BFC FINANCIAL CORP - 10-Q Quarterly Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

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

For the Quarter Ended September 30, 2002

Commission File Number: 333-72213

BFC FINANCIAL CORPORATION
State of Incorporation: Florida

I.R.S. Employer Identification Number:
59-2022148

1750 East Sunrise Boulevard, Fort Lauderdale, Florida 33304
(954) 760-5200

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.

Yes |X| No |_|

Indicate the number of shares outstanding for each of the Registrant's classes
of common stock, as of the latest practicable date:

Class A Common Stock of $.01 par value, 6,474,994 shares outstanding.
Class B Common Stock of $.01 par value, 2,362,157 shares outstanding.

BFC Financial Corporation and Subsidiaries
Index to Consolidated Financial Statements

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements:

Consolidated Statements of Financial Condition as of September
30, 2002 and December 31, 2001 - Unaudited

Consolidated Statements of Operations for the nine and three
month periods ended September 30, 2002 and 2001 - Unaudited

Consolidated Statements of Stockholders' Equity and
Comprehensive Income for the nine months ended September 30,
2002 and 2001 - Unaudited

Consolidated Statements of Cash Flows for the nine months
ended September 30, 2002 and 2001 - Unaudited

Notes to Unaudited Consolidated Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES

2

PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Financial Condition - Unaudited
September 30, 2002 and December 31, 2001
(In thousands, except share data)

2002 2001
---------- ----------
ASSETS

Cash and due from depository institutions $ 169,433 $ 124,383
Securities purchased under resell agreements 147 156
Investment securities and tax certificates (approximate fair value:
$418,047 and $434,470) 411,488 428,718
Loans receivable, net 3,632,680 2,776,624
Securities available for sale, at fair value 657,441 859,483
Trading securities, at fair value 166,182 68,296
Accrued interest receivable 36,645 33,787
Real estate held for development and sale and joint ventures 255,940 183,163
Equity method investment 59,995 --
Office properties and equipment, net 91,896 61,786
Federal Home Loan Bank stock, at cost which approximates fair value 65,224 56,428
Deferred tax asset, net 12,110 --
Goodwill 79,005 39,859
Core deposit intangible asset 14,210 --
Other assets 67,901 32,676
---------- ----------
Total assets $5,720,297 $4,665,359
========== ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $2,974,874 $2,276,567
Advances from FHLB 1,307,739 1,106,030
Securities sold under agreements to repurchase 286,663 406,070
Federal Funds purchased 45,000 61,000
Subordinated debentures, notes and bonds payable 212,518 145,484
Guaranteed preferred beneficial interests in Bancorp's Junior
Subordinated Debentures 190,125 74,750
Deferred tax liability, net -- 3,916
Securities sold not yet purchased 33,034 38,431
Due to clearing agent 81,774 9,962
Other liabilities 156,332 120,557
---------- ----------
Total liabilities 5,288,059 4,242,767
---------- ----------

Minority interest 356,614 348,420

Stockholders' equity:
Preferred stock of $.01 par value; authorized
10,000,000 shares; none issued -- --
Class A common stock of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 6,474,994 in 2002 and 6,461,994 in 2001 58 58
Class B common stock, of $.01 par value, authorized 20,000,000 shares;
issued and outstanding 2,362,157 in 2002 and 2,366,157 in 2001 21 21
Additional paid-in capital 24,084 24,206
Retained earnings 50,401 47,195
---------- ----------
Total stockholders' equity before
accumulated other comprehensive income 74,564 71,480
Accumulated other comprehensive income 1,060 2,692
---------- ----------
Total stockholders' equity 75,624 74,172
---------- ----------

Total liabilities and stockholders' equity $5,720,297 $4,665,359
========== ==========

See accompanying notes to unaudited consolidated financial statements.

3

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Operations - Unaudited
For the Three and Nine Month Periods
Ended September 30, 2002 and 2001
(In thousands, except per share data)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------

Interest income:
Interest and fees on loans and leases $ 60,061 $ 60,441 $ 166,571 $ 185,990
Interest and dividends on securities available for sale 10,332 13,150 34,236 39,883
Interest and dividends on other investment and trading securities 13,214 9,595 33,840 27,423
--------- --------- --------- ---------
Total interest income 83,607 83,186 234,647 253,296
--------- --------- --------- ---------
Interest expense:
Interest on deposits 16,089 21,410 48,521 68,943
Interest on advances from FHLB 15,856 15,476 46,452 44,837
Interest on securities sold under agreements to repurchase
and federal funds purchased 2,305 4,618 5,802 21,392
Interest on subordinated debentures, notes and bonds payable
and guaranteed beneficial interests in Bancorp's Junior
Subordinated Debentures 7,601 5,751 19,622 19,717
Capitalized interest on real estate developments and joint ventures (1,688) (1,426) (4,519) (4,444)
--------- --------- --------- ---------
Total interest expense 40,163 45,829 115,878 150,445
--------- --------- --------- ---------
Net interest income 43,444 37,357 118,769 102,851
Provision for loan losses 2,082 7,258 10,786 14,059
--------- --------- --------- ---------
Net interest income after provision for loan losses 41,362 30,099 107,983 88,792
--------- --------- --------- ---------
Non-interest income:
Investment banking income 53,506 10,944 106,675 29,999
Net revenues from sales of real estate and joint venture activities 8,852 11,241 33,295 25,991
Income from equity method investment 1,427 -- 3,168 --
Service charges on deposits 6,684 3,820 17,234 11,590
Other service charges and fees 3,591 3,903 10,246 11,275
Gains on trading securities and securities available for sale 186 2,241 6,308 4,292
Impairment of securities (302) (2,005) (20,042) (3,796)
Other 2,992 2,319 8,215 7,132
--------- --------- --------- ---------
Total non-interest income 76,936 32,463 165,099 86,483
--------- --------- --------- ---------
Non-interest expense:
Employee compensation and benefits 60,489 23,357 142,939 71,088
Occupancy and equipment 11,100 7,271 28,554 21,168
Advertising and promotion 3,645 1,943 9,619 5,862
Amortization of intangible assets 453 1,041 907 3,115
Writedown of real estate owned 1,400 126 1,464 298
Impairment of cost over fair value of net assets acquired -- 6,624 -- 6,624
Restructuring charges and impairment writedowns -- 331 1,007 331
Acquisition related charges and impairments (71) -- 4,925 --
Other 20,248 12,286 51,871 33,870
--------- --------- --------- ---------
Total non-interest expense 97,264 52,979 241,286 142,356
--------- --------- --------- ---------
Income before income taxes, minority interest,
extraordinary item and cumulative effect
of a change in accounting principle 21,034 9,583 31,796 32,919
Provision for income taxes 7,603 7,332 11,540 18,114
Minority interest in consolidated subsidiaries 11,545 1,618 25,692 11,570
--------- --------- --------- ---------
Income (loss) before extraordinary item and cumulative
effect of a change in accounting principle 1,886 633 (5,436) 3,235
Extraordinary item (less applicable income taxes of $0 and $2,771) (61) -- 23,749 --
Cumulative effect of a change in accounting principle
(less applicable income tax (benefit) and expense
of ($1,246) and $683) -- -- (15,107) 1,138
--------- --------- --------- ---------
Net income 1,825 633 3,206 4,373
Amortization of goodwill, net of tax and minority interest -- 158 -- 468
--------- --------- --------- ---------
Net income adjusted to exclude goodwill amortization $ 1,825 $ 791 $ 3,206 $ 4,841
========= ========= ========= =========

(continued)

See accompanying notes to unaudited consolidated financial statements.

4

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Operations - Unaudited
For the Three and Nine Month Periods Ended September 30, 2002 and 2001
(In thousands, except per share data)

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------

Basic earnings (loss) per share before extraordinary item
and cumulative effect of a change in accounting principle $ 0.24 $ 0.08 $ (0.68) $ 0.41
Basic (loss) earnings per share from extraordinary item (0.01) -- 2.97 --
Basic (loss) earnings per share from cumulative effect of a
change in accounting principle -- -- (1.89) 0.14
--------- --------- --------- ---------
Basic earnings per share $ 0.23 $ 0.08 $ 0.40 $ 0.55
========= ========= ========= =========

Diluted earnings (loss) per share before extraordinary item
and cumulative effect of a change in accounting principle $ 0.24 $ 0.07 $ (0.68) $ 0.37
Diluted (loss) earnings per share from extraordinary item (0.01) -- 2.97 --
Diluted (loss) earnings per share from cumulative effect of a
change in accounting principle -- -- (1.89) 0.13
--------- --------- --------- ---------
Diluted earnings per share $ 0.23 $ 0.07 $ 0.40 $ 0.50
========= ========= ========= =========

Basic weighted average number of common shares outstanding 7,988 7,957 8,001 7,957

Diluted weighted average number of common and common
equivalent shares outstanding 7,988 8,938 8,001 8,740

See accompanying notes to unaudited consolidated financial statements.

5

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Stockholders' Equity and Comprehensive
Income - Unaudited
For the Nine Months Ended September 30, 2001 and 2002
(In thousands)

Accumulated
Other
Compre- Class A Class B Additional Compre-
hensive Common Common Paid-in Retained hensive
income Stock Stock Capital Earnings Income Total
---------- ---------- ---------- ---------- ---------- ---------- ----------

Balance, December 31, 2000 $ 58 21 25,788 41,721 5,027 72,615
Net income $ 4,373 -- -- -- 4,373 -- 4,373
----------
Other comprehensive income,
net of tax:
Unrealized loss on securities
available for sale (1,232)
Accumulated loss associated
with cash flow hedges (272)
Reclassification adjustment for
net gain included in net income (538)
----------
Other comprehensive loss (2,042)
----------
Comprehensive income $ 2,331
==========
Net effect of Bancorp capital
transactions, net of income taxes -- -- (2,125) -- -- (2,125)
Net change in accumulated
other comprehensive income,
net of income taxes -- -- -- -- (2,042) (2,042)
---------- ---------- ---------- ---------- ---------- ----------
Balance, September 30, 2001 $ 58 21 23,663 46,094 2,985 72,821
========== ========== ========== ========== ========== ==========

Balance, December 31, 2001 $ 58 21 24,206 47,195 2,692 74,172
Net income $ 3,206 -- -- -- 3,206 -- 3,206
----------
Other comprehensive income,
net of tax:
Unrealized loss on securities
available for sale (853)
Accumulated loss associated
with cash flow hedges (264)
Reclassification adjustment
for cash flow hedges 55
Reclassification adjustment for
net gain included in net income (570)
----------
Other comprehensive loss (1,632)
----------
Comprehensive income $ 1,574
==========
Net effect of Bancorp capital
transactions, net of income taxes -- -- (8) -- -- (8)
Net change in accumulated
other comprehensive income,
net of income taxes -- -- -- -- (1,632) (1,632)
Retirement of Class B Common Stock (1) (318) -- -- (319)
Exercise of stock options -- 1 204 -- -- 205
---------- ---------- ---------- ---------- ---------- ----------
Balance, September 30, 2002 $ 58 21 24,084 50,401 1,060 75,624
========== ========== ========== ========== ========== ==========

See accompanying notes to unaudited consolidated financial statements.

6

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
For the Nine Months Ended September 30, 2002 and 2001
(In thousands)

For the Nine Months
Ended September 30,
------------------------
2002 2001
---------- ----------

Operating activities:
(Loss) income before cumulative effect of a change in accounting principle $ (5,436) $ 3,235
Cumulative effect of a change in accounting principle, net of tax (15,107) 1,138
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Minority interest in income of consolidated subsidiaries 25,692 11,570
Provision for credit losses * 13,425 15,257
Change in real estate inventory (57,545) (23,735)
Equity in joint venture earnings (2,166) (2,667)
Equity in earnings from equity method investment (3,168) --
Issuance of equity method investment common stock (228) --
Net originations of loans held for sale activity (17,228) (22,520)
Proceeds from sales of loans classified as held for sale 6,953 13,150
Gains on securities activities (6,308) (4,292)
Gain on sale of real estate held for sale (941) --
Impairment of securities 20,042 3,796
Losses (gains) on sales of property and equipment 328 (178)
Gain on sale of real estate owned (114) (1,174)
Gains on sales of in-store branches (384) (319)
Property and equipment impairment 205 --
Acquisition related impairment 515 --
Depreciation, amortization and accretion, net 5,140 4,606
Amortization of intangible assets 907 3,115
Impairment of cost over fair value of net assets acquired 16,353 6,624
(Increase) decrease in deferred tax asset, net (9,177) 4,244
Issuance of subsidiary stock options 92 --
Trading activities, net 20,877 10,533
(Increase) decrease in accrued interest receivable (38) 7,863
Increase in other assets (517) (25,741)
Decrease in due to clearing agent (29,893) (10,833)
(Decrease) increase in securities sold not yet purchased (6,598) 31,248
Increase in other liabilities 7,540 7,586
---------- ----------
Net cash (used in) provided by operating activities (36,779) 32,506
---------- ----------
Investing activities:
Proceeds from redemption and maturities of investment
securities and tax certificates 169,485 155,644
Purchase of investment securities and tax certificates (163,925) (131,865)
Purchases of securities available for sale (294,580) (480,749)
Proceeds from sales and maturities of securities available for sale 583,902 402,786
Proceeds from sales of FHLB stock 6,509 512
FHLB stock acquired (7,242) (5,000)
Purchases and net originations of loans and leases (247,328) (41,371)
Proceeds from sales of real estate held for sale 4,081 --
Proceeds from sales of real estate owned 4,965 5,338
Net additions to office property and equipment (17,452) (6,583)
Increase in equity method investment (53,430) --
Repayments of joint venture investments 2,667 1,326
Acquisitions, net of cash acquired (52,783) (315)
---------- ----------
Net cash used in investing activities $ (65,131) $ (100,277)
---------- ----------

(continued)

See accompanying notes to unaudited consolidated financial statements.

7

BFC Financial Corporation and Subsidiaries
Consolidated Statements of Cash Flows - Unaudited
For the Nine Months Ended September 30, 2002 and 2001
(In thousands)

For the Nine Months
Ended September 30,
----------------------
2002 2001
--------- ---------

Financing activities:
Net increase in deposits 102,177 96,116
Reduction in deposits from sale of in-store branches (42,597) (37,004)
Repayments of FHLB advances (162,661) (289,822)
Proceeds from FHLB advances 227,499 365,000
Net decrease in securities sold under agreements
to repurchase (119,407) (112,981)
Net (decrease) increase in federal funds purchased (16,000) 60,300
Repayment of notes and bonds payable (59,539) (45,426)
Proceeds from notes and bonds payable 105,123 44,073
Minority interest capital contributions -- 2,398
Issuance of Bancorp common stock 1,170 41,697
Issuance of BFC common stock upon exercise of stock options 144 --
Retirement of BFC common stock (319)
Retirement of convertible subordinated debentures -- (251)
Retirement of subordinated debentures -- (34,791)
Issuance of trust preferred securities 115,375 --
Bancorp common stock dividends paid to non-BFC shareholders (4,014) (2,508)
--------- ---------
Net cash provided by financing activities 146,951 86,801
--------- ---------
Increase in cash and cash equivalents 45,041 19,030
Cash and cash equivalents at beginning of period 124,539 88,609
--------- ---------
Cash and cash equivalents at end of period $ 169,580 $ 107,639
========= =========

Supplementary disclosure of non-cash investing and
financing activities:
Interest paid $ 120,004 $ 160,082
Income taxes paid 26,113 13,875
Loans transferred to real estate owned 12,427 3,040
Loan net charge-offs 19,341 16,771
Tax certificate net charge-offs 1,035 1,285
Transfer of securities available for sale to equity
method investment 2,728 --
Issuance of notes payable under the Ryan Beck deferred
compensation plan 3,675 --
Increase in equity for the tax effect related to the exercise
of stock option 60 --
Change in stockholders' equity resulting from the change
in other comprehensive income, net of taxes (1,632) (2,042)
Change in stockholders' equity from the net effect
of Bancorp's capital transactions, net of taxes (8) (2,125)
Decrease in minority interest resulting from the distribution of
its securities investment (8,229) --
Issuance of Bancorp Class A Common Stock upon
conversion of subordinated debentures 25 49,913

* Provision for credit losses represents provision for loan losses, REO and
tax certificates.

See accompanying notes to unaudited consolidated financial statements.

8

BFC Financial Corporation and Subsidiaries
Notes to Unaudited Consolidated Financial Statements

1. Presentation of Interim Financial Statements

BFC Financial Corporation and its subsidiaries, identified herein as the
"Company" and "BFC", is a unitary savings bank holding company as a consequence
of its ownership interest in the common stock of BankAtlantic Bancorp, Inc.
("Bancorp"). Bancorp is a diversified financial services holding company that
owns 100% of the outstanding stock of BankAtlantic, Levitt Companies, LLC
("Levitt Companies") and Ryan Beck & Co. ("Ryan Beck"). The Company's primary
asset is the capital stock of Bancorp and its primary activities currently
relate to the operations of Bancorp.

BFC owns shares of Bancorp Class A and Class B Common Stock which represent
55.2% of the combined voting power and 22.6% of Bancorp's outstanding Common
Stock. Because BFC controls greater than 50% of the vote of Bancorp, Bancorp is
consolidated in the Company's financial statements. The percentage of votes
controlled by the Company will determine the Company's consolidation policy,
whereas, the percentage of ownership of total outstanding common stock will
determine the amount of Bancorp's net income recognized by the Company.

In management's opinion, the accompanying consolidated financial statements
contain such adjustments necessary to present fairly the Company's consolidated
financial condition at September 30, 2002 and December 31, 2001, the
consolidated results of operations for the three and nine months ended September
30, 2002 and 2001, the consolidated stockholders' equity and comprehensive
income for the nine months ended September 30, 2002 and 2001 and the
consolidated cash flows for the nine months ended September 30, 2002 and 2001.
Such adjustments consisted only of normal recurring items except for the
extraordinary item discussed in Note 5 and cumulative effect of a change in
accounting principle discussed in Note 11 and Note 13. The accompanying
unaudited consolidated financial statements and related notes are presented as
permitted by Form 10-Q and should be read in conjunction with the notes to the
consolidated financial statements appearing in the Company's Annual Report on
Form 10-K for the year ended December 31, 2001 and Form 10-Q for each of the
periods ended March 31, 2002 and June 30, 2002.

2. Investment in Bancorp

At September 30, 2002, the Company's ownership of Bancorp was as follows:

Shares Percent
Owned Owned
----- -----
Class A Common Stock 8,296,891 15.5%
Class B Common Stock 4,876,124 100.0%
Total 13,173,015 22.6%

At September 30, 2002, the shares of Class A Common Stock and Class B Common
Stock owned by the Company represented approximately 55.2% of the voting power
of all outstanding shares of Bancorp's Common Stock.

3. Common Unit Options

Ryan Beck's Board of Directors adopted the Ryan, Beck & Co, LLC., Common Unit
Option Plan (the "Plan") effective March 29, 2002. The Plan provides for the
grant of not more than an aggregate of 500,000 Common Units representing limited
liability interests of Ryan Beck. During the second quarter 2002, Ryan Beck's
Board of Directors granted, pursuant to the Plan, common unit options to acquire
an aggregate of 470,000 common units of Ryan Beck. The fair value was determined
based on an independent appraisal. A compensation charge of $92,000 associated
with these options was included in Bancorp's statement of operations during the
nine months ended September 30, 2002 based on a fair value estimate from the
independent appraiser. As of September 30, 2002, Ryan Beck had 8,125,000 Common
Units outstanding, all of which were owned by Bancorp.

9

On September 30, 2002, Ryan Beck & Co., LLC converted from a limited liability
company to a corporation by merging into a newly formed corporation, Ryan Beck &
Co. The 470,000 common unit options were converted into options to acquire
470,000 shares of Ryan Beck & Co. common stock, and all common units outstanding
at September 30, 2002 were converted to common stock on a one-for-one basis. The
conversion to a corporation reduced Bancorp's third quarter provision for income
taxes by $525,000 resulting from a reduction in Bancorp's State deferred tax
valuation allowance.

4. Trust Preferred Securities

In September 2002, Bancorp participated in two pooled trust preferred securities
offerings in which $35 million of trust preferred securities were issued in two
separate transactions. The trust preferred securities pay interest quarterly at
a floating rate equal to 3 month LIBOR plus 340 basis points. The securities are
redeemable after September 2007 and are due September 2032. The net proceeds to
Bancorp from the Trust Preferred Securities offerings after underwriting
discounts and expenses were approximately $34 million. Bancorp used the proceeds
from the trust preferred securities offerings to redeem outstanding debt.

5. Acquisitions

On April 26, 2002 Ryan Beck acquired certain of the assets and assumed
certain of the liabilities of Gruntal & Co., LLC ("Gruntal") and acquired all of
the membership interests in The GMS Group, LLC ("GMS"), a wholly owned
subsidiary of Gruntal ("the Gruntal transaction"). The Gruntal transaction was
accounted for by the purchase method of accounting. Under this method the
acquired assets and assumed liabilities of Gruntal were recorded at their
estimated fair value, and the amount of estimated fair value of net assets in
excess of the purchase price was used to write down non-financial assets and the
remaining balance was recorded as an extraordinary income item. The Company's
financial statements have reflected the Gruntal transaction as of April 26,
2002. In connection with the Gruntal transaction, a nonqualified deferred
compensation plan was assumed by Ryan Beck covering select employees of Gruntal.
Gruntal provided an annual matching contribution and, in some cases, special
allocations, both of which would vest if the employee remained employed for ten
years from the plan year for which contributions were made. The obligations were
not required to be funded and were unsecured general obligations to pay, in the
future, the value of the deferred compensation, adjusted to reflect the
performance of selected investment measurement options chosen by each
participant during the deferral period. On April 26, 2002, Ryan Beck froze the
plan, so that the participants could no longer continue to make contributions
and related matches ceased. In August 2002, Ryan Beck allowed the participants
in the plan to elect to withdraw their vested benefits upon forfeiting their
unvested benefits. During September 2002, $15.3 million of plan assets, both
vested and non-vested amounts were withdrawn from the plan resulting in a $2.3
million realized loss upon the sale of mutual fund investments assigned to plan
obligations. At September 30, 2002, the nonqualified deferred compensation
obligation was $12.6 million of which $6.3 million was vested. During the three
and nine months ended September 30, 2002, Bancorp realized a $1.4 million and
$2.3 million, respectively, reduction in compensation expense associated with
the decrease in the nonqualified deferred compensation plan obligation during
the period. In July 2002, Ryan Beck established a retention plan for certain
Gruntal investment consultants, key employees and others. Pursuant to the
retention plan, the participants were granted a length of service award and a
retention award in forgivable notes in the aggregate amounts of $900,000 and
$9.5 million, respectively. The participants were granted the length of service
award and 50% of the retention award in forgivable notes in the aggregate amount
of $5.7 million in July 2002. The participants can elect to receive their
remaining 50% of the retention award in forgivable notes in February 2003, or
the participants can elect to receive an enhanced award based on production
goals, which will be paid out in the form of forgivable notes in January 2004.
The award based on production goals can be no less than the amount they would
have received on February 2003 assuming all participants remained employed
through the retention award date. Each forgivable note will have a term of five
years. A pro-rata portion of the principal amount of the note is forgiven each
month over the five-year term. If a participant terminates employment with Ryan
Beck prior to the end of the term of the Note, the outstanding balance becomes
immediately due to Ryan Beck.

On March 22, 2002 BankAtlantic acquired Community Savings Bankshares Inc., the
parent company of Community Savings, F.A. ("Community"), for $170.3 million in
cash and immediately merged Community into BankAtlantic. The fair value of
Community's assets acquired and liabilities assumed is included in the Company's
statement of financial condition and Community's results of operations have been
included in the Company's consolidated financial statements since March 22,
2002.

10

The following table summarizes the fair value of assets acquired and liabilities
assumed in connection with the acquisition of Community and the Gruntal
transaction effective March 22, 2002 and April 26, 2002, respectively (in
thousands).

Community Gruntal Total
----------- ----------- -----------

Cash and interest earning deposits $ 124,977 $ 886 $ 125,863
Securities available for sale 79,768 33,146 112,914
Trading securities -- 118,763 118,763
Loans receivable, net 623,039 -- 623,039
FHLB Stock 8,063 -- 8,063
Investments and advances to joint ventures 16,122 -- 16,122
Goodwill 55,498 -- 55,498
Core deposit intangible asset 15,117 -- 15,117
Other assets 46,620 12,597 59,217
----------- ----------- -----------
Fair value of assets acquired 969,204 165,392 1,134,596
----------- ----------- -----------

Deposits 639,111 -- 639,111
FHLB advances 138,981 -- 138,981
Other borrowings 14,291 3,427 17,718
Securities sold not yet purchased -- 1,201 1,201
Payable to clearing broker -- 101,705 101,705
Other liabilities 6,022 27,463(1) 33,485
----------- ----------- -----------
Fair value of liabilities assumed 798,405 133,796 932,201
Fair value of net assets acquired over cost -- (23,749)(2) (23,749)
----------- ----------- -----------
Purchase price 170,799 7,847 178,646
Cash acquired (124,977) (886) (125,863)
----------- ----------- -----------
Purchase price net of cash acquired $ 45,822 $ 6,961 $ 52,783
=========== =========== ===========

(1) Included in Gruntal's other liabilities were $675,000 of termination
costs for contract obligations related to leased equipment and
$654,000 of contract termination obligations associated with closing
certain Gruntal branches.

(2) Bancorp recognized an extraordinary gain of $23.7 million, net of
income taxes of $2.8 million, and reduced the carrying amount of
non-financial assets by $11.2 million as a result of the fair value
of the assets acquired exceeding the cost of the transaction.
Bancorp did not establish a deferred tax liability for the
extraordinary gain associated with the GMS membership interest
acquisition, because Bancorp acquired GMS rather than the net
assets.

The purchase price of Community consisted of $170.3 million in cash and $500,000
of acquisition professional fees. The cost of the Gruntal transaction consisted
of a $6.0 million cash payment, $750,000 of acquisition professional fees and an
estimated $1.05 million of contingent consideration payable to Gruntal. The
$1.05 million contingent consideration to Gruntal relates to possible deferred
compensation plan participant forfeitures and represents the maximum amount of
additional consideration. Pursuant to the terms of the Acquisition Agreement,
during each of the three years beginning October 27, 2002 Ryan Beck is obligated
to pay Gruntal & Co. LLC up to $350,000 of forfeitures each year under the
Amended and Restated Gruntal & Co. LLC Deferred Compensation Plan for each of
the years in the three year period ended October 26, 2005.

The following is pro forma information for the three and nine-months ended
September 30, 2002 and 2001 and is presented as if the Gruntal and Community
transactions had been consummated on January 1, 2002 and 2001, respectively. The
pro forma information is not necessarily indicative of the combined financial
position or results of operations which would have been realized had the
transactions been consummated during the period or as of the dates for which the
pro forma financial information is presented (in thousands, except per share
data).

11

For the Three Months Ended
-----------------------------------------------------
September 30,2002 September 30,2001
-----------------------------------------------------
Historical Pro Forma Historical Pro Forma
----------- ----------- ----------- -----------

Interest income $ 83,607 $ 83,607 $ 83,186 $ 103,946
Interest expense 40,163 40,163 45,829 56,654
Provision for loan losses 2,082 2,082 7,258 7,348
----------- ----------- ----------- -----------
Net interest income after provision for
loan losses 41,362 41,362 30,099 39,944
----------- ----------- ----------- -----------
Income (loss) before extraordinary item
and cumulative effect of a
change in accounting principles $ 1,886 $ 1,886 $ 633 $ (12)
=========== =========== =========== ===========
Basic earnings (loss) per share
from operations $ 0.24 $ 0.24 $ 0.08 $ (0.00)
=========== =========== =========== ===========
Diluted earnings (loss) per share
from operations $ 0.24 $ 0.24 $ 0.07 $ (0.00)
=========== =========== =========== ===========

Basic weighted average shares 7,988 7,988 7,957 7,957
Diluted weighted average shares 7,988 7,988 8,938 8,938

For the Nine Months Ended
-----------------------------------------------------
September 30, 2002 September 30, 2001
-----------------------------------------------------
Historical Pro Forma Historical Pro Forma
----------- ----------- ----------- -----------

Interest income $ 234,647 253,109 $ 253,296 $ 317,999
Interest expense 115,878 123,188 150,445 185,535
Provision for loan losses 10,786 12,830 14,059 14,329
----------- ----------- ----------- -----------
Net interest income after provision for
loan losses 107,983 117,091 88,792 118,135
----------- ----------- ----------- -----------
(Loss) income before extraordinary item
and cumulative effect of a
change in accounting principles $ (5,436) $ (5,882) $ 3,235 $ 1,808
=========== =========== =========== ===========
Basic (loss) earnings per share
from operations $ (0.68) $ (0.74) $ 0.41 $ 0.23
=========== =========== =========== ===========
Diluted (loss) earnings per share
from operations $ (0.68) $ (0.74) $ 0.37 $ 0.21
=========== =========== =========== ===========

Basic weighted average shares 8,001 8,001 7,957 7,957
Diluted weighted average shares 8,001 8,001 8,740 8,740

During April 2002, Bancorp and Levitt Companies ownership in Bluegreen
Corporation ("Bluegreen"), a New York Stock Exchange-listed company engaged in
the acquisition, development, marketing and sale of primarily drive-to vacation
interval resorts, golf communities and residential land, increased from
approximately 4.9% to 39.2%. This interest in Bluegreen was acquired for an
aggregate purchase price of approximately $56 million. Bancorp acquired
approximately 4.9% of Bluegreen common stock during the first quarter of 2001
and Levitt Companies acquired 34.3% of Bluegreen common stock in April 2002. As
a consequence of the acquisition of this interest in Bluegreen at various
acquisition dates, it is accounted for as a step acquisition under the equity
method of accounting. In a step acquisition the purchase price allocation is
performed at each acquisition date and goodwill is recognized with each step
purchase. Additionally, prior period financial statements should be restated to
reflect the results of applying the equity method of accounting to the initial
acquisition; however, Bancorp did not restate its prior year financial
statements due to lack of significance. Under the equity method of accounting
the investment in Bluegreen was recorded at cost and the carrying amount of the
investment is adjusted to recognize the 39.2% interest in the earnings or loss
of Bluegreen after the acquisition date. The carrying amount of Bluegreen's
investment was in the aggregate $2.4 million lower than the ownership percentage
in the underlying equity in the net assets of Bluegreen. This difference was
assigned to various assets and liabilities of Bluegreen and will be amortized
into the statement of operations as an adjustment to income from equity method
investment. The funds for the investment in Bluegreen

12

were obtained from $29.9 million of borrowings from Bancorp's existing bank line
of credit, proceeds of its trust preferred securities offering, proceeds from
the sale of equity securities from Bancorp's portfolio and Levitt Companies'
working capital.

6. Impairment of Securities

The Company recognized an impairment charge of $302,000 and $20.0 million during
the three and nine month periods ended September 30, 2002, respectively, on
equity securities resulting from significant declines in the value of such
securities that were considered other than temporary due to the financial
condition and near term prospects of the issuers of the equity securities.
Included in the impairment charge for the nine months ended September 30, 2002,
is the write off on an investment in Seisint, Inc. ("Seisint") a privately held
technology company. Bancorp wrote off $15 million and $1.1 million was written
off by a partnership in which BFC has an approximately 57% controlling interest
(the "Partnership"). During 1999, Bancorp entered into a strategic relationship
and invested $10 million in cash and issued 848,364 shares of Bancorp's Class A
Common Stock to acquire the investment in Seisint. Bancorp anticipated benefits
from the exchange of ideas and cooperation in the development by Seisint of
technology and support systems for use by financial institutions. During 2000,
the partnership invested $2.0 million in Seisint. Additionally, both Alan B.
Levan and John E. Abdo were directors of Seisint and each acquired direct and
indirect interests in Seisint common stock.

Because Seisint did not meet the objectives of its business plan or its
financial performance goals, Bancorp performed an evaluation of its investment
in Seisint to determine if there was an other than temporary decline in value
associated with this investment. As a consequence of this evaluation, Bancorp
wrote off its entire $15 million investment in Seisint and the Partnership wrote
off $1.1 million during June 2002. Previously, in December 2001, the Partnership
had written off $916,000 of its investment in Seisint.

The Company recognized a $2.0 million and $3.8 million impairment charge during
the three and nine month periods ended September 30, 2001, respectively,
primarily associated with BFC's write off of its equity securities resulting
from significant declines in their value that were considered other than
temporary due to the financial condition and near term prospects of the issuers
of the equity securities.

Bancorp recently revised its policy for equity investments made by it and any
future equity investments will be limited to liquid securities and will be
subject to significant concentration restrictions. At September 30, 2002, equity
investments at Bancorp totaled $4.9 million and equity investments assigned to
the Gruntal deferred compensation plan totaled $12.6 million. At September 30,
2002, equity investments directly held by BFC or by partnerships controlled by
BFC totaled $5.2 million.

7. Trading Securities and Securities Sold Not Yet Purchased

The Ryan Beck gains on trading securities were associated with sales and trading
activities conducted both as principal and as agent on behalf of individual and
institutional investor clients of Ryan Beck. Transactions as principal involve
making markets in securities which are held in inventory to facilitate sales to
and purchases from customers.

Ryan Beck's trading securities consisted of the following (in thousands):

September 30, December 31,
2002 2001
------------- -------------
Debt obligations:
States and municipalities $ 111,712 $ 7,593
Corporations 12,637 20,989
U.S. Government and agencies 27,780 32,308
Corporate equities 12,074 7,406
Certificates of deposit 1,979 --
------------- -------------
$ 166,182 $ 68,296
============= =============

13

Ryan Beck's securities sold not yet purchased consisted of the following (in
thousands):

September December 31,
2002 2001
------------- -------------
States and municipalities $ 4,164 $ --
Corporations 7,450 21,305
U.S. Government and agencies 9,792 15,117
Corporate equities 4,375 1,882
Certificates of deposit 7,253 127
------------- -------------
$ 33,034 $ 38,431
============= =============

8. Loans Held for Sale

BankAtlantic originated CRA loans for resale through September 2002. During
September 2002, BankAtlantic discontinued its practice of selling the CRA loans
it originates, transferred $7.3 million of CRA loans from loans held for sale to
loans held to maturity and realized a $151,000 loss at the transfer date.
BankAtlantic now originates CRA loans designated as held to maturity and also
originates CRA loans that are pre-sold to correspondents. During June 2000,
BankAtlantic discontinued its commercial non-mortgage syndication lending
activities and transferred the entire portfolio to loans held for sale.

Loans held for sale consisted of the following (in thousands):

September December 31,
2002 2001
------------- -------------
Residential $ -- $ 4,757
Commercial syndication 16,873 40,774
------------- -------------
Total loans held for sale $ 16,873 $ 45,531
============= =============

In February 2001, BFC originated several loans to officers and directors
totaling approximately $1.1 million, $100,000 of which are nonrecourse loans
secured by investments in BankAtlantic Financial Ventures II, Ltd. These loans
bear interest payable annually at the prime rate plus 1% and are due in February
2006. On July 16, 2002, John Abdo borrowed from the Company $3.5 million on a
recourse basis and paid off his existing loan due to the Company of $500,000.
The $3.5 million loan bears interest at the prime rate plus 1%, requires monthly
interest payments, is due on demand and is secured by 1,019,564 shares of BFC
Class A Common Stock and 370,750 shares of BFC Class B Common Stock.

9. Real Estate Held for Development and Sale and Joint Venture Activities

Real estate held for development and sale and joint venture activities consisted
of the combined activities of Core Communities, Levitt and Sons, Levitt
Companies' joint venture activities and a joint venture acquired in connection
with the Community Savings acquisition and BFC's real estate interests. Core
Communities develops land for master planned communities located in Florida.
Levitt and Sons is a developer of single-family home communities and has
participated in condominium and rental apartment joint ventures mainly in
Florida. BankAtlantic's investment and advances to the joint venture development
acquired in connection with the Community Savings acquisition was $21.8 million
at September 30, 2002. This development of single family homes, condominium
units and duplexes is located on 117 acres of land in Indian River County,
Florida. Also included in real estate held for development and sale and joint
venture activities is BFC's real estate which includes Burlington Manufacturers
Outlet Center ("BMOC"), a shopping center in North Carolina and the unsold land
at Center Port. In March 2001, BFC's 50% ownership interest in Delray Industrial
Park was sold and a net gain of approximately $1.3 million was recognized.

14

Real estate held for development and sale and joint ventures consisted of the
following (in thousands):

September 30, December 31,
2002 2001
------------- -------------
Land and land development costs $ 163,062 $ 114,499
Construction costs 27,040 17,949
Other costs 9,956 9,985
Equity investments in joint ventures 397 7,127
Loans to joint ventures 51,064 28,713
Other 4,421 4,890
------------- -------------
$ 255,940 $ 183,163
============= =============

The components of net revenues from sales of real estate were as follows (in
thousands):

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
----------------------- -----------------------
2002 2001 2002 2001
---------- ---------- ---------- ----------

Sales of real estate $ 40,981 $ 33,921 $ 125,697 $ 93,569
Cost of sales 32,357 24,088 94,568 70,245
---------- ---------- ---------- ----------
Net revenues from sales of real estate 8,624 9,833 31,129 23,324
Revenues from joint venture activities 228 1,408 2,166 2,667
---------- ---------- ---------- ----------
Net revenues from sales of real estate
and joint venture activities $ 8,852 $ 11,241 $ 33,295 $ 25,991
========== ========== ========== ==========

10. Comprehensive Income

The components of other comprehensive income relate to the net unrealized gains
(losses) on securities available for sale, net of income taxes and the Company's
proportionate shares of non-wholly owned subsidiaries other comprehensive
income, net of income taxes such as net unrealized gains (losses) on securities
available for sale and accumulated gains (losses) associated with cash flow
hedges. The income tax provision relating to the comprehensive income
reclassification adjustment in the Consolidated Statements of Stockholders'
Equity and Comprehensive Income for the nine months ended September 30, 2002 and
2001 was $520,000 and $387,000, respectively. Comprehensive loss for the three
months ended September 30, 2002 and 2001 was $611,000 and $284,000,
respectively.

11. Derivatives

The Company adopted Financial Accounting Standards Board Statement No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("FAS 133") on
January 1, 2001. At the adoption date we recognized all derivative instruments
as defined by FAS 133 in the statement of financial position as either assets or
liabilities and measured them at fair value resulting in a $1.1 million gain
associated with Bancorp's cumulative effect of a change in accounting principle
net of tax.

The derivatives utilized by Bancorp during the nine months ended September 30,
2002 were interest rate swaps. During the nine months ended September 30, 2002,
Bancorp created fair value hedges by entering into various interest rate swap
contracts with a notional amount of $33 million to convert $33 million of
designated fixed rate time deposits to a three-month LIBOR interest rate.

During the year ended December 31, 2000, Bancorp entered into forward contracts
to purchase the underlying collateral from a government agency pool of
securities in May 2005. Included in securities gains in the Statement of
Operations for the three and nine months ended September 30, 2002 were $14,000
and $41,000 of unrealized losses associated with the forward contracts compared
to unrealized gains of $6,600 and $62,000 during the same 2001 periods.

15

The following table outlines the notional amount and fair value of Bancorp's
derivatives outstanding at September 30, 2002 (dollars in thousands):

Paying Receiving
Notional Index/Fixed Index/Fixed Termination
Amount Fair Value Amount Amount Date
----------- ------------- -------------- ------------- -------------

3 mo. LIBOR
Fifteen year callable receive fixed swaps $ 10,000 $ 222 less 10bps 6.15% 11/13/2016
3 mo. LIBOR
Ten year callable receive fixed swaps 30,000 685 less 11bps 6.03% 12/20/2011
3 mo. LIBOR
Ten year callable receive fixed swaps 20,000 357 less 11bps 6.08% 2/14/2012
Seven and a half year 3 mo. LIBOR
callable receive fixed swaps 13,000 211 less 11bps 5.60% 9/19/2009
Five year pay fixed swaps 25,000 (2,429) 5.73% 3 mo. LIBOR 1/5/2006
Three year pay fixed swaps $ 50,000 $ (2,453) 5.81% 3 mo. LIBOR 12/28/2003
=========== ============ ============== ============= ==============
Forward contract to purchase
adjustable rate mortgages $ 54,718 $ 84
=========== ============

The net amount of existing losses on the swaps included in other liabilities
that are projected to be reclassified into earnings within the next 12 months is
$527,534. The hedging relationships are expected to last over the term of the
swaps.

12. Restructuring Charges and Impairment Write-Downs

During June 2002, BankAtlantic adopted a plan to discontinue certain ATM
relationships, resulting in an $801,000 restructuring charge and a $206,000
impairment write-down. These relationships were primarily with convenience
stores and gas stations and did not currently meet BankAtlantic's performance
expectations and were unlikely to meet future profitability goals. The remaining
ATM machines (approximately 150 machines) are primarily located in
BankAtlantic's branch network, cruise ships and other remote locations. The
restructuring plan is scheduled to be completed during the fourth quarter of
2002.

Restructuring charges at September 30, 2002 included in other liabilities
consisted of (in thousands):

Initial Amount paid Ending
Type of restructuring charge Amount during period Balance
- -------------------------------- -------- ------------- --------

Lease contract termination costs $ 664 $ (138) $ 526
De-installation costs 87 (7) 80
Other 50 -- 50
-------- -------- --------
Total restructuring charge $ 801 $ (145) $ 656
======== ======== ========

13. Transitional Goodwill Impairment Evaluation

In connection with the transitional goodwill impairment evaluation required
under FASB Statement 142, the Company performed an assessment of whether there
was an indication that goodwill was impaired as of January 1, 2002, the date of
adoption. During the six months ended June 30, 2002, Bancorp identified its
reporting units and determined the carrying value of each of its reporting units
by assigning the assets and liabilities, including the existing goodwill and
intangible assets, to those reporting units as of the date of adoption. Bancorp
then determined the fair value of each reporting unit and compared it to the
reporting unit's carrying amount. If the fair value of the reportable unit
exceeded the carrying amount, no further evaluation was performed, and the
goodwill in the reporting unit was determined not to be impaired. The fair
values of all reporting units, except for the Ryan Beck reportable segment,
exceeded their respective carrying amounts at the adoption date. For the Ryan
Beck reportable segment, an independent appraiser was engaged to determine the
fair value of the Ryan Beck operating segment in order for Bancorp to measure
the impairment amount. Based on the appraiser's evaluation, a $15.1 million
impairment loss (net of a $1.2 million tax benefit) was recorded effective as of
January 1, 2002 as a cumulative

16

effect of a change in accounting principle. As required under FASB 142, this
non-cash charge was recognized during the first quarter of 2002 and had no
effect upon third quarter earnings or on any period subsequent to the first
quarter, and had no effect on operating net income or tangible capital ratios.
Operating net income is defined as GAAP net income adjusted for goodwill
amortization, goodwill impairment and any non-recurring activities.

14. 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 deciding how to allocate resources and in
assessing performance. Reportable segments consist of one or more operating
segments with similar economic characteristics, products and services,
production processes, type of customer, distribution system and regulatory
environment. The information provided for Segment Reporting is based on internal
reports utilized by management. Interest expense and certain revenue and expense
items are allocated to the various segments as interest expense and overhead.
The presentation and allocation of interest expense and overhead and the net
income calculated under the management approach may not reflect the actual
economic costs, contribution or results of operations of the unit as a stand
alone business. If a different basis of allocation was utilized, the relative
contributions of the segments might differ but the relative trends in the
segments would, in management's view, likely not be impacted.

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

Reportable Segment Operating Segments Aggregated
- -------------------------------------------------------
Bank Investments Investments, tax certificates, residential loan
purchases, CRA lending and real estate capital
services

Commercial Banking Commercial lending, syndications, international, lease
finance, trade finance and a real estate joint venture
development

Community Banking Indirect and direct consumer lending, small business
lending and ATM operations

Levitt Companies Levitt Companies, which includes Levitt and Sons, Core
Communities, 34.3% of equity investment in Bluegreen
and real estate joint ventures

Ryan Beck Investment banking and brokerage operations

Bancorp Parent Company BankAtlantic Bancorp's operations, costs of
acquisitions, financing of acquisitions, and equity
investments

BFC Holding Company BFC's real estate owned which includes BMOC, Center
Port and 50% interest in the Delray property (sold in
2001). Loans receivable that relate to previously
owned properties, other securities and investments and
BFC's overhead and interest expense.

The accounting policies of the segments are generally the same as those
described in the summary of significant accounting policies. Inter-segment
transactions consist of borrowings by real estate operations and investment
banking operations which are recorded based upon the terms of the underlying
loan agreements and are effectively eliminated in the interest expense and
overhead allocations.

17

The Company evaluates segment performance based on net income after tax. The
table below is segment information for income before minority interest,
extraordinary item and the cumulative effect of a change in accounting principle
for the three months ended September 30, 2002 and 2001:

Bank Levitt Bancorp Parent
(In thousands) Operations Companies Ryan, Beck Company
----------- ----------- ----------- --------------
2002

Interest income $ 79,244 221 4,452 479
Interest expense (34,547) (70) (807) (4,790)
Provision for loan losses (2,082) -- -- --
Non-interest income 13,309 9,754 52,667 483
Non-interest expense (34,288) (7,069) (55,179) (162)
----------- ----------- ----------- -----------
Segment profits and losses before taxes 21,636 2,836 1,133 (3,990)
Provision for income taxes 7,503 336 108 (1,336)
----------- ----------- ----------- -----------
Segment net income (loss) $ 14,133 2,500 1,025 (2,654)
=========== =========== =========== ===========
Segment average assets $ 4,961,717 283,637 219,933 101,358
=========== =========== =========== ===========

BFC Holding Elimination Consolidated
(In thousands) Company Entries Total
----------- ----------- -----------
2002

Interest income $ 102 (891) 83,607
Interest expense (295) 346 (40,163)
Provision for loan losses -- -- (2,082)
Non-interest income 309 414 76,936
Non-interest expense (697) 131 (97,264)
----------- ----------- -----------
Segment profits and losses before taxes (581) -- 21,034
Provision for income taxes 992 -- 7,603
----------- ----------- -----------
Segment net income (loss) $ (1,573) -- 13,431
=========== =========== ===========
Segment average assets $ 18,234 229,993 5,814,872
=========== =========== ===========

Bank Levitt Bancorp Parent
(In thousands) Operations Companies Ryan, Beck Company
----------- ----------- ----------- --------------
2001

Interest income $ 82,322 810 541 119
Interest expense (41,709) (17) (136) (4,358)
Provision for loan losses (7,258) -- -- --
Non-interest income 9,511 10,618 11,141 2,985
Non-interest expense (27,196) (5,587) (10,990) (8,628)
----------- ----------- ----------- -----------
Segment profits and losses before taxes 15,670 5,824 556 (9,882)
Provision for income taxes 5,895 2,119 203 (1,140)
----------- ----------- ----------- -----------
Segment net income (loss) $ 9,775 3,705 353 (8,742)
=========== =========== =========== ===========
Segment average assets $ 4,284,499 173,086 64,379 113,070
=========== =========== =========== ===========

BFC Holding Elimination Consolidated
(In thousands) Company Entries Total
----------- ----------- -------------
2001

Interest income $ 107 (713) 83,186
Interest expense (311) 702 (45,829)
Provision for loan losses -- -- (7,258)
Non-interest income (1,730) (62) 32,463
Non-interest expense (651) 73 (52,979)
----------- ----------- -----------
Segment profits and losses before taxes (2,585) -- 9,583
Provision for income taxes 255 -- 7,332
----------- ----------- -----------
Segment net income (loss) $ (2,840) -- 2,251
=========== =========== ===========
Segment average assets $ 29,373 67,590 4,731,997
=========== =========== ===========

18

The table below is segment information for income before minority interest,
extraordinary item and cumulative effect of a change in accounting principle for
the nine months ended September 30, 2002 and 2001:

Bank Levitt Bancorp Parent
(In thousands) Operations Companies Ryan, Beck Company
----------- ----------- ----------- ---------------
2002

Interest income $ 225,969 1,020 8,623 1,243
Interest expense (101,531) (383) (1,828) (12,634)
Provision for loan losses (10,786) -- -- --
Non-interest income 36,224 35,278 107,825 (13,953)
Non-interest expense (98,909) (20,986) (115,741) (3,924)
----------- ----------- ----------- -----------
Segment profits and losses before taxes 50,967 14,929 (1,121) (29,268)
Provision for income taxes 17,711 3,675 (985) (10,245)
----------- ----------- ----------- -----------
Segment net income (loss) $ 33,256 11,254 (136) (19,023)
=========== =========== =========== ===========
Segment average assets $ 4,757,134 254,231 179,363 104,768
=========== =========== =========== ===========

BFC Holding Elimination Consolidated
(In thousands) Company Entries Total
----------- ----------- -----------
2002

Interest income $ 250 (2,458) 234,647
Interest expense (855) 1,353 (115,878)
Provision for loan losses -- -- (10,786)
Non-interest income (684) 409 165,099
Non-interest expense (2,422) 696 (241,286)
----------- ----------- -----------
Segment profits and losses before taxes (3,711) -- 31,796
Provision for income taxes 1,384 -- 11,540
----------- ----------- -----------
Segment net income (loss) $ (5,095) -- 20,256
=========== =========== ===========
Segment average assets $ 21,182 77,419 5,394,097
=========== =========== ===========

Bank Levitt Bancorp Parent
(In thousands) Operations Companies Ryan, Beck Company
----------- ----------- ----------- --------------
2001

Interest income $ 252,031 1,605 1,697 195
Interest expense (135,713) (167) (445) (15,077)
Provision for loan losses (14,059) -- -- --
Non-interest income 27,635 24,788 30,612 3,778
Non-interest expense (78,110) (16,773) (34,061) (11,500)
----------- ----------- ----------- -----------
Segment profits and losses before taxes 51,784 9,453 (2,197) (22,604)
Provision for income taxes 19,322 2,963 (777) (5,593)
----------- ----------- ----------- -----------
Segment net income (loss) $ 32,462 6,490 (1,420) (17,011)
=========== =========== =========== ===========
Segment average assets $ 4,290,892 168,502 66,836 102,944
=========== =========== =========== ===========

BFC Holding Elimination Consolidated
(In thousands) Company Entries Total
----------- ----------- -----------
2001

Interest income
$ 309 (2,541) 253,296
Interest expense (950) 1,907 (150,445)
Provision for loan losses -- -- (14,059)
Non-interest income (866) 536 86,483
Non-interest expense (2,010) 98 (142,356)
----------- ----------- -----------
Segment profits and losses before taxes (3,517) -- 32,919
Provision for income taxes 2,199 -- 18,114
----------- ----------- -----------
Segment net income (loss) $ (5,716) -- 14,805
=========== =========== ===========
Segment average assets $ 39,915 85,664 4,754,753
=========== =========== ===========

19

Bank Operations consists of three reportable segments. The table below is
segment information for income before extraordinary item and cumulative effect
of a change in accounting principle for the three and nine months ended
September 30, 2002 and 2001 associated with the three bank operations reportable
segments:

For the Three Months Ended For the Nine Months Ended
Bank Operations Bank Operations
Bank Commercial Community Bank Ops Bank Commercial Community Bank Ops
(In thousands) Investments Banking Banking Total Investments Banking Banking Total
----------- ----------- ---------- ---------- ----------- ------------------------------------

2002
Interest income $ 43,915 28,493 6,836 79,244 127,793 79,330 18,846 225,969
Interest expense and
overhead (29,890) (16,099) (4,053) (50,042) (88,252) (45,844) (11,232) (145,328)
Provision for loan losses 168 (1,059) (1,191) (2,082) 27 (9,207) (1,606) (10,786)
Direct non-interest
income 1,803 505 2,521 4,829 5,092 1,885 7,248 14,225
Direct non-interest
expense (1,583) (4,224) (4,506) (10,313) (7,907) (10,194) (15,012) (33,113)
----------- --------- ------- --------- --------- --------- ------- ---------
Segment profits and losses
before taxes 14,413 7,616 (393) 21,636 36,753 15,970 (1,756) 50,967
Provision for income taxes 4,998 2,641 (136) 7,503 12,887 5,345 (521) 17,711
----------- --------- ------- --------- --------- --------- ------- ---------
Segment net income (loss) $ 9,415 4,975 (257) 14,133 23,866 10,625 (1,235) 33,256
=========== ========= ======= ========= ========= ========= ======= =========
Segment average assets $ 2,801,826 1,725,521 434,370 4,961,717 2,708,604 1,645,518 403,012 4,757,134
=========== ========= ======= ========= ========= ========= ======= =========

2001
Interest income $ 44,971 30,787 6,564 82,322 137,914 92,940 21,177 252,031
Interest expense and
overhead (34,147) (17,660) (4,119) (55,926) (105,479) (54,554) (13,046) (173,079)
Provision for loan losses 168 (11,590) 4,164 (7,258) 48 (21,240) 7,133 (14,059)
Direct non-interest income 71 626 3,247 3,944 782 2,221 8,872 11,875
Direct non-interest expense (1,161) (1,617) (4,634) (7,412) (4,727) (4,620) (15,637) (24,984)
----------- --------- ------- --------- --------- --------- ------- ---------
Segment profits and losses
before taxes 9,902 546 5,222 15,670 28,538 14,747 8,499 51,784
Provision for income taxes 3,726 205 1,964 5,895 10,649 5,492 3,181 19,322
----------- --------- ------- --------- --------- --------- ------- ---------
Segment net income (loss) $ 6,176 341 3,258 9,775 17,889 9,255 5,318 32,462
=========== ========= ======= ========= ========= ========= ======= =========
Segment average assets $ 2,568,439 1,390,635 325,425 4,284,499 2,596,268 1,349,766 344,858 4,290,892
=========== ========= ======= ========= ========= ========= ======= =========

The difference between total consolidated segment income (loss) to consolidated
income (loss) before extraordinary item and cumulative effect of a change in
accounting principle is as follows:

For the Three Months Ended For the Nine Months Ended
September 30, September 30,
-------------------------- ------------------------
(In thousands) 2002 2001 2002 2001
---------- ---------- ---------- ----------

Total segment profits $ 13,431 2,251 20,256 14,805
Minority interest in income of consolidated
subsidiaries 11,545 1,618 25,692 11,570
---------- ---------- ---------- ----------
Income (loss) before extraordinary item and
cumulative effect of a change in accounting principle $ 1,886 633 (5,436) 3,235
========== ========== ========== ==========

15. New Accounting Pronouncements

In June 2002, the FASB issued Statement No. 146 ("Accounting for Costs
Associated with Exit or Disposal Activities.") This Statement requires that a
liability for a cost associated with an exit or disposal activity be recognized
when the liability is incurred. Prior to this Statement, a liability was
recognized when the entity committed to an exit plan. Management believes that
this Statement will not have a material impact on the

20

Company's financial statements; however, the Statement will result in a change
in accounting policy associated with the recognition of liabilities in
connection with future restructuring charges.

In October 2002, the FASB issued Statement No. 147 ("Acquisitions of Certain
Financial Institutions"). This Statement provides guidance on the accounting for
the acquisition of a financial institution and applies to all acquisitions
except those between two or more mutual enterprises. This Statement provides
that the excess of the fair value of liabilities assumed over the fair value of
tangible and identifiable intangible assets acquired in a business combination
represents goodwill that should be accounted for under FASB Statement No. 142,
Goodwill and Other Intangible Assets. Thus, the specialized accounting guidance
in paragraph 5 of FASB Statement No. 72, Accounting for Certain Acquisitions of
Banking or Thrift Institutions, will not apply after September 30, 2002. If
certain criteria in Statement 147 are met, the amount of the unidentifiable
intangible asset recorded in previous acquisition will be reclassified to
goodwill upon adoption of this Statement. The Statement will not affect the
Company's prior acquisitions and management believes that this Statement will
not have an impact on the Company's historical financial statements.

16. Subsequent Events

In October 2002, BankAtlantic issued $22 million of its floating rate
subordinated debentures due 2012. The Subordinated Debentures pay interest
quarterly at a floating rate equal to 3-month LIBOR plus 345 basis points and
are redeemable after October 2007 at a redemption price based upon then
prevailing market interest rates. The net proceeds will be used by BankAtlantic
for general corporate purposes to support asset growth. The Subordinated
Debentures were issued by BankAtlantic in a private transaction as part of a
larger pooled securities offering. The Subordinated Debentures currently qualify
for inclusion in BankAtlantic's total risk based capital.

In November 2002, Bancorp redeemed $43.7 million of its 9.5% cumulative trust
preferred securities at par plus accrued and unpaid distributions through the
redemption date. The funds for the redemption of the trust preferred securities
were obtained from the issuance of $35 million of LIBOR based trust preferred
securities and additional revolving line of credit borrowings. The redemption of
the trust preferred securities resulted in a $1.2 million loss associated with
the write-off of deferred offering costs.

17. Reclassifications

Certain amounts for prior periods have been reclassified to conform with the
statement presentation for 2002.

21

BFC Financial Corporation and Subsidiaries
Management's Discussion and Analysis of Financial Condition
and Results of Operations

General

BFC Financial Corporation, identified herein as the "Company" and "BFC", is a
unitary savings bank holding company as a consequence of its ownership interest
in the common stock of BankAtlantic Bancorp, Inc. ("Bancorp"). Bancorp is a
diversified financial services holding company that owns 100% of the outstanding
stock of BankAtlantic, Levitt Companies, LLC ("Levitt Companies") and Ryan Beck
& Co., LLC ("Ryan Beck"). The Company's primary asset is the capital stock of
Bancorp and its primary activities currently relate to the operations of
Bancorp.

At September 30, 2002, the Company's ownership of Bancorp was as follows:

Shares Percent
Owned Owned
----- -----
Class A Common Stock 8,296,891 15.5%
Class B Common Stock 4,876,124 100.0%
Total 13,173,015 22.6%

At September 30, 2002, the shares of Class A Common Stock and Class B Common
Stock owned by the Company represented approximately 55.2% of the voting power
of all outstanding shares of Bancorp's Common Stock. Because BFC controls
greater than 50% of the vote of Bancorp, Bancorp is consolidated in the
Company's financial statements. The percentage of votes controlled by the
Company will determine the Company's consolidation policy, whereas, the
percentage of ownership of total outstanding common stock will determine the
amount of Bancorp's net income recognized by the Company.

Except for historical information contained herein, the matters discussed in
this report contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act"), and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
that involve substantial risks and uncertainties. When used in this report and
in the documents incorporated by reference herein, the words "anticipate",
"believe", "estimate", "may", "intend", "expect" and similar expressions
identify certain of such forward-looking statements. Actual results, performance
or achievements could differ materially from those contemplated, expressed or
implied by the forward-looking statements contained herein. These
forward-looking statements are based largely on the expectations of the Company
and are subject to a number of risks and uncertainties that are subject to
change based on factors which are, in many instances, beyond the Company's
control. These include, but are not limited to, the risks and uncertainties
associated with: the impact of economic, competitive and other factors affecting
the Company and its operations, markets, products and services; credit risks and
loan losses, and the related sufficiency of the allowance for loan losses; the
effects of, and changes in, trade, monetary and fiscal policies and laws,
including but not limited to interest rate policies of the Board of Governors of
the Federal Reserve System; adverse conditions in the stock market, the public
debt market and other capital markets, including volatile trading markets,
fluctuations in the volume of market activity and the level and volatility of
interest rates and equity prices, as well as the impact of such conditions on
our assets and activities; the impact of changes in financial services' laws and
regulations (including laws concerning taxes, banking, securities and
insurance); technological changes; the impact of changes in accounting policies
by the Securities and Exchange Commission; the impact of periodic testing of
goodwill and other intangible assets for impairment; and with respect to the
operations of Levitt Companies and its real estate subsidiaries: the market for
real estate generally and in the areas where Levitt Companies has interests, the
availability and price of land suitable for development, materials prices, labor
costs, interest rates, environmental factors and governmental regulations; and
the Company's success at managing the risks involved in the foregoing. Further,
this report contains forward-looking statements with respect to recent
acquisitions, each of which are subject to risks and uncertainties, including
the risk that the acquisitions could involve additional costs or that the future
financial and operating performance of these acquisitions will not be
advantageous. BFC's primary asset is the investment in Bancorp, all of the above
risks also relate to BFC. In addition to the risks and factors identified above,
reference is also made to other risks and factors detailed in reports

22

filed by the Company with the Securities and Exchange Commission ("SEC"). The
Company cautions that the foregoing factors are not exclusive.

Critical Accounting Policies

Management views critical accounting policies as accounting policies that are
important to the understanding of our financial statements which also involve
estimates and judgments about inherently uncertain matters. We have identified
six accounting policies that management views as critical to the portrayal of
our financial condition and results of operations. The six accounting policies
are: (i) allowance for loan and lease losses, (ii) valuation of securities and
derivative instruments, (iii) other than temporary declines in fair value, (iv)
impairment of long lived assets, (v) real estate held for development and sale
and joint venture activities and (vi) accounting for business combinations. A
discussion of the first five critical accounting policies appears in the
Company's annual report on Form 10-K for the year ended December 31, 2001.

Accounting for Business Combinations - The Company accounts for its business
combinations such as the Community acquisition and the Gruntal transaction based
on the purchase method of accounting. The Company accounts for its
unconsolidated equity investments such as the investment in Bluegreen under the
equity method of accounting. The purchase method of accounting requires us to
fair value the tangible net assets and identifiable intangible assets acquired.
The equity method of accounting requires us to fair value our pro-rata ownership
interest in the net assets and identifiable intangible assets of the acquired
interest in the unconsolidated subsidiary. The fair values are based on
available information and current economic conditions at the date of
acquisition. The fair values may be obtained from independent appraisers,
discounted cash flow present value techniques, management valuation models,
quoted prices on national markets or quoted market prices from brokers. These
fair values estimates will affect future earnings through the disposition or
amortization of the underlying assets and liabilities. While management believes
the sources utilized to arrive at the fair value estimates are reliable,
different sources or methods could have yielded different fair value estimates.
Such different fair value estimates could affect future earnings through
different values being utilized for the disposition or amortization of the
underlying assets and liabilities acquired.

Consolidated Results of Operations

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------ ------------------------
(In thousands) 2002 2001 2002 2001
---------- ---------- ---------- ----------

Net interest income $ 43,444 37,357 118,769 102,851
Provision for loan losses 2,082 7,258 10,786 14,059
Securities gains 186 2,241 6,308 4,292
Impairment of securities (302) (2,005) (20,042) (3,796)
Other non-interest income 77,052 32,227 178,833 85,987
Non-interest expense 97,264 52,979 241,286 142,356
---------- ---------- ---------- ----------
Income before income taxes, minority interest,
extraordinary item
and cumulative effect of a change in accounting principle 21,034 9,583 31,796 32,919
Provision for income taxes 7,603 7,332 11,540 18,114
Minority interest in consolidated subsidiaries 11,545 1,618 25,692 11,570
---------- ---------- ---------- ----------
Income (loss) before extraordinary item and
cumulative effect of a change in accounting principle 1,886 633 (5,436) 3,235
Extraordinary item, net of tax (61) -- 23,749 --
Cumulative effect of a change in accounting principle, net
of tax -- -- (15,107) 1,138
---------- ---------- ---------- ----------
Net income $ 1,825 633 3,206 4,373
========== ========== ========== ==========

23

For the Three Months Ended September 30, 2002 Compared to the Same 2001 Period:

Net income increased by 188% from 2001. The substantial increase in net income
primarily resulted from a large increase in net interest income, an improvement
in the provision for loan losses, additional banking operations service charge
income, higher Ryan Beck investment banking income and a reduction in Bancorp's
deferred tax valuation allowance, as well as impairment write-downs in 2001
associated with other than temporary decline in fair value of equity securities.
The above improvements in net income were partially offset by an increase in
employee compensation, higher occupancy costs, lower gains on the sales of
assets and increased Ryan Beck communication and clearing fees.

The increase in net interest income primarily resulted from earning asset growth
as a consequence of the Community acquisition and the origination and purchase
of real estate loans. The decline in the provision for loan losses reflects
lower charge-offs during the current quarter compared to the same 2001 period,
along with declining portfolio balances associated with Bancorp discontinued
lines of business. The increase in other non-interest income primarily resulted
from higher investment banking income and higher bank operations service charge
income. The increase in investment banking income resulted from growth
associated primarily with the Gruntal transaction. The improvement in bank
operations service charge income reflects a significant increase in transaction
accounts associated with BankAtlantic's high performance checking product and
its seven-day banking initiative. The improvements in non-interest income were
partially offset by lower gains on the sales of assets due to a $2.3 million
loss on the sale of mutual funds that were held in connection with a
nonqualified deferred compensation plan assumed in connection with the Gruntal
transaction. The increase in non-interest expense was primarily related to
higher Ryan Beck compensation expense associated with the Gruntal transaction
and higher banking operation compensation, occupancy and advertising expense
associated with the Community acquisition and the implementation of the seven
day banking initiative. Additionally, Ryan Beck communication and clearing fee
expenses increased substantially due to the Gruntal transaction. The decrease in
the provision for income taxes during the current quarter reflects a $787,000
reduction in the deferred tax valuation allowance resulting primarily from the
utilization of tax benefits from real estate sales at Core Communities and a
$525,000 tax benefit realized upon the conversion of Ryan Beck from a limited
liability company to a corporation. Additionally, BankAtlantic acquired, as part
of the Community transaction, low-income housing tax credit investments which
reduced its tax liability by $140,000 during the 2002 quarter.

The non-recurring items that affected net income during the current quarter were
the sale of mutual funds to fund distributions under a plan assumed in
connection with the Gruntal transaction, adjustments of acquisition related
charges, an impairment write-down of equity securities due to an other than
temporary decline in value and an adjustment to the extraordinary gain
associated with the Gruntal transaction.

The non-recurring items that affected net income during the 2001 third quarter
were the amortization of goodwill, a $6.6 million goodwill impairment associated
with the Leasing Technology Inc. acquisition, a write-off of deferred offering
costs associated with the redemption of subordinated investment notes and
impairment write-downs associated with other than temporary decline in the fair
value of equity securities

For the Nine Months Ended September 30, 2002 Compared to the Same 2001 Period:

Net income was significantly affected by non-recurring items during the 2002
period. Bancorp recognized a $23.7 million extraordinary gain associated with
the Gruntal transaction. The extraordinary gain was partially offset by a $15.1
million cumulative effect of a change in accounting principle associated with
the implementation of FASB Statement 142. In connection with the transitional
goodwill impairment evaluation required under FASB Statement 142, Bancorp
performed an assessment of whether there was an indication that goodwill was
impaired as of January 1, 2002, the date of adoption. As a result of this
analysis, Bancorp determined that goodwill associated with the bank operations
reportable segment was not impaired at the adoption date; however, the goodwill
associated with the Ryan Beck reportable segment was impaired. As a consequence,
an independent appraiser was engaged to determine the fair value of the Ryan
Beck operating segment in order to measure the impairment amount. Based on the
appraiser's evaluation, a $15.1 million impairment loss (net of a $1.2 million
tax benefit) was recorded effective as of January 1, 2002 as a cumulative effect
of a change in accounting principle. As required under FASB 142, this non-cash
charge was recognized during the first quarter of 2002 and had no effect upon
third quarter earnings or on

24

any period subsequent to the first quarter, and had no effect on Bancorp
operating net income or tangible capital ratios.

Also included in non-recurring items during the 2002 period was a restructuring
charge and an impairment write-down associated with BankAtlantic's ATM network
and acquisition-related charges and impairments associated with the Community
and Gruntal transactions. The acquisition-related expenses were integration
expenses, long-lived asset impairments and professional fees associated with the
Gruntal and Community transactions. The ATM network restructuring charge and
impairment write-down resulted from the termination of convenience store and gas
station relationships which did not meet BankAtlantic's performance
expectations.

Additionally, the Company recognized an other than temporary decline in the fair
value of equity securities of $20 million and $3.8 million for the nine months
ended September 30, 2002 and 2001, respectively. The equity securities
impairment resulted from significant declines in the investments value that were
considered other than temporary due to the financial condition and near term
prospects of the issuers of the equity securities. Bancorp recognized an
impairment charge of $18.5 million and $700,000 during the nine months ended
September 30, 2002 and 2001, respectively. Bancorp recently revised its policy
for equity investments, and any future equity investments by Bancorp will be
limited to liquid securities and be subject to certain more stringent
concentration restrictions. Separately, BFC recognized an impairment charge of
$1.6 million and $3.1 million during the nine months ended September 30, 2002
and 2001, respectively.

During the 2002 period, the Company experienced a significant improvement in net
interest income and non-interest income associated with the items discussed
above as well as improved earnings at Levitt Companies. These earnings reflected
increased sales of real estate by Core Communities and Levitt and Sons, as well
as equity in earnings associated with the Company's investment in Bluegreen.

The provision for loan losses declined during the current period primarily
related to the same items discussed in the corresponding discussion of the
current quarter partially offset by additional reserves required for two
commercial real estate loans.

The above increases in net income were partially offset by a significant
increase in non-interest expenses primarily due to the same items discussed in
the corresponding discussion of the current quarter.

The provision for income taxes includes a reduction by Bancorp of $2.3 million
and was associated with the reduction in the deferred tax asset valuation
allowance. The reduction was attributed to Levitt Companies' election to be
taxed as a corporation, Ryan Beck's conversion to a corporation and the
utilization of tax benefits from real estate sales. Additionally, BankAtlantic
acquired, as part of the Community transaction, low income housing tax credit
investments which reduced BankAtlantic's tax liability by $280,000 during the
2002 nine month period.

Bank Operations Results of Operations

Net interest income

Banking Operations For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------------------- --------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
-------- -------- -------- -------- -------- --------

Interest and fees on loans and leases $ 60,245 60,882 (637) 166,853 187,785 (20,932)
Interest on securities available for sale 10,322 13,110 (2,788) 34,192 39,760 (5,568)
Interest and dividends on other investment 8,677 8,330 347 24,924 24,486 438
Interest on deposits (16,087) (21,410) 5,323 (48,521) (68,943) 20,422
Interest on advances from FHLB (15,856) (15,476) (380) (46,452) (44,837) (1,615)
Interest on securities sold under agreements
to repurchase (2,323) (4,823) 2,500 (6,037) (21,933) 15,896
Interest on mortgage backed bonds (281) -- (281) (521) -- (521)
-------- -------- -------- -------- -------- --------
Net interest income $ 44,697 40,613 4,084 124,438 116,318 8,120
======== ======== ======== ======== ======== ========
Net interest margin 3.64 3.83 (0.19) 3.56 3.61 (0.05)
======== ======== ======== ======== ======== ========

25

For the Three Months Ended September 30, 2002 Compared to the Same 2001 Period:

The substantial improvement in net interest income primarily resulted from
significant asset growth partially offset by a decline in the net interest
margin.

The growth in earning assets primarily resulted from the Community acquisition,
which added $709 million of earning assets, and continued growth in
BankAtlantic's commercial real estate, small business and home equity loan
portfolios. The above increases in earning assets were partially offset by
accelerated repayments of residential loans due to declining mortgage rates
during the period and lower average balances related to several discontinued or
curtailed lines of business, including BankAtlantic's lease finance business,
indirect consumer loans, syndication loans, international loans to correspondent
banks and small business loans originated under previous policies prior to
January 1, 2001. Interest income on loans and securities available for sale
declined during 2002 compared to the same 2001 period. The decline in interest
income reflects the rapid decline in interest rates during the latter half of
2001 and 2002, which resulted in the refinancing of residential loans and the
downward re-pricing of floating rate loans. These significant declines in yields
on earning assets were substantially offset by the growth in earning assets
mentioned above.

The increased interest income from other investments reflects higher average
balances resulting from $163.9 million of investment purchases during the
period. The higher interest income from increased average asset balances was
partially offset by lower average yields earned on other investments during the
2002 quarter compared to the same period during 2001.

The substantial reduction in BankAtlantic's deposit interest expense was
attributed to a significant reduction in the average deposit rate, partially
offset by average interest bearing deposits increasing by $486 million from the
same 2001 period. The increase was primarily due to the Community acquisition.
Interest expense on short-term borrowings was substantially lower during 2002.
The significant decline in short term borrowings interest expense reflected
lower short-term interest rates and a decline in short term borrowings linked to
an increase in deposit and FHLB advance balances. The rates on short-term
borrowings declined from 3.54% during the 2001 period to 1.74% during the same
2002 period. The higher FHLB advance and mortgage backed bond interest expense
resulted primarily from FHLB advance obligations and mortgage backed bonds
acquired in connection with the Community acquisition.

The net interest margin was impacted by a rapid decline in interest rates during
2001, a change in the composition of BankAtlantic's loan portfolio and a change
in the mix of BankAtlantic's deposit portfolio. The prime interest rate declined
from 9.00% at January 1, 2001 to 4.75% at December 31, 2001, which resulted in
the average yield on BankAtlantic's interest earning assets declining from 7.70%
during 2001 to 6.41% during the 2002 quarter and the average rates on
BankAtlantic's interest paying liabilities declining from 4.43% to 3.16% during
the same period. During the 2002 quarter, BankAtlantic continued to increase
their transaction accounts and savings accounts, which contributed to a
reduction in BankAtlantic's cost of funds. BankAtlantic's deposit mix changed
from 50% time deposits at September 30, 2001 to 42% time deposits and 58%
transaction and savings accounts during the same 2002 period. The composition of
BankAtlantic's loan portfolio changed from higher yielding loans associated with
discontinued lines of business to lower yielding residential loans acquired in
connection with the acquisition of Community and lower yielding floating rate
commercial and home equity loans.

For the Nine Months Ended September 30, 2002 Compared to the Same 2001 Period:

Net interest income increased by 7% from 2001. Total interest income decreased
by $26.1 million and total interest expense decreased by $34.2 million. The
decrease in interest income primarily resulted from rapidly declining interest
rates which impacted the re-pricing of floating rate loans and securities and
contributed to re-financings of residential loans. The average yield on interest
earning assets declined from 7.85% during the 2001 period to 6.47% during the
2002 period. The decline in average yields on earning assets was partially
offset by increased earning asset growth primarily associated with the Community
acquisition. The decline in interest expense primarily resulted from the lower
interest rate environment discussed above. The average rates on BankAtlantic's
interest paying liabilities declined from 4.83% during 2001 to 3.35% during the
same 2002 period, and the average rates on BankAtlantic's short-term borrowings
declined from 4.65% during 2001 to 1.76% during the same 2002 period.

26

Provision for Loan Losses

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
(In thousands) 2002 2001 2002 2001
-------- -------- -------- --------

Balance, beginning of period $ 48,587 48,018 44,585 47,000
Charge-offs:
Syndication loans (13) (7,235) (8,013) (7,235)
Commercial real estate loans (2,549) -- (6,858) --
Small business (727) (816) (2,919) (3,012)
Lease financing (1,779) (2,955) (5,963) (8,337)
Consumer loan - indirect (226) (676) (963) (2,369)
Consumer loans - direct (170) (1,399) (819) (2,090)
Residential real estate loans (284) -- (426) (152)
-------- -------- -------- --------
(5,748) (13,081) (25,961) (23,195)
-------- -------- -------- --------
Recoveries:
Syndication loans 102 -- 785 --
Small business 549 542 1,638 2,020
Lease financing 578 679 2,476 1,668
Commercial business loans 19 20 56 249
Commercial real estate loans 3 -- 20 7
Residential real estate loans 94 48 157 204
Consumer loans - indirect 232 425 1,075 1,674
Consumer loans - direct 179 379 412 602
-------- -------- -------- --------
1,756 2,093 6,619 6,424
-------- -------- -------- --------
Net charge-offs (3,992) (10,988) (19,342) (16,771)
Allowance for loan losses acquired (1,075) -- 9,573 --
Provision for loan losses 2,082 7,258 10,786 14,059
-------- -------- -------- --------
Balance, end of period $ 45,602 44,288 45,602 44,288
======== ======== ======== ========

Annualized net charge-offs to average loans were 0.43% for the 2002 third
quarter and 1.46% for the same 2001 period. The substantial decrease in net
charge-offs resulted primarily from lower net charge-offs associated with
discontinued lines of business partially offset by charge-offs associated with a
commercial real estate loan and a lease. Included in charge-offs for the third
quarter of 2002 was a charge-off of a commercial real estate loan to a company
in the hospitality industry for which a valuation allowance was established in a
prior period and a $670,000 charge-off of an airplane lease. The reduction in
BankAtlantic's provision for loan losses during the current quarter, compared to
the same 2001 period, was attributed to declining portfolio balances in
discontinued lines of business and improved charge-off and delinquency trends.

Annualized net charge-offs to average loans were 0.76% for the first nine months
of 2002 and 0.74% for the corresponding 2001 period. Included in net charge-offs
for the current year were the items discussed above as well as a $4.3 million
partial charge-off of a commercial real estate residential construction loan,
for which a $1.8 million specific valuation allowance was established in late
2001. This commercial real estate residential construction loan was transferred
to real estate owned effective June 30, 2002. Also included in net charge-offs
for the current year was an $8 million partial charge-off of a syndication loan
to a company in the commercial aviation repair parts and maintenance industry,
for which a specific valuation allowance was established for the entire amount
in 2001. In September 2002, the remaining $2.6 million balance of that loan was
repaid from the collateral liquidation.

The allowance for loan losses was 1.24% and 1.51% of total loans at September
30, 2002 and 2001, respectively. Included in the allowance for loan losses was a
$9.6 million allowance acquired in connection with the Community acquisition.
This allowance was reduced by $1.1 million during the third quarter of 2002 as a
result of loan payoffs in the acquired portfolio.

27

Net charge-offs associated with BankAtlantic's discontinued or curtailed lines
of business were 28% of total net charge-offs during the third quarter of 2002,
compared to 55% during the same 2001 period. Year to date, these charge-offs
represented 89% of total net charge-offs, compared to 87% during 2001.

At the indicated dates, BankAtlantic's non-performing assets and potential
problem loans were (in thousands):

September 30, December 31,
2002 2001
------------- -------------
NONPERFORMING ASSETS
Non-accrual:
Tax certificates $ 1,484 1,727
Loans and leases 30,947 37,255
------------- -------------
Total non-accrual 32,431 38,982
------------- -------------
Repossessed assets:
Real estate owned 10,015 3,904
Vehicles and equipment 1 17
------------- -------------
Total repossessed assets 10,016 3,921
------------- -------------
Total non-performing assets 42,447 42,903
Specific valuation allowances (390) (9,936)
------------- -------------
Total non-performing assets, net $ 42,057 32,967
============= =============
POTENTIAL PROBLEM LOANS
Contractually past due 90 days or more $ 2,031 --
Restructured loans 618 743
Delinquent residential loans purchased 1,473 1,705
------------- -------------
TOTAL POTENTIAL PROBLEM LOANS $ 4,122 2,448
============= =============

Non-performing assets represented 1.10% of total loans, tax certificates and
repossessed assets at September 30, 2002. This compares to 1.45% at December 31,
2001. The reduction in the percentage of non-performing assets to total loans,
tax certificates and repossessed assets reflects a significant increase in total
loans and tax certificate balances at September 30, 2002, compared to December
31, 2001. Included in non-performing assets at September 30, 2002 was a $13.7
million commercial real estate hotel loan and a $7.3 million foreclosed
residential construction loan referred to above, along with $3.1 million of
non-performing loans acquired in connection with the Community acquisition. In
October 2002, the hotel loan was sold at book value to an unrelated third party.
Assuming the sale was consummated as of September 30, 2002, the Bank's
non-performing loans would have been reduced to $18.7 million, non-performing
assets to approximately $28.7 million and the Bank's non-performing assets to
total loans and other assets ratio to 0.74%.

The increase in potential problem loans was associated with loans contractually
past due 90 days or more. These loans have matured and the borrowers continue to
make payments under the matured loan agreement. BankAtlantic is in the process
of renewing or extending these matured loans.

Non-Interest Income

Banking Operations For the Three Months For the Nine Months
Ended September 30, Ended September 30,
---------------------------------- ---------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
--------- --------- --------- --------- --------- ---------

Other service charges and fees $ 3,591 3,903 (312) 10,246 11,275 (1,029)
Service charges on deposits 6,684 3,820 2,864 17,234 11,590 5,644
Gains (losses) on securities
activities 1,978 (4) 1,982 4,768 548 4,220
Other 1,056 1,792 (736) 3,976 4,222 (246)
--------- --------- --------- --------- --------- ---------
Non-interest income $ 13,309 9,511 3,798 36,224 27,635 8,589
========= ========= ========= ========= ========= =========

28

The decline in other service charges and fees during the 2002 third quarter and
first nine months resulted from a 25% and 24%, respectively, decrease in ATM fee
income compared to the corresponding 2001 periods and a decline in late fee
income. The decline in ATM fee income resulted from the removal of
BankAtlantic's ATM machines from Wal*Mart stores and other locations. The
decline in late fee income was attributed to lower late fees assessed in
BankAtlantic's consumer and leasing portfolios. The above declines in fee income
were partially offset by higher fees earned on check cards. Check card fees
increased by 169% during the third quarter compared to the same 2001 period and
153% during 2002 year to date compared to the same 2001 period. The increase in
check card fees was linked to a significant increase in transaction accounts
associated with BankAtlantic's high performance checking products and
BankAtlantic's "Seven Day Banking" initiative.

Service charges on deposits increased by over 75% during the third quarter, and
49% year to date, from the comparable 2001 periods. The increase in service
charges primarily resulted from overdraft fees from transaction accounts and
secondarily from deposit fees associated with the Community acquisition. The
increase in overdraft fees was associated with BankAtlantic's new high
performance checking product. Since the inception of this product, we have
opened approximately 48,000 accounts with total deposit balances of $123 million
at September 30, 2002. Additionally, the rapid decline in interest rates
increased BankAtlantic's income from analysis charges by decreasing the earnings
credit for commercial accounts.

Securities activities gains during the three and nine-months ended September 30,
2002 resulted primarily from the sale of $74.2 million and $152.1 million of
REMIC securities, respectively. Additionally, BankAtlantic also recorded a
$14,000 and $41,000 unrealized loss on derivative instruments during the third
quarter and year to date.

Securities activities during the three months ended September 30, 2001 consisted
of a $4,000 unrealized loss on derivative instruments. Gains on securities
activities during the nine months ended September 30, 2001 included the sale of
mortgage-backed securities for a gain of $486,000 and a $62,000 unrealized gain
on derivative instruments.

Other income during the 2002 quarter was unfavorably impacted by a $230,000 loss
on the sale of CRA residential loans. Included in other income during the 2001
quarter was a $679,000 net gain from the disposition of fixed assets and the
sale of six in-store branches to unrelated financial institutions. The declines
in other income during the current three month period was partially offset by
increased customer related fees associated with the Community acquisition and
BankAtlantic's high performance checking products and $96,000 of income
associated with a real estate joint venture acquired in connection with the
Community acquisition. Included in other income during the nine months ended
September 30, 2002 were the items mentioned above as well as $660,000 of income
realized from a real estate joint venture and a $308,000 loss from the sale of
residential loan servicing acquired in connection with the Community
acquisition.

Non-Interest Expense

Banking Operations For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------- ------------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
---------- ---------- ---------- ---------- ---------- ----------

Employee compensation and benefits $ 17,170 12,692 4,478 48,555 38,420 10,135
Occupancy and equipment 7,554 6,473 1,081 21,430 18,664 2,766
Advertising and promotion 2,045 1,039 1,006 5,082 2,596 2,486
Restructuring charges and impairment write-downs -- 550 (550) 1,007 331 676
Amortization of intangible assets 453 -- 453 907 -- 907
Write-down of real estate owned 1,400 126 1,274 1,464 298 1,166
Acquisition related charges and impairments (941) -- (941) 864 -- 864
Other 6,607 6,316 291 19,600 17,801 1,799
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense $ 34,288 27,196 7,092 98,909 78,110 20,799
========== ========== ========== ========== ========== ==========

Compensation expenses increased 35% and 26% from the comparable 2001 quarter and
nine-month periods, respectively. The increase in compensation expenses was the
result of the implementation of seven day banking on

29

April 1, 2002 and the addition of 172 employees following the Community
acquisition. Total full time equivalent employees increased from 882 at
September 30, 2001 to 1,326 at September 30, 2002. Additionally, employee
benefits significantly increased from the comparable 2001 periods due to higher
health insurance costs and a reduction in pension income associated with Bancorp
defined benefit pension plan.

Occupancy and equipment expenses increased 17% and 15% from the comparable 2001
quarter and nine-month periods, respectively. The increase was primarily due to
the Community acquisition which added 21 branches to BankAtlantic's community
banking division. Additionally, BankAtlantic recognized approximately $600,000
and $1.2 million of accelerated depreciation expense during the 2002 third
quarter and nine month period, respectively, on equipment associated with
BankAtlantic's on-line banking delivery system. This equipment will be replaced
as BankAtlantic upgrades the technology with new equipment and software during
the fourth quarter of 2002.

The increase in advertising expense during the 2002 quarter and year to date
reflect marketing initiatives to increase BankAtlantic's transaction accounts
and to promote BankAtlantic's "Seven Day Banking " initiative.

The restructuring charges and impairment write-downs during the three months
ended September 30, 2001 related to a $550,000 write down on assets associated
with termination of in-store branch activities. Also, included in restructuring
charges and impairment write-downs during the nine months ended September 30,
2001 was a $219,000 restructuring charge recovery related to a charge recorded
in a prior period associated with the termination of the Wal-Mart ATM
relationship.

The restructuring charges and impairment write-downs during the nine months
ended September 30, 2002 were the result of a plan to discontinue certain ATM
relationships. As a consequence, an $801,000 restructuring charge and a $206,000
impairment write-down were realized. These relationships were primarily with
convenience stores and gas stations and did not meet BankAtlantic's performance
expectations and were unlikely to meet future profitability goals. The remaining
ATM machines (approximately 150 machines) are primarily located in
BankAtlantic's branch network, cruise ships and other remote locations.

Amortization of intangible assets during the three and nine months ended
September 30, 2002 consisted of the amortization of core deposit intangible
assets acquired in connection with the Community acquisition. The core deposits
intangible asset is being amortized over its estimated life of seven years.

During the three months ended September 30, 2002, BankAtlantic's management
reevaluated a residential construction real estate property that was transferred
to real estate owned during the second quarter of 2002 and recognized an
additional $1.4 million write-down. The remaining write-downs of real estate
owned during the three and nine months ended September 30, 2002 and 2001 were
associated with residential real estate owned.

Acquisition related charges and impairments during the three and nine months
ended September 30, 2002 include various data conversion and system integration
expenses as well as facilities impairment write-downs associated with the
Community acquisition. As a consequence of the acquisition, BankAtlantic closed
two of its Palm Beach county branches during the second quarter of 2002. The two
branch facilities were sold to unrelated financial institutions for an aggregate
gain of $941,000.

The slight increase in other expenses during the three months ended September
30, 2002 was attributed to a $304,000 increase in check losses and higher
operating expenses in connection with the increased size of BankAtlantic,
partially offset by $540,000 of lower legal expense during the 2002 quarter
compared to the same 2001 period. The additional check losses resulted from
strategies related to BankAtlantic's "high performance checking" campaign.

Other expenses increased by 10% from the comparable 2001 nine-month period.
During the nine-months ended September 30, 2001 we recognized $1.2 million of
gains on the sales of REO property compared to net gains of $114,000 from REO
property sales during the same 2002 period. The remaining increase in other
expenses were due to the items discussed above as well as $275,000 of additional
loss provisions associated with the tax certificate portfolio. The tax
certificate loss provision is calculated based on the aging of the portfolio.

30

Levitt Companies and Subsidiaries Results of Operations

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------- ------------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
---------- ---------- ---------- ---------- ---------- ----------

Net interest income:
Interest on investments $ 221 $ 810 $ (589) $ 1,020 $ 1,605 $ (585)
Interest on notes and bonds payable (2,284) (1,458) (826) (5,938) (4,934) (1,004)
Capitalized interest 2,214 1,441 773 5,555 4,767 788
---------- ---------- ---------- ---------- ---------- ----------
Net interest income 151 793 (642) 637 1,438 (801)
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income:
Net revenues from sales of real estate 8,522 10,476 (1,954) 31,810 23,212 8,598
Income from equity method investment 941 -- 941 2,463 -- 2,463
Other 291 142 149 1,005 1,576 (571)
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income 9,754 10,618 (864) 35,278 24,788 10,490
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense:
Employee compensation and benefits 3,334 2,287 1,047 9,492 6,556 2,936
Advertising and promotion 647 517 130 2,213 2,096 117
Selling, general and administrative 3,088 2,783 305 9,281 8,121 1,160
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense 7,069 5,587 1,482 20,986 16,773 4,213
---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes $ 2,836 $ 5,824 $ (2,988) $ 14,929 $ 9,453 $ 5,476
========== ========== ========== ========== ========== ==========

Net revenues from sales of real estate represented the net profits on sales of
real estate by Levitt and Sons and Core Communities as well as equity from
earnings in real estate joint venture activities. The decrease in net revenues
from the sales of real estate during the 2002 quarter compared to the same 2001
period primarily resulted from a decrease in Core Communities' land sales. This
decrease was partially offset by an increase in home sales net revenues at
Levitt and Sons. Net revenues from land sales for the quarter ended September
30, 2002 was $2.0 million as compared to $4.7 million for the same period in
2001. The 2001 land sales included the sale of a commercial tract of land for a
$4.1 million gain. Net revenues from home sales for the quarter ended September
30, 2002 was $6.4 million as compared to $4.4 million for the same period in
2001. Net revenues from joint venture activities were $130,000 during the 2002
quarter and $1.4 million during the 2001 quarter.

During the nine months ended September 30, 2002, Core Communities' net revenues
on land sales was $12.6 million as compared to $7.5 million in 2001. The 2002
land sales included the sale of two commercial properties for net revenues of
$9.3 million. During the nine months ended September 30, 2002, net revenues from
homes sales at Levitt and Sons were $17.7 million as compared to $12.4 million
during the same 2001 period. In 2001, Levitt Companies sold a marine rental
property for a $680,000 gain. Net revenues on joint venture activities were $1.5
million during the 2002 period and $2.6 million during the 2001 period.

In April 2002, Levitt Companies acquired 34.3% of Bluegreen Corporation's common
stock increasing the Company's consolidated ownership in Bluegreen's common
stock to 39.2%. Bluegreen Corporation is a developer and marketer of drive-to
vacation interval resorts and planned golf and residential real estate. Levitt
Companies' investment in Bluegreen Corporation is accounted for under the equity
method. Levitt Companies' income from Bluegreen Corporation for the 2002 quarter
was $941,000 and for the nine months ended September 30, 2002 was $2.5 million.

The decrease in other non-interest income during the nine months ended September
30, 2002, compared to the same 2001 period, was primarily due to rental income
associated with a marine property sold during the second quarter of 2001.

Net interest income decreased during the quarter and nine months ended September
30, 2002, compared to the same periods in 2001, primarily due to decreases in
interest from investments, resulting from lower average balances and yields.

31

The significant increase in compensation and benefits during the three and nine
months ended September 30, 2002 compared to the same 2001 periods primarily
resulted from increases in incentive accruals and personnel resulting from the
addition of several new development projects. These new projects and an increase
in home deliveries also resulted in an increase in selling and other general and
administrative expenses during the three and nine months ended September 30,
2002, compared to the same 2001 periods.

Ryan Beck & Co. and Subsidiaries Results of Operations

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------- --------------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
---------- ---------- ---------- ---------- ---------- ----------

Net interest income:
Interest on trading securities $ 4,452 $ 541 $ 3,911 $ 8,623 $ 1,697 $ 6,926
Interest expense affiliated loan
and trading activities (807) (136) (671) (1,828) (445) (1,383)
---------- ---------- ---------- ---------- ---------- ----------
Net interest income 3,645 405 3,240 6,795 1,252 5,543
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income:
Principal transactions 23,492 3,987 19,505 49,654 12,392 37,262
Investment banking 7,791 4,003 3,788 15,790 8,041 7,749
Commissions 22,224 2,954 19,270 41,642 9,566 32,076
Losses on sales of securities
available for sale (2,297) -- (2,297) (2,297) -- (2,297)
Other 1,457 197 1,260 3,036 613 2,423
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income 52,667 11,141 41,526 107,825 30,612 77,213
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense:
Employee compensation and benefits 39,553 7,416 32,137 80,226 23,193 57,033
Occupancy and equipment 3,526 785 2,741 7,068 2,430 4,638
Advertising and promotion 953 387 566 2,325 1,170 1,155
Amortization of goodwill -- 112 (112) -- 329 (329)
Acquisition related charges and
impairments 870 -- 870 4,061 -- 4,061
Other 10,277 2,290 7,987 22,061 6,939 15,122
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense 55,179 10,990 44,189 115,741 34,061 81,680
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before income taxes $ 1,133 $ 556 $ 577 $ (1,121) $ (2,197) $ 1,076
========== ========== ========== ========== ========== ==========

The significant increase in net interest income during the three and nine months
ended September 30, 2002 primarily resulted from the expansion of municipal bond
trading in connection with the Gruntal transaction. Tax exempt interest income
for the three and nine months ended September 30, 2002 was $1.2 million and $2.4
million, respectively. The above increase in net interest income was partially
offset by the interest expense associated with $5.0 million of borrowings from
Bancorp, as well as an increased level of borrowings from Ryan Beck's clearing
agent as a result of a higher volume of trading activity.

During the three and nine months ended September 30, 2002, compared to the same
2001 periods, non-interest income increased by 373% and 252%, respectively. The
increase was primarily the result of increased agency commissions and principal
transaction revenues. These increases resulted from the additional investment
consultants and trading personnel hired in connection with the Gruntal
transaction. The above increases in revenues were partially offset by losses on
the sales of mutual fund investments associated with a deferred compensation
plan acquired in connection with the Gruntal transaction. In September 2002,
Ryan Beck allowed the participants in the plan to withdraw their vested benefits
upon forfeiting their unvested benefits. The mutual fund investments were sold
to fund the plan distributions. There were $12.6 million of mutual fund
securities available for sale at September 30, 2002.

32

The increase in employee compensation and benefits during the three and nine
months ended September 30, 2002, compared to the same 2001 periods, was
primarily due to the additional personnel hired in connection with the Gruntal
transaction. The increase in compensation expense was partially offset by a $1.4
million and $2.3 million reduction in the Gruntal nonqualified deferred
compensation obligation during the three and nine months ended September 30,
2002, respectively.

Goodwill amortization during the three and nine month periods ended September
30, 2001 represented the amortization of goodwill associated with prior
acquisitions. Upon the implementation of Financial Accounting Standard Number
142 on January 1, 2002, we discontinued the amortization of goodwill. Goodwill
will be evaluated for impairment in subsequent periods in accordance with FASB
Statement 142.

Acquisition related charges and impairments during the three and nine months
ended September 30, 2002, included branch closures, professional fees, and
regulatory costs incurred in connection with the Gruntal transaction.

The increase in other expenses during the three and nine months ended September
30, 2002 compared to the same 2001 periods, related to increased floor brokerage
and clearing fees attributed to a significant increase in commission revenues.
Increased rent, occupancy and communication expenses were associated with the
additional offices acquired in connection with the Gruntal transaction.

Bancorp Parent Company Results of Operations

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------- ------------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
---------- ---------- ---------- ---------- ---------- ----------

Net interest income:
Interest and fees on loans $ 461 -- 461 978 21 957
Interest on investments 18 119 (101) 265 174 91
Interest on subordinated debentures,
notes payable and guaranteed
preferred interests in Bancorp's
Junior Subordinated Debentures (4,790) (4,358) (432) (12,634) (15,077) 2,443
---------- ---------- ---------- ---------- ---------- ----------
Net interest income (4,311) (4,239) (72) (11,391) (14,882) 3,491
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income:
Net revenues from sales of real estate (207) 744 (951) (35) 734 (769)
Income from equity method investment 486 -- 486 705 -- 705
Gains on securities available for sale 506 2,246 (1,740) 3,836 3,744 92
Impairment of securities (302) (5) (297) (18,459) (700) (17,759)
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income 483 2,985 (2,502) (13,953) 3,778 (17,731)
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense:
Employee compensation and benefits -- 531 (531) 3,038 1,505 1,533
Impairment of goodwill -- 6,624 (6,624) -- 6,624 (6,624)
Amortization of goodwill -- 929 (929) -- 2,786 (2,786)
Other 162 544 (382) 886 585 301
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense 162 8,628 (8,466) 3,924 11,500 (7,576)
---------- ---------- ---------- ---------- ---------- ----------
Loss before income taxes $ (3,990) (9,882) 5,892 (29,268) (22,604) (6,664)
========== ========== ========== ========== ========== ==========

Interest and fees on loans for the three and nine months ended September 30,
2002 represent interest income associated with a $5 million loan to Ryan Beck
and a $30 million loan to Levitt Companies. Interest and fees on loans for the
three and nine months ended September 30, 2001 represent interest income on a
loan to a non-real estate joint venture. The interest on investments for the
three and nine months ended September 30, 2002 and 2001 primarily represent
interest income earned on reverse repurchase agreement investments with
BankAtlantic.

33

The increase in interest expense on debentures and notes payable for the 2002
quarter, compared to the same 2001 period resulted from higher average balances
of trust preferred securities and notes payable. During 2002, Bancorp issued
$115.4 million of trust preferred securities, increased its bank line of credit
borrowings and issued $3.7 million of notes payable.

The decrease in interest expense on debentures and notes payable for the nine
months ended September 30, 2002, compared to the same 2001 period, resulted from
lower average balances from the redemption of the subordinated investment notes
and convertible subordinated debentures during the 2001 third quarter. The above
declines in interest expense were partially offset by the issuance of trust
preferred securities mentioned above.

The net revenues from the sales of real estate resulted from the recognition and
deferral of interest associated with inter-company loans to Levitt Companies.
The deferred income was recognized when the real estate associated with the
inter-company loans was sold.

Income from equity method investment represents BankAtlantic Bancorp's 4.9%
ownership interest in the earnings of Bluegreen Corporation. In April 2002,
Levitt Companies acquired an additional 34.3% of Bluegreen Corporation's common
stock. See the discussion above concerning the investment in Bluegreen
Corporation by Levitt Companies.

Bancorp sold equity securities with a book value of $4.5 million and $7.0
million during the three and nine months ended September 30, 2002 for gains
shown on the above table. During the three and nine months ended September 30,
2001 Bancorp sold equity securities with a book value of $1.1 million and $2.8
million for gains shown on the above table.

Bancorp recognized an impairment charge of $302,000 and $18.5 million during the
three and nine months ended September 30, 2002, respectively, on equity
securities resulting from significant declines in their value that were
considered other than temporary due to the financial condition and near term
prospects of the issuers of the equity securities. A significant portion of the
impairment charge for the nine month period was related to Seisint, Inc. During
1999, Bancorp entered into a strategic relationship with Seisint Inc. and
invested $10 million in cash and issued 848,364 shares of Class A common stock
for $15 million of Seisint, Inc. common stock. Seisint is a privately held
technology company, which provides marketing information, application solutions
and customer relationship management applications. Bancorp anticipated benefits
from this strategic relationship through the exchange of ideas and cooperation
in the development by Seisint of technology and support systems for use by
financial institutions. Additionally, both Alan B. Levan and John E. Abdo were
directors of Seisint and each acquired direct and indirect interests in Seisint
common stock. Because Seisint did not meet the objectives of its business plan
or financial performance goals, Bancorp performed an evaluation of its
investment in Seisint to determine if there was an other than temporary decline
in value associated with this investment. As a consequence of this evaluation,
Bancorp wrote off its entire $15 million investment in Seisint during June 2002.

Bancorp recognized a $5,000 and $700,000 impairment charge associated with
equity securities during the three and nine-month periods ended September 30,
2001. As a result of these losses, Bancorp has revised its policy for holding
company equity investments. Any future equity investments will be limited to
liquid securities and will be subject to significant concentration restrictions.
At September 30, 2002 parent company equity investments totaled $4.9 million.

During the three months ended September 30, 2002 and 2001 Bancorp accrued $0 and
$513,000 of compensation expense related to the Ryan Beck retention pool. The
participants' accounts in the Ryan Beck retention pool vested on June 28, 2002.
During the nine months ended September 30, 2002 and 2001, Bancorp accrued $1.0
million and $1.5 million of compensation expense related to the Ryan Beck
retention pool established in connection with Bancorp's acquisition of Ryan Beck
in 1998. Also included in compensation expense for the nine months ended
September 30, 2002 was $2.0 million of acquisition related expenses associated
with the Gruntal transaction.

The impairment of goodwill in 2001 related to Bancorp's 1998 acquisition of
Leasing Technology, Inc. ("LTI"). During the third quarter of 2001, Bancorp's
management concluded that LTI would not meet Bancorp performance expectations.
As a consequence, LTI offices were closed down and ceased the origination of
leases.

34

Goodwill amortization during the three months ended September 30, 2001
represents the amortization of goodwill associated with all acquisitions. Upon
the implementation of Financial Accounting Standard Number 142 on January 1,
2002, Bancorp discontinued the amortization of goodwill. Bancorp will evaluate
goodwill for impairment in subsequent periods in accordance with FASB Statement
142.

Other expenses for the three months ended September 30, 2002 and 2001 primarily
consist of professional fees. Included in other expenses for the three and nine
months ended September 30, 2001 was a $389,000 write-off of deferred offering
costs associated with the redemption of subordinated investment notes. Included
in other expenses for the nine months ended September 30, 2002 was $410,000 of
fees paid to Ryan Beck in connection with the underwriting of the Company's
securities.

BFC Holding Company Results of Operations

For the Three Months For the Nine Months
Ended September 30, Ended September 30,
------------------------------------- ------------------------------------
(In thousands) 2002 2001 Change 2002 2001 Change
---------- ---------- ---------- ---------- ---------- ----------

Net interest income:
Interest on investments $ 102 107 (5) 250 309 (59)
Interest on notes payable (295) (311) 16 (855) (950) 95
---------- ---------- ---------- ---------- ---------- ----------
Net interest income (193) (204) 11 (605) (641) 36
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income:
Net revenues from sales of real estate -- -- -- -- 1,346 (1,346)
Impairment of securities -- (2,000) 2,000 (1,583) (3,096) 1,513
Other 309 270 39 899 884 15
---------- ---------- ---------- ---------- ---------- ----------
Non-interest income 309 (1,730) 2,039 (684) (866) 182
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense:
Employee compensation and benefits 478 433 45 1,736 1,413 323
Occupancy and equipment 20 13 7 56 74 (18)
Other 199 205 (6) 630 523 107
---------- ---------- ---------- ---------- ---------- ----------
Non-interest expense 697 651 46 2,422 2,010 412
---------- ---------- ---------- ---------- ---------- ----------
Income (loss) before income taxes $ (581) (2,585) 2,004 (3,711) (3,517) (194)
========== ========== ========== ========== ========== ==========

During the nine months ended September 30, 2001, net revenues from sales of real
estate represents the gain on the sale of BFC's 50% interest in Delray
Industrial Park. BFC recognized an impairment charge of $1.6 million and $3.1
million during the nine months ended September 30, 2002 and 2001, respectively,
and a $2.0 million impairment charge during the quarter ended September 30,
2001. These impairment charges resulted from significant declines in the values
of equity investments that were considered other than temporary due to the
financial condition and near term prospects of the issuers of the equity
securities.

The increase in employee compensation and benefits for the nine months ended
September 30, 2002 as compared to the same period in 2001 was primarily due to
an increase in levels of compensation.

Financial Condition

The Company's total assets at September 30, 2002 were $5.7 billion compared to
$4.7 billion at December 31, 2001. The increase in total assets primarily
resulted from:

o The acquisition of Community Savings, which added approximately $969
million in assets.
o The Gruntal transaction which added $165 million in assets which
were primarily trading securities.
o A $60.0 million investment in Bluegreen Corporation, a New York
Stock Exchange listed company which engages in the acquisition,
development, marketing and sale of primarily drive-to vacation
interval resorts, golf communities and residential land.

35

o The purchase of a $14.3 million office facility to consolidate
BankAtlantic's headquarters and back office operations into a
centralized facility.
o Goodwill associated with the Community acquisition partially offset
by the impairment of goodwill assigned to the Ryan Beck reportable
segment.
o The origination of commercial real estate and home equity loans.
o Increases in real estate held for development and sale and joint
venture activities due to an increase in Levitt and Sons real estate
inventory and the purchase of land for development by Core
Communities.
o Increases in deferred tax assets related to the impairment of
securities.
o Increases in cash and due from depository institutions due to higher
in-transit cash letter balances.
o Higher other assets balances associated with the acquisition and
issuance of forgivable loans associated with the Gruntal
transaction.

The above increases in total assets were partially offset by:

o Decreased balances of residential loans due to accelerated loan
repayments.
o Continued run-off in the syndications, leasing, international and
indirect lending areas, which were discontinued activities.
o Reduction in securities available for sale related to the sale of
$152.1 million of mortgage backed securities.

The Company's total liabilities at September 30, 2002 were $5.3 billion compared
to $4.2 billion at December 31, 2001.

The increase in total liabilities primarily resulted from:

o The acquisition of Community Savings, which added approximately $799
million in liabilities.
o The Gruntal transaction, which added approximately $134 million in
liabilities.
o The issuance in the aggregate of $ 115.4 million of trust preferred
securities.
o Higher due to clearing agent liability associated with Ryan Beck
trading activities.
o Additional borrowings from Bancorp's bank line of credit and at
Levitt Companies to fund land purchases and its investment in
Bluegreen.
o Increased other liabilities related to a higher accrued expenses and
compensation associated with the Gruntal transaction.

The above increases in total liabilities were partially offset by:

o Lower short term borrowings associated with an increase in
FHLB advance obligations and higher deposit balances.
o A decrease in securities sold not yet purchased associated
with Ryan Beck trading activities.

BFC's Liquidity and Capital Resources

The primary sources of funds to BFC (without consideration of Bancorp's
liquidity and capital resources which except as noted, are not available to BFC)
were dividends from Bancorp, revenues from property operations, principal and
interest payments on loan receivables and borrowings. Funds were primarily
utilized by BFC to reduce mortgage payable and other borrowings, to buy back and
retire 40,000 shares of Class B Common Stock, and to fund operating expenses and
general and administrative expenses. BFC has an $8.0 million revolving line of
credit that can be utilized for working capital as needed. At September 30,
2002, approximately $1.98 million was available under this facility that matures
in December 2002 and bears interest at the prime rate plus 1%. In July 2002, BFC
borrowed $1.5 million from the revolving line of credit.

BFC (without consideration of Bancorp) acquired interests in unaffiliated
technology entities. During 2000 and 2001, BFC's interests in the technology
entities were transferred at BFC's cost to specified asset limited partnerships.
Subsidiaries of the Company are the controlling general partners of these
venture partnerships, and therefore, they are consolidated in these financial
statements. Interests in such partnerships were sold in 2000 and

36

2001 to accredited investors in private offerings. During 2000, approximately
$5.1 million of capital was raised from unaffiliated third parties by these
partnerships and officers, directors and affiliates of BFC invested
approximately $4.4 million in these partnerships. BFC and the general partners
retained ownership interests of approximately $1.8 million. Additionally, during
2001, approximately $895,000 of capital was raised from unaffiliated third
parties by these partnerships and officers, directors and affiliates of BFC
invested approximately $1.3 million in the partnerships. BFC and the general
partners retained ownership interests of approximately $3.8 million increasing
BFC's total investment in these partnerships to $5.6 million. Of the $1.3
million, Alan Levan, Chairman, and John Abdo, Vice Chairman, each borrowed
$500,000 from BFC on a recourse basis and Glen Gilbert, Executive Vice
President, and Earl Pertnoy, a director of BFC each borrowed $50,000 on a
non-recourse basis to make their investments. Such amounts were still
outstanding at the end of the quarter (except for John Abdo's $500,000 loan
which is discussed below), bear interest at the prime rate plus 1% and are
payable interest only annually with the entire balance due in February 2006.
After the limited partners receive a specified return from the partnerships, the
general partners are entitled to receive 20% of all cash distributions from the
partnerships. The general partners are limited liability companies of which the
members are: John E. Abdo - 13.75%; Alan B. Levan - 9.25%; Glen R. Gilbert -
2.0%; John E. Abdo, Jr. - 17.5% and BFC Financial Corporation - 57.5%. In
January 2002, two of these venture partnerships distributed the shares of its
investments that it owned. At September 30, 2002 and December 31, 2001, BFC's
net investments in these partnerships were $2.6 million and $4.7 million,
respectively.

On July 16, 2002, John Abdo borrowed $3.5 million from the Company on a recourse
basis and paid off his existing $500,000 loan due to BFC. The $3.5 million loan
bears interest at the prime rate plus 1%, requires monthly interest payments, is
due on demand and is secured by 1,019,564 shares of BFC Class A Common Stock and
370,750 shares of BFC Class B Common Stock.

As previously indicated the Company holds approximately 22.6% of the
outstanding Bancorp Common Stock. The payment of dividends by Bancorp is subject
to declaration by Bancorp's Board of Directors and applicable indenture
restrictions and loan covenants and will also depend upon, among other things,
the results of operations, financial condition and cash requirements of Bancorp
and, as discussed below, the ability of BankAtlantic to pay dividends or
otherwise advance funds to Bancorp, which in turn is subject to OTS regulation
and is based upon BankAtlantic's regulatory capital levels and net income. While
there is no assurance that Bancorp will pay dividends in the future, Bancorp has
paid a regular quarterly dividend to its common stockholders since August 1993
and management of Bancorp has indicated that it will seek to declare regular
quarterly cash dividends on the Bancorp Common Stock. Bancorp currently pays a
quarterly dividend of $.031 per share on its Class A and Class B Common Stock.
Based on its current level of ownership and Bancorp's current dividend rate, BFC
currently receives approximately $408,000 per quarter in dividends from Bancorp.

Bancorp's Liquidity and Capital Resources

Bancorp's principal source of liquidity is dividends from BankAtlantic. Bancorp
also obtains funds through the issuance of equity securities, sales of
securities available for sale, borrowings from financial institutions and
issuance of debt securities. Bancorp's annual debt service at September 30, 2002
associated with its subordinated debentures, Trust Preferred Securities, and
financial institution borrowings was $20.6 million. Bancorp's estimated current
annual dividends to common shareholders are approximately $7.2 million, of which
$5.2 million has been declared and paid during 2002. The declaration and payment
of dividends and the ability of Bancorp to meet its debt service obligations
will depend upon, among other things, the results of operations, financial
condition and cash requirements of Bancorp as well as indenture restrictions and
loan covenants and on the ability of BankAtlantic to pay dividends to Bancorp,
which payments are subject to OTS approval and regulations and based upon
BankAtlantic's regulatory capital levels and net income. During 2001, Bancorp
received $22.2 million of dividends from BankAtlantic.

In September 2002, Bancorp participated in two pooled trust preferred securities
offerings in which $35 million of trust preferred securities were issued in two
separate transactions. The trust preferred securities pay interest quarterly at
a floating rate equal to 3 month LIBOR plus 340 basis points. The securities are
redeemable after September 2007 and are due September 2032. The net proceeds to
Bancorp from the Trust Preferred Securities offerings after underwriting
discounts and expenses were approximately $34 million. Bancorp used the proceeds
from the trust preferred securities offerings, as well as additional revolving
line of credit borrowings, to redeem $43.7 million of its 9.5% trust preferred
securities on November 12, 2002, at par plus accrued and unpaid distributions
through the

37

redemption date. This redemption resulted in a $1.2 million write-off of
deferred offering costs. The funds for the redemption of the trust preferred
securities were obtained from the issuance of $35 million of LIBOR based trust
preferred securities and additional revolving line of credit borrowings. Annual
debt service on the 9.5% trust preferred securities which were redeemed was $4.2
million.

Certain covenants contained in a Levitt Companies loan agreement prohibit it
from paying dividends to Bancorp. Ryan Beck has not paid dividends to Bancorp
and it is not anticipated that Ryan Beck will pay dividends to the Bancorp
during 2002.

Bancorp maintains a revolving credit facility of $30 million with an independent
financial institution. The credit facility contains customary covenants,
including financial covenants relating to regulatory capital and maintenance of
certain loan loss reserves and is secured by the common stock of BankAtlantic.
In April 2002, Bancorp borrowed $29.9 million under this credit facility to fund
Levitt Companies' investment in Bluegreen Corporation. In June 2002, Bancorp
used a portion of the proceeds from its participation in a pooled trust
preferred securities offering to reduce outstanding borrowings under this credit
facility to $16 million. As a consequence of the Community acquisition, Bancorp
requested and received from the lender under the credit facility certain waivers
of financial covenants through December 31, 2002. Bancorp does not believe that
it will need additional waivers beyond December 31, 2002. Amounts outstanding
accrue interest at the prime rate minus 50 basis points and the facility matures
on September 1, 2004.

BankAtlantic's primary sources of funds during the nine-months of 2002 were from
principal collected on loans, securities available for sale and investment
securities held to maturity, sales of securities available for sale, borrowings
from FHLB advances, securities sold under agreements to repurchase, sales of
property and equipment, real estate held for sale and REO, capital contributions
from BankAtlantic Bancorp and deposit inflows. These funds were primarily
utilized to fund operating expenses and deposit outflows, and to fund or
purchase loans, FHLB stock, tax certificates, and securities available for sale
and to acquire Community. At September 30, 2002, BankAtlantic met all applicable
liquidity and regulatory capital requirements.

In October 2002, BankAtlantic issued $22 million of its floating rate
subordinated debentures due 2012. The Subordinated Debentures pay interest
quarterly at a floating rate equal to 3-month LIBOR plus 345 basis points and
are redeemable after October 2007 at a redemption price based upon then
prevailing market interest rates. The net proceeds will be used by BankAtlantic
for general corporate purposes to support asset growth. The Subordinated
Debentures were issued by BankAtlantic in a private transaction as part of a
larger pooled securities offering. The debentures currently qualify for
inclusion in BankAtlantic's total risk based capital.

BankAtlantic's commitments to originate and purchase loans at September 30, 2002
were $470.7 million and $85.0 million compared to $210.1 million and $20.4
million at September 30, 2001. Additionally, BankAtlantic had commitments to
purchase mortgage-backed securities of $144.6 million at September 30, 2001 and
zero at September 30, 2002. At September 30, 2002, loan commitments represented
approximately 15.3% of net loans receivable, net.

38

At the indicated date BankAtlantic's capital amounts and ratios were (dollars in
thousands):

Minimum Ratios
-------------------------
Actual Adequately Well
------------------- Capitalized Capitalized
Amount Ratio Ratio Ratio
-------- -------- ----------- -----------
At September 30, 2002:
Total risk-based capital $395,035 10.83% 8.0% 10.0%
Tier 1 risk-based capital $349,410 9.58% 4.0% 6.0%
Tangible capital $349,410 6.85% 1.5% 1.5%
Core capital $349,410 6.85% 4.0% 5.0%

At December 31, 2001:
Total risk-based capital $383,295 12.90% 8.0% 10.0%
Tier 1 risk-based capital $346,057 11.65% 4.0% 6.0%
Tangible capital $346,057 8.02% 1.5% 1.5%
Core capital $346,057 8.02% 4.0% 5.0%

Savings institutions are also subject to the provisions of the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"). Regulations
implementing the prompt corrective action provisions of FDICIA define specific
capital categories based on FDICIA's defined capital ratios, as discussed more
fully in the Company's Annual Report on Form 10-K for the year ended December
31, 2001.

Bancorp's wholly owned subsidiary, Ryan Beck, is subject to the net capital
provision of Rule 15c3-1 under the Securities Exchange Act of 1934, which
requires that Ryan Beck's aggregate indebtedness shall not exceed 15 times net
capital as defined under such provision. Additionally, Ryan Beck, as a market
maker, is subject to supplemental requirements of Rule 15c3-1(a)4, which
provides for the computation of net capital to be based on the number and price
of issues in which markets are made by Ryan Beck, not to exceed $1,000,000. At
September 30, 2002, Ryan Beck's regulatory net capital was approximately $12.3
million, which exceeded minimum net capital rule requirements by $11.3 million.

Ryan Beck operates under the provisions of paragraph (K)(2)(ii) of Rule 15c3-3
of the Securities and Exchange Commission as a fully-disclosed broker and,
accordingly, customer accounts are carried on the books of the clearing broker.
However, Ryan Beck safekeeps and redeems municipal bond coupons for the benefit
of its customers. Accordingly, Ryan Beck is subject to the provisions of SEC
Rule 15c3-3 relating to possession or control and customer reserve requirements
and was in compliance with such provisions at September 30, 2002.

Levitt Companies' primary source of funds during the nine months ended September
30, 2002 were proceeds from the sale of real estate inventory, capital
contributions and borrowings from BankAtlantic Bancorp and borrowings from
financial institutions. These funds were primarily utilized to purchase real
estate inventory, repay borrowings and invest in Bluegreen Corporation. In April
2002, Levitt Companies received an $18.6 million capital contribution and
borrowed $30 million from Bancorp. Levitt Companies utilized these funds plus
$5.1 million of working capital to purchase a 34.3% interest in Bluegreen
Corporation's common stock. Levitt Companies' borrowings with financial
institutions require Levitt Companies to comply with certain financial covenants
during the term of the agreements. At September 30, 2002 Levitt Companies was in
compliance with all loan agreement financial covenants.

39

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is defined as the risk of loss arising from adverse changes in
market valuations that arise from interest rate risk, foreign currency exchange
rate risk, commodity price risk and equity price risk. Bancorp's primary market
risk is interest rate risk and Bancorp's secondary market risk is equity price
risk. BFC's primary market risk, without consideration of Bancorp, is equity
price risk relating to its equity investments.

Interest Rate Risk

The majority of Bancorp assets and liabilities are monetary in nature,
subjecting Bancorp to significant interest rate risk which would arise if the
relative values of each of Bancorp assets and liabilities changed in conjunction
with a general rise or decline in interest rates. Bancorp has developed a model
using standard industry software to quantify its interest rate risk. A
sensitivity analysis was performed measuring Bancorp's potential gains and
losses in net portfolio fair values of interest rate sensitive instruments at
September 30, 2002 resulting from a change in interest rates. Interest rate
sensitive instruments included in the model were:

o Loan portfolio,
o Debt securities available for sale,
o Investment securities,
o FHLB stock,
o Federal Funds sold,
o Deposits,
o Advances from FHLB,
o Securities sold under agreements to repurchase,
o Federal Funds purchased,
o Notes and Bonds payable
o Subordinated Debentures,
o Trust Preferred Securities,
o Forward contracts,
o Interest rate swaps, and
o Off-balance sheet loan commitments.

The model calculates the net potential gains and losses in net portfolio fair
value by:

(i) discounting anticipated cash flows from existing assets,
liabilities and off-balance sheet contracts at market rates to
determine fair values at September 30, 2002, and
(ii) discounting the above expected cash flows based on
instantaneous and parallel shifts in the yield curve to
determine fair values.
(iii) The difference between the fair value calculated in (i) and
(ii) is the potential gain or loss in net portfolio fair
values.

Management of Bancorp has made estimates of fair value discount rates that it
believes to be reasonable. However, because there is no quoted market for many
of these financial instruments, management has no basis to determine whether the
fair value presented would be indicative of the value negotiated in an actual
sale. BankAtlantic's fair value estimates do not consider the tax effect that
would be associated with the disposition of the assets or liabilities at their
fair value estimates.

Presented below is an analysis of Bancorp's interest rate risk at September 30,
2002 as calculated utilizing Bancorp's model. The table measures changes in net
portfolio value for instantaneous and parallel shifts in the yield curve in 100
basis point increments up or down.

40

Net
Portfolio
Changes Value Dollar
in Rate Amount Change
------------- ------------- -------------
(dollars in thousands)
+200 bp $ 521,652 $ 39,853
+100 bp $ 523,635 $ 41,836
0 $ 481,799 $ 0
-100 bp $ 411,516 $ (70,283)
-200 bp $ 335,340 $ (146,459)

In preparing the above table, Bancorp makes various assumptions to determine the
net portfolio value at the assumed changes in interest rate. These assumptions
include:

o loan prepayment rates,
o deposit decay rates,
o market values of certain assets under the representative interest
rate scenarios, and
o re-pricing of certain deposits and borrowings

It was also assumed that delinquency rates would not change as a result of
changes in interest rates although there can be no assurance that this would be
the case. Even if interest rates change in the designated increments, there can
be no assurance that Bancorp assets and liabilities would be impacted as
indicated in the table above. In addition, a change in U.S. Treasury rates in
the designated amounts, accompanied by a change in the shape of the yield curve,
could cause significantly different changes to the fair values than indicated
above. Furthermore, the result of the calculations in the preceding table are
subject to significant deviations based upon actual future events, including
anticipatory or reactive measures which Bancorp may take in the future.

Equity Price Risk

The Company maintains a portfolio of trading and available for sale securities
which subjects the Company to equity pricing risks. The change in fair values of
equity securities represents instantaneous changes in all equity prices
segregated by trading securities, securities sold not yet purchased and
available for sale securities. The following are hypothetical changes in the
fair value of our securities sold, not yet purchased, trading and available for
sale securities at September 30, 2002 based on percentage changes in fair value.
Actual future price appreciation or depreciation may be different from the
changes identified in the table below.

Available Securities
Percent Trading for Sale Sold Not
Change in Securities Securities Yet Dollar
Fair Value Fair Value Fair Value Purchased Change
- ------------ ------------ ------------ ------------ ------------
(dollars in thousands)
20% $ 199,418 $ 18,751 $ (39,641) $ 29,755
10% $ 182,800 $ 17,189 $ (36,337) $ 14,878
0% $ 166,182 $ 15,626 $ (33,034) $ --
(10)% $ 149,564 $ 14,063 $ (29,731) $ (14,878)
(20)% $ 132,946 $ 12,501 $ (26,427) $ (29,755)

Excluded from the above table are $7.0 million of investments in private
companies for which no current market exists. The ability to realize on or
liquidate our investments will depend on future market conditions and is subject
to significant risk.

Ryan Beck, in its capacity as a market-maker and dealer in corporate and
municipal fixed-income and equity securities, may enter into transactions in a
variety of cash and derivative financial instruments in order to facilitate
customer order

41

flow and hedge market risk exposures. These financial instruments include
securities sold, not yet purchased and futures contracts. Securities sold, not
yet purchased represent obligations of Bancorp to deliver specified financial
instruments at contracted prices, thereby creating a liability to purchase the
financial instrument in the market at prevailing prices. Accordingly, these
transactions result in off-balance-sheet risk as Bancorp's ultimate obligation
may exceed the amount recognized in the Consolidated Statement of Financial
Condition.

Item 4. Controls and Procedures

Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of our management,
including the Company's Chief Executive Officer and Chief Financial Officer, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures pursuant to Exchange Act Rule 13a-14. Based upon that
evaluation, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosures controls and procedures are effective
to ensure that all material information relating to the Company and the
Company's consolidated subsidiaries required to be included in this quarterly
report has been made known to them in a timely fashion. No significant changes
were made in the Company's internal controls or in other factors that could
significantly affect internal controls subsequent to the date of the Company's
evaluation.

42

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

In April 2002, Ryan, Beck & Co., a subsidiary of Bancorp, acquired certain
of the assets and assumed certain of the liabilities of Gruntal & Co., LLC
("Gruntal"). Ryan Beck has been named as a defendant in a number of
arbitration claims filed by former Gruntal clients whose claims arose
prior to the transaction date. Ryan Beck has been named in these actions
as a "successor" in interest to Gruntal. In some instances the former
Gruntal brokers against whom the claims relate are now employed by Ryan
Beck and in other instances the brokers are not employed by Ryan Beck.
Ryan Beck did not assume any of the liabilities associated with these
actions in the Gruntal transaction. While Bancorp does not consider any
individual action to be material, an adverse result in a number of these
actions in the aggregate could adversely effect Bancorp's and the
Company's historical financial statements. In October 2002 Gruntal filed
for bankruptcy protection under Chapter 11 of the Federal Bankruptcy Laws.

Item 2 through 5. - Not applicable

Item 6. - Exhibits and Reports on Form 8-K

a) Index to Exhibits

Exhibit 99.1 Certification pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

Exhibit 99.2 Certification pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002

b) Reports on Form 8-K:

None

43

SIGNATURES

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

BFC FINANCIAL CORPORATION

Date: November 13, 2002 By: /s/ Alan B. Levan
--------------------------------------------
Alan B. Levan, President

Date: November 13, 2002 By: /s/ Glen R. Gilbert
--------------------------------------------
Glen R. Gilbert, Executive Vice President,
Chief Accounting Officer and
Chief Financial Officer

44

I, Glen R. Gilbert, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BFC Financial
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and

c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 13, 2002

By: /s/ Glen R. Gilbert
----------------------------------------
Glen R. Gilbert,
Chief Financial Officer

45

I, Alan B. Levan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of BFC Financial
Corporation;

2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;

3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:

a. designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;

b. evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date
of this quarterly report (the "Evaluation Date"); and

c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent function):

a. all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and

b. any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and

6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.

Date: November 13, 2002

By: /s/Alan B. Levan
-------------------------------------
Alan B. Levan,
Chief Executive Officer

46