  |  |                                        |  |      |                           |  |  | 18,434                   |  |  |  |      | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Total with allowance recorded       |  | $                                       | 272,788 |  |                                        |  | 1,422 |                           |  |  | 273,747                  |  |  |  | 2,167 | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|With no related allowance recorded: |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 11,746  |  |                                        |  | 2     |                           |  |  | 8,329                    |  |  |  | 8     | 
|Commercial real estate:             |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Residential                         |  |                                         | 21,203  |  |                                        |  | 40    |                           |  |  | 29,080                   |  |  |  | 110   | 
|Land                                |  |                                         | 16,638  |  |                                        |  |      |                           |  |  | 15,771                   |  |  |  |      | 
|Owner occupied                      |  |                                         | 5,018   |  |                                        |  | 33    |                           |  |  | 4,652                    |  |  |  | 69    | 
|Other                               |  |                                         | 80,084  |  |                                        |  | 536   |                           |  |  | 80,513                   |  |  |  | 778   | 
|Small business:                     |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Real estate                         |  |                                         | 9,334   |  |                                        |  | 122   |                           |  |  | 11,465                   |  |  |  | 252   | 
|Non-real estate                     |  |                                         | 624     |  |                                        |  | 7     |                           |  |  | 473                      |  |  |  | 14    | 
|Consumer                            |  |                                         | 9,668   |  |                                        |  | 111   |                           |  |  | 14,122                   |  |  |  | 222   | 
|Residential:                        |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Residential-interest only           |  |                                         | 21,740  |  |                                        |  |      |                           |  |  | 16,969                   |  |  |  |      | 
|Residential-amortizing              |  |                                         | 32,948  |  |                                        |  | 32    |                           |  |  | 30,520                   |  |  |  | 60    | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Total with no allowance recorded    |  | $                                       | 209,003 |  |                                        |  | 883   |                           |  |  | 211,894                  |  |  |  | 1,513 | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Commercial non-real estate          |  | $                                       | 27,150  |  |                                        |  | 170   |                           |  |  | 24,201                   |  |  |  | 192   | 
|Commercial real estate              |  |                                         | 322,747 |  |                                        |  | 1,863 |                           |  |  | 327,994                  |  |  |  | 2,940 | 
|Small business                      |  |                                         | 20,108  |  |                                        |  | 129   |                           |  |  | 20,165                   |  |  |  | 266   | 
|Consumer                            |  |                                         | 27,343  |  |                                        |  | 111   |                           |  |  | 27,148                   |  |  |  | 222   | 
|Residential                         |  |                                         | 84,443  |  |                                        |  | 32    |                           |  |  | 86,133                   |  |  |  | 60    | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 
|Total                               |  | $                                       | 481,791 |  |                                        |  | 2,305 |                           |  |  | 485,641                  |  |  |  | 3,680 | 
|                                    |  |                                         |         |  |                                        |  |       |                           |  |  |                          |  |  |  |       | 

Impaired loans without specific valuation allowances represent loans that were written-down to the fair value of the collateral less
cost to sell, loans in which the collateral value less cost to sell was greater than the carrying value of the loan, loans in which the present value of the cash flows discounted at the loans effective interest rate were equal to or greater
than the carrying value of the loans, or large groups of smaller-balance homogeneous loans that were collectively measured for impairment.

BBX Capital monitors impaired collateral dependent loans and performs an impairment analysis on these loans quarterly. Generally, a full appraisal is
obtained when a real estate loan is initially evaluated for impairment and an updated full appraisal is obtained within one year from the prior appraisal date, or earlier if management deems it appropriate based on significant changes in market
conditions. In instances where a property is in the process of foreclosure, an updated appraisal may be postponed beyond one year, as an appraisal is required on the date of



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foreclosure; however, such loans are subject to quarterly impairment analyses. Included in total impaired loans as of June 30, 2012 was $162.4 million of collateral dependent loans, of which
$71.1 million were measured for impairment using current appraisals and $91.3 million were measured by adjusting appraisals greater than six months old, as appropriate, to reflect changes in market conditions subsequent to the last appraisal date.
Appraised values with respect to seven loans which did not have current appraisals were adjusted down by an aggregate amount of $2.5 million to reflect the change in market conditions since the appraisal date.

BBX Capital had commitments to lend $0.2 million of additional funds on impaired loans as of June 30, 2012.

Credit Quality Information

Management of BBX Capital monitors delinquency trends, net charge-off levels of classified loans, impaired loans and general economic conditions
nationwide and in Florida in an effort to assess loan credit quality. BBX Capital uses a risk grading matrix to monitor credit quality for commercial and small business loans. Risk grades are assigned to each commercial and small business loan upon
origination. The loan officers monitor the risk grades and these risk grades are reviewed periodically by a third party consultant. BBX Capital assigns risk grades on a scale of 1 to 13. A general description of the risk grades is as follows:

Grades 1 to 7  The loans in these risk grades are generally well protected by the current net worth and paying capacity of the borrower
or guarantors or by the fair value, less cost to sell, of the underlying collateral.

Grades 8 to 9  Not used.

Grade 10  These loans are considered to have potential weaknesses that deserve managements close attention. While these loans do not expose
BBX Capital to immediate risk of loss, if left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan.

Grade 11  These loans are considered to be inadequately protected by the current sound net worth and paying capacity of the borrower or guarantors or by the collateral pledged, if any. Loans in this
grade have well-defined weaknesses that jeopardize the liquidation of the loan and there is a distinct possibility that BBX Capital may sustain some credit loss if the weaknesses are not corrected.

Grade 12  These loans are considered to have all the weaknesses of a Grade 11 with the added characteristic that the weaknesses make collection of
BBX Capitals investment in the loan highly questionable and improbable on the basis of currently known facts, conditions and fair values of the collateral.

Grade 13  These loans, or portions thereof, are considered uncollectible and of such little value that continuance on BBX Capitals books as an asset is not warranted. Such loans are generally
charged down or completely charged off.

The following table presents risk grades for commercial and small business
loans including loans held for sale as of June 30, 2012 (in thousands):



|              |  |                          |        |  |                       |  |        |                |  |  |                                    |  |  |                            |       |  |                          |  |         |                             |  |  |        |  |  |  |        | 
|------------- |  | ------------------------ | ------ |  | --------------------- |  | ------ | -------------- |  |  | ---------------------------------- |  |  | -------------------------- | ----- |  | ------------------------ |  | ------- | --------------------------- |  |  | ------ |  |  |  | ------ | 
|              |  | CommercialNonReal Estate |        |  | CommercialResidential |  |        | CommercialLand |  |  | OwnerOccupiedCommercialReal Estate |  |  | OtherCommercialReal Estate |       |  | SmallBusinessReal Estate |  |         | SmallBusinessNon-RealEstate | 
|Grade:        |  |                          |        |  |                       |  |        |                |  |  |                                    |  |  |                            |       |  |                          |  |         |                             |  |  |        |  |  |  |        | 
|Grades 1 to 7 |  | $                        | 188    |  |                       |  |       |                |  |  |                                   |  |  |                            | 5,285 |  |                          |  | 25,945  |                             |  |  |       |  |  |  | 695    | 
|Grade 10      |  |                          | 2,068  |  |                       |  | 1,538  |                |  |  |                                   |  |  |                            |      |  |                          |  | 21,220  |                             |  |  | 2,213  |  |  |  | 4,180  | 
|Grade 11      |  |                          | 25,911 |  |                       |  | 63,380 |                |  |  | 12,888                             |  |  |                            | 4,097 |  |                          |  | 130,069 |                             |  |  | 17,899 |  |  |  | 6,880  | 
|              |  |                          |        |  |                       |  |        |                |  |  |                                    |  |  |                            |       |  |                          |  |         |                             |  |  |        |  |  |  |        | 
|Total (1)     |  | $                        | 28,167 |  |                       |  | 64,918 |                |  |  | 12,888                             |  |  |                            | 9,382 |  |                          |  | 177,234 |                             |  |  | 20,112 |  |  |  | 11,755 | 
|              |  |                          |        |  |                       |  |        |                |  |  |                                    |  |  |                            |       |  |                          |  |         |                             |  |  |        |  |  |  |        | 



36



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The following table presents risk grades for commercial and small business
loans including loans held for sale as of December 31, 2011 (in thousands):



|              |  |                          |         |  |                       |  |         |                |  |  |                                      |  |  |                            |        |  |                          |  |         |                              |  |  |         |  |  |  |        | 
|------------- |  | ------------------------ | ------- |  | --------------------- |  | ------- | -------------- |  |  | ------------------------------------ |  |  | -------------------------- | ------ |  | ------------------------ |  | ------- | ---------------------------- |  |  | ------- |  |  |  | ------ | 
|              |  | CommercialNonReal Estate |         |  | CommercialResidential |  |         | CommercialLand |  |  | Owner 
OccupiedCommercialReal Estate |  |  | OtherCommercialReal Estate |        |  | SmallBusinessReal Estate |  |         | SmallBusinessNon-Real Estate | 
|Risk Grade:   |  |                          |         |  |                       |  |         |                |  |  |                                      |  |  |                            |        |  |                          |  |         |                              |  |  |         |  |  |  |        | 
|Grades 1 to 7 |  | $                        | 71,798  |  |                       |  | 16,085  |                |  |  | 18,752                               |  |  |                            | 82,251 |  |                          |  | 250,238 |                              |  |  | 157,237 |  |  |  | 85,942 | 
|Grade 10      |  |                          | 6,021   |  |                       |  | 1,375   |                |  |  |                                     |  |  |                            |       |  |                          |  | 50,208  |                              |  |  | 2,837   |  |  |  | 4,306  | 
|Grade 11      |  |                          | 40,326  |  |                       |  | 91,307  |                |  |  | 14,838                               |  |  |                            | 5,890  |  |                          |  | 184,261 |                              |  |  | 24,845  |  |  |  | 9,477  | 
|              |  |                          |         |  |                       |  |         |                |  |  |                                      |  |  |                            |        |  |                          |  |         |                              |  |  |         |  |  |  |        | 
|Total (1)     |  | $                        | 118,145 |  |                       |  | 108,767 |                |  |  | 33,590                               |  |  |                            | 88,141 |  |                          |  | 484,707 |                              |  |  | 184,919 |  |  |  | 99,725 | 
|              |  |                          |         |  |                       |  |         |                |  |  |                                      |  |  |                            |        |  |                          |  |         |                              |  |  |         |  |  |  |        | 



|(1) | There were no loans risk graded 12 or 13 as of June 30, 2012 or December 31, 2011.
|--- | ----------------------------------------------------------------------------------

BBX Capital monitors the credit quality of residential loans through loan-to-value ratios of the underlying collateral. Elevated
loan-to-value ratios indicate the likelihood of increased credit losses upon default which results in higher loan portfolio credit risk.

The loan-to-value ratios of BBX Capitals residential loans were as follows (in
thousands):



|                         |  |                          |        |  |                             |  |        |                          |  |  |                       |  |  |  |         | 
|------------------------ |  | ------------------------ | ------ |  | --------------------------- |  | ------ | ------------------------ |  |  | --------------------- |  |  |  | ------- | 
|                         |  | As of June 30, 2012 (1)  |        |  | As of December 31, 2011 (1) | 
|Loan-to-value ratios     |  | ResidentialInterest Only |        |  | ResidentialAmortizing       |  |        | ResidentialInterest Only |  |  | ResidentialAmortizing | 
|Ratios not available (2) |  | $                        | 4,764  |  |                             |  | 19,081 |                          |  |  | 124,868               |  |  |  | 304,372 | 
|=<60%                    |  |                          | 413    |  |                             |  | 3,532  |                          |  |  | 20,314                |  |  |  | 68,817  | 
|60.1% - 70%              |  |                          | 548    |  |                             |  | 1,148  |                          |  |  | 10,316                |  |  |  | 30,033  | 
|70.1% - 80%              |  |                          | 254    |  |                             |  | 1,791  |                          |  |  | 24,784                |  |  |  | 32,271  | 
|80.1% - 90%              |  |                          | 988    |  |                             |  | 2,000  |                          |  |  | 27,622                |  |  |  | 27,523  | 
|>90.1%                   |  |                          | 16,496 |  |                             |  | 14,388 |                          |  |  | 174,515               |  |  |  | 108,224 | 
|                         |  |                          |        |  |                             |  |        |                          |  |  |                       |  |  |  |         | 
|Total                    |  | $                        | 23,463 |  |                             |  | 41,940 |                          |  |  | 382,419               |  |  |  | 571,240 | 
|                         |  |                          |        |  |                             |  |        |                          |  |  |                       |  |  |  |         | 



|(1) | Current loan-to-value ratios (LTV) for the majority of the portfolio were obtained as of the second quarter of 2011 based on automated valuation models.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Ratios not available consisted of property not in the automated valuation database, and $10.0 million and $78.8 million as of June 30, 2012 and December 31,
2011, respectively, of loans originated under the community reinvestment act program that are not monitored based on loan-to-value.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BBX Capital monitors the credit quality of its portfolio of consumer loans secured by real estate utilizing loanto-value ratios
at origination. BBX Capitals experience indicates that default rates are significantly lower with loans that have lower loan-to-value ratios at origination.

The loan-to-value ratios at loan origination of BBX Capitals consumer loans secured
by real estate were as follows (in thousands):



|                     |  |                      |        |  |                  |  |         | 
|-------------------- |  | -------------------- | ------ |  | ---------------- |  | ------- | 
|                     |  | Consumer Home Equity |       
|Loan-to-value ratios |  | June 30,2012         |        |  | December 31,2011 | 
|<70%                 |  | $                    | 16,931 |  |                  |  | 334,050 | 
|70.1% - 80%          |  |                      | 2,001  |  |                  |  | 97,516  | 
|80.1% - 90%          |  |                      | 1,026  |  |                  |  | 62,674  | 
|90.1% -100%          |  |                      |       |  |                  |  | 40,327  | 
|>100%                |  |                      |       |  |                  |  | 11,341  | 
|                     |  |                      |        |  |                  |  |         | 
|Total                |  | $                    | 19,958 |  |                  |  | 545,908 | 
|                     |  |                      |        |  |                  |  |         | 



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BBX Capital monitors the credit quality of its consumer non-real estate loans based on loan delinquencies.

The restructuring of a loan is considered a troubled debt restructuring if both (i) the borrower is experiencing financial
difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules, extending loan maturities, deferring loan
payments until the loan maturity date and other actions intended to minimize potential losses. The majority of concessions for consumer loans were changing monthly payments from interest and principal payments to interest only payments as well as
deferring monthly loan payments until the loan maturity date. Commercial real estate and non-real estate loan concessions were primarily below market interest rates based on the risk profile of the loan and extensions of maturity dates. Residential
and small business loan concessions were mainly reductions of monthly payments by extending the amortization period and/or deferring monthly payments.

There was no financial statement effect of consumer and residential troubled debt restructured loans as the affected loans were generally on non-accrual status and measured for impairment before the
restructuring. The financial statement effects of commercial and small business troubled debt restructured loans was the establishment of specific valuation allowances, if any, in place of the general allowance for those loans that had not already
been placed on nonaccrual status. There was an impact to the allowance for loan losses as a result of the concessions made, which generally results from the expectation of slower future cash flows.

Troubled debt restructurings during the three months ended
June 30, 2012 and 2011 were as follows (dollars in thousands):



|                                 |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|-------------------------------- |  | -------------------------- | - |  | ------------------ | - | -- | ------ |  |  | ------------------ |  |  | - | ------ | 
|                                 |  | For the Three Months Ended |  
|                                 |  | June 30, 2012              |   |  | June 30, 2011      |  
|                                 |  | Number                     |   |  | RecordedInvestment |   |    | Number |  |  | RecordedInvestment | 
|Troubled Debt Restructurings     |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|Commercial non-real estate       |  |                            |  |  |                    | $ |   |        |  |  | 3                  |  |  | $ | 2,211  | 
|Commercial real estate:          |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|Residential                      |  |                            |  |  |                    |   |   |        |  |  | 6                  |  |  |   | 20,743 | 
|Land                             |  |                            |  |  |                    |   |   |        |  |  |                   |  |  |   |       | 
|Owner occupied                   |  |                            |  |  |                    |   |   |        |  |  | 1                  |  |  |   | 692    | 
|Other                            |  |                            |  |  |                    |   |   |        |  |  | 4                  |  |  |   | 39,880 | 
|Small business:                  |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|Real estate                      |  |                            |  |  |                    |   |   |        |  |  |                   |  |  |   |       | 
|Non-real estate                  |  |                            |  |  |                    |   |   |        |  |  |                   |  |  |   |       | 
|Consumer                         |  |                            | 1 |  |                    |   | 47 |        |  |  | 3                  |  |  |   | 410    | 
|Residential:                     |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|Residential-interest only        |  |                            |  |  |                    |   |   |        |  |  |                   |  |  |   |       | 
|Residential-amortizing           |  |                            |  |  |                    |   |   |        |  |  | 4                  |  |  |   | 294    | 
|                                 |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 
|Total Troubled Debt Restructured |  |                            | 1 |  |                    | $ | 47 |        |  |  | 21                 |  |  | $ | 64,230 | 
|                                 |  |                            |   |  |                    |   |    |        |  |  |                    |  |  |   |        | 



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Troubled debt restructurings during the six months ended June 30,
2012 and 2011 were as follows (dollars in thousands):



|                                 |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|-------------------------------- |  | ------------------------ | - |  | ------------------ | - | --- | ------ |  |  | ------------------ |  |  | - | ------ | 
|                                 |  | For the Six Months Ended |  
|                                 |  | June 30, 2012            |   |  | June 30, 2011      |  
|                                 |  | Number                   |   |  | RecordedInvestment |   |     | Number |  |  | RecordedInvestment | 
|Troubled Debt Restructurings     |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Commercial non-real estate       |  |                          |  |  |                    | $ |    |        |  |  | 3                  |  |  | $ | 2,211  | 
|Commercial real estate:          |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential                      |  |                          |  |  |                    |   |    |        |  |  | 6                  |  |  |   | 20,743 | 
|Land                             |  |                          |  |  |                    |   |    |        |  |  |                   |  |  |   |       | 
|Owner occupied                   |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 692    | 
|Other                            |  |                          |  |  |                    |   |    |        |  |  | 7                  |  |  |   | 50,998 | 
|Small business:                  |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Real estate                      |  |                          | 2 |  |                    |   | 342 |        |  |  |                   |  |  |   |       | 
|Non-real estate                  |  |                          |  |  |                    |   |    |        |  |  |                   |  |  |   |       | 
|Consumer                         |  |                          | 1 |  |                    |   | 47  |        |  |  | 4                  |  |  |   | 460    | 
|Residential:                     |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential-interest only        |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 547    | 
|Residential-amortizing           |  |                          | 1 |  |                    |   | 62  |        |  |  | 12                 |  |  |   | 1,695  | 
|                                 |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Total Troubled Debt Restructured |  |                          | 4 |  |                    | $ | 451 |        |  |  | 34                 |  |  | $ | 77,346 | 
|                                 |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 

The following table represents the recorded investment of
loans that were modified in troubled debt restructurings beginning January 1, 2011 and 2010 and experienced a payment default during the three months ended June 30, 2012 and 2011 (dollars in thousands).



|                                                                |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|--------------------------------------------------------------- |  | -------------------------- | - |  | ------------------ | - | --- | ------ |  |  | ------------------ |  |  | - | ------ | 
|                                                                |  | For the Three Months Ended |  
|                                                                |  | June 30, 2012              |   |  | June 30, 2011      |  
|                                                                |  | Number                     |   |  | RecordedInvestment |   |     | Number |  |  | RecordedInvestment | 
|Troubled Debt Restructurings which have subsequently defaulted: |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Commercial non-real estate                                      |  |                            |  |  |                    | $ |    |        |  |  |                   |  |  | $ |       | 
|Commercial real estate:                                         |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential                                                     |  |                            |  |  |                    |   |    |        |  |  | 2                  |  |  |   | 6,869  | 
|Land                                                            |  |                            |  |  |                    |   |    |        |  |  |                   |  |  |   |       | 
|Owner occupied                                                  |  |                            |  |  |                    |   |    |        |  |  | 2                  |  |  |   | 613    | 
|Other                                                           |  |                            |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 6,102  | 
|Small business:                                                 |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Real estate                                                     |  |                            |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 156    | 
|Non-real estate                                                 |  |                            |  |  |                    |   |    |        |  |  |                   |  |  |   |       | 
|Consumer                                                        |  |                            |  |  |                    |   |    |        |  |  | 8                  |  |  |   | 757    | 
|Residential:                                                    |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential-interest only                                       |  |                            |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 547    | 
|Residential-amortizing                                          |  |                            | 2 |  |                    |   | 177 |        |  |  | 5                  |  |  |   | 1,071  | 
|                                                                |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Total Troubled Debt Restructured                                |  |                            | 2 |  |                    | $ | 177 |        |  |  | 20                 |  |  | $ | 16,115 | 
|                                                                |  |                            |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 



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The following table represents the recorded investment of loans
that were modified in troubled debt restructurings beginning January 1, 2011 and 2010 and experienced a payment default during the six months ended June 30, 2012 and 2011 (dollars in thousands).



|                                                                |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|--------------------------------------------------------------- |  | ------------------------ | - |  | ------------------ | - | --- | ------ |  |  | ------------------ |  |  | - | ------ | 
|                                                                |  | For the Six Months Ended |  
|                                                                |  | June 30, 2012            |   |  | June 30, 2011      |  
|                                                                |  | Number                   |   |  | RecordedInvestment |   |     | Number |  |  | RecordedInvestment | 
|Troubled Debt Restructurings which have subsequently defaulted: |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Commercial non-real estate                                      |  |                          |  |  |                    | $ |    |        |  |  |                   |  |  | $ |       | 
|Commercial real estate:                                         |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential                                                     |  |                          |  |  |                    |   |    |        |  |  | 2                  |  |  |   | 6,869  | 
|Land                                                            |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 3,458  | 
|Owner occupied                                                  |  |                          |  |  |                    |   |    |        |  |  | 3                  |  |  |   | 1,473  | 
|Other                                                           |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 6,102  | 
|Small business:                                                 |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Real estate                                                     |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 156    | 
|Non-real estate                                                 |  |                          |  |  |                    |   |    |        |  |  |                   |  |  |   |       | 
|Consumer                                                        |  |                          |  |  |                    |   |    |        |  |  | 9                  |  |  |   | 777    | 
|Residential:                                                    |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Residential-interest only                                       |  |                          |  |  |                    |   |    |        |  |  | 1                  |  |  |   | 547    | 
|Residential-amortizing                                          |  |                          | 2 |  |                    |   | 177 |        |  |  | 5                  |  |  |   | 1,071  | 
|                                                                |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 
|Total Troubled Debt Restructured                                |  |                          | 2 |  |                    | $ | 177 |        |  |  | 23                 |  |  | $ | 20,453 | 
|                                                                |  |                          |   |  |                    |   |     |        |  |  |                    |  |  |   |        | 



|7. | Notes Receivable
|-- | ----------------

The table below sets forth information relating to Bluegreens notes
receivable (in thousands):



|                                                         |  |          |         |   |              |  |         |  
|-------------------------------------------------------- |  | -------- | ------- | - | ------------ |  | ------- | -
|                                                         |  | June 30, |         |   | December 31, | 
|                                                         |  | 2012     |         |   | 2011         | 
|Notes receivable, gross                                  |  | $        | 585,649 |   |              |  | 619,599 |  
|Purchase accounting adjustments                          |  |          | (21,031 | ) |              |  | (28,503 | )
|                                                         |  |          |         |   |              |  |         |  
|Notes receivable, net of purchase accounting adjustments |  |          | 564,618 |   |              |  | 591,096 |  
|Allowance for loan losses                                |  |          | (67,743 | ) |              |  | (73,260 | )
|                                                         |  |          |         |   |              |  |         |  
|Notes receivable, net                                    |  | $        | 496,875 |   |              |  | 517,836 |  
|                                                         |  |          |         |   |              |  |         |  

As previously disclosed, included in the table above are notes acquired through our November 2009 acquisition of approximately
7.4 million shares of Bluegreen Common Stock giving us a controlling interest in Bluegreen. In accordance with applicable accounting guidance Loans and Debt Securities Acquired with Deteriorated Credit Quality, the Company
has elected to recognize interest income on these notes receivable using the expected cash flows method. The Company



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treated expected prepayments consistently in determining its cash flows expected to be collected, such that the non-accretable difference is not affected and the difference between actual
prepayments and expected prepayments shall not affect the non-accretable difference. The assumption for prepayment rates was derived from Bluegreens historical performance information for its off-balance sheet securitizations and ranges from
4% to 9%. As of June 30, 2012 and December 31, 2011, the outstanding contractual unpaid principal balance of the acquired notes was $172.1 million and $196.3 million, respectively. As of June 30, 2012 and December 31, 2011, the
carrying amount of the acquired notes was $151.1 million and $167.8 million, respectively.

The carrying amount of the acquired notes is included
in the balance sheet amounts of notes receivable at June 30, 2012 and December 31, 2011. The following is a reconciliation of accretable yield as of June 30, 2012 and December 31, 2011 (in thousands):



|                                               |  |          |         |   |              |  |         |  
|---------------------------------------------- |  | -------- | ------- | - | ------------ |  | ------- | -
|Accretable Yield                               |  | June 30, |         |   | December 31, | 
|                                               |  | 2012     |         |   | 2011         | 
|Balance, beginning of period                   |  | $        | 74,526  |   |              |  | 85,906  |  
|Accretion                                      |  |          | (11,621 | ) |              |  | (25,237 | )
|Reclassification (to) from nonaccretable yield |  |          | 843     |   |              |  | 13,857  |  
|                                               |  |          |         |   |              |  |         |  
|Balance, end of period                         |  | $        | 63,748  |   |              |  | 74,526  |  
|                                               |  |          |         |   |              |  |         |  

All of Bluegreens vacation ownership interests (VOIs) notes receivable bear interest at fixed rates. The
weighted-average interest rate charged on loans secured by VOIs was 15.4% and 15.3% at June 30, 2012 and December 31, 2011, respectively. The majority of Bluegreens notes receivable secured by home sites bear interest at variable
rates. The weighted-average interest rate charged on notes receivable secured by home sites was 7.8% for each of the period ended June 30, 2012 and December 31, 2011.

Bluegreens VOI notes receivable are generally secured by properties located in Florida, Louisiana, Nevada, New Jersey, Michigan, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia,
Wisconsin, and Aruba. The majority of Bluegreen Communities notes receivables are secured by home sites in Georgia, Texas, and Virginia.

Notes receivable excluding the acquired notes as described above, are carried at amortized cost less an allowance for bad debts. Interest income is
suspended, and previously accrued but unpaid interest income is reversed on all delinquent notes receivable when principal or interest payments are more than three months contractually past due and not resumed until such loans are less than three
months past due. Bluegreens notes receivable are generally written off as uncollectible when they have become approximately 120 days past due. As of June 30, 2012 and December 31, 2011, $17.6 million and $20.9 million, respectively,
of the VOI notes receivable were more than three months past due, and accordingly, consistent with Bluegreens policy, were not accruing interest income.

Credit Quality for Financial Receivables and Allowance for Credit Losses

Bluegreen holds large amounts of homogeneous VOI notes receivable and assesses uncollectibility based on pools of receivables. In
estimating future credit losses, Bluegreen does not use a single primary indicator of credit quality but instead evaluates its VOI notes receivable based upon a combination of factors including a static pool analysis, the aging of the respective
receivables, current default trends and prepayment rates by origination year, and the FICO® scores of the buyers
at the time of origination.

The table below sets forth the activity in the allowance for loan losses
(including homesite notes receivable) as follows (in thousands):



|                                        |  |   |         |  
|--------------------------------------- |  | - | ------- | -
|Balance at December 31, 2011            |  | $ | 73,260  |  
|Provision for loan losses (1)           |  |   | 11,783  |  
|Write-offs of uncollectible receivables |  |   | (17,300 | )
|                                        |  |   |         |  
|Balance at June 30, 2012                |  | $ | 67,743  |  
|                                        |  |   |         |  



|(1) | Includes charges
totaling $2.2 million to increase the allowance for uncollectible VOI notes receivable in connection with loans generated prior to December 15, 2008, the date on which Bluegreen implemented
FICO® score-based credit standards.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



41



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The following table shows the delinquency status of Bluegreens VOI notes receivable as of
June 30, 2012 and December 31, 2011 (in thousands):



|                                                        |  |          |         |   |              |   |         |  
|------------------------------------------------------- |  | -------- | ------- | - | ------------ | - | ------- | -
|                                                        |  | June 30, |         |   | December 31, |  
|                                                        |  | 2012     |         |   | 2011         |  
|Current                                                 |  | $        | 551,569 |   |              | $ | 576,063 |  
|31-60 days                                              |  |          | 6,240   |   |              |   | 9,038   |  
|61-90 days                                              |  |          | 4,746   |   |              |   | 7,836   |  
|Over 91 days                                            |  |          | 17,604  |   |              |   | 20,861  |  
|Purchase accounting adjustments                         |  |          | (21,031 | ) |              |   | (28,503 | )
|                                                        |  |          |         |   |              |   |         |  
|Notes receivable net of purchase accounting adjustments |  |          | 559,128 |   |              |   | 585,295 |  
|Allowance for loan losses                               |  |          | (67,743 | ) |              |   | (73,260 | )
|                                                        |  |          |         |   |              |   |         |  
|Total                                                   |  | $        | 491,385 |   |              | $ | 512,035 |  
|                                                        |  |          |         |   |              |   |         |  



|8. | Variable Interest Entities  Bluegreen
|-- | --------------------------------------

Bluegreen sells VOI notes receivable originated by Bluegreen Resorts through special purpose finance entities. These transactions are
generally structured as non-recourse to Bluegreen, with the exception of one securitization transaction entered into in 2010 which was guaranteed by Bluegreen. These transactions are generally designed to provide liquidity for Bluegreen and transfer
the economic risks and certain of the benefits of the notes receivable to third-parties. In a securitization, various classes of debt securities are issued by the special purpose finance entities that are generally collateralized by a single tranche
of transferred assets, which consist of VOI notes receivable. Bluegreen services the notes receivable for a fee which it believes approximates market rate for such services.

With each securitization, Bluegreen generally retains a portion of the securities. Under these arrangements, the cash payment received from the obligors on the receivables sold are generally applied
monthly to pay fees to service providers, make interest and principal payments to investors, and fund required reserves, if any, with the remaining balance of such cash retained by Bluegreen; however, to the extent that portfolio of receivables
fails to satisfy specified performance criteria (as may occur due to an increase in default rate or loan loss severity) or other trigger events occur, the funds received from obligors are distributed on an accelerated basis to investors. Depending
on the circumstances and the transaction, the application of the accelerated payment formula may be permanent or temporary until the trigger event is cured. As of June 30, 2012, Bluegreen was in compliance with all applicable terms and no
trigger events had occurred.

In accordance with applicable guidance for the consolidation of variable interest entities, Bluegreen analyzes
its variable interests, which may consist of loans, guarantees, and equity investments, to determine if an entity in which it has a variable interest is a variable interest entity. Bluegreens analysis includes both quantitative and qualitative
reviews. Bluegreen bases its quantitative analysis on the forecasted cash flows of the entity, and it bases its qualitative analysis on the design of the entity, its organizational structure including decision-making ability, and relevant financial
agreements. Bluegreen also uses qualitative analysis to determine if it must consolidate a variable interest entity as the primary beneficiary. In accordance with applicable accounting guidance currently in effect, Bluegreen has determined these
securitization entities to be VIEs and consolidate the entities into its financial statements as it is the primary beneficiary of the entities.

Under the terms of certain of Bluegreens timeshare note sales, Bluegreen has the right to repurchase or substitute, a limited amount of defaulted
mortgage notes for new notes at the outstanding principal balance plus accrued interest or, in some facilities, at 24% of the original sale price associated with the VOI which collateralizes the defaulted mortgage note. Voluntary repurchases and
substitutions by Bluegreen of defaulted notes during the six months ended June 30, 2012 and 2011 were $8.2 million and $14.5 million, respectively.



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Below is the information related to the assets and liabilities of the VIEs included on the
consolidated statements of financial condition (in thousands):



|                                  |  |          |         |  |              |  |         | 
|--------------------------------- |  | -------- | ------- |  | ------------ |  | ------- | 
|                                  |  | June 30, |         |  | December 31, | 
|                                  |  | 2012     |         |  | 2011         | 
|Restricted cash                   |  | $        | 39,823  |  |              |  | 38,913  | 
|Securitized notes receivable, net |  |          | 353,631 |  |              |  | 375,904 | 
|Receivable backed notes payable   |  |          | 352,457 |  |              |  | 385,140 | 

The restricted cash and the securitized notes receivable balances disclosed above are restricted to satisfy obligations of the VIEs.



|9. | Inventory
|-- | ---------

Inventory consisted of the following (in thousands):



|                                        |  |          |         |   |              |  |         |  
|--------------------------------------- |  | -------- | ------- | - | ------------ |  | ------- | -
|                                        |  | June 30, |         |   | December 31, | 
|                                        |  | 2012     |         |   | 2011         | 
|                                        |  |         
|Completed VOI units                     |  | $        | 209,127 |   |              |  | 218,281 |  
|Construction-in-progress                |  |          | 432     |   |              |  | 1,609   |  
|Real estate held for future development |  |          | 83,930  |   |              |  | 82,953  |  
|Land and facilities held for sale       |  |          | 2,869   |   |              |  | 4,418   |  
|                                        |  |          |         |   |              |  |         |  
|Subtotal                                |  |          | 296,358 |   |              |  | 307,261 |  
|Purchase accounting adjustment          |  |          | (85,841 | ) |              |  | (93,936 | )
|                                        |  |          |         |   |              |  |         |  
|Total                                   |  | $        | 210,517 |   |              |  | 213,325 |  
|                                        |  |          |         |   |              |  |         |  

Bluegreen reviews real estate held for future resort development for impairment under applicable accounting guidelines, which require
that such properties be reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the assets might not be recoverable. No impairment charges were recorded with respect to Bluegreen Resorts inventory
during the six months ended June 30, 2012 or 2011.

Interest capitalized to VOI inventory during the three and six months ended
June 30, 2012 and 2011 was insignificant. The interest expense reflected in our financial statements is net of capitalized interest.



|10. | Debt
|--- | ----

Notes and Mortgage Notes Payable and Other Borrowings

The table below sets forth the balances of Bluegreens lines-of-credit and notes payable facilities
and BankAtlantics subordinated debentures (dollars in thousands):



|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|----------------------------------- |  | ------------- | ------ | - | ----------------- |  | ----------- | ------------------------------- |  |  | ------- |  |  | ------------- | ------- | - | ------------------------------- |  | ----------- | - |  |  | ------- | 
|                                    |  | As of         |       
|                                    |  | June 30, 2012 |        |   | December 31, 2011 | 
|                                    |  | Balance       |        |   | Interest Rate     |  |             | CarryingAmount 
ofPledgedAssets |  |  | Balance |  |  | Interest Rate |         |   | CarryingAmount 
ofPledgedAssets | 
|Bluegreen:                          |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|RFA AD&C Facility                   |  | $             | 14,808 |   |                   |  | 10.00       | %                               |  |  | 62,359  |  |  |               | 21,619  |   |                                 |  | 4.80        | % |  |  | 70,640  | 
|H4BG Communities Facility           |  |               |       |   |                   |  |            |                                 |  |  |        |  |  |               | 23,889  |   |                                 |  | 8.00        | % |  |  | 21,373  | 
|Wells Fargo Term Loan               |  |               |       |   |                   |  |            |                                 |  |  |        |  |  |               | 19,858  |   |                                 |  | 7.17        | % |  |  | 98,034  | 
|Foundation Capital                  |  |               | 9,474  |   |                   |  | 8.00        | %                               |  |  | 13,985  |  |  |               | 12,860  |   |                                 |  | 8.00        | % |  |  | 15,437  | 
|Textron AD&C Facility               |  |               | 2,945  |   |                   |  | 4.75        | %                               |  |  | 9,508   |  |  |               | 3,866   |   |                                 |  | 4.75        | % |  |  | 9,653   | 
|Fifth Third Bank Note Payable       |  |               | 2,814  |   |                   |  | 3.25        | %                               |  |  | 4,438   |  |  |               | 2,909   |   |                                 |  | 3.30        | % |  |  | 4,518   | 
|Other                               |  |               | 2,495  |   |                   |  | 5.00  6.00 | %                               |  |  | 4,305   |  |  |               | 1,816   |   |                                 |  | 5.00  6.88 | % |  |  | 1,705   | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|                                    |  |               | 32,536 |   |                   |  |             |                                 |  |  | 94,595  |  |  |               | 86,817  |   |                                 |  |             |   |  |  | 221,360 | 
|                                    |  |               |        |   |                   | 
|Less purchase accounting adjustment |  |               | (252   | ) |                   |  |             |                                 |  |  |        |  |  |               | (284    | ) |                                 |  |             |   |  |  |        | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|                                    |  |               |        |   |                   | 
|Total Real Estate and Other         |  | $             | 32,284 |   |                   |  |             |                                 |  |  | 94,595  |  |  |               | 86,533  |   |                                 |  |             |   |  |  | 221,360 | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|                                    |  |               |        |   |                   | 
|Bank Atlantic:                      |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|Subordinated debentures             |  | $             |       |   |                   |  |             |                                 |  |  |        |  |  |               | 22,000  |   |                                 |  | LIBOR+3.45  | % |  |  |        | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|                                    |  |               |        |   |                   | 
|Total Financial Services            |  |               |       |   |                   |  |             |                                 |  |  |        |  |  |               | 22,000  |   |                                 |  |             |   |  |  |        | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 
|Total notes payable                 |  | $             | 32,284 |   |                   |  |             |                                 |  |  | 94,595  |  |  |               | 108,533 |   |                                 |  |             |   |  |  | 221,360 | 
|                                    |  |               |        |   |                   |  |             |                                 |  |  |         |  |  |               |         |   |                                 |  |             |   |  |  |         | 



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Significant changes related to Bluegreens lines-of-credit and notes payable during the six months
ended June 30, 2012 include:

RFA AD&C Facility. This facility was used to finance the acquisition and
development of certain of Bluegreens resorts and currently has one outstanding project loan, which is primarily collateralized by the Bluegreen Club 36TMresort in Las Vegas, Nevada (the Club 36 Loan). On March 30, 2012, the Club 36 Loan was amended to
extend the maturity date from June 30, 2012 to December 31, 2012 and granted Bluegreen the option, subject to certain provisions and the payment of certain additional fees, to further extend the maturity of up approximately $9.1 million
until June 30, 2013. The amendment also increased the interest rate under the Club 36 Loan from LIBOR plus 4.5% to a fixed rate of 10%.

During the six months ended June 30, 2012, Bluegreen repaid $6.8 million of the outstanding balance under this facility.

H4BG Communities Facility. The H4BG Communities Facility was secured by the real property homesites (and personal property related thereto) and
golf courses at several Bluegreen Communities projects. In connection with the sale of Bluegreen Communities to Southstar on May 4, 2012, the entire then outstanding amount of the H4BG facility was repaid along with a $2.0 million deferred fee.

Wells Fargo Term Loan.In February 2012, the facility was amended to extend the maturity date to June 30, 2012, and to require
four $4.5 million minimum installments to be paid monthly starting March 2012. In May 2012, Bluegreen repaid the entire outstanding balance under this facility.

Foundation Capital. During the six months ended June 30, 2012, Bluegreen repaid $3.4 million of the outstanding balance under this facility.



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##### Table of Contents

Receivable-Backed Notes Payable

The table below sets forth the balances of Bluegreens receivable-backed notes payable facilities (dollars
in thousands):



|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|--------------------------------------------- |  | ------------- | ------- | - | ----------------- |  | --------- | ---------------------------------------------- |  |  | ----------- |  |  | ------------ | ------- | - | ---------------------------------------------- |  | ----- | - |  |  | ------- | 
|                                              |  | As of         |        
|                                              |  | June 30, 2012 |         |   | December 31, 2011 | 
|                                              |  | DebtBalance   |         |   | InterestRate      |  |           | PrincipalBalance 
ofPledged/SecuredReceivables |  |  | DebtBalance |  |  | InterestRate |         |   | PrincipalBalance 
ofPledged/SecuredReceivables | 
|Recourse receivable-backed notes payable:     |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|2008 Liberty Bank Facility                    |  | $             | 42,530  |   |                   |  | 6.50      | %                                              |  |  | 53,608      |  |  |              | 49,742  |   |                                                |  | 6.50  | % |  |  | 60,708  | 
|2011 Liberty Bank Facility                    |  |               | 9,598   |   |                   |  | 6.50      | %                                              |  |  | 11,905      |  |  |              | 10,858  |   |                                                |  | 6.50  | % |  |  | 13,367  | 
|GE Bluegreen/Big Cedar                        |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Receivables Facility                          |  |               | 11,438  |   |                   |  | 2.00      | %                                              |  |  | 21,989      |  |  |              | 15,551  |   |                                                |  | 2.05  | % |  |  | 24,512  | 
|Legacy Securitization(1)                      |  |               | 14,339  |   |                   |  | 12.00     | %                                              |  |  | 22,529      |  |  |              | 17,623  |   |                                                |  | 12.00 | % |  |  | 25,899  | 
|NBA Receivables Facility                      |  |               | 13,457  |   |                   |  | 6.75      | %                                              |  |  | 20,162      |  |  |              | 16,758  |   |                                                |  | 6.75  | % |  |  | 23,064  | 
|CapitalSource Facility                        |  |               | 9,157   |   |                   |  | 6.50      | %                                              |  |  | 12,117      |  |  |              |        |   |                                                |  |      |   |  |  |        | 
|                                              |  |               |         |   |                   | 
|RFA Receivables Facility                      |  |               |        |   |                   |  |          |                                                |  |  |            |  |  |              | 1,281   |   |                                                |  | 4.30  | % |  |  | 2,866   | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Total before discount                         |  |               | 100,519 |   |                   |  |           |                                                |  |  | 142,310     |  |  |              | 111,813 |   |                                                |  |       |   |  |  | 150,416 | 
|Less unamortized discount on                  |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Legacy Securitization                         |  |               | (1,460  | ) |                   |  |           |                                                |  |  |            |  |  |              | (1,797  | ) |                                                |  |       |   |  |  |        | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Total                                         |  |               | 99,059  |   |                   |  |           |                                                |  |  | 142,310     |  |  |              | 110,016 |   |                                                |  |       |   |  |  | 150,416 | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Less purchase accounting adjustment           |  |               | (742    | ) |                   |  |           |                                                |  |  |            |  |  |              | (1,232  | ) |                                                |  |       |   |  |  |        | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|                                              |  | $             | 98,317  |   |                   |  |           |                                                |  |  | 142,310     |  |  |              | 108,784 |   |                                                |  |       |   |  |  | 150,416 | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|                                              |  |               |         |   |                   | 
|Non-recourse receivable-backed notes payable: |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|                                              |  |               |         |   |                   | 
|BB&T Purchase Facility                        |  | $             | 39,400  |   |                   |  | 4.75      | %                                              |  |  | 57,771      |  |  |              | 28,810  |   |                                                |  | 4.75  | % |  |  | 42,075  | 
|GE 2004 Facility(2)                           |  |               | 7,265   |   |                   |  | 7.16      | %                                              |  |  | 8,302       |  |  |              | 8,144   |   |                                                |  | 7.16  | % |  |  | 9,301   | 
|2004 Term Securitization(2)                   |  |               | 7,989   |   |                   |  | 5.27      | %                                              |  |  | 8,132       |  |  |              | 11,307  |   |                                                |  | 5.27  | % |  |  | 11,693  | 
|2005 Term Securitization(2)                   |  |               | 32,489  |   |                   |  | 5.98      | %                                              |  |  | 36,114      |  |  |              | 39,591  |   |                                                |  | 5.98  | % |  |  | 44,277  | 
|GE 2006 Facility(2)                           |  |               | 37,323  |   |                   |  | 7.35      | %                                              |  |  | 42,201      |  |  |              | 41,275  |   |                                                |  | 7.35  | % |  |  | 47,015  | 
|2006 Term Securitization(2)                   |  |               | 34,444  |   |                   |  | 6.16      | %                                              |  |  | 37,919      |  |  |              | 40,194  |   |                                                |  | 6.16  | % |  |  | 44,128  | 
|                                              |  |               |         |   |                   | 
|2007 Term Securitization(2)                   |  |               | 68,044  |   |                   |  | 7.32      | %                                              |  |  | 77,701      |  |  |              | 78,062  |   |                                                |  | 7.32  | % |  |  | 89,502  | 
|                                              |  |               |         |   |                   | 
|2008 Term Securitization(2)                   |  |               | 26,131  |   |                   |  | 7.88      | %                                              |  |  | 30,159      |  |  |              | 30,148  |   |                                                |  | 7.88  | % |  |  | 34,699  | 
|                                              |  |               |         |   |                   | 
|2010 Term Securitization                      |  |               | 74,783  |   |                   |  | 5.54      | %                                              |  |  | 91,204      |  |  |              | 84,275  |   |                                                |  | 5.54  | % |  |  | 102,014 | 
|Quorum Purchase Facility                      |  |               | 11,710  |   |                   |  | 6.50-8.00 | %                                              |  |  | 14,096      |  |  |              | 7,508   |   |                                                |  | 8.00  | % |  |  | 9,175   | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Total                                         |  | $             | 339,578 |   |                   |  |           |                                                |  |  | 403,599     |  |  |              | 369,314 |   |                                                |  |       |   |  |  | 433,879 | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 
|Total receivable-backed debt                  |  | $             | 437,895 |   |                   |  |           |                                                |  |  | 545,909     |  |  |              | 478,098 |   |                                                |  |       |   |  |  | 584,295 | 
|                                              |  |               |         |   |                   |  |           |                                                |  |  |             |  |  |              |         |   |                                                |  |       |   |  |  |         | 



|(1) | Legacy Securitization debt bears interest at a coupon rate of 12% and was issued at a discount resulting in an effective yield of 18.5%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------

|(2) | These receivable-backed notes payable are included in the Other Receivable-Backed Notes Payable section below.
|--- | --------------------------------------------------------------------------------------------------------------

Significant changes related to our receivable-backed notes payable facilities during the six months ended June 30, 2012 include:

2008 Liberty Bank Facility. The advance period under the 2008 Liberty Bank Facility expired pursuant to the terms of the facility. All
outstanding borrowings are scheduled to mature no later than August 27, 2014. During the six months ended June 30, 2012, Bluegreen repaid $7.2 million on the facility.

2011 Liberty Bank Facility. The 2011 Liberty Bank Facility provides for an 85% advance on eligible receivables pledged under the facility during a two-year period ending in February 2013, subject
to eligible collateral and terms and conditions Bluegreen believes to be customary for transactions of this type. Availability under the 2011 Liberty



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##### Table of Contents

Bank Facility is reduced by amounts currently outstanding to certain syndicate participants under the 2008 Liberty Bank Facility ($31.2 million as of June 30, 2012), but as outstanding
amounts on the 2008 Liberty Bank Facility amortize over time, the 2011 Liberty Bank Facility will revolve up to $60.0 million. Principal and interest are repaid as cash is collected on the pledged receivables, with the remaining balance due in
February 2016. Indebtedness under the 2011 Liberty Bank Facility bears interest at the Prime Rate plus 2.25%, subject to a floor of 6.5% (6.5% as of June 30, 2012). During the six months ended June 30, 2012, Bluegreen received cash
proceeds of $0.4 million in order to adjust its outstanding balance to be consistent with previously pledged collateral. Bluegreen also repaid $1.7 million on the facility during the period.

NBA Receivables Facility.Bluegreen/Big Cedar Joint Venture has an outstanding timeshare notes receivable hypothecation facility with the National Bank of Arizona (NBA). Bluegreen
Corporation has guaranteed the full payment and performance of Bluegreen/Big Cedar Joint Venture in connection with the facility. The advance period under the facility has expired and $8.5 million of the amount outstanding as of June 30, 2012
matures on September 30, 2017, and $5.0 million matures on October 31, 2018. During the six months ended June 30, 2012, Bluegreen repaid $3.3 million on the facility.

BB&T Purchase Facility.Bluegreen has a timeshare notes receivable purchase facility with Branch Banking and Trust Company (BB&T) (the BB&T Purchase Facility)
which allows for maximum outstanding borrowings of $50.0 million and has a revolving advance period through December 17, 2012. During the six months ended June 30, 2012, Bluegreen pledged $20.0 million of VOI notes receivble to this
facility and received cash proceeds of $13.5 million. Bluegreen repaid $2.9 million on the facility.

Quorum Purchase Facility. On
March 1, 2012, Bluegreen amended and expanded an existing timeshare notes receivable purchase facility (the Quorum Purchase Facility) with Quorum Federal Credit Union (Quorum). Pursuant to the terms of the amended
facility and subject to certain conditions precedent, Quorum agreed to purchase on a revolving basis through March 31 2013 eligible timeshare receivables from Bluegreen or certain of its subsidiaries in an amount of up to an aggregate $25.0
million purchase price. The amended terms of the Quorum Purchase Facility reflect an 83% advance rate and a program fee rate of 6.5% per annum with respect to any future advances and $5.1 million of the outstanding balance at June 30, 2012
($6.6 million of the outstanding balance at June 30, 2012 bears interest at a fixed rate of 8.0%). Eligibility requirements for receivables sold include, among others, that the obligors under the timeshare notes receivable sold be members of
Quorum at the time of the note sale. Subject to the performance of the collateral, Bluegreen will receive any excess cash flows generated by the receivables transferred to Quorum under the facility (excess meaning after customary payments of fees,
interest and principal under the facility on a pro-rata basis as borrowers make payments on their timeshare loans).

During the six months
ended June 30, 2012, Bluegreen pledged $6.4 million of VOI notes receivable to this facility and received cash proceeds of $5.3 million. Bluegreen also repaid $1.1 million on the facility.

CapitalSource Facility.Bluegreen has a $30.0 million revolving timeshare receivables hypothecation facility (the CapitalSource
Facility) with CapitalSource Bank. The CapitalSource Facility provides for advances on eligible receivables pledged under the facility, subject to specified terms and conditions, during the two-year revolving credit period ending in September
2013. During the six months ended June 30, 2012, Bluegreen pledged $13.2 million of VOI notes receivable to this facility and received cash proceeds of $10.6 million. Bluegreen also repaid $1.4 million on the facility during the period.

Other Receivable-Backed Notes Payable. In addition to the above described facilities, during the six months ended June 30, 2012,
Bluegreen repaid $53.3 million of its other receivable-backed notes payable.



|11. | Shares Subject to Mandatory Redemption
|--- | --------------------------------------

On June 7, 2004, the Companys board of directors designated 15,000 shares of the Companys preferred stock as 5%
Cumulative Preferred Stock. On June 21, 2004, the Company sold all 15,000 shares of the 5% Cumulative Preferred Stock to an investor group in a private offering.

The Companys 5% Cumulative Preferred Stock has a stated value of $1,000 per share. The shares of 5% Cumulative Preferred Stock are redeemable at the option of the Company, from time to time, at
redemption prices ranging from $1,015 per share for the twelve month period ending April 29, 2013 to $1,000 per share for the twelve month period ending April 29, 2016. The 5% Cumulative Preferred Stocks liquidation preference is equal to its
stated value of $1,000 per share plus any accumulated and unpaid dividends or an amount equal to the applicable



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redemption price in a voluntary liquidation or winding up of the Company. Holders of the 5% Cumulative Preferred Stock have no voting rights, except as provided by Florida law, and are entitled
to receive, when and as declared by the Companys board of directors (and currently also upon the written non-objection from the Federal Reserve), cumulative quarterly cash dividends on each such share at a rate per annum of 5% of the stated
value from the date of issuance. From the second quarter of 2004 through the third quarter of 2011, the Company paid quarterly dividends on the 5% Cumulative Preferred Stock of $187,500. The Company determined not to seek the Federal Reserves
written non-objection to the dividend payment for fourth quarter of 2011 or the first or second quarters of 2012 and, therefore, has not yet made such dividend payments. Unpaid dividends on the 5% Cumulative Preferred Stock will cumulate, and it is
anticipated that payment of unpaid cumulative dividends will be made following BFCs deregistration as a unitary savings and loan holding company. BFC has requested deregistration as a result of BBX Capitals sale of BankAtlantic to
BB&T on July 31, 2012. If such request is approved, then upon deregistration, dividend payments by BFC, including with respect to the 5% Cumulative Preferred Stock, will no longer require the prior written non-objection of the Federal Reserve.
The unpaid dividend payments, which totaled approximately $563,000 as of June 30, 2012, are included in shares subject to mandatory redemption in the accompanying consolidated statement of financial condition as of June 30, 2012.

On December 17, 2008, certain of the previously designated relative rights, preferences and limitations of the 5% Cumulative Preferred Stock were
amended (the First Amendment) to eliminate the right of the holders of the 5% Cumulative Preferred Stock to convert their shares into shares of the Companys Class A Common Stock. The First Amendment also required the Company
to redeem shares of the 5% Cumulative Preferred Stock with the net proceeds received in the event the Company sold any shares of Benihanas stock that it owned and entitled the holders of the 5% Cumulative Preferred Stock, in the event the
Company defaulted on its dividend payment obligation with respect to such stock, to receive directly from Benihana the payments due (collectively, the Benihana Stock Provisions).

Based on an analysis of the 5% Cumulative Preferred Stock after giving effect to the First Amendment, the Company previously determined that the 5% Cumulative Preferred Stock met the requirements to be
re-classified outside of permanent equity and into the mezzanine category at its fair value at the effective date of the First Amendment of approximately $11.0 million. The remaining amount of approximately $4.0 million is recorded in additional
paid in capital in the Companys consolidated statements of financial condition. The fair value of the 5% Cumulative Preferred Stock was calculated using an income approach by discounting estimated cash flows at a market discount rate.

On April 4, 2012, the relative rights, preferences and limitations of the 5% Cumulative Preferred Stock were further amended (the
Second Amendment). Pursuant to the Second Amendment, to the extent the shares are not earlier redeemed pursuant to the optional redemption right described above, the Company will be required to redeem 5,000 shares of the 5% Cumulative
Preferred Stock during each of the years ending December 31, 2016, 2017 and 2018 for an aggregate annual redemption price of $5.0 million, or $1,000 per share.The Second Amendment also provides that, in the event that the Company defaults on
its dividend or mandatory redemption obligations, then the holders of the 5% Cumulative Preferred Stock will be entitled to receive from the Company shares of common stock of Bluegreen owned by the Company having, in the aggregate, a fair market
value equal to the amount of the dividend or redemption payment, as the case may be, to the extent not timely paid; provided that the maximum number of shares of Bluegreens common stock which the holders of the 5% Cumulative Preferred Stock
will be entitled to receive as a result of one or more defaults with respect to the Companys mandatory redemption obligation will be 5,000,000 shares (subject to adjustment in the case of a stock split or other applicable share combination or
division affecting Bluegreens common stock). In consideration therefor, the Second Amendment eliminated the Benihana Stock Provisions.

Under applicable accounting guidance, as a result of the Second Amendment and the mandatory redemption provision contained therein, the 5% Cumulative
Preferred Stock was re-classified as a liability during the quarter ended June 30, 2012 at its estimated fair value of approximately $11.5 million. The fair value was determined by an independent third party and was based on a cash flow model
using a discount rate equivalent to benchmark bond ratings. The $0.5 million difference between the previously stated value of $11.0 million as of March 31, 2012 and the current estimated fair value of $11.5 million was recorded as an
adjustment to additional paid in capital in the Companys consolidated statement of financial condition at June 30, 2012. The balance of the amount relating to shares subject to mandatory redemption as of June 30, 2012 also includes
accrued dividends of $0.4 million plus accretion of $0.3 million for the three months ended June 30, 2012.



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|12. | Noncontrolling Interests
|--- | ------------------------

The following table summarizes the noncontrolling interests in the Companys
subsidiaries at June 30, 2012 and December 31, 2011 (in thousands):



|                               |  |              |         |   |                  |  |        |  
|------------------------------ |  | ------------ | ------- | - | ---------------- |  | ------ | -
|                               |  | June 30,2012 |         |   | December 31,2011 | 
|                               |  |             
|BBX Capital                    |  | $            | (20,544 | ) |                  |  | (7,906 | )
|Bluegreen                      |  |              | 50,256  |   |                  |  | 39,489 |  
|Joint ventures                 |  |              | 30,532  |   |                  |  | 31,693 |  
|                               |  |              |         |   |                  |  |        |  
|Total noncontrolling interests |  | $            | 60,244  |   |                  |  | 63,276 |  
|                               |  |              |         |   |                  |  |        |  

The following table summarizes the income (loss) recognized with
respect to the Companys subsidiaries attributable to noncontrolling interests for the three and six months ended June 30, 2012 and 2011 (in thousands):



|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|---------------------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                           |  | For the Three 
MonthsEndedJune 30, |        |   | For the Six Months EndedJune 30, | 
|                                                           |  | 2012                               |        |   | 2011                             |  |         | 2012 |  |  | 2011    |  
|                                                           |  |                                    |        |  
|Noncontrolling interest - Continuing Operations:           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|BBX Capital                                                |  | $                                  | (3,930 | ) |                                  |  | (7,179  | )    |  |  | (10,083 | ) |  |  | (15,117 | )
|Bluegreen                                                  |  |                                    | 7,555  |   |                                  |  | 4,939   |      |  |  | 11,062  |   |  |  | 6,637   |  
|Joint ventures                                             |  |                                    | 2,562  |   |                                  |  | 2,123   |      |  |  | 6,190   |   |  |  | 3,685   |  
|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                           |  | $                                  | 6,187  |   |                                  |  | (117    | )    |  |  | 7,169   |   |  |  | (4,795  | )
|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                           |  |                                    |        |  
|Noncontrolling interest - Discontinued Operations:         |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|BBX Capital                                                |  | $                                  | (1,849 | ) |                                  |  | 19,898  |      |  |  | (2,333  | ) |  |  | 15,142  |  
|Bluegreen                                                  |  |                                    | (641   | ) |                                  |  | (15,826 | )    |  |  | (780    | ) |  |  | (16,107 | )
|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|                                                           |  | $                                  | 2,490  |   |                                  |  | 4,072   |      |  |  | (3,113  | ) |  |  | (965    | )
|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss) attributable to noncontrolling interests |  | $                                  | 3,697  |   |                                  |  | 3,955   |      |  |  | 4,056   |   |  |  | (5,760  | )
|                                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  



|13. | Segment Reporting
|--- | -----------------

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly
reviewed by the chief operating decision maker in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production
processes, type of customer, distribution system or regulatory environment.

The information provided for segment reporting is based on
internal reports utilized by management of the Company and its subsidiaries. The presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as standalone businesses. If a different basis
of allocation were utilized, the relative contributions of the segments might differ but the relative trends in the segments operating results would, in management's view, likely not be impacted.

The Companys business activities currently consist of (i) Real Estate and Other business activities and (ii) Financial Services. We
currently report the results of our business activities through five segments. Three of the segments relate to our Real Estate and Other business activities. These segments are: BFC Activities; Real Estate Operations; and Bluegreen Resorts. Our
other two segments BankAtlantics commercial lending reporting unit (CLRU) and BBX Capital Parent Company  relate to our Financial Services business activities and represent BBX Capitals continuing operations.
Discontinued operations include the results of Bluegreen Communities (which previously was a separate reporting segment) and BankAtlantics community banking, investment, capital services and tax certificate reporting units (which were
previously part of the BankAtlantic reporting segment) and Cypress Creek Holdings (which was previously part of the Real Estate Operations reporting segment). See Note 3 for additional information regarding discontinued operations.



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The Company evaluates segment performance based on its segment net income (loss).

The following summarizes the aggregation of the Company's operating segments into reportable segments:

BFC Activities

The BFC Activities
segment consists of BFC operations, our investment in Benihana, and other operations of Woodbridge described below. BFC operations primarily consist of our corporate overhead and general and administrative expenses, including the expenses of
Woodbridge, the financial results of a venture partnership that BFC controls and other equity investments, as well as income and expenses associated with BFCs shared service operations, which provides human resources, risk management, investor
relations and executive office administration services to BBX Capital and Bluegreen. This segment also includes investments made by our wholly owned subsidiary, BFC/CCC, Inc. (BFC/CCC). Woodbridges other operations include the
activities of Snapper Creek Equity Management, LLC and certain other investments.

Woodbridge had an equity interest in Pizza Fusion Holdings,
Inc. (Pizza Fusion), a restaurant operator and franchisor engaged in the quick service and organic food industries. The investment included all of the outstanding shares of Pizza Fusions Series B Convertible Preferred Stock, which
was entitled to special voting rights, including the right, to the extent Woodbridge chose to do so, to elect a majority of Pizza Fusions board of directors. During December 2011, Pizza Fusion effected a stock reclassification pursuant to
which each share of Pizza Fusions Series A and Series B Convertible Preferred Stock automatically converted into one share of Pizza Fusions common stock. As a result, Woodbridge is no longer deemed to have a controlling interest in Pizza
Fusion and, under the applicable accounting guidance for business combinations, the financial statements of Pizza Fusion were deconsolidated as of December 31, 2011. In connection with such deconsolidation, the Company recognized a $615,000
loss on investment in subsidiary during December 2011. Prior to that time, Pizza Fusion was determined to be a VIE under applicable accounting guidance, and the operating results of Pizza Fusion were consolidated into BFC.

Real Estate Operations

The
Companys Real Estate Operations segment consists of Core Communities, which suspended activities in December 2010, and Carolina Oak, which suspended its homebuilding activities in the fourth quarter of 2008.

Bluegreen Resorts

Bluegreen Resorts
markets, sells and manages real estate-based VOIs in resorts generally located in popular, high-volume, drive-to vacation destinations, which were developed or acquired by Bluegreen or developed by others. Bluegreen Resorts also earns
fees from third-party resort developers and timeshare owners for providing services such as sales and marketing, mortgage servicing, construction management, title, and resort management.

CLRU

CLRUs activities consist of managing a commercial loan portfolio, which include
construction, residential development, land acquisition and commercial business loans. The activities during the three and six months ended June 30, 2012 and 2011 consisted of, but were not limited to, renewing, modifying, increasing,
extending, refinancing and making protective advances on commercial loans, as well as the servicing of commercial loans.

BBX Capital
Parent Company

The BBX Capital Parent Company activities include the managing of non-performing loans and related real estate owned
acquired from BankAtlantic.



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The tables below set forth the Companys segment
information as of and for the three months ended June 30, 2012 and 2011 (in thousands):



|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|------------------------------------------------------------ |  | ------------- | ------ | - | -------------------- |  | ------ | ---------------- |  |  | ------- |  |  | ------------------------ | ------- | - | --------------------------------- |  | ------- | ------------ |  |  | --------- | - |  | - | --------- | -
|2012                                                         |  | BFCActivities |        |   | RealEstateOperations |  |        | BluegreenResorts |  |  | CLRU    |  |  | BBX CapitalParentCompany |         |   | UnallocatedAmountsandEliminations |  |         | SegmentTotal | 
|Revenues                                                     |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Sales of VOIs                                                |  | $             |       |   |                      |  |       |                  |  |  | 52,215  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 52,215    |  
|Fee-based sales commission and other revenues                |  |               |       |   |                      |  |       |                  |  |  | 25,703  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 25,703    |  
|Other fee-based services revenues                            |  |               |       |   |                      |  |       |                  |  |  | 18,875  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 18,875    |  
|Interest income                                              |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 7,242   |   |                                   |  | 45      |              |  |  | 20,913    |   |  |   | 28,200    |  
|Financial Services - non-interest income                     |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  | 287     |              |  |  | (275      | ) |  |   | 12        |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Total revenues                                               |  |               |       |   |                      |  |       |                  |  |  | 96,793  |  |  |                          | 7,242   |   |                                   |  | 332     |              |  |  | 20,638    |   |  |   | 125,005   |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Costs and Expenses                                           |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Cost of VOIs sold                                           |  |               |       |   |                      |  |       |                  |  |  | 6,308   |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 6,308     |  
|Cost of other resorts operations                             |  |               |       |   |                      |  |       |                  |  |  | 11,951  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 11,951    |  
|Interest expense                                             |  |               | 1,257  |   |                      |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  | 4,126   |              |  |  | 11,285    |   |  |   | 16,668    |  
|Recovery from loan losses                                    |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | (625    | ) |                                   |  | (2      | )            |  |  |          |   |  |   | (627      | )
|Selling, general and administrative expenses                 |  |               | 5,482  |   |                      |  | 40     |                  |  |  | 46,032  |  |  |                          |        |   |                                   |  |        |              |  |  | 12,055    |   |  |   | 63,609    |  
|Other expenses                                               |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 9,555   |   |                                   |  | 2,999   |              |  |  | (523      | ) |  |   | 12,031    |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Total costs and expenses                                     |  |               | 6,739  |   |                      |  | 40     |                  |  |  | 64,291  |  |  |                          | 8,930   |   |                                   |  | 7,123   |              |  |  | 22,817    |   |  |   | 109,940   |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Gain on extinguishment of debt                               |  |               |       |   |                      |  | 28,725 |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | 1,150     |   |  |   | 29,875    |  
|Equity in earnings from unconsolidated affiliates            |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  | 119     |              |  |  | 35        |   |  |   | 154       |  
|Other income                                                 |  |               | 976    |   |                      |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | (557      | ) |  |   | 419       |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|(Loss) income from continuing operations before income taxes |  |               | (5,763 | ) |                      |  | 28,685 |                  |  |  | 32,502  |  |  |                          | (1,688  | ) |                                   |  | (6,672  | )            |  |  | (1,551    | ) |  |   | 45,513    |  
|Less: Provision for income taxes                             |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | 10,813    |   |  |   | 10,813    |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                      |  |       
|(Loss) income from continuing operations                     |  | $             | (5,763 | ) |                      |  | 28,685 |                  |  |  | 32,502  |  |  |                          | (1,688  | ) |                                   |  | (6,672  | )            |  |  | (12,364   | ) |  |   | 34,700    |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Loss from discontinued operations                            |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | (5,324    | )
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Net income                                                   |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | 29,376    |  
|                                                             |  |               |        |   |                      |  |       
|Less: Net income attributable to noncontrolling interests    |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | 3,697     |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                      |  |       
|Net income attributable to BFC                               |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  | $ | 25,679    |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                      |  |       
|Total assets                                                 |  | $             | 48,263 |   |                      |  | 51     |                  |  |  | 750,021 |  |  |                          | 653,838 |   |                                   |  | 307,520 |              |  |  | 3,107,247 |   |  |   | 4,866,940 |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  



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|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|------------------------------------------------------------ |  | ------------- | ------ | - | --------------------- |  | ------ | ---------------- |  |  | ------- |  |  | ------------------------ | ------- | - | --------------------------------- |  | ------- | ------------ |  |  | --------- | - |  | - | --------- | -
|2011                                                         |  | BFCActivities |        |   | Real EstateOperations |  |        | BluegreenResorts |  |  | CLRU    |  |  | BBX CapitalParentCompany |         |   | UnallocatedAmountsandEliminations |  |         | SegmentTotal | 
|Revenues:                                                    |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Sales of VOIs                                               |  | $             |       |   |                       |  |       |                  |  |  | 45,344  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 45,344    |  
|Fee-based sales commission and other revenue                 |  |               | 299    |   |                       |  |       |                  |  |  | 18,308  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 18,607    |  
|Other fee-based services revenue                             |  |               |       |   |                       |  |       |                  |  |  | 17,287  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 17,287    |  
|Interest income                                              |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 11,109  |   |                                   |  | 60      |              |  |  | 21,972    |   |  |   | 33,141    |  
|Financial Services - non-interest income                     |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 12      |   |                                   |  | (1,183  | )            |  |  | (313      | ) |  |   | (1,484    | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Total revenues                                               |  |               | 299    |   |                       |  |       |                  |  |  | 80,939  |  |  |                          | 11,121  |   |                                   |  | (1,123  | )            |  |  | 21,659    |   |  |   | 112,895   |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                       |  |       
|Costs and Expenses:                                          |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Cost of VOIs sold                                           |  |               |       |   |                       |  |       |                  |  |  | 6,703   |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 6,703     |  
|Cost of other resorts operations                             |  |               |       |   |                       |  |       |                  |  |  | 12,156  |  |  |                          |        |   |                                   |  |        |              |  |  |          |   |  |   | 12,156    |  
|Interest expense                                             |  |               | 1,511  |   |                       |  | 675    |                  |  |  |        |  |  |                          |        |   |                                   |  | 3,856   |              |  |  | 14,221    |   |  |   | 20,263    |  
|Provision for loan losses                                    |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 3,799   |   |                                   |  | 514     |              |  |  |          |   |  |   | 4,313     |  
|Selling, general and administrative expenses                 |  |               | 5,212  |   |                       |  | 98     |                  |  |  | 39,667  |  |  |                          |        |   |                                   |  |        |              |  |  | 9,474     |   |  |   | 54,451    |  
|Other expenses                                               |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 17,460  |   |                                   |  | 2,507   |              |  |  | 449       |   |  |   | 20,416    |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Total costs and expenses                                     |  |               | 6,723  |   |                       |  | 773    |                  |  |  | 58,526  |  |  |                          | 21,259  |   |                                   |  | 6,877   |              |  |  | 24,144    |   |  |   | 118,302   |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Equity in earnings from unconsolidated affiliates            |  |               | 8      |   |                       |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  | 432     |              |  |  | 35        |   |  |   | 475       |  
|Other income                                                 |  |               | 1,481  |   |                       |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | (1,078    | ) |  |   | 403       |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|(Loss) income from continuing operations before income taxes |  |               | (4,935 | ) |                       |  | (773   | )                |  |  | 22,413  |  |  |                          | (10,138 | ) |                                   |  | (7,568  | )            |  |  | (3,528    | ) |  |   | (4,529    | )
|Less: (Benefit) provision for income taxes                   |  |               | (52    | ) |                       |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | 6,572     |   |  |   | 6,520     |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|(Loss) income from continuing operations                     |  | $             | (4,883 | ) |                       |  | (773   | )                |  |  | 22,413  |  |  |                          | (10,138 | ) |                                   |  | (7,568  | )            |  |  | (10,100   | ) |  |   | (11,049   | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Income from discontinued operations                          |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | 8,066     |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|Net loss                                                     |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | (2,983    | )
|Less: Net income attributable to noncontrolling interests    |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   | 3,955     |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                       |  |       
|Net loss attributable to BFC                                 |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  | $ | (6,938    | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  
|                                                             |  |               |        |   |                       |  |       
|Total assets                                                 |  | $             | 71,314 |   |                       |  | 25,286 |                  |  |  | 825,268 |  |  |                          | 745,175 |   |                                   |  | 356,709 |              |  |  | 3,002,412 |   |  |   | 5,026,164 |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |           |   |  |   |           |  



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The tables below set forth the Companys segment information as of and for
the six months ended June 30, 2012 and 2011 (in thousands):



|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|------------------------------------------------------------ |  | ------------- | ------ | - | -------------------- |  | ------ | ---------------- |  |  | ------- |  |  | ------------------------ | ------ | - | --------------------------------- |  | ------- | ------------ |  |  | ------- | - |  | - | ------- | -
|2012                                                         |  | BFCActivities |        |   | RealEstateOperations |  |        | BluegreenResorts |  |  | CLRU    |  |  | BBX CapitalParentCompany |        |   | UnallocatedAmountsandEliminations |  |         | SegmentTotal | 
|Revenues:                                                    |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Sales of VOIs                                                |  | $             |       |   |                      |  |       |                  |  |  | 95,812  |  |  |                          |       |   |                                   |  |        |              |  |  |        |   |  |   | 95,812  |  
|Fee-based sales commission and other revenues                |  |               |       |   |                      |  |       |                  |  |  | 38,481  |  |  |                          |       |   |                                   |  |        |              |  |  |        |   |  |   | 38,481  |  
|Other fee-based services revenues                            |  |               |       |   |                      |  |       |                  |  |  | 37,690  |  |  |                          |       |   |                                   |  |        |              |  |  |        |   |  |   | 37,690  |  
|Interest income                                              |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 15,401 |   |                                   |  | 221     |              |  |  | 42,077  |   |  |   | 57,699  |  
|Financial Services - non-interest income                     |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 70     |   |                                   |  | 626     |              |  |  | (597    | ) |  |   | 99      |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Total revenues                                               |  |               |       |   |                      |  |       |                  |  |  | 171,983 |  |  |                          | 15,471 |   |                                   |  | 847     |              |  |  | 41,480  |   |  |   | 229,781 |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                      |  |       
|Costs and Expenses:                                          |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Cost VOIs sold                                              |  |               |       |   |                      |  |       |                  |  |  | 10,670  |  |  |                          |       |   |                                   |  |        |              |  |  |        |   |  |   | 10,670  |  
|Cost of other resorts operations                             |  |               |       |   |                      |  |       |                  |  |  | 24,937  |  |  |                          |       |   |                                   |  |        |              |  |  |        |   |  |   | 24,937  |  
|Interest expense                                             |  |               | 2,223  |   |                      |  |       |                  |  |  |        |  |  |                          |       |   |                                   |  | 8,293   |              |  |  | 23,062  |   |  |   | 33,578  |  
|Recovery from loan losses                                    |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | (1,386 | ) |                                   |  | (6      | )            |  |  |        |   |  |   | (1,392  | )
|Selling, general and administrative expenses                 |  |               | 8,865  |   |                      |  | 71     |                  |  |  | 83,001  |  |  |                          |       |   |                                   |  |        |              |  |  | 25,881  |   |  |   | 117,818 |  
|Other expenses                                               |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 22,487 |   |                                   |  | 8,700   |              |  |  | (1,234  | ) |  |   | 29,953  |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Total costs and expenses                                     |  |               | 11,088 |   |                      |  | 71     |                  |  |  | 118,608 |  |  |                          | 21,101 |   |                                   |  | 16,987  |              |  |  | 47,709  |   |  |   | 215,564 |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                      |  |       
|Gain on extinguishment of debt                               |  |               |       |   |                      |  | 28,725 |                  |  |  |        |  |  |                          |       |   |                                   |  |        |              |  |  | 1,150   |   |  |   | 29,875  |  
|Equity in earnings from unconsolidated affiliates            |  |               | 4      |   |                      |  |       |                  |  |  |        |  |  |                          |       |   |                                   |  | 239     |              |  |  | 69      |   |  |   | 312     |  
|Other income                                                 |  |               | 1,955  |   |                      |  |       |                  |  |  |        |  |  |                          |       |   |                                   |  |        |              |  |  | (950    | ) |  |   | 1,005   |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|(Loss) income from continuing operations before income taxes |  |               | (9,129 | ) |                      |  | 28,654 |                  |  |  | 53,375  |  |  |                          | (5,630 | ) |                                   |  | (15,901 | )            |  |  | (5,960  | ) |  |   | 45,409  |  
|Less: Provision for income taxes                             |  |               |       |   |                      |  |       |                  |  |  |        |  |  |                          | 1      |   |                                   |  |        |              |  |  | 16,013  |   |  |   | 16,014  |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                      |  |       
|(Loss) income from continuing operations                     |  | $             | (9,129 | ) |                      |  | 28,654 |                  |  |  | 53,375  |  |  |                          | (5,631 | ) |                                   |  | (15,901 | )            |  |  | (21,973 | ) |  |   | 29,395  |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Loss from discontinued operations                            |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   | (2,380  | )
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Net income                                                   |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   | 27,015  |  
|Less: Net income attributable to noncontrolling interests    |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   | 4,056   |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Net income attributable to BFC                               |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  | $ | 22,959  |  
|                                                             |  |               |        |   |                      |  |        |                  |  |  |         |  |  |                          |        |   |                                   |  |         |              |  |  |         |   |  |   |         |  



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|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|------------------------------------------------------------ |  | ------------- | ------ | - | --------------------- |  | ------ | ---------------- |  |  | ------- |  |  | ------------------------ | ------- | - | --------------------------------- |  | ------- | ------------ |  |  | ------- | - |  | - | ------- | -
|2011                                                         |  | BFCActivities |        |   | Real EstateOperations |  |        | BluegreenResorts |  |  | CLRU    |  |  | BBX CapitalParentCompany |         |   | UnallocatedAmountsandEliminations |  |         | SegmentTotal | 
|Revenues:                                                    |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                       |  |       
|Sales of VOIs                                               |  | $             |       |   |                       |  |       |                  |  |  | 81,678  |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 81,678  |  
|Fee-based sales commission and other revenue                 |  |               | 570    |   |                       |  |        |                  |  |  | 29,072  |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 29,642  |  
|Other fee-based services revenue                             |  |               |       |   |                       |  |       |                  |  |  | 34,487  |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 34,487  |  
|Interest income                                              |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 22,862  |   |                                   |  | 143     |              |  |  | 44,407  |   |  |   | 67,412  |  
|Financial Services - non-interest income                     |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 13      |   |                                   |  | (974    | )            |  |  | (609    | ) |  |   | (1,570  | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Total revenues                                               |  |               | 570    |   |                       |  |       |                  |  |  | 145,237 |  |  |                          | 22,875  |   |                                   |  | (831    | )            |  |  | 43,798  |   |  |   | 211,649 |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                       |  |       
|Costs and Expenses:                                          |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Cost of VOIs sold                                           |  |               |       |   |                       |  |       |                  |  |  | 13,928  |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 13,928  |  
|Cost of other resorts operations                             |  |               |       |   |                       |  |       |                  |  |  | 25,237  |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 25,237  |  
|Interest expense                                             |  |               | 2,872  |   |                       |  | 1,916  |                  |  |  |        |  |  |                          |        |   |                                   |  | 7,638   |              |  |  | 29,356  |   |  |   | 41,782  |  
|Provision for loan losses                                    |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 10,646  |   |                                   |  | 494     |              |  |  |        |   |  |   | 11,140  |  
|Selling, general and administrative expenses                 |  |               | 10,588 |   |                       |  | 316    |                  |  |  | 72,286  |  |  |                          |        |   |                                   |  |        |              |  |  | 20,550  |   |  |   | 103,740 |  
|Other expenses                                               |  |               |       |   |                       |  |       |                  |  |  |        |  |  |                          | 30,046  |   |                                   |  | 5,939   |              |  |  | (464    | ) |  |   | 35,521  |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Total costs and expenses                                     |  |               | 13,460 |   |                       |  | 2,232  |                  |  |  | 111,451 |  |  |                          | 40,692  |   |                                   |  | 14,071  |              |  |  | 49,442  |   |  |   | 231,348 |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                       |  |       
|Gain on settlement of investment in subsidiary               |  |               |       |   |                       |  | 11,305 |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  |        |   |  |   | 11,305  |  
|Equity in earnings from unconsolidated affiliates            |  |               | 1,369  |   |                       |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  | 813     |              |  |  | 70      |   |  |   | 2,252   |  
|Other income                                                 |  |               | 2,799  |   |                       |  |       |                  |  |  |        |  |  |                          |        |   |                                   |  |        |              |  |  | (1,822  | ) |  |   | 977     |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|(Loss) income from continuing operations before income taxes |  |               | (8,722 | ) |                       |  | 9,073  |                  |  |  | 33,786  |  |  |                          | (17,817 | ) |                                   |  | (14,089 | )            |  |  | (7,396  | ) |  |   | (5,165  | )
|Less: (Benefit) provision for income taxes                   |  |               | (196   | ) |                       |  |       |                  |  |  |        |  |  |                          | 1       |   |                                   |  |        |              |  |  | 8,860   |   |  |   | 8,665   |  
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|(Loss) income from continuing operations                     |  | $             | (8,526 | ) |                       |  | 9,073  |                  |  |  | 33,786  |  |  |                          | (17,818 | ) |                                   |  | (14,089 | )            |  |  | (16,256 | ) |  |   | (13,830 | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Loss from discontinued operations                            |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   | (1,479  | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|                                                             |  |               |        |   |                       |  |       
|Net loss                                                     |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   | (15,309 | )
|Less: Net loss attributable to noncontrolling interests      |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   | (5,760  | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  
|Net loss attributable to BFC                                 |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  | $ | (9,549  | )
|                                                             |  |               |        |   |                       |  |        |                  |  |  |         |  |  |                          |         |   |                                   |  |         |              |  |  |         |   |  |   |         |  



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|14. | Commitments and Contingencies
|--- | -----------------------------

BFC and its Wholly Owned Subsidiaries

At June 30, 2009, a wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited partnership as a non-managing general partner. The partnership owns an office building located in Boca Raton,
Florida. In connection with the purchase of the office building in March 2006, BFC/CCC guaranteed repayment of a portion of the non-recourse loan on the property on a joint and several basis with the managing general partner. BFC/CCCs maximum
exposure under this guarantee is $2.0 million (which is shared on a joint and several basis with the managing general partner). In July 2009, BFC/CCCs wholly-owned subsidiary withdrew as a partner of the limited partnership and transferred its
10% interest to another unaffiliated partner. In return, the partner to whom this interest was assigned agreed to use its reasonable best efforts to obtain the release of BFC/CCC from the guarantee. The partner was unable to secure such a release
and that partner has agreed to indemnify BFC/CCC for any losses that may arise under the guarantee after the date of the assignment. There are no carrying amounts recorded on our financial statements at June 30, 2012 or December 31, 2011
relating to the guarantee or otherwise in respect of the partnership.

A wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited
liability company that owned two commercial properties in Hillsborough County, Florida. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member of the limited liability company each guaranteed
the payment of up to a maximum of $5.0 million for certain environmental indemnities and specific obligations that were not related to the financial performance of the properties. BFC and the unaffiliated member also entered into a cross
indemnification agreement which limited BFCs obligations under the guarantee to acts of BFC and its affiliates. On March 25, 2011, the limited liability company reached a settlement with the lender with respect to the loan secured by the
properties, pursuant to which the limited liability company conveyed the commercial properties securing the loan via a deed in lieu of foreclosure. BFC and BFC/CCCs wholly-owned subsidiary were released from all obligations and guarantees
related to the two commercial properties. During the first quarter of 2011, BFC recognized the negative basis of its investment of approximately $1.3 million which is included in equity in earnings from unconsolidated affiliates in the
Companys consolidated statements of operations for the six months ended June 30, 2011.

A wholly-owned subsidiary of BFC/CCC has a
50% limited partner interest in a limited partnership that has a 10% interest in a limited liability company that owns an office building in Tampa, Florida. At June 30, 2012 and December 31, 2011, the carrying amount of this investment was
approximately $287,000 and $283,000, respectively, which is included in investments in unconsolidated affiliates in the Companys consolidated statements of financial condition. In connection with the purchase of the office building by the
limited liability company in June 2007, BFC guaranteed the payment of certain environmental indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in the
event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered
into a cross indemnification agreement which limits BFCs obligations under the guarantee to acts of BFC and its affiliates. No amounts are recorded in the Companys financial statements for the obligations associated with this guarantee
based on the potential indemnification by the unaffiliated members and the limit of the specific obligations to non-financial matters.

Based
on current accounting guidance associated with the consolidation of variable interest entities implemented on January 1, 2010, we are not deemed the primary beneficiaries of the above-described entities related to BFC/CCC investments as we do
not have the power to direct the activities that can significantly impact the performance of these entities. Accordingly, these entities are not consolidated into our financial statements.



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On November 9, 2007, Levitt and Sons and substantially all of its subsidiaries (collectively, the
Debtors) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the Chapter 11 Cases) in the United States Bankruptcy Court for the Southern District of Florida (the Bankruptcy
Court). Pursuant to the settlement agreement entered into during June 2008, as subsequently amended (the Settlement Agreement), Woodbridge agreed to (i) pay $8 million to the Debtors bankruptcy estates (sometimes
referred to herein as the Debtors Estate), (ii) place $4.5 million in a release fund to be disbursed to third party creditors in exchange for a third party release and injunction, (iii) make a $300,000 payment to a
deposit holders fund and (iv) share a percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors Estate. In addition, Woodbridge agreed to waive and release substantially all of the claims it had against
the Debtors, including administrative expense claims through July 2008, and the Debtors (joined by the Joint Committee of Unsecured Creditors appointed in the Chapter 11 Cases (the Joint Committee)) agreed to waive and release any claims
they had against Woodbridge and its affiliates. On February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by the Debtors and the Joint Committee. That order also approved the settlement
pursuant to the Settlement Agreement. No appeal or rehearing of the Bankruptcy Courts order was filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and
conditions of the Settlement Agreement. As of December 31, 2011, we had placed into escrow approximately $11.7 million which represented the portion of the tax refund that was likely to be required to be paid to the Debtors Estate under
the Settlement Agreement. During the quarter ended June 30, 2012, the $11.7 million was paid to the Debtors Estate. Woodbridge is also required to pay to the Debtors Estate a settlement holdback amount of approximately $485,000 plus
interest by no later than August 30, 2012, and BFC has guaranteed Woodbridges timely payment of the settlement holdback amount. The settlement holdback amount is recorded as a liability in the consolidated statement of financial
condition. Upon payment of the settlement holdback amount, all of Woodbridges obligations under the Settlement Agreement will be satisfied.

In the ordinary course of business, BFC and its subsidiaries are parties to lawsuits as plaintiff or defendant involving its operations and activities. Reserves are accrued for amounts in which it is
probable that a loss will be incurred and the amount of such loss can be reasonably estimated. BFC has accrued $7.5 million and $4.6 million as of June 30, 2012 and December 31, 2011, respectively, for pending legal proceedings, all of
which relates to the Woodbridge appraisal rights litigation described below. BFC believes that it has meritorious defenses in the pending legal actions and that reasonably possible losses arising from these pending legal matters, in excess of the
amounts currently accrued, if any, will not have a material impact on BFCs financial statements.

Woodbridge Holdings, LLC v.
Prescott Group Aggressive Small Cap Master Fund, G.P., Cede & Co., William J. Maeck, Ravenswood Investments III, L.P., and The Ravenswood Investment Company, Circuit Court, 17th Judicial Circuit, Broward County, Florida.

Under Florida law, holders of WHCs Class A Common Stock who did not vote to approve BFCs merger with WHC and who properly asserted and
exercised their appraisal rights with respect to their shares are entitled to receive a cash payment in an amount equal to the fair value of their shares (as determined in accordance with the provisions of Florida law) in lieu of the shares of
BFCs Class A Common Stock which they would otherwise have been entitled to receive. In accordance with Florida law, Woodbridge provided written notices and required forms to the dissenting shareholders setting forth, among other things,
its determination that the fair value of WHCs Class A Common Stock immediately prior to the effectiveness of the merger was $1.10 per share. Dissenting shareholders, who collectively held approximately 4.2 million shares of
WHCs Class A Common Stock, rejected Woodbridges offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of WHCs Class A Common Stock. Under Florida law, Woodbridge
thereafter commenced the appraisal rights action. In December 2009, a $4.6 million liability was recorded with a corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridges offer to the dissenting
shareholders. On July 5, 2012, the presiding court determined the fair value of the dissenting shareholders shares of WHCs Class A Common Stock to be $1.78 per share and awarded legal and other costs in favor of the dissenting
shareholders. As a result, the $4.6 million liability was increased (with a corresponding reduction to additional paid in capital of $2.8 million) to approximately $7.5 million as of June 30, 2012 to account for the per share value awarded,
however, any award for legal and other costs that may be paid could not be reasonably estimated. Woodbridge has appealed the courts ruling with respect to its fair value determination and the award of legal fees and costs to the dissenting
shareholders. The outcome of the appeal is uncertain.

Westchester Fire Insurance Company vs. City of Brooksville, United States District
Court, Middle District of Florida, Tampa Division, Case No. 8:09 CV 00062-T23 TBM

This litigation arose from a dispute regarding
liability under two performance bonds for infrastructure issued in connection with a plat issued by the City of Brooksville for a single family housing project that was not commenced.



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The project had been abandoned by Levitt and Sons prior to its bankruptcy filing as non-viable as a consequence of the economic downturn and, in connection with the Levitt and Sons bankruptcy,
the mortgagee, Key Bank, was permitted by agreement to initiate and conclude a foreclosure leading to the acquisition of the property by Key Banks subsidiary. The City of Brooksville contended that, notwithstanding that the development had not
proceeded and was not likely to proceed at any known time in the future, it was entitled to recover the face amount of the bonds in the approximate amount of $5.4 million. Woodbridge filed a suit for declaratory judgment (in the name of its surety,
Westchester) against the City of Brooksville contending that the obligation under the bonds had terminated. In August 2010, Woodbridge was granted a motion for summary judgment. Subsequent to the motion being granted, the municipality appealed the
decision. On March 8, 2012, the court of appeals affirmed the district courts granting of Woodbridges motion for summary judgment.

Litigation Regarding the Proposed BFC/Bluegreen Merger

Between November 16, 2011 and February 13, 2012, seven purported class action lawsuits related to the proposed merger between BFC and Bluegreen were filed against Bluegreen, the members of
Bluegreens board of directors, BFC and BFCs wholly owned subsidiary formed for purposes of effecting the merger. As described below, four of these lawsuits have been consolidated into a single action in Florida. The other three lawsuits,
which were filed in Massachusetts, have been stayed. The lawsuits seek to enjoin the merger or, if it is completed, to recover relief as determined by the applicable presiding court to be appropriate. Further information regarding each of these
lawsuits is set forth below.

The four Florida lawsuits have been consolidated into an action styled In Re Bluegreen Corporation
Shareholder Litigation. On April 9, 2012, the plaintiffs filed a consolidated amended class action complaint which alleges that the individual director defendants breached their fiduciary duties by (i) agreeing to sell Bluegreen
without first taking steps to ensure adequate, fair and maximum consideration, (ii) engineering a transaction to benefit themselves and not the shareholders, and (iii) failing to protect the interests of Bluegreens minority
shareholders. In the complaint, the plaintiffs also allege that BFC breached its fiduciary duties to Bluegreens minority shareholders and that BFCs merger subsidiary aided and abetted the alleged breaches of fiduciary duties by
Bluegreens directors and BFC. In addition, the complaint includes allegations relating to claimed violations of Massachusetts law. The complaint seeks declaratory and injunctive relief, along with damages and attorneys fees and costs.

The three Massachusetts lawsuits were filed in the Superior Court for Suffolk County in the Commonwealth of Massachusetts and make
substantially the same allegations and claims as in the Florida cases. These three lawsuits are styled as follows: Gaetano Bellavista Caltagirone, on behalf of himself and all others similarly situated, v. Bluegreen Corporation, Alan B. Levan,
John E. Abdo, Norman H. Becker, Lawrence A. Cirillo, Mark A. Nerenhausen, Arnold Sevell, James R. Allmand III, Orlando Sharpe, BFC Financial Corporation and BXG Florida, LLC (filed on November 16, 2011); Alan W. Weber and J.B. Capital
Partners L.P., on behalf of themselves and all others similarly situated, v. Bluegreen Corporation, Alan B. Levan, John E. Abdo, Norman H. Becker, Lawrence A. Cirillo, Mark A. Nerenhausen, Arnold Sevell, James R. Allmand III, Orlando Sharpe, BFC
Financial Corporation and BXG Florida, LLC(filed on November 29, 2011); and Barry Fieldman, as Trustee for the Barry & Amy Fieldman Family Trust, on behalf of themselves and all others similarly situated, v. Bluegreen
Corporation, Alan B. Levan, John E. Abdo, Norman H. Becker, Lawrence A. Cirillo, Mark A. Nerenhausen, Arnold Sevell, James R. Allmand III, Orlando Sharpe, BFC Financial Corporation and BXG Florida, LLC(filed on December 6, 2011). The
Massachusetts court has stayed all three actions through January 2013 in favor of the consolidated action proceeding in Florida.

BFC and
Bluegreen believe that these lawsuits are without merit and intend to defend against them vigorously.

Bluegreen

In the ordinary course of its business, Bluegreen becomes subject to claims or proceedings from time to time relating to the purchase, sale, marketing or
financing of VOIs or other resort operations. Bluegreen is also subject to certain matters relating to Bluegreen Communities business, the assets of which Bluegreen sold to Southstar on May 4, 2012. Additionally, from time to time,
Bluegreen becomes involved in disputes with existing and former employees, vendors, taxing jurisdictions and various other parties. From time to time in the ordinary course of business, Bluegreen also receives individual consumer complaints, as well
as complaints received through regulatory and consumer agencies, including Offices of State Attorney Generals. Bluegreen takes these matters seriously and attempts to resolve any such issues as they arise. Unless otherwise described below, Bluegreen
believes that these claims are routine litigation incidental to its business.



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Reserves are accrued for matters in which Bluegreen believes it is probable that a loss will be incurred and
the amount of such loss can be reasonably estimated. As of June 30, 2012, Bluegreen had accrued $3.0 million for matters which it believes meet these criteria. The actual costs of resolving these legal claims may be substantially higher than
the amounts accrued for these claims. Bluegreens management is not at this time able to estimate a range of reasonably possible losses with respect to these matters in which it is reasonably possible that a loss will occur. In certain matters,
Bluegreen is unable to estimate the loss or reasonable range of loss until additional developments provide information sufficient to support an assessment of the loss or range of loss. Frequently in these matters, the claims are broad and the
plaintiffs have not quantified or factually supported the claim.

Bluegreen believes that liabilities arising from the litigation and
regulatory matters discussed below, in excess of the amounts currently accrued, if any, will not have a material impact on its financial statements.

Tennessee Tax Audit

In 2005, the State of Tennessee Audit Division (the
Division) audited certain subsidiaries within Bluegreen Resorts for the period from December 1, 2001 through December 31, 2004. On September 23, 2006, the Division issued a notice of assessment for approximately $0.7
million of accommodations tax based on the use of Bluegreen Vacation Club accommodations by Bluegreen Vacation Club members who became members through the purchase of non-Tennessee property. Bluegreen believes the attempt to impose such a tax is
contrary to Tennessee law and has vigorously opposed such assessment by the Division. An informal conference was held in December 2007 to discuss this matter with representatives of the Division. No formal resolution of the issue was reached during
the conference. By letter dated May 25, 2011, the State of Tennessee Department of Revenue issued a decision in which it held that two of the three types of transactions in question were taxable. The State of Tennessee Department of Revenue
confirmed that Bluegreen had already remitted the proper amount of sales tax due on one of the two types of taxable transactions, but has taken the position that Bluegreen owed a total of $0.7 million in taxes and interest based on the second type
of transaction. On August 1, 2011, Bluegreen filed suit in the Chancery Court of Davidson County, Tennessee for the purpose of invalidating and setting aside the tax assessment made against Bluegreen by the State of Tennessee Department of
Revenue. Discovery matters relative to the litigation are ongoing.

Inquiry into Consumer Matters by the Office of the Florida Attorney
General

The Office of the Attorney General for the State of Florida (the AGSF) advised Bluegreen that it has accumulated a
number of consumer complaints since 2004 related to timeshare sales and marketing, and requested that Bluegreen propose a resolution on a collective basis of any outstanding complaints. The AGSF also requested that Bluegreen enter into a written
agreement. Bluegreen has determined that many of the identified complaints were previously addressed and/or resolved. On May 24, 2012, the parties entered into a written agreement establishing a process for determining consumer eligibility for
relief (including, where applicable, monetary restitution) and providing a timeframe through August 24, 2012 to resolve identified customer complaints. Bluegreen is fulfilling its obligations and responsibilities under the terms of the written
agreement and does not believe this matter will have a material effect on its results of operations, financial condition or on its sales and marketing activities in Florida.

The matters described below relate to Bluegreen Communities business. As described above and further in Note 3, Bluegreen sold substantially all of the assets which comprised Bluegreen Communities
to Southstar on May 4, 2012. However, Southstar did not assume the liabilities related to the matters described below in connection with the transaction, and Bluegreen therefore remains responsible for these matters and any liabilities
resulting from them.

Mountain Lakes Mineral Rights

Bluegreen Southwest One, L.P. (Southwest), a subsidiary of Bluegreen Corporation, was the developer of the Mountain Lakes subdivision in Texas. In Case No. 28006, styled Betty Yvon
Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al., in the 266thJudicial District Court, Erath County, Texas, the plaintiffs filed a declaratory judgment action against Southwest seeking to develop their reserved mineral interests in, on and under the Mountain Lakes
subdivision. The plaintiffs claims are based on property law, oil and gas law, contract and tort theories. The property owners association and some of the individual landowners have filed cross actions against Bluegreen, Southwest and
individual directors of the property owners association related to the mineral rights and certain amenities in the subdivision as described below. On January 17, 2007, the court ruled that the restrictions placed on the development that
prohibited oil and gas production and development were invalid and not enforceable as a matter of law, that such restrictions did not prohibit the development of the plaintiffs prior reserved mineral interests and that Southwest breached its
duty to lease the minerals to third parties



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for development. The court further ruled that Southwest was the sole holder of the right to lease the minerals to third parties. The order granting the plaintiffs motion was severed into
Case No. 28769, styled Betty Yvon Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al. in the 266thJudicial District Court, Erath County, Texas. Southwest appealed the trial courts ruling. On January 22,
2009, in Bluegreen Southwest One, L.P. et al. v. Betty Yvon Lesley et al., in the 11th Court of Appeals, Eastland, Texas, the Appellate Court reversed the trial courts decision and ruled in Southwests favor and determined that all
executive rights were owned by Southwest and then transferred to the individual property owners in connection with the sales of land. All property owner claims were decided in favor of Southwest. It was also decided that Southwest did not breach a
fiduciary duty to the plaintiffs as an executive rights holder. On May 14, 2009, the plaintiffs filed an appeal with the Texas Supreme Court asking the Court to reverse the Appellate Courts decision in favor of Southwest. On
August 26, 2011, the Texas Supreme Court issued its opinion affirming the Appellate Courts decision in part and reversing it in part. The Texas Supreme Court held that Southwest did not breach any covenants in the deed, but did breach a
duty to the plaintiffs by filing restrictive covenants in connection with the development of the property which prohibited mineral development, and that the appropriate remedy was cancellation of the restrictive covenants. The Texas Supreme Court
further ruled that the plaintiffs have no right of ingress to, or egress from, the subdivision, and that Southwest did not breach a duty to the plaintiffs by not leasing the mineral rights. The Texas Supreme Court remanded the case to the trial
court for disposition consistent with its decision. No information is available as to when the trial court will render its ruling.

Separately, as a result of the Texas Supreme Courts decision invalidating the restrictive covenants prohibiting mineral development within the
subdivision, certain lot owners within Mountain Lakes filed a cross-claim against Southwest alleging fraud, negligence and a violation of deceptive trade practices laws based on a claim that the invalidation of the restrictive covenants has caused
devaluation of their residential lots and other economic damages. During the mediation held in June 2012, Southwest and the named plaintiffs (Lesley) reached agreement to settle their disputes with Southwest agreeing to pay Lesley $200,000 for
dismissal of their claims. Similarly, during the same mediation Southwest settled with seven of the lot owners claiming diminution of lot values for $5,000 collectively. However, settlement was not reached with the other landowners possessing
reserved mineral rights, nor with the majority of lot owners who filed the cross-claim against Southwest. Southwest intends to vigorously defend itself with respect to the pending matter.

See also the description of the litigation relating to the proposed merger between BFC and Bluegreen described above.

BBX Capital

BBX Capital and its subsidiaries are parties to lawsuits as plaintiff
or defendant involving its bank operations, lending and tax certificates. Although BBX Capital believes it has meritorious defenses in all current legal actions, the outcome of litigation and regulatory matters and timing of ultimate resolution are
inherently difficult to predict and uncertain.

Reserves are accrued for matters in which it is probable that a loss will be incurred and the
amount of such loss can be reasonably estimated. These accrual amounts as of June 30, 2012 are not material to BBX Capitals financial statements. The actual costs of resolving these legal claims may be substantially higher or lower than
the amounts accrued for these claims.

A range of reasonably possible losses is estimated for matters in which it is reasonably possible that
a loss has been incurred or that a loss is probable but not reasonably estimable. Management of BBX Capital currently estimates that the aggregate range of reasonably possible losses in excess of the accrued liability are insignificant as of
June 30, 2012. This estimated range of reasonably possible losses represents the estimated possible losses over the life of such legal matters, which may be an indeterminable time period, and is based on information currently available as of
June 30, 2012. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Those matters for which a reasonable estimate is not possible are not included within this
estimated range and, therefore, this estimated range does not represent BBX Capitals maximum loss exposure. During the six months ended June 30, 2012, a matter associated with tax certificates activities was settled for $1.6 million
reducing the range of possible losses reported as of December 31, 2011.

In certain matters BBX Capital is unable to estimate the loss or
reasonable range of loss until additional developments in the case provide information sufficient to support an assessment of the loss or range of loss. Frequently in these matters the claims are broad and the plaintiffs have not quantified or
factually supported the claim.



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BBX Capital believes that liabilities arising from litigation and regulatory matters, discussed below, in
excess of the amounts currently accrued, if any, will not have a material impact to BBX Capitals financial statements. However, due to the significant uncertainties involved in these legal matters, BBX Capital may incur losses in excess of
accrued amounts and an adverse outcome in these matters could be material to BBX Capitals financial statements.

Litigation and
regulatory matters assumed by BB&T in connection with the sale of BankAtlantic are no longer reported by BBX Capital. The following is a description of the ongoing litigation and regulatory matters:

Class action securities litigation

In
October 2007, BBX Capital and current or former officers of BBX Capital were named in a lawsuit which alleged that during the period of November 9, 2005 through October 25, 2007, BBX Capital and the named officers knowingly and/or
recklessly made misrepresentations of material fact regarding BankAtlantic and specifically BankAtlantics loan portfolio and allowance for loan losses. The Complaint asserted claims for violations of the Securities Exchange Act of 1934 and
Rule 10b-5 and sought unspecified damages. On November 18, 2010, a jury returned a verdict awarding $2.41 per share to shareholders who purchased shares of BBX Capitals Class A Common Stock during the period of April 26, 2007 to
October 26, 2007 who retained those shares until the end of the period. The jury rejected the plaintiffs claim for the six month period from October 19, 2006 to April 25, 2007. Prior to the beginning of the trial, the plaintiffs
abandoned any claim for any prior period. On April 25, 2011, the Court granted defendants post-trial motion for judgment as a matter of law and vacated the jury verdict, resulting in a judgment in favor of all defendants on all claims. On
July 23, 2012, a three judge panel of the United States Court of Appeals for the Eleventh Circuit issued a unanimous opinion affirming the judgment in favor of all defendants on all claims.

Securities and Exchange Commission Complaint

On January 18, 2012, the SEC brought an action in the United States District Court for the Southern District of Florida against BBX Capital and Alan B. Levan, BBX Capitals Chairman and Chief
Executive Officer, alleging that they violated securities laws by not timely disclosing known adverse trends in BBX Capitals commercial real estate loans, selectively disclosing problem loans and engaging in improper accounting treatment of
certain specific loans which may have resulted in a material understatement of its net loss in BBX Capitals Annual Report on Form 10-K for the year ended December 31, 2007. Further, the complaint alleges that Mr. Alan B. Levan
intentionally misled investors in related earnings calls. The SEC is seeking a finding by the court of violations of securities laws, a permanent injunction barring future violations, civil money penalties and, in the case of Mr. Alan B.
Levan, an order barring him from serving as an officer or director of a public company. The defendants have filed a motion to dismiss, which is pending before the Court.BBX Capital believes the claims to be without merit and intends to
vigorously defend the actions.

BBX Capital Shareholders Lawsuit Seeking to Block the sale of BankAtlantic to BB&T under the Agreement

On April 5, 2012, J.Phillip Max filed a class action complaint in the Circuit Court for the Seventeenth Judicial Circuit in Broward
County, Florida against Alan Levan, Jarett Levan, John Abdo, Steven Coldren, D. Keith Cobb, Charles C. Winningham III, Bruno Di Giulian, Willis Holcombe, David Lieberman, BankAtlantic Bancorp, Inc., BFC Financial Corporation, and BB&T
Corporation. The complaint alleges that the individual defendants breached their fiduciary duties of care, good faith and loyalty by causing or permitting BBX Capital to sell substantially all of its assets to BB&T. The complaint further alleges
that BBX Capital, BFC and BB&T aided and abetted these breaches of fiduciary duty. The complaint seeks declaratory and equitable relief, including an injunction against the proposed transaction between BBX Capital and BB&T, as well as
seeking damages. BBX Capital believes the claims to be without merit and intends to vigorously defend the lawsuit.



|15. | Certain Relationships and Related Party Transactions
|--- | ----------------------------------------------------

BFC is the controlling shareholder of BBX Capital and Bluegreen. BFC also has a direct non-controlling interest in Benihana. Shares of
BFCs Class A and Class B Common Stock representing a majority of BFCs total voting power are owned or controlled by BFCs Chairman, President and Chief Executive Officer, Alan B. Levan, and by BFCs Vice Chairman, John E.
Abdo, both of whom are also directors of Bluegreen and Benihana, and executive officers and directors of BBX Capital and BankAtlantic. In addition, Jarett S. Levan, the son of Alan B. Levan, is an executive officer and director of BFC and BBX
Capital.



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As previously described, on November 11, 2011, BFC and Bluegreen entered into a definitive merger
agreement pursuant to which, upon consummation of the merger contemplated thereby, Bluegreen will become a wholly-owned subsidiary of BFC. At the effective time of the merger, each outstanding share of Bluegreens Common Stock (other than
shares owned by BFC and holders of Bluegreens Common Stock who exercise and perfect their appraisal rights) will be converted automatically into the right to receive eight shares of BFCs Class A Common Stock (as adjusted in
connection with the reverse stock split expected to be effected by BFC prior to the consummation of the merger). Consummation of the merger remains subject to certain closing conditions, including the listing of BFCs Class A Common Stock
on a nation securities exchange. There is no assurance that the merger will be consummated on the contemplated terms or at all. See Note 1 for additional information regarding the proposed merger.

The following table presents related party transactions relating to the shared service
arrangements between BFC, BBX Capital and Bluegreen for the three and six months ended June 30, 2012 and 2011. All were eliminated in consolidation (in thousands).



|                                           |  |     |  |     |      |   |             |  |      |           |  |  |      |  
|------------------------------------------ |  | --- |  | --- | ---- | - | ----------- |  | ---- | --------- |  |  | ---- | -
|                                           |  |     |  | BFC |      |   | BBX Capital |  |      | Bluegreen | 
|For the Three Months Ended June 30, 2012   |  |     |  |     |      |   |             |  |      |           |  |  |      |  
|Shared service income (expense)            |  | (a) |  | $   | 355  |   |             |  | (251 | )         |  |  | (104 | )
|Facilities cost and information technology |  | (b) |  | $   | (104 | ) |             |  | 88   |           |  |  | 16   |  
|                                           |  |     |  |    
|For the Three Months Ended June 30, 2011   |  |     |  |     |      |   |             |  |      |           |  |  |      |  
|Shared service income (expense)            |  | (a) |  | $   | 482  |   |             |  | (381 | )         |  |  | (101 | )
|Facilities cost and information technology |  | (b) |  | $   | (116 | ) |             |  | 103  |           |  |  | 13   |  
|                                           |  |     |  |    
|For the Six Months Ended June 30, 2012     |  |     |  |     |      |   |             |  |      |           |  |  |      |  
|Shared service income (expense)            |  | (a) |  | $   | 785  |   |             |  | (569 | )         |  |  | (216 | )
|Facilities cost and information technology |  | (b) |  | $   | (194 | ) |             |  | 167  |           |  |  | 27   |  
|                                           |  |     |  |    
|For the Six Months Ended June 30, 2011     |  |     |  |     |      |   |             |  |      |           |  |  |      |  
|Shared service income (expense)            |  | (a) |  | $   | 863  |   |             |  | (672 | )         |  |  | (191 | )
|Facilities cost and information technology |  | (b) |  | $   | (227 | ) |             |  | 202  |           |  |  | 25   |  



|    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) |  | Pursuant to the terms of shared service agreements between BFC and BBX Capital, subsidiaries of BFC provide human resources, risk management, investor relations, executive office
administration and other services to BBX Capital. Additionally, BFC provides certain risk management and administrative services to Bluegreen. The costs of shared services are allocated based upon the usage of the respective
services.                                                                                                                
|(b) |  | As part of the shared service arrangement, BFC pays BankAtlantic and Bluegreen for the cost of office facilities utilized by BFC and its shared service operations. BFC also pays
BankAtlantic for information technology related services pursuant to a separate agreement. BankAtlantic received approximately $32,000 and $36,000 from BFC under the information technology services agreement during the three months ended June 30,
2012 and 2011, respectively, and $52,000 during each of the six months ended June 30, 2012 and 2011.

As of June 30, 2012 and December 31, 2011, BFC had cash and cash equivalents accounts at BankAtlantic with balances of
approximately $1.6 million and $0.2 million, respectively. These accounts were on the same general terms as deposits made by unaffiliated third parties. BFC received nominal interest with respect to these accounts during the three and six months
ended June 30, 2012 and 2011.

In June 2010, BBX Capital and BankAtlantic entered into a real estate advisory service agreement with BFC
for assistance relating to the work-out of loans and the sale of real estate owned. Under the terms of the agreement, BFC receives a monthly fee of $12,500 from each of BankAtlantic and BBX Capital and, if BFCs efforts result in net



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recoveries of any non-performing loan or the sale of real estate owned, BFC will receive a fee equal to 1% of the net value recovered. During the three months ended June 30, 2012 and 2011,
BFC received an aggregate of $0.1 million and $0.2 million, respectively, of real estate advisory service fees under this agreement. Real estate advisory service fees during the six months ended June 30, 2012 and 2011 were approximately $0.2
million and $0.3 million, respectively. Effective upon the closing of the sale of BankAtlantic to BB&T, BankAtlantic ceased to be a party to the real estate advisory services agreement.

During the six months ended June 30, 2012 and 2011, Bluegreen paid a subsidiary of BFC approximately $0.3 million and $0.4 million, respectively, for a variety of management advisory services. In
addition, BFC has an agreement with Bluegreen relating to the maintenance of different independent registered public accounting firms. Pursuant to this agreement, Bluegreen has reimbursed BFC or expect to reimburse BFC during the six months ended
June 30, 2012 and 2011, approximately $0.4 million and $0.5 million, respectively, for fees paid by BFC to its independent registered public accounting firm for services performed at Bluegreen as part of its annual financial statement audit.

Beginning in 2009, Bluegreen entered into a land lease with Benihana, who constructed and operates a restaurant on one of Bluegreens
land parcels. Under the terms of the lease, Bluegreen received payments from Benihana of less than $0.1 million during the three and six months ended June 30, 2012 and 2011.

In prior periods, BBX Capital issued options to purchase shares of BBX Capitals Class A Common Stock to employees of BFC. Additionally, certain employees of BBX Capital have transferred to
affiliate companies, and BBX Capital has elected, in accordance with the terms of BBX Capitals stock option plans, not to cancel the stock options held by those former employees. BBX Capital from time to time also issues options and restricted
stock awards to employees of BFC that perform services for BBX Capital. Expenses relating to all options and restricted stock awards granted by BBX Capital to BFC employees were approximately $8,000 and $17,000 for the three and six months ended
June 30, 2012, respectively, and $16,000 and $32,000 for the three and six months ended June 30, 2011, respectively.

There were no
options exercised by former employees of BBX Capital during the six months ended June 30, 2012 or 2011.

BBX Capitals options and non-vested restricted
stock outstanding to employees of BFC consisted of the following as of June 30, 2012:



|                                |  |                                |       |  |                      |   |        | 
|------------------------------- |  | ------------------------------ | ----- |  | -------------------- | - | ------ | 
|                                |  | As of June 30, 2012            |      
|                                |  | BBX CapitalClass 
ACommonStock |       |  | WeightedAveragePrice |  
|                                |  |                               
|Options outstanding             |  |                                | 5,667 |  |                      | $ | 333.85 | 
|Non-vested restricted stock (1) |  |                                | 7,500 |  |                      |   |       | 



|(1) | These restricted stock awards fully vested on July 31, 2012 in connection with the sale of BankAtlantic to BB&T. Acceleration of the vesting of these awards
was approved by BBX Capitals Compensation Committee.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Certain of BFCs affiliates, including its executive officers, have independently made investments with their own funds in both
public and private entities that BFC sponsored in 2001 and in which it holds investments.



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|16. | Earnings (Loss) Per Common Share
|--- | --------------------------------

The following table presents the computation of basic and diluted earnings
(loss) per common share attributable to the Company for the three and six months ended June 30, 2012 and 2011 (in thousands, except per share data):



|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|-------------------------------------------------------------------------------------------- |  | -------------------------- | ------ | - | ------------------------ |  | ------- | ---- |  |  | ------ | - |  |  | ------- | -
|                                                                                             |  | For the Three Months Ended |        |   | For the Six Months Ended | 
|                                                                                             |  | June 30,                   |        |   | June 30,                 | 
|                                                                                             |  | 2012                       |        |   | 2011                     |  |         | 2012 |  |  | 2011   |  
|Basic earnings (loss) per common share                                                       |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Numerator:                                                                                   |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Income (loss) from continuing operations                                                     |  | $                          | 34,700 |   |                          |  | (11,049 | )    |  |  | 29,395 |   |  |  | (13,830 | )
|Less: Noncontrolling interests income (loss) from continuing operations                      |  |                            | 6,187  |   |                          |  | (117    | )    |  |  | 7,169  |   |  |  | (4,795  | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Income (loss) to common shareholders                                                         |  |                            | 28,513 |   |                          |  | (10,932 | )    |  |  | 22,226 |   |  |  | (9,035  | )
|Preferred stock dividends                                                                    |  |                            |       |   |                          |  | (187    | )    |  |  | (188   | ) |  |  | (375    | )
|Decrease in equity due to the change in fair value of shares subject to mandatory redemption |  |                            | (472   | ) |                          |  |        |      |  |  | (472   | ) |  |  |        |  
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Income (loss) available to common shareholders                                               |  |                            | 28,041 |   |                          |  | (11,119 | )    |  |  | 21,566 |   |  |  | (9,410  | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|(Loss) income from discontinued operations                                                   |  |                            | (5,324 | ) |                          |  | 8,066   |      |  |  | (2,380 | ) |  |  | (1,479  | )
|Less: Noncontrolling interests loss from discontinued operations                             |  |                            | (2,490 | ) |                          |  | 4,072   |      |  |  | (3,113 | ) |  |  | (965    | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|(Loss) income from discontinued operations to common shareholders                            |  |                            | (2,834 | ) |                          |  | 3,994   |      |  |  | 733    |   |  |  | (514    | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Net income (loss) available to common shareholders                                           |  | $                          | 25,207 |   |                          |  | (7,125  | )    |  |  | 22,299 |   |  |  | (9,924  | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|Denominator:                                                                                 |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Basic weighted average number of common shares outstanding                                   |  |                            | 77,135 |   |                          |  | 75,381  |      |  |  | 77,135 |   |  |  | 75,381  |  
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|Basic earnings (loss) per common share:                                                      |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Earnings (loss) per share from continuing operations                                         |  | $                          | 0.36   |   |                          |  | (0.15   | )    |  |  | 0.28   |   |  |  | (0.12   | )
|(Loss) earnings per share from discontinued operations                                       |  |                            | (0.04  | ) |                          |  | 0.05    |      |  |  | 0.01   |   |  |  | (0.01   | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Basic earnings (loss) per share                                                              |  | $                          | 0.32   |   |                          |  | (0.10   | )    |  |  | 0.29   |   |  |  | (0.13   | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|Diluted earnings (loss) per common share                                                     |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Numerator:                                                                                   |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Income (loss) available to common stock                                                      |  | $                          | 28,041 |   |                          |  | (11,119 | )    |  |  | 21,566 |   |  |  | (9,410  | )
|(Loss) income from discontinued operations                                                   |  |                            | (2,834 | ) |                          |  | 3,994   |      |  |  | 733    |   |  |  | (514    | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Net income (loss) available to common shareholders                                           |  | $                          | 25,207 |   |                          |  | (7,125  | )    |  |  | 22,299 |   |  |  | (9,924  | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|Denominator:                                                                                 |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Basic weighted average number of common shares outstanding                                   |  |                            | 77,135 |   |                          |  | 75,381  |      |  |  | 77,135 |   |  |  | 75,381  |  
|Effect of dilutive stock options and unvested restricted stock                               |  |                            | 1,685  |   |                          |  |        |      |  |  | 1,132  |   |  |  |        |  
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Diluted weighted average number of common shares outstanding                                 |  |                            | 78,820 |   |                          |  | 75,381  |      |  |  | 78,267 |   |  |  | 75,381  |  
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|                                                                                             |  |                            |        |  
|Diluted earnings (loss) per common share:                                                    |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Earnings (loss) per share from continuing operations                                         |  | $                          | 0.36   |   |                          |  | (0.15   | )    |  |  | 0.28   |   |  |  | (0.12   | )
|(Loss) earnings per share from discontinued operations                                       |  |                            | (0.04  | ) |                          |  | 0.05    |      |  |  | 0.01   |   |  |  | (0.01   | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  
|Diluted earnings (loss) per share                                                            |  | $                          | 0.32   |   |                          |  | (0.10   | )    |  |  | 0.29   |   |  |  | (0.13   | )
|                                                                                             |  |                            |        |   |                          |  |         |      |  |  |        |   |  |  |         |  

During each of the three and six months ended June 30, 2012, there were no options to acquire shares of the Companys
Class A Common Stock that were anti-dilutive. During each of the three and six months ended June 30, 2011, options to acquire 2,297,858 shares of the Companys Class A Common Stock were anti-dilutive.



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|17. | Parent Company Financial Information
|--- | ------------------------------------

BFCs parent company accounting policies are generally the same as those described in the summary of significant accounting
policies appearing in Amendment No. 1 to BFCs Annual Report on Form 10-K/A for the year ended December 31, 2011. BFCs investments in BBX Capital, Bluegreen and other consolidated entities, including Woodbridge, are presented in
the parent company financial statements as if accounted for using the equity method of accounting.

BFCs parent company unaudited
condensed statements of financial condition at June 30, 2012 and December 31, 2011, unaudited condensed statements of operations for the three and six months ended June 30, 2012 and 2011, and unaudited condensed statements of cash
flows for the six months ended June 30, 2012 and 2011, are shown below:

Parent Company Condensed Statements of
Financial Condition

(In thousands)



|                                                   |  |              |         |  |                  |  |         | 
|-------------------------------------------------- |  | ------------ | ------- |  | ---------------- |  | ------- | 
|                                                   |  | June 30,2012 |         |  | December 31,2011 | 
|ASSETS                                             |  |              |         |  |                  |  |         | 
|Cash and cash equivalents                          |  | $            | 431     |  |                  |  | 1,418   | 
|Securities available for sale at fair value        |  |              | 25,509  |  |                  |  | 16,311  | 
|Investment in and advances to subsidiaries         |  |              | 142,350 |  |                  |  | 115,449 | 
|Notes receivable due from Woodbridge Holdings, LLC |  |              | 5,447   |  |                  |  | 7,574   | 
|Other assets                                       |  |              | 982     |  |                  |  | 1,004   | 
|                                                   |  |              |         |  |                  |  |         | 
|Total assets                                       |  | $            | 174,719 |  |                  |  | 141,756 | 
|                                                   |  |              |         |  |                  |  |         | 
|                                                   |  |             
|LIABILITIES AND EQUITY                             |  |              |         |  |                  |  |         | 
|Shares subject to mandatory redemption             |  |              | 12,177  |  |                  |  |        | 
|Other liabilities                                  |  |              | 13,468  |  |                  |  | 10,986  | 
|                                                   |  |              |         |  |                  |  |         | 
|Total liabilities                                  |  |              | 25,645  |  |                  |  | 10,986  | 
|                                                   |  |              |         |  |                  |  |         | 
|                                                   |  |             
|Redeemable 5% Cumulative Preferred Stock           |  |              |        |  |                  |  | 11,029  | 
|Shareholders equity                               |  |              | 149,074 |  |                  |  | 119,741 | 
|                                                   |  |              |         |  |                  |  |         | 
|Total liabilities and Equity                       |  | $            | 174,719 |  |                  |  | 141,756 | 
|                                                   |  |              |         |  |                  |  |         | 

Parent Company Condensed Statements of Operations

(In thousands)



|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|----------------------------------------------------------- |  | ----------------------------------- | ------ | - | -------------------------------- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                            |  | For the Three 
MonthsEnded June 30, |        |   | For the Six MonthsEnded
June 30, | 
|                                                            |  | 2012                                |        |   | 2011                             |  |        | 2012 |  |  | 2011   |  
|                                                            |  |                                     |        |  
|Revenues                                                    |  | $                                   | 493    |   |                                  |  | 696    |      |  |  | 1,037  |   |  |  | 1,113  |  
|                                                            |  |                                     |        |  
|Expenses                                                    |  |                                     | 2,531  |   |                                  |  | 1,940  |      |  |  | 4,518  |   |  |  | 3,520  |  
|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Loss before earnings (loss) from subsidiaries               |  |                                     | (2,038 | ) |                                  |  | (1,244 | )    |  |  | (3,481 | ) |  |  | (2,407 | )
|Equity in earnings from consolidated and other subsidiaries |  |                                     | 27,717 |   |                                  |  | (5,694 | )    |  |  | 26,440 |   |  |  | (7,142 | )
|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Income (loss) before income taxes                           |  |                                     | 25,679 |   |                                  |  | (6,938 | )    |  |  | 22,959 |   |  |  | (9,549 | )
|Income taxes                                                |  |                                     |       |   |                                  |  |       |      |  |  |       |   |  |  |       |  
|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Net income (loss)                                           |  |                                     | 25,679 |   |                                  |  | (6,938 | )    |  |  | 22,959 |   |  |  | (9,549 | )
|Preferred Stock dividends                                   |  |                                     |       |   |                                  |  | (187   | )    |  |  | (188   | ) |  |  | (375   | )
|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Net income (loss) to common shareholders                    |  | $                                   | 25,679 |   |                                  |  | (7,125 | )    |  |  | 22,771 |   |  |  | (9,924 | )
|                                                            |  |                                     |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  



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Parent Company Condensed Statements of Cash Flow

(In thousands)



|                                                                                                                           |  |                                   |         |   |      |  |         |  
|-------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------- | ------- | - | ---- |  | ------- | -
|                                                                                                                           |  | For the Six Months
Ended June 30, |        
|                                                                                                                           |  | 2012                              |         |   | 2011 | 
|Operating Activities:                                                                                                      |  |                                   |         |   |      |  |         |  
|Net cash used in operating activities                                                                                      |  | $                                 | (1,069  | ) |      |  | (8,241  | )
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|                                                                                                                           |  |                                  
|Investing Activities:                                                                                                      |  |                                   |         |   |      |  |         |  
|Proceeds from the sale of securities available for sale                                                                    |  |                                   |        |   |      |  | 8,405   |  
|Proceeds from maturities of securities available for sale                                                                  |  |                                   |        |   |      |  | 19,093  |  
|Purchase of securities                                                                                                     |  |                                   |        |   |      |  | (9,934  | )
|Distribution from subsidiaries                                                                                             |  |                                   | 82      |   |      |  | 91      |  
|Acquisition of BBX Capital Class A shares                                                                                  |  |                                   |        |   |      |  | (10,000 | )
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|Net cash provided by investing activities                                                                                  |  |                                   | 82      |   |      |  | 7,655   |  
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|                                                                                                                           |  |                                  
|Financing Activities:                                                                                                      |  |                                   |         |   |      |  |         |  
|Preferred stock dividends paid                                                                                             |  |                                   |        |   |      |  | (375    | )
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|Net cash used in financing activities                                                                                      |  |                                   |        |   |      |  | (375    | )
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|Decrease in cash and cash equivalents                                                                                      |  |                                   | (987    | ) |      |  | (961    | )
|Cash at beginning of period                                                                                                |  |                                   | 1,418   |   |      |  | 4,958   |  
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|Cash at end of period                                                                                                      |  | $                                 | 431     |   |      |  | 3,997   |  
|                                                                                                                           |  |                                   |         |   |      |  |         |  
|                                                                                                                           |  |                                  
|Supplementary disclosure of non-cash investing and financing activities                                                    |  |                                   |         |   |      |  |         |  
|                                                                                                                           |  |                                  
|Net increase (decrease) in shareholders equity from the effect of subsidiaries capital transactions, net of income
taxes |  | $                                 | 738     |   |      |  | (1,088  | )
|Increase (decrease) in accumulated other comprehensive income, net of taxes                                                |  |                                   | 8,937   |   |      |  | (5,287  | )
|Decrease in equity attributable to Woodbridges dissenting holders                                                         |  |                                   | (2,846  | ) |      |  |        |  
|Decrease in equity due to the change in fair value for shares subject to mandatory redemption                              |  |                                   | (472    | ) |      |  |        |  
|Change due to the reclassification of redeemable preferred stock to shares subject to mandatory redemption                 |  |                                   | (11,029 | ) |      |  |        |  

At June 30, 2012 and December 31, 2011, securities available for sale included BFCs investment in Benihanas
Common Stock at its estimated fair value of approximately $25.4 million and $16.2 million, respectively.

Approximately $4.6 million of the
amounts set forth as other liabilities at June 30, 2012 and December 31, 2011 represent amounts due in connection with the settlement of a class action litigation relating to exchange transactions that BFC entered into in 1989 and 1991.
BFC is required to repay this obligation as settlement holders submit their claims to BFC.



|18. | New Accounting Pronouncements
|--- | -----------------------------

Accounting Standards Update (ASU) ASU Number 2011-04  Fair Value
Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs(ASU 2011-04). The amendments in ASU 2011-04 clarify the intent of the Financial Accounting
Standards Board (the FASB) regarding the highest and best use valuation premise and also provide guidance on measuring the fair value of an instrument classified in shareholders equity, the treatment of premiums and discounts in
fair value



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measurements and measuring fair value of financial instruments that are managed within a portfolio. ASU 2011-04 also expands the disclosure requirements related to fair value measurements,
including a requirement to disclose valuation processes and sensitivity of the fair value measurements to changes in unobservable inputs for fair value measurements categorized within Level 3 of the fair value hierarchy and categorization by level
of the fair value hierarchy for items that are not measured at fair value in the statement of financial condition but for which the fair value measurement is required to be disclosed. ASU 2011-04 became effective for the first interim period
beginning after December 15, 2011. The Company implemented ASU 2011-04 as of January 1, 2012. The implementation of ASU 2011-04 did not have a material effect on the Companys financial statements.

ASU Number 2011-05  Comprehensive Income (Topic 220): Presentation of Comprehensive
Income(ASU 2011-05). ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders equity; requires the consecutive presentation of the statement
of net income and other comprehensive income; and requires an entity to present reclassification adjustments on the face of the financial statements from other comprehensive income to net income. ASU 2011-05 does not change the items that must be
reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The Company implemented ASU 2011-05 effective January 1, 2012, except for the reclassification adjustment on the face of
the financial statements which was deferred in ASU 2011-12 (as described below). The implementation of ASU 2011-05 did not have a material effect on the Companys financial statements.

ASU Number 2011-08  Intangibles Goodwill and Other (Topic 350): Testing Goodwill for
Impairment(ASU 2011-08). On September 15, 2011, the FASB issued ASU 2011-08, amending the guidance in Accounting Standards Codification (ASC) Topic 350-20, Intangibles-Goodwill and Other-Goodwill (ASC
350-20). This amendment allows the entity an option to first use qualitative factors to determine whether it is necessary to perform the two-step goodwill impairment described in ASC 350-20. An entity which chooses to use this option is no
longer required to calculate the fair value of a reporting unit unless the entity determines, based on its qualitative assessment, that it is more likely than not that the reporting units fair value is less than its carrying amount. ASU
2011-08 became effective for annual and interim goodwill impairment tests performed on or after January 1, 2012. The implementation of ASU 2011-08 did not have a material impact on the Companys financial statements.

ASU Number 2011-10  Property, Plant, and Equipment (Topic 360): Derecognition of
In-substance Real Estatea Scope Clarification (ASU 2011-10).ASU 2011-10 provides that, when a reporting entity ceases to have a controlling financial interest in a subsidiary that is in-substance real estate as a result of a
default on the subsidiarys nonrecourse debt, the reporting entity generally should apply the guidance of Topic 360 to determine whether it should derecognize the in-substance real estate. The reporting entity would continue to include the real
estate and debt on its financial statements until legal title to the real estate is transferred to legally satisfy the debt. ASU 2011-10 will be effective for annual and interim periods beginning on or after June 15, 2012. The Company believes
that ASU 2011-10 will not have a material impact on its financial statements.

ASU Number 2011-11  Balance Sheet (Topic 210): Disclosure About
Offsetting Assets and Liabilities.(ASU 2011-11). The amendment in ASU 2011-11 requires entities to disclose both gross information and net information about instruments and transactions that may offset in accordance with master
netting or similar arrangements, including derivatives, sale and repurchase agreements and reverse sale and repurchase agreements, and securities borrowing and securities lending arrangements. ASU 2011-11 is effective for annual and interim periods
beginning on or after January 1, 2013 and must be applied retrospectively. The Company believes that ASU 2011-11 will not have a material impact on its financial statements.

ASU Number 2011-12 
Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05(ASU
2011-12). In ASU 2011-12, the FASB deferred the changes in ASU 2011-05 that relate to the presentation of reclassification adjustments. The deferral allows the FASB to re-deliberate whether to require presentation on the face of the financial
statements of the effects of reclassifications out of accumulated other comprehensive income of the components of net income and other comprehensive income. All other requirements of ASU 2011-05 are not affected by this deferral.



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Item 2. Managements Discussion and Analysis of
Financial Condition and

Results of Operations

Overview

BFC Financial Corporation (BFC or, unless otherwise indicated or the
context otherwise requires, we, us, our or the Company) is a holding company whose principal holdings include controlling interests in BBX Capital Corporation (formerly BankAtlantic Bancorp, Inc.) and
its subsidiaries (BBX Capital) and Bluegreen Corporation and its subsidiaries (Bluegreen), and a non-controlling interest in Benihana Inc. (Benihana). BFC also holds interests in other investments and
subsidiaries, as described herein. On July 31, 2012, BBX Capital completed the sale of BankAtlantic, a federal savings bank, to BB&T Corporation (BB&T). The sale of BankAtlantic and related transactions described below
(collectively, the Transaction) were consummated pursuant to the terms of the Stock Purchase Agreement between BBX Capital and BB&T dated November 1, 2011, as amended (the BB&T Agreement). As a result of the
completion of the Transaction, BankAtlantics Community Banking, Investments, Tax Certificates and Capital Services reporting units are presented in the Companys consolidated financial statements as discontinued operations for all
periods. BBX Capital expects to continue commercial lending activities subsequent to the Transaction resulting in the inclusion of BankAtlantics CLRU in continuing operations.

The Companys business activities currently consist of (i) Real Estate and Other business activities and (ii) Financial Services. We currently report the results of our business activities
through five segments. Three of the segments relate to our Real Estate and Other business activities. These segments are: BFC Activities; Real Estate Operations; and Bluegreen Resorts. Our other two segments  BankAtlantics commercial
lending reporting unit (CLRU) and BBX Capital Parent Company (which represents the operations of BBX Capital at its parent company level)  relate to our Financial Services business activities.

In addition to BankAtlantics Community Banking, Investments, Tax Certificates, and Capital Services components (as discussed above), discontinued
operations also include the results of Bluegreen Communities and Cypress Creek Holdings, LLC (Cypress Creek Holdings). See Note 1  Basis of Financial Statement Presentation to the Notes to the Companys
Consolidated Financial Statements for a further discussion of the presentation of the Companys results of operations and Note 3  Assets and Liabilities Held for Sale to the Notes to the Companys Consolidated Financial
Statements for a further discussion of the presentation of assets and liabilities in the Companys Statement of Financial Condition.

Generally accepted accounting principles (GAAP) require that BFC consolidate the financial results of the entities in which it has
controlling interest. As a consequence, the assets and liabilities of all such entities are presented on a consolidated basis in BFCs financial statements. However, except as otherwise noted, the debts and obligations of the consolidated
entities, including BBX Capital, Bluegreen and Woodbridge Holdings, LLC, BFCs wholly owned subsidiary (Woodbridge), are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not
available to BFC absent a dividend or distribution from those entities. The recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At June 30, 2012, BFC had an
approximately 53% economic ownership interest in BBX Capital and an approximately 54% economic ownership interest in Bluegreen.



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As of June 30, 2012, we had total consolidated assets of approximately $4.9 billion and
shareholders equity attributable to BFC of approximately $149.1 million. Net income attributable to BFC was approximately $25.7 million and $23.0 million for the three and six months ended June 30, 2012, respectively, compared to a net
loss attributable to BFC of $6.9 million and $9.5 million for the three and six months ended June 30, 2011, respectively.

BFCs
business strategy has been to invest in and acquire businesses in diverse industries either directly or through controlled subsidiaries. However, in the short-term, BFC has focused on providing strategic support to its existing investments with a
view to the improved performance of the organization as a whole. We expect to consider other opportunities that could alter our ownership in our affiliates or seek to make opportunistic investments outside of our existing portfolio; however, we do
not currently have pre-determined parameters as to the industry or structure of any future investment. In furtherance of our goals, we will continue to evaluate various financing transactions, including (subject, to the extent applicable, to our
receipt of all required regulatory approvals) raising additional debt or equity as well as other alternative sources of new capital.

On
November 11, 2011, BFC entered into a definitive merger agreement with Bluegreen. Pursuant to the terms of the merger agreement, if the merger is consummated, Bluegreen will become a wholly-owned subsidiary of BFC, and Bluegreens shareholders
(other than BFC) will be entitled to receive eight shares of BFCs Class A Common Stock for each share of Bluegreens common stock that they hold at the effective time of the merger (as adjusted in connection with the reverse stock split
expected to be effected by BFC prior to the consummation of the merger). The merger was approved by BFCs and Bluegreens respective shareholders on June 19, 2012. At that time, BFCs shareholders also approved an amendment of
BFCs Articles of Incorporation relating to the contemplated reverse stock split and a reduction in the authorized number of shares of BFCs common stock. However, consummation of the merger remains subject to certain closing conditions,
including the listing of BFCs Class A Common Stock on a national securities exchange at the effective time of the merger. The merger agreement provides for the transaction to be consummated by September 30, 2012. BFC and Bluegreen are working
to satisfy the conditions required to consummate the merger, including BFCs pursuit of the listing of its Class A Common Stock. The transaction will close when all conditions in the merger agreement have been met. There is no assurance that
the conditions for the consummation of the merger will be met or that the merger will be consummated.

Following the announcement of our entry
into the merger agreement, purported class action lawsuits seeking to enjoin the merger or, if it is completed, to recover relief as determined by the presiding court to be appropriate were filed. See Note 14  Commitments and
Contingencies to the Notes to the Companys Consolidated Financial Statements for further information regarding this litigation.

On May 4, 2012, Bluegreen sold substantially all of the assets that comprised its Bluegreen Communities business to Southstar Development Partners,
Inc. (Southstar) for a purchase price of $29.0 million in cash. Southstar also agreed to pay an amount equal to 20% of the net proceeds (as calculated in accordance with the terms of the agreement) it receives upon its sale, if any, of
two specified parcels of real estate purchased by Southstar under the agreement. Assets excluded from the sale included primarily Bluegreens Communities notes receivable portfolio. Bluegreen Communities was previously reported as a separate
segment in our Real Estate and Other business activities and has been classified as a discontinued operation in all periods presented in the accompanying consolidated financial statements. See Note 3 - Assets and Liabilities Held for
Sale to the Notes to the Companys Consolidated Financial Statements for additional information.

As indicated above, on
July 31, 2012, BBX Capital completed the sale of BankAtlantic to BB&T pursuant to the terms of the BB&T Agreement. Under the terms of the BB&T Agreement, prior to the closing of the Transaction, BankAtlantic formed two subsidiaries,
BBX Capital Asset Management, LLC (CAM) and Florida Asset Resolution Group, LLC (FAR). BankAtlantic contributed to FAR certain performing and non-performing loans, tax certificates, and real estate owned that had an aggregate
carrying value on BankAtlantics balance sheet of approximately $358 million as of June 30, 2012. FAR assumed all liabilities related to these assets. BankAtlantic also contributed approximately $37 million in cash to FAR and thereafter
distributed all of the membership interests in FAR to BBX Capital. At the closing of the Transaction, BBX Capital transferred to BB&T 95% of the outstanding preferred membership interests in FAR in connection with BB&Ts assumption of
BBX Capitals outstanding TruPs obligations, as described in further detail below. BBX Capital continues to hold the remaining 5% of FARs preferred membership interests. Under the terms of the Amended and Restated Limited Liability
Company of FAR, which was entered into by BBX Capital and BB&T at the closing, BB&T will hold its 95% preferred interest in the net cash flows of FAR until such time as it has recovered $285 million in preference amount plus a priority
return of LIBOR + 200 basis points per annum on any unpaid preference amount. At that time, BB&Ts interest in FAR will terminate, and BBX Capital will thereafter be entitled to any and all residual proceeds



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from FAR through its ownership of FARs Class R units. It is expected that the assets (other than cash) contributed to FAR will be monetized over a period of seven years, or longer provided
BB&Ts preference amount is repaid within such seven-year period. BBX Capital entered into an incremental $35 million guarantee in BB&Ts favor to further assure BB&Ts recovery of the $285 million preference amount within
seven years.

Prior to the closing of the Transaction, BankAtlantic contributed to CAM, certain non-performing commercial loans, commercial
real estate owned and previously written off assets that had an aggregate carrying value on BankAtlantics balance sheet of $126 million as of June 30, 2012. CAM assumed all liabilities related to these assets. BankAtlantic also
contributed approximately $81 million in cash to CAM. Prior to the closing of the Transaction, BankAtlantic distributed all of the membership interests in CAM to BBX Capital. CAM remains a wholly owned subsidiary of BBX Capital.

Pursuant to the BB&T Agreement, the cash consideration exchanged by the parties at the closing of the Transaction in connection with the sale of
BankAtlantics stock was based on the deposit premium and the net asset value of BankAtlantic, in each case as calculated pursuant to the terms of the BB&T Agreement, including, with respect to the net asset value of BankAtlantic, after
giving effect to the asset contributions and membership interest distributions by BankAtlantic described above. Based on financial information as of June 30, 2012 and the preliminary calculations of the deposit premium (which was estimated to
be $315.9 million) and the net asset value of BankAtlantic, BBX Capital received from BB&T a cash payment related to the sale of BankAtlantics stock of approximately $6.4 million. However, the deposit premium and net asset value of
BankAtlantic as well as the resulting cash payment made to BBX Capital are all estimates based on available financial information as of June 30, 2012. Under the terms of the BB&T Agreement, these amounts are subject to adjustment
post-closing as all relevant financial information is reviewed and approved by the parties, and the cash payment made to BBX Capital may be less than the amount indicated above or BBX Capital may be required to make a net cash payment to BB&T.
BBX Capital expects to recognize a $307 million gain in connection with the Transaction and, based on the Companys approximately 53% ownership interest in BBX Capital, BFC expects to recognize a gain of approximately $165.7 million in
connection with the Transaction, including approximately $2.7 million related to purchase accounting adjustments. However, the amount of gain recognized by BBX Capital and BFC is subject to adjustment based on the final balance sheet reconciliation
procedures described above

Under the terms of the Agreement, at the closing of the Transaction, BB&T assumed the obligations with respect
to BBX Capitals approximately $285 million in principal amount of outstanding TruPs, and BBX Capital paid BB&T approximately $51.3 million, representing all accrued and unpaid interest on the TruPs through closing. BBX Capital also paid
approximately $2.3 million for certain legal fees and expenses incurred by trustees with respect to the previously disclosed litigation relating to the Transaction brought by certain trustees and holders of the TruPs.

Forward Looking Statements

This
document contains forward-looking statements that are subject to a number of risks and uncertainties that are subject to change based on factors which are, in many instances, beyond our control. All opinions, forecasts, projections, future plans or
other statements, other than statements of historical fact, are forward-looking statements. Forward-looking statements can be identified by the use of words or phrases such as plans, believes, will,
expects, anticipates, intends, estimates, our view, we see, would and words and phrases of similar import. The forward -looking statements in this document are also
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and
involve substantial risks and uncertainties. We can give no assurance that the expectations on which the forward-looking statements are based will prove to have been correct. Actual results, performance, or achievements could differ materially from
those contemplated, expressed, or implied by the forward-looking statements contained herein. When considering those forward-looking statements, the reader should keep in mind the risks, uncertainties and other cautionary statements made in this
report. The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This document also contains information regarding the past performance of our investments and the reader should note that
prior or current performance of investments is not a guarantee or indication of future performance.

Some factors which may affect the
accuracy of the forward-looking statements apply generally to the financial services, real estate, resort development and vacation ownership, and restaurant industries, while other factors apply more specifically to us. Risks and uncertainties
associated with BFC, including its wholly-owned Woodbridge subsidiary, include, but are not limited to:



| |  |  | BFC has negative cash flow and limited sources of cash which may present risks to its ongoing operations;
| | - |  | ---------------------------------------------------------------------------------------------------------



| |  |  | risks associated with BFCs current business strategy, including the risk that BFC will not be in a position to provide strategic support to its
affiliated entities or that such support will not achieve the anticipated benefits;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | the risks and uncertainties affecting BFC and its publicly-traded portfolio of companies, and their respective operations, markets, products and
services;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the risk that creditors of the Companys subsidiaries or other third parties may seek to recover from the subsidiaries respective parent
companies, including BFC, distributions or dividends made by such subsidiaries or other amounts owed by such subsidiaries to such creditors or third parties;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | BFCs shareholders interests may be diluted if additional shares of BFCs common stock are issued, and BFCs public company
investments may be diluted if BBX Capital or Bluegreen issues additional shares of its stock;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse conditions in the stock market, the public debt market and other capital markets and the impact of such conditions on the activities of the
Company and its subsidiaries;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the impact of the recent economic downturn on the Company, the price and liquidity of its common stock and its ability to obtain additional capital,
including the risk that if BFC needs or otherwise believes it is advisable to issue debt or equity securities to fund its operations, it may not be possible to issue any such securities on favorable terms, if at all;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the performance of entities in which the Company has made investments may not be profitable or their results as anticipated;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------



| |  |  | BFC is dependent upon dividends from its subsidiaries to fund its operations; BBX Capital may not be in a position to pay dividends. Bluegreen has
historically not paid dividends on its common stock and its ability to pay dividends may be limited by the terms of certain of its indebtedness, and any payment of dividends by BBX Capital or Bluegreen is subject to declaration by the applicable
companys Board of Directors;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to BFCs ability to pay dividends to holders of its preferred stock, which will depend on BFCs financial condition and also is
currently subject to the prior written non-objection of the Federal Reserve;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks relating to BFCs currently proposed merger with Bluegreen, including that the merger may not be consummated on the contemplated terms, or
at all, that the merger may not result in the realization of the expected benefits, and that costs incurred related to the merger, including with respect to the pending litigation described herein, and cash required to be paid to stockholders of
Bluegreen who exercise appraisal rights if the merger is consummated, may have a material adverse impact on BFCs financial condition and cash position;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to BFCs investment in Benihana, including that fluctuations in the market price of Benihanas Common Stock will impact the
proceeds that BFC receives upon any future sales of such stock and that Benihanas currently proposed merger may not be consummated on the contemplated terms, including in the contemplated time frame, or at all;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the uncertainty regarding the amount of cash that will be required to be paid to shareholders who exercised appraisal rights in connection with the
2009 merger between Woodbridge Holdings Corporation (WHC) and BFC , including the legal and other professional fees and other costs and expenses of such proceedings;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks associated with the securities we hold directly or indirectly, including the risk that they may decline in value and that we may be required to
record additional impairment charges with respect to such securities;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions, and any changes in estimates,
judgments and assumptions used could have a material adverse impact on our financial condition and operating results;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the risk that our and BBX Capitals request for deregistration as a unitary savings and loan holding company as a result of the sale of
BankAtlantic may not be approved and uncertainties regarding legislation relating to the regulation of companies within the financial services industry, including bank holding companies, and the impact of such legislation on our operations and the
operations of BBX Capital if deregistration is not approved;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks related to litigation and other legal proceedings against BFC and its subsidiaries, including (i) the legal and other professional fees and
other costs and expenses of such proceedings, as well as the impact of any finding of liability or damages on our financial condition and operating results and (ii) with respect to litigation brought by the Securities and Exchange Commission
(the SEC) against BBX Capital and our Chairman, reputational risks and risks relating to the loss of our Chairmans services; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the Companys success at managing the risks involved in the foregoing.
| | - |  | ----------------------------------------------------------------------



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With respect to BBX Capital, the risks and uncertainties include, but are not limited to:



| |  |  | the impact of economic, competitive and other factors affecting BBX Capital, a continued or deepening recession, decreases in real estate values, and
increased unemployment or sustained high unemployment rates on their business generally, the ability of BBX Capitals borrowers to service their obligations and of customers to maintain account balances and the value of collateral securing
outstanding loans;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | BBX Capitals loans, credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact of the
economy and real estate market values on its assets and the credit quality of its loans (including those held in the asset workout subsidiary of BBX Capital);
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the risk that loan losses will continue and the risks of additional charge-offs, impairments and required increases in the allowance for loan losses;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the impact of and expenses associated with litigation including but not limited to litigation relating to overdraft fees and litigation brought by the
SEC;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | risks associated with compliance with regulatory mandates will result in the imposition of additional regulatory requirements and/or fines;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on our
activities and our ability to raise capital; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the risks associated with the impact of periodic valuation testing of goodwill, deferred tax assets and other assets;
| | - |  | ---------------------------------------------------------------------------------------------------------------------



| |  |  | risks relating to the sale of BankAtlantic to BB&T and BBX Capitals future operations including, but not limited to, that the cash received
by BBX Capital and gain recognized by BBX Capital and BFC in connection with the Transaction are subject to adjustment pursuant to post-closing reconciliation procedures and that BBX Capitals shareholders may not realize the anticipated
benefits of the Transaction; that BBX Capitals future business plans may not be realized as anticipated, if at all; that BBX Capitals Class A Common Stock may not meet the requirements for continued listing on the NYSE; and that the
assets retained by BBX Capital directly or through subsidiaries may not be monetized at the values currently ascribed to them; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | BBX Capitals success at managing the risks involved in the foregoing.
| | - |  | ----------------------------------------------------------------------

With respect to Bluegreen, the risks and uncertainties include, but are not limited to



| |  |  | the overall state of the economy, interest rates and the availability of financing may affect Bluegreens ability to market vacation ownership
interests (VOIs);
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bluegreen would incur substantial losses and its liquidity position could be adversely impacted if the customers it finances default on their
obligations;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | while Bluegreen has attempted to restructure its business to reduce its need for and reliance on financing for liquidity in the short term, there is no
assurance that such restructuring will be successful or that Bluegreens business and profitability will not otherwise continue to depend on its ability to obtain financing, which may not be available on favorable terms, or at all;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bluegreens future success depends on its ability to market its products successfully and efficiently;
| | - |  | ------------------------------------------------------------------------------------------------------



| |  |  | Bluegreen may not be successful in increasing or expanding its fee-based services relationships and its fee-based service activities, including
Bluegreens property owner associations (POA) sales activities defined below, which Bluegreen commenced during January 2012, may not be profitable, which may have an adverse impact on its results of operations and financial
condition;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bluegreens results of operations and financial condition may be materially and adversely impacted if Bluegreen Resorts does not continue to
participate in exchange networks or its customers are not satisfied with the networks in which it participates;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the resale market for VOIs could adversely affect Bluegreens business;
| | - |  | -----------------------------------------------------------------------



| |  |  | Bluegreen is subject to the risks of the real estate market and the risks associated with real estate development, including the decline in real estate
values and the deterioration of other conditions relating to the real estate market and real estate development;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Adverse outcomes in legal or other regulatory procedures, including claims for development-related defects, could adversely affect Bluegreens
financial condition and operating results.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bluegreen may be adversely affected by federal, state and local laws and regulations and changes in applicable laws and regulations, including the
imposition of additional taxes on operations. In addition, results of audits of Bluegreens tax returns or those of its subsidiaries may have a material and adverse impact on its financial condition;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a material adverse impact on
Bluegreens business;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the ratings of third-party rating agencies could adversely impact Bluegreens ability to obtain, renew, or extend credit facilities, debt, or
otherwise raise capital;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | there are inherent uncertainties involved in estimates, judgments and assumptions used in the preparation of financial statements in accordance with
GAAP. Any changes in estimates, judgments and assumptions used could have a material adverse impact on Bluegreen operating results and financial condition; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the loss of the services of Bluegreens key management and personnel could adversely affect its business.
| | - |  | ---------------------------------------------------------------------------------------------------------

In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company, BBX
Capital and Bluegreen with the SEC, including those disclosed in the Risk Factors sections of such reports. The Company cautions that the foregoing factors are not exclusive.



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Critical Accounting Policies

Management views critical accounting policies as accounting policies that are important to the understanding of our financial statements and also involve estimates and judgments about inherently uncertain
matters. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the
consolidated statements of financial condition and assumptions that affect the recognition of income and expenses on the consolidated statements of operations for the periods presented. On an ongoing basis, management evaluates its estimates, and
actual results could differ significantly from those estimates, including those that relate to the determination of the allowance for loan losses, the estimated future sales value of inventory, the recognition of revenue, including revenue
recognition under the percentage-of-completion method of accounting, the recovery of the carrying value of real estate inventories, the fair value of assets measured at, or compared to, fair value on a non-recurring basis such as assets held for
sale, intangible assets and other long-lived assets, the evaluation of goodwill, the valuation of securities, as well as the determination of other-than-temporary declines in value, the valuation of real estate acquired in connection with
foreclosure or in satisfaction of loans, the valuation of the fair value of assets and liabilities in the application of the acquisition method of accounting, the estimate of contingent liabilities related to litigation and other claims and
assessments, and assumptions used in the valuation of stock based compensation. The accounting policies that we have identified as critical accounting policies are: (i) revenue recognition and inventory cost allocation; (ii) allowance for
loan losses, including with respect to notes receivable secured by VOIs; (iii) the carrying value of completed VOI inventory and VOIs held for and under development; (iv) the carrying value of assets held for sale; (v) impairment of long-lived
assets, including goodwill and intangible assets; and (vi) the valuation of Bluegreens notes receivable which for accounting purposes are treated as having been acquired by BFC. For a more detailed discussion of these critical accounting
policies see Critical Accounting Policies appearing in Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2011.

New Accounting Pronouncements

See Note 18 of the Notes to Unaudited Consolidated
Financial Statements included under Item 1 of this report for a discussion of new accounting pronouncements applicable to the Company and its subsidiaries.

Summary of Consolidated Results of Operations

The table below sets forth the
Companys summarized results of operations (in thousands):



|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|---------------------------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                                 |  | For the Three MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, | 
|                                                                 |  | 2012                               |        |   | 2011                             |  |         | 2012 |  |  | 2011    |  
|Real Estate and Other                                            |  | $                                  | 43,060 |   |                                  |  | 6,657   |      |  |  | 50,927  |   |  |  | 18,077  |  
|Financial Services                                               |  |                                    | (8,360 | ) |                                  |  | (17,706 | )    |  |  | (21,532 | ) |  |  | (31,907 | )
|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Income (loss) from continuing operations                         |  |                                    | 34,700 |   |                                  |  | (11,049 | )    |  |  | 29,395  |   |  |  | (13,830 | )
|(Loss) income from discontinued operations, net of income tax    |  |                                    | (5,324 | ) |                                  |  | 8,066   |      |  |  | (2,380  | ) |  |  | (1,479  | )
|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss)                                                |  |                                    | 29,376 |   |                                  |  | (2,983  | )    |  |  | 27,015  |   |  |  | (15,309 | )
|Less: Net income (loss) attributable to noncontrolling interests |  |                                    | 3,697  |   |                                  |  | 3,955   |      |  |  | 4,056   |   |  |  | (5,760  | )
|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss) attributable to BFC                            |  |                                    | 25,679 |   |                                  |  | (6,938  | )    |  |  | 22,959  |   |  |  | (9,549  | )
|Preferred stock dividends                                        |  |                                    |       |   |                                  |  | (187    | )    |  |  | (188    | ) |  |  | (375    | )
|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net income (loss) to common shareholders                         |  | $                                  | 25,679 |   |                                  |  | (7,125  | )    |  |  | 22,771  |   |  |  | (9,924  | )
|                                                                 |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  



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Consolidated net income attributable to BFC for the three and six months ended June 30, 2012 was $25.7
million and $23.0 million, respectively, compared to a consolidated net loss attributable to BFC of $6.9 million and $9.5 million, respectively, for the same periods in 2011. Discontinued operations include the results of BankAtlantics
community banking, investment, capital services and tax certificate reporting units, as well as Bluegreen Communities and Cypress Creek Holdings. The results of the Companys business segments and other information related to each segment are
discussed below in BFC Activities, Real Estate Operations, Bluegreen and Financial Services. The preferred stock dividend represents the dividend obligations of the Company with respect to its 5% Cumulative Preferred Stock. As previously disclosed,
BFC paid $187,500 quarterly cash dividends on its 5% Cumulative Preferred Stock from the second quarter of 2004 through the third quarter of 2011, including during each of the three months ended March 31 and June 30, 2011. BFC did not make
such dividend payments during the three months ended December 31, 2011, or March 31, 2012, or June 30, 2012. Unpaid dividends on the 5% Cumulative Preferred Stock will cumulate, and it is anticipated that payment of unpaid cumulative
dividends will be made following BFCs deregistration as a unitary savings and loan holding company. BFC has requested deregistration as a result of BBX Capitals sale of BankAtlantic to BB&T on July 31, 2012. If such request is
approved, then upon deregistration, dividend payments by BFC, including with respect to the 5% Cumulative Preferred Stock, will no longer require the prior written non-objection of the Federal Reserve. The unpaid dividend payments, which totaled
approximately $563,000 as of June 30, 2012, are included in shares subject to mandatory redemption in the accompanying consolidated statement of financial condition as of June 30, 2012.

Consolidated Financial Condition

Consolidated Assets and Liabilities

Total assets at June 30, 2012 and December 31, 2011 were $4.9 billion and $4.8 billion, respectively. The primary changes in components of total
assets are summarized below:



| |  |  | Increase in interest-bearing deposits in other banks reflecting higher cash balances at the Federal Reserve Bank resulting primarily from deposit
growth and repayments of loans and securities available for sale;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in securities available for sale reflecting the reclassification of $40.5 million of securities available for sale to assets held for sale as
well as normal repayments, partially offset by an increase of approximately $9.2 million resulting from an unrealized gain relating to an increase in market price of Benihanas Common Stock for the six months ended June 30, 2012;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in tax certificate balances reflecting the reclassification of $29.9 million of tax certificates to assets held for sale as well as normal
redemptions;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in loans held for sale primarily resulting from loan repayments and lower of cost or market adjustments;
| | - |  | -----------------------------------------------------------------------------------------------------------------



| |  |  | Reduction in loans receivable, net reflecting the reclassification of $1.9 billion of loans to assets held for sale as well as $21.9 million of loans
migrating to real estate owned and the repayments of loans in the ordinary course of business;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in accrued interest receivable resulting primarily from the reclassification of $12.8 million of accrued interest receivable into assets held
for sale and from lower earning asset balances;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in real estate owned primarily resulting from residential and commercial real estate sales partially offset by loans migrating to real estate
owned;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decrease in office properties and equipment resulting primarily from the reclassification of $133.2 million of office properties and equipment to
assets held for sale and the transfer of a $2.4 million property to real estate held for sale in June 2012; and
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | The reclassification of BankAtlantics FHLB stock, real estate held for sale, goodwill and prepaid FDIC deposit insurance to assets held for sale
in their entirety.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



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The reclassification of assets to assets held for sale as of June 30, 2012, as described above, related
to the then-expected transfer of those assets to BB&T in connection with BBX Capitals sale of BankAtlantic to BB&T.

Total
liabilities at June 30, 2012 and December 31, 2011 were $4.7 billion and $4.6 billion, respectively. The primary changes in components of total liabilities are summarized below:



| |  |  | Increase in junior subordinated debentures liability due to interest deferrals;
| | - |  | -------------------------------------------------------------------------------



| |  |  | BankAtlantics subordinated debentures of $22 million were reclassified to liabilities held for sale;
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Included in other liabilities as of June 30, 2012 were principal and interest advances on purchased residential loans and real estate owned
serviced by others of $12.6 million as well as loan escrow balances and accrued liabilities;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increase in shares subject to mandatory redemption of $12.2 million as of June 30, 2012 representing the reclassification of BFCs preferred
stock to a liability, together with accrued interest and dividends; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Recognition of the $29.9 million deferred gain on settlement of investment in subsidiary relating to the settlement of Carolina Oaks debt.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------

The reclassification of liabilities to liabilities held for sale as of June 30, 2012, as described above, related to
the then-expected assumption of those liabilities by BB&T in connection with BBX Capitals sale of BankAtlantic to BB&T.



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BFC Activities

The BFC Activities segment consists of BFC operations, our investment in Benihana, and other activities, including investments and operations of Woodbridge unrelated to real estate. BFC operations
primarily consist of our corporate overhead and selling, general and administrative expenses, including the expenses of Woodbridge, the financial results of a venture partnership that BFC controls and other equity investments, as well as income and
expenses associated with BFCs shared services which provides human resources, risk management, investor relations and executive office administration services to BBX Capital and Bluegreen. This segment also includes investments made by our
wholly owned subsidiary, BFC/CCC, Inc. (BFC/CCC), as well as the activities of Snapper Creek Equity Management, LLC and certain other investments.

Woodbridge had an equity interest in Pizza Fusion Holdings, Inc. (Pizza Fusion), a restaurant operator and franchisor engaged in the quick service and organic food industries. The investment
included all of the outstanding shares of Pizza Fusions Series B Convertible Preferred Stock, which was entitled to special voting rights, including the right, to the extent Woodbridge chose to do so, to elect a majority of Pizza Fusions
board of directors. During December 2011, Pizza Fusion effected a stock reclassification pursuant to which each share of Pizza Fusions Series A and Series B Convertible Preferred Stock automatically converted into one share of Pizza
Fusions common stock. As a result, Woodbridge is no longer deemed to have a controlling interest in Pizza Fusion and, under the applicable accounting guidance for business combinations, the financial statements of Pizza Fusion were
deconsolidated as of December 31, 2011. Prior to that time, Pizza Fusion was determined to be a VIE under the provisions of the accounting guidance for VIEs, and the operating results of Pizza Fusion were consolidated into BFC.

The discussion that follows reflects the operations and related matters of BFC Activities (in thousands).



|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|--------------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                    |  | For the Three MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, | 
|                                                    |  | 2012                               |        |   | 2011                             |  |        | 2012 |  |  | 2011   |  
|Revenues                                            |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Other revenues                                      |  | $                                  |       |   |                                  |  | 299    |      |  |  |       |   |  |  | 570    |  
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|                                                    |  |                                    |       |   |                                  |  | 299    |      |  |  |       |   |  |  | 570    |  
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Cost and Expenses                                   |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Interest expense                                    |  |                                    | 1,257  |   |                                  |  | 1,511  |      |  |  | 2,223  |   |  |  | 2,872  |  
|Selling, general and administrative expenses        |  |                                    | 5,482  |   |                                  |  | 5,212  |      |  |  | 8,865  |   |  |  | 10,588 |  
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|                                                    |  |                                    | 6,739  |   |                                  |  | 6,723  |      |  |  | 11,088 |   |  |  | 13,460 |  
|Equity in earnings from unconsolidated affiliates   |  |                                    |       |   |                                  |  | 8      |      |  |  | 4      |   |  |  | 1,369  |  
|Other income                                        |  |                                    | 976    |   |                                  |  | 1,481  |      |  |  | 1,955  |   |  |  | 2,799  |  
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Loss from continuing operations before income taxes |  |                                    | (5,763 | ) |                                  |  | (4,935 | )    |  |  | (9,129 | ) |  |  | (8,722 | )
|Less: Benefit for income taxes                      |  |                                    |       |   |                                  |  | (52    | )    |  |  |       |   |  |  | (196   | )
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  
|Net loss from continuing operations                 |  | $                                  | (5,763 | ) |                                  |  | (4,883 | )    |  |  | (9,129 | ) |  |  | (8,526 | )
|                                                    |  |                                    |        |   |                                  |  |        |      |  |  |        |   |  |  |        |  

Other revenues for the three and six months ended June 30, 2011 related to franchise revenues generated by Pizza
Fusion. There were no franchise revenues for the three or six months ended June 30, 2012 due to the deconsolidation of Pizza Fusion in December 2011.

Interest expense totaled $1.3 million and $1.5 million for the three months ended June 30, 2012 and 2011, respectively, and $2.2 million and $2.9 million for the six months ended June 30, 2012
and 2011, respectively. The decrease in interest expense was primarily the result of lower interest rates on outstanding indebtedness.

Selling, general and administrative expenses for the three months ended June 30, 2012 increased by approximately $270,000 compared to the same
period for 2011. The increase is primarily due to higher legal fees incurred related to the appraisal rights litigation partially offset by lower depreciation expenses and a decrease in franchise related expenses as a result of the deconsolidation
of Pizza Fusion in December 2011. Selling, general and administrative expenses for the six months ended June 30, 2012 decreased by $1.7 million compared to the same period in 2011. The decrease is primarily due to lower franchise related
expenses as a result of the deconsolidation of Pizza Fusion and lower depreciation expenses, partially offset by higher legal fees related to our currently proposed merger with Bluegreen and the Woodbridge appraisal rights litigation.

The decrease in equity in earnings from unconsolidated affiliates was primarily due to the recognition of the negative basis of an investment in
BFC/CCCs wholly-owned subsidiary of approximately $1.3 million during the six months ended June 30, 2011. BFC/CCCs wholly-owned subsidiary had a 10% interest in a limited liability company that owned two commercial properties in
Hillsborough County, Florida. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member of the limited liability company each guaranteed the payment of up to a maximum of $5.0 million for certain
environmental indemnities and specific obligations that were not related to the financial performance of the properties. BFC and the unaffiliated member also entered into a cross indemnification agreement which limited BFCs obligations under
the guarantee to acts of BFC and its affiliates. On March 25, 2011, the limited liability company reached a settlement with the lender with respect to the loan secured by the properties, pursuant to which the limited liability company conveyed
the properties to the lender via a deed in lieu of foreclosure. BFC and BFC/CCCs wholly-owned subsidiary were released from all obligations and guarantees related to the two commercial properties. During the first quarter of 2011, BFC
recognized the negative basis of its investment of approximately $1.3 million.

2008 Step acquisitions  Purchase Accounting

During 2008, BFC purchased an aggregate of approximately 144,770 shares of BBX Capitals Class A Common Stock on the open
market. The shares purchased were accounted for as step acquisitions under the purchase method of accounting then in effect, pursuant to which the assets and liabilities deemed to be acquired by BFC were revalued to reflect market values at the date
of acquisition. The discounts and premiums arising as a result of such revaluation are generally being accreted or amortized, net of tax, over the remaining life of the assets and liabilities. The net impact of such accretion, amortization and other
effects of purchase accounting increased our consolidated net income for the three months ended June 30, 2012 by approximately $15,000, decreased consolidated net income for the six months ended June 30, 2012 by approximately $95,000 and
decreased our consolidated net loss for the three and six months ended June 30, 2011 by approximately $356,000 and $516,000, respectively.



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BFC Activities- Liquidity and Capital Resources

As of June 30, 2012 and December 31, 2011, we had cash, cash equivalents and short-term investments in our BFC Activities segment totaling
approximately $3.4 million and $7.8 million, respectively. The decrease in cash, cash equivalents and short-term investments was due to BFCs operating and general and administrative expenses of approximately $5.6 million, interest payments
related to Woodbridges junior subordinated debentures of approximately $1.9 million, and closing costs related to the sale of the Cypress Creek Holdings office building of approximately $ 0.7 million, partially offset by a refund of $3.8
million representing a return of the escrow deposit made in connection with surety bond claims made by a municipality.

Except as otherwise
noted, the debts and obligations of BBX Capital, Bluegreen and Woodbridge are not direct obligations of BFC and generally are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution
from those entities. BFCs principal sources of liquidity are its available cash and short-term investments. In addition, during the fourth quarter of 2011, we received a $7.4 million tax refund, net of amounts payable under the Settlement
Agreement related to the Chapter 11 Cases. We expect to use our available funds to fund operations and meet our obligations. We may also use available funds to make additional investments in the companies within our consolidated group, invest in
equity securities and other investments, or repurchase shares of our common stock pursuant to our share repurchase program. On September 21, 2009, our board of directors approved a share repurchase program which authorizes the repurchase of up
to 20,000,000 shares of Class A Common Stock and Class B Common Stock at an aggregate cost of up to $10 million. The share repurchase program replaced our $10 million repurchase program that our board of directors approved in October 2006 which
placed a limitation on the number of shares which could be repurchased under the program at 1,750,000 shares of Class A Common Stock. The current program, like the prior program, authorizes management, at its discretion, to repurchase shares
from time to time subject to market conditions and other factors. No shares were repurchased during the three or six months ended June 30, 2012 or the years ended December 31, 2011 or 2010.

We believe that our current financial condition and credit relationships, together with anticipated cash flows from other sources of funds, including
proceeds from the sale of Benihanas Common Stock or the cash we receive in exchange for such stock upon the consummation, if any, of Benihanas currently proposed merger, in each case as described below, and, to the extent determined to
be advisable, proceeds from the disposition of properties or investments, will allow us to meet our anticipated near-term liquidity needs. With respect to long-term liquidity requirements, in addition to the foregoing, we may also, subject to the
receipt of any regulatory approval or non-objection, seek to raise funds through the incurrence of long-term secured or unsecured indebtedness, or the issuance of equity and/or debt securities. However, these alternatives may not be available to us
on attractive terms, or at all. The inability to raise funds through the sources discussed above would have a material adverse effect on the Companys business, results of operations and financial condition.

As of June 30, 2012, BFC owned an aggregate of 1,582,577 shares of Benihanas Common Stock, representing an approximately 9% ownership and
voting interest in Benihana. At June 30, 2012 and December 31, 2011, the estimated fair value of our investment in Benihanas Common Stock was approximately $25.4 million and $16.2 million, respectively. A decline in the market price
of Benihanas Common Stock would have an adverse impact on BFCs financial statements. During each of January 2012, April 2012, and August 2012, BFC received approximately $127,000 of dividend payments with respect to its shares of
Benihanas Common Stock.

During March 2012, a registration statement on Form S-3 was filed by Benihana and declared effective by the
SEC, under which we may sell any and all of the shares of Benihanas Common Stock that we own. On July 13, 2012, we entered into a Rule 10b5-1 Trading Plan providing for the sale of up to an aggregate of 150,000 shares of Benihanas
Common Stock from time to time until January 28, 2013 at a minimum predetermined price per share. Sales commenced under the plan on July 30, 2012. The proceeds we receive from sales of Benihanas Common Stock will depend on the timing
of the sale and the market price of Benihanas Common Stock.

On May 22, 2012, Benihana entered into an Agreement and Plan of Merger
with Safflower Holdings Corp. which provides for Safflowers acquisition of Benihana for a purchase price of $16.30 per share of Benihanas Common Stock. The proceeds that we receive in connection with the merger, if consummated, will
depend on the number of shares of Benihanas Common Stock that we own at the effective time of the merger. Consummation of the merger is subject to certain closing conditions, including the approval of Benihanas stockholders and
regulatory clearance. Benihana has indicated that, assuming the satisfaction of all closing conditions, this merger is expected to close during August 2012.



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BFC has not received cash dividends from BBX Capital since March 2009. BBX Capital may only pay
dividends if and when declared by its board of directors, a majority of whom are independent directors under the listing standards of the New York Stock Exchange (the NYSE) In addition, pending approval of its request for deregistration
as a unitary savings and loan holding company, BBX Capitals payment of dividends is subject to oversight of the Federal Reserve.

BFC
has never received cash dividends from Bluegreen. Certain of Bluegreens credit facilities contain terms which prohibit the payment of cash dividends, and Bluegreen may only pay dividends subject to such restrictions and declaration by its
board of directors, a majority of whom are independent directors under the listing standards of the NYSE.

BFC, on a parent company only
basis, has previously committed that it will not, without the prior written non-objection of its primary regulator, (i) incur or issue any additional debt or debt securities, increase lines of credit or guarantee the debt of any other entity or
(ii) make dividend payments on stock. BFC has determined not to seek the Federal Reserves written non-objection to the dividend payments on its preferred stock for each of the quarters ended December 31, 2011 March 31,
2012, and June 30, 2012 and, therefore, has not yet made the dividend payments. Unpaid dividends on BFCs outstanding preferred stock will cumulate, and it is anticipated that payment of unpaid cumulative dividends will be made following
BFCs deregistration as a unitary savings and loan holding company. BFC has requested deregistration as a result of the consummation of BBX Capitals sale of BankAtlantic to BB&T on July 31, 2012. If such request is approved, then
upon deregistration, dividend payments by BFC, including with respect to its outstanding preferred stock, will no longer require the prior written non-objection of the Federal Reserve. As of June 30, 2012, unpaid dividend payments totaled
approximately $563,000, and such amount is included in other liabilities in the accompanying consolidated statement of financial condition as of June 30, 2012.

On June 7, 2004, the Companys board of directors designated 15,000 shares of the Companys preferred stock as 5% Cumulative Preferred Stock. On June 21, 2004, the Company sold all
15,000 shares of the 5% Cumulative Preferred Stock to an investor group in a private offering.

The Companys 5% Cumulative Preferred
Stock has a stated value of $1,000 per share. The shares of 5% Cumulative Preferred Stock are redeemable at the option of the Company, from time to time, at redemption prices ranging from $1,015 per share for the twelve month period ending April 29,
2013 to $1,000 per share for the twelve month period ending April 29, 2016. The 5% Cumulative Preferred Stocks liquidation preference is equal to its stated value of $1,000 per share plus any accumulated and unpaid dividends or an amount equal
to the applicable redemption price in a voluntary liquidation or winding up of the Company. Holders of the 5% Cumulative Preferred Stock have no voting rights, except as provided by Florida law, and are entitled to receive, when and as declared by
the Companys board of directors (and currently also upon the written non-objection from the Federal Reserve), cumulative quarterly cash dividends on each such share at a rate per annum of 5% of the stated value from the date of issuance. From
the second quarter of 2004 through the third quarter of 2011, the Company paid quarterly dividends on the 5% Cumulative Preferred Stock of $187,500. The Company determined not to seek the Federal Reserves written non-objection to the dividend
payment for fourth quarter of 2011 or the first or second quarters of 2012 and, therefore, has not yet made such dividend payments. Unpaid dividends on the 5% Cumulative Preferred Stock will cumulate, and it is anticipated that payment of unpaid
cumulative dividends will be made following BFCs deregistration as a unitary savings and loan holding company. BFC has requested deregistration as a result of BBX Capitals sale of BankAtlantic to BB&T on July 31, 2012. If such
request is approved, then upon deregistration, dividend payments by BFC, including with respect to the 5% Cumulative Preferred Stock, will no longer require the prior written non-objection of the Federal Reserve. The unpaid dividend payments, which
totaled approximately $563,000 as of June 30, 2012, are included in shares subject to mandatory redemption in the accompanying consolidated statement of financial condition as of June 30, 2012.

On December 17, 2008, certain of the previously designated relative rights, preferences and limitations of the 5% Cumulative Preferred Stock were
amended (the First Amendment) to eliminate the right of the holders of the 5% Cumulative Preferred Stock to convert their shares into shares of the Companys Class A Common Stock. The First Amendment also required the Company
to redeem shares of the 5% Cumulative Preferred Stock with the net proceeds received in the event the Company sold any shares of Benihanas stock that it owned and entitled the holders of the 5% Cumulative Preferred Stock, in the event the
Company defaulted on its dividend payment obligation with respect to such stock, to receive directly from Benihana the payments due (collectively, the Benihana Stock Provisions).



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Based on an analysis of the 5% Cumulative Preferred Stock after giving effect to the First Amendment,
the Company previously determined that the 5% Cumulative Preferred Stock met the requirements to be re-classified outside of permanent equity and into the mezzanine category at its fair value at the effective date of the First Amendment of
approximately $11.0 million. The remaining amount of approximately $4.0 million is recorded in additional paid in capital in the Companys consolidated statements of financial condition. The fair value of the 5% Cumulative Preferred Stock was
calculated using an income approach by discounting estimated cash flows at a market discount rate.

On April 4, 2012, the relative
rights, preferences and limitations of the 5% Cumulative Preferred Stock were further amended (the Second Amendment). Pursuant to the Second Amendment, to the extent the shares are not earlier redeemed pursuant to the optional redemption
right described above, the Company will be required to redeem 5,000 shares of the 5% Cumulative Preferred Stock during each of the years ending December 31, 2016, 2017 and 2018 for an aggregate annual redemption price of $5.0 million, or $1,000
per share. The Second Amendment also provides that, in the event that the Company defaults on its dividend or mandatory redemption obligations, then the holders of the 5% Cumulative Preferred Stock will be entitled to receive from the Company shares
of common stock of Bluegreen owned by the Company having, in the aggregate, a fair market value equal to the amount of the dividend or redemption payment, as the case may be, to the extent not timely paid; provided that the maximum number of shares
of Bluegreens common stock which the holders of the 5% Cumulative Preferred Stock will be entitled to receive as a result of one or more defaults with respect to the Companys mandatory redemption obligation will be 5,000,000 shares
(subject to adjustment in the case of a stock split or other applicable share combination or division affecting Bluegreens common stock). In consideration therefor, the Second Amendment eliminated the Benihana Stock Provisions.



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Under applicable accounting guidance, as a result of the Second Amendment and the mandatory redemption
provision contained therein, the 5% Cumulative Preferred Stock was re-classified as a liability during the quarter ended June 30, 2012 at its estimated fair value of approximately $11.5 million. The fair value was determined by an independent
third party and was based on a cash flow model using a discount rate equivalent to benchmark bond ratings. The $0.5 million difference between the previously stated value of $11.0 million as of March 31, 2012 and the current estimated fair
value of $11.5 million was recorded as an adjustment to additional paid in capital in the Companys consolidated statement of financial condition at June 30, 2012. The balance of the amount relating to shares subject to mandatory
redemption as of June 30, 2012 includes accrued dividends of $0.4 million plus accretion of $0.3 million for the three months ended June 30, 2012.

On September 21, 2009, BFC and WHC consummated their merger pursuant to which WHC merged with Woodbridge, a wholly owned subsidiary of BFC. Under Florida law, holders of WHCs Class A
Common Stock who did not vote to approve the merger and properly asserted and exercised their appraisal rights with respect to their shares (Dissenting Holders) are entitled to receive a cash payment in an amount equal to the fair value
of their shares as determined in accordance with the provisions of Florida law in lieu of the shares of BFCs Class A Common Stock that they would otherwise have been entitled to receive. Dissenting Holders, who collectively held
approximately 4.2 million shares of WHCs Class A Common Stock, have rejected Woodbridges offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of WHCs Class A
Common Stock. Under Florida law, Woodbridge thereafter initiated legal proceedings relating to the appraisal process. In December 2009, a $4.6 million liability was recorded with a corresponding reduction to additional paid-in capital, which is
reflected in the Companys consolidated statements of financial condition representing in the aggregate Woodbridges offer to the Dissenting Holders. On July 5, 2012, the presiding court ruled the fair value of the Dissenting
Holders shares of WHCs Class A Common Stock to be $1.78 per share and awarded legal and other costs in favor of the Dissenting Holders. As a result of the trial courts ruling, the $4.6 million liability was increased (with a
corresponding reduction to additional paid in capital of $2.8 million) to approximately $7.5 million as of June 30, 2012 to account for the per share value awarded, however, any award for legal and other costs that may be paid could not be
reasonably estimated. Woodbridge has appealed the courts ruling with respect to the per share value determination and the award of legal fees and other costs to the Dissenting Holders. The outcome of the appeal is uncertain.

On November 9, 2007, Levitt and Sons and substantially all of its subsidiaries (collectively, the Debtors) filed voluntary petitions for
relief under Chapter 11 of Title 11 of the United States Code (the Chapter 11 Cases) in the United States Bankruptcy Court for the Southern District of Florida (the Bankruptcy Court). Pursuant to the settlement agreement
entered into during June 2008, as subsequently amended (the Settlement Agreement), Woodbridge agreed to (i) pay $8 million to the Debtors bankruptcy estates (sometimes referred to herein as the Debtors
Estate), (ii) place $4.5 million in a release fund to be disbursed to third party creditors in exchange for a third party release and injunction, (iii) make a $300,000 payment to a deposit holders fund and (iv) share a
percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors Estate. In addition, Woodbridge agreed to waive and release substantially all of the claims it had against the Debtors, including administrative
expense claims through July 2008, and the Debtors (joined by the Joint Committee of Unsecured Creditors appointed in the Chapter 11 Cases (the Joint Committee)) agreed to waive and release any claims they had against Woodbridge and its
affiliates. On February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by the Debtors and the Joint Committee. That order also approved the settlement pursuant to the Settlement Agreement. No
appeal or rehearing of the Bankruptcy Courts order was filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and conditions of the Settlement Agreement. As of
December 31, 2011, we had placed into escrow approximately $11.7 million which represented the portion of the tax refund that was likely to be required to be paid to the Debtors Estate under the Settlement Agreement. During the quarter
ended June 30, 2012, the $11.7 million was paid to the Debtors Estate. Woodbridge is also required to pay to the Debtors Estate a settlement holdback amount of approximately $485,000 plus interest by no later than August 30,
2012, and BFC has guaranteed Woodbridges timely payment of the settlement holdback amount. The settlement holdback amount is recorded as a liability in the consolidated statement of financial condition. Upon payment of the settlement holdback
amount, all of Woodbridges obligations under the Settlement Agreement will be satisfied.

At June 30, 2009, a wholly-owned
subsidiary of BFC/CCC had a 10% interest in a limited partnership as a non-managing general partner. The partnership owns an office building located in Boca Raton, Florida. In connection with the purchase of the office building in March 2006,
BFC/CCC guaranteed the repayment of a portion of the non-recourse loan on the property on a joint and several basis with the managing general partner. BFC/CCCs maximum exposure under this guarantee is $2.0 million (which is shared on a joint
and several basis with the managing general



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partner). In July 2009, BFC/CCCs wholly-owned subsidiary withdrew as a partner of the limited partnership and transferred its 10% interest to another unaffiliated partner. In return, the
partner to whom this interest was assigned agreed to use its reasonable best efforts to obtain the release of BFC/CCC from the guarantee. The partner was unable to secure such a release and that partner has agreed to indemnify BFC/CCC for any losses
that may arise under the guarantee after the date of the assignment. There are no carrying amounts recorded on our financial statements at June 30, 2012 or December 31, 2011 relating to the guarantee or otherwise in respect of the
partnership.

A wholly-owned subsidiary of BFC/CCC had a 10% interest in a limited liability company that owned two commercial properties in
Hillsborough County, Florida. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member of the limited liability company each guaranteed the payment of up to a maximum of $5.0 million for certain
environmental indemnities and specific obligations that were not related to the financial performance of the properties. BFC and the unaffiliated member also entered into a cross indemnification agreement which limited BFCs obligations under
the guarantee to acts of BFC and its affiliates. On March 25, 2011, the limited liability company reached a settlement with the lender with respect to the loan secured by the properties, pursuant to which the limited liability company conveyed
the properties to the lender via a deed in lieu of foreclosure. BFC and BFC/CCCs wholly-owned subsidiary were released from all obligations and guarantees related to the two commercial properties. During the first quarter of 2011, BFC
recognized the negative basis of its investment of approximately $1.3 million, which is included in equity in earnings from unconsolidated affiliates in the Companys consolidated statements of operations for the six months ended June 30,
2011.

A wholly-owned subsidiary of BFC/CCC has a 50% limited partner interest in a limited partnership that has a 10% interest in a limited
liability company that owns an office building in Tampa, Florida. At June 30, 2012 and December 31, 2011, the carrying amount of this investment was approximately $287,000 and $283,000, respectively, which is included in investments in
unconsolidated affiliates in the Companys consolidated statements of financial condition. In connection with the purchase of the office building by the limited liability company in June 2007, BFC guaranteed the payment of certain environmental
indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in the event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar
state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered into a cross indemnification agreement which limits BFCs obligations under the
guarantee to acts of BFC and its affiliates. No amounts are recorded on the Companys financial statements for the obligations associated with this guarantee based on the potential indemnification by the unaffiliated members and the limit of
the specific obligations to non-financial matters.

Real Estate Operations

The Real Estate Operations segment includes the subsidiaries through which Woodbridge historically conducted its real estate business activities. These activities were concentrated in Florida and South
Carolina and included the development and sale of land, the construction and sale of single family homes and townhomes and the leasing of commercial properties through Core Communities, LLC (Core or Core Communities) and
Carolina Oak Homes, LLC (Carolina Oak). The Real Estate Operations segment also previously included the operations of Cypress Creek Holdings. The results of Cypress Creek Holdings are classified as discontinued operations for each of the
three months ended March 31, 2012 and 2011.

In early 2010, Woodbridge made the decision to pursue an orderly liquidation of Core and
worked cooperatively with its various lenders to achieve that objective. During November 2010, Core entered into a settlement agreement with one of its lenders, which had previously commenced actions seeking foreclosure of properties in Florida and
South Carolina which served as collateral under mortgage loans totaling approximately $113.9 million. Under the terms of the agreement, Core pledged additional collateral to the lender consisting of membership interests in five of Cores
subsidiaries and granted security interests in the real property owned by such subsidiaries in Port St. Lucie, Florida, substantially all of which is undeveloped raw land. Core also agreed to an amendment of the complaint related to the Florida
foreclosure action to include this additional collateral and an entry into consensual judgments of foreclosure in both the Florida and South Carolina foreclosure actions. In consideration therefor, the lender agreed not to enforce a deficiency
judgment against Core and, in February 2011, released Core from any other claims arising from or relating to the loans. As of November 30, 2010, Core deconsolidated the five subsidiaries, the membership interests in which were transferred to
the lender upon entry into the consensual judgments of foreclosure. In accordance with the accounting guidance for consolidation, Woodbridge recorded a guarantee



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obligation deferred gain on settlement of investment in subsidiary of $11.3 million in the Companys consolidated statement of financial condition as of December 31, 2010,
and the deferred gain on settlement of investment in subsidiary was recognized into income during the first quarter of 2011.

As a result of
significant challenges faced during 2009, Woodbridge made a decision to cease all activities at Carolina Oak. Woodbridge was the obligor under a $37.2 million loan collateralized by property owned by Carolina Oak. During 2009, the lender declared
the loan to be in default and filed an action for foreclosure. On April 26, 2011, a settlement agreement was entered into to resolve the disputes and litigation relating to the loan. Under the terms and subject to the conditions of the
settlement agreement, (i) Woodbridge paid $2.5 million to the note holder, (ii) Carolina Oak conveyed to the note holder the real property securing the loan and (iii) the note holder agreed not to pursue certain remedies, including a
deficiency judgment, and after the expiration of an agreed-upon time period (which expired during April 2012), to fully release Woodbridge and Carolina Oak. In accordance with applicable accounting guidance, a deferred gain on debt settlement of
$29.9 million was recorded in the Companys consolidated statement of financial condition as of December 31, 2011 and was recognized as income in the three and six months ended June 30, 2012 as a result of the full release of
Woodbridge and Carolina Oak during April 2012.

The discussion that follows reflects the operations and related matters of the Real Estate
Operations segment (in thousands):



|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|------------------------------------ |  | ---------------------------------- | ------ |  | -------------------------------- |  | ---- | ---- |  |  | ------ |  |  |  | ------ | 
|                                     |  | For the Three Months EndedJune 30, |        |  | For the Six Months EndedJune 30, | 
|                                     |  | 2012                               |        |  | 2011                             |  |      | 2012 |  |  | 2011   | 
|Revenues:                            |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Other revenue                        |  | $                                  |       |  |                                  |  |     |      |  |  |       |  |  |  |       | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|                                     |  |                                    |       |  |                                  |  |     |      |  |  |       |  |  |  |       | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Cost and Expenses:                   |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|General and administrative           |  |                                    | 40     |  |                                  |  | 98   |      |  |  | 71     |  |  |  | 316    | 
|Interest expense                     |  |                                    |       |  |                                  |  | 675  |      |  |  |       |  |  |  | 1,916  | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Total costs and expenses             |  |                                    | 40     |  |                                  |  | 773  |      |  |  | 71     |  |  |  | 2,232  | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Gain on investment in subsidiary     |  |                                    |       |  |                                  |  |     |      |  |  |       |  |  |  | 11,305 | 
|Gain on the settlement of debt       |  |                                    | 28,725 |  |                                  |  |     |      |  |  | 28,725 |  |  |  |       | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Income (loss) before taxes           |  |                                    | 28,685 |  |                                  |  | (773 | )    |  |  | 28,654 |  |  |  | 9,073  | 
|(Provision) benefit for income taxes |  |                                    |       |  |                                  |  |     |      |  |  |       |  |  |  |       | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 
|Net income (loss)                    |  | $                                  | 28,685 |  |                                  |  | (773 | )    |  |  | 28,654 |  |  |  | 9,073  | 
|                                     |  |                                    |        |  |                                  |  |      |      |  |  |        |  |  |  |        | 

For the three and six months ended June 30, 2012 compared to the same periods in 2011

There were no real estate sales or other revenues during the three or six months ended June 30, 2012 or 2011 due to the liquidation of the real
estate assets at Core and Carolina Oak.

There was no interest expense for the three or six months ended June 30, 2012 due to the
above-described settlement agreements entered into by Core and its lenders and Carolina Oak and its lender which resulted in both Core and Carolina Oak being released from all outstanding debt obligations during 2011. Interest expense of
approximately $675,000 and $1.9 million recognized during the three and six months ended June 30, 2011, respectively, was primarily due to the then outstanding loan of approximately $27.2 million at Core and the then outstanding loan at
Carolina Oak of approximately $37.2 million.

General and administrative expenses decreased to $40,000 for the three months ended
June 30, 2012 from $98,000 for the same period in 2011. General and administrative expenses for the six months ended June 30, 2012 decreased to $71,000 from $316,000 for the same period in 2011. The decreases resulted from the cessation of
operations at Core and Carolina Oak.

Gain on settlement of investment in subsidiary of $11.3 million during the six months ended
June 30, 2011 is



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attributable to the deconsolidation of five of Cores subsidiaries, the membership interests in which were transferred to the lender upon settlement of approximately $86.7 million in debt,
as described above. Gain on extinguishment of debt during the three and six months ended June 30, 2012 includes the recognition of the deferred gain of $29.9 million on the Carolina Oak debt settlement.

Discontinued Operations  Cypress Creek Holdings

Cypress Creek Holdings owned an 80,000 square foot office building in Fort Lauderdale, Florida. As of December 31, 2011, the building, which had an estimated carrying value of approximately $6.4
million, served as collateral for an approximately $11.2 million mortgage loan.

The building was previously 50% occupied by an unaffiliated
third party pursuant to a lease which expired in March 2010. The tenant opted not to renew the lease and vacated the space as of March 31, 2010. After efforts to lease the space proved unsuccessful, the lender with respect to the loan secured
by the office building agreed to permit Cypress Creek Holdings to pursue a short sale of the building. During January 2012, the building was sold for approximately $10.8 million. The proceeds of the sale plus a $668,000 payment made by Cypress Creek
Holdings were paid to the lender in full satisfaction of the loan. During the first quarter of 2012, the Company recognized a gain of approximately $4.4 million in connection with the sale.

Cypress Creek Holdings results of operations are reported as a discontinued operation in the Companys consolidated financial statements and its assets, which were sold during the first quarter
of 2012, are classified as assets held for sale as of December 31, 2011.

Below are the results of discontinued operations related to
Cypress Creek Holdings for the three months ended June 30, 2011 and the six months ended June 30, 2012 and 2011 (in thousands):



|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|-------------------------------------------------------- |  | --------------------------------- | ---- | - | -------------------------------- |  | ----- | ---- |  |  | ---- | -
|                                                         |  | For the ThreeMonthsEnded June 30, |      |   | For the Six Months EndedJune 30, | 
|                                                         |  | 2011                              |      |   | 2012                             |  |       | 2011 | 
|Revenues                                                 |  | $                                 | 4    |   |                                  |  | 3     |      |  |  | 4    |  
|Gain on sale of asset                                    |  |                                   |     |   |                                  |  | 4,446 |      |  |  |     |  
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|                                                         |  |                                   | 4    |   |                                  |  | 4,449 |      |  |  | 4    |  
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|Cost and Expenses:                                       |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|Cost of discontinued operations                          |  |                                   | 265  |   |                                  |  | 52    |      |  |  | 536  |  
|Interest expense                                         |  |                                   | 160  |   |                                  |  |      |      |  |  | 321  |  
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|                                                         |  |                                   | 425  |   |                                  |  | 52    |      |  |  | 857  |  
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|(Loss) income from discontinued operations, before taxes |  |                                   | (421 | ) |                                  |  | 4,397 |      |  |  | (853 | )
|(Provision) benefit for income taxes                     |  |                                   |     |   |                                  |  |      |      |  |  |     |  
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  
|(Loss) income from discontinued operations, net          |  | $                                 | (421 | ) |                                  |  | 4,397 |      |  |  | (853 | )
|                                                         |  |                                   |      |   |                                  |  |       |      |  |  |      |  



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Revenues for the six months ended June 30, 2012 include a gain of approximately $4.4 million
related to the sale of the office building owned by Cypress Creek Holdings during January 2012. There were no significant revenues for the three and six months ended June 30, 2011.

Total costs and expenses for the three months ended June 30, 2011 was $425,000. There were no similar costs for the same period in 2012 due to the sale of the office building in January 2012. Total
costs and expenses for the six months ended June 30, 2012 decreased to $52,000 compared to $857,000 for the same period in 2011 due to sale of the office building in January 2012 and the related settlement of the outstanding loan collateralized
by the building.

Real Estate Operations-Liquidity and Capital Resources

Due to the cessation of operations at Core and Carolina Oak, the cash and cash equivalents balance with respect to the Real Estate Operations segment at June 30, 2012 and December 31, 2011 was
not significant.

Off Balance Sheet Arrangements and Contractual Obligations

Levitt and Sons, Woodbridges former wholly-owned homebuilding subsidiary, had approximately $33.3 million of surety bonds related to its ongoing projects at November 9, 2007, the date on which
Levitt and Sons and substantially all of its subsidiaries filed voluntary bankruptcy petitions. At June 30, 2012 and December 31, 2011, Woodbridge had no surety bond accruals related to these surety bonds; however, in the event that the
obligations are drawn and paid by the surety, Woodbridge could be responsible for up to $2.2 million plus costs and expenses in accordance with the surety indemnity agreements. Woodbridge will not receive any repayment, assets or other consideration
as recovery of any amounts it may be required to pay. No reimbursements were made during the three or six months ended June 30, 2012 or the year ended December 31, 2011.

In September 2008, a surety filed a lawsuit to require Woodbridge to post collateral against a portion of the surety bonds exposure in connection with demands made by a municipality. Based on claims made
by the municipality on the bonds, the surety requested that Woodbridge post a $4.0 million escrow deposit while the matter was being litigated. While Woodbridge did not believe that the municipality had the right to demand payment under the bonds,
Woodbridge complied with that request. In August 2010, a motion for summary judgment was entered in Woodbridges favor terminating any obligations under the bonds. Subsequent to the motion being granted, the municipality appealed the decision.
On March 8, 2012, the Court of Appeals affirmed the district courts granting of Woodbridges motion for summary judgment. During May 2012, the Company received a refund of $3.8 million of the escrow deposit. The $200,000 balance
remains in escrow pending a final reconciliation of legal fees related to the matter.



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(Bluegreen)



Bluegreen

The Companys consolidated financial statements for the three and six months ended June 30, 2012 and 2011 include the results of operations of Bluegreen. Bluegreens results of
operations are reported through Bluegreen Resorts, the operating segment of Bluegreen engaged in the vacation ownership industry. Bluegreen Communities, which prior to June 30, 2011 was a separate reporting segment of Bluegreen and BFC, has
ceased to be a separate reporting segment as a result of the sales process with respect to, and resulting sale of, substantially all of the assets which comprised Bluegreen Communities. Bluegreen Communities operating results are presented as
discontinued operations for the three and six months ended June 30, 2012 and 2011. See Note 3 of the Notes to Unaudited Consolidated Financial Statements for information regarding the results of discontinued operations. The only
assets available to BFC from Bluegreen are dividends when and if paid by Bluegreen. Bluegreen is a separate public company, and the following discussion is derived from or includes disclosure prepared by Bluegreens management for inclusion in
its Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. Accordingly, unless noted to the contrary or the context otherwise requires, references to the Company, we, us or our in the
following discussion are references to Bluegreen and its subsidiaries, and are not references to BFC or BBX Capital. See Note 1  Basis of Financial Statement Presentation to the Notes to the Companys Consolidated Financial
Statements for a further discussion of the presentation of the Companys results of operations and Note 3  Assets and Liabilities Held for Sale to the Notes to the Companys Consolidated Financial Statements for a further
discussion of the results of discontinued operations and the presentation of assets and liabilities in the Companys Consolidated Statement of Financial Condition.

Bluegreen is a sales, marketing and management company, primarily focused on the vacation ownership industry. Bluegreens business was historically conducted through two operating segments  our
resorts business segment (Bluegreen Resorts) and our residential communities business segment (Bluegreen Communities).

As a result of Bluegreens sale of substantially all of the assets that comprised Bluegreen Communities on May 4, 2012, Bluegreens
continuing operations only relate to Bluegreen Resorts. Bluegreen Resorts markets, sells and manages vacation ownership interests (VOIs) in resorts, which are generally located in popular, high-volume, drive-to vacation
destinations, and were either developed or acquired by us or developed by others, in which case Bluegreen earns fees for providing these services. VOIs in Bluegreens resorts and those sold by Bluegreen on behalf of third parties typically entitle
the buyer to use resort accommodations through an annual or biennial allotment of points which represent their ownership and beneficial use rights in perpetuity in the Bluegreen Vacation Club (supported by an underlying deeded VOI held
in trust for the buyer). Owners in the Bluegreen Vacation Club may stay in any of the 59 Bluegreen Vacation Club resorts or take advantage of an exchange program offered by a third-party world-wide vacation ownership exchange network of over 4,000
resorts and other vacation experiences such as cruises and hotel stays. Bluegreen Resorts also provides property and homeowners association management services, VOI title services, mortgage servicing and resort amenity operational services. In
addition, Bluegreen Resorts provides financing to individual purchasers of VOIs, which provides significant interest income to Bluegreen.

Bluegreen Resorts results for the three and six months ended June 30, 2012 reflect its continued focus on Bluegreens fee-based service
business and its efforts to achieve selling and marketing efficiencies. Furthermore, in January 2012 Bluegreen began selling VOI inventory in connection with a new category of sales requiring low levels of capital deployment whereby Bluegreen
acquires VOI inventory from resorts property owner associations (POA Sales) on a non-committed basis, in close proximity to the timing of Bluegreen selling of such VOIs. VOIs are typically obtained by the POAs through foreclosure
in connection with maintenance fee defaults and are generally acquired by Bluegreen at a discount. Since Bluegreen acquires the VOIs from the POAs just-in-time, POA Sales are included in Bluegreens Sales of VOIs along
with sales of its existing VOI inventory. In the future, Bluegreen intends to enter into similar just-in-time arrangements with third-party developers as part of its fee-based services initiative; however, Bluegreen may not be successful
in doing so.

During the three months ended June 30, 2012:



| |  |  | Bluegreen earned income from continuing operations of $19.0 million compared to $12.3 million during the three months ended June 30, 2011.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | VOI system-wide sales, which include sales of third-party inventory, were $96.2 million compared to $79.1 million during the three months ended
June 30, 2011. VOI system-wide sales during the three months ended June 30, 2012 included $4.4 million of POA Sales described above.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Bluegreen sold $39.4 million of third-party inventory and earned sales and marketing commissions of $25.7 million. Including Bluegreens resort
management, title services, construction management and other fee-based operations, Bluegreens total fee-based service revenues were $44.6 million, a 25% increase over the same period in 2011.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Bluegreen believes its fee-based service business enables it to leverage its expertise in resort management, sales and marketing, mortgage servicing,
title services, and construction management to generate recurring revenues from third parties. Providing these services requires significantly less capital investment than Bluegreens traditional vacation ownership business. Bluegreens
goal is for fee-based services to become an increasing portion of its business over time; however, Bluegreens efforts to do so may not be successful.

During the three months ended June 30, 2012 and 2011, Bluegreen sold $39.4 million and $27.0 million, respectively, of third-party inventory and earned sales and marketing commissions of
approximately $25.7 million and $18.3 million, respectively. Based on an allocation of Bluegreens selling, marketing and field general and administrative expenses to these sales, Bluegreen believes it generated approximately $7.0 million and
$4.6 million in pre-tax profits by providing sales and marketing fee-based services during the three months ended June 30, 2012 and 2011, respectively.

During the six months ended June 30, 2012 and 2011, Bluegreen sold $59.1 million and $43.9 million, respectively, of third-party inventory and earned sales and marketing commissions of approximately
$38.5 million and $29.1 million, respectively. Based on an allocation of our selling, marketing and field general and administrative expenses to these sales, Bluegreen believes it generated approximately $9.0 million and $5.8 million in pre-tax
profits by providing sales and marketing fee-based services during the six months ended June 30, 2012 and 2011, respectively.

Bluegreen
generated free cash flow (cash flow from operating and investing activities) during the six months ended June 30, 2012 of $89.8 million compared to $75.6 million during the same period 2011. Free cash flow during 2012 reflects $27.8
million in net proceeds from the sale of the Bluegreen Communities division to Southstar, prior to the associated debt repayment.

Additionally, consistent with initiatives seeking to improve its liquidity, Bluegreen continued to seek cash sales and larger customer down payments on
financed sales. During the six months ended June 20, 2012, 59% of Bluegreens VOI sales were paid in cash in full within approximately 30 days from the contract date. Refer to Liquidity and Capital Resourcessection below for
additional information.

Seasonality

Bluegreen has historically experienced and expects to continue to experience seasonal fluctuations in its gross revenues and results of operations. This seasonality may result in fluctuations in
Bluegreens quarterly operating results. Although Bluegreen typically sees more potential customers at its sales offices during the quarters ending in June and September, ultimate recognition of the resulting sales during these periods may be
delayed due to down payment requirements for recognition of real estate sales under GAAP or due to the timing of development and the requirement that Bluegreen use the percentage-of-completion method of accounting.

Notes Receivable and Allowance for Loan Losses

Bluegreen offers financing to buyers of its VOIs who meet certain minimum requirements. On a more limited basis, Bluegreen Communities also offered financing to buyers of its homesites. Accordingly,
Bluegreen is subject to the risk of defaults by customers. GAAP requires that Bluegreen reduce sales of VOIs by its estimate of future uncollectible note balances on originated VOI notes receivables, excluding any benefit for the value of future
recoveries of defaulted VOI inventory. Bluegreen updates its estimate of such future losses each quarter, and consequently, the charge against sales in a particular period may be impacted, favorably or unfavorably, by a change in Bluegreens
expected losses related to notes originated in prior periods.



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Bluegreen seeks to monetize its notes receivable by transferring the notes to
warehouse purchase facilities, in which case the notes are legally sold to a special purpose entity for the benefit of a financial institution or conduit, or by pledging the notes as collateral for a receivables hypothecation loan. Bluegreen
attempts to maintain these diversified liquidity sources for its notes receivable in order to mitigate the risks of being dependent on a single source. Each such facility has eligibility standards for the notes receivable that may be sold or pledged
under the facility. It is generally contemplated that notes receivable transferred to a warehouse purchase facility will ultimately be included in a future securitization of the transferred notes. The notes receivable securitized are determined
during the negotiation of the securitization transaction, with the characteristics of the notes receivable selected determining the terms of the transaction. Notes receivable previously pledged as collateral for a receivable hypothecation loan may
also be included in a term securitization transaction, however such notes are generally not included if doing so would result in a significant prepayment penalty. Further, based on the size and timing of the securitization, Bluegreen may also choose
to include newly originated notes receivable. Additionally, the specific characteristics of the notes receivable factor into whether such notes would be desirable to include in a securitization. Such factors may include delinquency status, FICO® score, interest rate, remaining term, outstanding balance and whether the obligor is foreign or domestic.

The activity in Bluegreens allowance for uncollectible notes receivable for the six months ended June 30, 2012 was as follows (in
thousands):



|                                        |  |   |         |  
|--------------------------------------- |  | - | ------- | -
|Balance at December 31, 2011            |  | $ | 73,260  |  
|Provision for loan losses (1)           |  |   | 11,783  |  
|Write-offs of uncollectible receivables |  |   | (17,300 | )
|                                        |  |   |         |  
|Balance at June 30, 2012                |  | $ | 67,743  |  
|                                        |  |   |         |  



|(1) | Includes provision for loan losses on notes receivable generated in connection with the sales of homesites
|--- | ----------------------------------------------------------------------------------------------------------

Bluegreens estimates regarding its allowance for loan losses involve interpretation of historical data, the aging of
receivables, current default trends by origination year, the impact of loan seasoning, current economic conditions, the economic outlook, and the FICO® scores of the borrowers at the time of origination. To the extent that Bluegreens estimates change, its results of operations could be adversely affected. While
Bluegreen believes its notes receivable are adequately reserved at this time, future defaults may occur at levels greater than Bluegreen expects. If the future performance of Bluegreens loans varies from its expectations and estimates,
additional charges may be required in the future.

The average annual default rates and delinquency rates (more than 30 days past due) on
Bluegreens notes receivable were as follows:



|                                                  |  |                                        |      |      |      |  |      |     
|------------------------------------------------- |  | -------------------------------------- | ---- | ---- | ---- |  | ---- | ----
|Average Annual Default Rates                      |  | For the 12 Month Period Ended June 30, |     
|Division                                          |  | 2012                                   |      |      | 2011 | 
|Notes receivable secured by VOIs:                 |  |                                        |      |      |      |  |      |     
|Loans originated prior to December 15, 2008(1)    |  |                                        | 10.0 | %    |      |  | 11.6 | %   
|Loans originated on or after December 15, 2008(1) |  |                                        | 6.2  | %(2) |      |  | 6.5  | %(2)
|Notes receivable secured by homesites             |  |                                        | 9.0  | %    |      |  | 9.6  | %   



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|                                                  |  |               |     |   |                  |  |     |  
|------------------------------------------------- |  | ------------- | --- | - | ---------------- |  | --- | -
|Delinquency Rates
(3)                             |  | As of         |    
|Division                                          |  | June 30, 2012 |     |   | December31, 2011 | 
|Notes receivable secured by VOIs:                 |  |               |     |   |                  |  |     |  
|Loans originated prior to December 15, 2008(1)    |  |               | 3.5 | % |                  |  | 4.9 | %
|Loans originated on or after December 15, 2008(1) |  |               | 2.1 | % |                  |  | 3.0 | %
|Notes receivable secured by homesites             |  |               | 3.3 | % |                  |  | 3.1 | %



|(1) | On December 15, 2008, Bluegreen implemented its FICO® score-based credit underwriting program.
|--- | ----------------------------------------------------------------------------------------------

|(2) | Reflects, in managements opinion, the benefits of Bluegreens FICO® score-based credit underwriting standards as well as Bluegreens policy that loans are not defaulted until after 120 days past due.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | The percentage of Bluegreens notes receivable portfolio that was over 30 days past due as of the dates indicated.
|--- | ------------------------------------------------------------------------------------------------------------------

Substantially all defaulted VOI notes receivable result in a recovery of the related VOI that secured the note receivable, typically soon after default
and at a nominal cost. Bluegreen then attempts to resell the recovered VOI in the normal course of business.

Bluegreen Segments Financial
Results

As described above and elsewhere in this report, the operating results of Bluegreen Communities, Bluegreens residential
communities business segment, have been classified as a discontinued operation. On May 4, 2012 Bluegreen sold substantially all of the assets of Bluegreen Communities to Southstar as further described in Note 3 to the Notes to Unaudited
Consolidated Financial Statements.



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(Bluegreen)



Information regarding the results of operations for Bluegreen Resorts for the three and six months ended
June 30, 2012 and 2011 is set forth below (dollars in thousands):

Bluegreen Resorts



|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|---------------------------------------------------------- |  | ----------------------------------- | ------- | - | -------------------------------- |  | --- | ------ |  |  | ------------------------------- | - |  |  | --- | -
|                                                           |  | For the Three Months Ended June 30, |        
|                                                           |  | 2012                                |         |   | 2011                             | 
|                                                           |  | Amount                              |         |   | % ofSystem-wide salesof
VOIs,net |  |     | Amount |  |  | % ofSystem-wide saleof
VOIs,net |  
|                                                           |  | (dollars in thousands)              |        
|System-wide sales of VOIs(1)                               |  | $                                   | 96,217  |   |                                  |  |     |        |  |  | 79,149                          |   |  |  |     |  
|Changes in sales deferred under timeshare accounting rules |  |                                     | 849     |   |                                  |  |     |        |  |  | (788                            | ) |  |  |     |  
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|System-wide sales of VOIs, net                             |  |                                     | 97,066  |   |                                  |  | 100 | %      |  |  | 78,361                          |   |  |  | 100 | %
|Less: Sales of third party VOIs                            |  |                                     | (39,393 | ) |                                  |  | (41 | )      |  |  | (26,951                         | ) |  |  | (34 | )
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Gross Sales of VOIs                                        |  |                                     | 57,673  |   |                                  |  | 59  |        |  |  | 51,410                          |   |  |  | 66  |  
|Estimated uncollectible VOI notes receivable(2)            |  |                                     | (5,458  | ) |                                  |  | (9  | )      |  |  | (6,066                          | ) |  |  | (12 | )
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Sales of VOIs                                              |  |                                     | 52,215  |   |                                  |  | 54  |        |  |  | 45,344                          |   |  |  | 58  |  
|Cost of VOIs sold(3)                                       |  |                                     | (6,308  | ) |                                  |  | (12 | )      |  |  | (6,703                          | ) |  |  | (15 | )
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Gross profit                                               |  |                                     | 45,907  |   |                                  |  | 88  |        |  |  | 38,641                          |   |  |  | 85  |  
|Fee-based sales commission revenue                         |  |                                     | 25,703  |   |                                  |  | 26  |        |  |  | 18,308                          |   |  |  | 23  |  
|Other fee-based services revenue                           |  |                                     | 18,875  |   |                                  |  | 19  |        |  |  | 17,287                          |   |  |  | 22  |  
|Cost of other fee-based services                           |  |                                     | (10,241 | ) |                                  |  | (11 | )      |  |  | (9,231                          | ) |  |  | (12 | )
|Net carrying cost of VOI inventory                         |  |                                     | (1,710  | ) |                                  |  | (2  | )      |  |  | (2,925                          | ) |  |  | (4  | )
|Selling and marketing expenses                             |  |                                     | (40,938 | ) |                                  |  | (42 | )      |  |  | (35,018                         | ) |  |  | (45 | )
|Field general and administrative expenses(4)               |  |                                     | (5,094  | ) |                                  |  | (5  | )      |  |  | (4,649                          | ) |  |  | (6  | )
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Operating profit                                           |  | $                                   | 32,502  |   |                                  |  | 33  |        |  |  | 22,413                          |   |  |  | 29  |  
|                                                           |  |                                     |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  



|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|---------------------------------------------------------- |  | --------------------------------- | ------- | - | -------------------------------- |  | --- | ------ |  |  | ------------------------------- | - |  |  | --- | -
|                                                           |  | For the Six Months Ended June 30, |        
|                                                           |  | 2012                              |         |   | 2011                             | 
|                                                           |  | Amount                            |         |   | % ofSystem-wide salesof
VOIs,net |  |     | Amount |  |  | % ofSystem-wide saleof
VOIs,net |  
|                                                           |  | (dollars in thousands)            |        
|System-wide sales of VOIs(1)                               |  | $                                 | 170,930 |   |                                  |  |     |        |  |  | 137,623                         |   |  |  |     |  
|Changes in sales deferred under timeshare accounting rules |  |                                   | (4,154  | ) |                                  |  |     |        |  |  | (1,304                          | ) |  |  |     |  
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|System-wide sales of VOIs, net                             |  |                                   | 166,776 |   |                                  |  | 100 | %      |  |  | 136,319                         |   |  |  | 100 | %
|Less: Sales of third party VOIs                            |  |                                   | (59,115 | ) |                                  |  | (35 | )      |  |  | (43,861                         | ) |  |  | (32 | )
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Gross Sales of VOIs                                        |  |                                   | 107,661 |   |                                  |  | 65  |        |  |  | 92,458                          |   |  |  | 68  |  
|Estimated uncollectible VOI notes receivable(2)            |  |                                   | (11,849 | ) |                                  |  | (11 | )      |  |  | (10,780                         | ) |  |  | (12 | )
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Sales of VOIs                                              |  |                                   | 95,812  |   |                                  |  | 57  |        |  |  | 81,678                          |   |  |  | 60  |  
|Cost of VOIs sold(3)                                       |  |                                   | (10,670 | ) |                                  |  | (11 | )      |  |  | (13,928                         | ) |  |  | (17 | )
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Gross profit                                               |  |                                   | 85,142  |   |                                  |  | 89  |        |  |  | 67,750                          |   |  |  | 83  |  
|Fee-based sales commission revenue                         |  |                                   | 38,481  |   |                                  |  | 23  |        |  |  | 29,072                          |   |  |  | 21  |  
|Other fee-based services revenue                           |  |                                   | 37,690  |   |                                  |  | 23  |        |  |  | 34,487                          |   |  |  | 25  |  
|Cost of other fee-based services                           |  |                                   | (19,835 | ) |                                  |  | (12 | )      |  |  | (18,170                         | ) |  |  | (13 | )
|Net carrying cost of VOI inventory                         |  |                                   | (5,102  | ) |                                  |  | (3  | )      |  |  | (7,067                          | ) |  |  | (5  | )
|Selling and marketing expenses                             |  |                                   | (73,594 | ) |                                  |  | (44 | )      |  |  | (63,547                         | ) |  |  | (47 | )
|Field general and administrative expenses(4)               |  |                                   | (9,407  | ) |                                  |  | (6  | )      |  |  | (8,739                          | ) |  |  | (6  | )
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  
|Operating profit                                           |  | $                                 | 53,375  |   |                                  |  | 32  |        |  |  | 33,786                          |   |  |  | 25  |  
|                                                           |  |                                   |         |   |                                  |  |     |        |  |  |                                 |   |  |  |     |  



|(1) | Includes sales of VOIs made on behalf of third parties, which are transacted in the same manner as the sale of Bluegreens VOI inventory.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------

|(2) | Percentages for estimated uncollectible VOI notes receivable are calculated as a percentage of gross sales of VOIs.
|--- | -------------------------------------------------------------------------------------------------------------------



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|(3) | Percentages for cost of VOIs sold and gross profit are calculated based on sales of VOIs.
|--- | -----------------------------------------------------------------------------------------

|(4) | General and administrative expenses attributable to corporate overhead have been excluded from the table. Corporate general and administrative expenses totalled $11.7
million and $9.1 million for the three months ended June 30, 2012 and 2011, respectively and $25.2 million and $19.7million for the six months ended June 30, 2012 and 2011, respectively. (See Corporate General and Administrative Expenses below for
further discussion).
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Sales and Marketing

System-wide sales of VOIs.System-wide sales of VOIs include sales of Bluegreen-owned VOIs as well as sales of VOIs owned by third parties. The sales of third-party VOIs are transacted as sales of
timeshare interests in the Bluegreen Vacation Club through the same selling and marketing process Bluegreen use to sell its VOI inventory. Bluegreen earns commissions on such sales from third parties. System-wide sales of VOIs were $96.2 million and
$79.1 million during the three months ended June 30, 2012 and 2011, respectively, and were $170.9 million and $137.6 million during the six months ended June 30, 2012 and 2011, respectively. System-wide sales of VOIs increased during the
2012 periods as a result of an increase in the number of sales transactions, partly offset by a lower average sales price per transaction. The number of sales transactions increased due to higher volume of marketing tours from various marketing
initiatives including targeted campaigns to owners as well as increased tours from Bluegreens alliance marketing programs. Additionally, Bluegreens sales further benefited from an improved sale-to-tour conversion ratio. During the three
months ended June 30, 2012, Bluegreens sale-to-tour conversion ratio was 17.1% compared to 14.5% during the same period of 2011. During the six months ended June 30, 2012, Bluegreens sale-to-tour conversion ratio was 17.5%
compared to 14.7% during the same period of 2011.

The following table sets forth certain information for sales of both Bluegreen VOIs and VOI
sales made on behalf of third parties for a fee for the periods indicated. The information is provided before giving effect to the deferral of Bluegreen VOI sales in accordance with GAAP:



|                                                          |  |                                     |        |   |                                  |   |        |      |  |   |        |   |  |   |        |  
|--------------------------------------------------------- |  | ----------------------------------- | ------ | - | -------------------------------- | - | ------ | ---- |  | - | ------ | - |  | - | ------ | -
|                                                          |  | For the Three 
MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, |  
|                                                          |  | 2012                                |        |   | 2011                             |   |        | 2012 |  |   | 2011   |  
|Number of sales offices at period-end                     |  |                                     | 23     |   |                                  |   | 20     |      |  |   | 23     |   |  |   | 20     |  
|Number of Bluegreen VOI sales transactions                |  |                                     | 5,053  |   |                                  |   | 4,505  |      |  |   | 10,066 |   |  |   | 8,027  |  
|Number of sales made on behalf of third parties for a fee |  |                                     | 3,325  |   |                                  |   | 2,054  |      |  |   | 4,904  |   |  |   | 3,420  |  
|Total number of VOI sales transactions                    |  |                                     | 8,378  |   |                                  |   | 6,559  |      |  |   | 14,970 |   |  |   | 11,447 |  
|Average sales price per transaction                       |  | $                                   | 11,748 |   |                                  | $ | 12,250 |      |  | $ | 11,660 |   |  | $ | 12,189 |  
|Number of total prospects tours                           |  |                                     | 48,963 |   |                                  |   | 45,348 |      |  |   | 85,433 |   |  |   | 77,632 |  
|Sale-to-tour conversion ratio total prospects            |  |                                     | 17.1   | % |                                  |   | 14.5   | %    |  |   | 17.5   | % |  |   | 14.7   | %
|Number of new prospects tours                             |  |                                     | 28,949 |   |                                  |   | 26,966 |      |  |   | 48,405 |   |  |   | 44,766 |  
|Sale-to-tour conversion ratio new prospects              |  |                                     | 12.0   | % |                                  |   | 10.2   | %    |  |   | 12.5   | % |  |   | 10.7   | %
|Percentage of sales to owners                             |  |                                     | 57.3   | % |                                  |   | 57.2   | %    |  |   | 58.6   | % |  |   | 58.1   | %

Gross Sales of VOIs. Gross sales of VOIs represent sales of Bluegreen-owned VOIs as adjusted by changes in sales
deferred under timeshare accounting rules. Gross sales of VOIs were $57.7 million and $51.4 million during the three months ended June 30, 2012 and 2011, respectively, and $107.7 million and $92.5 million during the six months ended
June 30, 2012 and 2011, respectively. Sales of VOIs owned by Bluegreen increased during 2012 due to the overall increase in the system-wide sales of VOIs, as further described above.



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Gross sales of VOIs are impacted by the timing of when a sale meets the criteria for revenue
recognition. Sales of Bluegreen-owned VOIs that do not meet the revenue recognition criteria as of the end of a period are deferred to a future period until such time as the revenue recognition criteria are met. During the three months ended
June 30, 2011, due to the timing of revenue recognition, Bluegreen realized a net deferral of approximately $0.8 million as compared to a net recognition of approximately $0.8 million of sales during the same period in 2012. During the six
months ended June 30, 2012 and 2011, due to the timing of revenue recognition, we realized a net deferral of approximately $4.2 million and $1.3 million of sales, respectively.

Sales of VOIs. Sales of VOIs represent gross sales of VOIs, as reduced by the impact of estimated uncollectible VOI notes receivable as further described below. Sales of VOIs were $52.2 million
during the three months ended June 30, 2012 compared to $45.3 million during the three months ended June 30, 2011, and 95.8 million during the six months ended June 30, 2012 compared to $81.7 million during the six months ended
June 30, 2011.

In January 2012 Bluegreen began selling VOI inventory in connection with a new category of sales requiring low levels of
capital deployment whereby Bluegreen acquires VOI inventory from Bluegreens resorts property owner associations (POA Sales) on a non-committed basis, in close proximity to the timing of our selling of such VOIs. VOIs are
typically obtained by the POAs through foreclosure in connection with maintenance fee defaults and are generally acquired by us at a discount. Since Bluegreen acquires the VOIs from the POAs just-in-time, POA Sales are included in
Bluegreens Sales of VOIs along with sales of Bluegreens existing VOI inventory. In the future, Bluegreen intends to enter into similar just-in-time arrangements with third-party developers as part of its fee-based
services initiative, although Bluegreen may not be successful in doing so. During the three and the six months ended June 30, 2012, gross revenues from POA Sales were $4.4 million and $7.9 million, respectively.

During the three months ended June 30, 2012 and 2011, Bluegreen reduced revenue by $5.5 million and $6.1 million, respectively, for the estimated
future uncollectibles on its loans. During the six months ended June 30, 2012 and 2011, Bluegreen reduced revenue by $11.8 million and $10.8 million, respectively, for the estimated future uncollectibles on our loans. Estimated losses for
uncollectible VOI notes receivable vary with the amount of financed sales during the period and changes in our estimates of future note receivable performance for existing and newly originated loans. In connection with Bluegreens quarterly
analysis of its loan portfolio, which consists of evaluating the expected future performance of loans with remaining lives of one to ten years, Bluegreen may identify factors or trends that change its estimate of future loan performance and result
in a change in Bluegreens allowance for loan losses. Bluegreens estimated uncollectible VOI notes receivable as a percentage of gross sales of VOIs were 9% and 12% during the three months ended June 30, 2012 and 2011, respectively,
and were 11% and 12% during the six months ended June 30, 2012 and 2011, respectively. While Bluegreen believes its notes receivable are adequately reserved at this time, actual defaults may differ from our estimates.

Cost of VOIs Sold. Cost of VOIs sold is the cost of Bluegreen VOIs sold during the period and relieved from inventory. During the three months
ended June 30, 2012 and 2011, cost of VOIs sold was $6.3 million and $6.7 million, respectively, and represented 12% and 15%, respectively, of sales of VOIs. During the six months ended June 30, 2012 and 2011, cost of VOIs sold was $10.7
million and $13.9 million, respectively, and represented 11% and 17%, respectively, of sales of VOIs. Cost of VOIs sold as a percentage of sales of VOIs varies between periods based on the relative costs of the specific VOIs sold in each period.
Additionally, changes in assumptions, including estimated project sales, future defaults, upgrades and estimated incremental revenue from the resale of repossessed VOI inventory, and the size of the point packages of the VOIs sold (due to offered
volume discounts, including consideration of cumulative sales to existing owners), are reflected on a retrospective basis in the period the change occurs.

Fee-Based Sales Commission Revenue.Bluegreen earns commissions for the sales of third-party inventory upon the closing of the respective sales transaction. During the three months ended
June 30, 2012 and 2011, Bluegreen sold $39.4 million and $27.0 million, respectively, of third-party inventory and earned sales and marketing commissions of $25.7 million and $18.3 million, respectively. Based on an allocation of our selling,
marketing and resort general and administrative expenses to these sales, Bluegreen believes it generated approximately $7.0 million and $4.6 million in pre-tax profits from these sales during the three months ended June 30, 2012 and 2011,
respectively. During the six months ended June 30, 2012 and 2011, Bluegreen sold $59.1 million and $43.9 million, respectively, of third-party inventory and earned sales and marketing commissions of $38.5 million and $29.1 million,
respectively. Based on an allocation of its selling, marketing and resort general and administrative expenses to these sales, Bluegreen believes it generated approximately $9.0 million and $5.8 million in pre-tax profits from these sales during the
six months ended June 30, 2012 and 2011, respectively. The increase in the sales of third-party developer inventory during 2012 is due to the overall increase in the system-wide sales of VOIs further described above.



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Net Carrying Cost of VOI Inventory.Bluegreen is responsible for paying maintenance fees and
developer subsidies for unsold Bluegreen VOI inventory, which is paid to the property owners associations that maintain the resorts. Bluegreen attempts to mitigate this expense, to the extent possible, through the rental of its owned VOIs.
Accordingly, the net carrying cost for Bluegreens unsold inventory fluctuates with the number of VOIs it owns and the number of resorts subject to the developer subsidy arrangements, as well as proceeds from rental and sampler activity. During
the three months ended June 30, 2012 and 2011, the carrying cost of Bluegreens inventory was $4.2 million and $6.2 million, respectively, and was partly offset by rental and sampler revenues, net of expenses, of $2.5 million and $3.3
million, respectively. During the six months ended June 30, 2012 and 2011, the carrying cost of Bluegreens inventory was $10.1 million and $13.0 million, respectively, and was partly offset by rental and sampler revenues, net of expenses,
of $5.0 million and $5.9 million, respectively.

Selling and Marketing Expenses.Selling and marketing expenses were $40.9 million and
$35.0 million for the three months ended June 30, 2012 and 2011, respectively, and $73.6 million and $63.5 million for the six months ended June 30, 2012 and 2011, respectively. As a percentage of system-wide sales, net, selling and
marketing expenses decreased to 42% during the three months ended June 30, 2012 from 45% during the three months ended June 30, 2011. As a percentage of system-wide sales, net, selling and marketing expenses decreased to 44% during the six months
ended June 30, 2012 from 47% during the six months ended June 30, 2011. The decreases in percentages during the three and six months ended June 30, 2012 as compared to the same periods in 2011 are due to improved sale-to-tour
conversion and a favorable mix of lower-cost marketing programs. Bluegreens sale-to-tour ratio increased to 17.1% during the three months ended June 30, 2012 from 14.5% during the three months ended June 30, 2011. Bluegreens
sale-to-tour ratio increased to 17.5% during the six months ended June 30, 2012 from 14.7% during the six months ended June 30, 2011. Sales to existing owners, which carry a relatively lower marketing cost, accounted for 57% of system-wide
sales during both the three months ended June 30, 2011 and 2012. Sales to existing owners accounted for 59% of system-wide sales during the six months ended June 30, 2012, as compared to 58% during the six months ended June 30, 2011.

Field General and Administrative Expenses.Field general and administrative expenses, which represents expenses directly attributable
to Bluegreens resort sales and marking operations and excludes corporate overhead, were $5.1 million and $4.6 million during the three months ended June 30, 2012 and 2011, respectively, and $9.4 million and $8.7 million during the six
months ended June 30, 2012 and 2011, respectively. As a percentage of system-wide sales, net, field general and administrative expenses decreased to 5% during the three months ended June 30, 2012 from 6% during the three months ended
June 30, 2011 and remained at 6% during both the six months ended June 30, 2012 and 2011.

Other Fee-Based Services

Revenues and costs related to Bluegreens other fee-based services were as follows (in thousands):



|                                       |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|-------------------------------------- |  | ----------------------------------- | ------ | - | --------------------------------- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                       |  | For the Three 
MonthsEnded June 30, |        |   | For the Six Months 
EndedJune 30, | 
|                                       |  | 2012                                |        |   | 2011                              |  |        | 2012 |  |  | 2011   |  
|Revenues:                              |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Fee-based management services          |  | $                                   | 15,016 |   |                                   |  | 13,639 |      |  |  | 29,857 |   |  |  | 26,937 |  
|Title operations                       |  |                                     | 2,330  |   |                                   |  | 1,669  |      |  |  | 4,512  |   |  |  | 3,861  |  
|Other                                  |  |                                     | 1,529  |   |                                   |  | 1,979  |      |  |  | 3,321  |   |  |  | 3,689  |  
|                                       |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Total other fee-based services revenue |  |                                     | 18,875 |   |                                   |  | 17,287 |      |  |  | 37,690 |   |  |  | 34,487 |  
|Costs:                                 |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Fee-based management services          |  |                                     | 7,077  |   |                                   |  | 6,431  |      |  |  | 14,373 |   |  |  | 13,015 |  
|Title operations                       |  |                                     | 992    |   |                                   |  | 570    |      |  |  | 1,878  |   |  |  | 1,136  |  
|Other                                  |  |                                     | 2,172  |   |                                   |  | 2,230  |      |  |  | 3,584  |   |  |  | 4,019  |  
|                                       |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Total cost of other fee-based services |  |                                     | 10,241 |   |                                   |  | 9,231  |      |  |  | 19,835 |   |  |  | 18,170 |  
|Profit:                                |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Fee-based management services          |  |                                     | 7,939  |   |                                   |  | 7,208  |      |  |  | 15,484 |   |  |  | 13,922 |  
|Title operations                       |  |                                     | 1,338  |   |                                   |  | 1,099  |      |  |  | 2,634  |   |  |  | 2,725  |  
|Other                                  |  |                                     | (643   | ) |                                   |  | (251   | )    |  |  | (263   | ) |  |  | (330   | )
|                                       |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  
|Total other fee-based services profit  |  | $                                   | 8,634  |   |                                   |  | 8,056  |      |  |  | 17,855 |   |  |  | 16,317 |  
|                                       |  |                                     |        |   |                                   |  |        |      |  |  |        |   |  |  |        |  



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Other Fee-Based Services Revenue. Bluegreens other fee-based services revenue consists
primarily of fees earned for providing management services and fees earned for providing title services for VOI transactions. Bluegreen provides management services to the Bluegreen Vacation Club and to a majority of the property owners
associations of the resorts within the Bluegreen Vacation Club. In connection with Bluegreens management services provided to the Bluegreen Vacation Club, Bluegreen manages the club reservation system, provide services to owners, and perform
billing and collections services.

Revenues generated by other fee-based services were $18.9 million and $17.3 million during the three months
ended June 30, 2012 and 2011, respectively. Revenues generated by other fee-based services were $37.7 million and $34.5 million during the six months ended June 30, 2012 and 2011, respectively. Revenues related to other fee-based services
increased in the 2012 periods as Bluegreen provided services to more VOI owners, earned additional fees on new owner programs, and generated higher title revenues on increased sales volumes during the 2012 periods.

Bluegreen intends to continue to pursue its efforts to provide Bluegreens management and title services to resort developers and others, on a
cash-fee basis. While Bluegreens efforts to do so may not be successful, Bluegreen hopes that this will become an increasing portion of its business over time.

Cost of Other Fee-Based Services. Cost of other fee-based services was $10.2 million and $9.2 million during the three months ended June 30, 2012 and 2011, respectively, and $19.8 million and
$18.2 million during the six months ended June 30, 2012 and 2011, respectively. The increases were due to the additional service volume described above.

Interest Income and Interest Expense.The following table details the sources of interest income and interest expense (in thousands):



|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|------------------------------- |  | ----------------------------------- | ------ |  | -------------------------------- |  | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                                |  | For the Three 
MonthsEnded June 30, |        |  | For the Six MonthsEnded
June 30, | 
|                                |  | 2012                                |        |  | 2011                             |  |        | 2012 |  |  | 2011   | 
|Interest Income:                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|VOI Notes receivable            |  | $                                   | 20,734 |  |                                  |  | 21,810 |      |  |  | 41,791 |  |  |  | 44,063 | 
|Other                           |  |                                     | 179    |  |                                  |  | 164    |      |  |  | 286    |  |  |  | 344    | 
|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|Total interest income           |  |                                     | 20,913 |  |                                  |  | 21,974 |      |  |  | 42,077 |  |  |  | 44,407 | 
|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|Interest Expense:               |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|Receivable-backed notes payable |  |                                     | 8,398  |  |                                  |  | 9,529  |      |  |  | 17,083 |  |  |  | 19,526 | 
|Other                           |  |                                     | 2,852  |  |                                  |  | 4,844  |      |  |  | 5,913  |  |  |  | 10,010 | 
|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|Total interest expense          |  |                                     | 11,250 |  |                                  |  | 14,373 |      |  |  | 22,996 |  |  |  | 29,536 | 
|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 
|Net interest spread             |  | $                                   | 9,663  |  |                                  |  | 7,601  |      |  |  | 19,081 |  |  |  | 14,871 | 
|                                |  |                                     |        |  |                                  |  |        |      |  |  |        |  |  |  |        | 

Interest Income.Interest income was $20.9 million and $22.0 million during the three months ended
June 30, 2012 and 2011, respectively and $42.1 million and $44.4 million during the six months ended June 30, 2012 and 2011, respectively. The decrease in interest income during 2012 periods compared to the same periods of 2011 was a
result of the continued decrease in Bluegreens VOI notes receivable portfolio, which in turn was due to both the maturing of the portfolio as well as Bluegreens efforts to increase cash sales and collect higher down payments on those VOI
sales that Bluegreen does finance. Bluegreen expects that its notes receivable portfolio will continue to decrease in the near term due to these factors.

Interest Expense. Interest expense on receivable-backed notes payable was $8.4 million and $9.5 million during the three months ended June, 2012 and 2011, respectively and $17.1 million and
$19.5 million during the six months ended June 30, 2012 and 2011, respectively. Interest expense decreased in 2012 compared to 2011 due to lower average outstanding debt balances during 2012 as a result of debt repayments.



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Bluegreens other interest expense, which is mainly comprised of interest on lines of credit and
notes payable and its junior subordinated debentures, was $2.9 million and $4.8 million during the three months ended June 30, 2012 and 2011, respectively and $5.9 million and $10.0 million during the six months ended June 30, 2012 and
2011, respectively. Other interest expense decreased in 2012 compared to 2011 primarily due to lower average outstanding debt balances during 2012 as a result of debt repayments.

Bluegreens effective cost of borrowing was 7.59 % and 7.64% during the six months ended June 30, 2012 and 2011, respectively.

Mortgage Servicing Operations.Bluegreens mortgage servicing operations includes processing payments and collection of notes receivable owned by Bluegreen and by third parties. In
addition, Bluegreens mortgage servicing operations facilitate the monetization of its VOI notes receivable through Bluegreens various credit facilities and includes monthly reporting activities for its lenders, receivable investors and
third parties whose loans Bluegreen services.

Bluegreen earns loan servicing fees from securitization and securitization-type transactions as
well as from providing loan servicing to third-party developers. Mortgage servicing fees earned by Bluegreen for providing mortgage servicing to its consolidated special purpose finance entities are reported as a component of interest income.

In 2010, Bluegreen began earning servicing fee income for servicing the loan portfolios of certain third-parties. Bluegreens servicing
fee income was approximately $0.2 million and $0.1 million during the three months ended June 30, 2012 and 2011, respectively and $0.4 million and $0.2 million during the six months ended June 30, 2012 and 2011, respectively. As of
June 30, 2012, the total principal amount of notes receivable serviced by Bluegreen under these arrangements was $56.2 million.

The cost
of Bluegreens mortgage servicing operations was $1.2 and $1.3 million during each of the three month periods ended June 30, 2012 and 2011, respectively, and $2.5 million during both the six months ended June 30, 2012 and 2011.

Corporate General and Administrative Expenses. Bluegreens corporate general and administrative expenses consist primarily of expenses
associated with administering the various support functions at its corporate headquarters to support Bluegreens business operations, including accounting, human resources, information technology, treasury, and legal. In addition, changes in
both its self-insurance liability and accrued payroll between reporting periods for the entire company are recorded as corporate general and administrative expense.

Corporate general and administrative expenses were $11.7 million and $9.1 million during the three months ended June 30, 2012 and 2011, respectively and $25.2 million and $19.7 million during the six
months ended June 30, 2012 and 2011, respectively. The increase in the 2012 periods compared to the same periods in 2011 primarily reflects increased employee healthcare costs and higher spending on information technology during the 2012
periods.

For a discussion of field selling, general and administrative expenses, see discussion above.

Other Income/Expense, Net.Other expense, net, was $1.2 million for the three months ended June 30, 2011. Other income, net, was
insignificant for the three months ended June 30, 2012. Other income, net, was $0.4 million for the six months ended June 30, 2012 as compared to other expense, net, of $0.9 million during the same period of 2012. The amount for each 2011
period includes a charge of $1.2 million due to an unfavorable outcome related to a disputed deposit on an acquisition attempted in 2005.

Non-controlling Interest in Income of Consolidated Subsidiary. Bluegreen includes the results of operations and financial position of Bluegreen/Big Cedar Vacations, LLC (the
Subsidiary), its 51%-owned subsidiary, in Bluegreens condensed consolidated financial statements. The non-controlling interests in income of consolidated subsidiary is the portion of Bluegreens consolidated pre-tax income
that is attributable to Big Cedar, LLC, the unaffiliated 49% interest holder in the Subsidiary. Non-controlling interests in income of consolidated subsidiary was $2.6 million and $2.0 million for the three months ended June 30, 2012 and 2011,
respectively and $6.2 million and $3.7 million for the six months ended June 30, 2012 and 2011, respectively.



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Provision for Income Taxes.Bluegreens effective income tax rate related to its
continuing operations was approximately 40% and 39% during the six months ended June 30, 2012 and 2011, respectively. Bluegreens quarterly effective income tax rates are based upon its current estimated annual rate. Bluegreens
annual effective income tax rate varies based upon its taxable earnings as well as on Bluegreens mix of taxable earnings in the various states in which Bluegreen operates.

Discontinued Operations.On May 4, 2012, Bluegreen sold substantially all of the assets that comprised Bluegreen Communities to Southstar for a purchase price of $29.0 million in
cash. Southstar also agreed to pay an amount equal to 20% of the net proceeds (as calculated in accordance with the terms of the agreement), if any, it receives upon its sale of two specified parcels of real estate purchased by Southstar under the
agreement. Bluegreen Communities notes receivable were excluded from the assets sold. The operating results of Bluegreen Communities are presented as a discontinued operation for all periods in our Condensed Consolidated Statements of Income
and Comprehensive Income. See Note 3 to our Consolidated Financial Statements for additional information.

Below are the results of
discontinued operations for the three and six months ended June 30, 2012 and 2011 (in thousands):



|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|----------------------------------------------- |  | ---------------------------------- | ------ | - | --------------------------------- |  | ------- | ---- |  |  | ------ | - |  |  | ------- | -
|                                                |  | For the Three Months EndedJune 30, |        |   | For the Six Months 
EndedJune 30, | 
|                                                |  | 2012                               |        |   | 2011                              |  |         | 2012 |  |  | 2011   |  
|Revenues                                        |  | $                                  | 1,017  |   |                                   |  | 4,170   |      |  |  | 3,815  |   |  |  | 9,893   |  
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|                                                |  |                                    | 1,017  |   |                                   |  | 4,170   |      |  |  | 3,815  |   |  |  | 9,893   |  
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|Cost and Expenses:                              |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|Cost of discontinued operations                 |  |                                    | 3,053  |   |                                   |  | 4,271   |      |  |  | 5,717  |   |  |  | 10,169  |  
|(Gain) loss on assets held for sale             |  |                                    | (59    | ) |                                   |  | 52,733  |      |  |  | 205    |   |  |  | 52,733  |  
|Interest expense                                |  |                                    | 744    |   |                                   |  | 772     |      |  |  | 1,386  |   |  |  | 1,532   |  
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|                                                |  |                                    | 3,738  |   |                                   |  | 57,776  |      |  |  | 7,308  |   |  |  | 64,434  |  
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|Loss from discontinued operations, before taxes |  |                                    | (2,721 | ) |                                   |  | (53,606 | )    |  |  | (3,493 | ) |  |  | (54,541 | )
|Benefit for income taxes                        |  |                                    | 1,328  |   |                                   |  | 20,634  |      |  |  | 1,797  |   |  |  | 20,986  |  
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  
|Loss from discontinued operations, net          |  | $                                  | (1,393 | ) |                                   |  | (32,972 | )    |  |  | (1,696 | ) |  |  | (33,555 | )
|                                                |  |                                    |        |   |                                   |  |         |      |  |  |        |   |  |  |         |  

Revenues of discontinued operations, which primarily consist of sales of homesites, were $1.0 million and $4.2 million
during the three months ended June 30, 2012 and 2011, respectively and $3.8 million and $9.9 million during the six months ended June 30, 2012 and 2011, respectively. Revenues during the six months June 30, 2011 period were favorably
impacted from the recognition of $1.2 million of sales previously deferred under the percentage of completion method of accounting.

Cost of
discontinued operations was $3.1 million and $4.3 million for the three months ended June 30, 2012 and 2011, respectively and $5.7 million and $10.2 million for the six months ended June 30, 2012 and 2011, respectively. Cost of
discontinued operations primarily consists of cost of sales of real estate, expenses associated with the operation of two golf courses, selling and marketing expenses, and general and administrative expenses.

Loss on assets held for sale during the three and six months ended June 30, 2011 primarily consisted of a non-cash charge of $52.7 million to write
down the carrying value of the assets held for sale to the fair value less cost to sell. The fair value of the assets held for sale was derived from the sale price under the agreement with Southstar and therefore we did not incur a significant gain
or loss upon the closing of the sale transaction in May 2012.

Discontinued operations also include interest expense on notes payable which
were collateralized by certain



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Bluegreen Communities inventory and property and equipment as such debt was required to be repaid upon the sale of the related assets. Interest expense was $0.7 million and $0.8 million during
the three months ended June 30, 2012 and 2011, respectively, and $1.4 million and $1.5 million during the six months ended June 30, 2012 and 2011, respectively.

Bluegreens Liquidity and Capital Resources

Changes in Financial Condition

The following table summarizes Bluegreens cash flows for the six months ended June 30, 2012 and 2011 (in thousands):



|                                                      |  |                                   |          |   |      |  |         |  
|----------------------------------------------------- |  | --------------------------------- | -------- | - | ---- |  | ------- | -
|                                                      |  | For the Six Months Ended June 30, |         
|                                                      |  | 2012                              |          |   | 2011 | 
|Cash flows provided by operating activities           |  | $                                 | 64,350   |   |      |  | 77,759  |  
|Cash flows provided by (used in) investing activities |  |                                   | 25,478   |   |      |  | (2,158  | )
|Cash flows used in financing activities               |  |                                   | (105,254 | ) |      |  | (80,565 | )
|                                                      |  |                                   |          |   |      |  |         |  
|Net increase in cash and cash equivalents             |  | $                                 | (15,426  | ) |      |  | (4,964  | )
|                                                      |  |                                   |          |   |      |  |         |  

Cash Flows from Operating Activities. Bluegreen generated $64.4 million of cash from its operating
activities during the six months ended June 30, 2012, as compared to $77.8 million of cash generated during the same period in 2011. The decrease in cash from operating activities during the 2012 period as compared to the same period in 2011
reflects approximately $5.0 million higher VOI construction and development spending at its Bluegreen/Big Cedar Joint Venture and lower cash received from notes receivable due to the decreasing balance of the portfolio. Additionally, cash from
operating activities in the first quarter of 2011 benefited from an income tax refund of approximately $2.5 million.

Cash Flows from
Investing Activities. Bluegreen generated $25.5 million of cash in its investing activities during the six months ended June 30, 2012, as compared to $2.2 million of cash used during the same period in 2011. The cash generated by
Bluegreens investing activities during the 2012 period includes the $27.8 million net proceeds received from the sale of Bluegreen Communities, the majority of which was used to repay the H4BG Communities Facility (see Cash Flows from
Financing Activities).

Cash Flows from Financing Activities. Bluegreen used $105.3 million of cash in its financing
activities during the six months ended June 30, 2012, as compared to $80.6 million of cash used during the same period of 2011. Bluegreen used more cash from financing activities in the 2012 period as it repaid in full both the H4BG Communities
Facility, which became due and payable upon the sale of the Communities, and the Wells Fargo Term Loan. Also, cash distributions made to the non-controlling member of the Bluegreen/Big Cedar Joint Venture during the 2012 period exceeded the amount
of the distribution in the 2011 period. For additional information on the availability of cash from our existing credit facilities as well as our repayment obligations, see Liquidity and Capital Resources below.

Liquidity and Capital Resources

Bluegreens primary sources of funds from internal operations are: (i) cash sales, (ii) down payments on VOI sales which are financed,
(iii) proceeds from the sale of, or borrowings collateralized by, notes receivable, including cash received from Bluegreens residual interests in such transactions, (iv) cash from Bluegreens finance operations, including
mortgage servicing fees and principal and interest payments received on the purchase money mortgage loans arising from sales of VOIs, and (v) net cash generated from Bluegreens sales and marketing fee-based services and other resort
fee-based services, including Bluegreens resort management operations.

During the six months ended June 30, 2012, including down
payments received on financed sales, 59% of Bluegreens VOI sales were paid in cash within approximately 30 days from the contract date. Bluegreen believes that the amount of cash received within 30 days is a result of (i) incentives paid
to its sales associates for generating cash sales volume, and (ii) point-of-sale credit card programs provided by third parties for Bluegreens customers. Should such programs change or be eliminated, or other factors occur which would
cause cash sales to be less attractive or desirable to purchasers Bluegreens percentage of cash sales could decrease significantly.



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While the vacation ownership business has historically been capital intensive, Bluegreens
principal goal in the current environment has been to emphasize the generation of free cash flow (defined as cash flow from operating and investing activities) by (i) incentivizing Bluegreen sales associates and creating programs
with third-party credit card companies to generate higher percentages of Bluegreen sales in cash compared to historical levels, as discussed above; (ii) maintaining sales volumes that allow Bluegreen to focus on what it believes to be the most
efficient marketing channels available to Bluegreen; (iii) minimizing capital and inventory expenditures; and (iv) utilizing Bluegreens sales and marketing, mortgage servicing, resort management services, title and construction
expertise to pursue fee-based-service business relationships that require minimal up-front capital investment and have the potential to produce strong cash flows for Bluegreen. Bluegreens free cash flow generated from collections on its note
receivable portfolio is expected to decrease as the portfolio decreases. However, while there is no assurance it will be the case, we also expect that our cash used in financing activities, specifically required repayments on receivable-backed debt,
will also decrease.

Historically, Bluegreens business model has depended on the availability of credit in the commercial markets. VOI
sales are generally dependent upon Bluegreen providing financing to its buyers. Bluegreens ability to sell and/or borrow against its notes receivable from VOI buyers has been a critical factor in Bluegreens continued liquidity. When
Bluegreen sells VOIs, a financed buyer is only required to pay a minimum of 10% to 20% of the purchase price in cash at the time of sale; however, selling, marketing, and administrative expenses attributable to the sale are primarily cash expenses
that generally exceed the buyers minimum required down-payment. Accordingly, having financing facilities available for the hypothecation, sale, or transfer of these VOI receivables has been a critical factor in Bluegreens ability to meet
its short and long-term cash needs. Bluegreen has attempted to diversify its sources of such financing facilities. Historically, Bluegreen has relied on its ability to sell receivables in the term securitization market in order to generate liquidity
and create capacity in its receivable facilities. In addition, maintaining adequate VOI inventory to sell and pursue growth into new markets has historically required Bluegreen to incur debt for the acquisition, construction and development of new
resorts. Although Bluegreen expects to continue to develop VOIs at its Bluegreen/Big Cedar Joint Venture in the near-term, Bluegreen believes that in general Bluegreen currently has adequate completed VOIs in inventory to satisfy its needs for the
next few years. Accordingly, except for development at the Bluegreen/Big Cedar Joint Venture, Bluegreen expects acquisition and development expenditures to remain at current levels in the near term. However, if the opportunity to acquire a strategic
property on favorable terms presents itself, Bluegreen may decide to acquire or develop more inventory in the future which would increase its acquisition and development expenditures and may require Bluegreen to incur additional debt. Bluegreen
currently expects development expenditures for the second half of 2012 to be in a range of approximately $10.0 million to $15.0 million, with the majority of spending related to the Bluegreen/Big Cedar Joint Venture.

In addition, in connection with Bluegreens POA Sales and initiatives to pursue other potential just in time inventory purchases as part
of its fee-based service activities, Bluegreen may acquire inventory from time to time in the future. Although there is no assurance, such acquisitions are not expected to materially adversely impact Bluegreens balance sheet or cash flows.

Bluegreen may seek to raise additional debt or equity financing in the future to fund operations or repay outstanding debt, however, such
financing may not be available to us on favorable terms or at all. If Bluegreens efforts are unsuccessful, its liquidity would be significantly adversely impacted. Further, Bluegreen may not issue additional shares of its common stock under
the terms of Bluegreens agreement with BFC.

Bluegreens levels of debt and debt service requirements have several important
effects on its operations, including the following: (i) its significant debt service cash requirements reduce the funds available for operations and future business opportunities and increases its vulnerability to adverse economic and industry
conditions, as well as conditions in the credit markets, generally; (ii) its leverage position increases its vulnerability to economic and competitive pressures; (iii) the financial covenants and other restrictions contained in indentures,
credit agreements and other agreements relating to its indebtedness requires Bluegreen to meet certain financial tests and restricts its ability to, among other things, borrow additional funds, dispose of assets or make investments; and
(iv) its leverage position may limit funds available for working capital, capital expenditures, acquisitions and general corporate purposes. In addition, certain of Bluegreen financing arrangements limit its ability in the near term to pay cash
dividends on its common stock and repurchase shares. Bluegreens financing arrangements may be also impacted by its pending merger with BFC. Certain of Bluegreens competitors operate on a less leveraged basis and have greater operating
and financial flexibility than Bluegreen does.



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Credit Facilities

The following is a discussion of Bluegreens material purchase and credit facilities, including those that were important sources of Bluegreens liquidity as of June 30, 2012. These
facilities do not constitute all of Bluegreens outstanding indebtedness as of June 30, 2012. Bluegreens other indebtedness includes outstanding junior subordinated debentures and borrowings collateralized by real estate inventories
that were not incurred pursuant to a significant credit facility.

Credit Facilities for Bluegreen Receivables with Future Availability

Bluegreen maintain various credit facilities with financial institutions that provide receivable financing for its operations.
Bluegreen had the following credit facilities with future availability as of June 30, 2012 (in thousands):



|                                 |  |                |         |  |                                      |  |        |                               |  |  |                                            |  |                                        |                               |  |                             
|-------------------------------- |  | -------------- | ------- |  | ------------------------------------ |  | ------ | ----------------------------- |  |  | ------------------------------------------ |  | -------------------------------------- | ----------------------------- |  | ----------------------------
|                                 |  | BorrowingLimit |         |  | OutstandingBalance asof
June 30,2012 |  |        | Availabilityas ofJune 30,2012 |  |  | Advance
PeriodExpiration;BorrowingMaturity |  | BorrowingRate; Rate as ofJune 30, 2012
|BB&T Purchase Facility(1)        |  | $              | 50,000  |  |                                      |  | 39,400 |                               |  |  | 10,600                                     |  |                                        | December 2012;December 2015   |  | 30 day LIBOR+3.50%; 4.75%(3)
|2011 Liberty Bank Facility(1)(2) |  |                | 60,000  |  |                                      |  | 9,598  |                               |  |  | 19,213                                     |  |                                        | February 2013;February 2016   |  | Prime
Rate+2.25%; 6.50%(4)  
|CapitalSource Facility(1)        |  |                | 30,000  |  |                                      |  | 9,157  |                               |  |  | 20,843                                     |  |                                        | September 2013;September 2016 |  | 30
dayLIBOR+5.75%;6.50%(5)  
|Quorum Purchase Facility(1)      |  |                | 25,000  |  |                                      |  | 11,710 |                               |  |  | 13,290                                     |  |                                        | March 2013;December 2030      |  | 8.0%; 6.5%(6)               
|                                 |  |                |         |  |                                      |  |        |                               |  |  |                                            |  |                                        |                               |  |                             
|                                 |  | $              | 165,000 |  |                                      |  | 69,865 |                               |  |  | 63,946                                     |  |                                        |                               |  |                             
|                                 |  |                |         |  |                                      |  |        |                               |  |  |                                            |  |                                        |                               |  |                             



|(1) | Facility is revolving during the advance period, providing additional availability as the facility is paid down, subject to eligible collateral and applicable terms and
conditions.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | In February 2011, Bluegreen entered into a new revolving hypothecation facility with certain existing participants in the Liberty-led syndicate. Availability under the
2011 Liberty Bank Facility is reduced by the amounts outstanding to the extending participants under the 2008 Liberty Bank Facility, as the aggregate amount outstanding to such participants under the 2008 Liberty Bank Facility and the 2011 Liberty
Bank Facility at any point in time cannot exceed $60.0 million. The amount outstanding under the 2008 Liberty Bank Facility to the extending participants was $31.2 million as of June 30, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Interest charged on this facility is subject to a LIBOR floor of 1.25%
|--- | ----------------------------------------------------------------------

|(4) | Interest charged on this facility is subject to a floor of 6.50%.
|--- | -----------------------------------------------------------------

|(5) | Interest charged on this facility is subject to a LIBOR floor of 0.75%.
|--- | -----------------------------------------------------------------------

|(6) | Interest charged on $6.6 million of the outstanding balance as of June 30, 2012 is subject to a fixed rate of 8.0%. Interest charged on $5.1 million of the
outstanding balance as of June 30, 2012 as well as any future advances is subject to a fixed rate of 6.5%.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

BB&T
Purchase Facility. Bluegreen has a timeshare notes receivable purchase facility with Branch Banking and Trust Company (BB&T)(the BB&T Purchase Facility) that allows for maximum outstanding borrowings of $50.0
million on a revolving basis through December 17, 2012. The BB&T Purchase Facility provides for the financing of Bluegreens timeshare receivables at an advance rate of 67.5% during the revolving advance period, subject to the terms of
the facility and eligible collateral. The BB&T Purchase Facility matures three years after the expiration of the revolving advance period (such three-year period, the Term-Out Period), or earlier as provided under the facility. The
interest rate on the BB&T Purchase Facility prior to the commencement of the Term-Out Period is the 30-day LIBOR rate plus 3.5% (4.75% as of June 30, 2012). During the Term-Out Period, the interest rate will be the 30-day LIBOR rate plus
5.5%. The 30-day LIBOR rate is subject to a floor of 1.25%.

Additionally, subject to the terms of the facility, Bluegreen will receive the
excess cash flows generated by the receivables financed under the facility (excess meaning after customary payments of fees, interest and principal under the facility) until the commencement of the Term-Out Period, at which point all of the excess
cash flow will be paid to BB&T until the outstanding balance is paid in full.



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While ownership of the receivables is transferred for legal purposes, the transfers of receivables under
the facility are accounted for as secured borrowings. Accordingly, the receivables are reflected as assets and the associated obligations are reflected as liabilities on our balance sheet. The BB&T Purchase Facility is nonrecourse and is not
guaranteed by Bluegreen.

During the six months ended June 30, 2012, Bluegreen pledged $20.0 million of VOI notes receivable to this
facility and received cash proceeds of $13.5 million. Bluegreen also repaid $2.9 million on the facility.

2011 Liberty Bank Facility.
In February 2011, Bluegreen entered into a $60.0 million revolving hypothecation facility (the 2011 Liberty Bank Facility) with certain participants in our 2008 Liberty Bank Facility. (See Other Outstanding Receivable-Backed Notes
Payable - 2008 Liberty Bank Facility below for information regarding the 2008 Liberty Bank Facility). The 2011 Liberty Bank Facility provides for an 85% advance on eligible receivables pledged under the facility during the two-year period
ending in February 2013, subject to eligible collateral and terms and conditions Bluegreen believes to be customary for transactions of this type. Availability under the 2011 Liberty Bank Facility is reduced by amounts outstanding to certain
syndicate participants under the 2008 Liberty Bank Facility ($31.2 million as of June 30, 2012), but as outstanding amounts on the 2008 Liberty Bank Facility amortize over time, the 2011 Liberty Bank Facility will, subject to its terms, revolve
up to $60.0 million. Principal and interest are repaid as cash is collected on the pledged receivables, with the remaining balance due in February 2016. Indebtedness under the 2011 Liberty Bank Facility bears interest at the Prime Rate plus 2.25%,
subject to a floor of 6.50% (6.50% as of June 30, 2012).

During the six months ended June 30, 2012, Bluegreen received cash
proceeds of $0.4 million in order to adjust its outstanding balance to be consistent with previously pledged collateral. Bluegreen also repaid $1.7 million on the facility during the period.

CapitalSource Facility. On September 20, 2011, Bluegreen entered into a $30.0 million revolving timeshare receivables
hypothecation facility (the CapitalSource Facility) with CapitalSource Bank. The CapitalSource Facility provides for advances on eligible receivables pledged under the facility, subject to specified terms and conditions, during the
two-year revolving credit period ending in September 2013. Eligible A receivables that meet certain eligibility and
FICO® score requirements, which Bluegreen believes are typically consistent with loans originated under our
current credit underwriting standards, are subject to an 80% advance rate. The CapitalSource Facility also allows for certain eligible B receivables (which have less stringent FICO® score requirements) to be funded at a 45% advance rate. Principal repayments and interest are to be paid as cash is collected on the pledged receivables, subject to
future required decreases in the advance rate after the two-year revolving credit period, with the remaining balance being due in September 2016. The CapitalSource Facility bears interest at the 30-day LIBOR plus 5.75%, subject to a LIBOR floor of
0.75% (6.50% as of June 30, 2012).

During the six months ended June 30, 2012, Bluegreen pledged $13.2 million of VOI notes
receivable to this facility and received cash proceeds of $10.6 million. Bluegreen also repaid $1.4 million on the facility during the period.

Quorum Purchase Facility. On March 1, 2012, Bluegreen amended and expanded an existing timeshare notes receivable purchase facility (the
Quorum Purchase Facility) with Quorum Federal Credit Union (Quorum). Pursuant to the terms of the amended facility and subject to certain conditions precedent, Quorum agreed to purchase on a revolving basis through
March 31, 2013 eligible timeshare receivables from Bluegreen or certain of its subsidiaries in an amount of up to an aggregate $25.0 million purchase price. The amended terms of the Quorum Purchase Facility include an 83% advance rate and a
program fee rate of 6.5% per annum with respect to any future advances and $5.1 million of the outstanding balance at June 30, 2012 ($6.6 million of the outstanding balance at June 30, 2012 bears interest at a fixed rate of 8.0%).
Eligibility requirements for receivables sold include, among others, that the obligors under the timeshare notes receivable sold be members of Quorum at the time of the note sale. Subject to performance of the collateral, Bluegreen will receive any
excess cash flows generated by the receivables transferred to Quorum under the facility (excess meaning after customary payments of fees, interest and principal under the facility on a pro-rata basis as borrowers make payments on their timeshare
loans).

While ownership of the receivables is transferred for legal purposes, the transfers of receivables under the facility are accounted
for as secured borrowings. Accordingly, the receivables are reflected as assets and the associated obligations are reflected as liabilities on our balance sheet. The Quorum Purchase Facility is non-recourse and is not guaranteed by Bluegreen.



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During the six months ended June 30, 2012, Bluegreen pledged $6.4 million of VOI notes receivable
to this facility and received cash proceeds of $5.3 million. Bluegreen also repaid $1.1 million on the facility.

Other Outstanding
Receivable-Backed Notes Payable

Bluegreen has outstanding obligations under various receivable-backed credit facilities and
securitizations that have no remaining future availability. Information regarding these facilities and securitizations is set forth in the table below (dollars in thousands):



|                                                   |  |                                       |         |  |                   |                                 |                                         |                             
|-------------------------------------------------- |  | ------------------------------------- | ------- |  | ----------------- | ------------------------------- | --------------------------------------- | ----------------------------
|                                                   |  | OutstandingBalance as ofJune 30, 2012 |         |  | BorrowingMaturity |                                 | Borrowing Rate; Rate asof
June 30, 2012
|2008 Liberty Bank Facility                         |  | $                                     | 42,530  |  |                   | August 2014                     |                                         | Prime + 2.25%;6.50%
(1)     
|NBA Receivables Facility                           |  |                                       | 13,457  |  |                   | September 2017,October 2018 (2) |                                         | 30 day LIBOR+5.25%;6.75%
(3)
|GE Bluegreen/Big Cedar Facility                    |  |                                       | 11,438  |  |                   | April 2016                      |                                         | 30 dayLIBOR+1.75%;2.00%     
|Legacy Securitization (4)                          |  |                                       | 12,879  |  |                   | September 2025                  |                                         | 12.00%                      
|Other Non-Recourse Receivable-Backed Notes Payable |  |                                       | 288,468 |  |                   | December 2015 March 2026       |                                         | 5.27%-7.88%                 
|                                                   |  |                                       |         |  |                   |                                 |                                         |                             
|                                                   |  | $                                     | 368,772 |  |                   |                                 |                                         |                             
|                                                   |  |                                       |         |  |                   |                                 |                                         |                             



|(1) | Interest charged on this facility is subject to a floor of 6.50%
|--- | ----------------------------------------------------------------

|(2) | $8.5 million of the amount outstanding as of June 30, 2012 matures on September 30, 2017, and $5.0 million matures on October 31, 2018.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------

|(3) | Interest charged on this facility is subject to a floor of 6.75%.
|--- | -----------------------------------------------------------------

|(4) | Legacy Securitization debt bears interest at a coupon rate of 12% and was issued at a discount resulting in an effective yield of 18.5%. The associated debt balance is
presented net of the discount of $1.5 million.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

2008 Liberty Bank Facility. Bluegreen has an outstanding revolving
timeshare receivables hypothecation facility with a syndicate of lenders led by Liberty Bank and assembled by Wellington Financial (2008 Liberty Bank Facility). Amounts borrowed under the facility and incurred interest are repaid as cash
is collected on the pledged receivables. The advance period under the 2008 Liberty Bank Facility has expired pursuant to the terms of the facility. All outstanding borrowings are scheduled to mature no later than August 27, 2014. Indebtedness
under the 2008 Liberty Bank Facility bears interest at the Prime Rate plus 2.25%, subject to a floor of 6.50% (6.50% as of June 30, 2012). During the six months ended June 30, 2012, Bluegreen repaid $7.2 million on the facility.

NBA Receivables Facility. The Bluegreen/Big Cedar Joint Venture has an outstanding timeshare notes receivable hypothecation facility
with the National Bank of Arizona (NBA). Bluegreen Corporation has guaranteed the full payment and performance of the Bluegreen/Big Cedar Joint Venture in connection with this facility. During the six months ended June 30, 2012,
Bluegreen repaid $3.3 million on the facility. The advance period under the facility has expired and $8.5 million of the amount outstanding as of June 30, 2012 matures on September 30, 2017, and $5.0 million matures on October 31,
2018. Indebtedness under the NBA Facility bears interest at 30-day LIBOR rate plus 5.75% (6.75% as of June 30, 2012).



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GE Bluegreen/Big Cedar Receivables Facility. The Bluegreen/Big Cedar Joint Venture has an
outstanding VOI receivables credit facility with GE (the GE Bluegreen/Big Cedar Receivables Facility). Bluegreen Corporation has guaranteed the full payment and performance of the Bluegreen/Big Cedar Joint Venture in connection with the
GE Bluegreen/Big Cedar Receivables Facility. The advance period under this facility has expired, and all outstanding borrowings are scheduled to mature no later than April 16, 2016. All principal and interest payments received on pledged
receivables are applied to principal and interest due under the facility. Indebtedness under the facility bears interest adjusted monthly at a rate equal to the 30-day LIBOR rate plus 1.75% (2.00% as of June 30, 2012). During the six months
ended June 30, 2012, Bluegreen repaid $4.1 million on the facility.

Legacy Securitization. In September 2010,
Bluegreen completed a securitization transaction of the lowest FICO®-score loans previously financed in the
BB&T Purchase Facility discussed above. Substantially all of the timeshare receivables included in this transaction were generated prior to December 15, 2008, the date that we implemented our FICO® score-based credit underwriting program, and had FICO® scores below 600.

While ownership of the timeshare
receivables included in the Legacy Securitization is transferred and sold for legal purposes, the transfer of these timeshare receivables is accounted for as a secured borrowing.

Bluegreen guaranteed the principal payments for defaulted vacation ownership loans in the Legacy Securitization at amounts equal to the then-current advance rate inherent in the notes, any shortfalls in
monthly interest distributions to the Legacy Securitization investors and any shortfall in the ultimate principal payment on the notes upon their stated maturity in September 2025. Indebtedness under the facility bears interest at a coupon rate of
12% and was issued at a discount resulting in an effective yield of 18.5%. During the six months ended June 30, 2012, Bluegreen repaid $3.3 million on the facility.

Other Non-Recourse Receivable-Backed Notes Payable. In addition to the above described facilities, Bluegreen has other non-recourse securitization debt outstanding. While the ownership of VOI
receivables under these securitizations was transferred for legal purposes, these transfers have been accounted for as secured borrowings since January 1, 2010 and therefore are included on Bluegreens balance sheet. Under these
arrangements, the principal and interest payments received from obligors on the receivables sold are generally applied monthly to make interest and principal payments to investors, to pay fees to service providers, and to fund required reserves, if
any, with the remaining balance of such cash retained by Bluegreen. During the six months ended June 30, 2012, Bluegreen repaid $44.5 million under these facilities.

Credit Facilities for Bluegreen Inventories without Existing Future Availability

Bluegreen
has outstanding obligations under various credit facilities and other notes payable collateralized by Bluegreens inventories. As of June 30, 2012, these included the following significant items (dollars in thousands):



|                                        |  |                                       |        |  |                       |                        |                                         |                         
|--------------------------------------- |  | ------------------------------------- | ------ |  | --------------------- | ---------------------- | --------------------------------------- | ------------------------
|                                        |  | OutstandingBalance as ofJune 30, 2012 |        |  | BorrowingMaturity (1) |                        | Borrowing Rate; Rateas of June 30,
2012
|RFA AD&C Facility                       |  | $                                     | 14,808 |  |                       | December 2012          |                                         | 10.00%                  
|Foundation Capital                      |  |                                       | 9,474  |  |                       | October 2015           |                                         | 8.00% (2); 8.00%        
|Textron AD&C Facility                   |  |                                       | 2,945  |  |                       | April 2013             |                                         | Prime + 1.50%; 4.75%    
|Fifth Third Bank Note Payable           |  |                                       | 2,814  |  |                       | April 2023             |                                         | 30-day LIBOR+3.00%;3.25%
|Other Lines-of-Credit and Notes Payable |  |                                       | 2,495  |  |                       | June 2013 - March 2023 |                                         | 5.00%-6.00%             
|                                        |  |                                       |        |  |                       |                        |                                         |                         
|                                        |  | $                                     | 32,536 |  |                       |                        |                                         |                         
|                                        |  |                                       |        |  |                       |                        |                                         |                         



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|(1) | Repayment of the outstanding amount is effected through release payments as the related collateral is sold, subject to periodic minimum required amortization between
June 30, 2012 and maturity.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The borrowing rate under this facility is fixed at 8% through October 2013 and changes thereafter to Prime Rate plus 4.75% or the lender specified rate, not to exceed
9%.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

RFA AD&C Facility. This facility was used to finance the acquisition and development of
certain of Bluegreens resorts and currently has one outstanding project loan, which is primarily collateralized by our Bluegreen Club 36TMresort in Las Vegas, Nevada (the Club 36 Loan). Principal payments are effected through agreed-upon
release prices as timeshare interests in the Club 36 resort that serve as collateral under the facility are sold, subject to periodic minimum required amortization.

On March 30, 2012, the Club 36 Loan was amended to extend the maturity date from June 30, 2012 to December 31, 2012 and to grant Bluegreen an option, subject to certain provisions and the
payment of certain additional fees, to further extend the maturity date of the Club 36 Loan until June 30, 2013 with respect to approximately $9.1 million of the amounts outstanding under the facility. The amendment also changed the interest
rate under the Club 36 Loan from LIBOR plus 4.5% to a fixed rate of 10%.

During the six months ended June 30, 2012, Bluegreen repaid
$6.8 million of the outstanding balance under this facility.

Foundation Capital. In 2010, in two separate transactions, Bluegreen Big
Cedar Joint Venture acquired Paradise Point Resort and a 109-acre development parcel, both located in close proximity to the Bluegreen/Big Cedar Joint Ventures existing Wilderness Club at Big Cedar. A portion of each of the acquisitions was
financed with a separate note payable to Foundation Capital Resources, Inc (Foundation Capital), with notes totaling $13.2 million. The real estate property acquired in connection with these transactions serves as collateral on the notes
payable. Both notes payable to Foundation Capital have maturities of five years (the note underlying the 109-acre parcel purchase has a two-year extension provision subject to certain conditions) and bear interest at a rate of 8% for three years,
which then adjusts to the lower of Prime plus 4.75% or the lender specified rate, not to exceed 9%. Repayments of the notes will be based upon release payments from future sales of VOIs located on the underlying properties, subject to minimum
payments stipulated in the agreements. During the six months ended June 30, 2012, Bluegreen Big Cedar Joint Venture repaid $3.4 million of the outstanding balance.

Textron AD&C Facility. Bluegreen has a master acquisition, development and construction facility loan agreement (the Textron AD&C Facility) with Textron Financial Corporation
(Textron). The Textron AD&C Facility was used to facilitate the borrowing of funds for resort acquisition and development activities. Interest on the Textron AD&C Facility is equal to the Prime Rate plus 1.50% (4.75% as of
June 30, 2012) and is due monthly. The advance period under the Textron AD&C Facility has expired.

The outstanding balance under the
Textron AD&C facility as June 30, 2012 of $2.9 million relates to the sub-loan used for the acquisition of Bluegreens Atlantic Palace Resort in Atlantic City, New Jersey (the Atlantic Palace Sub-Loan). Bluegreen pays
Textron principal payments as it sells timeshare interests that collateralize the Atlantic Palace Sub-Loan, subject to periodic minimum required principal amortization. The final maturity of outstanding borrowings under the Atlantic Palace Sub-Loan
is April 2013. During the six months ended June 30, 2012, Bluegreen repaid $0.9 million of the outstanding balance under the facility.

Fifth Third Bank Note Payable. In April 2008, Bluegreen purchased a building in Myrtle Beach, South Carolina. The purchase price was $4.8 million,
of which $3.4 million was financed by a note payable to Fifth Third Bank. Principal and interest on amounts outstanding under the note are payable monthly through maturity in April 2023. The interest rate under the note equals the 30-day LIBOR plus
3.00% (3.25% as of June 30, 2012). Repayments of the outstanding balance during the six months ended June 30, 2012 were not material.

Commitments

Bluegreens material commitments as of June 30, 2012 included
the required payments due on Bluegreens receivable-backed debt, lines-of-credit and other notes payable, commitments to complete its projects based on Bluegreens sales contracts with customers and commitments under non-cancelable
operating leases.



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The following table summarizes the contractual minimum principal and interest payments, net of
unamortized discount, required on all of Bluegreens outstanding debt (including our receivable-backed debt, lines-of-credit and other notes and debentures payable) and Bluegreens non-cancelable operating leases by period date, as of
June 30, 2012 (in thousands):



|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 
|----------------------------------- |  | ---------------------- | ------ |  | ---------- |  | ------- | ---------- |  |  | ------------ |  |  | ----------------------------- | ------- |  | ----- |  | ------- | - |  |  | ------- | 
|                                    |  | Payments Due by Period |       
|Contractual Obligations             |  | Lessthan1 year         |        |  | 1  3Years |  |         | 4  5Years |  |  | After 5Years |  |  | PurchaseAccountingAdjustments |         |  | Total | 
|Receivable-backed notes payable (1) |  | $                      |       |  |            |  | 48,047  |            |  |  | 84,358       |  |  |                               | 306,232 |  |       |  | (742    | ) |  |  | 437,895 | 
|Lines-of-credit and notes payable   |  |                        | 20,277 |  |            |  | 1,668   |            |  |  | 8,910        |  |  |                               | 1,681   |  |       |  | (252    | ) |  |  | 32,284  | 
|Jr. subordinated debentures         |  |                        |       |  |            |  |        |            |  |  |             |  |  |                               | 110,827 |  |       |  | (52,275 | ) |  |  | 58,552  | 
|Noncancelable operating leases      |  |                        | 5,884  |  |            |  | 11,131  |            |  |  | 10,920       |  |  |                               | 19,585  |  |       |  | 1,484   |   |  |  | 49,004  | 
|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 
|Total contractual obligations       |  |                        | 26,161 |  |            |  | 60,846  |            |  |  | 104,188      |  |  |                               | 438,325 |  |       |  | (51,785 | ) |  |  | 577,735 | 
|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 
|                                    |  |                        |        |  |            | 
|Interest Obligations (2)            |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       | 
|Receivable-backed notes payable     |  |                        | 28,925 |  |            |  | 56,094  |            |  |  | 46,369       |  |  |                               | 122,240 |  |       |  |        |   |  |  | 253,628 | 
|Lines-of-credit and notes payable   |  |                        | 2,001  |  |            |  | 2,109   |            |  |  | 517          |  |  |                               | 319     |  |       |  |        |   |  |  | 4,946   | 
|Jr. subordinated debentures         |  |                        | 5,886  |  |            |  | 11,772  |            |  |  | 11,772       |  |  |                               | 109,636 |  |       |  |        |   |  |  | 139,066 | 
|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 
|Total contractual interest          |  |                        | 36,812 |  |            |  | 69,975  |            |  |  | 58,658       |  |  |                               | 232,195 |  |       |  |        |   |  |  | 397,640 | 
|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 
|Total contractual obligations       |  | $                      | 62,973 |  |            |  | 130,821 |            |  |  | 162,846      |  |  |                               | 670,520 |  |       |  | (51,785 | ) |  |  | 975,375 | 
|                                    |  |                        |        |  |            |  |         |            |  |  |              |  |  |                               |         |  |       |  |         |   |  |  |         | 



|(1) | Legacy Securitization payments included in the receivable-backed notes payable after 5 years are presented net of a discount of $1.5 million.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Assumes that the scheduled minimum principal payments are made in accordance with the table above and the interest rate on variable rate debt remains the same as the
rate at June 30, 2012.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Bluegreen estimates that the cash required to satisfy Bluegreens development obligations
related to resort buildings and resort amenities is approximately $5.7 million as of June 30, 2012. Bluegreen also estimates that the cash required to satisfy its obligations related to Bluegreen Communities projects is approximately $0.9
million as of June 30, 2012. Bluegreen plans to fund these expenditures over the next three to five years, primarily with cash generated from operations; however, Bluegreen may not be able to generate the cash from operations necessary to
complete these commitments and actual costs may exceed the amounts estimated. Each of the foregoing estimates assumes that Bluegreen is not obligated to develop any building, project or amenity in which a commitment has not been made pursuant to a
sales contract with a customer or other obligations; however, Bluegreen anticipates that it will incur such obligations in the future.

Bluegreen believes that its existing cash, anticipated cash generated from operations, anticipated future permitted borrowings under existing or proposed
credit facilities and anticipated future sales of notes receivable under the purchase facilities and one or more replacement facilities Bluegreen will seek to put in place will be sufficient to meet its anticipated working capital, capital
expenditures and debt service requirements, including the contractual payment of the obligations set forth above, for the foreseeable future, subject to the successful implementation of ongoing strategic initiatives and the ongoing availability of
credit. Bluegreen will continue its efforts to renew, extend or replace any credit and receivables purchase facilities that have expired or that will expire or, in certain



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(Bluegreen)



circumstances, accelerate in the near term. Bluegreen may, in the future, also obtain additional credit facilities and may issue corporate debt or equity securities. Any debt incurred or issued
by Bluegreen may be secured or unsecured, bear interest at fixed or variable rates and may be subject to such terms as the lender may require. In addition, Bluegreens efforts to renew or replace the credit facilities or receivables purchase
facilities which have expired or which are scheduled to expire in the near term may not be successful, and sufficient funds may not be available from operations or under existing, proposed or future revolving credit or other borrowing arrangements
or receivables purchase facilities to meet Bluegreens cash needs, including its debt service obligations. To the extent Bluegreen is not able to sell notes receivable or borrow under such facilities, Bluegreens ability to satisfy its
obligations would be materially adversely affected.

Bluegreens credit facilities, indentures, and other outstanding debt instruments,
and receivables purchase facilities include what Bluegreen believes to be customary conditions to funding, eligibility requirements for collateral, cross-default and other acceleration provisions, certain financial and other affirmative and negative
covenants, including, among others, limits on the incurrence of indebtedness, the repurchase of securities, payment of dividends, investments in joint ventures and other restricted payments, the incurrence of liens, and transactions with affiliates,
as well as covenants concerning net worth, fixed charge coverage requirements, debt-to-equity ratios, portfolio performance requirements, cash balances and events of default or termination. In the future, Bluegreen may be required to seek waivers of
such covenants, and Bluegreen may not be successful in obtaining waivers, and such covenants may limit Bluegreens ability to raise funds, sell receivables, satisfy or refinance our obligations or otherwise adversely affect its operations. In
addition, Bluegreens future operating performance and ability to meet its financial obligations will be subject to future economic conditions and to financial, business and other factors, many of which may be beyond Bluegreens control.

Off-Balance-Sheet Arrangements

As of June 30, 2012, Bluegreen did not have any off-balance sheet arrangements.



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(BBX Capital)



Financial Services

The Companys consolidated financial statements for the three and six months ended June 30, 2012 and 2011 include the results of operations of BBX Capital. On July 31, 2012, BBX Capital
completed the sale of BankAtlantic to BB&T Corporation (BB&T). As a result of the sales process with respect to, and ultimate sale of, BankAtlantic, the financial statements reflect BankAtlantics Community Banking,
Investments, Tax Certificates and Capital Services reporting units as discontinued operations for the three and six months ended June 30, 2012 and 2011. BBX Capitals continuing operations are reported through two reportable segments:
BankAtlantics commercial lending reporting unit and BBX Capital Parent Company. The only assets available to BFC from BBX Capital are dividends when and if paid by BBX Capital. BBX Capital is a separate public company, and its management
prepared the following discussion, which was included in BBX Capitals Quarterly Report on Form 10-Q for the quarter ended June 30, 2012. Accordingly, references to the Company, we, us or our
in the following discussion are references to BBX Capital and its subsidiaries, references to the Parent Company are references to BBX Capital, at its parent company level, and none of the foregoing are references to BFC or Bluegreen.
See Note 1  Basis of Financial Statement Presentation to the Notes to the Companys Consolidated Financial Statements for a further discussion of the presentation of the Companys results of operations and Note 3 
Assets and Liabilities Held for Sale to the Notes to the Companys Consolidated Financial Statements for a further discussion of the results of discontinued operations and the presentation of assets and liabilities in the
Companys Consolidated Statement of Financial Condition.

The objective of the following discussion is to provide an understanding of
the financial condition and results of operations of BBX Capital Corporation (formerly BankAtlantic Bancorp, Inc.) (the Parent Company or BBX Capital) and subsidiaries (BBX Capital, together with its subsidiaries, the
Company, which may also be referred to as we, us, or our) for the three and six months ended June 30, 2012. On November 1, 2011, BBX Capital entered into a definitive agreement to sell
BankAtlantic to BB&T Corporation (BB&T), which agreement was amended on March 13, 2012 (Agreement). Due to the Agreement and completion on July 31, 2012 of the sale of BankAtlantic to BB&T under the
Agreement (the sale and related transactions, the Transaction), the financial statements reflect BankAtlantics Community Banking, Investments, Tax Certificates and Capital Services reporting units as discontinued operations for the
three and six months ended June 30, 2012 and 2011, respectively. BBX Capital expects to continue commercial lending activities subsequent to the Transaction resulting in the inclusion of BankAtlantics Commercial Lending reporting unit
(CLRU) in continuing operations for the three and six months ended June 30, 2012 and 2011. See Note 1  Basis of Financial Statement Presentation to the Notes to the Companys Consolidated Financial Statements
for a further discussion of the presentation of the Companys results of operations and Note 2  Assets and Liabilities Held for Sale to the Notes to the Companys Consolidated Financial Statements for a further discussion
of the presentation of assets and liabilities in the Companys Statement of Condition.

Consolidated Results of Operations

CLRU consists of the results of operations of BankAtlantics Commercial Lending reporting unit which includes the interest income and
impairments associated with $378.2 million of commercial loans included in assets held for sale as of June 30, 2012 that were transferred to BB&T upon the consummation of the Transaction on July 31, 2012. The CLRU results of operations
also include BankAtlantics general corporate overhead.

Loss from continuing operations from each of the Companys reportable
segments was as follows (in thousands):



|                                |  |                                     |        |   |      |  |         |        |  |  |       | 
|------------------------------- |  | ----------------------------------- | ------ | - | ---- |  | ------- | ------ |  |  | ----- | 
|                                |  | For the Three Months Ended June 30, |       
|                                |  | 2012                                |        |   | 2011 |  |         | Change | 
|CLRU                            |  | $                                   | (1,688 | ) |      |  | (10,138 | )      |  |  | 8,450 | 
|Parent Company                  |  |                                     | (6,672 | ) |      |  | (7,568  | )      |  |  | 896   | 
|                                |  |                                     |        |   |      |  |         |        |  |  |       | 
|Loss from continuing operations |  | $                                   | (8,360 | ) |      |  | (17,706 | )      |  |  | 9,346 | 
|                                |  |                                     |        |   |      |  |         |        |  |  |       | 

For the Three Months Ended June 30, 2012 Compared to the Same 2011 Period:

The improvement in CLRUs net loss during the 2012 quarter compared to the 2011 quarter was primarily the result of lower operating expenses and a
decrease in the provision for loan losses partially offset by a decline in net interest income.



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The decrease in operating expenses reflects a reduction in real estate owned impairments as well as
lower compensation and occupancy expenses. During the three months ended June 30, 2011, a $5.2 million valuation allowance was established on one real estate owned property due to an updated valuation compared to $1.2 million of valuation
allowances established during the 2012 quarter. The decline in employee compensation resulted primarily from workforce reductions and the corresponding reduction in payroll taxes and employee benefits. The lower occupancy expense reflects the
consolidation of back-office facilities during prior periods. The decrease in the provision for loan losses primarily reflects a significant reduction in charge-offs and the slowing in the amount of commercial loans migrating to a delinquency or
non-accrual status compared to prior periods. This reduction resulted in improved historical loss experience ratios during 2012 compared to 2011 with corresponding declines in the allowance for loan losses. The lower net interest income resulted
primarily from a significant reduction in commercial loan average balances and secondarily from lower average loan yields.

The decrease in
the Parent Companys loss for the 2012 quarter compared to the same 2011 quarter resulted primarily from a $1.5 million impairment on an equity security during the 2011 quarter with no security impairments during the same 2012 period. Also
contributing to the reduced 2012 Parent Company loss was a $0.5 million decline in the provision for loan losses and $0.4 million of lower expenses partially offset by an increase in interest expense on junior subordinated debentures. The decrease
in the provision for loan losses primarily reflects lower charge-offs during the 2012 quarter compared to the 2011 quarter. The decrease in non-interest expense was mainly the result of lower impairments on real estate owned. The increase in
interest expense resulted from higher average balances on junior subordinated debentures during the 2012 quarter compared to the 2011 quarter reflecting the deferral of interest on junior subordinated debentures during prior periods.

For the Six Months Ended June 30, 2012 Compared to the Same 2011 Period:



|                                |  |                                   |         |   |      |  |         |        |  |  |        |  
|------------------------------- |  | --------------------------------- | ------- | - | ---- |  | ------- | ------ |  |  | ------ | -
|                                |  | For the Six Months Ended June 30, |        
|                                |  | 2012                              |         |   | 2011 |  |         | Change | 
|CLRU                            |  | $                                 | (5,630  | ) |      |  | (17,817 | )      |  |  | 12,187 |  
|Parent Company                  |  |                                   | (15,901 | ) |      |  | (14,089 | )      |  |  | (1,812 | )
|                                |  |                                   |         |   |      |  |         |        |  |  |        |  
|Loss from continuing operations |  | $                                 | (21,531 | ) |      |  | (31,906 | )      |  |  | 10,375 |  
|                                |  |                                   |         |   |      |  |         |        |  |  |        |  

The improvement in CLRUs net loss during the six months ended June 30, 2012 compared to the same 2011 period
resulted primarily from the items discussed above for the three months ended June 30, 2012 compared to the same 2011 period.

The
increase in the Parent Companys loss for the six months ended June 30, 2012 resulted primarily from higher professional fees due to TruPs related litigation in Delaware associated with the BB&T Transaction.

Results of Discontinued Operations

The
(loss) income from BankAtlantics discontinued operations was as follows (in thousands):



|                                           |  |                      |         |   |                    |  |         |        |  |  |         |   |  |      |         |   |        |  |         |   |  |  |         |  
|------------------------------------------ |  | -------------------- | ------- | - | ------------------ |  | ------- | ------ |  |  | ------- | - |  | ---- | ------- | - | ------ |  | ------- | - |  |  | ------- | -
|                                           |  | For the Three Months |         |   | For the Six Months | 
|                                           |  | Ended June 30,       |         |   | Ended June 30,     | 
|                                           |  | 2012                 |         |   | 2011               |  |         | Change |  |  | 2012    |   |  | 2011 |         |   | Change | 
|Net interest income                        |  | $                    | 14,676  |   |                    |  | 21,871  |        |  |  | (7,195  | ) |  |      | 32,149  |   |        |  | 44,826  |   |  |  | (12,677 | )
|Provision for loan losses                  |  |                      | (7,301  | ) |                    |  | (6,396  | )      |  |  | (905    | ) |  |      | (16,518 | ) |        |  | (27,381 | ) |  |  | 10,863  |  
|Non-interest income                        |  |                      | 14,733  |   |                    |  | 59,646  |        |  |  | (44,913 | ) |  |      | 32,257  |   |        |  | 82,139  |   |  |  | (49,882 | )
|Non-interest expense                       |  |                      | (26,055 | ) |                    |  | (34,014 | )      |  |  | 7,959   |   |  |      | (52,871 | ) |        |  | (67,163 | ) |  |  | 14,292  |  
|Provision for income taxes                 |  |                      |        |   |                    |  |        |        |  |  |        |   |  |      |        |   |        |  |        |   |  |  |        |  
|                                           |  |                      |         |   |                    |  |         |        |  |  |         |   |  |      |         |   |        |  |         |   |  |  |         |  
|(Loss) income from discontinued operations |  | $                    | (3,947  | ) |                    |  | 41,107  |        |  |  | (45,054 | ) |  |      | (4,983  | ) |        |  | 32,421  |   |  |  | (37,404 | )
|                                           |  |                      |         |   |                    |  |         |        |  |  |         |   |  |      |         |   |        |  |         |   |  |  |         |  



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For the Three Months Ended June 30, 2012 Compared to the Same 2011 Period:

The significant decline in earnings from discontinued operations during the three months ended June 30, 2012 compared to the same 2011 period
primarily resulted from the sale during the 2011 period of 19 Tampa branches and related facilities to an unrelated financial institution for a net gain of $38.7 million. The remaining earnings decline during the 2012 quarter compared to the 2011
quarter reflects lower net interest income and deposit service fee income. The decline in net interest income resulted primarily from a significant reduction in earning assets and an increasing proportion of investments in low yielding cash balances
at the Federal Reserve Bank. The decline in deposit fee income primarily reflects fewer deposit accounts as a result of the sale of the Tampa branches and lower overdraft fees. We believe that the decline in overdraft fees reflects higher customer
balances, regulatory initiatives and changes in our overdraft policies, as well as changes in customer behavior. The above reductions in net interest income and non-interest income during the three months ended June 30, 2012 compared to the
same 2011 period were partially offset by lower operating expenses. The decrease in operating expenses reflects lower compensation and occupancy expenses associated with the consolidation of back-office facilities, workforce reductions, normal
attrition and elimination of expenses associated with BankAtlantics Tampa operations as a result of the completion of the Tampa branch sale on June 3, 2011.

For the Six Months Ended June, 2012 Compared to the Same 2011 Period:

The significant
decline in earnings from discontinued operations during the six months ended June 30, 2012 compared to the same 2011 period primarily was the result of the items discussed above for the three months ended June 30, 2012 compared to the same
2011 period. The improvement in the provision for loan losses resulted primarily from a significant decline in charge-offs and reductions in the allowance for loan losses associated with improved charge-off trends during the 2012 six month period
compared to the same 2011 period.

CLRU Results of Operations

The following table is a condensed income statement summarizing the results of operations of the Commercial Lending Reporting Unit (CLRU) (in thousands):



|                                                    |  |                      |        |   |                    |  |         |        |  |  |        |   |  |      |         |   |        |  |         |   |  |  |        |  
|--------------------------------------------------- |  | -------------------- | ------ | - | ------------------ |  | ------- | ------ |  |  | ------ | - |  | ---- | ------- | - | ------ |  | ------- | - |  |  | ------ | -
|                                                    |  | For the Three Months |        |   | For the Six Months | 
|                                                    |  | Ended June 30,       |        |   | Ended June 30,     | 
|                                                    |  | 2012                 |        |   | 2011               |  |         | Change |  |  | 2012   |   |  | 2011 |         |   | Change | 
|Interest income                                     |  | $                    | 7,242  |   |                    |  | 11,109  |        |  |  | (3,867 | ) |  |      | 15,401  |   |        |  | 22,862  |   |  |  | (7,461 | )
|Provision for loan losses                           |  |                      | 625    |   |                    |  | (3,799  | )      |  |  | 4,424  |   |  |      | 1,386   |   |        |  | (10,646 | ) |  |  | 12,032 |  
|                                                    |  |                      |        |   |                    |  |         |        |  |  |        |   |  |      |         |   |        |  |         |   |  |  |        |  
|Net interest income after provision for loan losses |  |                      | 7,867  |   |                    |  | 7,310   |        |  |  | 557    |   |  |      | 16,787  |   |        |  | 12,216  |   |  |  | 4,571  |  
|Non-interest income                                 |  |                      |       |   |                    |  | 12      |        |  |  | (12    | ) |  |      | 70      |   |        |  | 13      |   |  |  | 57     |  
|Non-interest expense                                |  |                      | (9,555 | ) |                    |  | (17,460 | )      |  |  | 7,905  |   |  |      | (22,487 | ) |        |  | (30,046 | ) |  |  | 7,559  |  
|                                                    |  |                      |        |   |                    |  |         |        |  |  |        |   |  |      |         |   |        |  |         |   |  |  |        |  
|CLRU loss before income taxes                       |  |                      | (1,688 | ) |                    |  | (10,138 | )      |  |  | 8,450  |   |  |      | (5,630  | ) |        |  | (17,817 | ) |  |  | 12,187 |  
|Provision for income taxes                          |  |                      |       |   |                    |  |        |        |  |  |       |   |  |      | 1       |   |        |  |        |   |  |  | (1     | )
|                                                    |  |                      |        |   |                    |  |         |        |  |  |        |   |  |      |         |   |        |  |         |   |  |  |        |  
|CLRU net loss                                       |  | $                    | (1,688 | ) |                    |  | (10,138 | )      |  |  | 8,450  |   |  |      | (5,631  | ) |        |  | (17,817 | ) |  |  | 12,186 |  
|                                                    |  |                      |        |   |                    |  |         |        |  |  |        |   |  |      |         |   |        |  |         |   |  |  |        |  



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Interest Income

The average balance and average yield of CLRUs commercial loans during the three months ended June 30, 2012 were $672.7 million and 4.31%, respectively, compared to $945.3 million and 4.70%,
respectively, during the same 2011 period. The average balance and average yield of CLRUs commercial loans during the six months ended June 30, 2012 were $728.2 million and 4.23%, respectively, compared to $976.8 million and 4.68%,
respectively, during the same 2011 period. The reduction in average balances reflects loan repayments, migration of loans to real estate owned and loan sales as well as a substantial decline in loan originations. The lower yields reflect the
repayment of loans with higher yields than the existing loan portfolio.

Asset Quality

The loans and real estate owned and related data presented below as of June 30, 2012 and for the three and six months ended June 30, 2012
excludes loans and real estate owned transferred to BB&T under the terms of the Agreement as these loans are included in assets held for sale.

The table below presents the allocation of the allowance for loan losses (ALL) by various loan classifications, the percent of allowance to each loan category (ALL to gross loans
percent) and the percentage of loans in each category to total loans (Loans to gross loans percent). The allowance shown in the table should not be interpreted as an indication that charge-offs in future periods will occur in these
amounts or percentages or that the allowance accurately reflects future charge-off amounts or trends (dollars in thousands):



|                                |  |               |       |  |                   |  |      |          |  |  |          |   |  |          |         |  |          |  |       |   |  |  |        |  
|------------------------------- |  | ------------- | ----- |  | ----------------- |  | ---- | -------- |  |  | -------- | - |  | -------- | ------- |  | -------- |  | ----- | - |  |  | ------ | -
|                                |  | June 30, 2012 |       |  | December 31, 2011 | 
|                                |  |               |       |  | ALL               |  |      | Loans    |  |  |          |   |  | ALL      |         |  | Loans    | 
|                                |  |               |       |  | to gross          |  |      | by       |  |  |          |   |  | to gross |         |  | by       | 
|                                |  | ALL           |       |  | loans             |  |      | category |  |  | ALL      |   |  | loans    |         |  | category | 
|                                |  | by            |       |  | in each           |  |      | to gross |  |  | by       |   |  | in each  |         |  | to gross | 
|                                |  | category      |       |  | category          |  |      | loans    |  |  | category |   |  | category |         |  | loans    | 
|Commercial non-real estate      |  | $             | 800   |  |                   |  | 3.29 | %        |  |  | 6.01     | % |  | $        | 16,408  |  |          |  | 13.89 | % |  |  | 4.60   | %
|Commercial real estate          |  |               | 4,383 |  |                   |  | 1.67 |          |  |  | 64.93    |   |  |          | 66,269  |  |          |  | 9.84  |   |  |  | 26.23  |  
|Small business                  |  |               | 1,326 |  |                   |  | 4.16 |          |  |  | 7.89     |   |  |          | 7,168   |  |          |  | 2.52  |   |  |  | 11.09  |  
|Residential real estate         |  |               | 237   |  |                   |  | 0.36 |          |  |  | 16.19    |   |  |          | 16,704  |  |          |  | 1.79  |   |  |  | 36.34  |  
|Consumer                        |  |               | 407   |  |                   |  | 2.02 |          |  |  | 4.98     |   |  |          | 22,554  |  |          |  | 4.04  |   |  |  | 21.74  |  
|                                |  |               |       |  |                   |  |      |          |  |  |          |   |  |          |         |  |          |  |       |   |  |  |        |  
|Total allowance for loan losses |  | $             | 7,153 |  |                   |  | 1.77 | %        |  |  | 100.00   | % |  | $        | 129,103 |  |          |  | 5.03  | % |  |  | 100.00 | %
|                                |  |               |       |  |                   |  |      |          |  |  |          |   |  |          |         |  |          |  |       |   |  |  |        |  

Included in the allowance for loan losses as of June 30, 2012 and December 31, 2011 were
specific valuation allowances by loan type as follows (in thousands):



|                           |  |          |       |  |              |  |        | 
|-------------------------- |  | -------- | ----- |  | ------------ |  | ------ | 
|                           |  | June 30, |       |  | December 31, | 
|                           |  | 2012     |       |  | 2011         | 
|Commercial non-real estate |  | $        | 237   |  |              |  | 15,408 | 
|Commercial real estate     |  |          | 1,265 |  |              |  | 51,798 | 
|Small business             |  |          | 790   |  |              |  | 861    | 
|Consumer                   |  |          |      |  |              |  | 1,454  | 
|Residential                |  |          |      |  |              |  | 6,942  | 
|                           |  |          |       |  |              |  |        | 
|Total                      |  | $        | 2,292 |  |              |  | 76,463 | 
|                           |  |          |       |  |              |  |        | 



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The decrease in the allowance for loan losses at June 30, 2012 compared to December 31, 2011
resulted primarily from the charge-off of specific valuation allowances on collateral dependent loans as well as from the transfer of loans to assets held for sale. In connection with the BB&T Transaction, BankAtlantic transferred $1.8 billion
of loans and $46.1 million of allowance for loan losses to assets held for sale. The reduction in allowance for loan losses to gross loans in each category reflects the charge-off of $65.7 million of the specific valuation allowances discussed in
the following paragraph and the fact that a higher percent of the loans which were not transferred to assets held for sale (because they were not transferred to BB&T in the Transaction) are non-performing and/or collateral dependent. An
allowance for loan losses was not established for those collateral dependent loans as those loans were instead charged-down to the fair value of the collateral less cost to sell. The specific valuation allowance as of June 30, 2012 reflects
impaired loans measured based on present value of expected cash flows discounted at the loans effective interest rate or appraisal adjustments on collateral dependent impaired loans.

As part of the transition of the regulation of OTS savings associations to the OCC, the OCC provided guidance to thrifts related to their transition to OCC regulatory reporting, which was to be
implemented no later than March 31, 2012, including guidance surrounding specific valuation allowances on collateral dependent loans. Under OCC guidance, where the appraised value of collateral on a collateral dependent loan is less than the
recorded investment of the loan, a charge-off of the amount of the deficiency rather than a specific valuation allowance is now generally required. Management considered the appraisals on its impaired collateral dependent loans, including appraised
values and appraisal dates and, during the first quarter of 2012, the Company charged down the recorded investment of loans by $66.5 million to the fair value of the collateral less cost to sell. This charge down consisted entirely of the
charging-off of existing specific valuation allowances. As a specific valuation allowance was previously established for these loans, the charge-offs did not impact the provision for loan losses or the net loss during the three months ended
March 31, 2012, but did reduce the Companys allowance for loan losses and recorded investment in the loans. Further, these charge-offs of specific valuation allowances did not impact the estimation of the allowance for loan losses as the
change in the specific valuation allowances was always a factor in the overall estimation of BankAtlantics allowance for loan losses.

The activity in CLRUs allowance for loan losses was as follows (in thousands):



|                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|------------------------------------------ |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                           |  | For the Three MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, | 
|Allowance for Loan Losses:                 |  | 2012                               |        |   | 2011                             |  |         | 2012 |  |  | 2011    |  
|Balance, beginning of period               |  | $                                  | 5,571  |   |                                  |  | 89,036  |      |  |  | 82,676  |   |  |  | 93,816  |  
|Charge-offs :                              |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Commercial real estate                     |  |                                    | (1,778 | ) |                                  |  | (13,546 | )    |  |  | (52,501 | ) |  |  | (26,214 | )
|Commercial non-real estate                 |  |                                    |       |   |                                  |  | (124    | )    |  |  | (14,614 | ) |  |  | (588    | )
|                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Total Charge-offs                          |  |                                    | (1,778 | ) |                                  |  | (13,670 | )    |  |  | (67,115 | ) |  |  | (26,802 | )
|Recoveries of loans previously charged-off |  |                                    | 2,017  |   |                                  |  | 132     |      |  |  | 2,071   |   |  |  | 1,637   |  
|                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Net (charge-offs)                          |  |                                    | 239    |   |                                  |  | (13,538 | )    |  |  | (65,044 | ) |  |  | (25,165 | )
|(Recovery from) provision for loan losses  |  |                                    | (625   | ) |                                  |  | 3,799   |      |  |  | (1,386  | ) |  |  | 10,646  |  
|Transfer to assets held for sale           |  |                                    |       |   |                                  |  |        |      |  |  | (11,061 | ) |  |  |        |  
|                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  
|Balance, end of period                     |  | $                                  | 5,185  |   |                                  |  | 79,297  |      |  |  | 5,185   |   |  |  | 79,297  |  
|                                           |  |                                    |        |   |                                  |  |         |      |  |  |         |   |  |  |         |  

Commercial real estate charge-offs during the three months ended June 30, 2012 primarily represent declines in
collateral values on collateral dependent non-accrual loans based on updated property valuations. Management



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believes that the significant decline in commercial real estate charge-offs during the 2012 quarter compared to the 2011 quarter reflects the stabilization of commercial property values resulting
in lower loss severity impairments from updated valuations.

The commercial loan recoveries during the three and six months ended
June 30, 2012 primarily resulted from loan short sales at amounts higher than the loans carrying value and cash settlements with borrowers in connection with obtaining deeds in lieu of foreclosure.

Commercial real estate loan charge-offs during the six months ended June 30, 2012 included $46.7 million of charge-offs related to previously
established specific valuation allowances as discussed above. Excluding these specific valuation allowance charge-offs, commercial real estate charge-offs declined from $26.2 million during the six months ended June 30, 2011 to $5.9 million for
the same 2012 period. Commercial real estate loan charge-offs during the 2012 six month period included $4.0 million related to one $16.3 million commercial residential loan transferred to loans held for sale. During the six months ended
June 30, 2011, commercial real estate loan charge-offs included $12.6 million of charge-offs related to commercial other loans, $5.1 million of charge-offs related to commercial residential loans and $0.2 million of charge-offs related to owner
occupied loans.

Commercial non-real estate charge-offs during the six months ended June 30, 2012 included $12.5 million of charge-offs
related to previously established specific valuation allowances. The remaining $2.1 million of charge-offs during the 2012 period related to one asset backed lending relationship. The commercial non-real estate loan charge-offs during the six months
ended June 30, 2011 primarily related to one $0.5 million business loan in the real estate brokerage industry.

The improvement in the
provision for loan losses for the three and six months ended June 30, 2012 compared to the same 2011 period reflects declining commercial real estate loan balances, improved historical loss experience during 2012 compared to 2011, and a decline
in loans migrating to non-accrual status.

Pursuant to the Agreement with BB&T, commercial loans with a recorded investment of $378.2
million as of March 31, 2012 were transferred to assets held for sale as these loans were anticipated to be transferred to BB&T in the Transaction. The allowance for loan losses associated with these commercial loans as of March 31,
2012, which were included in the above table for the six months ended June 30, 2012, was $11.1 million.

At the indicated dates,
CLRUs non-performing assets, loans contractually past due 90 days or more and still accruing, performing impaired loans and troubled debt restructured loans as of June 30, 2012 (amounts at June 30, 2012 exclude loans included in
assets held for sale), and as of December 31, 2011 were as follows (in thousands):



|                                           |  |               |         |  |                   |  |         | 
|------------------------------------------ |  | ------------- | ------- |  | ----------------- |  | ------- | 
|                                           |  | As of         |        
|                                           |  | June 30, 2012 |         |  | December 31, 2011 | 
|NON-PERFORMING ASSETS                      |  |               |         |  |                   |  |         | 
|Tax certificates                           |  | $             | 5,338   |  |                   |  | 3,094   | 
|Residential (1)                            |  |               | 57,090  |  |                   |  | 85,855  | 
|Commercial real estate (2)                 |  |               | 167,278 |  |                   |  | 206,038 | 
|Commercial non-real estate                 |  |               | 5,607   |  |                   |  | 19,172  | 
|Small business                             |  |               | 6,267   |  |                   |  | 12,016  | 
|Consumer                                   |  |               | 8,261   |  |                   |  | 14,134  | 
|                                           |  |               |         |  |                   |  |         | 
|Total non-accrual assets (3)               |  |               | 249,841 |  |                   |  | 340,309 | 
|                                           |  |               |         |  |                   |  |         | 
|REPOSSESSED ASSETS:                        |  |               |         |  |                   |  |         | 
|Tax certificates                           |  |               | 707     |  |                   |  | 800     | 
|Residential real estate                    |  |               | 5,663   |  |                   |  | 9,592   | 
|Commercial real estate                     |  |               | 67,447  |  |                   |  | 63,091  | 
|Small business real estate                 |  |               | 3,515   |  |                   |  | 3,883   | 
|Consumer real estate                       |  |               | 477     |  |                   |  | 671     | 
|                                           |  |               |         |  |                   |  |         | 
|Total repossessed assets                   |  |               | 77,809  |  |                   |  | 78,037  | 
|                                           |  |               |         |  |                   |  |         | 
|Total non-performing assets                |  | $             | 327,650 |  |                   |  | 418,346 | 
|                                           |  |               |         |  |                   |  |         | 
|OTHER ACCRUING IMPAIRED LOANS              |  |               |         |  |                   |  |         | 
|Contractually past due 90 days or more (4) |  | $             |        |  |                   |  | 80      | 
|Troubled debt restructured loans           |  |               | 75,428  |  |                   |  | 116,954 | 
|TOTAL OTHER ACCRUING                       |  |               |         |  |                   |  |         | 
|                                           |  |               |         |  |                   |  |         | 
|IMPAIRED LOANS                             |  | $             | 75,428  |  |                   |  | 117,034 | 
|                                           |  |               |         |  |                   |  |         | 



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|(1) | Includes $22.1 million and $33.2 million of interest-only residential loans as of June 30, 2012 and December 31, 2011, respectively.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(2) | Excluded from the above table as of June 30, 2012 and December 31, 2011 were $3.7 million and $8.1 million, respectively, of commercial residential loans that
were transferred to a work-out subsidiary of the Parent Company in March 2008.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Includes $75.4 million and $124.8 million of troubled debt restructured loans as of June 30, 2012 and December 31, 2011, respectively.
|--- | --------------------------------------------------------------------------------------------------------------------------------------

|(4) | BankAtlantic believes that it will ultimately collect the principal and interest associated with these loans; however, the timing of the payments may not be in
accordance with the contractual terms of the loan agreement.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

The decline in non-performing assets at June 30, 2012
compared to December 31, 2011 reflects the charge-off of $66.5 million of collateral dependent loans, payoffs and loan short sales.

The
decline in commercial real estate non-accrual loans resulted primarily from $46.7 million of loan charge-offs associated with previously established specific valuation allowances and the payoff of $27.4 million of commercial residential loans
partially offset by $41.7 million of commercial loans transferring to nonaccrual.

The decline in commercial non-real estate non-accrual loans
reflects $12.5 million of charge-offs associated with previously established specific valuation allowances and the charge-off of a $2.1 million asset based loan.

The decline in residential non-accrual loans resulted primarily from loan repayments through borrower short sales and $6.9 million of charge-offs associated with previously established specific valuation
allowance and charge-offs.

The decline in consumer non-accrual loans reflects $1.1 million of charge-offs associated with previously
established specific valuation allowances and charge-offs.

The decline in small business non-accrual loans reflects loan payoffs and the
transfer of loans to real estate owned.

The lower repossessed assets balances resulted primarily from the sale of residential real estate
owned. During the six months ended June 30, 2012, $21.6 million of loans migrated to real estate owned, $4.1 million of impairments were recognized and $18.7 million of real estate owned properties were sold. During the six months ended
June 30, 2011, $25.0 million of loans migrated to real estate owned and $10.1 million of real estate owned properties were sold. As non-accrual loans migrate into repossessed assets in the future, we expect repossessed assets as well as sales
of real estate owned to increase.

In response to current market conditions, management generally decides, on a case-by-case basis, whether to
modify loans for borrowers experiencing financial difficulties and has modified the terms of certain commercial, small business, residential and consumer home equity loans. The concessions made to borrowers experiencing financial difficulties have
generally included, among others, the reduction of contractual interest rates and, in some cases, forgiveness of a portion of loan principal upon satisfactory performance under the modified terms, conversion of amortizing loans to interest only
payments or the deferral of some interest payments until the maturity date of the loan. Loans that are not delinquent at the date of modification are generally not placed on non-accrual. Modified non-accrual loans are generally not returned to an
accruing status and the days past due are not reset on delinquent modified loans until the borrower demonstrates a sustained period of performance under the modified terms, which is generally performance over a six month period.



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Troubled debt restructured loans by loan type were as follows (in thousands):



|               |  |                     |         |  |                         |  |        |             |  |  |          |  |  |  |         | 
|-------------- |  | ------------------- | ------- |  | ----------------------- |  | ------ | ----------- |  |  | -------- |  |  |  | ------- | 
|               |  | As of June 30, 2012 |         |  | As of December 31, 2011 | 
|               |  | Non-accrual         |         |  | Accruing                |  |        | Non-accrual |  |  | Accruing | 
|Commercial     |  | $                   | 107,861 |  |                         |  | 56,988 |             |  |  | 108,946  |  |  |  | 96,146  | 
|Small business |  |                     | 2,859   |  |                         |  | 6,001  |             |  |  | 4,024    |  |  |  | 6,878   | 
|Consumer       |  |                     | 1,099   |  |                         |  | 10,369 |             |  |  | 1,071    |  |  |  | 11,536  | 
|Residential    |  |                     | 9,021   |  |                         |  | 2,070  |             |  |  | 10,718   |  |  |  | 2,394   | 
|               |  |                     |         |  |                         |  |        |             |  |  |          |  |  |  |         | 
|Total          |  | $                   | 120,840 |  |                         |  | 75,428 |             |  |  | 124,759  |  |  |  | 116,954 | 
|               |  |                     |         |  |                         |  |        |             |  |  |          |  |  |  |         | 

BankAtlantics commercial loan portfolio includes large loan balance lending relationships. Seven relationships
accounted for 45.4% of our $172.9 million of non-accrual commercial loans as of June 30, 2012. The following table outlines general information about these seven relationships as of June 30, 2012 (in thousands):



|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|------------------------------------- |  | ---------------------- | ------- |  | ---------------------- |  | ------ | ------------------- |  |  | ------------------------ |  |  | --------------- | ------- |  | --------- |  | ------- | -------------------------- |  |  | ----- |  |  |  | ------- | 
|Relationships                         |  | UnpaidPrincipalBalance |         |  | RecordedInvestment (3) |  |        | Date loanOriginated |  |  | Date 
PlacedonNonaccrual |  |  | DefaultDate (2) |         |  | LoanClass |  |         | Date of 
LastFullAppraisal | 
|Commercial Land Developers            |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Relationship No. 1                    |  | $                      | 10,338  |  |                        |  | 6,907  |                     |  |  | Q1-2005                  |  |  |                 | Q4-2010 |  |           |  | (1      | )                          |  |  | Land  |  |  |  | Q4-2011 | 
|Relationship No. 2                    |  |                        | 30,516  |  |                        |  | 9,392  |                     |  |  | Q4-2006                  |  |  |                 | Q4-2008 |  |           |  | Q4-2008 |                            |  |  | Land  |  |  |  | Q4-2011 | 
|Relationship No. 3                    |  |                        | 17,642  |  |                        |  | 10,686 |                     |  |  | Q1-1995                  |  |  |                 | Q4-2009 |  |           |  | Q4-2009 |                            |  |  | Land  |  |  |  | Q1-2012 | 
|Relationship No. 4                    |  |                        | 31,050  |  |                        |  | 11,058 |                     |  |  | Q4-2007                  |  |  |                 | Q4-2008 |  |           |  | (1      | )                          |  |  | Land  |  |  |  | Q4-2011 | 
|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Total                                 |  | $                      | 89,546  |  |                        |  | 38,043 |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Commercial Non-Residential Developers |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Relationship No. 5                    |  | $                      | 24,790  |  |                        |  | 12,109 |                     |  |  | Q2-2008                  |  |  |                 | Q4-2011 |  |           |  | (1      | )                          |  |  | Other |  |  |  | Q1-2012 | 
|Relationship No. 6                    |  |                        | 25,379  |  |                        |  | 16,159 |                     |  |  | Q3-2006                  |  |  |                 | Q2-2010 |  |           |  | (1      | )                          |  |  | Other |  |  |  | Q2-2012 | 
|Relationship No. 7                    |  |                        | 18,388  |  |                        |  | 12,255 |                     |  |  | Q1-2007                  |  |  |                 | Q3-2010 |  |           |  | (1      | )                          |  |  | Other |  |  |  | Q2-2012 | 
|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Total                                 |  | $                      | 68,557  |  |                        |  | 40,523 |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|Total of Large Relationships          |  | $                      | 158,103 |  |                        |  | 78,566 |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 
|                                      |  |                        |         |  |                        |  |        |                     |  |  |                          |  |  |                 |         |  |           |  |         |                            |  |  |       |  |  |  |         | 



|(1) | The loan is currently not in default; however, management believes that it is not probable that the borrower will comply with the contractual or modified loan repayment
terms.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The default date is defined as the date of the initial missed payment prior to default.
|--- | ---------------------------------------------------------------------------------------

|(3) | Recorded investment is the Unpaid Principal Balance less charge-offs.
|--- | -----------------------------------------------------------------------

The following table presents purchased residential loans by year of origination segregated by amortizing and interest only loans June 30, 2012 (excluding purchased residential loans to be transferred
to BB&T under the terms of the Agreement as these loans are included in assets held for sale) (dollars in thousands):



|                    |  |                                        |        |  |                    |  |        |                   |  |  |                |   |  |                           |        |   |                       |  |     |                  |  |  |                               |  |  |  |        |  |  |  |       |  
|------------------- |  | -------------------------------------- | ------ |  | ------------------ |  | ------ | ----------------- |  |  | -------------- | - |  | ------------------------- | ------ | - | --------------------- |  | --- | ---------------- |  |  | ----------------------------- |  |  |  | ------ |  |  |  | ----- | -
|                    |  | Amortizing Purchased Residential Loans |       
|Year of Origination |  | UnpaidPrincipal                        |        |  | RecordedInvestment |  |        | LTV atOrigination |  |  | CurrentLTV (1) |   |  | FICO Scoresat Origination |        |   | CurrentFICOScores (2) |  |     | AmountDelinquent |  |  | Debt Ratios atOrigination (3) | 
|2007                |  | $                                      | 5,302  |  |                    |  | 3,038  |                   |  |  | 78.74          | % |  |                           | 169.56 | % |                       |  | 713 |                  |  |  | 667                           |  |  |  | 4,860  |  |  |  | 41.55 | %
|2006                |  |                                        | 5,514  |  |                    |  | 3,800  |                   |  |  | 74.34          | % |  |                           | 131.16 | % |                       |  | 685 |                  |  |  | 581                           |  |  |  | 4,633  |  |  |  | 37.93 | %
|2005                |  |                                        | 7,752  |  |                    |  | 4,589  |                   |  |  | 77.74          | % |  |                           | 135.26 | % |                       |  | 704 |                  |  |  | 596                           |  |  |  | 7,752  |  |  |  | 38.06 | %
|2004                |  |                                        | 20,668 |  |                    |  | 15,853 |                   |  |  | 74.87          | % |  |                           | 103.79 | % |                       |  | 714 |                  |  |  | 584                           |  |  |  | 17,837 |  |  |  | 36.65 | %
|Prior to 2004       |  |                                        | 4,644  |  |                    |  | 4,348  |                   |  |  | 72.98          | % |  |                           | 71.53  | % |                       |  | 709 |                  |  |  | 579                           |  |  |  | 4,012  |  |  |  | 36.64 | %
|                    |  |                                        |        |  |                    |  |        |                   |  |  |                |   |  |                           |        |   |                       |  |     |                  |  |  |                               |  |  |  |        |  |  |  |       |  



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|                    |  |                                           |        |  |                    |  |       |                   |  |  |                |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  
|------------------- |  | ----------------------------------------- | ------ |  | ------------------ |  | ----- | ----------------- |  |  | -------------- | - |  | ------------------------- | ------ | - | --------------------- |  | --- | ---------------- |  |  | ---------------------------- |  |  |  | ------ |  |  |  | ----- | -
|                    |  | Interest Only Purchased Residential Loans |       
|Year of Origination |  | UnpaidPrincipal                           |        |  | RecordedInvestment |  |       | LTV atOrigination |  |  | CurrentLTV (1) |   |  | FICO Scoresat Origination |        |   | CurrentFICOScores (2) |  |     | AmountDelinquent |  |  | Debt
RatiosatOrigination (3) | 
|2007                |  | $                                         | 10,504 |  |                    |  | 5,957 |                   |  |  | 77.66          | % |  |                           | 138.74 | % |                       |  | 741 |                  |  |  | 681                          |  |  |  | 9,925  |  |  |  | 37.19 | %
|2006                |  |                                           | 17,062 |  |                    |  | 9,503 |                   |  |  | 77.54          | % |  |                           | 127.49 | % |                       |  | 732 |                  |  |  | 639                          |  |  |  | 16,574 |  |  |  | 33.83 | %
|2005                |  |                                           | 6,371  |  |                    |  | 3,828 |                   |  |  | 73.44          | % |  |                           | 132.23 | % |                       |  | 719 |                  |  |  | 689                          |  |  |  | 5,748  |  |  |  | 37.49 | %
|2004                |  |                                           | 3,974  |  |                    |  | 2,730 |                   |  |  | 73.78          | % |  |                           | 137.68 | % |                       |  | 728 |                  |  |  | 626                          |  |  |  | 3,974  |  |  |  | 27.55 | %
|Prior to 2004       |  |                                           | 1,836  |  |                    |  | 1,444 |                   |  |  | 63.44          | % |  |                           | 70.72  | % |                       |  | 711 |                  |  |  | 619                          |  |  |  | 1,836  |  |  |  | 28.22 | %
|                    |  |                                           |        |  |                    |  |       |                   |  |  |                |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  

The following table presents purchased residential loans by geographic area segregated by amortizing and interest-only
loans at June 30, 2012 (dollars in thousands):



|             |  |                                        |        |  |                    |  |        |                   |  |  |               |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  
|------------ |  | -------------------------------------- | ------ |  | ------------------ |  | ------ | ----------------- |  |  | ------------- | - |  | ------------------------- | ------ | - | --------------------- |  | --- | ---------------- |  |  | ---------------------------- |  |  |  | ------ |  |  |  | ----- | -
|             |  | Amortizing Purchased Residential Loans |       
|State        |  | UnpaidPrincipal                        |        |  | RecordedInvestment |  |        | LTV atOrigination |  |  | CurrentLTV(1) |   |  | FICO Scoresat Origination |        |   | CurrentFICOScores (2) |  |     | AmountDelinquent |  |  | Debt
RatiosatOrigination (3) | 
|Arizona      |  | $                                      | 321    |  |                    |  | 301    |                   |  |  | 79.63         | % |  |                           | 50.68  | % |                       |  | 741 |                  |  |  | 494                          |  |  |  | 321    |  |  |  | 45.11 | %
|California   |  |                                        | 9,361  |  |                    |  | 6,621  |                   |  |  | 75.89         | % |  |                           | 110.42 | % |                       |  | 706 |                  |  |  | 630                          |  |  |  | 7,392  |  |  |  | 37.84 | %
|Florida      |  |                                        | 10,356 |  |                    |  | 6,545  |                   |  |  | 77.33         | % |  |                           | 149.70 | % |                       |  | 702 |                  |  |  | 569                          |  |  |  | 10,080 |  |  |  | 35.01 | %
|Nevada       |  |                                        | 773    |  |                    |  | 403    |                   |  |  | 92.24         | % |  |                           | 226.41 | % |                       |  | 697 |                  |  |  | 524                          |  |  |  | 773    |  |  |  | 35.29 | %
|Other States |  |                                        | 23,264 |  |                    |  | 17,960 |                   |  |  | 74.25         | % |  |                           | 98.90  | % |                       |  | 706 |                  |  |  | 588                          |  |  |  | 20,528 |  |  |  | 38.69 | %
|             |  |                                        |        |  |                    |  |        |                   |  |  |               |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  



|             |  |                                           |        |  |                    |  |        |                   |  |  |               |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  
|------------ |  | ----------------------------------------- | ------ |  | ------------------ |  | ------ | ----------------- |  |  | ------------- | - |  | ------------------------- | ------ | - | --------------------- |  | --- | ---------------- |  |  | ---------------------------- |  |  |  | ------ |  |  |  | ----- | -
|             |  | Interest Only Purchased Residential Loans |       
|State        |  | UnpaidPrincipal                           |        |  | RecordedInvestment |  |        | LTV atOrigination |  |  | CurrentLTV(1) |   |  | FICO Scoresat Origination |        |   | CurrentFICOScores (2) |  |     | AmountDelinquent |  |  | Debt
RatiosatOrigination (3) | 
|Arizona      |  | $                                         | 1,483  |  |                    |  | 658    |                   |  |  | 78.13         | % |  |                           | 208.62 | % |                       |  | 763 |                  |  |  | 732                          |  |  |  | 1,483  |  |  |  | 39.80 | %
|California   |  |                                           | 9,237  |  |                    |  | 5,850  |                   |  |  | 72.76         | % |  |                           | 118.79 | % |                       |  | 733 |                  |  |  | 693                          |  |  |  | 8,170  |  |  |  | 31.54 | %
|Florida      |  |                                           | 7,914  |  |                    |  | 4,385  |                   |  |  | 71.55         | % |  |                           | 133.63 | % |                       |  | 738 |                  |  |  | 672                          |  |  |  | 7,914  |  |  |  | 35.89 | %
|Nevada       |  |                                           | 1,162  |  |                    |  | 436    |                   |  |  | 78.61         | % |  |                           | 206.07 | % |                       |  | 729 |                  |  |  | 543                          |  |  |  | 1,162  |  |  |  | 34.70 | %
|Other States |  |                                           | 19,951 |  |                    |  | 12,132 |                   |  |  | 78.73         | % |  |                           | 117.80 | % |                       |  | 721 |                  |  |  | 638                          |  |  |  | 19,327 |  |  |  | 34.90 | %
|             |  |                                           |        |  |                    |  |        |                   |  |  |               |   |  |                           |        |   |                       |  |     |                  |  |  |                              |  |  |  |        |  |  |  |       |  



|(1) | Current loan-to-values (LTV) for the majority of the portfolio were obtained as of the second quarter of 2011 from automated valuation models.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Current FICO scores based on borrowers for which FICO scores were available as of the second quarter of 2011.
|--- | -------------------------------------------------------------------------------------------------------------

|(3) | Debt ratio is defined as the portion of the borrowers income that goes towards debt service.
|--- | ---------------------------------------------------------------------------------------------



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CLRU Non-Interest Income

Non-interest income during the three and six months ended June 30, 2012 was $0 and $70,000, respectively. The non-interest income during the six months ended June 30, 2012 consisted of the
retention of a non-refundable deposit associated with a contract to sell a real estate owned property and a $3,000 gain on the sale of a loan.

Non-interest income during the three and six months ended June 30, 2011 was $1,000 and $2,000, respectively. The income consisted of miscellaneous
income from a joint venture that factors receivables. The joint venture ceased operations during the fourth quarter of 2011

CLRU
Non-Interest Expense



|                                     |  |                                    |        |   |                                  |  |        |        |  |  |        |   |  |      |        |   |        |  |        |  |  |  |        |  
|------------------------------------ |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------ | ------ |  |  | ------ | - |  | ---- | ------ | - | ------ |  | ------ |  |  |  | ------ | -
|                                     |  | For the Three MonthsEnded
June 30, |        |   | For the Six MonthsEnded
June 30, | 
|(in thousands)                       |  | 2012                               |        |   | 2011                             |  |        | Change |  |  | 2012   |   |  | 2011 |        |   | Change | 
|Employee compensation and benefits   |  | $                                  | 3,793  |   |                                  |  | 5,791  |        |  |  | (1,998 | ) |  |      | 8,535  |   |        |  | 10,787 |  |  |  | (2,252 | )
|Occupancy and equipment              |  |                                    | 1,689  |   |                                  |  | 2,692  |        |  |  | (1,003 | ) |  |      | 3,856  |   |        |  | 5,735  |  |  |  | (1,879 | )
|Advertising and promotion            |  |                                    | 55     |   |                                  |  | 57     |        |  |  | (2     | ) |  |      | 149    |   |        |  | 143    |  |  |  | 6      |  
|Professional fees                    |  |                                    | 1,492  |   |                                  |  | (107   | )      |  |  | 1,599  |   |  |      | 3,106  |   |        |  | 1,643  |  |  |  | 1,463  |  
|(Recoveries) on assets held for sale |  |                                    | (1,165 | ) |                                  |  |       |        |  |  | (1,165 | ) |  |      | (1,165 | ) |        |  |       |  |  |  | (1,165 | )
|Impairment on loans held for sale    |  |                                    | 196    |   |                                  |  | 404    |        |  |  | (208   | ) |  |      | 459    |   |        |  | 606    |  |  |  | (147   | )
|Impairment of real estate owned      |  |                                    | 1,235  |   |                                  |  | 5,470  |        |  |  | (4,235 | ) |  |      | 2,605  |   |        |  | 5,179  |  |  |  | (2,574 | )
|Other                                |  |                                    | 2,260  |   |                                  |  | 3,153  |        |  |  | (893   | ) |  |      | 4,942  |   |        |  | 5,953  |  |  |  | (1,011 | )
|                                     |  |                                    |        |   |                                  |  |        |        |  |  |        |   |  |      |        |   |        |  |        |  |  |  |        |  
|Total non-interest expense           |  | $                                  | 9,555  |   |                                  |  | 17,460 |        |  |  | (7,905 | ) |  |      | 22,487 |   |        |  | 30,046 |  |  |  | (7,559 | )
|                                     |  |                                    |        |   |                                  |  |        |        |  |  |        |   |  |      |        |   |        |  |        |  |  |  |        |  

Accounting rules require that BankAtlantics general corporate overhead be included in its entirety in non-interest
expense as presented for CLRU for the three and six months ended June 30, 2012 and 2011. Management anticipates that the Companys cost structure will significantly change as a result of the consummation of the BB&T Transaction with a
substantial reduction in non-interest expenses.

The decline in employee compensation and benefits during the three and six months ended
June 30, 2012 compared to the same 2011 periods resulted primarily from workforce reductions and attrition. The majority of employee compensation and benefits reflects general corporate overhead. BankAtlantic has significantly reduced its
back-office work force since January 1, 2010. BankAtlantic also reduced its commercial lending workforce, consisting primarily of lending officers, through normal attrition as commercial loan originations and purchases during 2011 and the first
half of 2012 were significantly reduced from historical levels. The reduction in the number of employees resulted in lower health insurance, payroll taxes, and share-based compensation.

Occupancy and equipment for the three and six months ended June 30, 2012 and 2011 primarily reflects costs associated with the operation of back office facilities including the corporate
headquarters. The lower occupancy and equipment expenses during the 2012 periods compared to the same 2011 periods reflects lower real estate taxes, utilities, depreciation and repairs and maintenance expenses due primarily to consolidation of
back-office facilities.

The increase in professional fees during the three months ended June 30, 2012 compared to the same 2011 period
resulted primarily from $3.3 million of insurance reimbursements during the three months ended June 30, 2011 relating to expenses incurred during prior periods in connection with class action securities litigation compared to no reimbursements
during the second quarter of 2012. The above increase in professional fees was partially offset



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by lower consulting fees and legal fees. The decline in consulting fees was primarily associated with lower loan review, internal audit and external audit costs in anticipation of the closing of
the BB&T Transaction. The decline in legal fees reflects decreased class action securities and tax certificate activities legal costs during the 2012 second quarter compared to the same 2011 quarter. The increase in professional fees for the six
months ended June 30, 2012 compared to the same 2011 period reflects the insurance reimbursements mentioned above as well as legal costs associated with a commercial loan foreclosure involving a land lease during the three months ended
March 31, 2011 partially offset by higher general loan foreclosure expenses during the 2012 six month period compared to the same 2011 period.

The recoveries on assets held for sale represents a $1.2 million decline in the carrying value of loans transferred to BB&T in the Transaction during the three and six months ended June 30, 2012.

Impairment of loans held for sale for the three and six months ended June 30, 2012 represents lower of cost or market adjustments on
commercial loans classified as held for sale. The impairments resulted primarily from property values obtained from updated valuations of the underlying loan collateral.

Impairment of real estate owned during the three and six months ended June 30, 2012 reflects lower of cost or fair value less cost of sale adjustments on commercial real estate owned. During the
three and six months ended June 30, 2012, valuation allowances were established on three and nine properties, respectively, due to updated property valuations. During the three and six months ended June 30, 2011, a real estate owned
impairment of $5.2 million was recognized related to one property.

Other non-interest expenses consisted of the following:



|                           |  |                                    |       |  |                                  |  |       |        |  |  |      |   |  |      |       |  |        |  |       |  |  |  |      |  
|-------------------------- |  | ---------------------------------- | ----- |  | -------------------------------- |  | ----- | ------ |  |  | ---- | - |  | ---- | ----- |  | ------ |  | ----- |  |  |  | ---- | -
|                           |  | For the Three MonthsEnded June 30, |       |  | For the Six MonthsEnded
June 30, | 
|(in thousands)             |  | 2012                               |       |  | 2011                             |  |       | Change |  |  | 2012 |   |  | 2011 |       |  | Change | 
|Insurance                  |  | $                                  | 1,199 |  |                                  |  | 1,001 |        |  |  | 198  |   |  |      | 2,287 |  |        |  | 1,941 |  |  |  | 346  |  
|Foreclosed asset activity  |  |                                    | 163   |  |                                  |  | 651   |        |  |  | (488 | ) |  |      | 553   |  |        |  | 1,005 |  |  |  | (452 | )
|Executive services         |  |                                    | 486   |  |                                  |  | 632   |        |  |  | (146 | ) |  |      | 1,067 |  |        |  | 1,196 |  |  |  | (129 | )
|Other                      |  |                                    | 412   |  |                                  |  | 874   |        |  |  | (462 | ) |  |      | 1,033 |  |        |  | 1,757 |  |  |  | (724 | )
|                           |  |                                    |       |  |                                  |  |       |        |  |  |      |   |  |      |       |  |        |  |       |  |  |  |      |  
|Total non-interest expense |  | $                                  | 2,260 |  |                                  |  | 3,158 |        |  |  | (898 | ) |  |      | 4,940 |  |        |  | 5,899 |  |  |  | (959 | )
|                           |  |                                    |       |  |                                  |  |       |        |  |  |      |   |  |      |       |  |        |  |       |  |  |  |      |  

The decline in foreclosed asset activity during the three and six months ended June 30, 2012 compared to the same
2011 periods resulted primarily from increases in rental income from foreclosures of income producing properties.

The reduced other expenses
during the three and six months periods of 2012 compared to the same 2011 periods resulted from lower intangible asset amortization and declines in operating expenses. Core deposit intangible assets were fully amortized as of March 31, 2012
reducing other expenses by $0.3 million during the three and six months ended June 30, 2012.



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Parent Company Results of Operations



|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|---------------------------------------------------- |  | ---------------------------------- | ------ | - | -------------------------------- |  | ------ | ------ |  |  | ----- | - |  | ---- | ------- | - | ------ |  | ------- | - |  |  | ------ | -
|                                                     |  | For the Three MonthsEnded June 30, |        |   | For the Six MonthsEnded June 30, | 
|(in thousands)                                       |  | 2012                               |        |   | 2011                             |  |        | Change |  |  | 2012  |   |  | 2011 |         |   | Change | 
|Net interest income (expense):                       |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Interest income on loans                             |  | $                                  | 45     |   |                                  |  | 57     |        |  |  | (12   | ) |  |      | 221     |   |        |  | 100     |   |  |  | 121    |  
|Interest and dividend income on taxable securities   |  |                                    |       |   |                                  |  | 3      |        |  |  | (3    | ) |  |      |        |   |        |  | 43      |   |  |  | (43    | )
|Interest expense on junior subordinated debentures   |  |                                    | (4,126 | ) |                                  |  | (3,856 | )      |  |  | (270  | ) |  |      | (8,293  | ) |        |  | (7,638  | ) |  |  | (655   | )
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Net interest expense                                 |  |                                    | (4,081 | ) |                                  |  | (3,796 | )      |  |  | (285  | ) |  |      | (8,072  | ) |        |  | (7,495  | ) |  |  | (577   | )
|(Recovery from) provision for loan losses            |  |                                    | (2     | ) |                                  |  | 514    |        |  |  | (516  | ) |  |      | (6      | ) |        |  | 494     |   |  |  | (500   | )
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Net interest expense after provision for loan losses |  |                                    | (4,079 | ) |                                  |  | (4,310 | )      |  |  | 231   |   |  |      | (8,066  | ) |        |  | (7,989  | ) |  |  | (77    | )
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Non-interest income:                                 |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Income from unconsolidated trusts                    |  |                                    | 119    |   |                                  |  | 432    |        |  |  | (313  | ) |  |      | 240     |   |        |  | 813     |   |  |  | (573   | )
|Securities activities, net                           |  |                                    |       |   |                                  |  | (1,500 | )      |  |  | 1,500 |   |  |      |        |   |        |  | (1,500  | ) |  |  | 1,500  |  
|Other income                                         |  |                                    | 287    |   |                                  |  | 317    |        |  |  | (30   | ) |  |      | 625     |   |        |  | 526     |   |  |  | 99     |  
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Non-interest income                                  |  |                                    | 406    |   |                                  |  | (751   | )      |  |  | 1,157 |   |  |      | 865     |   |        |  | (161    | ) |  |  | 1,026  |  
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Non-interest expense:                                |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Employee compensation and benefits                   |  |                                    | 476    |   |                                  |  | 512    |        |  |  | (36   | ) |  |      | 993     |   |        |  | 1,039   |   |  |  | (46    | )
|Professional fees                                    |  |                                    | 1,747  |   |                                  |  | 765    |        |  |  | 982   |   |  |      | 6,330   |   |        |  | 1,143   |   |  |  | 5,187  |  
|Advertising and promotion                            |  |                                    | 75     |   |                                  |  | 88     |        |  |  | (13   | ) |  |      | 134     |   |        |  | 114     |   |  |  | 20     |  
|Other                                                |  |                                    | 701    |   |                                  |  | 1,142  |        |  |  | (441  | ) |  |      | 1,243   |   |        |  | 3,643   |   |  |  | (2,400 | )
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Non-interest expense                                 |  |                                    | 2,999  |   |                                  |  | 2,507  |        |  |  | 492   |   |  |      | 8,700   |   |        |  | 5,939   |   |  |  | 2,761  |  
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  
|Parent Company loss                                  |  | $                                  | (6,672 | ) |                                  |  | (7,568 | )      |  |  | 896   |   |  |      | (15,901 | ) |        |  | (14,089 | ) |  |  | (1,812 | )
|                                                     |  |                                    |        |   |                                  |  |        |        |  |  |       |   |  |      |         |   |        |  |         |   |  |  |        |  

The Parent Company interest income on loans during the three and six months ended June 30, 2012 and 2011 represents
interest income on two performing loans. During the six months ended June 30, 2012, the Parent Company recognized $134,000 of additional interest income on one of the performing loans as a result of the receipt of previously deferred monthly
payments.

Interest and dividend income on taxable securities during the three months ended June 30, 2011 primarily represents earnings
from a BankAtlantic reverse repurchase agreement and dividends from an equity investment. The Parent Company ceased receiving dividends from the equity investment during the second quarter of 2011 and transferred the reverse repurchase agreement to
a non-interest bearing BankAtlantic checking account during the third quarter of 2011.

Interest expense for the three and six months ended
June 30, 2012 and 2011 represents interest expense recognized on the Parent Companys junior subordinated debentures. The increase in interest expense during the 2012 periods compared to 2011 periods reflects higher average balances on
junior subordinated debentures resulting from the



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deferral of interest. The average balance on junior subordinated debentures increased from $327 million and $325 million during the three and six months ended June 30, 2011 to $342 million
and $340 million during the same 2012 periods, respectively. Average interest rates on junior subordinated debentures were 4.73% and 4.74% during the three and six months ended June 30, 2011 compared to 4.84% and 4.90% during the same 2012
periods, respectively.

Income from unconsolidated trusts during the three and six months ended June 30, 2012 and 2011 represents equity
earnings from trusts formed to issue trust preferred securities.

Securities activities, net during the three and six months ended
June 30, 2011 represents the Parent Companys recognition of a $1.5 million other than temporary impairment on an equity security. There were no impairments on equity securities during the three and six months ended June 30, 2012.

Included in other non-interest income during each of the three and six months ended June 30, 2012 and 2011 was $0.3 million and $0.6
million of income from BankAtlantic for executive management services. These fees were eliminated in the Companys consolidated financial statements. Other non-interest income during the six months ended June 30, 2011 included a loss of
$99,000 from the sale of $1.7 million of loans held for sale. The Parent Company did not sell loans during the six months ended June 30, 2012.

The lower compensation expense primarily reflects lower share-based compensation expense as equity awards have not been granted since February 2010.

The substantial increase in professional fees during the three and six months ended June 30, 2012 compared to the same 2011 periods primarily
represents litigation costs from the TruPs related litigation in Delaware associated with the BB&T Transaction, which includes an estimate of reimbursements to trustees for their legal fees and related expenses in that litigation.

The decrease in other non-interest expense during the quarter ended June 30, 2012 compared to the same 2011 quarter related primarily to lower
impairments. Impairments on real estate owned and loans held for sale declined from $0.7 million during the 2011 quarter to $0.5 million during the same 2012 quarter. The decrease in other non-interest expenses during the six months ended
June 30, 2012 compared to the same 2011 period primarily reflects lower impairments of loans and real estate owned which decreased from $3.1 million during the 2011 six month period to $0.8 million during the same 2012 period.

Credit Quality

The composition
of the Parent Companys loans and real estate owned at the indicated dates was as follows (in thousands):



|                                  |  |              |       |  |                  |  |       |  
|--------------------------------- |  | ------------ | ----- |  | ---------------- |  | ----- | -
|                                  |  | June 30,2012 |       |  | December 31,2011 | 
|Nonaccrual loans:                 |  |              |       |  |                  |  |       |  
|Commercial non-real estate:       |  | $            |      |  |                  |  | 948   |  
|Commercial real estate:           |  |              |       |  |                  |  |       |  
|Residential                       |  |              | 3,296 |  |                  |  | 3,703 |  
|Land                              |  |              | 424   |  |                  |  | 3,432 |  
|                                  |  |              |       |  |                  |  |       |  
|Total non-accrual loans           |  |              | 3,720 |  |                  |  | 8,083 |  
|Allowance for loan losses         |  |              |      |  |                  |  | (784  | )
|                                  |  |              |       |  |                  |  |       |  
|Non-accrual loans, net            |  |              | 3,720 |  |                  |  | 7,299 |  
|Performing other commercial loans |  |              | 2,386 |  |                  |  | 2,432 |  
|                                  |  |              |       |  |                  |  |       |  
|Loans receivable, net             |  | $            | 6,106 |  |                  |  | 9,731 |  
|                                  |  |              |       |  |                  |  |       |  
|Real estate owned                 |  | $            | 8,386 |  |                  |  | 9,137 |  
|                                  |  |              |       |  |                  |  |       |  



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During the six months ended June 30, 2012, the Parent Company charged off a $0.9 million commercial
non-real estate loan and foreclosed on $3.4 million of land loans. The Parent Company had established a $0.8 million specific valuation allowance during prior periods on the charged off commercial non-real estate loan.

During the six months ended June 30, 2012, the Parent Company sold $3.5 million of real estate owned for a $0.4 million gain.

The following table outlines general information about the Parent Companys non-accrual loans as of June 30, 2012 (in thousands):



|                                  |  |                        |        |  |                    |  |       |                  |  |  |                     |  |  |                         |         |  |                 |  |         |                    |  |  |                           |  |  |  |             |  |  |  |         | 
|--------------------------------- |  | ---------------------- | ------ |  | ------------------ |  | ----- | ---------------- |  |  | ------------------- |  |  | ----------------------- | ------- |  | --------------- |  | ------- | ------------------ |  |  | ------------------------- |  |  |  | ----------- |  |  |  | ------- | 
|Relationships                     |  | UnpaidPrincipalBalance |        |  | RecordedInvestment |  |       | SpecificReserves |  |  | Date loanOriginated |  |  | DatePlaced onNonaccrual |         |  | DefaultDate (2) |  |         | CollateralType (3) |  |  | Date ofLast FullAppraisal | 
|Residential Land Developers       |  |                        |        |  |                    |  |       |                  |  |  |                     |  |  |                         |         |  |                 |  |         |                    |  |  |                           |  |  |  |             |  |  |  |         | 
|Borrower No. 1 (1)                |  | $                      | 20,005 |  |                    |  | 3,296 |                  |  |  |                    |  |  |                         | Q1-2005 |  |                 |  | Q4-2007 |                    |  |  | Q1-2008                   |  |  |  | Residential |  |  |  | Q3-2011 | 
|Borrower No. 2                    |  |                        | 3,060  |  |                    |  | 424   |                  |  |  |                    |  |  |                         | Q2-2006 |  |                 |  | Q4-2008 |                    |  |  | Q1-2008                   |  |  |  | Residential |  |  |  | Q2-2011 | 
|                                  |  |                        |        |  |                    |  |       |                  |  |  |                     |  |  |                         |         |  |                 |  |         |                    |  |  |                           |  |  |  |             |  |  |  |         | 
|Total Residential Land Developers |  | $                      | 23,065 |  |                    |  | 3,720 |                  |  |  |                    |  |  |                         |         |  |                 |  |         |                    |  |  |                           |  |  |  |             |  |  |  |         | 
|                                  |  |                        |        |  |                    |  |       |                  |  |  |                     |  |  |                         |         |  |                 |  |         |                    |  |  |                           |  |  |  |             |  |  |  |         | 



|(1) | During 2008, 2009 and 2010, the Parent Company recognized partial charge-offs on relationship No. 1 aggregating $16.4 million.
|--- | ------------------------------------------------------------------------------------------------------------------------------

|(2) | The default date is defined as the date of the initial missed payment prior to default.
|--- | ---------------------------------------------------------------------------------------

|(3) | Acquisition and development (A&D).
|--- | ------------------------------------

The loans that comprise the above relationships are all collateral dependent. As such, the Parent Company measures these loans based on the fair value of the collateral less costs to sell. The fair value
of the collateral was determined using unadjusted third party appraisals for all relationships. Management performs quarterly impairment analyses on these credit relationships subsequent to the date of the appraisal and may reduce appraised values
if market conditions significantly deteriorate subsequent to the appraisal date. However, our policy is to obtain a full appraisal within one year from the date of the prior appraisal, unless the loan is in the process of foreclosure.

Changes in the Parent Companys allowance for loan losses were as follows (in thousands):



|                                           |  |                                    |    |   |                                  |  |        |      |  |  |      |   |  |  |        |  
|------------------------------------------ |  | ---------------------------------- | -- | - | -------------------------------- |  | ------ | ---- |  |  | ---- | - |  |  | ------ | -
|                                           |  | For the Three MonthsEnded June 30, |    |   | For the Six MonthsEnded June 30, | 
|                                           |  | 2012                               |    |   | 2011                             |  |        | 2012 |  |  | 2011 |  
|Balance, beginning of period               |  | $                                  |   |   |                                  |  | 814    |      |  |  | 784  |   |  |  | 830    |  
|                                           |  |                                    |    |   |                                  |  |        |      |  |  |      |   |  |  |        |  
|Loans charged-off                          |  |                                    |   |   |                                  |  | (1,329 | )    |  |  | (948 | ) |  |  | (1,325 | )
|Recoveries of loans previously charged-off |  |                                    | 2  |   |                                  |  |       |      |  |  | 170  |   |  |  |       |  
|                                           |  |                                    |    |   |                                  |  |        |      |  |  |      |   |  |  |        |  
|Net (charge-offs)                          |  |                                    | 2  |   |                                  |  | (1,329 | )    |  |  | (778 | ) |  |  | (1,325 | )
|Recovery for loan losses                   |  |                                    | (2 | ) |                                  |  | 515    |      |  |  | (6   | ) |  |  | 495    |  
|                                           |  |                                    |    |   |                                  |  |        |      |  |  |      |   |  |  |        |  
|Balance, end of period                     |  | $                                  |   |   |                                  |  |       |      |  |  |     |   |  |  |       |  
|                                           |  |                                    |    |   |                                  |  |        |      |  |  |      |   |  |  |        |  

The provision for loan losses during the six months ended June 30, 2012 reflects the charge-off of a $0.9 million
commercial non-real estate loan and the related charge-off of the specific valuation allowances established on this non-real estate loan during prior periods. The $0.2 million recovery relates to the foreclosure of a commercial land loan for which
the fair value of the collateral less cost to sell exceeded the recorded investment in the loan.



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The $1.3 million of charge-offs during the three and six months ended June 30, 2011 were comprised
of a $1.2 million charge-off of a commercial land loan and a $0.1 million charge-off of a commercial residential loan. The Parent Company reversed a $0.8 million specific valuation allowance related to the commercial land loan charged-off during the
three months ended June 30, 2011.

Liquidity and Capital Resources

BBX Capital

On July 31, 2012, BBX Capital completed its previously announced sale of
BankAtlantic to BB&T. Under the terms of the Agreement, immediately prior to the sale of BankAtlantic to BB&T, BankAtlantic distributed to BBX the membership interests of two BankAtlantic wholly-owned subsidiaries, Florida Asset Resolution
Group, LLC (FAR) and BBX Capital Management, LLC (CAM).

CAMs assets consisted of non-performing commercial
loans, commercial real estate owned and previously written off assets that had an aggregate carrying value on BankAtlantics balance sheet of $126 million and $81 million of cash as of June 30, 2012. CAM had approximately $1.5 million of
liabilities related to these assets as of June 30, 2012.

FARs assets consisted of performing and non-performing loans, tax
certificates and real estate owned that had an aggregate carrying value on BankAtlantics balance sheet of approximately $358 million and $37 million of cash as of June 30, 2012. FAR had approximately $13.6 million of liabilities related
to these assets as of June 30, 2012. At the closing of the Transaction, the Company transferred to BB&T 95% of the outstanding preferred membership interests in FAR in connection with BB&Ts assumption of the Companys
outstanding TruPs obligations. The Company continues to hold the remaining 5% of FARs preferred membership interests. Under the terms of the Amended and Restated Limited Liability Company of FAR which was entered into by the Company and
BB&T at the closing, BB&T will hold its 95% preferred interest in the net cash flows of FAR until such time as it has recovered $285 million in preference amount plus a priority return of LIBOR + 200 basis points per annum on any unpaid
preference amount. At that time, BB&Ts interest in FAR will terminate, and the Company will thereafter be entitled to any and all residual proceeds from FAR. It is expected that the assets (other than cash) contributed to FAR will be
monetized over a period of seven years, or longer provided BB&Ts preference amount is repaid within such seven-year period. The Company entered into an incremental $35 million guarantee in BB&Ts favor to further assure
BB&Ts recovery of the $285 million preference amount within seven years. As a consequence, until BB&Ts preferred interest in FAR is recovered, the cash generated from the activities of FAR will be utilized to pay expenses, fund
the preferred return and repay the preferred membership interest.

BBX Capital also received $6.4 million of cash consideration upon the sale
of BankAtlantic and the Company recognized a $307 million gain in connection with the Transaction: however, the gain and the $6.4 million of cash consideration received from BB&T were based on available financial information as of June 30,
2012. Under the terms of the Agreement, these amounts are subject to adjustment post-closing as all relevant financial information is reviewed and approved by the parties, and the cash payment made to the Company may be less than the amount
indicated above or the Company may be required to make a net cash payment to BB&T. BBX Capital utilized $51.3 million of the cash to pay BB&T for all accrued and unpaid interest on the TruPs through the closing of the Transaction, and $7.3
million of the cash to fund transaction costs and payments of certain legal fees and expenses with respect to the litigation relating to the Transaction brought by certain holders of the TruPs. The remaining cash of approximately $29 million is
available for general corporate purposes.

The net cash flows received by BBX Capital from the Transaction are summarized below (in
thousands):



|                                                  |  |   |         |  
|------------------------------------------------- |  | - | ------- | -
|Cash received from Transaction:                   |  |   |         |  
|Cash received from CAM                            |  | $ | 81,210  |  
|Transaction cash consideration                    |  |   | 6,433   |  
|                                                  |  |   |         |  
|Total cash received                               |  |   | 87,643  |  
|                                                  |  |   |         |  
|Cash outflows from Transaction:                   |  |   |         |  
|TruPS accrued and unpaid interest                 |  |   | (51,314 | )
|Legal fees - TruPS litigation                     |  |   | (2,349  | )
|Estimated Transaction costs                       |  |   | (5,000  | )
|                                                  |  |   |         |  
|Total cash outflows                               |  |   | (58,663 | )
|Net cash received from Transaction by BBX Capital |  | $ | 28,980  |  
|                                                  |  |   |         |  

BBX Capitals principal source of liquidity was its cash holdings and funds obtained from its wholly-owned work-out
subsidiary. The Company received approximately $29 million of cash in connection with the sale of BankAtlantic excluding the cash in FAR, subject to adjustment as described above, and expects to obtain funds in subsequent periods from the loans and
real estate and other assets in CAM and the Companys existing asset workout subsidiary, each of which is wholly-owned by the Company, and distributions from its 5% preferred interest in the net cash flows from FAR. The Company also may obtain
funds through the issuance of equity and debt securities. The Company anticipates utilizing these funds for general corporate purposes including employee compensation and benefits, servicing costs and real estate owned operating expenses in the near
term and anticipates involvement in real estate investment and specialty finance activities over time as assets are monetized.



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|Item 3. | Quantitative and Qualitative Disclosures about Market Risk
|------- | ----------------------------------------------------------

After giving effect to the consummation of its Transaction with BB&T, BBX Capitals market risk primarily consists of interest rate risk on its accruing loans. As a result, BBX Capitals
earnings are affected by interest rates, which are subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal
Reserve Board. BBX Capital has estimated the changes in its interest income based on changes in interest rates. Presented below is an analysis of BBX Capitals estimated interest income over a twelve month period calculated utilizing BBX
Capitals model (dollars in thousands):



|                           |  |                   |        | 
|-------------------------- |  | ----------------- | ------ | 
|As of June 30, 2012        | 
|Basis Point
Change
in Rate |  | NetInterestIncome |       
|                          
|                          
|200                        |  | $                 | 13,372 | 
|100                        |  |                   | 12,048 | 
|                          |  |                   | 10,723 | 
|(100)                      |  |                   | 9,399  | 
|(200)                      |  |                   | 8,075  | 

Additionally, because a significant majority of BBX Capitals assets consist of loans secured by real estate and
real estate owned, BBX Capitals financial condition and earnings are also affected by changes in real estate values in the markets where the real estate is located.

Except as it relates to BBX Capital (as described above), there have been no significant changes in BFCs or its subsidiaries, including Bluegreens, market risk from the market risk
described in Part II, Item 7A of Amendment No. 1 to BFCs Annual Report on Form 10-K for the year ended December 31, 2011.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation
of Disclosure Controls and Procedures

As of the end of the period covered by this report, our management evaluated, with the
participation of our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon that evaluation, our
Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were effective as of June 30, 2012 to ensure that information required to be disclosed by us in the reports that
we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SECs rules and forms and (ii) is accumulated and communicated to our management, including our
Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, as appropriate, to allow for timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our
internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



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PART II  OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Except as set forth
below, there have been no material changes in our legal proceedings from those previously disclosed in the Legal Proceedings section of Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31,
2011.

Woodbridge Holdings, LLC v. Prescott Group Aggressive Small Cap Master Fund, G.P., Cede & Co., William J. Maeck,
Ravenswood Investments III, L.P., and The Ravenswood Investment Company, Circuit Court, 17th Judicial Circuit, Broward County, Florida

Under Florida law, holders of shares of Class A Common Stock of Woodbridge Holdings Corporation (WHC) who did not vote to approve
BFCs merger with WHC, which was consummated during September 2009, and who properly asserted and exercised their appraisal rights with respect to their shares are entitled to receive a cash payment in an amount equal to the fair value of their
shares (as determined in accordance with Florida law) in lieu of the shares of BFCs Class A Common Stock which they would otherwise have been entitled to receive. In accordance with Florida law, Woodbridge Holdings, LLC, the successor to
WHC (Woodbridge), provided written notices and required forms to the dissenting shareholders setting forth, among other things, its determination that the fair value of WHCs Class A Common Stock immediately prior to the
effectiveness of the merger was $1.10 per share. Dissenting shareholders, who collectively held approximately 4.2 million shares of WHCs Class A Common Stock, rejected Woodbridges offer of $1.10 per share and requested payment
for their shares based on their respective fair value estimates of WHCs Class A Common Stock. Under Florida law, Woodbridge thereafter commenced the appraisal rights action. In December 2009, a $4.6 million liability was recorded with a
corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridges offer to the dissenting shareholders. On July 5, 2012, the presiding court determined the fair value of the dissenting shareholders
shares of WHCs Class A Common Stock to be $1.78 per share and awarded legal and other costs in favor of the dissenting shareholders. Woodbridge has appealed the courts ruling with respect to the fair value determination as well as
the award of legal fees and other costs in favor of the dissenting shareholders. The outcome of the appeal is uncertain. As a result of the trial courts ruling, the $4.6 million liability was increased (with a corresponding reduction to
additional paid in capital of $2.8 million) to approximately $7.5 million as of June 30, 2012 to account for the per share value awarded; however, the amount of legal and other costs that may be required to be paid to the dissenting
shareholders could not be reasonably estimated.

Betty Yvon Lesley et al. v. Bluff Dale Development Corporation,
Bluegreen Southwest One L.P. et al., 266thJudicial District
Court, Erath County, Texas

Bluegreen Southwest One, L.P. (Southwest), a subsidiary of Bluegreen
Corporation, was the developer of the Mountain Lakes subdivision in Texas. In Case No. 28006, styled Betty Yvon Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al., in the 266thJudicial District Court, Erath County, Texas, the plaintiffs filed a
declaratory judgment action against Southwest seeking to develop their reserved mineral interests in, on and under the Mountain Lakes subdivision. The plaintiffs claims are based on property law, oil and gas law, contract and tort theories.
The property owners association and some of the individual landowners have filed cross actions against Bluegreen, Southwest and individual directors of the property owners association related to the mineral rights and certain amenities in the
subdivision as described below. On January 17, 2007, the court ruled that the restrictions placed on the development that prohibited oil and gas production and development were invalid and not enforceable as a matter of law, that such
restrictions did not prohibit the development of the plaintiffs prior reserved mineral interests and that Southwest breached its duty to lease the minerals to third parties for development. The court further ruled that Southwest was the sole
holder of the right to lease the minerals to third parties. The order granting the plaintiffs motion was severed into Case No. 28769, styled Betty Yvon Lesley et a1. v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P.
et al. in the 266thJudicial District Court, Erath
County, Texas. Southwest appealed the trial courts ruling. On January 22, 2009, in Bluegreen Southwest One, L.P. et al. v. Betty Yvon Lesley et al., in the 11th Court of Appeals, Eastland, Texas, the Appellate Court reversed the
trial courts decision and ruled in Southwests favor and determined that all executive rights were owned by Southwest and then transferred to the individual property owners in connection with the sales of land. All property owner claims
were decided in favor of Southwest. It was also decided that Southwest did not breach a fiduciary duty to the plaintiffs as an executive rights holder. On May 14, 2009, the plaintiffs filed an appeal with the Texas



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Supreme Court asking the Court to reverse the Appellate Courts decision in favor of Southwest. On August 26, 2011, the Texas Supreme Court issued its opinion affirming the Appellate
Courts decision in part and reversing it in part. The Texas Supreme Court held that Southwest did not breach any covenants in the deed, but did breach a duty to the plaintiffs by filing restrictive covenants in connection with the development
of the property which prohibited mineral development, and that the appropriate remedy was cancellation of the restrictive covenants. The Texas Supreme Court further ruled that the plaintiffs have no right of ingress to, or egress from, the
subdivision, and that Southwest did not breach a duty to the plaintiffs by not leasing the mineral rights. The Texas Supreme Court remanded the case to the trial court for disposition consistent with its decision. No information is available as to
when the trial court will render its ruling.

Separately, as a result of the Texas Supreme Courts decision invalidating the restrictive
covenants prohibiting mineral development within the subdivision, certain lot owners within Mountain Lakes filed a cross-claim against Southwest alleging fraud, negligence and a violation of deceptive trade practices laws based on a claim that the
invalidation of the restrictive covenants has caused devaluation of their residential lots and other economic damages. During mediation held in June 2012, Southwest and the named plaintiffs (Lesley) reached agreement to settle their disputes with
Southwest agreeing to pay Lesley $200,000 for dismissal of their claims. Similarly, during the same mediation Southwest settled with seven of the lot owners claiming diminution of lot values for $5,000 collectively. However, settlement was not
reached with the other landowners possessing reserved mineral rights, nor with the majority of lot owners who filed the cross-claim against Southwest. Southwest intends to vigorously defend itself with respect to the pending matter.



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|Item 1A. | Risk Factors
|-------- | ------------

Except as set forth below,
there have been no material changes in the risks and uncertainties that we face from those disclosed in the Risk Factors section of Amendment No. 1 to our Annual Report on Form 10-K/A for the year ended December 31, 2011.

BBX Capitals business and operations and the mix of BBX Capitals assets will change as a result of the sale of BankAtlantic
to BB&T and BBX Capitals financial condition and results of operations will depend on whether the assets retained by BBX Capital in connection with the sale transaction are monetized at or near their current book values and BBX
Capitals results of operations will vary depending upon the timing of such monetization.

On July 31, 2012, BBX Capital
completed its previously announced sale of BankAtlantic to BB&T. Under the terms of the Agreement, immediately prior to the sale of BankAtlantic to BB&T, BankAtlantic distributed to BBX Capital the membership interests of two BankAtlantic
wholly-owned subsidiaries, Florida Asset Resolution Group, LLC (FAR) and BBX Capital Management, LLC (CAM). CAMs assets consisted of non-performing commercial loans, commercial real estate owned and previously written
off assets that had an aggregate carrying value on BankAtlantics balance sheet of $126 million as of June 30, 2012 and cash. FARs assets consisted of performing and non-performing loans, tax certificates and real estate owned that
had an aggregate carrying value on BankAtlantics balance sheet of approximately $358 million and $37 million of cash as of June 30, 2012. At the closing of the Transaction, BBX Capital transferred to BB&T 95% of the outstanding
preferred membership interests in FAR which BB&T will hold until such time as it has recovered $285 million in preference amount plus a priority return of LIBOR + 200 basis points per annum on any unpaid preference amount. BBX Capital continues
to hold the remaining 5% of FARs preferred membership interests and 100% of the residual interest in any remaining cash flows. BBX Capital expects to focus its operations on managing the assets held in CAM and in BBX Capitals existing
wholly owned asset work out subsidiary and on servicing approximately $54.7 million of commercial nonaccrual loans and real estate owned held by FAR. BBX Capitals activities in this regard may include renewing, modifying, increasing,
extending, refinancing and making protective advances with respect to the assets and participating in the management of real estate development activities. Additionally, depending on the timing and volume of cash flow generated in connection with
BBX Capitals management of these assets and BBX Capitals interests in FAR, BBX Capital may in the near-term make short term investments, and over time make investments and engage in various specialty finance activities. Accordingly, BBX
Capitals business and operations will differ significantly from its business and operations prior to the sale of BankAtlantic.

BBX
Capitals financial condition and results of operations will be dependent in the near term, in large part, on its ability to successfully manage and monetize the assets currently held in CAM and in BBX Capitals existing wholly owned asset
workout subsidiary and the assets in FAR which BBX Capital has been engaged to service as well as on the cash flow BBX Capital receives based on its interest in FAR. Further, BBX Capitals financial condition and results of operations will be
dependent in the longer term on these factors as well as BBX Capitals ability to successfully invest these cash flows. If the assets held in CAM and BBX Capitals other wholly owned asset workout subsidiary and the assets held in FAR are
not monetized at or near the current book values ascribed to them, BBX Capitals financial condition and results of operations would be adversely affected, and BBX Capitals ability to successfully pursue its business goals could be
adversely affected. Additionally, because a majority of these assets are nonaccrual and otherwise do not generate income on a regular basis, BBX Capital does not expect to generate significant revenue or income with respect to these assets until
such time as an asset is monetized through repayments or transactions involving the sale, joint venture or development of the underlying real estate. Accordingly, BBX Capital expects its revenues and results of operations to vary significantly on a
quarterly basis and from year to year.



|Item 6. | Exhibits
|------- | --------



|               |  |                                                                                                
|-------------- |  | -----------------------------------------------------------------------------------------------
|Exhibit 31.1 * |  | Chief Executive Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|               | 
|Exhibit 31.2 * |  | Chief Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



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|                |  |                                                                                                                                                
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
|                | 
|Exhibit 31.3 *  |  | Chief Accounting Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                               
|                | 
|Exhibit 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 2002 
|                | 
|Exhibit 32.2 ** |  | Chief Financial Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
|                | 
|Exhibit 32.3 ** |  | Chief Accounting Officer Certification pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



|* | Exhibits filed with this Form 10-Q.
|- | -----------------------------------

|** | Exhibits furnished with this Form 10-Q.
|-- | ---------------------------------------



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



|                      |  |                           |  |                                           
|--------------------- |  | ------------------------- |  | ------------------------------------------
|                      |  | BFC FINANCIAL CORPORATION
|                      |  |                          
|Date: August 14, 2012 |  | By:                       |  | /s/  Alan B. Levan                        
|                      |  |                           |  | Alan B. Levan, Chief Executive Officer    
|                      |  |                          
|Date: August 14, 2012 |  | By:                       |  | /s/  John K. Grelle                       
|                      |  |                           |  | John K. Grelle, Chief Financial Officer   
|                      |  |                          
|Date: August 14, 2012 |  | By:                       |  | /s/  Maria R. Scheker                     
|                      |  |                           |  | Maria R. Scheker, Chief Accounting Officer



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