UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

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

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

Commission File Number

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 þ NO o

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 þ NO o

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 o		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

The number of shares outstanding of each of the registrant’s classes of common stock as of August 8, 2011 is as follows:

Class A Common Stock of $.01 par value, 68,521,497 shares outstanding as of August 8, 2011.

Class B Common Stock of $.01 par value, 6,859,751 shares outstanding as of August 8, 2011.

 

 

BFC Financial Corporation

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:			3
Consolidated Statements of Financial Condition as of June 30, 2011 and December 31, 2010 — Unaudited			3
Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2011 and 2010 — Unaudited			4
Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2011 and 2010 — Unaudited			6
Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2011 — Unaudited			7
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2011 and 2010 — Unaudited			8
Notes to Unaudited Consolidated Financial Statements			10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			60
Item 4T. Controls and Procedures			110
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			111
Item 1A. Risk Factors			113
Item 6. Exhibits			113
SIGNATURES
EX-10.1
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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,
		2011				2010
ASSETS
Cash and due from other banks		$	185,489				178,868
Interest bearing deposits in other banks			318,437				455,538
Restricted cash (including held by variable interest entities (“VIE”) of $38,813 in 2011 and $41,243 in 2010)			61,351				62,249
Securities available for sale, at fair value			333,181				465,020
Investment securities, at cost which approximate fair value			333				2,033
Tax certificates, net of allowance of $8,526 in 2011 and $8,811 in 2010			66,211				89,789
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value			31,614				43,557
Loans held for sale			49,425				29,765
Loans receivable, net of allowance for loan losses of $137,643 in 2011 and $162,139 in 2010			2,659,237				3,009,721
Notes receivable (including gross securitized notes of $486,138 in 2011 and $533,479 in 2010) net of allowance of $79,160 in 2011 and $93,398 in 2010			543,174				574,969
Accrued interest receivable			17,973				22,010
Inventory of real estate			243,050				265,319
Real estate owned			79,704				74,488
Investments in unconsolidated affiliates			13,344				12,455
Properties and equipment, net			206,160				213,089
Goodwill			12,241				12,241
Intangible assets, net			75,620				78,918
Prepaid Federal Deposit Insurance Corporation (“FDIC”) deposit insurance assessment			16,733				22,008
Assets held for sale			1,768				37,334
Assets held for sale from discontinued operations			31,750				83,754
Other assets			79,369				79,941
Total assets		$	5,026,164				5,813,066
LIABILITIES AND EQUITY
Liabilities:
Interest bearing deposits		$	2,540,102				2,758,032
Non-interest bearing deposits			883,474				792,012
Deposits held for sale			—				341,146
Total deposits			3,423,576				3,891,190
Advances from FHLB			—				170,000
Securities sold under agreements to repurchase			—				21,524
Other short term borrowings			1,020				1,240
Receivable-backed notes payable, (including $412,780 held by VIE in 2011 and $459,030 in 2010)			515,373				569,214
Notes and mortgage notes payable and other borrowings			181,441				239,571
Junior subordinated debentures			469,419				461,568
Deferred income taxes, net			16,342				28,663
Deferred gain on debt settlement			29,875				11,305
Other liabilities			177,807				186,634
Total liabilities			4,814,853				5,580,909
Commitments and contingencies
Preferred stock of $.01 par value; authorized - 10,000,000 shares:
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				11,029
Equity:
Class A common stock of $.01 par value, authorized 150,000,000 shares; issued and outstanding 68,521,497 in 2011 and 2010			685				685
Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,859,751 in 2011 and 2010			69				69
Additional paid-in capital			229,978				230,748
Accumulated deficit			(98,777	)			(88,853	)
Accumulated other comprehensive (loss) income			(5,064	)			223
Total BFC Financial Corporation (“BFC”) shareholders’ equity			126,891				142,872
Noncontrolling interests			73,391				78,256
Total equity			200,282				221,128
Total liabilities and equity		$	5,026,164				5,813,066

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation

Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
						(As Revised)								(As Revised)
Revenues:
Real Estate and Other
Sales of VOIs and real estate		$	45,344				62,410				81,678				87,016
Other resort revenue			17,287				16,423				34,487				32,093
Fee based sale commission and other revenues			18,607				12,892				29,642				24,079
Interest income			21,974				23,679				44,407				47,893
			103,212				115,404				190,214				191,081
Financial Services
Interest income			37,569				43,648				77,633				91,735
Service charges on deposits			11,226				15,502				23,258				30,550
Other service charges and fees			6,886				7,739				14,077				15,117
Securities activities, net			(1,500	)			312				(1,524	)			3,450
Gain on sale of Tampa branches			38,656				—				38,656				—
Other non-interest income			3,208				2,491				6,735				5,017
			96,045				69,692				158,835				145,869
Total revenues			199,257				185,096				349,049				336,950
Costs and Expenses:
Real Estate and Other
Cost of sales of VOIs and real estate			6,703				10,598				13,928				13,333
Cost of sales of other resorts operations			12,156				11,452				25,237				23,395
Interest expense, net			16,538				20,232				34,403				40,322
Selling, general and administrative expenses			55,901				57,610				105,292				109,090
			91,298				99,892				178,860				186,140
Financial Services
Interest expense			8,127				9,951				16,654				21,795
Provision for loan losses			10,709				48,553				38,521				79,308
Employee compensation and benefits			19,731				25,155				39,021				50,533
Occupancy and equipment			11,488				13,745				24,073				27,327
Advertising and promotion			1,523				2,239				3,218				4,183
Check losses			663				521				962				953
Professional fees			1,295				4,824				4,654				7,711
Supplies and postage			955				921				1,857				1,919
Telecommunication			446				662				1,021				1,196
Provision for tax certificates			1,021				2,134				1,800				2,867
Impairment of loans held for sale			1,856				—				2,484				—
Impairment of real estate owned			6,507				1,221				8,830				1,364
FDIC deposit insurance assessment			2,181				2,430				5,486				4,789
Other expenses			5,776				8,409				9,336				13,429
			72,278				120,765				157,917				217,374
Total costs and expenses			163,576				220,657				336,777				403,514
(Loss) gain on settlement of investment in subsidiary			—				(1,135	)			11,305				(1,135	)
Equity in earnings from unconsolidated affiliates			475				276				2,252				469
Other income			407				1,199				981				1,637
Income (loss) from continuing operations before income taxes			36,563				(35,221	)			26,810				(65,593	)
Less: Provision for income taxes			6,520				4,541				8,665				3,678
Income (loss) from continuing operations			30,043				(39,762	)			18,145				(69,271	)
Loss from discontinued operations, net of income taxes			(33,026	)			(1,035	)			(33,454	)			(4,626	)
Net loss			(2,983	)			(40,797	)			(15,309	)			(73,897	)
Less: Net income (loss) attributable to noncontrolling interests			3,955				(25,219	)			(5,760	)			(38,539	)
Net loss attributable to BFC			(6,938	)			(15,578	)			(9,549	)			(35,358	)
Preferred stock dividends			(187	)			(187	)			(375	)			(375	)
Net loss allocable to common stock		$	(7,125	)			(15,765	)			(9,924	)			(35,733	)

(CONTINUED)

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
						(As Revised)								(As Revised)
Basic and Diluted Earnings (Loss) Per Common Share Attributable to BFC (Note 17):
Basic Earnings (Loss) Per Common Share
Earnings (loss) per share from continuing operations		$	0.13				(0.22	)			0.10				(0.46	)
(Loss) earnings per share from discontinued operations			(0.23	)			0.01				(0.23	)			(0.02	)
Net loss per common share		$	(0.10	)			(0.21	)			(0.13	)			(0.48	)
Diluted Earnings (Loss) Per Common Share
Earnings (loss) per share from continuing operations		$	0.13				(0.22	)			0.10				(0.46	)
(Loss) earnings per share from discontinued operations			(0.23	)			0.01				(0.23	)			(0.02	)
Net loss per common share		$	(0.10	)			(0.21	)			(0.13	)			(0.48	)
Basic weighted average number of common shares outstanding			75,381				75,379				75,381				75,378
Diluted weighted average number of common and common equivalent shares outstanding			75,381				75,379				75,381				75,378
Amounts attributable to BFC common shareholders:
Income (loss) from continuing operations		$	10,049				(16,530	)			7,472				(34,511	)
(Loss) income from discontinued operations			(17,174	)			765				(17,396	)			(1,222	)
Net loss		$	(7,125	)			(15,765	)			(9,924	)			(35,733	)

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2011				2010				2011				2010
						(As Revised)								(As Revised)
Net loss		$	(2,983	)			(40,797	)			(15,309	)			(73,897	)
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains on securities available for sale, net of income tax provision (benefit) of $0 in 2011; $(70) and $899 for the three and six months ended June 30, 2010, respectively.			(4,053	)			1,706				(4,917	)			4,176
Realized gains reclassified into net loss			—				—				—				(3,139	)
Other comprehensive (loss) income			(4,053	)			1,706				(4,917	)			1,037
Comprehensive loss			(7,036	)			(39,091	)			(20,226	)			(72,860	)
Less: Comprehensive income (loss) attributable to noncontrolling interests			4,738				(24,053	)			(5,390	)			(38,765	)
Total comprehensive loss attributable to BFC		$	(11,774	)			(15,038	)			(14,836	)			(34,095	)

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation

																										Accumulated
																										Other
																										Compre-				Total				Non-
		Shares of Common								Class A				Class B				Additional								hensive				BFC				controlling
		Stock Outstanding								Common				Common				Paid-in				Accumulated				Income				Shareholders’				Interest in				Total
		Class A				Class B				Stock				Stock				Capital				Deficit				(Loss)				Equity				Subsidiaries				Equity
Balance, December 31, 2010			68,521				6,860			$	685			$	69			$	230,748			$	(88,853	)		$	223			$	142,872			$	78,256			$	221,128
Net loss			—				—				—				—				—				(9,549	)							(9,549	)			(5,760	)			(15,309	)
Other comprehensive income (loss)			—				—				—				—				—				—				(5,287	)			(5,287	)			370				(4,917	)
Net effect of subsidiaries’ capital transactions attributable to BFC			—				—				—				—				(1,088	)			—				—				(1,088	)			—				(1,088	)
Noncontrolling interest net effect of subsidiaries’ capital transactions			—				—				—				—				—				—				—				—				525				525
Cash dividends on 5% Preferred Stock			—				—				—				—				—				(375	)			—				(375	)			—				(375	)
Share-based compensation related to stock options			—				—				—				—				318				—				—				318				—				318
Balance, June 30, 2011			68,521				6,860			$	685			$	69			$	229,978			$	(98,777	)		$	(5,064	)		$	126,891			$	73,391			$	200,282

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation

		For the Six Months Ended
		June 30,
		2011				2010
						(As Revised)
Net cash provided by operating activities		$	110,997				176,257
Investing activities:
Purchase of tax certificates			(18,567	)			(93,142	)
Proceeds from redemption of tax certificates			40,459				68,993
Purchase of securities available for sale			(9,932	)			(84,762	)
Proceeds from sales of securities available for sale			9,597				73,540
Proceeds from maturities of securities available for sale			126,679				64,943
Purchase of interest-bearing deposits in other financial institutions			—				(33,863	)
Proceeds from the maturities of interest bearing deposits			25,283				—
Decrease in restricted cash			898				9,160
Redemption of FHLB stock			11,943				—
Distributions from unconsolidated affiliates			139				85
Net repayments of loans			232,518				183,598
Proceeds from the sales of loans transferred to held for sale			27,793				26,871
Improvements to real estate owned			—				(800	)
Proceeds from sales of real estate owned			10,197				12,362
Proceeds from the sale of assets			—				75,305
Purchases of office property and equipment			(3,676	)			(4,101	)
Proceeds from the sale of office property and equipment			1,247				528
Net cash outflow from sale of Tampa branches			(257,221	)			—
Net cash provided by investing activities			197,357				298,717
Financing activities:
Net (decrease) increase in deposits			(144,400	)			35,662
Net repayments from FHLB advances			(170,020	)			(167,061	)
Net (decrease) increase in securities sold under agreements to repurchase			(21,524	)			256
Decrease in short term borrowings			(220	)			(732	)
Prepayment of bonds payable			—				(661	)
Repayment of notes, mortgage notes and bonds payable			(103,933	)			(178,600	)
Proceeds from notes, mortgage notes and bonds payable			25,301				21,508
Payments for debt issuance costs			(1,090	)			(958	)
Preferred stock dividends paid			(375	)			(375	)
Proceeds from issuance of subsidiaries’ common stock to non-BFC shareholders			1,001				783
Payments for the issuance costs of BankAtlantic Bancorp Class A common stock			—				(118	)
Proceeds from the exercise of BFC stock options			—				2
Non-controlling interest distributions			(4,142	)			(338	)
Net cash used in financing activities			(419,402	)			(290,632	)
(Decrease) increase in cash and cash equivalents			(111,048	)			184,342
Cash and cash equivalents at beginning of period			588,846				316,080
Cash and cash equivalents held for sale			5,850				—
Cash and cash equivalents at end of period		$	483,648	(a)			500,422

(CONTINUED)

BFC Financial Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)

		For the Six Months Ended
		June 30,
		2011				2010
						(As Revised)
Supplemental cash flow information:
Interest paid on borrowings and deposits		$	39,024				50,691
Net income taxes paid (refunds)			1,324				(60,222	)
Supplementary disclosure of non-cash investing and financing activities:
Loans and tax certificates transferred to real estate owned			25,074				22,115
Long-lived assets held-for-use transferred to assets held for sale			—				1,919
Long-lived assets held-for-sale transferred to assets held for use			—				1,239
Securities purchased pending settlement			—				30,002
(Decrease) increase in BFC’s accumulated other comprehensive income, net of taxes			(5,287	)			1,263
Net (decrease) increase in BFC shareholders’ equity from the effect of subsidiaries’ capital transactions, net of taxes			(1,088	)			1,249
Net decrease in equity resulting from cumulative effect of change in accounting principle			—				(2,569	)

See Notes to Unaudited Consolidated Financial Statements.

BFC Financial Corporation

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 diversified holding company whose principal holdings include a controlling interest in BankAtlantic Bancorp, Inc. and its subsidiaries, including BankAtlantic (“BankAtlantic Bancorp”), a controlling interest in 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. As a result of its position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” and was historically examined and regulated by the Office of Thrift Supervision (“OTS”). However, effective July 21, 2011, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the OTS’ supervisory authority is now held by, and BFC is subject to the supervision of, the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”).

          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 BankAtlantic Bancorp, Bluegreen and Woodbridge Holdings, LLC, a wholly-owned subsidiary of BFC (“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, 2011, we had an approximately 52% ownership and voting interest in Bluegreen and an approximately 53% ownership interest and 75% voting interest in BankAtlantic Bancorp.

          Our business activities currently consist of (i) Real Estate and Other and (ii) Financial Services. Since our acquisition of a controlling interest in Bluegreen during November 2009, we have reported the results of our business activities through six segments. Four of the segments relate to our Real Estate and Other business activities. These segments are: BFC Activities; Real Estate Operations; and Bluegreen Resorts and Bluegreen Communities, the two segments through which Bluegreen’s business was historically conducted. Our other two segments — BankAtlantic and BankAtlantic Bancorp Parent Company — relate to our Financial Services business activities and include BankAtlantic Bancorp’s results of operations.

          On March 24, 2011, Bluegreen announced that it had engaged advisors to explore strategic alternatives for Bluegreen Communities. In connection with that process, Bluegreen’s Board of Directors made a determination during June 2011 to seek to sell Bluegreen Communities or all or substantially all of its assets. As a consequence, it was determined that Bluegreen Communities met the criteria for classification as a discontinued operation. Bluegreen recently entered into a non-binding letter of intent with a third party contemplating the sale of Bluegreen Communities, or a similar transaction. However, as of the date of this filing, Bluegreen had not entered into any definitive agreement or agreements with respect to the sale of Bluegreen Communities or its assets, and Bluegreen may not be successful in its efforts to consummate any such sale or sales. See Note 4 for further information regarding the classification of Bluegreen Communities as a discontinued operation and the results of discontinued operations for the three and six months ended June 30, 2011, and Note 14 for additional information about our operating segments.

          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, 2011; the consolidated results of operations and comprehensive loss for the three and six months ended June 30, 2011 and 2010; cash flows for the six months ended June 30, 2011 and 2010; and the changes in consolidated equity for the six months ended June 30, 2011. Operating results for the three and six months ended June 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011. The accompanying unaudited consolidated financial statements and these 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. 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.

          As described above, the operating results of Bluegreen Communities, which had previously been presented as a separate reporting segment, are included in discontinued operations in the consolidated statements of operations. In addition, the majority of the assets related to Bluegreen Communities are presented separately on the consolidated statement of financial condition as “assets held for sale from discontinued operations.” See Note 4 for further information.

          Revisions to Consolidated Financial Statements

          On November 16, 2009, we purchased an additional 7.4 million shares of Bluegreen’s common stock. This share purchase increased our ownership interest in Bluegreen to approximately 16.9 million shares, or approximately 52%, of Bluegreen’s outstanding common stock. Accordingly, we are deemed to have a controlling interest in Bluegreen and, under GAAP, Bluegreen’s results are consolidated in our financial statements. The Company accounted for the acquisition of a controlling interest in Bluegreen in accordance with the accounting guidance for business combinations, pursuant to which we were required to evaluate the fair value of Bluegreen’s assets and liabilities as of the acquisition date. As previously disclosed, the allocation of the purchase price was based on preliminary estimates of the fair value of Bluegreen’s inventory and contracts, and was subject to change within the measurement period as valuations were finalized. Additionally, any offset relating to amortization/accretion was also retrospectively adjusted in the appropriate periods. As discussed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, during the fourth quarter of 2010, the Company finalized its valuations and adjusted the preliminary values assigned to the assets and liabilities of Bluegreen in order to reflect additional information obtained since the November 16, 2009 share acquisition date. These changes resulted in the following adjustments at December 31, 2009: a decrease in real estate inventory of approximately $6.9 million; an increase in other assets of approximately $3.5 million; an increase in other liabilities of approximately $4.1 million; and a decrease in deferred income taxes of approximately $7.1 million. Such adjustments resulted in a decrease to the “bargain purchase gain” related to the share acquisition for the year ended December 31, 2009 from $183.1 million to $182.8 million. The Company’s Consolidated Statements of Operations for the three and six months ended June 30, 2010 were revised to reflect the impact of the amortization/accretion associated with the above adjustments which resulted in a decrease to the net loss for the three and six months ended June 30, 2010 of approximately $188,000 and $276,000, respectively, compared to the previously reported amounts.

          Additionally, during the fourth quarter of 2010, management identified certain errors in its previously reported financial statements for 2010 and 2009. Because these errors were not material to the Company’s financial statements for 2010 or 2009, individually or in the aggregate, the Company revised its previously reported 2010 first, second and third quarter financial statements and its 2009 annual financial statements. These adjustments related to the following: the recognition of interest income associated with the notes receivable which for accounting purposes are treated as having been acquired by BFC in accordance with the accounting guidance Loans and Debt Securities with Deteriorated Credit Quality; an adjustment to the provision for loan losses for these notes receivable; interest expense recognition for notes payable of certain defaulted debt at Woodbridge’s subsidiaries, Core Communities, LLC (“Core” or “Core Communities”) and Carolina Oak Homes, LLC (“Carolina Oak”), at the defaulted interest rate, where the stated interest rate was previously used; the recognition of income tax benefits associated with unrealized gains in accumulated other comprehensive income; and an adjustment to deferred taxes related to an impairment to real estate inventory which was reflected after November 16, 2009 and accounted for as a temporary difference, which should have been included in the determination of deferred taxes at the acquisition date, as part of the Bluegreen purchase price allocation.

          The Company’s financial statements for the three and six months ended June 30, 2010 contained herein reflect the adjustments and revisions described above. The Company will present the impact of these adjustments and revisions for the three and nine months ended September 30, 2010 in its Quarterly Report on Form 10-Q for the quarter ending September 30, 2011 , in which they will be disclosed as comparable periods. The quarterly period adjustments and revisions were previously disclosed in Note 40 to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. With respect to the adjustments and revisions for the quarter ended March 31, 2010, the Company disclosed the impact of these adjustments in the Quarterly Report on Form 10-Q for the quarter ended March 31, 2011.

          The following table summarizes the quarterly results for the three and six months ended June 30, 2010 as it was previously reported and as revised (in thousands):

		For the Three Months Ended								For the Six Months Ended
		June 30, 2010								June 30, 2010
						(As Previously								(As Previously
		(As Revised)				Reported)				(As Revised)				Reported)
Revenues (1)		$	185,096				183,252				336,950				335,243
Costs and expenses (2)			220,657				229,109				403,514				421,889
			(35,561	)			(45,857	)			(66,564	)			(86,646	)
Loss on settlement of investment in subsidiary			(1,135	)			(1,135	)			(1,135	)			(1,135	)
Equity in earnings from unconsolidated affiliates			276				276				469				469
Other income			1,199				1,199				1,637				1,953
Loss from continuing operations before income taxes			(35,221	)			(45,517	)			(65,593	)			(85,359	)
Less: Provision (benefit) for income taxes (3)			4,541				392				3,678				(4,199	)
Loss from continuing operations			(39,762	)			(45,909	)			(69,271	)			(81,160	)
(Loss) income from discontinued operations, net of income tax			(1,035	)			2,714				(4,626	)			2,465
Net loss			(40,797	)			(43,195	)			(73,897	)			(78,695	)
Less: Net loss attributable to noncontrolling interests (4)			(25,219	)			(27,015	)			(38,539	)			(41,680	)
Net loss attributable to BFC			(15,578	)			(16,180	)			(35,358	)			(37,015	)
Preferred Stock dividends			(187	)			(187	)			(375	)			(375	)
Net loss allocable to common stock		$	(15,765	)			(16,367	)			(35,733	)			(37,390	)
Basic (Loss) Earnings per Common Share
Loss per share from continuing operations		$	(0.22	)			(0.26	)			(0.46	)			(0.53	)
Earnings (loss) per share from discontinued operations			0.01				0.04				(0.02	)			0.03
Net loss per common share		$	(0.21	)			(0.22	)			(0.48	)			(0.50	)
Diluted (Loss) Earnings per Common Share
Loss per share from continuing operations		$	(0.22	)			(0.26	)			(0.46	)			(0.53	)
Earnings (loss) per share from discontinued operations			0.01				0.04				(0.02	)			0.03
Net loss per common share		$	(0.21	)			(0.22	)			(0.48	)			(0.50	)

          The principal amount of loans in BankAtlantic Bancorp’s residential loan portfolios set forth in the table in Note 10 to the Company’s financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 were incorrectly identified as reflecting loan-to-value ratios obtained as of the first quarter of 2010 when in fact the amounts instead reflected loan-to-value ratios as of the date of loan origination. The table below labeled “As Corrected” reflects loan-to-value ratios of BankAtlantic Bancorp’s residential loans as of December 31, 2010 based on valuations obtained during the first quarter of 2010. The table below labeled “As Reported” reflects the table contained in our Annual Report on Form 10-K for the year ended December 31, 2010 which reflects loan-to-value ratios of BankAtlantic Bancorp’s residential loans as of the date of loan origination.

		As Reported								As Corrected
		As of December 31, 2010								As of December 31, 2010
(in thousands)		Residential				Residential				Residential				Residential
Loan-to-value ratios		Interest Only				Amortizing				Interest Only				Amortizing
Ratios not available		$	—				78,031				59,520				185,610
=<60%			107,063				144,744				47,605				145,075
60.1% - 70%			118,679				103,891				33,005				49,732
70.1% - 80%			290,840				309,925				37,808				48,586
80.1% - 90%			17,055				23,982				47,574				47,039
>90.1%			16,609				13,212				324,734				197,743
Total		$	550,246				673,785				550,246				673,785

2. Regulatory and Liquidity Considerations

BFC

          Regulatory Considerations

          As described above, BFC, due to its position as the controlling shareholder of BankAtlantic Bancorp, is a “unitary savings bank holding company” and, as such, was historically examined and regulated by the OTS. Effective July 21, 2011, the Federal Reserve Board, pursuant to the Dodd-Frank Act, assumed the supervisory authority previously held by the OTS.

          BFC, on a parent company only basis, had previously committed that it would not, without the prior written non-objection of the OTS, (i) incur, issue, renew or roll over any current lines of credit, guarantee the debt of any other entity or otherwise incur any additional debt, except as contemplated by BFC’s business plan or in connection with BankAtlantic’s compliance requirements applicable to it; (ii) declare or make any dividends or other capital distributions other than dividends payable on BFC’s currently outstanding preferred stock of approximately $187,500 a quarter or (iii) enter into any new agreements, contracts or arrangements or materially modify any existing agreements, contracts or arrangements with BankAtlantic not consistent with past practices. On June 30, 2011, the OTS advised BFC that it was not permitted to (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 preferred stock, in each case without the prior written non-objection of the OTS. On July 21, 2011, BFC made a formal request to the Federal Reserve Board, which, as described above, now has the supervisory authority previously held by the OTS, for non-objection to the payment of the dividend on its outstanding preferred stock.

          As described below, BankAtlantic Bancorp and BankAtlantic each entered into Cease and Desist Orders with the OTS during February 2011. (See “BankAtlantic Bancorp and BankAtlantic — Regulatory Considerations” below for a discussion regarding the terms of the Cease and Desist Orders.) Based on its ownership interest in BankAtlantic Bancorp, BFC may in the future be required to enter into a Cease and Desist Order with the Federal Reserve Board addressing its ownership and oversight of those companies.

          Liquidity Considerations

          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp, 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, including tax refunds received as a result of tax law changes, short-term investments, and dividends from Benihana on our holdings of its convertible preferred stock. In addition, dividends we receive from Benihana in the future will be less than historical amounts due to our conversion of an aggregate of 300,000 shares out of a total of 800,000 shares of Benihana’s convertible preferred stock during May and July 2011. However, the

holders of our preferred stock may have the right to receive such dividends from Benihana in our place if the Federal Reserve Board does not consent to our payment of dividends on our preferred stock or we otherwise fail to satisfy such obligation. W also expect to receive an additional $7.5 million tax refund, net of amounts payable under the settlement agreement related to the bankruptcy filing of Levitt and Sons LLC and substantially all of its subsidiaries, as discussed in Note 15 below.

          We intend 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 and Class B Common Stock at an aggregate cost of no more than $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 years ended December 31, 2010 or 2009, or during the six months ended June 30, 2011.

          During June 2011, BFC acquired an aggregate of 13.3 million shares of BankAtlantic Bancorp’s Class A Common Stock in connection with the exercise of subscriptions rights granted to it in BankAtlantic Bancorp’s rights offering that commenced on May 16, 2011 and expired on June 16, 2011. The aggregate purchase price for the 13.3 million shares purchased was $10.0 million. During June and July 2010, BFC acquired an aggregate of 10.0 million shares of BankAtlantic Bancorp’s Class A Common Stock in connection with the exercise of subscription rights granted to it in BankAtlantic Bancorp’s rights offering that commenced on June 14, 2010 and expired on July 20, 2010. The aggregate purchase price for the 10.0 million shares purchased at that time was $15.0 million. See Note 3 for additional information.

          Since March 2009, BFC has not received cash dividends from BankAtlantic Bancorp. BankAtlantic Bancorp is currently prohibited from paying dividends on its common stock without first receiving the written non-objection of the Federal Reserve Board. In addition, during February 2009, BankAtlantic Bancorp elected to exercise its right to defer payments of interest on its trust preferred junior subordinated debt. BankAtlantic Bancorp is permitted to defer quarterly interest payments for up to 20 consecutive quarters. During the deferral period, BankAtlantic Bancorp is prohibited from paying dividends to its shareholders, including BFC. While BankAtlantic Bancorp can end the deferral period at any time, BankAtlantic Bancorp has indicated that it anticipates that it may continue to defer such interest payments for the foreseeable future. Furthermore, BFC has not received cash dividends from Bluegreen and does not expect to receive cash dividends from Bluegreen in the foreseeable future. Certain of Bluegreen’s credit facilities contain terms which may limit the payment of cash dividends, and Bluegreen may only pay dividends as declared by its Board of Directors, a majority of whom are independent directors under the listing standards of the New York Stock Exchange.

          We believe that our current financial condition and credit relationships, together with anticipated cash flows from other sources of funds, including tax refunds and, if determined to be advisable, proceeds from the disposition of certain properties or investments, will allow us to meet our anticipated near-term liquidity needs at least through June 30, 2012. With respect to long-term liquidity requirements, we may also, subject to the receipt of any regulatory approvals or non-objection, seek to raise funds through the incurrence of long-term secured or unsecured indebtedness, the issuance of equity and/or debt securities or through the sale of assets; however these alternatives may not be available to us on attractive terms, or at all.

Woodbridge

          The development activities at Carolina Oak, which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. Woodbridge was the obligor under a $37.2 million loan that was collateralized by the Carolina Oak property. During November 2009, the lender filed an action against Woodbridge and Carolina Oak alleging default under a promissory note and breach of a guaranty related to the loan. During December 2009, the OTS closed the lender and appointed the Federal Deposit Insurance Corporation (the “FDIC”) as receiver. The FDIC subsequently sold the loan to an investor group (sometimes referred to herein as the “note holder”). Effective April 26, 2011, Woodbridge and Carolina Oak entered into a settlement agreement with the note holder to resolve the disputes and litigation between them. Under the terms 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, to fully release Woodbridge and Carolina Oak, in each case subject to certain conditions. On April 26, 2011, the carrying amount of Carolina Oak’s inventory was approximately $10.8 million. In accordance with applicable accounting guidance, the Company recorded a deferred gain on debt settlement of $29.9 million in its Consolidated Statement of Financial Condition as of June 30, 2011. The deferred gain will be recognized into income at the earlier of the conclusion of a foreclosure proceeding or April 25, 2012.

          On September 21, 2009, BFC consummated its merger with Woodbridge pursuant to which Woodbridge merged with and into a wholly-owned subsidiary of BFC. Under Florida law, holders of Woodbridge’s Class A Common Stock who did not vote to approve the merger with Woodbridge and who 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 which they would otherwise have been entitled to receive. Dissenting Holders, who owned in the aggregate approximately 4.6 million shares of Woodbridge’s Class A Common Stock, provided written notice to Woodbridge regarding their intent to exercise their appraisal rights. In accordance with Florida law, Woodbridge provided written notices and required forms to the Dissenting Holders setting forth, among other things, its determination that the fair value of Woodbridge’s Class A Common Stock immediately prior to the effectiveness of the merger was $1.10 per share. Dissenting Holders were required to return their appraisal forms by November 10, 2009 and indicate on their appraisal forms whether the Dissenting Holder chose to (i) accept Woodbridge’s offer of $1.10 per share or (ii) demand payment of the fair value estimate determined by the Dissenting Holder plus interest. One Dissenting Holder, which held approximately 400,000 shares of Woodbridge’s Class A Common Stock, withdrew its shares from the appraisal rights process, while the remaining Dissenting Holders, who collectively held approximately 4.2 million shares of Woodbridge’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 Woodbridge’s Class A Common Stock. In December 2009, the Company recorded a $4.6 million liability with a corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridge’s offer to the Dissenting Holders. Thereafter, the appraisal rights litigation commenced and it is currently ongoing. The outcome of the litigation is uncertain and there is no assurance as to the amount of cash that will be required to be paid to the Dissenting Holders, which amount may be greater than the $4.6 million that we have accrued.

Core Communities

          Historically, the activities of Core Communities focused on the development of a master-planned community in Port St. Lucie, Florida called Tradition, Florida and a community outside of Hardeeville, South Carolina called Tradition Hilton Head. Until 2009, Tradition, Florida was in active development as was Tradition Hilton Head, although in a much earlier stage.

          During 2010, demand for residential and commercial inventory showed no signs of recovery, particularly in the geographic regions where Core’s properties were located. 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 mortgage loans totaling approximately $113.9 million collateralized by property in Florida and South Carolina. 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 acreage 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 entered 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 of the consensual judgments of foreclosure. In accordance with the accounting guidance for consolidation, the Company recorded a guarantee 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. Core received its general release of liability, and accordingly the deferred gain on settlement of investment in subsidiary was recognized into income during the first quarter of 2011. Approximately $27.2 million of the $113.9 million of mortgage loans described above is collateralized by property in South Carolina which had an estimated carrying

value of approximately $19.4 million at June 30, 2011. This property is subject to separate foreclosure proceedings which are expected to occur during the fourth quarter of 2011. While Core was released by the lender from any other claims relating to the loans, the applicable accounting guidance requires that the $27.2 million of debt and associated $19.4 million of collateral remain in Core’s financial statements until the foreclosure proceedings have been completed.

          In December 2010, Core and one of its subsidiaries entered into agreements, including a Deed in Lieu of Foreclosure Agreement, with one of their lenders which resolved the foreclosure proceedings relating to property at Tradition Hilton Head which served as collateral for a $25 million loan. Pursuant to the agreements, Core’s subsidiary transferred to the lender all of its rights to the property which served as collateral for the loan as well as certain additional real and personal property. The lender in turn released Core and its subsidiary from any claims arising from or relating to the loan. In accordance with applicable accounting guidance, this transaction was accounted for as a troubled debt restructuring and, accordingly, a $13.0 million gain on debt extinguishment was recognized in December 2010.

BankAtlantic Bancorp and BankAtlantic

Regulatory Considerations

          The Parent Company of BankAtlantic Bancorp (“BankAtlantic Bancorp Parent Company”) and BankAtlantic were historically regulated and subject to regular examination by the OTS. Since July 21, 2011, the regulatory oversight of BankAtlantic Bancorp Parent Company is by the Federal Reserve and the regulatory oversight of BankAtlantic is by the Office of the Comptroller of the Currency (“OCC”) as a result of the passage of the Dodd-Frank Act.

          On February 23, 2011, BankAtlantic Bancorp Parent Company and BankAtlantic each entered into a Stipulation and Consent to Issuance of Order to Cease and Desist with the OTS. The Order to Cease and Desist to which BankAtlantic Bancorp Parent Company is subject is referred to as the “Company Order,” the Order to Cease and Desist to which BankAtlantic is subject is referred to as the “Bank Order” and the Company Order and Bank Order are referred to collectively as the “Orders.” The OTS issued the Orders due to BankAtlantic Bancorp’s losses over the past three years, high levels of classified assets and inadequate levels of capital based on BankAtlantic’s risk profile as determined by the OTS. BankAtlantic Bancorp Parent Company submitted updated written plans to the OTS that addressed, among other things, maintenance and enhancement of BankAtlantic’s capital and its business plan for the year ending December 31, 2011. In addition, under the terms of the Company Order, BankAtlantic Bancorp Parent Company was prohibited from taking certain actions without receiving the prior written non-objection of the Federal Reserve, including, without limitation, declaring or paying any dividends or other capital distributions and incurring certain indebtedness. BankAtlantic Bancorp Parent Company is also required to ensure BankAtlantic’s compliance with the terms of the Bank Order as well as all applicable laws, rules, regulations and agency guidance.

          Pursuant to the terms of the Bank Order, BankAtlantic was required to maintain a tier 1 (core) capital ratio equal to or greater than 8% and a total risk-based capital ratio equal to or greater than 14%. At June 30, 2011, BankAtlantic had a tier 1 (core) capital ratio of 8.24% and a total risk-based capital ratio of 14.52%. Pursuant to the terms of the Bank Order, BankAtlantic has revised certain of its plans, programs and policies and submitted to the OTS certain written plans, including a capital plan, a revised business plan and a plan to reduce BankAtlantic’s delinquent loans and non-performing assets. If BankAtlantic fails to comply with the capital plan and/or fails to maintain the increased capital ratio requirements, or upon any written request from the OCC, BankAtlantic is required to submit a contingency plan, which details actions which BankAtlantic would, in its case, take to either merge with or be acquired by another banking institution. BankAtlantic will not be required to implement such contingency plan until such time as it receives written notification from the OCC to do so. In addition, the Bank Order requires BankAtlantic to limit its asset growth and restricts BankAtlantic from originating or purchasing new commercial real estate loans or entering into certain material agreements, in each case without receiving the prior written non-objection of the OCC. Separately, the OTS has confirmed that it has no objection to BankAtlantic originating loans to facilitate the sale of certain assets or the renewal, extension or modification of existing commercial real estate loans, subject in each case to compliance with applicable regulations and bank policies. The Bank Order prohibits the payment of dividends and other distributions without the prior written non-objection of the OCC. The Orders also include certain restrictions on compensation paid to the senior executive officers of BankAtlantic Bancorp Parent Company and BankAtlantic, and restrictions on agreements with affiliates.

          BankAtlantic Bancorp Parent Company and BankAtlantic will seek to maintain the higher capital requirements of the Bank Order through efforts that may include the issuance of BankAtlantic Bancorp’s Class A Common Stock through a public or private offering or through initiatives to maintain or improve its regulatory capital position including: operating strategies to increase revenues and to reduce non-interest expenses, and reduction of asset balances and non-performing loans. There can be no assurance that BankAtlantic Bancorp Parent Company or BankAtlantic will be able to execute these or other strategies in order to maintain BankAtlantic’s new minimum regulatory capital levels by the required time frames.

          Each Order became effective on February 23, 2011 and will remain in effect until terminated, modified or suspended by the OCC, as it relates to the Bank Order, or the Federal Reserve, as it relates to the Company Order. No fines or penalties were imposed in connection with either Order. While the Orders formalize steps that BankAtlantic Bancorp believes are already underway, if there is any material failure by BankAtlantic Bancorp Parent Company or BankAtlantic to comply with the terms of the Orders, or if unanticipated market factors emerge, and/or if BankAtlantic Bancorp is unable to successfully execute its plans, or comply with other regulatory requirements, then the regulators could take further action, which could include the imposition of fines and/or additional enforcement actions. Enforcement actions broadly available to regulators include the issuance of a capital directive, removal of officers and/or directors, institution of proceedings for receivership or conservatorship, and termination of deposit insurance. Any such action would have a material adverse effect on BankAtlantic Bancorp’s business, results of operations and financial position.

          Liquidity Considerations

          Both BankAtlantic Bancorp Parent Company and BankAtlantic actively manage liquidity and cash flow needs. BankAtlantic Bancorp Parent Company had cash of $3.8 million as of June 30, 2011. BankAtlantic Bancorp Parent Company does not have debt maturing until March 2032 and has the ability to defer interest payments on its junior subordinated debentures until December 2013; however, based on current interest rates, accrued and unpaid interest of approximately $73.9 million would be due in December 2013 if interest is deferred until that date. BankAtlantic Bancorp Parent Company’s operating expenses for the year ended December 31, 2010 were $6.4 million and were $3.1 million during the six months ended June 30, 2011. BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and the availability of its lines of credit borrowings with the Federal Home Loan Bank (“FHLB”), as well as the Treasury and Federal Reserve lending programs.

          As of June 30, 2011, BankAtlantic had $431 million of cash and short-term investments and approximately $832 million of available unused borrowings, consisting of $541 million of unused FHLB line of credit capacity, $257 million of unpledged securities, and $34 million of available borrowing capacity at the Federal Reserve. However, such available borrowings are subject to regular reviews and may be terminated, suspended or reduced at any time at the discretion of the issuing institution or based on the availability of qualifying collateral. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets, adverse litigation or regulatory actions, or deterioration in BankAtlantic’s financial condition may reduce the amounts it is able to borrow, make borrowings unavailable or make terms of the borrowings and deposits less favorable. As a result, BankAtlantic’s cost of funds could increase and the availability of funding sources could decrease. Based on current and expected liquidity needs and sources, BankAtlantic Bancorp expects to be able to meet its obligations at least through June 30, 2012.

3. Acquisitions and Dispositions

Bluegreen Share Acquisition

          As described above, on November 16, 2009, we purchased approximately 7.4 million shares of the common stock of Bluegreen for an aggregate purchase price of approximately $23 million, increasing our interest from 9.5 million shares, or 29%, of Bluegreen’s common stock to 16.9 million shares, or 52%, of Bluegreen’s common stock. As a result, we hold a controlling interest in Bluegreen and, under GAAP, consolidate Bluegreen and all of Bluegreen’s consolidated entities into our financial statements. See Revisions to Consolidated Financial Statements under Note 1 above for a discussion regarding adjustments made to our previously reported financial statements resulting from our finalization during the fourth quarter of 2010 of our valuation of Bluegreen’s assets and liabilities as of the November 16, 2009 share acquisition date.

Purchases of BankAtlantic Bancorp’s Class A Common Stock

          On June 18, 2010, BankAtlantic Bancorp commenced a rights offering to its shareholders of record as of the close of business on June 14, 2010 (the “2010 Rights Offering”). In the 2010 Rights Offering, BankAtlantic Bancorp distributed to each eligible shareholder 0.327 subscription rights for each share of BankAtlantic Bancorp’s Class A Common Stock and Class B Common Stock owned as of the close of business on June 14, 2010. Each subscription right entitled the holder thereof to purchase one share of BankAtlantic Bancorp’s Class A Common Stock at the purchase price of $1.50 per share. Shareholders who exercised their basic subscription rights in full were also given the opportunity to request to purchase any additional shares of BankAtlantic Bancorp’s Class A Common Stock that remained unsubscribed for at the expiration of the 2010 Rights Offering at the same $1.50 per share purchase price. The 2010 Rights Offering expired on July 20, 2010. During June 2010, BFC exercised its basic subscription rights in full, thereby purchasing 5,986,865 shares of BankAtlantic Bancorp’s Class A Common Stock, and requested to purchase an additional 4,013,135 shares of BankAtlantic Bancorp’s Class A Common Stock to the extent available at the expiration of the 2010 Rights Offering. In connection with the exercise of its subscription rights, BFC delivered to BankAtlantic Bancorp $15.0 million in cash, which represented the full purchase price for all of the shares subscribed for by BFC. In exchange, BFC was issued 4,697,184 shares of BankAtlantic Bancorp’s Class A Common Stock on June 28, 2010, which represented a portion of its basic subscription rights exercise. The balance of BFC’s subscription was treated as an advance to BankAtlantic Bancorp, as evidenced by a related $8.0 million promissory note executed by BankAtlantic Bancorp in favor of BFC. The promissory note had a scheduled maturity of July 30, 2010 and was payable in cash or shares of BankAtlantic Bancorp’s Class A Common Stock issuable to BFC in connection with its exercise of subscription rights in the 2010 Rights Offering. The promissory note was eliminated in consolidation as of June 30, 2010. In July 2010, in connection with the completion of the 2010 Rights Offering, the promissory note was satisfied in accordance with its terms through the issuance to BFC of the additional 5,302,816 shares of BankAtlantic Bancorp’s Class A Common Stock subscribed for by BFC. The 2010 Rights Offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71%.

          During the second quarter of 2011, BankAtlantic Bancorp distributed to its shareholders of record as of the close of business on May 12, 2011, 0.624 subscription rights for each share of such stock owned on that date (the “2011 Rights Offering”). Each subscription right entitled the holder thereof to purchase one share of BankAtlantic Bancorp’s Class A Common Stock at a purchase price of $0.75 per share. Shareholders who exercised their basic subscription rights in full were also given the opportunity to request to purchase, at the same $0.75 per share purchase price, additional shares of BankAtlantic Bancorp’s Class A Common Stock that were not purchased by other shareholders through the exercise of the basic subscription rights granted to them. The 2011 Rights Offering expired on June 16, 2011. BFC participated in the 2011 Rights Offering, acquiring an aggregate of 13,333,333 shares of BankAtlantic Bancorp’s Class A Common Stock for an aggregate purchase price of $10 million. This increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 53% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 75%.

          BFC’s acquisition of shares of BankAtlantic Bancorp’s Class A Common Stock in the 2010 and 2011 Rights Offerings were each accounted for as an equity transaction in accordance with applicable accounting guidance which provides that changes in a parent’s ownership interest which do not result in the parent losing its controlling interest are reported as equity transactions.

Sale of Tampa Branches and Related Facilities by BankAtlantic

          In August 2010, BankAtlantic announced that, due to the rapidly changing environment in Florida and the banking industry, it decided to focus on its core markets in South Florida and BankAtlantic began seeking a buyer for its 19 branches located in the Tampa, Florida area. In January 2011, BankAtlantic agreed to sell its 19 branches and 2 related facilities in the Tampa area and the associated deposits to an unrelated financial institution and on June 3, 2011, BankAtlantic completed the Tampa sale. The purchasing financial institution paid i) a 10% premium for the deposits plus ii) the net book value of the acquired real estate and substantially all of the fixed assets associated with the branches and facilities.

          The following summarizes the assets sold, liabilities transferred and cash outflows associated with the branches and facilities sold (in thousands):

		Amount
Assets Sold:
Property and equipment		$	28,626
Total assets sold			28,626
Liabilities Transferred:
Deposits			324,320
Other liabilities			183
Total liabilities transferred			324,503
Net liabilities transferred			(295,877	)
Gain on sale of Tampa branches, net of transaction costs of $1,959			38,656
Net cash outflows from sale of branches		$	(257,221	)

          The assets and liabilities associated with the Tampa branches as of December 31, 2010 were as follows (in thousands):

ASSETS
Cash and cash equivalents		$	5,850
Office properties and equipment			31,484
Total assets held for sale		$	37,334
LIABILITIES
Interest bearing deposits		$	255,630
Non-interest bearing deposits			85,516
Total deposits			341,146
Accrued interest payable			87
Total liabilities held for sale		$	341,233

4. Discontinued Operations

          On March 24, 2011, Bluegreen announced that it had engaged advisors to explore strategic alternatives for Bluegreen Communities, including a possible sale of the division. Based on its analysis of information and the available options presented to it, on June 30, 2011, Bluegreen’s Board of Directors made the determination to seek to sell Bluegreen Communities or all or substantially all of its assets. As a consequence, Bluegreen determined that Bluegreen Communities met the criteria for classification as discontinued operations and, accordingly, the operating results of Bluegreen Communities, which had previously been presented as a separate reporting segment, are included in discontinued operations in the Consolidated Statements of Operations for the three and six months ended June 30, 2011 and 2010. In addition, the majority of the assets related to Bluegreen Communities are presented separately on the Consolidated Statements of Financial Condition as “assets held for sale from discontinued operations.” The assets held for sale primarily consist of Bluegreen Communities real estate assets valued on our books at $31.8 million and $83.8 million as of June 30, 2011 and December 31, 2010, respectively. The decrease in the carrying amount of the assets held for sale as of June 30, 2011 as compared to December 31, 2010, primarily relates to a $52.4 million non-cash charge recorded during the three months ended June 30, 2011 to write down the value of Bluegreen Communities’ assets to its estimated fair value less cost to sell. Bluegreen derived the fair value of Bluegreen Communities’ assets available for sale based on the enterprise level discounted cash flow estimates, (Level 3 inputs), and the expressions of interest received in the marketing process of the related assets. Bluegreen recently entered into a non-binding letter of intent with a third party contemplating the sale of Bluegreen Communities, or a similar transaction. However, as of the date of this filing, Bluegreen had not entered into any definitive agreement or agreements with respect to the sale of Bluegreen Communities or its assets, and Bluegreen may not be successful in its efforts to consummate any such sale or sales.

          In December 2009, Core Communities reinitiated efforts to sell two of its commercial leasing projects (sometimes referred to herein as the “Projects”) and began soliciting bids from several potential buyers to purchase assets associated with the Projects. Accordingly, the results of operations for the Projects are included in the Company’s Consolidated Statement of Operations for the three and six months ended June 30, 2010 as discontinued operations. On June 10, 2010, Core sold the Projects to Inland Real Estate Acquisition, Inc. (“Inland”) for approximately $75.4 million. As a result of the sale, Core realized a gain on sale of discontinued operations of approximately $2.6 million in the second quarter of 2010. In connection with the sale, the outstanding balance of the loans related to the assets held for sale was reduced to approximately $800,000 as a result of negotiations with the lender. Core used the proceeds from the sale to repay these loans. As a result, Core was released from its obligations

to the lender with respect to the loans. The Projects net income from discontinued operations was approximately $2.7 million and $2.5 million for the three and six months ended June 30, 2010, respectively.

          The following table summarizes the results from discontinued operations of Bluegreen Communities during the three months ended June 30, 2011 and 2010 and Core Communities during the three and six months ended June 30, 2010 (in thousands). Core Communities ceased operations during 2010. Therefore, no comparative information is included for Core Communities for the three and six months ended June 30, 2011.

		For the Three
		Months Ended				For the Three Months Ended
		June 30, 2011				June 30, 2010
		Bluegreen				Bluegreen
		Communities				Communities				Core				Total
Revenue from discontinued operations		$	4,170				2,671				1,117				3,788
Gain on sale of assets			—				—				2,617				2,617
			4,170				2,671				3,734				6,405
Costs and Expenses:
Loss on assets held for sale (1)			52,733				—				—				—
Other costs and expenses			4,325				6,985				1,020				8,005
Interest expense (3)			772				1,120				—				1,120
			57,830				8,105				1,020				9,125
(Loss) income from discontinued operations
before income taxes (1)			(53,660	)			(5,434	)			2,714				(2,720	)
Benefit for income taxes			(20,634	)			(1,685	)			—				(1,685	)
(Loss) income from discontinued operations (1)		$	(33,026	)			(3,749	)			2,714				(1,035	)

		For the Six
		Months Ended				For the Six Months Ended
		June 30, 2011				June 30, 2010
		Bluegreen				Bluegreen
		Communities				Communities				Core				Total
Revenue from discontinued operations		$	9,893				6,268				2,951				9,219
Gain on sale of assets			—				—				2,617				2,617
			9,893				6,268				5,568				11,836
Costs and Expenses:
Loss on assets held for sale (1)			52,733				—				—				—
Other costs and expenses (2)			10,068				15,724				3,103				18,827
Interest expense (3)			1,532				2,288				—				2,288
			64,333				18,012				3,103				21,115
(Loss) income from discontinued operations
before income taxes (1)			(54,440	)			(11,744	)			2,465				(9,279	)
Benefit for income taxes			(20,986	)			(4,653	)			—				(4,653	)
(Loss) income from discontinued operations (1)		$	(33,454	)			(7,091	)			2,465				(4,626	)

5. Fair Value Measurement

          The following tables present major categories of the Company’s assets measured at fair value on a recurring basis as of June 30, 2011 and December 31, 2010 (in thousands):

						Fair Value Measurements Using
						Quoted prices in
						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
		June 30,				Assets				Inputs				Inputs
Description		2011				(Level 1)				(Level 2)				(Level 3)
Mortgage-backed securities		$	97,894				—				97,894				—
REMICS (1)			54,353				—				54,353				—
Agency bonds			60,059				—				60,059				—
Municipal bonds			85,305				—				85,305				—
Taxable securities			17,600				—				17,600				—
Benihana Convertible Preferred Stock			12,336				—				12,336				—
Benihana Common Stock			4,140				4,140				—				—
Other equity securities			1,494				1,494				—				—
Total		$	333,181				5,634				327,547				—

						Fair Value Measurements Using
						Quoted prices in
						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
		December 31,				Assets				Inputs				Inputs
Description		2010				(Level 1)				(Level 2)				(Level 3)
Mortgage-backed securities		$	112,042				—				112,042				—
REMICS(1)			68,841				—				68,841				—
Agency bonds			60,143				—				60,143				—
Municipal bonds			162,123				—				162,123				—
Taxable securities			19,922				—				19,922				—
Foreign currency put options			24				24				—				—
Benihana Convertible Preferred Stock			21,106				—				—				21,106
Other equity securities			20,819				20,819				—				—
Total		$	465,020				20,843				423,071				21,106

     There were no liabilities measured at fair value on a recurring basis in the Company’s financial statements at June 30, 2011 or December 31, 2010.

          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 months ended June 30, 2011 and 2010 (in thousands):

		For the Three Months Ended
		June 30, 2011
		Benihana
		Convertible
		Preferred Stock
Beginning Balance		$	20,951
Total gains and losses (realized/unrealized)
Included in earnings			—
Cumulative effect of change in accounting principle			—
Included in other comprehensive loss			—
Purchases, issuances, and settlements (1)			(5,238	)
Transfers in and/or out of Level 3 (1)			(15,713	)
Balance at June 30, 2011		$	—

		For the Three Months Ended June 30, 2010
						Benihana
						Convertible
		Other Bonds				Preferred Stock				Total
Beginning Balance		$	250				20,247				20,497
Total gains and losses (realized/unrealized)
Included in earnings			—				—				—
Included in other comprehensive income			—				(88	)			(88	)
Purchases, issuances, and settlements			—				—				—
Transfers in and/or out of Level 3			—				—				—
Balance at June 30, 2010		$	250				20,159				20,409

          The following tables present major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2011 and 2010 (in thousands):

		For the Six Months
		Ended June 30, 2011
		Benihana
		Convertible
		Preferred Stock
Beginning Balance		$	21,106
Total gains and losses (realized/unrealized)
Included in earnings			—
Included in other comprehensive loss			(155	)
Purchases, issuances, and settlements (1)			(5,238	)
Transfers in and/or out of Level 3 (1)			(15,713	)
Balance at June 30, 2011		$	—

		For the Six Months Ended June 30, 2010
		Retained
		Interests in								Benihana
		Notes				Other				Convertible
		Receivable Sold				Bonds				Preferred Stock				Total
Beginning Balance		$	26,340				250				17,766				44,356
Total gains and losses (realized/unrealized)
Included in earnings			—				—				—				—
Cumulative effect of change in accounting principle (1)			(26,340	)			—				—				(26,340	)
Included in other comprehensive income			—				—				2,393				2,393
Purchases, issuances, and settlements			—				—				—				—
Transfers in and/or out of Level 3			—				—				—				—
Balance at June 30, 2010		$	—				250				20,159				20,409