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

(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 o      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. (Check one):

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 the latest practicable date is as follows:

Class A Common Stock of $.01 par value, 38,254,389 shares outstanding as of May 12, 2009.
Class B Common Stock of $.01 par value, 6,875,104 shares outstanding as of May 12, 2009.

 

 

BFC Financial Corporation

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Statements of Financial Condition as of March 31, 2009 and December 31, 2008 — Unaudited	3
Consolidated Statements of Operations for the Three Months Ended March 31, 2009 and 2008 — Unaudited	4
Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2009 and 2008 — Unaudited	5
Consolidated Statement of Changes in Equity as of March 31, 2009 — Unaudited	6
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and 2008 — Unaudited	7
Notes to Unaudited Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	37
Item 3. Quantitative and Qualitative Disclosures about Market Risk	72
Item 4T. Controls and Procedures	74
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	75
Item 1A. Risk Factors	75
Item 6. Exhibits	75
SIGNATURES
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3

PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BFC Financial Corporation

		March 31,				December 31,
		2009				2008
ASSETS
Cash and cash equivalents		$	354,652				278,937
Restricted cash			8,575				21,288
Securities available for sale and other financial instruments (at fair value)			538,516				722,698
Investment securities at cost or amortized costs (fair value: $37,294 in 2009 and $12,475 in 2008)			36,955				12,008
Tax certificates, net of allowance of $7,036 in 2009 and $6,064 in 2008			172,641				213,534
Federal Home Loan Bank stock, at cost which approximates fair value			48,751				54,607
Residential loans held for sale at lower of cost or fair value			6,238				3,461
Loans receivable, net of allowance for loan losses $158,397 in 2009 and $137,257 in 2008			4,197,587				4,314,184
Accrued interest receivable			38,519				41,817
Real estate held for development and sale			269,014				268,763
Real estate owned			21,763				19,045
Investments in unconsolidated affiliates			28,494				41,386
Properties and equipment, net			309,251				315,347
Goodwill and other intangible assets, net			36,553				44,986
Other assets			44,945				43,521
Total assets		$	6,112,454				6,395,582
LIABILITIES AND EQUITY
Liabilities:
Interest bearing deposits		$	3,254,626				3,184,677
Non-interest bearing deposits			798,687				741,691
Total deposits			4,053,313				3,926,368
Advances from FHLB			817,372				967,491
Federal funds purchased and other short term borrowings			62,967				238,339
Securities sold under agreements to repurchase			28,238				41,387
Subordinated debentures, mortgage notes payable and mortgage-backed bonds			287,314				287,772
Junior subordinated debentures			379,460				376,104
Loss in excess of investment in Woodbridge’s subsidiary			—				52,887
Other liabilities			115,609				118,784
Total liabilities			5,744,273				6,009,132
Commitments and contingencies (see Note 17)
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 in 2009 and 2008 with a redemption value of $1,000 per share			11,029				11,029
Equity:
Class A common stock of $.01 par value, authorized 70,000,000 shares; issued and outstanding 38,254,389 in 2009 and 2008			382				382
Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,875,104 in 2009 and 2008			69				69
Additional paid-in capital			124,182				123,562
Accumulated deficit			(19,439	)			(8,848	)
Accumulated other comprehensive loss			(742	)			(2,298	)
Total BFC Financial Corporation (“BFC”) shareholders’ equity			104,452				112,867
Noncontrolling interests			252,700				262,554
Total equity			357,152				375,421
Total liabilities and equity		$	6,112,454				6,395,582

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation

		For the Three Months Ended
		March 31,
		2009				2008
						(As Adjusted)
Revenues
BFC Activities:
Interest and dividend income		$	258				415
Other income			164				1,258
			422				1,673
Financial Services:
Interest and dividend income			62,908				83,732
Service charges on deposits			18,685				24,014
Other service charges and fees			7,025				7,433
Securities activities, net			4,440				(4,738	)
Other income			2,650				2,602
			95,708				113,043
Real Estate Development:
Sales of real estate			1,427				154
Interest and dividend income			509				1,455
Other income			2,944				3,090
			4,880				4,699
Total revenues			101,010				119,415
Costs and Expenses
BFC Activities:
Employee compensation and benefits			2,196				3,160
Other expenses			701				927
			2,897				4,087
Financial Services:
Interest expense			24,775				41,075
Provision for loan losses			44,277				42,888
Employee compensation and benefits			28,806				35,155
Occupancy and equipment			14,911				16,386
Advertising and promotion			2,832				4,895
Restructuring charges and exit activities			1,875				(115	)
Cost associated with debt redemption			591				1
Provision for (recovery from) tax certificates losses			1,486				(117	)
Impairment of goodwill			8,541				—
Other expenses			13,514				13,564
			141,608				153,732
Real Estate Development:
Cost of sales of real estate			693				88
Interest expense, net of interest capitalized			2,773				2,911
Selling, general and administrative expenses			10,339				12,451
			13,805				15,450
Total costs and expenses			158,310				173,269
Equity in earnings from unconsolidated affiliates			6,495				1,803
Impairment of other investments			(22,797	)			—
Gain on settlement of investment in Woodbridge’s subsidiary			40,369				—
Loss from continuing operations before income taxes and noncontrolling interests			(33,233	)			(52,051	)
Benefit for income taxes			—				(18,953	)
Loss from continuing operations			(33,233	)			(33,098	)
Discontinued operations, less income tax provision $0 in 2009 and $708 in 2008			4,201				1,019
Net loss			(29,032	)			(32,079	)
Net loss attributable to noncontrolling interests			18,629				26,208
Net loss attributable to BFC			(10,403	)			(5,871	)
5% Preferred Stock dividends			(188	)			(188	)
Net loss allocable to common stock		$	(10,591	)			(6,059	)
Basic and Diluted (Loss) Earnings Per Common Share (see Note 20):
Loss per share from continuing operations		$	(0.26	)			(0.13	)
Earnings per share from discontinued operations			0.03				—
Net loss per common share		$	(0.23	)			(0.13	)
Weighted average number of common shares outstanding - basic and diluted			45,114				45,103

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation

		For the Three Months Ended
		March 31,
		2009				2008
Loss from continuing operations		$	(29,032	)			(32,079	)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities available for sale			7,016				(5,741	)
Benefit for income taxes			—				(2,214	)
Unrealized gains (loss) on securities available for sale, net of tax			7,016				(3,527	)
Unrealized gains (losses) associated with investment in unconsolidated affiliates			473				(427	)
Benefit for income taxes			—				(165	)
Unrealized gains (losses) associated with investment in unconsolidated affiliates, net of tax			473				(262	)
Reclassification adjustments of net realized losses (gains) included in net loss			(2,044	)			2,036
Provision for income taxes			—				786
Net realized (losses) gains reclassified into net loss, net of tax			(2,044	)			1,250
Total other comprehensive income (loss), net of tax			5,445				(2,539	)
Comprehensive loss			(23,587	)			(34,618	)
Comprehensive loss attributable to noncontrolling interests			14,740				28,170
Total comprehensive loss attributable to BFC		$	(8,847	)			(6,448	)

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation

																										Accumulated
																										Other				Total				Non-
		Shares of Common								Class A				Class B				Additional				Accu-				Compre-				BFC				controlling
		Stock Outstanding								Common				Common				Paid-in				mulated				hensive				Shareholders’				Interests in				Total
		Class A				Class B				Stock				Stock				Capital				Deficit				Loss				Equity				Subsidiaries				Equity
Balance, December 31, 2008			38,254				6,875			$	382			$	69			$	123,562			$	(8,848	)		$	(2,298	)		$	112,867			$	262,554			$	375,421
Net loss			—				—				—				—				—				(10,403	)			—				(10,403	)			(18,629	)			(29,032	)
Other comprehensive income, net of taxes			—				—				—				—				—				—				1,556				1,556				3,889				5,445
Noncontrolling interests net effect of subsidiaries’ capital transactions			—				—				—				—				—				—				—				—				4,886				4,886
Net effect of subsidiaries’ capital transactions attributable to BFC			—				—				—				—				391				—				—				391				—				391
Cash dividends on 5% Preferred Stock			—				—				—				—				—				(188	)			—				(188	)			—				(188	)
Share-based compensation related to stock options and restricted stock			—				—				—				—				229				—				—				229				—				229
Balance, March 31, 2009			38,254				6,875			$	382			$	69			$	124,182			$	(19,439	)		$	(742	)		$	104,452			$	252,700			$	357,152

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation

		For the Three Months Ended
		March 31,
		2009				2008
Net cash used in operating activities		$	(5,013	)			(27,801	)
Investing activities:
Proceeds from redemption and maturities of investment securities and tax certificates			43,528				40,953
Purchase of investment securities and tax certificates			(29,491	)			(11,912	)
Purchase of securities available for sale			—				(101,954	)
Proceeds from sales and maturities of securities available for sale			199,731				187,498
Decrease in restricted cash			12,713				338
Cash paid in settlement of Woodbridge’s subsidiary bankruptcy			(12,430	)			—
Purchases of FHLB stock			(2,295	)			(8,325	)
Redemption of FHLB stock			8,151				4,771
Investments in unconsolidated subsidiaries			(461	)			(198	)
Distributions from unconsolidated subsidiaries			224				1,889
Net decrease (increase) in loans			69,773				(13,323	)
Proceeds from the sale of loans receivable			—				10,100
Adjustment to acquisition of Pizza Fusion			3,000				—
Improvements to real estate owned			—				(11	)
Proceeds from sales of real estate owned			602				756
Net additions to office properties and equipment			(973	)			(4,120	)
Net cash provided by investing activities			292,072				106,462
Financing activities:
Net increase in deposits			128,618				42,209
Prepayment of FHLB advances			(249,591	)			—
Net proceeds from FHLB advances			99,000				80,000
Decrease in securities sold under agreements to repurchase			(13,148	)			(2,818	)
Decrease in federal funds purchased			(175,373	)			(62,489	)
Repayment of notes and bonds payable			(583	)			(16,316	)
Proceeds from notes and bonds payable			132				4,667
Preferred stock dividends paid			(188	)			(188	)
Proceeds from issuance of BankAtlantic Bancorp Class A common stock			—				93
Purchase and retirement of Woodbridge Class A common stock			(13	)			—
BankAtlantic Bancorp cash dividends paid to non-BFC shareholders			(198	)			(216	)
Net cash (used in) provided by financing activities			(211,344	)			44,942
Increase in cash and cash equivalents			75,715				123,603
Cash and cash equivalents at the beginning of period			278,937				332,165
Cash and cash equivalents at end of period		$	354,652				455,768
Supplemental cash flow information:
Interest paid on borrowings and deposits		$	29,424				45,568
Supplementary disclosure of non-cash investing and financing activities:
Loans and tax certificates transferred to REO			3,388				—
Increase (decrease) in BFC accumulated other comprehensive income, net of taxes			1,556				(577	)
Net increase in equity from the effect of subsidiaries’ capital transactions to BFC			391				170

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation

1. Presentation of Interim Financial Statements

          BFC Financial Corporation (“BFC” or the “Company”) is a diversified holding company whose major holdings include controlling interests in BankAtlantic Bancorp, Inc. and its wholly-owned subsidiaries (“BankAtlantic Bancorp”) and Woodbridge Holdings Corporation (formerly Levitt Corporation) and its wholly-owned subsidiaries (“Woodbridge”) and a noncontrolling interest in Benihana, Inc. (“Benihana”), which operates Asian-themed restaurant chains in the United States. As a result of the Company’s position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” regulated by the Office of Thrift Supervision (“OTS”).

          As a holding company with controlling positions in BankAtlantic Bancorp and Woodbridge, BFC is required under generally accepted accounting principles (“GAAP”) to consolidate the financial results of these companies. As a consequence, the financial information of both entities is presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of BankAtlantic Bancorp and 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 its pro rata share in a dividend or distribution.

          BFC’s ownership in BankAtlantic Bancorp and Woodbridge as of March 31, 2009 was as follows:

										Percent
		Shares				Percent of				of
		Owned				Ownership				Vote
BankAtlantic Bancorp
Class A Common Stock			2,389,697				23.29	%			12.35	%
Class B Common Stock			975,225				100.00	%			47.00	%
Total			3,364,922				29.95	%			59.35	%
Woodbridge Holdings Corporation
Class A Common Stock			3,735,392				22.45	%			11.90	%
Class B Common Stock			243,807				100.00	%			47.00	%
Total			3,979,199				23.57	%			58.90	%

          BankAtlantic Bancorp is a unitary savings bank holding company organized under the laws of the State of Florida. BankAtlantic Bancorp’s principal asset is its investment in BankAtlantic and its subsidiaries. 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 network of over 100 branches or “stores” located in Florida.

          On February 28, 2007, BankAtlantic Bancorp completed the sale of Ryan Beck Holdings, Inc. (“Ryan Beck”), a subsidiary of BankAtlantic Bancorp engaged in retail and institutional brokerage and investment banking, to Stifel Financial Corp. (“Stifel”). As a consequence, the results of operations of Ryan Beck are presented as “Discontinued Operations” in the consolidated statements of operations. Under the terms of the agreement, BankAtlantic Bancorp received, among other consideration, consideration based on revenues generated by Ryan Beck over the two year period following the closing of the sale. This earn-out consideration in the amounts of $4.2 million and $1.7 million is included in the Company’s consolidated statement of operations in discontinued operations for the three months ended March 31, 2009 and 2008, respectively.

          Historically, Woodbridge’s operations were primarily within the real estate industry; however Woodbridge’s current business strategy includes the pursuit of investments and acquisitions within or outside of the real estate industry, as well as the continued development of master-planned communities.

          Woodbridge engages in business activities through its Land Division, consisting of the operations of Core Communities, LLC (“Core Communities” or “Core”), which develops master-planned communities, and through its Other Operations segment (“Woodbridge Other Operations”), which includes the other operations of Woodbridge, such as the consolidated operations of Pizza Fusion Holdings, Inc. (“Pizza Fusion”), the consolidated operations of Carolina Oak Homes, LLC (“Carolina Oak”), which engaged in homebuilding activities in South Carolina prior to

the suspension of those activities in the fourth quarter of 2008, and the activities of Cypress Creek Capital Holdings, LLC (“Cypress Creek Capital”) and Snapper Creek Equity Management, LLC (“Snapper Creek”). An equity investment in Bluegreen Corporation (“Bluegreen”) and an investment in Office Depot, Inc. (“Office Depot”) are also included in the Woodbridge Other Operations segment.

          Prior to November 9, 2007, Woodbridge also conducted homebuilding operations through Levitt and Sons, LLC (“Levitt and Sons”), which comprised Woodbridge’s Homebuilding Division. Woodbridge’s Homebuilding Division consisted of two reportable operating segments, the Primary Homebuilding segment and the Tennessee Homebuilding segment. As previously reported, on November 9, 2007, Levitt and Sons and substantially all of its subsidiaries (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”). In connection with the filing of the Chapter 11 Cases, Woodbridge deconsolidated Levitt and Sons as of November 9, 2007, eliminating all future operations of Levitt and Sons from Woodbridge’s financial results of operations. As a result of the deconsolidation of Levitt and Sons, in accordance with Accounting Research Bulletin (“ARB”) No. 51, “Consolidated Financial Statements” (“ARB No. 51”), Woodbridge recorded its interest in Levitt and Sons under the cost method of accounting.

          As previously reported, on February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Official Committee of Unsecured Creditors. That order also approved the settlement pursuant to the settlement agreement that was entered into on June 27, 2008. No appeal or rehearing of the Bankruptcy Court’s order was timely 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. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the settlement agreement, as amended) was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary. See Note 24 for further information regarding the bankruptcy of Levitt and Sons.

          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 consolidated financial statements contain such adjustments as are necessary for a fair presentation of the Company’s consolidated financial condition at March 31, 2009 and December 31, 2008; the consolidated results of operations, comprehensive loss and cash flows for the three months ended March 31, 2009 and 2008, and the changes in consolidated equity for the three months ended March 31, 2009. Operating results for the three months ended March 31, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. These consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008. All significant inter-company balances and transactions have been eliminated in consolidation.

          Certain amounts for prior periods have been reclassified to conform to the current period’s presentation.

          In December 2007, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 160, “Noncontrolling Interests in Consolidated Financial Statements—An Amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 established new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The Company implemented SFAS No. 160 on January 1, 2009 and, accordingly, the Company reflected the new presentation of noncontrolling interest as a separate item in the equity section in the Company’s Consolidated Statements of Financial Condition. The Company also reflected the amount of consolidated net loss attributable to noncontrolling interests and the amount attributable to BFC to be separately presented in the Company’s Consolidated Statements of Operations. SFAS No. 160 was applied prospectively with the exception of the financial statements presentation and required disclosures, which were applied retrospectively for all periods presented. Accordingly, included in the Company’s equity in the Consolidated Statements of Financial Condition is the equity attributable to noncontrolling interests of approximately $252.7 million and $262.6 million at March 31, 2009 and December 31, 2008, respectively. SFAS No. 160 also clarifies that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, SFAS No. 160 requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. See Note 4.

          In 2007, Core Communities began soliciting bids from several potential buyers to purchase assets associated with two of Core’s commercial leasing projects (the “Projects”). As the criteria for assets held for sale had been met in accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the assets were reclassified to assets held for sale and the liabilities related to those assets were reclassified to liabilities related to assets held for sale. The results of operations for these assets were reclassified as discontinued operations. During the fourth quarter of 2008, Woodbridge determined that given the difficulty in predicting the timing or probability of a sale of the assets associated with the Projects as a result of, among other things, the economic downturn and disruptions in credit markets, the requirements of SFAS No. 144 necessary to classify these assets as held for sale and to be included in discontinued operations were no longer met and Woodbridge could not assert the Projects could be sold within a year. Therefore, the results of operations for these Projects were reclassified back into continuing operations for prior periods to conform to the current period’s presentation.

          A revision was recorded by Woodbridge in the first quarter of 2009 to account for assets and non-controlling interests not recorded properly in the initial application of purchase accounting of Woodbridge’s investment in Pizza Fusion. The adjustment resulted in an increase in cash of $3.0 million, goodwill of $1.1 million and non-controlling interest of $4.1 million. Woodbridge has also recorded an increase in cash flows from investing activities in the three months ended March 31, 2009 of $3.0 million which is included in adjustment to acquisition of Pizza Fusion. The impact of this revision is not material to our consolidated balance sheets at September 30, 2008 and December 31, 2008, nor is it material to our consolidated statement of cash flows for the periods then ended. The revision had no impact on our net income or loss or on our cash flows from operating activities for the three month periods ended September 30, 2008 and December 31, 2008.

2. Liquidity

BFC

          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp and 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 its pro rata share in a dividend or distribution. BFC has incurred operating cash flow deficits which have been financed with available working capital. BFC expects to meet its liquidity requirements generally through existing cash balances and cash dividends from Benihana and, if necessary with respect to its long-term liquidity requirements, through secured and unsecured indebtedness, future issuances of equity and/or debt securities, and, the sale of assets; however, there is no assurance that any of these alternatives will be available to BFC on attractive terms, or at all, particularly if the adverse current economic and financial market conditions continue.

BankAtlantic Bancorp and BankAtlantic

          BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and availability under its lines of credit, federal funds and Treasury and Federal Reserve programs. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets or deterioration in BankAtlantic’s financial condition may make terms of the borrowings and deposits less favorable. As a result, there is a risk that BankAtlantic’s cost of funds will increase or that the availability of funding sources may decrease. As of March 31, 2009, BankAtlantic had available unused borrowings of approximately $813 million in connection with its FHLB line of credit, federal funds lines, and Treasury and Federal Reserve programs. However, such available borrowings are subject to periodic reviews and they may be terminated or limited at any time.

          As of March 31, 2009, BankAtlantic met the regulatory requirements of a “well capitalized” institution with actual capital amounts and ratios exceeding all “well capitalized” amounts and ratios. However, the OTS, at its discretion, can at any time require an institution to maintain capital amounts and ratios above the established “well capitalized” requirements based on its view of the risk profile of the specific institution. If higher capital requirements are imposed, BankAtlantic could be required to raise additional capital. There is no assurance that additional capital will not be necessary, or that BankAtlantic Bancorp or BankAtlantic would be successful in raising additional capital in subsequent periods. BankAtlantic Bancorp’s inability to raise capital or be deemed “well capitalized” could have a material adverse impact on BFC’s and BankAtlantic Bancorp’s financial condition and results.

Core Communities

          Core’s operations have been negatively impacted by the downturn in the residential and commercial real-estate industries. Market conditions have adversely affected Core’s commercial leasing projects and its ability to complete sales, and Core is currently experiencing cash flow deficits. Possible liquidity sources available to Core include the sale of real estate inventory, including commercial properties, debt or outside equity financing, including secured borrowings using unencumbered land; however, there is no assurance that any or all of these alternatives will be available to Core on attractive terms, if at all, or that Core will otherwise be in a position to utilize such alternatives to improve its cash position. In addition, while funding from Woodbridge is a possible source of liquidity, Woodbridge is under no obligation to provide funding to Core and there can be no assurance that it will do so.

          Core has a credit agreement with a financial institution which provides for borrowings of up to $64.3 million, of which $58.3 million was outstanding at March 31, 2009. This facility matures in June 2009 and has two one-year extension options. The loan agreement requires that Core provide at least 30 days notice prior to the initial maturity of its election to exercise the one-year option period. Throughout the extension period, the collateral must generate a debt service coverage ratio of 1.20:1, otherwise Core would be required to re-margin the loan. Core does not currently anticipate that it will meet the debt service coverage ratio requirements with respect to the extension period, and Core is in discussions with its lender regarding this credit agreement. Under the terms of the loan, Core can make a re-margining payment, if necessary, from current cash reserves, and the loan will be automatically extended. As part of its discussions with the lender, Core is seeking to achieve the extension by restructuring the loan without making a re-margining payment. However, there can be no assurance that Core will be successful in doing so.

          All of Core’s debt facilities contain financial covenants generally requiring certain net worth, liquidity and loan to value ratios. In January of 2009, Core was advised by one of its lenders that the lender had received an external appraisal on the land that serves as collateral for a loan, which had an outstanding balance of $86.7 million at March 31, 2009. The appraised value would suggest that a re-margining payment must be required to reduce the note payable so as to meet the minimum loan-to-value requirement. The lender is conducting its internal review procedures, including the determination of the appraised value. As of the date of this filing, the lender’s evaluation is continuing and, until such time as there is final conclusion on the part of the lender, the amount of a possible re-margining requirement is not determinable.

          As discussed above, the negative trends in the operations of Core which have been impacted by the deterioration of the real estate market and the potential for re-margining payments of yet unknown amounts raise substantial doubt regarding Core’s ability to continue as a going concern in accordance with “Statement of Auditing Standards No. 59, “The Auditors Consideration of an Entity’s Ability to Continue as a Going Concern,” if Woodbridge chooses not to provide Core with the cash needed to meet any such obligations when and if they arise. Core’s results are reported separately for segment purposes as the Land Division segment in Note 5. The financial information provided in the Land Division segment and in the unaudited consolidated financial statements has been prepared assuming that Core will meet its obligations and continue as a going concern. As a result, the unaudited consolidated financial statements and the financial information provided for the Land Division do not include any adjustments that might result from the outcome of this uncertainty.

3. Fair Value Measurement

          The following table presents major categories of the Company’s assets measured at fair value on a recurring basis for the three months ended March 31, 2009 (in thousands):

						Fair Value Measurements at March 31, 2009
						Quoted prices in
						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
		March 31,				Assets				Inputs				Inputs
Description		2009				(Level 1)				(Level 2)				(Level 3)
Securities Available for Sale:
Mortgage-backed securities		$	363,389				—				363,389				—
REMICS			154,449				—				154,449				—
Bonds			250				—				—				250
Benihana Convertible Preferred Stock			16,384				—				—				16,384
Other equity securities			4,044				2,792				—				1,252
Total securities available for sale at fair value		$	538,516				2,792				517,838				17,886

There were no liabilities measured at fair value on a recurring basis in the Company’s financial statements.

          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 March 31, 2009 (in thousands):

						Benihana
						Convertible				Equity
		Bonds				Preferred Stock				Securities				Total
Beginning Balance		$	250				16,426				1,588				18,264
Total gains and losses (realized/unrealized)
Included in earnings			—				—				—				—
Included in other comprehensive loss			—				(42	)			(336	)			(378	)
Purchases, issuances, and settlements			—				—				—				—
Transfers in and/or out of Level 3			—				—				—				—
Ending balance		$	250				16,384				1,252				17,886

          The following table presents major categories of assets measured at fair value on a non-recurring basis during the three months ended March 31, 2009 (in thousands):

						Fair Value Measurements at March 31, 2009 using
						Quoted prices in
						Active Markets				Significant				Significant
		As of				for Identical				Other Observable				Unobservable
		March 31,				Assets				Inputs				Inputs				Total
Description		2009				(Level 1)				(Level 2)				(Level 3)				Impairments
Loans measured for impairment using the fair value of the collateral		$	36,208				—				—				36,208				9,860
Impaired real estate owned			1,590				—				—				1,590				211
Impaired goodwill			—				—				—				—				8,541

          There were no liabilities measured at fair value on a non-recurring basis in the Company’s financial statements.

          Loans Measured For Impairment

          Impaired loans are generally valued based on the fair value of the underlying collateral. Third party appraisals of the collateral are primarily used to assist in measuring impairment. 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 these values may also be adjusted for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, judgment on market conditions is used 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 fair value of the collateral is considered a Level 3 valuation.

          Impaired Real Estate Owned

          Real estate owned 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. However, the appraiser or brokers use professional judgment in determining the fair value of the properties, and BankAtlantic may also adjust these values for changes in market conditions subsequent to the valuation date. As a consequence of using broker price opinions and adjustments to appraisals, the fair values of the properties are considered a Level 3 valuation.

          Impaired Goodwill

          Goodwill impairment charges relating to BankAtlantic Bancorp’s tax certificates and investments reporting units in the aggregate amount of $8.5 million, net of purchase accounting adjustment from the 2008 step acquisition in the amount of approximately $0.6 million, was recorded during the three months ended March 31, 2009. The remaining $13.1 million of goodwill on BankAtlantic Bancorp’s statement of financial condition relates to BankAtlantic Bancorp’s capital services reporting unit, and the goodwill associated with this reporting unit was determined not to be impaired as of March 31, 2009. In determining the fair value of the reporting units, BankAtlantic Bancorp used discounted cash flow valuation techniques. This method requires assumptions for expected cash flows and applicable discount rates. The aggregate fair value of all reporting units derived from the above valuation methodology was compared to BankAtlantic Bancorp’s market capitalization adjusted for a control premium in order to determine the reasonableness of the financial model output. A control premium represents the value an investor would pay above minority interest transaction prices in order to obtain a controlling interest in the respective company. BankAtlantic Bancorp used financial projections over a period of time considered necessary to achieve a steady state of cash flows for each reporting unit. The primary assumptions in the projections were anticipated loan, tax certificates and securities growth, interest rates and revenue growth. The discount rates were estimated based on the Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk and size premium adjustments specific to a particular reporting unit. The estimated fair value of a reporting unit is highly sensitive to changes in the discount rate and terminal value assumptions. Changes in the assumptions used could impact significantly the fair value assigned to a reporting unit and cause the fair value of the reporting unit to be below its carrying value. As a result of the significant judgments used in determining the fair value of the reporting units, the fair values of the reporting units are considered a Level 3 valuation.

4. Noncontrolling Interests

          The following table summarizes the noncontrolling interests held by others in the Company’s subsidiaries at March 31, 2009 and December 31, 2008 (in thousands):

		March 31,				December 31,
		2009				2008
BankAtlantic Bancorp		$	145,011				170,888
Woodbridge			103,488				91,389
Other subsidiaries			4,201				277
		$	252,700				262,554

          The following table summarizes the noncontrolling interests loss (earnings) recognized by others with respect to the Company’s subsidiaries for the three months ended March 31, 2009 and 2008 (in thousands):

		For the Three Months Ended
		March 31,
		2009				2008
Noncontrolling interests - Continuing Operations:
BankAtlantic Bancorp		$	32,649				18,779
Woodbridge			(11,296	)			8,274
Other subsidiaries			219				12
			21,572				27,065
Noncontrolling interests - Discontinued Operations:
BankAtlantic Bancorp		$	(2,943	)			(857	)
Woodbridge			—				—
Other subsidiaries			—				—
			(2,943	)			(857	)
		$	18,629				26,208

5. 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, types of customers, distribution systems or regulatory environments.

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

          The Company operates through five reportable segments, which are: BFC Activities, BankAtlantic, BankAtlantic Bancorp Other Operations, Land Division and Woodbridge Other Operations. The Company’s financial services activities include BankAtlantic Bancorp’s results of operations and consist of two reportable segments, which are: BankAtlantic and BankAtlantic Bancorp Other Operations. The Company’s real estate development activities include Woodbridge’s results of operations and consist of two reportable segments, which are: Land Division and Woodbridge Other Operations.

          The Company evaluates segment performance based on net income (loss) net of tax and noncontrolling interests.

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

BFC Activities

          This segment includes all of the operations and all of the assets owned by BFC other than BankAtlantic Bancorp and its subsidiaries and Woodbridge Holdings Corporation and its subsidiaries. The BFC Activities segment includes dividends from BFC’s investment in Benihana’s convertible preferred stock and income and expenses associated with shared service operations in the areas of human resources, risk management, investor relations and executive office administration and other services that BFC provides to BankAtlantic Bancorp and Woodbridge pursuant to a shared services agreement. Additionally, BFC provides certain risk management and administrative services to Bluegreen. This segment also includes BFC’s overhead and expenses, the financial results of venture partnerships that BFC controls and BFC’s benefit for income taxes.

BankAtlantic

          The Company’s BankAtlantic segment consists of the banking operations of BankAtlantic.

BankAtlantic Bancorp Other Operations

          The BankAtlantic Bancorp Other Operations segment consists of the operations of BankAtlantic Bancorp other than the banking operations of BankAtlantic, including cost of acquisitions, asset and capital management and financing activities.

Land Division

          The Company’s Land Division segment consists of Core Communities’ operations.

Woodbridge Other Operations

          The Woodbridge Other Operations segment consists of Woodbridge Holdings Corporation’s operations, the operations of Pizza Fusion and Carolina Oak, other investment activities through Cypress Creek Capital and Snapper Creek. Woodbridge’s equity investment in Bluegreen and its investment in Office Depot are also included in the Woodbridge Other Operations segment.

          The table below sets forth the Company’s segment information as of and for the three months ended March 31, 2009 and 2008 (in thousands):

										BankAtlantic
										Bancorp								Woodbridge				Adjustments
		BFC								Other				Land				Other				and
2009		Activities				BankAtlantic				Operations				Division				Operations				Eliminations				Total
Revenues:
Sales of real estate		$	—				—				—				1,427				—				—				1,427
Interest and dividend income			258				62,409				209				275				237				287				63,675
Other income			909				32,787				342				2,276				677				(1,083	)			35,908
Total revenues			1,167				95,196				551				3,978				914				(796	)			101,010
Costs and Expenses:
Cost of sale of real estate			—				—				—				693				—				—				693
Interest expense, net			—				20,640				4,230				1,370				1,403				(95	)			27,548
Provision for loan losses			—				43,520				757				—				—				—				44,277
Other expenses			2,958				71,703				1,704				6,247				4,507				(1,327	)			85,792
Total costs and expenses			2,958				135,863				6,691				8,310				5,910				(1,422	)			158,310
Equity in (loss) earnings from unconsolidated affiliates			(71	)			78				118				—				6,336				34				6,495
Impairment of other investment			—				—				—				—				(22,797	)			—				(22,797	)
Gain on settlement of investment in Woodbridge’s subsidiary			—				—				—				—				26,985				13,384				40,369
(Loss) income from continuing operations			(1,862	)			(40,589	)			(6,022	)			(4,332	)			5,528				14,044				(33,233	)
Discontinued operations			1,258				—				4,201				—				—				(1,258	)			4,201
Net (loss) income			(604	)			(40,589	)			(1,821	)			(4,332	)			5,528				12,786				(29,032	)
Net loss (income) attributable to noncontrolling interests			15				28,431				1,276				3,358				(4,082	)			(10,369	)			18,629
Net (loss) income attributable to BFC		$	(589	)			(12,158	)			(545	)			(974	)			1,446				2,417				(10,403	)
At March 31, 2009
Total assets		$	39,807				5,488,603				506,711				333,810				191,503				(447,980	)			6,112,454

										BankAtlantic
										Bancorp								Woodbridge				Adjustments
		BFC								Other				Land				Other				and
2008		Activities				BankAtlantic				Operations				Division				Operations				Eliminations				Total
Revenues:
Sales of real estate		$	—				—				—				154				—				—				154
Interest and dividend income			420				83,358				420				189				1,287				(72	)			85,602
Other income			1,689				34,440				(4,808	)			3,420				314				(1,396	)			33,659
			2,109				117,798				(4,388	)			3,763				1,601				(1,468	)			119,415
Costs and Expenses:
Cost of sales of real estate			—				—				—				28				—				60				88
Interest expense, net			—				35,353				5794				993				2,673				(827	)			43,986
Provision for loan losses			—				42,888				—				—				—				—				42,888
Other expenses			4,158				68,626				1,675				5,531				7,096				(779	)			86,307
			4,158				146,867				7,469				6,552				9,769				(1,546	)			173,269
Equity in earnings from unconsolidated affiliates			2				1,113				162				—				526				—				1,803
Loss from continuing operations before income taxes			(2,047	)			(27,956	)			(11,695	)			(2,789	)			(7,642	)			78				(52,051	)
Benefit for income taxes			(3,866	)			(10,975	)			(4,112	)			—				—				—				(18,953	)
(Loss) income from continuing operations		$	1,819				(16,981	)			(7,583	)			(2,789	)			(7,642	)			78				(33,098	)
Discontinued operations, less income taxes			1,019				—				1,121				—				—				(1,121	)			1,019
Net (loss) income			2,838				(16,981	)			(6,462	)			(2,789	)			(7,642	)			(1,043	)			(32,079	)
Net loss attributable to noncontrolling interests			12				13,603				5176				1,983				5,434				—				26,208
Net (loss) income attributable to BFC		$	2,850				(3,378	)			(1,286	)			(806	)			(2,208	)			(1,043	)			(5,871	)
At March 31, 2008
Total assets		$	35,511				6,212,300				730,427				328,255				365,699				(563,360	)			7,108,832

6. Discontinued Operations

          On February 28, 2007, BankAtlantic Bancorp sold Ryan Beck to Stifel. The sales agreement provided for contingent earn-out payments, payable in cash or shares of Stifel common stock, at Stifel’s election, based on certain defined revenues generated by Ryan Beck during the two-year period which ended on February 28, 2009. The contingent earn-out payments were accounted for when earned as additional proceeds from the sale. BankAtlantic Bancorp received additional earn-out consideration of $1.7 million and $4.2 million during the three months ended March 31, 2008 and 2009, respectively.

7. Restructuring Charges and Exit Activities

BankAtlantic Bancorp and BankAtlantic

          The following provides liabilities associated with restructuring charges and exit activities (in thousands):

		Employee
		Termination
		Benefits				Contract				Total
		Liability				Liability				Liability
Balance at January 1, 2008		$	102				990				1,092
Expenses (recoveries)			—				(115	)			(115	)
Amounts paid or amortized			(88	)			(88	)			(176	)
Balance at March 31, 2008		$	14				787				801
Balance at January 1, 2009			171				1,462				1,633
Expense incurred			1,875				—				1,875
Amounts paid or amortized			(138	)			(30	)			(168	)
Balance at March 31, 2009		$	1,908				1,432				3,340

          In March 2009, BankAtlantic Bancorp completed a reduction of its workforce by approximately 130 associates, or 7%, impacting back-office functions as well as its community banking and commercial lending business units. BankAtlantic Bancorp incurred $1.9 million of employee termination costs which were included in the statement of operations for the three months ended March 31, 2009.

Woodbridge Holdings Corporation and Levitt and Sons

          The following table summarizes the restructuring related accruals activity recorded for the three months ended March 31, 2009 and 2008 (in thousands):

		Severance								Independent
		Related and								Contractor				Surety Bond
		Benefits				Facilities				Agreements				Accrual				Total
Balance at December 31, 2007		$	1,954				1,010				1,421				1,826				6,211
Restructuring charges (credits)			1,207				—				(42	)			—				1,165
Cash payments			(1,527	)			(86	)			(206	)			(165	)			(1,984	)
Balance at March 31, 2008		$	1,634				924				1,173				1,661				5,392
Balance at December 31, 2008		$	129				704				597				1,144				2,574
Restructuring charges			89				—				8				—				97
Cash payments			(132	)			(93	)			(206	)			(37	)			(468	)
Balance at March 31, 2009		$	86				611				399				1,107				2,203

          On November 9, 2007, Woodbridge implemented an employee fund and indicated that it would pay up to $5.0 million of severance benefits to terminated Levitt and Sons employees to supplement the limited termination benefits which Levitt and Sons was permitted to pay to those employees. Levitt and Sons was restricted in the payment of termination benefits to its former employees by virtue of the Chapter 11 Cases.

          The severance related and benefits accrual includes severance payments made to Levitt and Sons employees as well as other employees of Woodbridge, payroll taxes and other benefits related to the terminations that occurred in 2007 as part of the Chapter 11 Cases. Woodbridge incurred severance and benefits related restructuring charges in the three months ended March 31, 2009 and 2008 of approximately $89,000 and $1.2

million, respectively. For the three months ended March 31, 2009 and 2008, Woodbridge paid approximately $132,000 and $1.5 million, respectively, in severance and termination charges related to the above described employee fund as well as severance for employees other than Levitt and Sons employees, all of which are reflected in the Woodbridge Other Operations segment. Employees entitled to participate in the fund either received a payment stream, which in certain cases extended over two years, or a lump sum payment, dependent on a variety of factors. Former Levitt and Sons’ employees who received these payments were required to assign to Woodbridge their unsecured claims against Levitt and Sons.

          The facilities accrual as of March 31, 2009 represents expense associated with property and equipment leases that Woodbridge had entered into that are no longer providing a benefit to Woodbridge, as well as termination fees related to contractual obligations that Woodbridge cancelled. Included in this amount are future minimum lease payments fees and expenses for which the provisions of SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, as applicable, were satisfied. Total cash payments related to the facilities accrual were $93,000 and $86,000 for the three months ended March 31, 2009 and 2008, respectively.

          The independent contractor agreements accrual relates to two consulting agreements entered into by Woodbridge with former Levitt and Sons employees. The total commitment related to these agreements as of March 31, 2009 was approximately $399,000 and will be paid monthly through November 2009. During each of the quarters ended March 31, 2009 and 2008, Woodbridge paid $206,000 under these agreements.

          At each of March 31, 2009 and December 31, 2008, Woodbridge had $1.1 million in surety bonds accrual related to certain bonds where Woodbridge’s management believes it to be probable that Woodbridge will be required to reimburse the surety under applicable indemnity agreements. During the three months ended March 31, 2009 and 2008, Woodbridge reimbursed the surety approximately $37,000 and $165,000, respectively, in accordance with the indemnity agreement for bond claims paid during the period. It is unclear whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond this accrual. There is no assurance that Woodbridge will not be responsible for amounts in excess of the $1.1 million accrual. Woodbridge will not receive any repayment, assets or other consideration as recovery of any amounts it may be required to pay. (See Note 17.)

8. Securities Available for Sale

          The following tables summarize securities available for sale (in thousands):

		March 31, 2009
						Gross				Gross
		Amortized				Unrealized				Unrealized				Estimated
		Cost				Gains				Losses				Fair Value
Mortgage-Backed Securities
Mortgage-backed securities		$	350,142				13,258				11				363,389
Real estate mortgage investment conduits (1)			150,445				4,004				—				154,449
Total mortgage-backed securities			500,587				17,262				11				517,838
Investment Securities:
Other bonds			250				—				—				250
Investment in Benihana Convertible Preferred Stock			16,426				—				42				16,384
Equity securities			4,290				97				343				4,044
Total investment securities			20,966				97				385				20,678
Total		$	521,553				17,359				396				538,516