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Table of Contents

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
     
þ   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarter Ended September 30, 2010
OR
     
o   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number
001-09071
BFC Financial Corporation
(Exact name of registrant as specified in its charter)
     
Florida   59-2022148
     
(State or other jurisdiction of incorporation or   (IRS Employer Identification Number)
organization)    
     
2100 West Cypress Creek Road    
Fort Lauderdale, Florida   33309
     
(Address of Principal executive office)   (Zip Code)
(954) 940-4900
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
YES þ            NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
YES o            NO o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
             
Large accelerated filer o    Accelerated filer o    Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company þ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o            NO þ
The number of shares outstanding of each of the registrant’s classes of common stock as of November 10, 2010 is as follows:
Class A Common Stock of $.01 par value, 68,521,497 shares outstanding.
Class B Common Stock of $.01 par value, 6,859,751 shares outstanding.   
 
 

 


 

BFC Financial Corporation
TABLE OF CONTENTS
         
       
 
       
       
 
       
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 EX-31.1
 EX-31.2
 EX-31.3
 EX-32.1
 EX-32.2
 EX-32.3

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Table of Contents

PART I — FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
BFC Financial Corporation
Consolidated Statements of Financial Condition — Unaudited
(In thousands, except share data)
                 
    September 30,     December 31,  
    2010     2009  
ASSETS
               
Cash and cash equivalents
  $ 385,874       316,080  
Interest bearing deposits at other financial institutions
    47,990        
Restricted cash
    62,748       24,020  
Securities available for sale, at fair value
    490,634       346,375  
Derivatives, at fair value
    95        
Investment securities at cost (fair value: $1,981 in 2010 and $9,654 in 2009)
    1,981       9,654  
Current income tax receivable
    9,399       64,006  
Tax certificates, net of allowance of $8,452 in 2010 and $6,781 in 2009
    104,681       110,991  
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value
    45,259       48,751  
Loans held for sale
    2,839       4,547  
Loans receivable, net of allowance for loan losses of $185,947 in 2010 and $187,218 in 2009
    3,226,715       3,678,894  
Notes receivable including gross securitized notes, net of allowance of $80,754 in 2010 and $3,986 in 2009
    598,693       277,274  
Retained interest in notes receivable sold
          26,340  
Accrued interest receivable
    23,290       32,279  
Real estate inventory
    460,712       494,291  
Real estate owned and other repossessed assets
    67,783       46,477  
Investments in unconsolidated affiliates
    12,776       15,272  
Properties and equipment, net
    236,636       289,209  
Goodwill
    12,241       12,241  
Intangible assets, net
    78,016       81,686  
Assets held for sale
    37,209        
Assets held for sale from discontinued operations
          71,900  
Other assets
    96,619       96,750  
 
           
Total assets
  $ 6,002,190       6,047,037  
 
           
 
               
Assets of consolidated variable interest entities (“VIEs”) included in total assets above
               
Restricted cash
  $ 39,388          
Securitized notes receivable, gross
    551,899          
 
           
Total assets of consolidated VIEs
  $ 591,287          
 
             
 
               
LIABILITIES AND EQUITY
               
Liabilities:
               
Interest bearing deposits
  $ 2,688,407       3,133,360  
Non-interest bearing deposits
    805,501       815,458  
Deposits held for sale
    339,360        
 
           
Total deposits
    3,833,268       3,948,818  
Advances from FHLB
    180,000       282,012  
Securities sold under agreements to repurchase
    19,138       24,468  
Short-term borrowings
    1,810       2,803  
Receivable-backed notes payable
    590,052       237,416  
Notes and mortgage notes payable and other borrowings
    357,123       395,361  
Junior subordinated debentures
    457,699       447,211  
Deferred income taxes
    32,514       31,204  
Liabilities related to assets held for sale
    100        
Liabilities related to assets held for sale from discontinued operations
          76,351  
Other liabilities
    229,218       186,453  
 
           
Total liabilities
    5,700,922       5,632,097  
 
           
 
               
Commitments and contingencies
               
 
Preferred stock of $.01 par value; authorized - 10,000,000 shares:
               
Redeemable 5% Cumulative Preferred Stock — $.01 par value; authorized 15,000 shares; issued and outstanding 15,000 shares with a redemption value of $1,000 per share
    11,029       11,029  
 
           
 
               
Equity:
               
Class A common stock of $.01 par value, authorized 150,000,000 shares; issued and outstanding 68,521,497 in 2010 and 2009
    685       685  
Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,859,751 in 2010 and 6,854,251 in 2009
    69       69  
Additional paid-in capital
    230,589       227,934  
(Accumulated deficit) retained earnings
    (50,729 )     16,608  
Accumulated other comprehensive income (loss)
    3,639       (237 )
 
           
Total BFC Financial Corporation (“BFC”) shareholders’ equity
    184,253       245,059  
Noncontrolling interests
    105,986       158,852  
 
           
Total equity
    290,239       403,911  
 
           
Total liabilities and equity
  $ 6,002,190       6,047,037  
 
           
 
               
Liabilities of consolidated VIEs included in total liabilities above
               
Receivable-backed notes payable
  $ 468,325          
 
             
Total liabilities of consolidated VIEs
  $ 468,325          
 
             
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Revenues
                               
Real Estate and Other:
                               
Sales of real estate, net of estimated uncollectibles
  $ 57,919       130       130,089       3,324  
Other resorts and communities operations revenue
    17,603             50,546        
Other revenues
    15,942       845       40,021       2,606  
Interest income
    20,869             81,051        
 
                       
 
    112,333       975       301,707       5,930  
 
                       
 
                               
Financial Services:
                               
Interest income
    44,706       54,561       136,441       174,948  
Service charges on deposits
    15,214       19,767       45,764       57,799  
Other service charges and fees
    7,495       7,355       22,612       22,439  
Securities activities, net
    (552 )     4,774       2,898       9,906  
Other non-interest income
    4,708       3,158       9,725       9,087  
 
                       
 
    71,571       89,615       217,440       274,179  
 
                       
 
                               
Total revenues
    183,904       90,590       519,147       280,109  
 
                       
 
                               
Costs and Expenses
                               
Real Estate and Other:
                               
Cost of sales of real estate
    21,840       31,664       44,380       33,658  
Cost of sales of other resorts and communities operations
    13,401             38,456        
Interest expense
    24,847       3,128       64,847       8,606  
Selling, general and administrative expenses
    67,790       10,996       184,394       33,225  
Impairment of goodwill
          2,001             2,001  
 
                       
 
    127,878       47,789       332,077       77,490  
 
                       
 
                               
Financial Services:
                               
Interest expense
    9,126       15,805       30,921       61,378  
Provision for loan losses
    24,410       63,586       103,718       151,357  
Employee compensation and benefits
    23,549       24,876       74,082       79,617  
Occupancy and equipment
    13,263       14,553       40,590       44,306  
Advertising and promotion
    2,026       1,549       6,209       6,360  
Check losses
    763       1,146       1,716       2,981  
Professional fees
    6,209       3,470       13,920       9,491  
Supplies and postage
    983       1,035       2,902       3,038  
Telecommunication
    702       353       1,898       1,637  
Cost associated with debt redemption
          5,431       60       7,463  
Provision for (recovery from) tax certificates
    885       (198 )     3,752       2,702  
Impairment of goodwill
                      8,541  
Impairment of assets held for sale
    4,469             4,469        
Impairment of real estate held for development and sale
          1,131       1,511       1,165  
Impairment of real estate owned
    500       137       1,864       760  
Lease termination costs, net
    1,093       383       1,308       1,684  
Employee termination costs
    2,103       78       2,103       2,024  
FDIC special assessment
                      2,428  
Other expenses
    6,617       8,004       23,049       22,900  
 
                       
 
    96,698       141,339       314,072       409,832  
 
                       
Total costs and expenses
    224,576       189,128       646,149       487,322  
 
                       
(continued)
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Operations — Unaudited
(In thousands, except per share data)
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
(Loss) gain on settlement of investment in Woodbridge’s subsidiary
                (1,135 )     40,369  
Equity in earnings from unconsolidated affiliates
    317       12,213       786       29,463  
Impairment of unconsolidated affiliates
          (10,780 )           (31,181 )
Impairment of investments
                        (2,396 )
Other income
    498       766       2,135       2,525  
 
                       
Loss from continuing operations before income taxes
    (39,857 )     (96,339 )     (125,216 )     (168,433 )
Less: Provision (benefit) for income taxes
    (996 )     3       (5,195 )     3  
 
                       
Loss from continuing operations
    (38,861 )     (96,342 )     (120,021 )     (168,436 )
(Loss) income from discontinued operations
          (1,367 )     2,465       2,169  
 
                       
Net loss
    (38,861 )     (97,709 )     (117,556 )     (166,267 )
Less: Net loss attributable to noncontrolling interests
    (11,239 )     (43,697 )     (52,919 )     (88,943 )
 
                       
Net loss attributable to BFC
    (27,622 )     (54,012 )     (64,637 )     (77,324 )
Preferred stock dividends
    (188 )     (188 )     (563 )     (563 )
 
                       
Net loss allocable to common stock
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       
 
                               
Basic and Diluted (Loss) Earnings Per Common Share Attributable to BFC (Note 22):
                               
Basic (Loss) Earnings Per Common Share
                               
Loss per share from continuing operations
  $ (0.37 )     (1.08 )     (0.90 )     (1.68 )
(Loss) earnings per share from discontinued operations
          (0.01 )     0.03       0.01  
 
                       
Net loss per common share
  $ (0.37 )     (1.09 )     (0.87 )     (1.67 )
 
                       
 
                               
Diluted (Loss) Earnings Per Common Share
                               
Loss per share from continuing operations
  $ (0.37 )     (1.08 )     (0.90 )     (1.68 )
(Loss) earnings per share from discontinued operations
          (0.01 )     0.03       0.01  
 
                       
Net loss per common share
  $ (0.37 )     (1.09 )     (0.87 )     (1.67 )
 
                       
 
                               
Basic weighted average number of common shares outstanding
    75,381       49,509       75,379       46,599  
 
                       
 
                               
Diluted weighted average number of common and common equivalent shares outstanding
    75,381       49,509       75,379       46,599  
 
                       
 
                               
Amounts attributable to BFC common shareholders:
                               
Loss from continuing operations
  $ (27,810 )     (53,337 )     (67,665 )     (78,125 )
(Loss) income from discontinued operations
          (863 )     2,465       238  
 
                       
Net loss attributable to BFC common shareholders
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Comprehensive Loss — Unaudited
(In thousands)
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Net loss
  $ (38,861 )     (97,709 )     (117,556 )     (166,267 )
 
                       
 
Other comprehensive income, net of tax:
                               
Unrealized gains on securities available for sale
    219       8,232       5,294       21,953  
Unrealized loss associated with investment in unconsolidated affiliates
          (986 )           (381 )
Pro-rata share of cumulative impact of accounting changes recognized by Bluegreen Corporation on retained interests in notes receivable sold
                      (1,251 )
Realized (gains) loss reclassified into net loss
    249       (4,773 )     (2,890 )     (7,510 )
 
                       
Other comprehensive income
    468       2,473       2,404       12,811  
 
                       
 
                               
Comprehensive loss
    (38,393 )     (95,236 )     (115,152 )     (153,456 )
Less: Comprehensive loss attributable to noncontrolling interests
    (11,560 )     (46,447 )     (53,466 )     (87,051 )
 
                       
Total comprehensive loss attributable to BFC
  $ (26,833 )     (48,789 )     (61,686 )     (66,405 )
 
                       
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statement of Changes in Equity — Unaudited
For the Nine Months Ended September 30, 2010
(In thousands)
                                                                                 
                                                    Accumulated                    
                                                    Other                    
                                            (Accumulated     Compre-     Total     Non-        
    Shares of Common     Class A     Class B     Additional     Deficit)     hensive     BFC     controlling        
    Stock Outstanding     Common     Common     Paid-in     Retained     Income     Shareholders’     Interest in     Total  
    Class A     Class B     Stock     Stock     Capital     Earnings     (Loss)     Equity     Subsidiaries     Equity  
     
Balance, December 31, 2009
    68,521       6,854     $ 685     $ 69     $ 227,934     $ 16,608     $ (237 )   $ 245,059     $ 158,852     $ 403,911  
Cumulative effect of change in accounting principle (Note 2)
                                  (2,137 )     925       (1,212 )     (811 )     (2,023 )
                     
Balance beginning of year, as adjusted
                  $ 685     $ 69     $ 227,934     $ 14,471     $ 688     $ 243,847     $ 158,041     $ 401,888  
Net loss
                                  (64,637 )           (64,637 )     (52,919 )     (117,556 )
Other comprehensive income (loss)
                                        2,951       2,951       (547 )     2,404  
Issuance of Class B Common Stock from exercise of options
          6                   2                   2             2  
Net effect of subsidiaries’ capital transactions attributable to BFC
                            1,772                   1,772             1,772  
Noncontrolling interest net effect of subsidiaries’ capital transactions
                                                    1,411       1,411  
Cash dividends on 5% Preferred Stock
                                  (563 )           (563 )           (563 )
Share-based compensation related to stock options
                            881                   881             881  
     
Balance, September 30, 2010
    68,521       6,860     $ 685     $ 69     $ 230,589     $ (50,729 )   $ 3,639     $ 184,253     $ 105,986     $ 290,239  
     
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)
                 
    For the Nine Months Ended  
    September 30,  
    2010     2009  
Net cash provided by operating activities
  $ 246,196       25,754  
 
           
Investing activities:
               
Purchase of interest-bearing deposits in other financial institutions
    (47,990 )      
Proceeds from redemption and maturity of investment securities and tax certificates
    107,238       170,087  
Purchase of investment securities and tax certificates
    (97,285 )     (123,250 )
Proceeds from sales of securities available for sale
    92,109       318,779  
Proceeds from maturities of securities available for sale
    96,420       116,743  
Purchase of securities available for sale
    (322,872 )     (75,500 )
(Increase) decrease in restricted cash
    (2,970 )     12,971  
Cash paid in settlement of Woodbridge subsidiary’s bankruptcy
          (12,430 )
Purchases of FHLB stock
          (2,295 )
Redemption of FHLB stock
    3,492       8,151  
Investments in unconsolidated affiliates
          (973 )
Distributions from unconsolidated affiliates
    85       564  
Net decrease in loans receivable
    283,226       305,467  
Proceeds from the sale of loans receivable
    29,421       5,427  
Improvements to real estate owned
    (945 )     (1,018 )
Proceeds from sales of real estate owned
    18,899       3,715  
Proceeds from the sale of assets
    75,306        
Disposals of office properties and equipment
    507        
Purchases of office property and equipment, net
    (5,455 )     (3,016 )
Cash from consolidation of Pizza Fusion
          3,000  
 
           
Net cash provided by investing activities
    229,186       726,422  
 
           
Financing activities:
               
Net (decrease) increase in deposits
    (115,550 )     39,683  
Prepayment of FHLB advances
    (2,068 )     (1,159,463 )
Net (repayments) proceeds from FHLB advances
    (100,000 )     527,000  
Decrease in short-term borrowings
    (6,323 )     (250,488 )
Prepayment of notes and bonds payable
    (661 )      
Repayment of notes, mortgage notes and bonds payable
    (256,944 )     (2,612 )
Proceeds from notes, mortgage notes and bonds payable
    84,509       132  
Payments for debt issuance costs
    (3,198 )     (1,167 )
Preferred stock dividends paid
    (563 )     (563 )
Purchase and retirement of Woodbridge common stock
          (13 )
Proceeds from the issuance of BankAtlantic Bancorp Class A common stock from non-BFC shareholders
    4,601       45,377  
BankAtlantic Bancorp common stock dividends paid to non-BFC shareholders
          (198 )
Proceeds from the exercise of BFC stock options
    2        
Proceeds from the issuance of common stock in Pizza Fusion
    1,279        
Non-controlling interest distributions
    (5,770 )      
 
           
Net cash used in financing activities
    (400,686 )     (802,312 )
 
           
Increase (decrease) in cash and cash equivalents
    74,696       (50,136 )
Cash and cash equivalents at beginning of period
    316,080       278,937  
Cash and cash equivalents held for sale
    (4,902 )      
 
           
Cash and cash equivalents at end of period
  $ 385,874       228,801  
 
           
(continued)
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Consolidated Statements of Cash Flows — Unaudited
(In thousands)
                 
    For the Nine Months Ended
    September 30,
    2010   2009
Supplemental cash flow information:
               
Interest paid on borrowings and deposits
  $ 74,836       78,149  
Income taxes refunded, net of payments
    59,793        
Supplementary disclosure of non-cash investing and financing activities:
               
Loans and tax certificates transferred to real estate owned
    40,942       21,268  
Long-lived assets held-for-use transferred to assets held for sale
    1,919        
Long-lived assets held-for-sale transferred to assets held for use
    1,239        
Transfers to assets held-for-sale:
               
Cash
    4,902          
Office properties and equipment
    32,307          
Securities purchased pending settlement
    5,239        
Net increase in BFC accumulated other comprehensive income, net of taxes
    2,951       10,919  
Net increase in BFC shareholders’ equity from the effect of subsidiaries’ capital transactions, net of taxes
    1,772       7,818  
Net decrease in equity resulting from cumulative effect of change in accounting principle (See Note 2)
    (2,023 )      
Net increase in shareholders’ equity resulting from the cumulative impact of accounting changes recognized by Bluegreen on retained interests in notes receivable sold
          485  
BFC and Woodbridge Merger related transactions:
               
Increase in BFC’s Class A Common Stock
          448  
Increase in additional paid-in-capital
          99,135  
Decrease in BFC’s non-controlling interest in Woodbridge
          (99,583 )
See Notes to Unaudited Consolidated Financial Statements.

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BFC Financial Corporation
Notes to Unaudited Consolidated Financial Statements
1. Presentation of Interim Financial Statements
          BFC Financial Corporation (“BFC” or, unless otherwise indicated or the context otherwise requires, “we”, “us”, “our” or the “Company”) is a diversified holding company whose principal holdings include a controlling interest in BankAtlantic Bancorp, Inc. and its subsidiaries, including BankAtlantic (“BankAtlantic Bancorp”), a controlling interest in Bluegreen Corporation and its subsidiaries (“Bluegreen”), and a non-controlling interest in Benihana, Inc. (“Benihana”). BFC also holds interests in other investments and subsidiaries, including Core Communities, LLC and its subsidiaries (“Core” or “Core Communities”). As a result of its position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” regulated by the Office of Thrift Supervision (“OTS”).
          As previously disclosed, on September 21, 2009, BFC consummated its merger with Woodbridge Holdings Corporation pursuant to which Woodbridge Holdings Corporation merged with and into Woodbridge Holdings, LLC (“Woodbridge”), BFC’s wholly-owned subsidiary which continued as the surviving company of the merger and the successor entity to Woodbridge Holdings Corporation. As a result of the merger, Woodbridge Holdings Corporation’s separate corporate existence ceased and its Class A Common Stock is no longer publicly traded. Woodbridge is the parent company of Core.
          On November 16, 2009, an additional 7.4 million shares of the common stock of Bluegreen were purchased, increasing our ownership interest to approximately 16.9 million shares, or approximately 52%, of Bluegreen’s outstanding common stock. Accordingly, we are deemed to have a controlling interest in Bluegreen and, under generally accepted accounting principles (“GAAP”), Bluegreen’s results since November 16, 2009, the date of the share purchase, are consolidated in BFC’s financial statements. Prior to November 16, 2009, the investment in Bluegreen’s shares represented approximately 29% of Bluegreen’s common stock and Bluegreen was accounted for using the equity method.
          GAAP requires that BFC consolidate the financial results of the entities in which it has controlling interest. As a consequence, the assets and liabilities of all such entities are presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of the consolidated entities, including BankAtlantic Bancorp, Bluegreen, Woodbridge and Core are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent a dividend or distribution from those entities. The recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At September 30, 2010, we owned approximately 52% of Bluegreen’s common stock and had an approximately 45% ownership interest and 71% voting interest in BankAtlantic Bancorp.
          The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments, which include normal recurring adjustments, except the adjustments described below, as are necessary for a fair statement of the Company’s consolidated financial condition at September 30, 2010, the consolidated results of operations, comprehensive loss for the three and nine months ended September 30, 2010 and 2009, the changes in consolidated equity for the nine months ended September 30, 2010 and consolidated cash flows for the nine months ended September 30, 2010 and 2009. Operating results for the three and nine months ended September 30, 2010 are not necessarily indicative of the results that may be expected for the year ending December 31, 2010. The unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. All significant inter-company balances and transactions have been eliminated in consolidation.
          During the third quarter of 2010, the Company recorded adjustments to sales of real estate, net of estimated uncollectibles, and interest income on notes receivable to correct amounts previously recorded in the first and second quarters of 2010 in connection with the consolidation of the financial statements of Bluegreen.
          The impact of these adjustments was an increase in sales of real estate, net of estimated uncollectibles of approximately $6.0 million and a decrease in interest income on notes receivable of $5.8 million, resulting in a net increase in notes receivable of approximately $200,000.
          Additionally, during the third quarter of 2010, the Company recorded an adjustment to interest expense to properly recognize interest expense using the default rates applicable on the defaulted debt at Woodbridge and Core in accordance with their respective loan agreements for the fourth quarter of 2009 and the first and second quarters of 2010. This adjustment resulted in a $3.1 million increase in both interest expense and accrued interest liability.
          The impact of these adjustments was not material to the Company’s consolidated financial statements as of and for the three and nine months ended September 30, 2010 or the Company’s consolidated financial statements for the applicable prior periods.
          Certain amounts for prior periods have been reclassified to conform to the current period’s presentation.
          As a result of the Woodbridge merger on September 21, 2009 and the Bluegreen share acquisition on November 16, 2009, the Company reorganized its reportable segments to better align its segments with the current operations of its businesses. The Company’s business activities currently consist of (i) Real Estate and Other Activities and (ii) Financial Services Activities. The Company currently reports the results of operations of these

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business activities through six reportable segments: BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, BankAtlantic and BankAtlantic Bancorp Parent Company. As a result of this reorganization, our BFC Activities segment now includes activities formerly reported in the Woodbridge Other Operations segment and our Real Estate Operations segment is comprised of what was previously identified as the Land Division.
          In December 2009, Core Communities reinitiated efforts to sell two of its commercial leasing projects (the “Projects”) and began soliciting bids from several potential buyers to purchase assets associated with the Projects. Due to this decision, the assets associated with the Projects were reclassified as assets held for sale and the liabilities related to these assets were reclassified as liabilities related to assets held for sale in the Consolidated Statements of Financial Condition. Additionally, the results of operations for the Projects are included in the Company’s Consolidated Statements of Operations in discontinued operations for the three and nine month periods ended September 30, 2009 and the nine month period ended September 30, 2010. On June 10, 2010, Core sold the Projects for approximately $75.4 million. As a result of the sale, a $2.6 million gain on sale of discontinued operations was realized in the second quarter of 2010. See Note 5 for further information.
          On February 28, 2007, BankAtlantic Bancorp completed the sale to Stifel Financial Corp (“Stifel”) of Ryan Beck Holdings, Inc. (“Ryan Beck”), a subsidiary of BankAtlantic Bancorp engaged in retail and institutional brokerage and investment banking. Under the terms of the Ryan Beck sales agreement, BankAtlantic Bancorp received additional consideration based on Ryan Beck revenues over the two year period following the closing of the sale. BankAtlantic Bancorp also had certain indemnification obligations under the terms of the agreement. The $4.2 million of earn-out consideration is included in the Company’s Consolidated Statement of Operations as discontinued operations for the nine months ended September 30, 2009. See Note 5 for further information.
2. Cumulative Effect of Change in Accounting Principle
          On January 1, 2010, BFC, Bluegreen and BankAtlantic Bancorp adopted an amendment to the accounting guidance for transfers of financial assets and an amendment to the accounting guidance associated with the consolidation of VIEs. As a result of the adoption of these accounting standards, Bluegreen consolidated seven existing special purpose finance entities (“QSPEs”) associated with prior securitization transactions which previously qualified for off-balance sheet sales treatment, and BankAtlantic Bancorp consolidated its joint venture that conducts a factoring business. Accordingly, Bluegreen’s special purpose finance entities and BankAtlantic Bancorp’s factoring joint venture are now consolidated in BFC’s financial statements. The consolidation of Bluegreen’s special purpose finance entities resulted in a one-time non-cash after-tax reduction to retained earnings of $2.1 million. No charges were recorded to retained earnings in connection with the consolidation of BankAtlantic Bancorp’s factoring joint venture.
          The consolidation of Bluegreen’s special purpose finance entities also resulted in the following impacts to BFC’s Consolidated Statement of Financial Condition at January 1, 2010: (1) assets increased by $413.8 million, primarily representing the consolidation of notes receivable, net of allowance, partially offset by the elimination of retained interests; (2) liabilities increased by $416.1 million, primarily representing the consolidation of non-recourse debt obligations to securitization investors, partially offset by the elimination of certain deferred tax liabilities; and (3) total equity decreased by approximately $2.3 million, including a decrease to noncontrolling interest of approximately $1.1 million.

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          The impact of the adoption of the change in accounting principle on the related assets, related liabilities, noncontrolling interests and total equity are as follows (in thousands):
                                         
            Consolidation        
                    BankAtlantic              
    December 31,     Bluegreen’s     Bancorp’s         January 1,  
    2009     QSPEs     Joint Venture (1)     Total     2010  
Restricted cash
  $ 24,020       36,518             36,518       60,538  
Loans receivable
    3,678,894             3,214       3,214       3,682,108  
Notes receivable
    277,274       377,265             377,265       654,539  
Real estate inventory
    494,291       16,403             16,403       510,694  
Retained interest in notes receivable sold
    26,340       (26,340 )           (26,340 )      
Investment in unconsolidated affiliates
    15,272             (3,256 )     (3,256 )     12,016  
Other assets
    96,750       9,970       367       10,337       107,087  
                   
Change in related assets
  $ 4,612,841       413,816       325       414,141       5,026,982  
                   
 
                                       
Other liabilities
  $ 186,453       3,544       18       3,562       190,015  
Deferred income taxes
    31,204       1,233             1,233       32,437  
Receivable -backed notes payable
    237,416       411,369             411,369       648,785  
                   
Change in related liabilities
  $ 455,073       416,146       18       416,164       871,237  
                   
 
                                       
Total BFC’s shareholders’ equity
  $ 245,059       (1,212 )           (1,212 )     243,847  
Noncontrolling interests
    158,852       (1,118 )     307       (811 )     158,041  
                   
Total equity
  $ 403,911       (2,330 )     307       (2,023 )     401,888  
                   
 
(1)   As a result of the adoption of the accounting guidance associated with the consolidation of VIEs, we consolidated BankAtlantic Bancorp’s factoring joint venture, BankAtlantic Business Capital, LLC (“BBC”). Prior to January 1, 2010, the investment in BBC was accounted for using the equity method of accounting.
3. Liquidity
BFC
          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp, Bluegreen, Woodbridge and Core are not direct obligations of BFC and generally are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution from those entities. BFC’s principal sources of liquidity are its available cash, short-term investments, dividends or distributions from subsidiaries and dividends from Benihana. As discussed further in this report, recent tax law changes have resulted in the receipt of significant tax refunds.
          We may use our available funds to make additional investments in the companies within our consolidated group, invest in equity securities and other investments, fund operations or repurchase shares of our common stock pursuant to our share repurchase program. The current program authorizes management, at its discretion, to repurchase shares from time to time subject to market conditions and other factors. No shares were repurchased during the nine months ended September 30, 2010 or the year ended December 31, 2009. As discussed further in this report, during June and July 2010, BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock for an aggregate purchase price of $15 million as a result of its exercise of subscription rights distributed in BankAtlantic Bancorp’s rights offering to its shareholders.
          Since March 2009, BFC has not received cash dividends from BankAtlantic Bancorp and does not expect to receive cash dividends from BankAtlantic Bancorp for the foreseeable future because BankAtlantic Bancorp is currently prohibited from paying dividends on its common stock. Furthermore, certain of Bluegreen’s credit facilities contain terms which may limit the payment of cash dividends.
          BFC, on a parent company only basis, has committed that it will not, without the prior written non-objection of the OTS, (i) incur, issue, renew or roll over any current lines of credit, guarantee the debt of any other entity or otherwise incur any additional debt or (ii) declare or make any dividends or other capital distributions.
          We believe that our current financial condition and credit relationships, together with anticipated cash flows from operating activities and other sources of funds, including tax refunds and proceeds from the disposition of certain properties or investments, will provide for anticipated near-term liquidity needs. With respect to long-term liquidity requirements, BFC may also seek to raise funds through the issuance of long-term secured or unsecured indebtedness, equity and/or debt securities or through the sale of assets; however, there is no assurance that any of these alternatives will be available to BFC on attractive terms, or at all.

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Woodbridge
          The development activities at Carolina Oak, which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. In the fourth quarter of 2009, we reviewed the inventory of real estate at Carolina Oak for impairment and as a result, recorded a $16.7 million impairment charge to adjust the carrying amount of Carolina Oak’s inventory to its estimated fair value of $10.8 million. Woodbridge is the obligor under a $37.2 million loan that is collateralized by the Carolina Oak property. During 2009, the lender declared the loan to be in default and filed an action for foreclosure. While there may have been an issue with respect to compliance with certain covenants in the loan agreements, we do not believe that an event of default had occurred as was alleged. Woodbridge continues to seek a satisfactory conclusion with regard to the debt; however, the outcome of these efforts and the litigation is uncertain.
          As previously disclosed, under Florida law, holders of Woodbridge’s Class A Common Stock who did not vote to approve the merger between Woodbridge and BFC and properly asserted and exercised their appraisal rights with respect to their shares (“Dissenting Holders”) are entitled to receive a cash payment in an amount equal to the fair value of their shares as determined in accordance with the provisions of Florida law in lieu of the shares of BFC’s Class A Common Stock that they would otherwise have been entitled to receive. Dissenting Holders, who collectively held approximately 4.2 million shares of Woodbridge’s Class A Common Stock, have rejected Woodbridge’s offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of Woodbridge’s Class A Common Stock. Woodbridge is currently a party to legal proceedings relating to the Dissenting Holders appraisal process. In December 2009, a $4.6 million liability was recorded with a corresponding reduction to additional paid-in capital, which is reflected in the Company’s Consolidated Statements of Financial Condition representing in the aggregate Woodbridge’s offer to the Dissenting Holders. However, the appraisal rights litigation is currently ongoing and its outcome is uncertain. As a result, there is no assurance as to the amount of the payment that will ultimately be required to be made to the Dissenting Holders, which amount may be greater than the $4.6 million that we have accrued.
Core Communities
          During 2009, the recession continued and the demand for residential and commercial inventory showed no signs of recovery, particularly in the geographic regions where Core’s properties are located. The decrease in land sales in 2009 and continued cash flow deficits contributed to, among other things, the deterioration of Core’s liquidity. As a result, Core has ceased all development in Tradition, Florida and Tradition Hilton Head. Its assets have been impaired significantly and in an effort to bring about an orderly liquidation without a bankruptcy filing, Core commenced negotiations with all of its lenders seeking to liquidate its assets in an orderly way. Core is currently in default under the terms of all of its outstanding debt totaling approximately $139.4 million. During February 2010, with Core’s concurrence, a significant portion of the land in Tradition Hilton Head was placed under the control of a court appointed receiver. In connection with the receivership, Core entered into a separate agreement with the lender that, among other things, granted Core a right of first refusal to purchase the $25.6 million loan in the event that the lender decides to sell the loan to a third party. This loan is collateralized by inventory that had a net carrying value of $32.3 million, net of impairment charges during 2009 of approximately $29.6 million. On September 1, 2010, the lender commenced an action to enforce the guarantee executed by Core in connection with the loan transactions between the lender and Core South Carolina, a wholly-owned subsidiary of Core. Through this action, the lender seeks to collect on approximately $25 million of indebtedness guaranteed by Core. On October 25, 2010, Core filed an answer and affirmative defenses asserting, among other things, that the claim on the guarantee is not ripe given the bank’s election to first foreclose against the underlying collateral. In addition, Core has raised additional equitable defenses to the claim on the guarantee. Discovery in the case has not yet commenced, and the trial date has been set. The amount of Core’s liability, if any, in this litigation has not been established.
          Separately, on April 7, 2010 and April 8, 2010, Investors Warranty of America, Inc. (“IWA”) filed actions in South Carolina and Florida, respectively, against Core and certain of its subsidiaries seeking foreclosure of mortgage loans totaling approximately $113.8 million, plus additional interest and costs and expenses, including attorneys’ fees. On September 8, 2010, Core and its applicable subsidiaries entered into an agreement with IWA, among other parties, relating to the foreclosure proceedings. IWA subsequently assigned and conveyed its interests in both the Florida and South Carolina loan facilities to PSL Acquisitions, LLC (“PSLA”). On November 8, 2010, Core and its applicable subsidiaries, on the one hand, and PSLA, on the other hand, executed an agreement which, upon the occurrence of certain events and subject to certain exceptions, provides for the resolution of the disputes between them. Pursuant to the agreement, Core and its subsidiaries agreed to, among other things, (i) pledge additional collateral to PSLA consisting of membership interests in certain subsidiaries of Core, (ii) grant security interests in the acreage owned by the subsidiaries in Port St. Lucie, Florida, substantially all of which is undeveloped raw land, (iii) the amendment of the complaint related to the Florida foreclosure action to include this additional collateral and (iv) the entry into consensual judgments of foreclosure in both foreclosure actions. Core also agreed to cooperate with PSLA in connection with the enforcement of its remedies against the collateral. PSLA has agreed, upon the occurrence of certain events and subject to certain exceptions, not to enforce a deficiency judgment against Core and has released Core from any other claims arising from or relating to the loans. As of September 30, 2010, the net carrying value of Core’s inventory collateralizing the defaulted loans that are the subject of the foreclosure proceedings was $78.1 million, net of impairment charges during 2009 of approximately $33.7 million. There was no impairment charge during the nine months ended September 30, 2010.

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          Core was also a party to a certain Development Agreement with the city of Hardeeville, SC, under which Core was obligated to fund $1 million towards the building of a fire station. Funding was scheduled in three installments: the first installment of $100,000 was due on October 21, 2009; the second installment of $450,000 was due on January 1, 2010; and the final installment of $450,000 was due on April 1, 2010. Additionally, Core was obligated to fund certain staffing costs of $200,000 under the terms of this agreement. Core did not pay any of the required installments and has not funded the $200,000 payment for staffing. On November 5, 2009, Core received a notice of default from the city for nonpayment. In the event that Core does not make these payments, it may be unable to cure the default on its obligation to the city, which could result in a loss of entitlements associated with the development project.
          On June 10, 2010, Core sold its two commercial leasing projects referred to as “the Projects” to Inland Real Estate Acquisition, Inc. (“Inland”) for approximately $75.4 million. As a result of the sale, Core realized a gain on sale of discontinued operations of approximately $2.6 million in the second quarter of 2010. The sale resulted in net cash proceeds to Core of approximately $1.5 million. See Note 5 for further information regarding the Projects.
          Based on an ongoing evaluation of its cost structure and in light of current market conditions, Core reduced its head count by 41 employees during 2009, resulting in approximately $1.3 million in severance charges which were recorded during the fourth quarter of 2009. In the three and nine months ended September 30, 2010, severance related payments at Core totaled approximately $140,000 and $1.1 million, respectively.
          The negative impact of the adverse real estate market conditions on Core, together with Core’s limited liquidity, have caused substantial doubt regarding Core’s ability to continue as a going concern. Woodbridge has not committed to fund any of Core’s obligations or cash requirements, and it is not currently anticipated that Woodbridge will provide additional funds to Core. The consolidated financial statements and the financial information provided for Core do not include any adjustments that might result from the outcome of this uncertainty. See Note 19 for Core’s results which are reported in the Real Estate Operations segment.
BankAtlantic Bancorp and BankAtlantic
          Both BankAtlantic Bancorp Parent Company and BankAtlantic actively manage their liquidity and cash flow needs. BankAtlantic Bancorp Parent Company had cash of $12.2 million as of September 30, 2010, does not have debt maturing until March 2032 and has the ability to defer interest payments on its junior subordinated debentures until December 2013; however, based on current interest rates, accrued and unpaid interest of approximately $73.9 million would be due in December 2013 if interest is deferred until that date. BankAtlantic Bancorp Parent Company’s operating expenses for the three and nine months ended September 30, 2010 were $2.9 million and $7.9 million, respectively, and $2.2 million and $5.7 million for the three and nine months ended September 30, 2009, respectively. BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and the availability of borrowings under its lines of credit and Treasury and Federal Reserve lending programs. As of September 30, 2010, BankAtlantic had $338 million of cash and short-term investments and approximately $915 million of available unused borrowings, consisting of $516 million of unused FHLB line of credit capacity, $391 million of unpledged securities, and $8 million of available borrowing capacity at the Federal Reserve. However, such available borrowings are subject to regular reviews and may be terminated, suspended or reduced at any time. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets or deterioration in BankAtlantic’s financial condition, litigation or regulatory action may make borrowings unavailable or make terms of the borrowings and deposits less favorable. As a result, BankAtlantic’s cost of funds could increase and the availability of funding sources could decrease.
          The substantial uncertainties throughout the Florida and national economies and the U.S. banking industry coupled with current market conditions have adversely affected BankAtlantic Bancorp’s and BankAtlantic’s results. As of September 30, 2010, BankAtlantic’s capital was in excess of all regulatory “well capitalized” levels. However, the OTS, in its discretion, can at any time require an institution to maintain capital amounts and ratios

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above the established “well capitalized” requirements and otherwise restrict operations based on its view of the risk profile of the specific institution. BankAtlantic’s communications with the OTS include providing information on an ad-hoc, one-time or regular basis related to areas of regulatory oversight and bank operations. As part of such communications, BankAtlantic has and will continue to provide to its regulators, forecasts, strategic business plans and other information relating to anticipated asset balances, asset quality, capital levels, expenses, anticipated earnings and levels of brokered deposits and liquidity. Additionally, BankAtlantic is subject to various restrictions, the most significant of which include that BankAtlantic will not, unless pursuant to an approved business plan or permitted by the OTS, increase its assets, originate or purchase new commercial real estate loans, acquire or renew brokered deposits or pay dividends to BankAtlantic Bancorp Parent Company. Further, it will not solicit deposits by offering interest rates more than 75 basis points over the local market area rate. BankAtlantic currently expects to receive formal communication from the OTS that we anticipate will require BankAtlantic to maintain regulatory capital ratios at levels above the minimum amounts required for “well capitalized” institutions. Higher capital requirements could require BankAtlantic to raise additional capital or to reduce its asset size further, making it more difficult to achieve profitability. There is no assurance that the BankAtlantic Bancorp Parent Company or BankAtlantic would be successful in raising additional capital on favorable terms or at all, and if successful, may involve the issuance of securities in transactions highly dilutive to BankAtlantic Bancorp’s existing shareholders, including BFC. If BankAtlantic is not able to meet higher regulatory capital requirements, BankAtlantic’s results of operations would be materially adversely impacted. Although BankAtlantic Bancorp and BankAtlantic have experienced operating losses since June 2007, BankAtlantic Bancorp believes that it maintains sufficient liquidity to fund operations at least through September 30, 2011. However, if unanticipated market factors emerge and/or BankAtlantic Bancorp is unable to execute its plans or if BankAtlantic or BankAtlantic Bancorp requires capital and BankAtlantic Bancorp is unable to raise capital, it could have a material adverse impact on the Company’s business, results of operations and financial condition.
4. Share Acquisitions
Bluegreen Share Acquisition
          On November 16, 2009, approximately 7.4 million shares of common stock of Bluegreen were purchased for an aggregate purchase price of approximately $23 million, increasing our interest from 9.5 million shares, or 29%, of Bluegreen’s common stock to 16.9 million shares, or 52%, of Bluegreen’s common stock. As a result, the Company now holds a controlling interest in Bluegreen and, in accordance with GAAP, the Company consolidates all of Bluegreen’s wholly-owned subsidiaries and entities in which Bluegreen holds a controlling financial interest. The Company also consolidates Bluegreen/Big Cedar Vacations, LLC (the “Bluegreen/Big Cedar Joint Venture”), in which Bluegreen holds a 51% equity interest, has an active role as the day-to-day manager of its activities, and has majority voting control of its management committee. The operating results of Bluegreen are included in the Company’s Bluegreen Resorts and Bluegreen Communities segments.
          As part of the accounting for the November 2009 Bluegreen share acquisition, management is continuing to evaluate the fair value of Bluegreen’s inventory and certain of Bluegreen’s contracts, and as such, certain amounts at December 31, 2009 and September 30, 2010 are estimates and are subject to revision as more detailed analyses are completed and additional information becomes available. Any change resulting from the final evaluation of the inventory and contracts of Bluegreen as of the acquisition date may change the amount of the $183.1 million “bargain purchase gain” recorded during the fourth quarter of 2009.
Additional Shares Purchased in BankAtlantic Bancorp’s Rights Offering
          On June 18, 2010, BankAtlantic Bancorp commenced a rights offering (the “Rights Offering”) to its shareholders of record as of the close of business on June 14, 2010 (the “Record Date”). In the Rights Offering, BankAtlantic Bancorp distributed to each eligible shareholder 0.327 subscription rights for each share of BankAtlantic Bancorp’s Class A Common Stock and Class B Common Stock owned as of the close of business on the Record Date. Fractional subscription rights were rounded up to the next largest whole number. Each subscription right entitled the holder thereof to purchase one share of BankAtlantic Bancorp’s Class A Common Stock at the purchase price of $1.50 per share. Shareholders who exercised their basic subscription rights in full were also given the opportunity to request to purchase any additional shares of BankAtlantic Bancorp’s Class A Common Stock that remained unsubscribed for at the expiration of the Rights Offering at the same $1.50 per share purchase price. The Rights Offering expired on July 20, 2010.

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          As previously disclosed, BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock in the Rights Offering for an aggregate purchase price of $15.0 million. BFC exercised its basic subscription rights to purchase 5,986,865 shares, and the remaining 4,013,135 shares were acquired by BFC pursuant to its over-subscription request. The shares acquired in the Rights Offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71%.
          BFC’s acquisition of shares of BankAtlantic Bancorp’s Class A Common Stock in the Rights Offering was accounted for as an equity transaction in accordance with applicable Financial Accounting Standards Board (“FASB”) authoritative guidance which provides that changes in a parent’s ownership interest which do not result in the parent losing its controlling interest are reported as equity transactions.
5. Discontinued Operations and Assets Held for Sale
Real Estate Discontinued Operations
          Core Communities
          In December 2009, Core Communities reinitiated efforts to sell “the Projects”, its two commercial leasing projects, and began soliciting bids from several potential buyers for the immediate sale of the Projects in their present condition. Due to this decision, the assets associated with the Projects were classified as discontinued operations in accordance with the accounting guidance for the disposal of long-lived assets.
          The assets were reclassified as assets held for sale and the liabilities related to these assets were reclassified as liabilities related to assets held for sale in the Consolidated Statement of Financial Condition at December 31, 2009. Additionally, the results of operations for the Projects were reclassified to income from discontinued operations in the Consolidated Statements of Operations for the three and nine months ended September 30, 2009 and the nine months ended September 30, 2010. Depreciation related to these assets held for sale ceased in December 2009. The Company elected not to separate these assets in the Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009. Management reviewed the net asset value and estimated the fair market value of the assets based on the bids received related to these assets and determined that an impairment charge was necessary to write down the aggregate carrying value of the Projects to fair value less the estimated costs to sell and, accordingly, recorded an impairment charge of approximately $13.6 million in the fourth quarter of 2009.
          On June 10, 2010, Core sold the Projects to Inland for approximately $75.4 million. As a result of the sale, a gain on sale of discontinued operations of approximately $2.6 million was realized in the second quarter of 2010. In connection with the sale, the lender reduced the outstanding balance of the loans related to the assets held for sale by approximately $800,000 as a result of negotiations with the lender. Core used the proceeds from the sale to Inland to repay these loans. As a result, Core was released from its obligations with the lender.
          The following table summarizes information regarding the assets held for sale and liabilities related to the assets held for sale for the Projects (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Restricted cash
  $       538  
Property and equipment, net
          61,588  
Other assets
          9,774  
 
           
Assets held for sale
  $       71,900  
 
           
 
               
Accounts payable, accrued liabilities and other
  $       1,602  
Notes and mortgage payable
          74,749  
 
           
Liabilities related to assets held for sale
  $       76,351  
 
           

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          The following table summarizes the results of operations for the Projects (in thousands):
                                 
    For the Three Months     For the Nine Months  
    Ended September 30,     Ended September 30,  
    2010     2009     2010     2009  
Revenue
  $       2,161       2,951       6,344  
Costs and expenses
          3,028       3,103       7,876  
 
                       
Loss before income taxes
          (867 )     (152 )     (1,532 )
Gain on sale of discontinued operations
                2,617        
 
                       
Net (loss) income
  $       (867 )     2,465       (1,532 )
 
                       
Financial Services- Discontinued Operations
          On February 28, 2007, BankAtlantic Bancorp sold Ryan Beck to Stifel. The Stifel sales agreement provided for contingent earn-out payments, payable in cash or shares of Stifel common stock, at Stifel’s election, based on certain defined Ryan Beck revenues during the two-year period immediately following the Ryan Beck sale, which ended on February 28, 2009, and required BankAtlantic Bancorp to indemnify Stifel for certain losses arising out of activities of Ryan Beck prior to the sale and asserted through September 30, 2009. BankAtlantic Bancorp recognized $4.2 million of earn-out consideration during the nine months ended September 30, 2009 and BankAtlantic Bancorp received $3.7 million in proceeds net of a $0.5 million indemnification obligation. In October 2010, BankAtlantic Bancorp received notice from Stifel that Stifel believes that BankAtlantic Bancorp is obligated to pay Stifel an additional $1.2 million based on such indemnification obligation. Management of BankAtlantic Bancorp believes that it has no liability beyond the previously satisfied $0.5 million indemnification obligation and accordingly, no additional obligation was recognized in connection with the indemnification obligation under the Ryan Beck sales agreement at September 30, 2010.
Financial Services- Assets Held for Sale
          In August 2010, BankAtlantic announced that, due to the rapidly changing environment in Florida and the banking industry, it decided to focus on its core markets in South Florida and BankAtlantic began seeking a buyer for its Tampa operations which includes 19 branches. BankAtlantic engaged an investment banking firm to assist it in selling the Tampa operations. As a consequence, BankAtlantic reclassified its fixed assets related to the anticipated branch sale to held-for-sale and recognized a $4.5 million impairment as these held-for-sale assets are accounted for at the lower of cost or fair value.
          The assets and liabilities associated with the Tampa operations as of September 30, 2010 were as follows:
         
ASSETS
       
Cash and cash equivalents
  $ 4,902  
Office properties and equipment
    32,307  
 
     
Total assets held for sale
  $ 37,209  
 
     
LIABILITIES
       
Interest bearing deposits
  $ 259,893  
Non-interest bearing deposits
    79,467  
 
     
Total deposits
    339,360  
Accrued interest payable
    100  
 
     
Total liabilities held for sale
  $ 339,460  
 
     
          BankAtlantic anticipates that the sale of the Tampa operations would reduce annual non-interest expenses by approximately $15 million to $20 million. However, there is no assurance that management will be able to sell its Tampa operations at acceptable terms or at all, and the terms of any such sale are uncertain.

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6. Fair Value Measurement
          The following tables present major categories of the Company’s assets measured at estimated fair value on a recurring basis at September 30, 2010 and December 31, 2009 (in thousands):
                                 
            Fair Value Measurements using  
            Quoted prices in              
            Active Markets     Significant Other     Significant  
            for Identical     Observable     Unobservable  
    September 30,     Assets     Inputs     Inputs  
Description   2010     (Level 1)     (Level 2)     (Level 3)  
 
                       
Mortgage-backed securities
  $ 123,927             123,927        
REMICS (1)
    78,805             78,805        
Agency bonds
    90,375             90,375        
Municipal bonds
    152,177             152,177        
Foreign currency put options
    95       95              
Benihana Convertible Preferred Stock
    21,393                   21,393  
Other equity securities
    23,957       23,957              
 
                       
Total
  $ 490,729       24,052       445,284       21,393  
 
                       
                                 
            Fair Value Measurements using  
            Quoted prices in              
            Active Markets     Significant Other     Significant  
            for Identical     Observable     Unobservable  
    December 31,     Assets     Inputs     Inputs  
Description   2009     (Level 1)     (Level 2)     (Level 3)  
Mortgage-backed securities
  $ 211,945             211,945        
REMICS (1)
    107,347             107,347        
Other bonds
    250                   250  
Benihana Convertible Preferred Stock
    17,766                   17,766  
Other equity securities
    9,067       9,067              
 
                       
Total securities available for sale at fair value
    346,375       9,067       319,292       18,016  
Retained interest in notes receivable sold
    26,340                   26,340  
 
                       
Total
  $ 372,715       9,067       319,292       44,356  
 
                       
 
(1)   Real estate mortgage investment conduits (REMICS) are pass-through entities that hold residential loans. Investors in these entities are issued ownership interests in the entities in the form of a bond. The securities are guaranteed by government agencies.
There were no recurring liabilities measured at fair value on a recurring basis in the Company’s financial statements.
          The following tables present major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended September 30, 2010 and 2009 (in thousands):
                         
    For the Three Months Ended September 30, 2010
            Benihana      
    Other   Convertible      
    Bonds   Preferred Stock   Total
     
Beginning Balance
  $ 250       20,159       20,409  
Total gains and losses (realized/unrealized)
                       
Included in earnings
                 
Included in other comprehensive income
          1,234       1,234  
Purchases, issuances, and settlements
    (250 )           (250 )
Transfers in and/or out of Level 3
                 
     
Balance at September 30, 2010
  $       21,393       21,393  
     

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    Three Months Ended September 30, 2009
            Benihana            
            Convertible   Equity      
    Other Bonds   Preferred Stock   Securities   Total
     
Beginning Balance
  $ 250       20,511       210       20,971  
Total gains and losses (realized/unrealized)
                               
Included in earnings
                       
Included in other comprehensive income
          773       (46 )     727  
Purchases, issuances, and settlements
                       
Transfers in and/or out of Level 3
                       
     
Balance at September 30, 2009
  $ 250       21,284       164       21,698  
     
 
          The following tables present major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the nine months ended September 30, 2010 and 2009 (in thousands):
 
    For the Nine Months Ended September 30, 2010
    Retained                    
    Interests in           Benihana      
    Notes   Other   Convertible      
    Receivable Sold   Bonds   Preferred Stock   Total
     
Beginning Balance
  $ 26,340       250       17,766       44,356  
Total gains and losses (realized/unrealized)
                               
Included in earnings
                       
Cumulative effect of change in accounting principle (1)
    (26,340 )                 (26,340 )
Included in other comprehensive income
                3,627       3,627  
Purchases, issuances, and settlements
          (250 )           (250 )
Transfers in and/or out of Level 3
                       
     
Balance at September 30, 2010
  $             21,393       21,393  
     
 
    For the Nine Months Ended September 30, 2009
            Benihana        
    Other   Convertible   Equity    
    Bonds   Preferred Stock   Securities   Total
     
Beginning Balance
  $ 250       16,426       1,588       18,264  
Total gains and losses (realized/unrealized)
                               
Included in earnings (2)
                (1,378 )     (1,378 )
Included in other comprehensive income
          4,858       (46 )     4,812  
Purchases, issuances, and settlements
                       
Transfers in and/or out of Level 3
                       
     
Balance at September 30, 2009
  $ 250       21,284       164       21,698  
     
 
(1)   Retained interests in notes receivable sold was eliminated upon a change in accounting principle. For further information see Note 2.
 
(2)   The $1.4 million loss represented an other-than-temporary impairment associated with a decline in value related to an equity investment in an unrelated financial institution.
          The valuation techniques and the inputs used in our financial statements to measure the fair value of our recurring financial instruments are described below.
          The fair values of agency bonds, municipal bonds mortgage-backed and real estate mortgage conduit securities are estimated using independent pricing sources and matrix pricing. Matrix pricing uses a market approach valuation technique and Level 2 valuation inputs as quoted market prices are not available for the specific securities that BankAtlantic Bancorp owns. The independent pricing sources value these securities using observable market inputs including: benchmark yields, reported trades, broker/dealer quotes, issuer spreads and other reference data in the secondary institutional market which is the principal market for these types of assets. To validate fair values obtained from the pricing sources, BankAtlantic Bancorp reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness of the fair values obtained from independent pricing

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sources. BankAtlantic Bancorp reviews any price that it determines may not be reasonable and requires the pricing sources to explain the differences in fair value or reevaluate its fair value.
          Other bonds and equity securities are generally fair valued using the market approach and quoted market prices (Level 1) or matrix pricing (Level 2 or Level 3) with inputs obtained from independent pricing sources, if available. Also non-binding broker quotes are obtained to validate fair values obtained from matrix pricing. However, for certain equity and debt securities in which observable market inputs cannot be obtained, these securities are valued either using the income approach and pricing models that BankAtlantic Bancorp has developed or based on observable market data that BankAtlantic Bancorp adjusted based on judgment of the factors BankAtlantic Bancorp believes a market participant would use to value the securities (Level 3).
          The fair value of foreign currency put options was obtained using the market approach and quoted market prices using Level 1 inputs.
          The estimated fair value of the Company’s investment in Benihana’s Series B Convertible Preferred Stock (“Convertible Preferred Stock”) was assessed using the income approach with Level 3 inputs by discounting future cash flows at a market discount rate combined with the fair value of the underlying shares of Benihana’s common stock that BFC would receive upon conversion of its shares of Benihana Convertible Preferred Stock.
          The following tables present major categories of assets measured at fair value on a non-recurring basis as of September 30, 2010 and 2009 (in thousands):
                                         
            Fair Value Measurements Using        
            Quoted prices in                    
            Active Markets     Significant     Significant        
            for Identical     Other Observable     Unobservable        
    September 30,     Assets     Inputs     Inputs     Total  
Description   2010     (Level 1)     (Level 2)     (Level 3)     Impairments  
Loans measured for impairment using the fair value of the underlying collateral
  $ 304,275                   304,275     $ 93,649  
Impaired real estate assets held for sale
    13,964                   13,964       4,469  
Impaired real estate owned
    10,437                   10,437       1,864  
Impaired real estate held for development and sale
    3,490                   3,490       1,532  
 
                             
Total
  $ 332,166                   332,166     $ 101,514  
 
                             
                                         
            Fair Value Measurements Using        
            Quoted prices in                    
            Active Markets     Significant     Significant        
            for Identical     Other Observable     Unobservable        
    September 30,     Assets     Inputs     Inputs     Total  
Description   2009     (Level 1)     (Level 2)     (Level 3)     Impairments  
Loans measured for impairment using the fair value of the underlying collateral
  $ 219,173                   219,173     $ 78,710  
Impaired real estate owned
    4,373                   4,373       760  
Impaired real estate inventory
    162,676                   162,676       32,759  
Impaired goodwill
                            10,542  
Investment in Bluegreen
    29,028       29,028                   31,181  
 
                             
Total
  $ 415,250       29,028             386,222     $ 153,952  
 
                             

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          There were no material liabilities measured at fair value on a non-recurring basis in the Company’s financial statements.
          Loans Receivable Measured For Impairment
          Impaired loans receivable are generally valued based on the fair value of the underlying collateral. BankAtlantic Bancorp primarily uses third party appraisals to assist in measuring non-homogenous impaired loans. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the estimated fair value of the loan’s collateral. However, the appraiser uses professional judgment in determining the fair value of the collateral or properties, and these values may also be adjusted for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans receivable, judgment on market conditions is used to adjust the most current appraisal. The sales prices may reflect prices of sales contracts not closed, and the amount of time required to sell out the real estate project may be derived from current appraisals of similar projects. As a consequence, the calculation of the estimated fair value of the collateral uses Level 3 inputs. BankAtlantic Bancorp generally uses third party broker price opinions or an automated valuation service to measure the fair value of the collateral for impaired homogenous loans in the establishment of specific reserves or charge-downs when these loans become 120 days delinquent. The third party valuations from real estate professionals also use Level 3 inputs in the determination of the fair values.
          Impaired Real Estate and Assets Held for Sale
          Real estate is generally valued with the assistance of third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an opinion of the fair value of the properties. However, the appraisers or brokers use professional judgments in determining the fair value of the properties and these values may also be adjusted for changes in market conditions subsequent to the valuation date. As a consequence of using broker price opinions and adjustments to appraisals, the fair values of the properties are considered a Level 3 valuation.
          Impaired Goodwill
          In determining the estimated fair value of BankAtlantic Bancorp’s reporting units in the test of goodwill for impairment, BankAtlantic Bancorp uses discounted cash flow valuation techniques. This method requires assumptions for expected cash flows and applicable discount rates. The aggregate fair value of all reporting units derived from the above valuation methodology was compared to BankAtlantic Bancorp’s market capitalization adjusted for a control premium in order to determine the reasonableness of the financial model output. A control premium represents the value an investor would pay above minority interest transaction prices in order to obtain a controlling interest in the respective company. BankAtlantic Bancorp used financial projections over a period of time considered necessary to achieve a steady state of cash flows for each reporting unit. The primary assumptions in the projections include anticipated growth in loans, tax certificates, securities, interest rates and revenue. The discount rates are estimated based on a Capital Asset Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk and size premium adjustments specific to a particular reporting unit. The estimated fair value of a reporting unit is highly sensitive to changes in the discount rate and terminal value assumptions and, accordingly, minor changes in these assumptions could significantly impact the fair value assigned to a reporting unit. Future potential changes in these assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. As a result of the significant judgments used in determining the fair value of the reporting units, the fair values of the reporting units use Level 3 inputs in the determination of fair value.
          Included on the Company’s Consolidated Statements of Financial Condition as of September 30, 2010 and December 31, 2009 is goodwill of $12.2 million associated with BankAtlantic’s capital services reporting unit which was tested for potential impairment on September 30, 2010 (the annual testing date) and was determined not to be impaired. As of September 30, 2010 the estimated fair value of BankAtlantic’s capital services reporting unit exceeded the estimated fair value of the underlying assets by $20.0 million. If market conditions do not improve or deteriorate further, goodwill impairments charges may be recognized in future periods.

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Financial Disclosures about Fair Value of Financial Instruments
          The following table presents information for financial instruments at September 30, 2010 and December 31, 2009 (in thousands):
                                 
    September 30, 2010   December 31, 2009
    Carrying   Fair   Carrying   Fair
    Amount   Value   Amount   Value
Financial assets:
                               
Cash and cash equivalents
  $ 385,874       385,874       316,080       316,080  
Interest bearing deposits in other financial institutions
    47,990       47,990              
Restricted cash
    62,748       62,748       24,020       24,020  
Securities available for sale
    490,634       490,634       346,375       346,375  
Derivatives
    95       95              
Investment securities
    1,981       1,981       9,654       9,654  
Tax certificates
    104,681       105,723       110,991       112,472  
Federal Home Loan Bank stock
    45,259       45,259       48,751       48,751  
Retained interest in notes receivable sold
                26,340       26,340  
Loans receivable including loans held for sale, net
    3,229,554       2,859,955       3,683,441       3,381,796  
Notes receivable
    598,693       628,000       277,274       277,274  
 
                               
Financial liabilities:
                               
Deposits
  $ 3,833,268       3,836,626       3,948,818       3,950,840  
Advances from FHLB
    180,000       179,935       282,012       282,912  
Securities sold under agreements to repurchase and short term borrowings
    20,948       20,948       27,271       27,271  
Receivable-backed notes payable
    590,052       575,832       237,416       237,416  
Notes and mortgage notes payable and other borrowings
    357,123       354,987       395,361       392,047  
Mortgage payables associated with assets held for sale from discontinued operations
                74,749       74,749  
Junior subordinated debentures
    457,699       216,213       447,211       170,598  
          Management has made estimates of fair value that it believes to be reasonable. However, because there is no active market for many of these financial instruments and management has derived the fair value of the majority of these financial instruments using the income approach technique with Level 3 unobservable inputs, there is no assurance that the estimated value would be received upon sale or disposition of the asset or pay the estimated value upon disposition of the liability in advance of its scheduled maturity. Management estimates used in its net present value financial models rely on assumptions and judgments regarding issues where the outcome is unknown and actual results or values may differ significantly from these estimates. The Company’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.
          Interest bearing deposits in other financial institutions are certificates of deposits guaranteed by the FDIC with maturities of less than one year. Due to the FDIC guarantee and the short maturity of these certificates of deposit, the fair value of these deposits approximates the carrying value.
          Fair values are estimated for loan portfolios with similar financial characteristics. Loans receivable are segregated by category, and each loan category is further segmented into fixed and adjustable interest rate categories and into performing and non-performing categories.
          The fair value of performing loans is calculated by using an income approach with Level 3 inputs. The fair value of performing loans is estimated by discounting forecasted cash flows through the estimated maturity using estimated market discount rates that reflect the interest rate risk inherent in the loan portfolio. The estimate of

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average maturity is based on BankAtlantic Bancorp’s historical experience with prepayments for each loan classification, modified as required, by an estimate of the effect of current economic and lending conditions. Management of BankAtlantic Bancorp assigns a credit risk premium and an illiquidity adjustment to these loans based on risk grades and delinquency status.
          The fair value of tax certificates was calculated using the income approach with Level 3 inputs. The fair value is based on discounted expected cash flows using discount rates that we believe take into account the risk of the cash flows of tax certificates relative to alternative investments.
          The fair value of Federal Home Loan Bank stock is its carrying amount.
          The fair values of Bluegreen notes receivable are based on estimated future cash flows considering contractual payments and estimates of prepayments and defaults, discounted at a market rate.
          As permitted by applicable accounting guidance, the fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings and NOW accounts, and money market and checking accounts, is shown in the above table at its book value. The fair value of certificates of deposit is based on an income approach with Level 3 inputs. The fair value is calculated by using the discounted value of contractual cash flows with the discount rate estimated using current rates offered by BankAtlantic for similar remaining maturities.
          The fair value of short-term borrowings is calculated using the income approach with Level 2 inputs. Contractual cash flows are discounted based on current interest rates. The carrying value of these borrowings approximates fair value as maturities are generally less than thirty days.
          The fair value of FHLB advances was calculated using the income approach with Level 2 inputs. The fair value was based on discounted cash flows using rates offered for debt with comparable terms to maturity and issuer credit standing.
          The fair values of BankAtlantic’s subordinated debentures were based on discounted values of contractual cash flows at a market discount rate adjusted for non-performance risk.
          The estimated fair values of notes and mortgage notes payable and other borrowings, including receivable-backed notes payable were based upon current rates and spreads it would pay to obtain similar borrowings and also used discounted values of contractual cash flows at a market discount rate.
          The fair value of BankAtlantic Bancorp’s mortgage-backed bonds included in notes and mortgage notes payable and other borrowings as of December 31, 2009 was based on discounted values of contractual cash flows at a market discount rate. The mortgage-backed bonds were retired during the nine months ended September 30, 2010 resulting in a $7,000 loss.
          In determining the fair value of BankAtlantic Bancorp’s junior subordinated debentures, BankAtlantic Bancorp used NASDAQ price quotes available with respect to its $66.1 million of publicly traded trust preferred securities related to its junior subordinated debentures (“public debentures”). However, $252.7 million of the outstanding trust preferred securities related to its junior subordinated debentures are not traded, but are privately held in pools (“private debentures”) and with no liquidity or readily determinable source for valuation. BankAtlantic Bancorp has deferred the payment of interest with respect to all of its junior subordinated debentures as permitted by the terms of these securities. Based on the deferral status and the lack of liquidity and ability of a holder to actively sell such private debentures, the fair value of these private debentures may be subject to a greater discount to par and have a lower fair value than indicated by the public debenture price quotes. However, due to their private nature and the lack of a trading market, fair value of the private debentures was not readily determinable at September 30, 2010 and December 31, 2009, and as a practical alternative, BankAtlantic Bancorp used the NASDAQ price quotes of the public debentures to value its remaining outstanding junior subordinated debentures whether privately held or publicly traded.
          The estimated fair value of Woodbridge’s and Bluegreen’s junior subordinated debentures as of September 30, 2010 and December 31, 2009 were based on a discounted value of contractual cash flows at a market discount rate or market price quotes from the over-the-counter bond market.

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          The carrying amount and fair values of BankAtlantic’s commitments to extend credit, standby letters of credit, financial guarantees and forward commitments are not considered significant. (See Note 20 for the contractual amounts of BankAtlantic’s financial instrument commitments.)
7. Securities Available for Sale
          The following tables summarize securities available for sale (in thousands):
                                 
    As of September 30, 2010  
            Gross     Gross        
    Amortized     Unrealized     Unrealized     Estimated  
    Cost     Gains     Losses     Fair Value  
Government agency securities:
                               
Mortgage-backed securities
  $ 116,836       7,091             123,927  
Agency bonds
    89,996       379             90,375  
REMICS (1)
    75,602       3,203             78,805  
 
                       
Total
    282,434       10,673             293,107  
 
                       
Investment Securities:
                               
Municipal bonds
    152,183       71       77       152,177  
Other bonds
                       
Benihana Convertible Preferred Stock
    16,426       4,967             21,393  
Equity and other securities
    23,773       186       2       23,957  
 
                       
Total investment securities
    192,382       5,224       79       197,527  
 
                       
Total
  $ 474,816       15,897       79       490,634  
 
                       
                                 
    As of December 31, 2009  
            Gross     Gross        
    Amortized     Unrealized     Unrealized     Estimated  
    Cost     Gains     Losses     Fair Value  
Government agency securities:
                               
Mortgage-backed securities
  $ 202,985       8,961       1       211,945  
REMICS (1)
    104,329       3,037       19       107,347  
 
                       
Total
    307,314       11,998       20       319,292  
 
                       
Investment Securities:
                               
Other bonds
    250                   250  
Benihana Convertible Preferred Stock
    16,426       1,340             17,766  
Equity and other securities
    8,947       126       6       9,067  
 
                       
Total investment securities
    25,623       1,466       6       27,083  
 
                       
Total
  $ 332,937       13,464       26       346,375  
 
                       
 
(1)   REMICS are pass-through entities that hold residential loans. Investors in these entities are issued ownership interests in the entities in the form of a bond. The securities are guaranteed by government agencies.
          The following tables show the gross unrealized losses and fair value of the Company’s securities available for sale with unrealized losses that are deemed temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2010 and December 31, 2009 (in thousands):
                                                 
    As of September 30, 2010
    Less Than 12 Months   12 Months or Greater   Total
    Fair   Unrealized   Fair   Unrealized   Fair   Unrealized
    Value   Losses   Value   Losses   Value   Losses
             
Municipal notes
    88,337       (77 )                 88,337       (77 )
Equity securities
                8       (2 )     8       (2 )
             
Total available for sale securities:
  $ 88,337       (77 )     8       (2 )     88,345       (79 )
             

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    As of December 31, 2009
    Less Than 12 Months   12 Months or Greater   Total
    Fair   Unrealized   Fair   Unrealized   Fair   Unrealized
    Value   Losses   Value   Losses   Value   Losses
             
Mortgage-backed securities
  $             159       (1 )     159       (1 )
REMICS
                21,934       (19 )     21,934       (19 )
Equity securities
    4       (6 )                 4       (6 )
             
Total available for sale securities:
  $ 4       (6 )     22,093       (20 )     22,097       (26 )
             
          The unrealized losses on the equity securities are insignificant. The municipal notes are insured general obligations of the municipality and have maturities of approximately one year or less and BankAtlantic expects to receive its entire investment in the note upon maturity. Accordingly, BankAtlantic Bancorp does not consider these investments other-than-temporarily impaired at September 30, 2010.
          Unrealized losses on mortgage-backed and REMICS securities outstanding at December 31, 2009 were primarily the result of interest rate changes. These securities are guaranteed by government sponsored enterprises. These securities are of high credit quality, and management of BankAtlantic Bancorp believed that the securities would recover their losses in the foreseeable future. Further, management of BankAtlantic Bancorp did not intend to sell these debt securities and did not believe that it would be required to sell these debt securities before the price recovers.
          The scheduled maturities of debt securities available for sale were (in thousands):
                 
    Debt Securities  
    Available for Sale  
            Estimated  
    Amortized     Fair  
    Cost     Value  
September 30, 2010 (1)
               
Due within one year
  $ 143,652       143,642  
Due after one year, but within five years
    98,595       98,980  
Due after five years, but within ten years
    27,057       28,088  
Due after ten years
    165,313       174,574  
 
           
Total
  $ 434,617       445,284  
 
           
 
(1)   Scheduled maturities in the above table are based on contractual maturities which may vary significantly from actual maturities due to prepayments.
          Securities activities in the Company’s Consolidated Statements of Operations and Consolidated Statements of Cash Flows were (in thousands):
                                 
    For the Three Months     For the Nine Months  
    Ended September 30,     Ended September 30,  
    2010     2009     2010     2009  
Gross gains on securities sales
  $       4,774       3,138       11,284  
 
                       
Gross losses on securities sales
                       
 
                       
Proceed from sales of securities
    18,569       113,073       92,109       318,779  
 
                       
          Management reviews its investment portfolios for other-than-temporary declines in value quarterly. As a consequence of BankAtlantic Bancorp’s review during 2009, the Company recognized $1.4 million of other-than-temporary declines in value related to an equity investment in an unrelated financial institution.

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BFC – Benihana Investment
          The Company owns 800,000 shares of Benihana’s Convertible Preferred Stock. The Convertible Preferred Stock is convertible into an aggregate of 1,578,943 shares of Benihana’s Common Stock at a conversion price of $12.67, subject to adjustment from time to time upon certain defined events. Based on the number of currently outstanding shares of Benihana’s capital stock, the Convertible Preferred Stock, if converted, would represent an approximately 19% voting interest and an approximately 9% economic interest in Benihana.
          The Convertible Preferred Stock was acquired pursuant to an agreement with Benihana on June 8, 2004 to purchase an aggregate of 800,000 shares of Convertible Preferred Stock for $25.00 per share. The shares of the Convertible Preferred Stock have voting rights on an “as if converted” basis together with Benihana’s Common Stock on all matters put to a vote of the holders of Benihana’s Common Stock. The approval of a majority of the holders of the Convertible Preferred Stock then outstanding, voting as a single class, is required for certain events outside the ordinary course of business. The Company is entitled to receive cumulative quarterly dividends on the Convertible Preferred Stock at an annual rate equal to $1.25 per share, payable on the last day of each calendar quarter. The Convertible Preferred Stock is subject to mandatory redemption at the original issue price of $20 million plus accumulated dividends on July 2, 2014 unless the Company elects to extend the mandatory redemption date to a later date not to extend beyond July 2, 2024. At September 30, 2010, the closing price of Benihana’s Common Stock was $7.75 per share. The market value of the Convertible Preferred Stock if converted at September 30, 2010 would have been approximately $12.2 million.
          At September 30, 2010, the Company’s estimated fair value of its investment in Benihana’s Convertible Preferred Stock was approximately $21.4 million, which includes a gross unrealized gain of approximately $3.6 million for the nine months ended September 30, 2010. The estimated fair value of the Company’s investment in Benihana’s Convertible Preferred Stock was assessed using the income approach with Level 3 inputs by discounting future cash flows at a market discount rate combined with the fair value of the underlying shares of Benihana’s Common Stock that BFC would receive upon conversion of its shares of Benihana’s Convertible Preferred Stock.
8. Derivatives
          During 2010, BankAtlantic expanded its cruise ship automated teller machine (“ATM”) operations and began dispensing foreign currency from certain ATMs on cruise ships. At September 30, 2010, BankAtlantic had $7.3 million of foreign currency in cruise ship ATMs and recognized $0.8 million and $0.1 million of foreign currency unrealized exchange gains, respectively, which were included in Financial Services other non-interest income in the Company’s statement of operations for the three and nine months ended September 30, 2010. BankAtlantic purchased foreign currency put options as an economic hedge for the foreign currency in its cruise ship ATMs. The terms of the put options and the fair value as of September 30, 2010 were as follows (in thousands, except strike price):
                                         
Contract         Expiration     Strike             Fair  
Amount         Date     Price     Premium     Value  
2,800    
 
  Nov-10   $ 1.34     $ 166       36  
  1,600    
 
  Dec-10     1.34       104       32  
  400    
 
  Jan-11     1.34       28       12  
  400    
 
  Apr-11     1.34       31       15  
     
 
                           
5,200    
 
                  $ 329       95  
     
 
                           
          Included in Financial Services — securities activities, net in the Company’s Consolidated Statement of Operations were $0.5 million and $0.2 million of unrealized losses associated with the above put options for the three and nine months ended September 30, 2010. The put options were included in derivatives in the Company’s Consolidated Statement of Financial Condition as of September 30, 2010.

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9. Loans Receivable
          The consolidated loan portfolio consisted of the following (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Real estate loans:
               
Residential
  $ 1,297,333       1,538,906  
Builder land loans
    19,826       57,807  
Land acquisition and development
    140,637       182,235  
Land acquisition, development and construction
    10,766       26,184  
Construction and development
    162,042       211,809  
Commercial
    694,655       688,386  
Consumer — home equity
    619,312       669,690  
Small business
    206,544       213,591  
Other loans:
               
Commercial business
    140,580       155,226  
Small business — non-mortgage
    97,445       99,113  
Consumer loans
    17,481       15,935  
Deposit overdrafts
    3,886       4,816  
 
           
Total gross loans
    3,410,507       3,863,698  
 
           
Adjustments:
               
Premiums, discounts and net deferred fees
    2,155       2,414  
Allowance for loan losses
    (185,947 )     (187,218 )
 
           
Loans receivable – net
  $ 3,226,715       3,678,894  
 
           
Loans held for sale
  $ 2,839       4,547  
 
           
          Loans held for sale at September 30, 2010 and December 31, 2009 are loans originated with the assistance of an independent mortgage company. The mortgage company provides processing and closing assistance to BankAtlantic. Pursuant to an agreement, the mortgage company purchases the loans from BankAtlantic within a defined period of time after the date of funding. BankAtlantic earns the interest income during the period that BankAtlantic owns the loan. Gains from the sale of loans held for sale were $28,000 and $169,000 for the three and nine months ended September 30, 2010, respectively, and were $134,000 and $397,000 for the three and nine months ended September 30, 2009, respectively.
          During the three months ended September 30, 2010, BankAtlantic Bancorp sold a non-residential commercial loan for net proceeds of $2.5 million. BankAtlantic Bancorp incurred a $0.2 million charge-off on the loan upon sale and reversed a $0.2 million specific valuation allowance established in a prior period. During the nine months ended September 30, 2010, BankAtlantic Bancorp sold builder land bank loans and land acquisition and development loans for net proceeds of $26.9 million resulting in charge-offs of $20.1 million. However, BankAtlantic Bancorp had previously established $17.7 million of specific valuation allowances on these loans as of December 31, 2009, and accordingly a $2.4 million additional charge-off was incurred in connection with the sales.
          Undisbursed loans in process consisted of the following components (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Construction and development
  $ 32,988       43,432  
Commercial
    25,391       25,696  
 
           
Total undisbursed loans in process
  $ 58,379       69,128  
 
           

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          Allowance for Loan Losses (in thousands):
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Balance, beginning of period
  $ 187,862       172,220       187,218       137,257  
Loans charged-off
    (27,309 )     (51,506 )     (107,899 )     (105,767 )
Recoveries of loans previously charged-off
    984       362       2,910       1,815  
 
                       
Net charge-offs
    (26,325 )     (51,144 )     (104,989 )     (103,952 )
Provision for loan losses
    24,410       63,586       103,718       151,357  
 
                       
Balance, end of period
  $ 185,947       184,662       185,947       184,662  
 
                       
          The following summarizes impaired loans (in thousands):
                                 
    September 30, 2010     December 31, 2009  
    Gross     Specific     Gross     Specific  
    Recorded     Valuation     Recorded     Valuation  
    Investment     Allowances     Investment     Allowances  
         
Impaired loans with specific valuation allowances
  $ 363,479       106,124       249,477       70,485  
Impaired loans without specific valuation allowances
    191,825             196,018        
         
Total
  $ 555,304       106,124       445,495       70,485  
         
          Impaired loans without specific valuation allowances represent loans that were written-down to the fair value of the collateral less cost to sell, loans in which the collateral value less cost to sell was greater than the carrying value of the loan, loans in which the present value of the cash flows discounted at the loan’s effective interest rate was equal to or greater than the carrying value of the loan, or large groups of smaller-balance homogeneous loans that are collectively measured for impairment.
          BankAtlantic Bancorp continuously monitors collateral dependent loans and performs an impairment analysis on these loans quarterly. Generally, a full appraisal is obtained when a real estate loan is evaluated for impairment and an updated full appraisal is obtained within one year from the prior appraisal date, or earlier if management deems it appropriate based on significant changes in market conditions. In instances where a property is in the process of foreclosure, an updated appraisal may be postponed beyond one year, as an appraisal is required on the date of foreclosure; however, such loans are subject to quarterly impairment analyses. Included in total impaired loans as of September 30, 2010 was $360.4 million of collateral dependent loans, of which $188.9 million were measured for impairment using current appraisals and $171.5 million were measured by adjusting appraisals that were less than one year old, as appropriate, to reflect changes in market conditions subsequent to the last appraisal date. Appraised values were adjusted down by an aggregate amount of $21.4 million to reflect current market conditions on 21 loans due to property value declines since the last appraisal dates.
          As of September 30, 2010, impaired loans with specific valuation allowances had been previously written down by $64.5 million and impaired loans without specific valuation allowances had been previously written down by $74.6 million. BankAtlantic had commitments to lend $9.8 million of additional funds on impaired loans as of September 30, 2010.

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          Interest income which would have been recorded under the contractual terms of impaired loans and the interest income actually recognized were (in thousands):
                                 
    For the Three Months     For the Nine Months  
    Ended September, 30     Ended September, 30  
    2010     2009     2010     2009  
Contracted interest income
  $ 6,239       5,561       18,721       16,645  
Interest income recognized
    (2,364 )     (1,346 )     (8,255 )     (4,848 )
 
                       
Foregone interest income
  $ 3,875       4,215       10,466       11,797  
 
                       
10. Notes Receivable
          The table below sets forth information relating to Bluegreen’s notes receivable (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Notes receivable, gross
  $ 739,417       356,133  
Discount on notes receivable
    (59,970 )     (74,873 )
 
           
Notes receivable, net of discount
    679,447       281,260  
Allowance for loan losses
    (80,754 )     (3,986 )
 
           
Notes receivable, net
  $ 598,693       277,274  
 
           
          The Company is using the expected cash flow method under the accounting guidance for receivables to recognize interest income on the notes receivable acquired in connection with the additional Bluegreen share acquisition on November 16, 2009. In determining the expected cash flows, the Company estimates credit losses and prepayments of principal. Prepayment rates used for the expected cash flows are based upon actual experience and the rates used ranged from 5% to 9% depending on the remaining terms of the loans. As of September 30, 2010, the outstanding contractual unpaid principal balance and the carrying amount for the acquired notes were $270.2 million and $210.2 million, respectively. As of December 31, 2009, the outstanding contractual unpaid principal balance and the carrying amount for the acquired notes were $343.8 million and $268.9 million, respectively.
          The table below sets forth the activity in the allowance for uncollectible notes receivable during the nine months ended September 30, 2010 (in thousands):
         
Balance at December 31, 2009
  $ 3,986  
One-time impact of the amendment to the accounting guidance for transfer of financial assets and the amendment to the accounting guidance for the consolidation of VIEs (see Note 2)
    86,252  
Provision for loan losses
    42,749  
Write-offs of uncollectible receivables
    (52,233 )
 
     
Balance at September 30, 2010
  $ 80,754  
 
     
          All of Bluegreen’s vacation ownership interests (“VOIs”) notes receivable, which comprise the majority of the notes receivable, bear interest at fixed rates. The weighted-average interest rate charged on loans secured by VOIs was 15.3% and 14.9% at September 30, 2010 and December 31, 2009, respectively. Approximately 86% of Bluegreen’s notes receivable secured by home sites bear interest at variable rates, while the balance bears interest at

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fixed rates. The weighted-average interest rate charged on notes receivable secured by home sites was 7.8% and 8.8% at September 30, 2010 and December 31, 2009, respectively.
          Bluegreen’s VOI notes receivable are generally secured by properties located in Florida, Louisiana, Nevada, New Jersey, Michigan, Missouri, Pennsylvania, South Carolina, Tennessee, Virginia, Wisconsin, and Aruba. The majority of Bluegreen Communities notes receivable are secured by home sites in Georgia, Texas, and Virginia.
11. Variable Interest Entities — Bluegreen
          In accordance with the guidance for the consolidation of variable interest entities, Bluegreen analyzes its variable interests, including loans, guarantees, and equity investments, to determine if an entity in which it has a variable interest is a variable interest entity. Bluegreen’s analysis includes both quantitative and qualitative reviews. Bluegreen bases its quantitative analysis on the forecasted cash flows of the entity, and it bases its qualitative analysis on its review of the design of the entity, its organizational structure including decision-making ability, and relevant financial agreements. Bluegreen also uses qualitative analyses to determine if it must consolidate a variable interest entity as the primary beneficiary.
          Bluegreen sells through special purpose finance entities, VOI notes receivable originated by Bluegreen Resorts. These transactions are generally structured as non-recourse to Bluegreen, with the exception of one securitization transaction entered into on September 2, 2010, which was guaranteed by Bluegreen (refer to the description of the Legacy Securitization in Note 15, Receivable-Backed Notes Payable, below). These transactions are generally designed to provide liquidity for Bluegreen and transfer the economic risks and certain of the benefits of the notes receivable to third parties. In a securitization, various classes of debt securities are issued by the special purpose finance entities that are generally collateralized by a single tranche of transferred assets, which consist of VOI notes receivable. Bluegreen services the notes receivable for a fee. With each securitization, Bluegreen generally retains a portion of the securities.
          Pursuant to generally accepted accounting principles that were in effect prior to 2010, seven of Bluegreen’s eight special purpose finance entities then in existence met the definition of a qualified special purpose entity, and Bluegreen was not required to consolidate those seven entities in its financial statements. Upon the adoption of the new accounting guidance related to transfers of financial assets (see Note 2 for additional information), Bluegreen was required to evaluate these entities for consolidation. Since Bluegreen created these entities to serve as financing vehicles for holding assets and related liabilities, and the entities have no equity investment at risk, they are considered variable interest entities. Furthermore, since Bluegreen continues to service the notes and retain rights to receive benefits that are potentially significant to the entities, Bluegreen concluded that it is the entities’ primary beneficiary and, therefore, now consolidates these entities into its financial statements. Please see Note 2 for the impact of initial consolidation of these entities.
          At September 30, 2010, the principal balance of VOI notes receivable included within the Company’s Consolidated Statement of Financial Condition that are restricted to satisfy obligations of the variable interest entities’ obligations totaled $551.9 million. In addition, approximately $39.4 million of Bluegreen’s restricted cash is held in accounts for the benefit of the variable interest entities. Further, at September 30, 2010, the carrying amount of the consolidated liabilities included within the Company’s Consolidated Statement of Financial Condition for these variable interest entities totaled $468.4 million, comprised of $444.0 million of non-recourse receivable-backed notes payable and $24.4 million of receivable-backed notes payable which is recourse to Bluegreen. See Note 15, Receivable-Backed Notes Payable, below.
          Under the terms of Bluegreen’s timeshare note sales, Bluegreen has the right at its option to repurchase or substitute for defaulted mortgage notes at the outstanding principal balance plus accrued interest or, in some facilities, at 24% of the original sale price associated with the defaulted mortgage note. The transaction documents typically limit such repurchases or substitutions to 15-20% of the receivables originally funded into the transaction. Voluntary repurchases or substitutions by Bluegreen of defaulted notes during the nine months ended September 30, 2010 were $31.7 million.

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12. Real Estate Inventory
          Real estate inventory consisted of the following (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Land and land development costs
  $ 234,393       264,454  
Bluegreen Resorts
    219,260       222,026  
Other costs
    526       552  
Land and facilities held for sale
    6,533       7,259  
 
           
Total
  $ 460,712       494,291  
 
           
          Inventory consisted of the combined real estate assets of Bluegreen Resorts, Bluegreen Communities, Core Communities, Carolina Oak, and BankAtlantic Bancorp’s land facilities held for sale.
          As a result of Bluegreen’s continued low sales volume, reduced prices, and the impact of reduced sales on the forecasted sell-out period of its communities projects, the Company recorded non-cash charges to cost of sales of real estate of approximately $8.7 million, net of purchase accounting adjustments, during the three months ended September 30, 2010, to write-down the inventory balances of certain phases of Bluegreen’s completed communities properties to their estimated fair value less estimated costs to sell.
13. Investments in Unconsolidated Affiliates
          As previously discussed, approximately 7.4 million additional shares of Bluegreen’s common stock were purchased on November 16, 2009, increasing our ownership in Bluegreen to 16.9 million shares, or 52%, of Bluegreen’s outstanding common stock. As a result of the purchase, the Company has a controlling interest in Bluegreen and, accordingly, has consolidated Bluegreen’s results since November 16, 2009 into the Company’s financial statements.
          Prior to November 16, 2009, the investment in Bluegreen was accounted for using the equity method of accounting. The cost of the Bluegreen investment was adjusted to recognize the Company’s interest in Bluegreen’s earnings or losses. The difference between a) the Company’s ownership percentage in Bluegreen multiplied by its earnings and b) the amount of the Company’s equity in earnings of Bluegreen as reflected in the Company’s financial statements related to the amortization or accretion of purchase accounting made at the time of the initial acquisition of Bluegreen’s common stock and a basis difference due to impairment charges recorded on the investment in Bluegreen, as described below. Based on the results of the quarterly evaluation of the investment in Bluegreen, other-than temporary impairment charges of $10.8 million and $31.2 million were recorded in the three and nine months ended September 30, 2009, respectively.
          The following table shows the reconciliation of the Company’s pro rata share of Bluegreen’s net income to the Company’s share of total earnings from Bluegreen for the three and nine months ended September 30, 2009, prior to our consolidation of Bluegreen in November 2009 (in thousands):
                 
    Three Months Ended   Nine Months Ended
    September 30, 2009   September 30, 2009
     
Pro rata share of Bluegreen’s net income
  $ 1,199       4,357  
Amortization of basis difference (a)
    10,582       24,474  
     
Total earnings from Bluegreen Corporation
  $ 11,781       28,831  
     
 
(a)   As a result of the impairment charges previously taken under the equity method prior to our consolidation of Bluegreen in November 2009, a basis difference was created between the investment in Bluegreen and the underlying assets and liabilities carried on the books of Bluegreen. Therefore, earnings from Bluegreen were adjusted each period to reflect the amortization of this basis difference. As such, a methodology was established to allocate the impairment loss to the relative estimates of the fair value of Bluegreen’s underlying assets based upon the position that the impairment loss was a reflection of the perceived value of these underlying assets. The appropriate amortization was calculated based on the estimated useful lives of the underlying assets and other relevant data associated with each asset category.

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14. Goodwill
          The Company tests goodwill for potential impairment annually or during interim periods if impairment indicators exist. In response to the deteriorating economic and real estate environments and the effects that the external environment had on BankAtlantic Bancorp’s business units, BankAtlantic reduced its asset balances with a view toward strengthening its regulatory capital ratios and revised its projected operating results to reflect a smaller organization. Based on the results of an interim goodwill impairment evaluation undertaken during the first quarter of 2009, an impairment charge of $8.5 million, net of purchase accounting from the step acquisition of approximately $0.6 million, was recorded during the nine months ended September 30, 2009.
15. Notes and Mortgage Notes Payable and Other Borrowings, Receivable-Backed Notes Payable and Junior Subordinated Debentures
          Woodbridge
          The development activities at Carolina Oak, which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. In the fourth quarter of 2009, we reviewed the inventory of real estate at Carolina Oak for impairment and as a result, recorded a $16.7 million impairment charge to adjust the carrying amount of Carolina Oak’s inventory to its fair value of $10.8 million. Woodbridge is the obligor under a $37.2 million loan that is collateralized by the Carolina Oak property. During 2009, the lender declared the loan to be in default and filed an action for foreclosure. While there may have been an issue with respect to compliance with certain covenants in the loan agreements, we do not believe that an event of default had occurred as was alleged. Woodbridge continues to seek a satisfactory conclusion with regard to the debt; however, the outcome of these efforts and the litigation is uncertain.
          Core
          Core is currently in default under the terms of all of its outstanding debt totaling approximately $139.4 million. See Note 3 for additional information.

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          Bluegreen
          Bluegreen’s pledged assets under its facilities and notes payable as of September 30, 2010 and December 31, 2009 had a carrying amount of approximately $369.1 million and $336.6 million, respectively.
          The RFA AD&C Facility. During September 2010, GMAC assigned all rights, title, and interest in the GMAC AD&C Facility to Resort Finance America, LLC (“RFA”). This assignment did not affect any of the material financial terms of the loan agreement. During the nine months ended September 30, 2010, Bluegreen repaid $23.6 million of the outstanding balance under this facility.
          H4BG Communities Facility. During April 2010, GMAC assigned all rights, title, and interest in the GMAC Communities Facility to H4BG, LP. This assignment did not affect any of the material financial terms of the loan agreement. During the nine months ended September 30, 2010, Bluegreen repaid $5.4 million on this facility.
          The Wachovia Notes Payable. On April 30, 2010, Bluegreen executed an agreement with Wells Fargo Bank, N.A., the parent company of Wachovia (“Wells Fargo”), to refinance the remaining $21.9 million outstanding under the Wachovia Notes Payable into a new term loan. See Wells Fargo Term Loan below for further details.
          The Wachovia Line-of-Credit. On April 30, 2010, the remaining $14.5 million outstanding was refinanced by Wells Fargo. See Wells Fargo Term Loan below for further details.
          The Wells Fargo Term Loan. On April 30, 2010, Bluegreen entered into a definitive agreement with Wells Fargo, which amended, restated and consolidated Bluegreen’s notes payable to Wachovia and the line-of-credit issued by Wachovia into a single term loan with Wells Fargo (the “Wells Fargo Term Loan”). The notes payable and line of credit which were consolidated into the Wells Fargo Term Loan had a total outstanding balance of $36.4 million as of April 30, 2010. In connection with the closing of the Wells Fargo Term Loan, Bluegreen made a principal payment of $0.4 million, reducing the balance to $36.0 million, and paid accrued interest on the existing Wachovia debt. The interest rate on the Wells Fargo Term Loan at September 30, 2010 was 7.13%. Principal payments are effected through agreed-upon release prices as real estate collateralizing the Wells Fargo Term Loan is sold, subject to minimum remaining required amortization of $2.8 million in 2010, $10.6 million in 2011 and $20.2 million in 2012. In addition to the resort projects previously pledged as collateral for the various notes payable to Wachovia, Bluegreen pledged additional timeshare interests, resorts real estate, and the residual interests in certain of Bluegreen’s sold VOI notes receivables as collateral for the Wells Fargo Term Loan. Wells Fargo has the right to receive as additional collateral, the residual interest in one future transaction which creates such a retained interest. During the nine months ended September 30, 2010, Bluegreen repaid $2.8 million on this facility.
Receivable-Backed Notes Payable
          Bluegreen’s pledged receivables under its receivable-backed notes payable as of September 30, 2010 and December 31, 2009 had a principal balance before purchase accounting adjustments of approximately $697.9 million and $292.9 million, respectively.
          Liberty Bank Facility. During the nine months ended September 30, 2010, Bluegreen pledged $27.6 million of VOI notes receivable to this facility and received cash proceeds of $26.9 million. Bluegreen also made repayments of $14.3 million on the facility during the nine months ended September 30, 2010
          GE Bluegreen/Big Cedar Receivables Facility. During the nine months ended September 30, 2010, Bluegreen repaid $6.9 million on this facility.
          The Wells Fargo Facility. During the nine months ended September 30, 2010, Bluegreen repaid $10.7 million on this facility.
          BB&T Purchase Facility. On September 2, 2010, the BB&T Purchase Facility was amended and restated, extending the revolving advance period under the facility to August 31, 2011. The facility will initially revolve up to $125.0 million. During the nine months ended September 30, 2010, Bluegreen pledged $16.5 million of VOI notes receivable under the facility and received cash proceeds of $11.2 million. On September 2, 2010, Bluegreen repaid $24.3 million of the outstanding balance under the BB&T Purchase Facility with the proceeds generated from

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the sale of the notes in connection with the Legacy Securitization described below. During the nine months ended September 30, 2010, Bluegreen made total repayments of $49.0 million on the facility.
          Legacy Securitization. On September 2, 2010, Bluegreen completed a term securitization transaction of the lowest FICO-score loans previously financed in the BB&T Purchase Facility. Substantially all of the timeshare receivables backing the notes were generated prior to December 15, 2008, the date that Bluegreen implemented its FICO score-based credit underwriting program, and were primarily loans with FICO scores below 600. In this private placement transaction, BXG Legacy 2010 LLC, a wholly-owned special purpose subsidiary of Bluegreen, issued $27.0 million of notes payable secured by a portfolio of timeshare receivables totaling $36.1 million (the “Legacy Securitization”). The sale of the notes generated proceeds to Bluegreen of $24.3 million before fees and customary reserves and expenses), which were used to repay a portion of the outstanding balance under the BB&T Purchase Facility.
          National Bank of Arizona Receivables Facility. On September 30, 2010, Bluegreen/Big Cedar Joint Venture entered into a $20.0 million timeshare receivables hypothecation facility with National Bank of Arizona. Bluegreen Corporation has guaranteed the full payment and performance of Bluegreen/Big Cedar Joint Venture in connection with this facility. The facility is subject to financial covenant requirements, which include compliance by Bluegreen/Big Cedar Joint Venture with the maximum VOI selling expenses-to-net sales ratios, and maintaining a minimum net worth balance. Bluegreen, as a guarantor of the debt, is also subject to a minimum net worth requirement.
          Receivable —Backed Notes Payable Previously Reported as Off-Balance-Sheet
          As discussed further in Notes 2 and 11 above, on January 1, 2010, Bluegreen consolidated seven of its special purpose finance entities and associated receivable-backed notes payable. These entities and their associated debt were not required to be consolidated during periods prior to January 1, 2010. Historically, Bluegreen has been a party to a number of securitization-type transactions, in which it sold receivables to one of its special purpose finance entities which, in turn, sold the receivables either directly to third parties or to a trust established for the transaction. These receivables were typically sold on a non-recourse basis (except for breaches of certain representations and warranties). Under these arrangements, the cash payments received from obligors on the receivables sold are generally applied monthly to pay fees to service providers, make interest and principal payments to investors, and fund required reserves, if any, with the remaining balance of such cash retained by Bluegreen; however, to the extent the portfolio of receivables fails to satisfy specified performance criteria (as may occur due to an increase in default rates or loan loss severity) or other trigger events, the funds received from obligors are distributed on an accelerated basis to investors. Depending on the circumstances and the transaction, the application of the accelerated payment formula may be permanent or temporary until the trigger event is cured. As of September 30, 2010, Bluegreen believed it was in compliance in all material respects with all applicable terms and no trigger events had occurred.
          The table below sets forth the balances as of September 30, 2010 of Bluegreen’s receivable-backed notes payable facilities (in thousands):
                 
    As of  
    September 30, 2010  
    Debt     Interest  
    Balance     Rate  
Non-recourse receivable-backed notes payable previously reported as off-balance sheet (1):
               
BB&T Purchase Facility
  $ 93,462       6.75 %
GE 2004 Facility
    10,596       7.16 %
2004 Term Securitization
    20,727       5.27 %
2005 Term Securitization
    60,463       5.98 %
GE 2006 Facility
    53,356       7.35 %
2006 Term Securitization
    56,194       6.16 %
2007 Term Securitization
    107,349       7.32 %
2008 Term Securitization
    41,803       7.88 %
 
             
Total
  $ 443,950          
 
             
 
(1)   With the exception of the BB&T Purchase Facility, non-recourse receivable-backed notes payable were reported off-balance sheet prior to January 1, 2010.

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Junior Subordinated Debentures
          As more fully described in Note 23 “Junior Subordinated Debentures” to the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009, some of the Company’s subsidiaries have formed statutory business trusts (collectively, the “Trusts”), each of which issued trust preferred securities and invested the proceeds thereof in its junior subordinated debentures. The Trusts are variable interest entities in which the Company’s subsidiaries are not the primary beneficiaries as defined by the accounting guidance for consolidation. Accordingly, the Company does not consolidate the operations of the Trusts; instead, the Trusts are accounted for under the equity method of accounting.
          On March 30, 2010, the interest rate on the securities issued by Levitt Capital Trust (“LCT”) I contractually changed from a fixed-rate of 8.11% to a variable rate equal to the 3-month LIBOR + 3.85% (4.14% as of September 30, 2010).
          On July 30, 2010, the interest rate on the securities issued by LCT II contractually changed from a fixed-rate of 8.09% to a variable rate equal to the 3-month LIBOR + 3.80% (4.09% as of September 30, 2010).
          On March 30, 2010, the interest rate on the securities issued by Bluegreen Statutory Trust (“BST”) I contractually changed from a fixed-rate of 9.160% to a variable rate equal to the 3-month LIBOR + 4.90% (5.19% as of September 30, 2010).
          On July 30, 2010, the interest rate on the securities issued by BST II and BST III contractually changed from a fixed-rate of 9.158% and 9.193%, respectively, to a variable rate equal to the 3-month LIBOR + 4.85% (5.14% as of September 30, 2010).
16. Development Bonds Payable
          In connection with the development of certain of Core’s projects, community development, special assessment or improvement districts were established that may have utilized tax-exempt bond financing to fund construction or acquisition of certain on-site and off-site infrastructure improvements near or at these communities. The obligation to pay principal and interest on the bonds issued by the districts is assigned to each parcel within the district, and a priority assessment lien may be placed on benefited parcels to provide security for the debt service. The bonds, including interest and redemption premiums, if any, and the associated priority lien on the property are typically payable, secured and satisfied by revenues, fees, or assessments levied on the property benefited. Core is required to pay the revenues, fees, and assessments levied by the districts on the properties it still owns that are benefited by the improvements. Core may also be required to pay down a specified portion of the bonds at the time each unit or parcel is sold. The costs of these obligations were capitalized to inventory during the development period and recognized as cost of sales when the properties are sold.
          Core’s bond financing at September 30, 2010 and December 31, 2009 consisted of district bonds totaling $218.7 million at each of these dates with outstanding amounts of approximately $180.8 million and $170.8 million, respectively. Bond obligations at September 30, 2010 mature in 2035 and 2040. As of September 30, 2010, Core owned approximately 4% of the property subject to assessments within the community development district and approximately 91% of the property subject to assessments within the special assessment district. During the three months ended September 30, 2010 and 2009, Core recorded a liability of approximately $103,000 and $220,000, respectively, in assessments on property owned by it in the districts. During the nine months ended September 30, 2010 and 2009, Core recorded a liability of approximately $328,000 and $537,000, respectively, in assessments on property owned by it in the districts. Core is responsible for any assessed amounts until the underlying property is sold and will continue to be responsible for the annual assessments through the maturity dates of the respective bonds issued if the property is never sold. Based on Core’s approximate 91% ownership of property within the special assessment district as of September 30, 2010, it will be responsible for the payment of approximately $10 million in assessments by March 2011. If Core sells land within the special assessment district and reduces its ownership percentage, the potential payment of approximately $10 million would decrease in relation to the decrease in the ownership percentage. In addition, Core has guaranteed payments for assessments under the district bonds in Tradition, Florida which would require funding if future assessments to be allocated to property owners are insufficient to repay the bonds. Management has evaluated this exposure based upon the criteria in accounting

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guidance for contingencies, and has determined that there have been no substantive changes to the projected density or land use in the development subject to the bond which would make it probable that Core would have to fund future shortfalls in assessments.
          A liability was recorded for the estimated developer obligations that are fixed and determinable and user fees that are required to be paid or transferred at the time the parcel or unit is sold to an end user. At September 30, 2010, the liability related to developer obligations associated with Core’s ownership of the property was $175,000 after the sale of Core’s commercial leasing projects in June 2010 (See Note 5 for information relating to the sale). At December 31, 2009, the liability related to developer obligations was $3.3 million, of which $3.1 million was included in the liabilities related to assets held for sale in the accompanying Consolidated Statement of Financial Condition as of December 31, 2009.
17. Interest Expense
          The following table is a summary of the Company’s consolidated interest expense and the amounts capitalized (in thousands):
                                 
    For the Three Months Ended,     For the Nine Months Ended,  
    September 30,     September 30,  
    2010     2009     2010     2009  
Real Estate and Other:
                               
Interest incurred on borrowings
  $ 24,889       3,791       65,074       11,554  
Interest capitalized
    (42 )     (663 )     (227 )     (2,948 )
 
                       
 
    24,847       3,128       64,847       8,606  
 
                       
 
                               
Financial Services:
                               
Interest on deposits
    4,877       9,420       17,954       33,934  
Interest on advances from FHLB
    106       2,494       1,065       14,740  
Interest on short term borrowings
    8       9       23       200  
Interest on debentures and bonds payable
    4,135       3,882       11,879       12,504  
 
                       
 
    9,126       15,805       30,921       61,378  
 
                       
Total interest expense
  $ 33,973       18,933       95,768       69,984  
 
                       
18. Noncontrolling Interests
          The following table summarizes the noncontrolling interests held by others in the Company’s subsidiaries at September 30, 2010 and December 31, 2009 (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
BankAtlantic Bancorp
  $ 34,860       88,910  
Bluegreen
    41,746       41,905  
Joint ventures
    29,380       28,037  
 
           
 
  $ 105,986       158,852  
 
           

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          The following table summarizes the noncontrolling interests (loss) earnings recognized by others with respect to the Company’s subsidiaries for the three and nine months ended September 30, 2010 and 2009 (in thousands):
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Noncontrolling interest — Continuing Operations:
                               
BankAtlantic Bancorp
  $ (14,005 )     (36,493 )     (59,360 )     (96,010 )
Woodbridge
          (6,314 )           6,008  
Bluegreen
    (1,144 )           156        
Joint ventures
    3,910       (386 )     6,285       (872 )
 
                       
 
  $ (11,239 )     (43,193 )     (52,919 )     (90,874 )
 
                       
 
                               
Noncontrolling interest — Discontinued Operations:
                               
BankAtlantic Bancorp
  $       (351 )           2,592  
Woodbridge
          (153 )           (661 )
 
                       
 
  $       (504 )           1,931  
 
                       
Net Loss Attributable to Noncontrolling Interests
  $ (11,239 )     (43,697 )     (52,919 )     (88,943 )
 
                       
19. Segment Reporting
          Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in assessing performance and deciding how to allocate resources. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, type of customer, distribution system or regulatory environment.
          The information provided for segment reporting is based on internal reports utilized by management of the Company and its respective subsidiaries. The presentation and allocation of assets and results of operations may not reflect the actual economic costs of the segments as stand alone businesses. If a different basis of allocation were utilized, the relative contributions of the segments might differ but the relative trends in segments’ operating results would, in management’s view, likely not be impacted.
          As a result of the Woodbridge merger on September 21, 2009 and the Bluegreen share acquisition on November 16, 2009, the Company reorganized its reportable segments to better align its segment reporting with the current operations of its businesses. The Company’s business activities currently consist of (i) Real Estate and Other activities and (ii) Financial Services activities. These business activities are reported through six segments: BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, BankAtlantic and BankAtlantic Bancorp Parent Company. As a result of this reorganization, our BFC Activities segment now includes, in addition to other activities historically included in this segment, Woodbridge Other Operations (which was previously a separate segment). Our Real Estate Operations segment is now comprised of what was previously identified as our Land Division, including the real estate business activities of Core Communities and Carolina Oak.
          BFC’s consolidated financial statements include the results of operations of Bluegreen since November 16, 2009, when we acquired a controlling interest in Bluegreen. Bluegreen’s results of operations are reported through the Bluegreen Resorts and Bluegreen Communities segments. Prior to November 16, 2009, we owned approximately 9.5 million shares of Bluegreen’s common stock, representing approximately 29% of such stock, the investment in Bluegreen was accounted for under the equity method of accounting, and our interest in Bluegreen’s earnings and losses was included in our BFC Activities segment. The Company’s Financial Services business activities include BankAtlantic Bancorp’s results of operations and are reported in two segments: BankAtlantic and BankAtlantic Bancorp Parent Company.
          The accounting policies of the segments are generally the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. Intersegment transactions are eliminated in consolidation. The Company evaluates segment performance based on its segment net income (loss).

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          The following summarizes the aggregation of the Company’s operating segments into reportable segments:
BFC Activities
          The BFC Activities segment consists of BFC operations, our investment in Benihana, and other operations of Woodbridge described below. BFC operations primarily consist of our corporate overhead and general and administrative expenses, including the expenses of Woodbridge, the financial results of a venture partnership that BFC controls and other equity investments, as well as income and expenses associated with BFC’s shared service operations which provides services, including human resources, risk management, investor relations and executive office administration services to BankAtlantic Bancorp and Bluegreen. This segment also includes investments made by our wholly owned subsidiary, BFC/CCC, Inc. (“BFC/CCC”). Other operations includes the consolidated operations of Pizza Fusion Holdings, Inc. (“Pizza Fusion”), a restaurant franchisor operating within the quick service and organic food industries, the activities of Cypress Creek Capital Holdings, LLC (“Cypress Creek Capital”) and Snapper Creek Equity Management, LLC (“Snapper Creek”) and other investments. Prior to obtaining a controlling interest in Bluegreen on November 16, 2009, we accounted for our investment in Bluegreen under the equity method of accounting and our interest in Bluegreen’s earnings or loss was included in the BFC Activities segment.
Real Estate Operations
          The Company’s Real Estate Operations segment consists of the operations of Core Communities, Carolina Oak, which was engaged in homebuilding activities in South Carolina prior to the suspension of those activities in the fourth quarter of 2008, and Cypress Creek Holdings which engages in leasing activities.
Bluegreen Resorts
          Bluegreen Resorts develops, markets and sells VOIs in its resorts through the Bluegreen Vacation Club. Bluegreen Resorts also provides fee-based sales, marketing, title and construction and other management services to third-party resort developers and owners.
Bluegreen Communities
          Bluegreen Communities acquires large tracts of real estate, which are subdivided, improved (in some cases to include a golf course on the property and other related amenities) and sold, typically on a retail basis as homesites.
BankAtlantic
          The Company’s BankAtlantic segment consists of the banking operations of BankAtlantic.
BankAtlantic Bancorp Parent Company
          The BankAtlantic Bancorp Parent Company segment consists of the operations of BankAtlantic Bancorp Parent Company, including the cost of acquisitions, asset and capital management and financing activities and the results of BankAtlantic Bancorp’s asset work out subsidiary.

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          The table below sets forth the Company’s segment information as of and for the three month periods ended September 30, 2010 and 2009 (in thousands):
                                                                 
                                            BankAtlantic     Unallocated        
                                            Bancorp     Amounts        
    BFC     Real Estate     Bluegreen     Bluegreen             Parent     and     Segment  
2010   Activities     Operations     Resorts     Communities     BankAtlantic     Company     Eliminations     Total  
Revenues:
                                                               
Sales of real estate, net of estimated uncollectibles
  $             54,782       3,137                         57,919  
Other resorts and communities operations revenue
                17,170       433                         17,603  
Other real estate revenues
    517       294       15,148                         (17 )     15,942  
Interest income
                            44,331       80       21,164       65,575  
Financial Services — non-interest income
                            27,035       283       (453 )     26,865  
 
                                               
Total revenues
    517       294       87,100       3,570       71,366       363       20,694       183,904  
 
                                               
 
                                                               
Costs and Expenses:
                                                               
Cost of sales of real estate
                10,473       11,367                         21,840  
Cost of sales of other resorts and communities operations
                12,535       866                         13,401  
Interest expense
    1,439       6,573                   5,230       3,872       16,859       33,973  
Provision for loan losses
                            23,012       1,398             24,410  
Selling, general and administrative expenses
    6,633       3,054       45,997       3,752                   8,354       67,790  
Other expenses
                            60,756       2,901       (495 )     63,162  
 
                                               
Total costs and expenses
    8,072       9,627       69,005       15,985       88,998       8,171       24,718       224,576  
 
                                               
 
                                                               
Equity in earnings (loss) from unconsolidated affiliates
    (11 )                             293       35       317  
Other income
    1,403       47                               (952 )     498  
 
                                               
(Loss) income from continuing operations before income taxes
    (6,163 )     (9,286 )     18,095       (12,415 )     (17,632 )     (7,515 )     (4,941 )     (39,857 )
Less: Provision (benefit) for income taxes
    (71 )                       37             (962 )     (996 )
 
                                               
(Loss) income from continuing operations
    (6,092 )     (9,286 )     18,095       (12,415 )     (17,669 )     (7,515 )     (3,979 )     (38,861 )
Income from discontinued operations
                                               
 
                                               
Net (loss) income
  $ (6,092 )     (9,286 )     18,095       (12,415 )     (17,669 )     (7,515 )     (3,979 )     (38,861 )
 
                                                   
Less: Net loss attributable to noncontrolling interests
                                                    (11,239 )     (11,239 )
 
                                                           
Net loss attributable to BFC
                                                  $ 7,260       (27,622 )
 
                                                           
 
                                                               
 
                                               
Total assets at September 30, 2010
  $ 154,395       178,851       878,326       94,973       4,485,476       384,778       (174,609 )     6,002,190  
 
                                               

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                            BankAtlantic     Unallocated        
                            Bancorp     Amounts        
    BFC     Real Estate             Parent     and     Segment  
2009   Activities     Operations     BankAtlantic     Company     Eliminations     Total  
Revenues:
                                               
Sales of real estate, net of estimated uncollectibles
  $       130                         130  
Other real estate revenues
    342       512                   (9 )     845  
Interest income
                53,668       85       808       54,561  
Financial Services — non-interest income
                35,304       141       (391 )     35,054  
 
                                   
Total revenues
    342       642       88,972       226       408       90,590  
 
                                   
 
                                               
Costs and Expenses:
                                               
Cost of sales of real estate
    4,136       18,144                   9,384       31,664  
Interest expense
    1,869       1,259       12,183       3,718       (96 )     18,933  
Provision for loan losses
                52,246       11,340             63,586  
Impairment of goodwill
    2,001                               2,001  
Selling, general and administrative expenses
    8,026       3,480                   (510 )     10,996  
Other expenses
                60,032       2,175       (259 )     61,948  
 
                                   
Total costs and expenses
    16,032       22,883       124,461       17,233       8,519       189,128  
 
                                   
 
                                               
Equity in earnings from unconsolidated affiliates
    11,767             188       223       35       12,213  
Impairment of unconsolidated affiliates
    (10,780 )                             (10,780 )
Other income
    1,502       102                   (838 )     766  
 
                                   
Loss from continuing operations before income taxes
    (13,201 )     (22,139 )     (35,301 )     (16,784 )     (8,914 )     (96,339 )
Less: Provision for income taxes
                3                   3  
 
                                   
Loss from continuing operations
    (13,201 )     (22,139 )     (35,304 )     (16,784 )     (8,914 )     (96,342 )
Income from discontinued operations
          (867 )           (500 )           (1,367 )
 
                                   
Net loss
  $ (13,201 )     (23,006 )     (35,304 )     (17,284 )     (8,914 )     (97,709 )
 
                                       
Less: Net loss attributable to noncontrolling interests
                                    (43,697 )     (43,697 )
 
                                           
Net loss attributable to BFC
                                  $ 34,783       (54,012 )
 
                                           
 
                                               
 
                                   
Total assets at September 30, 2009
  $ 160,476       346,773       4,882,385       496,774       (466,961 )     5,419,447  
 
                                   

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          The table below sets forth the Company’s segment information for the nine month periods ended September 30, 2010 and 2009 (in thousands):
                                                                 
                                            BankAtlantic     Unallocated        
                                            Bancorp     Amounts        
    BFC     Real Estate     Bluegreen     Bluegreen             Parent     and     Segment  
2010   Activities     Operations     Resorts     Communities     BankAtlantic     Company     Eliminations     Total  
Revenues:
                                                               
Sales of real estate, net of estimated uncollectibles
  $       2,455       117,894       9,740                         130,089  
Other resorts and communities operations revenue
                49,263       1,283                         50,546  
Other real estate revenues
    1,386       1,228       37,458                         (51 )     40,021  
Interest income
                            135,317       239       81,936       217,492  
Financial Services — non-interest income
                            81,563       826       (1,390 )     80,999  
 
                                               
Total revenues
    1,386       3,683       204,615       11,023       216,880       1,065       80,495       519,147  
 
                                               
 
                                                               
Costs and Expenses:
                                                               
Cost of sales of real estate
          2,175       22,646       19,559                         44,380  
Cost of sales of other resorts and communities operations
                35,930       2,526                         38,456  
Interest expense
    4,920       10,423                   19,749       11,095       49,581       95,768  
Provision for loan losses
                            98,680       5,038             103,718  
Selling, general and administrative
    20,261       7,515       114,771       10,620                   31,227       184,394  
Other expenses
                            172,992       7,938       (1,497 )     179,433  
 
                                               
Total costs and expenses
    25,181       20,113       173,347       32,705       291,421       24,071       79,311       646,149  
 
                                               
 
                                                               
Loss on settlement of investment in Woodbridge’s subsidiary
    (1,135 )                                         (1,135 )
Equity in (loss) earnings from unconsolidated affiliates
    (38 )                             719       105       786  
Other income
    4,569       808                               (3,242 )     2,135  
 
                                               
(Loss) income from continuing operations before income taxes
    (20,399 )     (15,622 )     31,268       (21,682 )     (74,541 )     (22,287 )     (1,953 )     (125,216 )
Less: Provision (benefit) for income taxes
    (5,718 )                       127             396       (5,195 )
 
                                               
(Loss) income from continuing operations
    (14,681 )     (15,622 )     31,268       (21,682 )     (74,668 )     (22,287 )     (2,349 )     (120,021 )
Income from discontinued operations
          2,465                                     2,465  
 
                                               
Net (loss) income
  $ (14,681 )     (13,157 )     31,268       (21,682 )     (74,668 )     (22,287 )     (2,349 )     (117,556 )
 
                                                   
Less: Net loss attributable to noncontrolling interests
                                                    (52,919 )     (52,919 )
 
                                                           
Net loss attributable to BFC
                                                  $ 50,570       (64,637 )
 
                                                           

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                            BankAtlantic     Unallocated        
                            Bancorp     Amounts        
    BFC     Real Estate             Parent     and     Segment  
2009   Activities     Operations     BankAtlantic     Company     Eliminations     Total  
Revenues:
                                               
Sales of real estate, net of estimated uncollectibles
  $       3,285                   39       3,324  
Other real estate revenues
    843       1,789                   (26 )     2,606  
Interest income
                173,068       490       1,390       174,948  
Financial Services — non-interest income
                100,844       (490 )     (1,123 )     99,231  
 
                                   
Total revenues
    843       5,074       273,912             280       280,109  
 
                                   
 
                                               
Costs and Expenses:
                                               
Cost of sales of real estate
    4,153       20,106                   9,399       33,658  
Interest expense
    4,641       3,965       49,736       11,950       (308 )     69,984  
Provision for loan losses
                131,721       19,636             151,357  
Impairment of goodwill
    2,001             9,124             (583 )     10,542  
Selling, general and administrative
    22,569       12,129                   (1,473 )     33,225  
Other expenses
                183,688       5,740       (872 )     188,556  
 
                                   
Total costs and expenses
    33,364       36,200       374,269       37,326       6,163       487,322  
 
                                   
 
                                               
Gain on settlement of investment in Woodbridge’s subsidiary
    26,985                         13,384       40,369  
Equity in earnings from unconsolidated affiliates
    28,729             289       341       104       29,463  
Impairment of unconsolidated affiliates
    (31,181 )                             (31,181 )
Impairment of investments
    (2,396 )                             (2,396 )
Other income
    4,381       512                   (2,368 )     2,525  
 
                                   
Loss from continuing operations before income taxes
    (6,003 )     (30,614 )     (100,068 )     (36,985 )     5,237       (168,433 )
Less: Provision for income taxes
                3                   3  
 
                                   
Loss from continuing operations
    (6,003 )     (30,614 )     (100,071 )     (36,985 )     5,237       (168,436 )
(Loss) income from discontinued operations
          (1,532 )           3,701             2,169  
 
                                   
Net loss
  $ (6,003 )     (32,146 )     (100,071 )     (33,284 )     5,237       (166,267 )
 
                                       
Less: Net loss attributable to noncontrolling interests
                                    (88,943 )     (88,943 )
 
                                           
Net loss attributable to BFC
                                  $ 94,180       (77,324 )
 
                                           

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20. Commitments, Contingencies and Financial Instruments with Off-Balance Sheet Risk
BFC
          A wholly-owned subsidiary of BFC/CCC has a 10% interest in a limited liability company that owns two commercial properties in Hillsborough County, Florida. At September 30, 2010 and December 31, 2009, the carrying amount of this investment was approximately $665,000 and $690,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member each guaranteed the payment of up to a maximum of $5.0 million each for certain environmental indemnities and specific obligations that are not related to the financial performance of the assets. BFC and the unaffiliated member also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates.
          A wholly-owned subsidiary of BFC/CCC has a 50% limited partner interest in a limited partnership that has a 10% interest in a limited liability company that owns an office building in Tampa, Florida. At September 30, 2010 and December 31, 2009, the carrying amount of this investment was approximately $306,000 and $319,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the office building by the limited liability company in June 2007, BFC guaranteed the payment of certain environmental indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in the event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates.
          No amounts are recorded in the Company’s financial statements for the obligations associated with the above guarantees based on the potential indemnification by unaffiliated members and the limit of the specific obligations to non-financial matters.
          Based on the current accounting guidance associated with the consolidation of variable interest entities implemented on January 1, 2010, we are not classified as primary beneficiaries in connection with the above mentioned BFC/CCC investments and do not consolidate these entities into our financial statements. We do not have the power to direct the activities that can significantly impact the performance of these entities.
Core
          At each of September 30, 2010 and December 31, 2009, Core had outstanding surety bonds of approximately $495,000, which were related primarily to its obligations to various governmental entities to construct improvements in its various communities. It is estimated that approximately $495,000 of work remains to complete these improvements and it is not currently anticipated that any outstanding surety bonds will be drawn upon.
Woodbridge
          Levitt and Sons, Woodbridge’s former wholly-owned homebuilding subsidiary, had approximately $33.3 million of surety bonds related to its ongoing projects at November 9, 2007, the date on which Levitt and Sons and substantially all of its subsidiaries filed voluntary bankruptcy petitions (the “Chapter 11 Cases”). In the event that these obligations are drawn and paid by the surety, Woodbridge could be responsible for up to $7.6 million plus costs and expenses in accordance with the surety indemnity agreements executed by Woodbridge. At September 30, 2010 and December 31, 2009, Woodbridge had $490,000 and $527,000, respectively, in surety bond accruals related to certain bonds where management believes it to be probable that Woodbridge will be required to reimburse the surety under applicable indemnity agreements. Woodbridge reimbursed the surety approximately $85,000 and $122,000 during the three and nine months ended September 30, 2009, respectively, in accordance with the indemnity agreement for bond claims paid during the period. No reimbursements were made in the three or nine month periods ended September 30, 2010. It is unclear whether and to what extent the remaining outstanding surety bonds of Levitt and Sons will be drawn and the extent to which Woodbridge may be responsible for additional amounts beyond the previous accrued amount. Woodbridge will not receive any repayment, assets or other consideration as recovery of any amounts it may be required to pay. In September 2008, a surety filed a lawsuit to require Woodbridge to post collateral against a portion of the surety bonds exposure in connection with demands made by a municipality. While Woodbridge did not believe that the municipality had the right to demand payment under the bonds

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Based on claims by the municipality on the bonds, the surety requested that Woodbridge post a $4.0 million escrow deposit while the matter was being litigated with the municipality and Woodbridge complied with that request. In August 2010, Woodbridge was granted a motion for summary judgment terminating any obligations under the bonds. Subsequent to the motion being granted, the municipality appealed the decision.
          On February 20, 2009, the Bankruptcy Court presiding over the Chapter 11 Cases entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Official Committee of Unsecured Creditors. That order also approved the settlement pursuant to the settlement agreement that was entered into with the Joint Committee of Unsecured Creditors. No appeal or rehearing of the Bankruptcy Court’s order was filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and conditions of the settlement agreement. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the settlement agreement) was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary. Pursuant to the settlement agreement, we agreed to share a percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors Estate. In the fourth quarter of 2009, we accrued approximately $10.7 million in connection with the portion of the tax refund which may be payable to the Debtors Estate pursuant to the settlement agreement. As a result, the gain on settlement of investment in subsidiary for the year ended December 31, 2009 was reduced to $29.7 million. Additionally, in the second quarter of 2010, we increased the $10.7 million accrual by approximately $1.1 million, representing a portion of an additional tax refund which we expect to receive due to a recent change in Internal Revenue Service (“IRS”) guidance that will likely be required to be paid to the Debtors Estate pursuant to the Settlement Agreement. We have placed into escrow approximately $8.4 million, which represents the portion of the tax refund received to date from the Internal Revenue Service that is payable to the Debtors Estate. At September 30, 2010, this amount is included as restricted cash in the Company’s Consolidated Statement of Financial Condition.
          As previously disclosed, under Florida law, holders of Woodbridge’s Class A Common Stock who did not vote to approve the merger between Woodbridge and BFC and properly asserted and exercised their appraisal rights with respect to their shares (“Dissenting Holders”) are entitled to receive a cash payment in an amount equal to the fair value of their shares as determined in accordance with the provisions of Florida law in lieu of the shares of BFC’s Class A Common Stock that they would otherwise have been entitled to receive. Dissenting Holders, who collectively held approximately 4.2 million shares of Woodbridge’s Class A Common Stock, have rejected Woodbridge’s offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of Woodbridge’s Class A Common Stock. Litigation with respect to the appraisal process is currently ongoing. In December 2009, a $4.6 million liability was recorded with a corresponding reduction to additional paid-in capital, which is reflected in the Company’s Consolidated Statements of Financial Condition representing in the aggregate Woodbridge’s offer to the Dissenting Holders. However, outcome of the appraisal rights litigation is uncertain. There is no assurance as to the amount of cash that we will be required to pay to the Dissenting Holders, and such amount may be greater than the $4.6 million that we have accrued.
Bluegreen
Tennessee Tax Audit
          In 2005, the State of Tennessee Audit Division (the “Division”) audited certain subsidiaries within Bluegreen Resorts for the period from December 1, 2001 through December 31, 2004. On September 23, 2006, the Division issued a notice of assessment for approximately $652,000 of accommodations tax based on the use of Bluegreen Vacation Club accommodations by Bluegreen Vacation Club members who became members through the purchase of non-Tennessee property. Bluegreen believes the attempt to impose such a tax is contrary to Tennessee law and has vigorously opposed, and intends to continue to vigorously oppose, such assessment by the Division. An informal conference was held in December 2007 to discuss this matter with representatives of the Division. No formal resolution of the issue was reached during the conference and no further action has to date been initiated by the State of Tennessee. While the timeshare industry has been successful in challenging the imposition of sales taxes on the use of accommodations by timeshare owners, there is no assurance that Bluegreen will be successful in contesting the current assessment.

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Pennsylvania Attorney General Lawsuit
          On October 28, 2008, in Cause No. 479 M.D. 2008, styled Commonwealth of Pennsylvania Acting by Attorney General Thomas W. Corbett, Jr. v. Bluegreen Corporation, Bluegreen Resorts, Bluegreen Vacations Unlimited, Inc. and Great Vacation Destinations, Inc., in the Commonwealth Court of Pennsylvania, the Commonwealth of Pennsylvania acting through its Attorney General filed a lawsuit against Bluegreen Corporation, Bluegreen Resorts, Bluegreen Vacations Unlimited, Inc. and Great Vacation Destinations, Inc. (a wholly owned subsidiary of Bluegreen Corporation) alleging violations of Pennsylvania’s Unfair Trade Practices and Consumer Protection Laws. The lawsuit alleged that Bluegreen used sales and marketing methods or practices that were unlawful under Pennsylvania law and sought a permanent injunction preventing Bluegreen from using such methods and practices in the future. The lawsuit also sought civil penalties and restitution on behalf of Pennsylvania consumers. The lawsuit did not seek to permanently restrain Bluegreen or any of its affiliates from doing business in the Commonwealth of Pennsylvania. The parties reached a settlement on this matter and a consent was signed which received Court approval on May 26, 2010. Pursuant to the terms of the settlement, Bluegreen paid $200,000 to the Attorney General’s Office and agreed to a 30-day trial period within which additional consumers meeting certain eligibility requirements can apply for relief. Bluegreen and the Attorney General’s Office are working together to determine the payments to be made to consumers who applied for relief during the 30-day trial period. Bluegreen does not expect this amount will be material.
Destin, Florida Deposit Dispute Lawsuit
          In Cause No. 2006-Ca-3374, styled Joseph M. Scheyd, Jr., P.A. vs. Bluegreen Vacations Unlimited, Inc.,; Hubert A. Laird; and MSB of Destin, Inc., in the Circuit Court of the First Judicial Circuit in and for Okaloosa County, Florida, the Plaintiff as escrow agent brought an interpleader action seeking a determination as to whether Bluegreen, as purchaser, or Hubert A. Laird and MSB of Destin, Inc. as seller, were entitled to the $1.4 million escrow deposit being maintained with the escrow agent pursuant to a purchase and sale contract for real property located in Destin, Florida. Both Bluegreen and the seller have brought cross-claims for breach of the underlying purchase and sale contract. The seller alleges Bluegreen failed to perform under the terms of the purchase and sale contract and claims entitlement to the amount in escrow. Bluegreen maintains that its decision not to close on the purchase of the property was proper under the terms of the purchase and sale contract and therefore Bluegreen is entitled to a return of the full escrow deposit. The seller amended its complaint to include a fraud count. Bluegreen believes the fraud allegations are without merit and intends to vigorously defend this claim.
Other Matters
     In addition to the matters disclose above, from time to time in the ordinary course of business Bluegreen receives individual consumer complaints, as well as complaints received through regulatory and consumer agencies, including Offices of State Attorney Generals. Bluegreen takes these matters seriously and attempts to resolve any such issues as they arise. Bluegreen’s goal is to cooperate fully with regulatory and consumer agencies with respect to any inquiries they receive.
Mountain Lakes Mineral Rights
          Bluegreen Southwest One, L.P., (“Southwest”), a subsidiary of Bluegreen Corporation, is the developer of the Mountain Lakes subdivision in Texas. In Cause No. 28006, styled Betty Yvon Lesley et a1 v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al., in the 266th Judicial District Court, Erath County, Texas, the plaintiffs filed a declaratory judgment action against Southwest seeking to develop their reserved mineral interests in, on and under the Mountain Lakes subdivision. The plaintiffs’ claims are based on property law, oil and gas law, contract and tort theories. The property owners association and some of the individual landowners have filed cross actions against Bluegreen, Southwest and individual directors of the property owners association related to the mineral rights and certain amenities in the subdivision as described below. On January 17, 2007, the court ruled that the restrictions placed on the development that prohibited oil and gas production and development were invalid and not enforceable as a matter of law, that such restrictions did not prohibit the development of the plaintiffs’ prior reserved mineral interests and that Southwest breached its duty to lease the minerals to third parties for development. The court further ruled that Southwest was the sole holder of the right to lease the minerals to third parties. The order granting the plaintiffs’ motion was severed into a new cause styled Cause No. 28769 Betty Yvon Lesley et a1 v. Bluff Dale Development Corporation, Bluegreen Southwest One. L.P. et al. in the 266th Judicial District Court, Erath County, Texas. Southwest appealed the trial court’s ruling. On January 22, 2009, in Bluegreen Southwest One, L.P. et al. v. Betty Yvon Lesley et al., in the 11th Court of Appeals, Eastland, Texas, the

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Appellate Court reversed the trial court’s decision and ruled in Southwest’s favor and determined that all executive rights were owned by Southwest and then transferred to the individual property owners in connection with the sales of land. All property owner claims were decided in favor of Southwest. It was also decided that Southwest did not breach a fiduciary duty to the plaintiffs as an executive rights holder. On May 14, 2009, the plaintiffs filed an appeal with the Texas Supreme Court asking the Court to reverse the Appellate Court’s decision in favor of Bluegreen. On September 15, 2010 the Court heard oral arguments on whether to reverse or affirm the Appellate Court’s decision. No information is available as to when the Texas Supreme Court will render a decision on the appeal.
          Separately, one of the amenity lakes in the Mountain Lakes development did not reach the expected water level after construction was completed. Owners of homesites within the Mountain Lakes subdivision and the property owners Association of Mountain Lakes have asserted cross claims against Southwest and Bluegreen regarding such failure as part of the Lesley litigation described above as well as in Cause No. 067-223662-07, Property Owners Association of Mountain Lakes Ranch, Inc. v. Bluegreen Southwest One, L.P. et al., in the 67th Judicial District Court of Tarrant County, Texas. This case has been settled and the entire $3.4 million settlement was paid in March of 2010. Additional claims may be pursued in the future by certain individual lot owners within the Mountain Lakes subdivision in connection with these matters, but it is not possible at this time to estimate the likelihood of loss or amount of potential exposure with respect to any such matters, including the likelihood that any such loss may exceed the amount accrued.
Catawba Falls Preserve Homeowner’s Association Demand Letter
          On March 27, 2010, a settlement agreement was executed in connection with the Catawba Falls Preserve Homeowners Association Inc. demand letter, wherein Bluegreen agreed to pay the Association a nominal sum and convey to the Association title to two lots located within the Catawba Falls Preserve subdivision.
Marshall, et al. Lawsuit Regarding Community Amenities
          On September 14, 2009, in Cause No. 09-09-08763-CV, styled William Marshall and Patricia Marshall, et al. v Bluegreen Southwest One, L.P., Bluegreen Southwest Land, Inc., Bluegreen Corporation, Stephen Davis, and Bluegreen Communities of Texas, L.P., Plaintiffs filed this action alleging fraud, negligent misrepresentation, breach of contract, and negligence with regards to the Ridgelake Shores subdivision, developed in Montgomery County, Texas, specifically, the usability of the lakes within the community for fishing and sporting and the general level of quality at the community. The lawsuit seeks material damages and the payment of costs to remediate the lake. On September 10, 2010, a tentative settlement of this matter was reached, pursuant to which Bluegreen agreed to pay $320,000 to provide for improvements to the fish habitat and general usability of the lake environment. The settlement agreement remains subject to certain conditions, including court approval.
Schawrz, et al. Lawsuit Regarding Community Amenities
          On September 18, 2008, in Cause No. 2008-5U-CV-1358-WI, styled Paul A. Schwarz and Barbara S. Schwarz v. Bluegreen Communities of Georgia, LLC and Bluegreen Corporation, Plaintiffs brought suit alleging fraud and misrepresentation with regards to the construction of a marina at the Sanctuary Cove subdivision located in Camden County, Georgia. Plaintiff subsequently withdrew the fraud and misrepresentation counts and filed a count alleging violation of racketeering laws, including mail fraud and wire fraud. On January 25, 2010, Plaintiffs filed a second complaint seeking approval to proceed with the lawsuit as a class action on behalf of more than 100 persons claimed to have been harmed by the alleged activities in a similar manner. Bluegreen has filed a response with the Court in opposition to class certification. No decision has yet been made by the Court as to whether they will certify a class. Bluegreen denies the allegations and intends to vigorously defend the lawsuit.
Community Cable Service, LLC Lawsuit
          On June 3, 2010, in a case captioned Community Cable Service, LLC v. Bluegreen Communities of Georgia, LLC and Sanctuary Cove at St. Andrews Sound Community Association, Inc., a/k/a Sanctuary Cove Home Developers Association, Inc., Case No. 16-2009-CA-008028, in the Circuit Court of the Fourth Judicial Circuit in and for Duval County, Florida, the plaintiffs filed suit alleging breach by the Bluegreen Communities of Georgia and the community association of a bulk cable TV services contract at Bluegreen’s Sanctuary Cove single family residential community being developed in Waverly, Georgia. In its Complaint, the Plaintiffs alleged that approximately $170,000 in unpaid bulk cable fees is due from the defendants, and the non-payment of fees will continue to accrue on a monthly basis. Bluegreen and the community association allege incomplete performance under the contract by plaintiffs and that the cable system installed was inferior and did not comply with the

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requirements of the contract. The case went to mediation on September 20, 2010 but no resolution was reached. Bluegreen intends to vigorously defend the lawsuit.
BankAtlantic Bancorp
          Financial instruments with off-balance sheet risk were (in thousands):
                 
    September 30,     December 31,  
    2010     2009  
Commitments to sell fixed rate residential loans
  $ 22,408       23,255  
Commitments to originate loans held for sale
    19,569       18,708  
Commitments to originate loans held to maturity
    21,632       43,842  
Commitments to purchase residential loans
    8,100        
Commitments to extend credit, including the undisbursed portion of loans in process
    372,724       396,627  
Standby letters of credit
    8,818       13,573  
Commercial lines of credit
    67,428       74,841  
          Standby letters of credit are conditional commitments issued by BankAtlantic to guarantee the performance of a customer to a third party. BankAtlantic’s standby letters of credit are generally issued to customers in the construction industry guaranteeing project performance. These types of standby letters of credit had a maximum exposure of $7.2 million at September 30, 2010. BankAtlantic also issues standby letters of credit to commercial lending customers guaranteeing the payment of goods and services. These types of standby letters of credit had a maximum exposure of $1.6 million at September 30, 2010. These guarantees are primarily issued to support public and private borrowing arrangements and have maturities of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. BankAtlantic may hold certificates of deposit and residential and commercial liens as collateral for such commitments. Included in other liabilities at September 30, 2010 and December 31, 2009 were $4,000 and $5,000, respectively, of unearned guarantee fees. There were no obligations associated with these guarantees recorded in the financial statements.
          Management of BankAtlantic Bancorp, based on discussions with legal counsel, has accrued $1.0 million for legal liabilities and believes its results of operations or financial condition will not be materially impacted by the resolution of these matters. However, there is no assurance that BankAtlantic Bancorp will not incur losses in excess of reserved amounts or in amounts that will be material to its results of operations or financial condition.
Concentration of Credit Risk
          BankAtlantic has a high concentration of its consumer home equity and commercial loans in the State of Florida. Real estate values and general economic conditions have significantly deteriorated since the origination dates of these loans. If market conditions in Florida do not improve or deteriorate further, BankAtlantic may be exposed to significant credit losses in these loan portfolios.
          BankAtlantic purchases residential loans located throughout the country. The majority of these residential loans are jumbo residential loans. A jumbo loan has a principal amount above the industry-standard definition of conventional conforming loan limits. These loans could potentially have outstanding loan balances significantly higher than related collateral values in distressed areas of the country as a result of the decline in real estate values in residential housing markets. Also included in this purchased residential loan portfolio are interest-only loans. The structure of these loans results in possible increases in a borrower’s loan payments when the contractually required repayments change due to interest rate movement and the required amortization of the principal amount. These payment increases could affect a borrower’s ability to meet the debt service on or repay the loan and lead to increased defaults and losses. At September 30, 2010, BankAtlantic’s residential loan portfolio included $600 million of interest-only loans, which represents 48.7% of the residential loan portfolio, with 26.1% of the aggregate principal amount of these interest-only loans secured by collateral located in California. Interest-only residential loans scheduled to become fully amortizing during the three months ended December 31, 2010 and during the year ended December 31, 2011 are $2.1 million and $51.0 million, respectively. If market conditions in the areas where the collateral for BankAtlantic’s residential loans are located do not improve or deteriorate further, BankAtlantic may be exposed to additional losses in this portfolio.

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21. Certain Relationships and Related Party Transactions
          BFC is the controlling shareholder of BankAtlantic Bancorp and Bluegreen. Woodbridge Holdings Corporation became a wholly owned subsidiary of BFC upon consummation of the merger between Woodbridge and BFC on September 21, 2009. Prior to the merger, BFC held an approximately 59% voting interest in Woodbridge. BFC also has a direct non-controlling interest in Benihana. Shares of BFC’s Class A and Class B common stock representing a majority of BFC’s total voting power are owned or controlled by the Company’s Chairman, President and Chief Executive Officer, Alan B. Levan, and by the Company’s Vice Chairman, John E. Abdo, both of whom are also directors of Bluegreen and Benihana, and executive officers and directors of BankAtlantic Bancorp and BankAtlantic.
          The following table presents related party transactions between BFC, BankAtlantic Bancorp and Bluegreen for the three and nine months ended September 30, 2010 and 2009. Woodbridge’s 2009 amounts are included in the amounts set forth for BFC. Amounts related to BankAtlantic Bancorp and BankAtlantic and services provided to Bluegreen after we acquired a controlling interest in Bluegreen (in November 2009) were eliminated in consolidation (in thousands).
                                 
                    BankAtlantic    
            BFC   Bancorp   Bluegreen
For the Three Months Ended September 30, 2010
                               
Shared service income (expense)
    (a )   $ 617       (524 )     (93 )
Facilities cost and information technology
    (b )   $ (145 )     129       16  
 
                               
For the Three Months Ended September 30, 2009
                               
Shared service income (expense)
    (a )   $ 544       (406 )     (138 )
Facilities cost and information technology
    (b )   $ (138 )     127       11  
 
                               
For the Nine Months Ended September 30, 2010
                               
Shared service income (expense)
    (a )   $ 1,886       (1,566 )     (320 )
Facilities cost and information technology
    (b )   $ (425 )     382       43  
 
                               
For the Nine Months Ended September 30, 2009
                               
Shared service income (expense)
    (a )   $ 1,723       (1,312 )     (411 )
Facilities cost and information technology
    (b )   $ (395 )     353       42  
 
(a)   Pursuant to the terms of shared service agreements between BFC and BankAtlantic Bancorp, subsidiaries of BFC provide human resources, risk management, investor relations, executive office administration and other services to BankAtlantic Bancorp. Additionally, BFC provides certain risk management and administrative services to Bluegreen. The costs of shared services are allocated based upon the usage of the respective services.
 
(b)   As part of the shared service arrangement, BFC pays BankAtlantic and Bluegreen for office facilities cost relating to BFC and its shared service operations. BFC also pays BankAtlantic for information technology related services pursuant to a separate agreement. For information technology related services, BFC paid BankAtlantic approximately $45,000 during each of the three month periods ended September 30, 2010 and 2009, and $135,000 and $115,000 during the nine months ended September 30, 2010 and 2009, respectively.
          As of September 30, 2010 and December 31, 2009, the Company had cash and cash equivalents accounts at BankAtlantic with balances of approximately $4.4 million and $20.9 million, respectively. These accounts were on the same general terms as deposits made by unaffiliated third parties. Additionally, during 2009, the Company invested funds through the Certificate of Deposit Account Registry Service (“CDARS”) program at BankAtlantic, which facilitates the placement of funds into certificates of deposits issued by other financial institutions in increments of less than the standard FDIC insurance maximum to insure that both principal and interest are eligible for full FDIC insurance coverage. At December 31, 2009, the Company had $7.7 million invested through the CDARS program at BankAtlantic. The Company did not have any funds invested through the CDARS program at BankAtlantic at September 30, 2010. The aggregate interest income recognized by the Company in connection with these funds held at BankAtlantic was approximately $4,000 and $6,000 for the three months ended September 30, 2010 and 2009, respectively, and $5,000 and $34,000 for the nine months ended September 30, 2010 and 2009, respectively.

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          In June 2010, BankAtlantic Bancorp and BankAtlantic entered into a real estate advisory service agreement with BFC for assistance relating to the work-out of loans and the sale of real estate owned. BFC will receive a monthly fee of $12,500 from each of BankAtlantic and BankAtlantic Bancorp Parent Company and if BFC’s efforts result in net recoveries of any nonperforming loan or the sale of real estate owned, BFC will receive a fee equal to 1% of the net value recovered. During the three and nine months ended September 30, 2010, BFC recognized $110,000 and $335,000, respectively, of real estate advisory service fees under this agreement.
          On June 28, 2010, BFC loaned approximately $8.0 million to BankAtlantic Bancorp, and BankAtlantic Bancorp executed a promissory note agreement in favor of BFC with a maturity date of July 30, 2010. The note provided for payment either in cash or shares of BankAtlantic Bancorp’s Class A Common Stock, depending on the results of BankAtlantic Bancorp’s Rights Offering and the number of shares allocable to BFC pursuant to its exercise of its subscription rights in the Rights Offering. In July 2010, BankAtlantic Bancorp satisfied the promissory note in full through the issuance of 5,302,816 shares of BankAtlantic Bancorp’s Class A Common Stock to BFC. These shares were in addition to the 4,697,184 shares previously issued to BFC in the Rights Offering.
          The Company leases office space to Pizza Fusion for approximately $68,000 annually pursuant to a month-to-month lease which commenced in September 2008. During the nine months ended September 30, 2010 and 2009, Pizza Fusion paid approximately $48,000 and $51,000, respectively, under this lease agreement.
          During the nine months ended September 30, 2010 and 2009, we were reimbursed approximately $2.3 million and $1.1 million, respectively, from Bluegreen for various advisory services and certain expenses incurred in assisting Bluegreen in its efforts to explore potential additional sources of liquidity.
          During December 2009, BFC’s wholly owned subsidiary, Snapper Creek Equity Management, LLC, was engaged by Benihana to provide certain management, financial advisory and other consulting services. For the nine months ended September 30, 2010, the consulting fees payable to Snapper Creek Equity Management under this arrangement were approximately $350,000. In 2010, Benihana engaged Risk Management Services (“RMS”), a wholly-owned subsidiary of BFC, to provide insurance and risk management services. Fees owed to RMS under this arrangement were approximately $45,000 for the nine months ended September 30, 2010.
          In prior periods, BankAtlantic Bancorp issued options to purchase shares of its Class A common stock to employees of Woodbridge prior to the 2004 spin-off of Woodbridge to BankAtlantic Bancorp’s shareholders. Additionally, certain employees of BankAtlantic Bancorp have transferred to affiliate companies and BankAtlantic Bancorp has elected, in accordance with the terms of BankAtlantic Bancorp’s stock option plans, not to cancel the stock options held by those former employees. BankAtlantic Bancorp accounts for these options to former employees as employee stock options because these individuals were employees of BankAtlantic Bancorp on the grant date.
          Outstanding options to purchase BankAtlantic Bancorp stock held by former employees consisted of the following as of September 30, 2010:
                 
    Class A   Weighted
    Common   Average
    Stock   Price
Options outstanding
    44,176     $ 52.38  
          During 2007, BankAtlantic Bancorp issued to BFC employees that performed services for BankAtlantic Bancorp options to acquire 9,800 shares of BankAtlantic Bancorp’s Class A common stock at an exercise price of $46.90. These options vest in five years and expire ten years from the grant date. BankAtlantic recorded $12,000 and $37,000 of service provider expenses relating to these options for the three and nine months ended September 30, 2010 and 2009, respectively.
          Certain of the Company’s affiliates, including its executive officers, have independently made investments with their own funds in both public and private entities that the Company sponsored in 2001 and in which it holds investments.
          Florida Partners Corporation owns 133,314 shares of the Company’s Class B Common Stock and 1,270,294 shares of the Company’s Class A Common Stock. Alan B. Levan may be deemed to be the controlling shareholder of Florida Partners Corporation, and is also a member of its Board of Directors.

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22. Loss Per Common Share
          The following table presents the computation of basic and diluted loss per common share attributable to the Company (in thousands, except for per share data):
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
    2010     2009     2010     2009  
Basic (loss) earnings per common share
                               
Numerator:
                               
Loss from continuing operations
  $ (38,861 )     (96,342 )     (120,021 )     (168,436 )
Less: Noncontrolling interests loss from continuing operations
    (11,239 )     (43,193 )     (52,919 )     (90,874 )
 
                       
Loss attributable to BFC
    (27,622 )     (53,149 )     (67,102 )     (77,562 )
Preferred stock dividends
    (188 )     (188 )     (563 )     (563 )
 
                       
Loss allocable to common stock
    (27,810 )     (53,337 )     (67,665 )     (78,125 )
 
                       
 
                               
(Loss) income from discontinued operations
          (1,367 )     2,465       2,169  
Less: Noncontrolling interests (loss) income from discontinued operations
          (504 )           1,931  
 
                       
Discontinued operations attributable to BFC
          (863 )     2,465       238  
 
                       
 
                               
 
                       
Net loss allocable to common shareholders
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       
 
                               
Denominator:
                               
 
                       
Basic weighted average number of common shares outstanding
    75,381       49,509       75,379       46,599  
 
                       
 
                               
Basic (loss) earnings per common share:
                               
Loss per share from continuing operations
  $ (0.37 )     (1.08 )     (0.90 )     (1.68 )
Earnings (loss) per share from discontinued operations
          (0.01 )     0.03       0.01  
 
                       
Basic loss per share
  $ (0.37 )     (1.09 )     (0.87 )     (1.67 )
 
                       
 
                               
Diluted earnings (loss) per common share:
                               
Numerator:
                               
Loss allocable to common stock
  $ (27,810 )     (53,337 )     (67,665 )     (78,125 )
Income (loss) from discontinued operations allocable to common stock
          (863 )     2,465       238  
 
                       
Net loss allocable to common stock
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       
 
                               
Denominator
                               
 
                       
Diluted weighted average number of common shares outstanding
    75,381       49,509       75,379       46,599  
 
                       
 
                               
Diluted (loss) earnings per share
                               
Loss per share from continuing operations
  $ (0.37 )     (1.08 )     (0.90 )     (1.68 )
Earnings (loss) per share from discontinued operations
          (0.01 )     0.03       0.01  
 
                       
Diluted loss per share
  $ (0.37 )     (1.09 )     (0.87 )     (1.67 )
 
                       
          During each of the three month periods ended September 30, 2010 and 2009 and each of the nine month periods ended September 30, 2010 and 2009, options to acquire 2,494,779 shares of Class A Common Stock and 2,530,983 shares of Class A Common Stock, respectively, were anti-dilutive and not included in the calculation of diluted loss per share.

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23. Parent Company Financial Information
          BFC’s parent company accounting policies are generally the same as those described in the summary of significant accounting policies appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The Company’s investments in BankAtlantic Bancorp, Bluegreen and the Company’s wholly-owned subsidiaries and venture partnerships are presented in the parent company financial statements as if accounted for using the equity method of accounting.
          BFC’s parent company unaudited condensed statements of financial condition at September 30, 2010 and December 31, 2009, unaudited condensed statements of operations for the three and nine month periods ended September 30, 2010 and 2009 and unaudited condensed statements of cash flows for the nine months ended September 30, 2010 and 2009 are shown below:
Parent Company Condensed Statements of Financial Condition
(In thousands)
                 
    September 30,     December 31,  
    2010     2009  
Assets
               
Cash and cash equivalents
  $ 5,678       1,308  
Securities available for sale
    42,084       18,981  
Investment in Woodbridge Holdings, LLC
    132,920       197,264  
Investment in BankAtlantic Bancorp, Inc.
    23,442       47,555  
Investment in and advances in other subsidiaries
    1,955       2,218  
Other assets
    1,771       1,279  
 
           
Total assets
  $ 207,850       268,605  
 
           
 
               
Liabilities and Shareholders’ Equity
               
Advances from wholly owned subsidiaries
  $ 935       818  
Other liabilities
    11,633       11,699  
 
           
Total liabilities
    12,568       12,517  
 
           
 
               
Redeemable 5% Cumulative Preferred Stock
    11,029       11,029  
 
               
Shareholders’ equity
    184,253       245,059  
 
           
Total liabilities and shareholders’ equity
  $ 207,850       268,605  
 
           
Parent Company Condensed Statements of Operations
(In thousands)
                                 
    For the Three Months     For the Nine Months  
    Ended September 30,     Ended September 30,  
    2010     2009     2010     2009  
Revenues
  $ 393       280       1,198       896  
Expenses
    2,206       2,669       6,752       6,704  
 
                       
(Loss) before earnings (loss) from subsidiaries
    (1,813 )     (2,389 )     (5,554 )     (5,808 )
Equity loss from Woodbridge Holdings, LLC
    (14,118 )     (35,778 )     (22,667 )     (31,850 )
Equity loss from BankAtlantic Bancorp
    (11,489 )     (15,057 )     (38,522 )     (39,880 )
Equity (loss) earnings from other subsidiaries
    (202 )     75       (359 )     (24 )
 
                       
Loss before income taxes
    (27,622 )     (53,149 )     (67,102 )     (77,562 )
Income taxes
                       
 
                       
Loss from continuing operations
    (27,622 )     (53,149 )     (67,102 )     (77,562 )
Equity earnings from subsidiaries’ discontinued operations
          (863 )     2,465       238  
 
                       
Net loss
    (27,622 )     (54,012 )     (64,637 )     (77,324 )
5% Preferred Stock dividends
    (188 )     (188 )     (563 )     (563 )
 
                       
Net loss allocable to common stock
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       

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Parent Company Statements of Cash Flow
(In thousands)
                 
    For the Nine Months  
    Ended September 30,  
    2010     2009  
Operating Activities:
               
Net cash used in operating activities
  $ (5,724 )     (5,110 )
 
           
 
               
Investing Activities:
               
Purchase of securities available for sale
    (46,174 )     (1,508 )
Proceeds from sales of securities available for sale
    2,498       400  
Proceeds from maturities of securities available for sale
    24,246        
Distribution from subsidiaries
    45,085       30,084  
Acquisition of BankAtlantic Bancorp Class A shares
    (15,000 )     (29,888 )
 
           
Net cash provided by investing activities
    10,655       (912 )
 
           
 
               
Financing Activities:
               
Proceeds from issuance of Common Stock upon exercise of stock option
    2        
Preferred stock dividends paid
    (563 )     (563 )
 
           
Net cash used in financing activities
    (561 )     (563 )
 
           
Increase (decrease) in cash and cash equivalents
    4,370       (6,585 )
Cash at beginning of period
    1,308       9,218  
 
           
Cash at end of period
  $ 5,678       2,633  
 
           
 
               
Supplementary disclosure of non-cash investing and financing activities
               
BFC and Woodbridge Merger related transactions:
               
Increase in BFC’s Class A Common Stock
  $       448  
Increase in additional paid-in capital
          99,135  
Decrease in BFC’s non-controlling interest in Woodbridge
          (99,583 )
Net increase in shareholders’ equity from the effect of subsidiaries’ capital transactions, net of income taxes
    1,772       7,818  
Increase in accumulated other comprehensive income, net of taxes
    2,951       10,919  
BFC’s prorata share of the cumulative effect of accounting changes recognized by Bluegreen
          485  
Net decrease in shareholders’ equity resulting from cumulative effect of change in accounting principle
    (1,212 )      
          During the nine months ended September 30, 2010, BFC received $45 million of cash dividends from Woodbridge. BFC did not receive cash dividends from BankAtlantic Bancorp during the period. For the nine months ended September 30, 2009, BFC received cash dividends of $30.8 million, which included $30.0 million from Woodbridge and $84,000 from BankAtlantic Bancorp.
          At September 30, 2010 and December 31, 2009, securities available for sale included approximately $20.6 million and $1.1 million, respectively, of readily marketable securities, as well as our investment in Benihana’s Convertible Preferred Stock of $21.4 million and $17.8 million at September 30, 2010 and December 31, 2009, respectively.
24. Litigation
          Except as set forth below, there have been no material changes in our legal proceedings from those previously disclosed in Note 23 in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and Note 24 in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010 (see also Note 20 in this report for information relating to all of Bluegreen’s material legal proceedings).

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In re BankAtlantic Bancorp, Inc. Securities Litigation, No. 0:07-cv-61542-UU, United States District Court, Southern District of Florida
          On October 29, 2007, Joseph C. Hubbard filed a purported class action in the United States District Court for the Southern District of Florida against BankAtlantic Bancorp and four of its current or former officers. The Defendants in this action are BankAtlantic Bancorp, Inc., James A. White, Valerie C. Toalson, Jarett S. Levan, and Alan B. Levan. The Complaint, which was later amended, alleges that during the purported class period of November 9, 2005 through October 25, 2007, BankAtlantic Bancorp and the named officers knowingly and/or recklessly made misrepresentations of material fact regarding BankAtlantic and specifically BankAtlantic’s loan portfolio and allowance for loan losses. The Complaint seeks to assert claims for violations of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and seeks unspecified damages. On December 12, 2007, the Court consolidated into Hubbard a separately filed action captioned Alarm Specialties, Inc. v. BankAtlantic Bancorp, Inc., No. 0:07—cv-61623-WPD. On February 5, 2008, the Court appointed State-Boston Retirement System lead plaintiff and Lubaton Sucharow LLP to serve as lead counsel pursuant to the provisions of the Private Securities Litigation Reform Act. BankAtlantic Bancorp believes the claims to be without merit and intends to vigorously defend the actions. A jury trial on these claims commenced on October 12, 2010 and the jury is currently in deliberations. Plaintiffs are seeking damages with respect to shares that were purchased during and held throughout the class period of $0.37 per share for a portion of the class period and $2.93 per share for another portion of the class period. As the number of shares for which any damage claim could be asserted is not determinable at this time, the amount of any loss that might be incurred by BankAtlantic Bancorp if the claims are decided against BankAtlantic Bancorp cannot be reasonably estimated.
Surety Bond Claim (Westchester Fire Insurance Company v. City of Brooksville)
          This litigation arose from a dispute regarding liability under two performance bonds for infrastructure issued in connection with a plat issued by the City of Brooksville for a single family housing project that was not commenced. The project had been abandoned by Levitt and Sons prior to its bankruptcy filing as non-viable as a consequence of the economic downturn and, in connection with the Levitt and Sons bankruptcy, the mortgagee, Key Bank, was permitted by agreement to initiate and conclude a foreclosure leading to the acquisition of the property by Key Bank’s subsidiary. The City of Brooksville contended that, notwithstanding that the development had not proceeded and was not likely to proceed at any known time in the future, it was entitled to recover the face of the amount of the bonds in the approximate amount of $5.4 million. The company filed a suit for declaratory judgment (in the name of its surety, Westchester) against the City of Brooksville contending that the obligation under the bonds had terminated. In August 2010, Woodbridge was granted a motion for summary judgment terminating any obligations under the bonds. Subsequent to the motion being granted, the municipality appealed the decision.
National Bank of South Carolina v. Core Communities of South Carolina, LLC, et al., South Carolina Court of Common Pleas, Fourteenth Judicial Circuit
          On January 13, 2010, National Bank of South Carolina filed a complaint in the South Carolina Court of Common Pleas, Fourteenth Judicial Circuit, to commence foreclosure proceedings related to property at Tradition Hilton Head which served as collateral under a note and mortgage executed and delivered by Core South Carolina, LLC, a wholly-owned subsidiary of Core, in favor of the lender. With Core’s concurrence, the property was subsequently placed under the control of a receiver appointed by the court. Core is secondarily liable to the lender as a guarantor but was not a party to the action.
          On September 1, 2010, Synovus Bank (successor by merger to National Bank of South Carolina) commenced an action to enforce the guarantee executed by Core in connection with the loan transactions between Core South Carolina, LLC and National Bank of South Carolina. Through this action, Synovus Bank seeks to collect on approximately $25 million of indebtedness guaranteed by Core. On October 25, 2010, Core filed an answer and affirmative defenses asserting, among other things, that the claim on the guarantee is not ripe given the bank’s election to first foreclose against the underlying collateral. In addition, Core has raised additional equitable defenses to the claim on the guarantee. Discovery in the case has not yet commenced, and the trial date has been set. The amount of Core’s liability, if any, in this litigation has not been established.

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Investors Warranty of America, Inc. v. Core Communities of South Carolina, LLC and Core Communities, LLC, et. al., Circuit Court, Jasper County, South Carolina, and
Investors Warranty of America, Inc. v. Core Communities, LLC and Horizons Acquisition 5, LLC, Circuit Court of the Nineteenth Judicial Circuit in and for St. Lucie County, Florida
     On September 8, 2010, Core and the other defendants entered into an agreement with the Investors Warranty of America, among other parties, relating to foreclosure proceedings. Investors Warranty of America previously commenced foreclosure proceedings on property located in Florida and South Carolina which serves as collateral under loans which Core has defaulted on. Subsequently, Investors Warranty of America assigned and conveyed its interests in both the Florida and South Carolina loan facilities to PSL Acquisitions, LLC (“PSLA”). On November 8, 2010, Core and its applicable subsidiaries, on the one hand, and PSLA, on the other hand, executed an agreement which, upon the occurrence of certain events and subject to certain exceptions, provides for the resolution of the disputes between them. Pursuant to the agreement, Core and its subsidiaries agreed to, among other things, (i) pledge additional collateral to PSLA consisting of membership interests in certain subsidiaries of Core, (ii) grant security interests in the acreage owned by the subsidiaries in Port St. Lucie, Florida, substantially all of which is undeveloped raw land, (iii) the amendment of the complaint related to the Florida foreclosure action to include this additional collateral and (iv) the entry into consensual judgments of foreclosure in both foreclosure actions. Core also agreed to cooperate with PSLA in connection with the enforcement of its remedies against the collateral. PSLA has agreed, upon the occurrence of certain events and subject to certain exceptions, not to enforce a deficiency judgment against Core and has released Core from any other claims arising from or relating to the loans.
          In the ordinary course of business, the Company and its subsidiaries are also parties to proceedings or lawsuits as plaintiff or defendant involving its operations and activities. Although the Company believes it has meritorious defenses in the pending legal actions and that the outcomes of these pending legal matters should not materially impact us, the ultimate outcomes of these matters are uncertain.
25. Restructuring Charges and Exit Activities
          Restructuring charges and exit activities includes employee termination costs, lease contracts executed for branch expansion and real estate acquired for branch expansion. The following table provides information regarding liabilities associated with restructuring charges and exit activities (in thousands):
                                         
    Severance                    
    Related and           Independent   Surety    
    Benefits   Contract   Contractor   Bond    
    Liability   Liability   Agreements   Accrual   Total
         
Balance at January 1, 2009
  $ 300       2,166       597       1,144       4,207  
Expenses incurred
    2,106       1,666       43       (49 )     3,766  
Cash payments
    (2,277 )     (384 )     (532 )     (122 )     (3,315 )
         
Balance at September 30, 2009
  $ 129       3,448       108       973       4,658  
         
                                         
    Severance                    
    Related                    
    and           Lease   Surety    
    Benefits   Contract   Termination   Bond    
    Liability   Liability   Obligation   Accrual   Total
         
Balance at January 1, 2010
  $ 1,124       3,925       1,720       527       7,296  
Expenses incurred
    2,234       1,308       (15 )           3,527  
Amounts paid or amortized
    (1,994 )     (604 )     (777 )     (37 )     (3,412 )
         
Balance at September 30, 2010
  $ 1,364       4,629       928       490       7,411  
         
          In March 2009, BankAtlantic Bancorp reduced its workforce by approximately 130 associates, or 7%, impacting back-office functions as well as our community banking and commercial lending business units. BankAtlantic Bancorp incurred $2.0 million of employee termination costs which were included in the Company’s consolidated statements of operations for the nine months ended September 30, 2009.

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          In July 2010, BankAtlantic Bancorp reduced its workforce by approximately 105 associates, or 7%, again impacting both back-office functions and community banking and commercial business lending units. BankAtlantic Bancorp incurred $2.1 million of employee termination costs which are included in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2010.
          Beginning in December 2007, BankAtlantic terminated leases or sought to sublease properties that it had previously leased for future branch expansion. These operating leases were fair valued and are amortized to rent expense until the leases are terminated or subleased. BankAtlantic is actively seeking tenants for potential sub-leases or unrelated third parties to assume the lease obligations. During the nine months ended September 30, 2010 and 2009, BankAtlantic Bancorp recognized $1.3 million and $1.7 million, respectively, of contract termination liabilities in connection with operating leases executed for future branch expansion. During the nine months ended September 30, 2010, BankAtlantic recognized $1.5 million of additional impairments on real estate acquired for branch expansion. In addition, during the nine months ended September 30, 2010, BankAtlantic transferred a recently constructed $1.9 million branch facility to real estate held for sale based on its decision to seek a buyer for the asset. BankAtlantic also transferred $1.3 million of land from real estate held for sale to property held for use as BankAtlantic suspended efforts to seek a buyer due to adverse real estate market conditions in the area where the land was located.
          Lease termination obligation includes costs associated with non-cancelable property and equipment leases that Bluegreen has ceased to use, as well as termination fees related to the cancellation of certain contractual lease obligations at Bluegreen.
          At September 30, 2010 Woodbridge had $490,000 in surety bond accruals related to certain bonds where management believes it to be probable that Woodbridge will be required to reimburse the surety under applicable indemnity agreements. Woodbridge reimbursed the surety approximately $85,000 and $122,000 during the three and nine months ended September 30, 2009, respectively, in accordance with the indemnity agreement for bond claims paid during the period. No reimbursements were made in the three or nine month periods ended September 30, 2010.
26. New Accounting Pronouncements
          Beginning with the period ended March 31, 2010, new accounting guidance was implemented requiring the following additional disclosure regarding fair value measurements: (1) transfers in and out of Level 1 and 2 measurements and the reasons for the transfers, and (2) a presentation of gross activity within the Level 3 roll forward. The guidance also included clarifications to existing disclosure requirements on the level of disaggregation and disclosures regarding inputs and valuation techniques. The guidance is applicable to all disclosures about recurring and nonrecurring fair value measurements. The effective date of the guidance was the first interim or annual reporting period beginning after December 15, 2009, except for the gross presentation of the Level 3 roll forward information, which is required for annual reporting periods beginning after December 15, 2010 and for interim reporting periods within those years. The additional disclosures made in accordance with this new guidance did not have a material effect on the Company’s financial statements.
          In July 2010, the FASB issued new disclosure guidance about the “Credit Quality of Financing Receivables and the Allowance for Credit Losses.” The new guidance provides enhanced disclosures related to the credit quality of financing receivables, which includes the Company’s loans receivable and the allowance for credit losses, and provides that new and existing disclosures should be disaggregated based on how an entity develops its allowance for credit losses and how it manages credit exposures. Under the new guidance, additional disclosures required for loans receivable include information regarding the aging of past due receivables, credit quality indicators, and modifications of financing receivables. The new guidance is effective for periods ending after December 15, 2010, with the exception of the amendments to the roll forward of the allowance for credit losses and the disclosures about modifications which are effective for periods beginning after December 15, 2010. Comparative disclosures are required only for periods ending subsequent to initial adoption. The Company does not currently believe that the new guidance will have a material effect on the Company’s financial statements.

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27. Subsequent Event
          In October 2010, the Bluegreen/Big Cedar Joint Venture acquired Paradise Point Resort, which is located in close proximity to the existing Wilderness Club at Big Cedar in Ridgedale, Missouri. The Paradise Point Resort acquisition consisted of land, completed residential units (consisting of both condominium and timeshare units), the right to construct additional VOI units on the acquired property, as well as a clubhouse and related recreational areas. The property was acquired with the intent to expand the amount of completed VOI inventory available for sale by the Bluegreen/Big Cedar Joint Venture as well as to develop and sell new VOI inventory in the future. In connection with the acquisition, Bluegreen has assumed management of the property. The purchase price of Paradise Point Resort was $7.7 million, of which $2.3 million was paid in cash and the balance of $5.4 million was financed with a note payable to Foundation Capital Resources, Inc., a lender affiliated with the seller. The acquisition will be accounted for as a purchase of a business. Bluegreen is in the process of determining the fair values of the assets and the liabilities acquired.
          Additionally, in a separate transaction in October 2010, the Bluegreen/Big Cedar Joint Venture acquired a 109-acre development parcel, located adjacent to the existing Wilderness Club at Big Cedar, from an affiliate of Big Cedar, LLC. The parcel was acquired with the intent to develop future VOI inventory for sale by the Bluegreen/Big Cedar Joint Venture. The purchase price of the parcel was $10.0 million, of which $2.3 million was paid in cash and the balance of $7.7 million was financed with a note payable to Foundation Capital Resources, Inc. Concurrent with the acquisition of the 109-acre parcel, the expiration date of the exclusive marketing agreement between Bluegreen and Bass Pro, Inc., an affiliate of Big Cedar, LLC, was extended from January of 2015 to January of 2025.
          Both notes payable to Foundation Capital Resources, Inc. have maturities of five years (the note underlying the 109-acre parcel purchase has a two-year extension provision subject to certain conditions) and bear interest at a rate of 8% for three years, which then adjusts to the lower of Prime plus 4.75% or the lender specified rate, not to exceed 9%. Repayments of the notes will be based upon the release payments from future sales of VOIs located on the underlying properties, subject to minimum payments stipulated in the agreements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and
Results of Operations
Overview
          The objective of the following discussion is to provide an understanding of the financial condition and results of operations of BFC Financial Corporation and its subsidiaries for the three and nine months ended September 30, 2010 and 2009. As of September 30, 2010, BFC had total assets of approximately $6.0 billion, liabilities of approximately $5.7 billion and equity of approximately $290.2 million, including noncontrolling interest of approximately $106.0 million.
          BFC Financial Corporation (“BFC” or, unless otherwise indicated or the context otherwise requires, “we”, “us”, “our” or the “Company”) is a diversified holding company whose principal holdings include a controlling interest in BankAtlantic Bancorp, Inc. and its subsidiaries, including BankAtlantic (“BankAtlantic Bancorp”), a controlling interest in Bluegreen Corporation and its subsidiaries (“Bluegreen”), and a non-controlling interest in Benihana, Inc. (“Benihana”). BFC also holds interests in other investments and subsidiaries, including Core Communities, LLC and its subsidiaries (“Core” or “Core Communities”). As a result of its position as the controlling shareholder of BankAtlantic Bancorp, BFC is a “unitary savings bank holding company” regulated by the Office of Thrift Supervision (“OTS”).
          Historically, BFC’s business strategy has been to invest in and acquire businesses in diverse industries either directly or through controlled subsidiaries. However, BFC believes that, in the short term, the Company’s and its shareholders’ interests are best served by BFC providing strategic support to its existing investments. In furtherance of this strategy, the Company took several steps in 2009 and 2010, including those described below, which it believes will enhance the Company’s prospects. During the third quarter of 2009, BFC and Woodbridge Holdings Corporation consummated their merger pursuant to which Woodbridge became a wholly-owned subsidiary of BFC. During the fourth quarter of 2009, our ownership interest in Bluegreen increased to 52% as a result of the purchase of an additional 23% interest in Bluegreen. The acquisition of this control position in Bluegreen resulted in a “bargain purchase gain” under generally accepted accounting principles (“GAAP”) of approximately $183.1 million in the fourth quarter of 2009. We have also increased our investment in BankAtlantic Bancorp through our participation in BankAtlantic Bancorp’s rights offerings to its shareholders during the third quarter of 2009 and the second quarter of 2010 (as described below), which in the aggregate increased our economic interest in BankAtlantic Bancorp to 45% and our voting interest in BankAtlantic Bancorp to 71%. In addition, we have taken actions to restructure Core in recognition of the continued depressed real estate market and Core’s inability to meet its obligations, as described further in Note 3 of the Notes to Unaudited Consolidated Financial Statements. In the future, we will consider other opportunities that could alter our ownership in our affiliates or seek to make opportunistic investments outside of our existing portfolio; however, we do not currently have pre-determined parameters as to the industry or structure of any future investment. In furtherance of our goals, we will continue to evaluate various financing transactions that may present themselves, including raising additional debt or equity as well as other alternative sources of new capital.
          During July 2010, Benihana announced its intention to engage in a formal review of strategic alternatives, including a possible sale of the company. Benihana has since engaged an investment banker to assist it in pursuing a sale of the Company. BFC is supportive of Benihana in achieving its objectives.
          On June 18, 2010, BankAtlantic Bancorp commenced a rights offering (the “Rights Offering”) to its shareholders of record as of the close of business on June 14, 2010 (the “Record Date”). In the Rights Offering, BankAtlantic Bancorp distributed to each eligible shareholder 0.327 subscription rights for each share of BankAtlantic Bancorp’s Class A Common Stock and Class B Common Stock owned as of the close of business on the Record Date. Fractional subscription rights were rounded up to the next largest whole number. Each subscription right entitled the holder thereof to purchase one share of BankAtlantic Bancorp’s Class A Common Stock at the purchase price of $1.50 per share. Shareholders who exercised their Basic Subscription Rights in full were also given the opportunity to request to purchase any additional shares of BankAtlantic Bancorp’s Class A Common Stock that remained unsubscribed for at the expiration of the Rights Offering at the same $1.50 per share purchase price. The Rights Offering expired on July 20, 2010.
          BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock in the Rights Offering. BFC exercised its basic subscription rights to purchase 5,986,865 shares, and the remaining 4,013,135 shares were acquired by BFC pursuant to its over-subscription request. The purchase of these shares in

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the Rights Offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71%.
          As previously disclosed, on September 21, 2009, we consummated our merger with Woodbridge Holdings Corporation pursuant to which Woodbridge Holdings Corporation merged with and into Woodbridge Holdings, LLC, our wholly-owned subsidiary which continued as the surviving company of the merger and the successor entity to Woodbridge Holdings Corporation. Pursuant to the terms of the merger each outstanding share of Woodbridge’s Class A Common Stock (other than those held by Dissenting Holders) automatically converted into the right to receive 3.47 shares of our Class A Common Stock. Shares otherwise issuable to us attributable to the shares of Woodbridge’s Class A Common Stock and Class B Common Stock owned by us were canceled in connection with the merger. As a result of the merger, Woodbridge Holdings Corporation’s separate corporate existence ceased and its Class A Common Stock is no longer publicly traded.
          On November 16, 2009, an additional 7.4 million shares of the common stock of Bluegreen were purchased for an aggregate purchase price of approximately $23 million, increasing our ownership interest to approximately 16.9 million shares, or approximately 52%, of Bluegreen’s outstanding common stock. Accordingly, we are deemed to have a controlling interest in Bluegreen and, under generally accepted accounting principles (“GAAP”), Bluegreen’s results since November 16, 2009, the date of the share purchase, are consolidated in BFC’s financial statements. Prior to November 16, 2009, the investment in Bluegreen’s shares represented approximately 29% of Bluegreen’s common stock and was accounted for using the equity method.
          GAAP requires that BFC consolidate the financial results of the entities in which it has a controlling interest. As a consequence, the assets and liabilities of all such entities are presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of the consolidated entities, including BankAtlantic Bancorp, Bluegreen, Woodbridge and Core, are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent a dividend or distribution from those entities, which may be limited or restricted. The recognition by BFC of income from controlled entities is determined based on the total percent of economic ownership in those entities. At September 30, 2010, we owned approximately 52% of Bluegreen’s common stock and had an approximately 45% ownership interest and 71% voting interest in BankAtlantic Bancorp.
          On February 20, 2009, the Bankruptcy Court presiding over the Levitt and Sons Chapter 11 Cases entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Official Committee of Unsecured Creditors. That order also approved the settlement pursuant to the settlement agreement that was entered into with the Joint Committee of Unsecured Creditors. No appeal or rehearing of the Bankruptcy Court’s order was filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and conditions of the settlement agreement. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the settlement agreement) was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary. As discussed further in this report, recent tax law changes have resulted in the receipt of tax refunds, and pursuant to the settlement agreement, we agreed to share a percentage of any tax refund attributable to periods prior to the bankruptcy with the Debtors Estate. At September 30, 2010 and December 31, 2009, we have a liability of approximately $11.8 million and $10.7 million, respectively, in connection with the portion of the tax refund which may be payable to the Debtors Estate pursuant to the settlement agreement. We have placed into escrow approximately $8.4 million, which represents the portion of the tax refund received to date from the Internal Revenue Service that is payable to the Debtors Estate. At September 30, 2010, this amount is included as restricted cash in the Company’s Consolidated Statement of Financial Condition.
          In December 2009, Core Communities reinitiated efforts to sell two of its commercial leasing projects (the “Projects”) and began soliciting bids from several potential buyers to purchase assets associated with the Projects. Due to this decision, the assets associated with the Projects were reclassified as assets held for sale and the liabilities related to these assets were reclassified as liabilities related to assets held for sale in the Consolidated Statements of Financial Condition. Additionally, the results of operations for the Projects are included in the Company’s Consolidated Statements of Operations in discontinued operations for the three and nine month periods ended September 30, 2009 and the nine month period ended September 30, 2010. On June 10, 2010, Core sold the Projects for approximately $75.4 million. As a result of the sale, a $2.6 million gain on sale of discontinued operations was realized in the second quarter of 2010. See Note 5 of the “Notes to Unaudited Consolidated Financial Statements” for further information.

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          On January 1, 2010, BFC, Bluegreen and BankAtlantic Bancorp adopted an amendment to the accounting guidance associated with the consolidation of variable interest entities (“VIEs”) and the accounting guidance for transfers of financial assets. The adoption of these standards resulted in Bluegreen consolidating seven of its special purpose finance entities and BankAtlantic Bancorp consolidating its joint venture that conducts a factoring business. For further information, see Note 2 of the “Notes to Unaudited Consolidated Financial Statements”.
          As a result of the Woodbridge merger on September 21, 2009 and the Bluegreen share acquisition on November 16, 2009, the Company reorganized its reportable segments to better align its segments with the current operations of its businesses. The Company’s business activities currently consist of (i) Real Estate and Other Activities and (ii) Financial Services. The Company currently reports the results of operations of its business activities through six reportable segments: BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, and the two reportable segments through which Financial Services activities are conducted, BankAtlantic and BankAtlantic Bancorp Parent Company. As a result of this reorganization, our BFC Activities segment now includes activities formerly reported in the Woodbridge Other Operations segment, and our Real Estate Operations segment is comprised of what was previously identified as the Land Division. Bluegreen’s results of operations since November 16, 2009 are reported through the Bluegreen Resorts and Bluegreen Communities segments. Prior to November 16, 2009, when we owned approximately 9.5 million shares of Bluegreen’s common stock, representing approximately 29% of such stock, the investment in Bluegreen was accounted for using the equity method of accounting, and our interest in Bluegreen’s earnings and losses was included in our BFC Activities segment. The Company’s Financial Services business activities include BankAtlantic Bancorp’s results of operations and are reported in two segments: BankAtlantic and BankAtlantic Bancorp Parent Company.
Forward Looking Statements
          Except for historical information contained herein, the matters discussed in this document 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 document and in any 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. When considering those forward-looking statements, the reader should keep in mind the risks, uncertainties and other cautionary statements made in this report and our other filings with the Securities and Exchange Commission (“SEC”), including those discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2009. The reader should not place undue reliance on any forward-looking statement, which speaks only as of the date made. This document also contains information regarding the past performance of our investments and the reader should note that prior or current performance of investments and acquisitions is not a guarantee or indication of future performance.
          Some factors which may affect the accuracy of the forward-looking statements apply generally to the financial services, real estate, resort development and vacation ownership, and restaurant industries, while other factors apply directly to us. Risks and uncertainties associated with BFC, including its wholly-owned Woodbridge Holdings subsidiary, include, but are not limited to:
    risks associated with the Company’s current business strategy, including the risk that BFC will not be in a position to provide strategic support to its affiliated entities or that such support will not achieve the anticipated benefits and may negatively impact our cash flow;
 
    BFC’s shareholders’ interests may be diluted if additional shares of BFC’s common stock are issued, and BFC’s public company investments may be diluted if BankAtlantic Bancorp, Bluegreen or Benihana issue additional shares of its stock;
 
    the risk that creditors of the Company’s subsidiaries or other third parties may seek to recover distributions or dividends made by such subsidiaries or other amounts owed by such subsidiaries from their respective parent companies, including BFC;

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    the impact of economic, competitive and other factors affecting the Company and its subsidiaries, and their operations, markets, products and services;
 
    adverse conditions in the stock market, the public debt market and other capital markets and the impact of such conditions on the activities of the Company and its subsidiaries;
 
    the impact of the current economic downturn on the price and liquidity of BFC’s common stock and on BFC’s ability to obtain additional capital, including the risk that if BFC needs or otherwise believes it is advisable to issue debt or equity securities to fund its operations, it may not be possible to issue any such securities on favorable terms, if at all;
 
    the performance of entities in which the Company has made investments may not be profitable or their results as anticipated;
 
    BFC is dependent upon dividends from its subsidiaries to fund its operations, and currently BankAtlantic Bancorp is prohibited from paying dividends and may not pay dividends in the future, whether as a result of such restrictions continuing in the future or otherwise, and Bluegreen has historically not paid dividends on its common stock, and even if paid, BFC has historically experienced and may continue to experience negative cash flow;
 
    the uncertainty regarding the amount of cash that will be required to be paid to Woodbridge shareholders who exercised appraisal rights in connection with Woodbridge’s merger with BFC;
 
    the risks related to the indebtedness of Woodbridge and its subsidiaries, including the risks relating to the indebtedness currently in default and the risk that negotiations and agreements relating to the resolution of the indebtedness and the release from the obligations under any or all of the debt may not be successful or complied with;
 
    the risks relating to Core’s liquidity, cash position and ability to continue operations, including the risk that Core could be obligated to make additional payments under its outstanding development bonds, or incur additional impairment charges and losses beyond those already incurred;
 
    the risk that Core’s lenders will foreclose on the property which serves as collateral for defaulted loans or take other remedial actions available to them, and Core could incur additional impairment charges and losses beyond those already incurred;
 
    risks associated with the securities we hold directly or indirectly, including the risk that we may record further impairment charges with respect to such securities in the event trading prices decline in the future;
 
    uncertainties associated with the accounting for the Bluegreen share acquisition, including the impact of changes in the estimates and analyses used to determine the revised evaluation of the inventory of Bluegreen as of the acquisition date and the effect, if any, on the amount of the $183.1 million bargain purchase gain recorded at December 31, 2009;
 
    the preparation of financial statements in accordance with GAAP involves making estimates, judgments and assumptions, and our financial condition and operating results may be materially impacted in the future if our estimates, judgments or assumptions prove to be incorrect;
 
    risks relating to our investment in Benihana, including the risk that Benihana may not be successful in its efforts to sell Benihana, and the risk that any such sale may not have a favorable impact on our investment in Benihana or otherwise on our financial condition, cash position and operating results;
 
    the risk that the amount of any tax refund that we may receive in the future may be less than expected, or received later than expected;
 
    the risks related to litigation and other legal proceedings against BFC and its subsidiaries, including the costs and expenses of such proceedings, including legal and other professional fees, as well as the impact of any finding of liability or damages on our financial condition and operating results; and
 
    the Company’s success at managing the risks involved in the foregoing.
          With respect to BFC’s subsidiary, BankAtlantic Bancorp, and its subsidiary, BankAtlantic, the risks and uncertainties include:
    the impact of economic, competitive and other factors affecting BankAtlantic Bancorp and its operations, markets, products and services, including the impact of the changing regulatory environment, a continued or deepening recession, continued decreases in real estate values, and increased unemployment or sustained high unemployment rates on its business generally, BankAtlantic’s regulatory capital ratios, the ability of its borrowers to service their obligations and its customers to maintain account balances and the value of collateral securing its loans;
 
    credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact on the credit quality of BankAtlantic Bancorp loans (including those held in the asset workout subsidiary of BankAtlantic Bancorp) of a sustained downturn in the economy and in the real estate market and other changes in the real estate markets in BankAtlantic Bancorp’s trade area and where collateral is located;

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    the quality of BankAtlantic Bancorp’s real estate based loans including its residential land acquisition and development loans (including Builder land bank loans, Land acquisition and development loans and Land acquisition, development and construction loans) as well as Commercial land loans, other Commercial real estate loans; and Residential loans and Consumer loans; and conditions specifically in those market sectors;
 
    the quality of BankAtlantic Bancorp’s Commercial business loans and conditions specifically in that market sector;
 
    the risks of additional charge-offs, impairments and required increases in BankAtlantic Bancorp allowance for loan losses especially if the economy and real estate markets in Florida do not improve;
 
    additional regulatory requirements or restrictions on BankAtlantic Bancorp’s activities which impact BankAtlantic Bancorp’s business and prospects;
 
    the uncertain impact of legal proceedings on BankAtlantic Bancorp’s financial condition or operations;
 
    changes in interest rates and the effects of, and changes in, trade, monetary and fiscal policies and laws including their impact on the bank’s net interest margin;
 
    adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on our activities, the value of our assets and on the ability of our borrowers to service their debt obligations and maintain account balances;
 
    BankAtlantic Bancorp may not be able to sell its Tampa operations on acceptable terms or at all;
 
    BankAtlantic Bancorp expense reduction initiatives may not be successful and additional cost savings may not be achieved;
 
    BankAtlantic Bancorp may raise additional capital and such capital may be highly dilutive to BankAtlantic Bancorp’s shareholders or may not be available;
 
    the impact of periodic valuation testing of goodwill, deferred tax assets and other assets;
 
    past performance and perceived trends may not be indicative of future results; and
 
    BankAtlantic Bancorp success at managing the risks involved in the foregoing.
          With respect to Bluegreen Corporation, the risks and uncertainties include, but are not limited to:
    the overall state of the economy, interest rates and the availability of financing affect Bluegreen’s ability to market vacation ownership interests (“VOIs”) and residential homesites;
 
    Bluegreen would incur substantial losses and its liquidity position could be adversely impacted if the customers it finances default on their obligations;
 
    Bluegreen’s business plan historically has depended on its ability to sell or borrow against its notes receivable to support its liquidity and profitability;
 
    while Bluegreen has attempted to restructure its business to reduce its need for and reliance on financing for liquidity in the short term, there is no assurance that such restructuring will be successful or that its business and profitability will not otherwise continue to depend on its ability to obtain financing, which may not be available on favorable terms, or at all;
 
    Bluegreen’s results of operations and financial condition could in the past has been and be in the future continue to adversely impacted if its estimates concerning its notes receivable are incorrect. This may include additional impairment charges on loans generated prior to December 2008, when Bluegreen implemented stricter credit underwriting standards. In addition, Bluegreen’s new credit underwriting standards may not have the anticipated favorable impact on the performance of its receivables;
 
    Bluegreen’s future success depends on its ability to market its products successfully and efficiently;
 
    Bluegreen is subject to the risks of the real estate market and the risks associated with real estate development, including the decline in real estate values and the deterioration of real estate sales;
 
    Bluegreen’s adoption on January 1, 2010, of the accounting guidance requiring the consolidation of its special purpose finance entities had a material adverse impact on its net worth, leverage, and book value per share, and could have an adverse impact on its profits in the future;
 
    Bluegreen’s initiatives to increase the amount of cash received upon sales of VOI’s and to achieve selling and marketing efficiencies in its Bluegreen Resorts segment may not be successful;
 
    Bluegreen may not be successful in increasing or expanding its fee-based services relationships and its fee-based service activities may not be profitable, which may have an adverse impact on its results of operations and financial condition;
 
    low consumer demand for homesites has had and may continue to have, an adverse impact on Bluegreen’s Communities segment;

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    claims for development-related defects could adversely affect Bluegreen’s financial condition and operating results;
 
    the resale market for VOIs could adversely affect Bluegreen’s business;
 
    Bluegreen may be adversely affected by extensive federal, state and local laws and regulations and changes in applicable laws and regulations, including with respect to the imposition of additional taxes on operations. In addition, results of audits of Bluegreen’s tax returns or those of its subsidiaries may have a material and adverse impact on its financial condition;
 
    environmental liabilities, including claims with respect to mold or hazardous or toxic substances, could have a material adverse impact on Bluegreen’s business;
 
    the ratings of third-party rating agencies could adversely impact Bluegreen’s ability to obtain, renew, or extend credit facilities, debt, or otherwise raise capital;
 
    in the near term, Bluegreen has significant debt maturing and advance periods expiring on its receivable-backed credit facilities, which could adversely impact its liquidity position, and, it may not be successful in refinancing or renewing the debt on favorable terms, if at all;
 
    Bluegreen’s financial statements are prepared based on certain estimates, including those related to future cash flows which in turn are based upon expectations of its performance given current and projected forecasts of the economy and real estate markets in general. Bluegreen’s results and financial condition may be materially and adversely impacted if the adverse conditions in the real estate market continue for longer than expected or deteriorate further or if its performance does not otherwise meet its expectations; and
 
    the loss of the services of Bluegreen’s key management and personnel could adversely affect its business.
     In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company, BankAtlantic Bancorp and Bluegreen with the SEC.
Critical Accounting Policies
          Management views critical accounting policies as accounting policies that are important to the understanding of our financial statements and also involve estimates and judgments about inherently uncertain matters. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated statements of financial condition and assumptions that affect the recognition of income and expenses on the consolidated statements of operations for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change in subsequent periods relate to the determination of the allowance for loan losses, evaluation of goodwill and other intangible assets for impairment, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, the valuation of real estate held for development and sale and its impairment reserves, revenue and cost recognition on percent complete projects, estimated costs to complete construction, the valuation of investments in unconsolidated subsidiaries, the valuation of the fair value of assets and liabilities in the application of the acquisition method of accounting, accounting for deferred tax asset valuation allowance, accounting for uncertain tax positions, accounting for contingencies, and assumptions used in the valuation of stock based compensation. The accounting policies that we have identified as critical accounting policies are: (i) allowance for loan losses and notes receivables; (ii) impairment of goodwill and long-lived assets; (iii) valuation of securities as well as the determination of other-than-temporary declines in value; (iv) accounting for business combinations, including the valuation of the fair value of assets and liabilities in the application of the acquisition method of accounting; (v) the valuation of real estate; (vi) revenue and cost recognition on percentage of completion; (vii) estimated cost to complete construction; (viii) the valuation of equity method investments; (ix) accounting for deferred tax asset valuation allowance; and (x) accounting for contingencies. For a more detailed discussion of these critical accounting policies see “Critical Accounting Policies” appearing in our Annual Report on Form 10-K for the year ended December 31, 2009.
New Accounting Pronouncements
          See Note 26 of the “Notes to Unaudited Consolidated Financial Statements” included under Item 1 of this report for a discussion of new accounting pronouncements applicable to the Company and its subsidiaries.

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Summary of Consolidated Results of Operations
The table below sets forth the Company’s summarized results of operations (in thousands):
                                 
    For the Three Months Ended     For the Nine Months Ended  
    September 30,     September 30,  
Income (loss) from operations:   2010     2009     2010     2009  
Real Estate and Other
  $ (13,677 )     (44,254 )     (23,066 )     (31,380 )
Financial Services
    (25,184 )     (52,088 )     (96,955 )     (137,056 )
 
                       
Loss from continuing operations
    (38,861 )     (96,342 )     (120,021 )     (168,436 )
(Loss) income from discontinued operations
          (1,367 )     2,465       2,169  
 
                       
Net loss
    (38,861 )     (97,709 )     (117,556 )     (166,267 )
Less: Net loss attributable to noncontrolling interests
    (11,239 )     (43,697 )     (52,919 )     (88,943 )
 
                       
Net loss attributable to BFC
    (27,622 )     (54,012 )     (64,637 )     (77,324 )
5% Preferred stock dividends
    (188 )     (188 )     (563 )     (563 )
 
                       
Net loss allocable to common stock
  $ (27,810 )     (54,200 )     (65,200 )     (77,887 )
 
                       
     Consolidated net loss for the three and nine months ended September 30, 2010 was $27.6 million and $64.6 million, respectively, compared with a net loss of $54 million and $77.3 million, respectively, for the same periods in 2009. The results from discontinued operations relate to Ryan Beck (for all periods) and Core Communities commercial leasing projects (for the three and nine months ended September 30, 2009 and the nine months ended September 30, 2010), as discussed further in Note 5 of the “Notes to Unaudited Consolidated Financial Statements”.
          The 5% Preferred Stock dividend represents the dividends paid by the Company on its 5% Cumulative Preferred Stock.
          The results of our business segments and other information on each segment are discussed below in BFC Activities, Real Estate Operations, Bluegreen Resorts, Bluegreen Communities, BankAtlantic and BankAtlantic Bancorp Parent Company.

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Consolidated Financial Condition
          Total assets at each of September 30, 2010 and December 31, 2009 were $6.0 billion. On January 1, 2010, BFC, Bluegreen and BankAtlantic Bancorp adopted an amendment to the accounting guidance for transfers of financial assets and an amendment to the accounting guidance associated with the consolidation of VIEs. As a result of the adoption of these accounting standards, Bluegreen consolidated seven existing special purpose finance entities associated with prior securitization transactions that previously qualified for off-balance sheet sales treatment, and BankAtlantic Bancorp consolidated its joint venture that conducts a factoring business. Accordingly, Bluegreen’s consolidated special purpose finance entities and BankAtlantic Bancorp’s consolidated factoring joint venture are now consolidated in BFC’s financial statements. The consolidation of Bluegreen’s special purpose finance entities resulted in a one-time non-cash after-tax reduction to retained earnings of $2.1 million and the following impacts to the Company’s Consolidated Statement of Financial Condition at January 1, 2010: (1) assets increased by $414.1 million, primarily representing the consolidation of notes receivable, net of allowance, partially offset by the elimination of Bluegreen’s retained interests; (2) liabilities increased by $416.2 million, primarily representing the consolidation of non-recourse debt obligations associated with third parties, partially offset by the elimination of certain deferred tax liabilities; and (3) total equity decreased by approximately $2.0 million, including a decrease of approximately $811,000 to noncontrolling interests (see Note 2 of the “Notes to Unaudited Consolidated Financial Statements” for further information). No charges were recorded in connection with consolidation of BankAtlantic Bancorp’s factoring joint venture. Other than such increases and decreases, the changes in components of total assets from December 31, 2009 to September 30, 2010 were primarily comprised of:
    Increase in cash and cash equivalents primarily reflecting a $58.5 million in BankAtlantic Bancorp’s interest bearing cash balances at the Federal Reserve Bank associated with daily cash management activities;
 
    an increase in BankAtlantic Bancorp’s interest-bearing deposits at other financial institutions associated with the investment of excess cash reflecting that yields on certificates of deposit at federally insured financial institutions were higher than alternative short term investment yields;
 
    increase in securities available for sale reflecting BankAtlantic Bancorp’s purchase of $253.3 million of agency and municipal securities partially offset by the sale of $43.8 million of mortgage-backed securities as well as repayments;
 
    an increase in derivatives associated with a foreign currency derivative position executed during 2010 as an economic hedge of foreign currency used in BankAtlantic’s ATM cruise ship operations;
 
    a decrease in investment securities due to the maturity of investments;
 
    a decrease in current income tax receivables primarily resulting from the receipt of income tax refunds associated with recent tax law changes which extended the net operating loss carry-back period from two years to up to five years;
 
    a decrease in BankAtlantic Bancorp’s tax certificate balances primarily relating to redemptions, partially offset by the purchase of $97.3 million of tax certificates during 2010;
 
    a decrease in BankAtlantic Bancorp’s loan receivable balances associated with $107.9 million of charge-offs, $40.7 million of loans transferred to real estate owned, and repayments of loans in the ordinary course of business combined with a significant decline in loan originations and purchases;
 
    a decrease in accrued interest receivables primarily resulting from tax certificate activities and lower loan balances at BankAtlantic Bancorp;
 
    a decrease in real estate inventory reflecting a sale of $6.5 million at BankAtlantic and a decrease in Bluegreen’s real estate inventory, including non-cash charges of approximately $8.7 million, net of purchase accounting;
 
    an increase in BankAtlantic Bancorp’s real estate owned and other repossessed assets associated with residential and commercial loan foreclosures;
 
    a decrease in office properties and equipment resulting from BankAtlantic Bancorp’s depreciation and the transfer of $18.1 million of fixed assets to assets held for sale net of impairments;
 
    a decrease in assets held for sale from discontinued operations resulting from the sale of Core’s Projects in June 2010; and
 
    an increase in assets held for sale comprised of cash and fixed assets transferred to held for sale upon the announcement that BankAtlantic intended to pursue the sale of its Tampa operations.

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          The Company’s total liabilities at September 30, 2010 were $5.7 billion compared to $5.6 billion at December 31, 2009. Other than increases due to the above described change in accounting principle at January 1, 2010, the primary changes in components of total liabilities from December 31, 2009 to September 30, 2010 are summarized below:
    a decrease in BankAtlantic’s interest bearing deposit account balances associated with declines in certificate of deposit balances and the transfer of $259.9 million of Tampa operations interest bearing deposits to deposits held for sale;
 
    a decrease in BankAtlantic’s non-interest-bearing deposit balances primarily due to the transfer of $79.5 million of Tampa operations non-interest bearing deposits to held for sale;
 
    lower FHLB advances at BankAtlantic due to repayments;
 
    a decrease in notes and mortgage notes payable and other borrowings resulting from net repayments related to Bluegreen’s debt collateralized by notes receivable;
 
    an increase in BankAtlantic Bancorp’s outstanding junior subordinated debentures due to interest deferrals;
 
    a decrease in liabilities related to assets held for sale from discontinued operations resulting from the sale of Core’s Projects in June 2010; and
 
    an increase in other liabilities associated with $8.2 million of higher loan escrow balances, $5.2 million of securities purchased pending settlement and real estate tax liabilities at BankAtlantic Bancorp.

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BFC Activities
BFC Activities
          “BFC Activities” consists primarily of (i) BFC operations, (ii) our investment in Benihana and (iii) Woodbridge other operations.
          BFC operations primarily consist of our corporate overhead and general and administrative expenses, the financial results of a venture partnership that BFC controls and other equity investments, as well as income and expenses associated with human resources, risk management, investor relations, executive office administration and other services that BFC provides to BankAtlantic Bancorp and Bluegreen. BFC operations also include investments made by BFC/CCC, Inc. Woodbridge other operations consists of the operations of Pizza Fusion Holdings, Inc. (“Pizza Fusion”), a restaurant franchisor operating within the quick service and organic food industries, and the activities of Cypress Creek Capital Holdings, LLC (“Cypress Creek Capital”) and Snapper Creek Equity Management, LLC (“Snapper Creek”). Prior to November 16, 2009, when we acquired additional shares of Bluegreen’s common stock giving us a controlling interest in Bluegreen, Woodbridge other operations included an equity investment in Bluegreen.
          The discussion that follows reflects the operations and related matters of BFC Activities (in thousands).
                                                 
    For The Three Months     For The Nine Months  
    Ended September 30,     Ended September 30,  
    2010     2009     Change     2010     2009     Change  
Revenues
                                               
Other revenues
  $ 517       342       175       1,386       843       543  
 
                                   
Total revenue
    517       342       175       1,386       843       543  
 
                                   
 
                                               
Cost and Expenses
                                               
Cost of sales of real estate
          4,136       (4,136 )           4,153       (4,153 )
Interest expense, net
    1,439       1,869       (430 )     4,920       4,641       279  
Selling, general and administrative expenses
    6,633       8,026       (1,393 )     20,261       22,569       (2,308 )
Impairment of goodwill
          2,001       (2,001 )           2,001       (2,001 )
 
                                   
Total costs and expenses
    8,072       16,032       (7,960 )     25,181       33,364       (8,183 )
 
                                   
 
                                               
(Loss) gain on settlement of investment in Woodbridge’s subsidiary
                      (1,135 )     26,985       (28,120 )
Equity in earnings (loss) from unconsolidated affiliates
    (11 )     11,767       (11,778 )     (38 )     28,729       (28,767 )
Impairment of unconsolidated affiliates
          (10,780 )     10,780             (31,181 )     31,181  
Impairment of investments
                            (2,396 )     2,396  
Other income
    1,403       1,502       (99 )     4,569       4,381       188  
 
                                   
Loss from continuing operations before income taxes
    (6,163 )     (13,201 )     7,038       (20,399 )     (6,003 )     (14,396 )
Less: Benefit for income taxes
    (71 )           (71 )     (5,718 )           (5,718 )
 
                                   
Net (loss) income
  $ (6,092 )     (13,201 )     7,109       (14,681 )     (6,003 )     (8,678 )
 
                                   
          Other revenues for the three and nine months ended September 30, 2010 relate to franchise revenues generated by Pizza Fusion.
          Cost of sales of real estate for each of the three and nine months ended September 30, 2009 was approximately $4.1 million and represents the write-off of capitalized interest associated with Core’s impairment of real estate inventory in 2009.
          Interest expense consists of interest incurred less interest capitalized. Interest incurred totaled $1.4 million and $4.9 million for the three and nine months ended September 30, 2010, respectively, compared with $1.9 million and $5.6 million for the same periods in 2009. No interest was capitalized during the three or nine months ended September 30, 2010 or the three months ended September 30, 2009, while interest capitalized during the nine months ended

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BFC Activities
September 30, 2009 totaled $931,000. This resulted in net interest expense of $1.4 million and $4.9 million during the three and nine months ended September 30, 2010, respectively, compared to $1.9 million and $4.6 million, respectively, of net interest expense in the same 2009 periods.
          General and administrative expenses decreased $1.4 million to $6.6 million for the three months ended September 30, 2010 from $8.0 million for the same period in 2009. For the nine months ended September 30, 2010, general and administrative expenses decreased $2.3 million to $20.3 million from $22.6 million for the same period in 2009. The decrease in general and administrative expenses during the nine months ended September 30, 2010 was primarily attributable to lower compensation and benefits expense and professional fees. This was offset in part by higher accrued audit fees incurred during 2010 and a write-off of intangible assets related to Pizza Fusion. Included in general and administrative expenses for the nine months ended September 30, 2010 are management advisory service fees earned in connection with an agreement with Bluegreen (See Note 21 of the “Notes to Unaudited Consolidated Financial Statements” for further information).
          During the three months ended September 30, 2009, a $2.0 million goodwill impairment was recorded with respect to the Pizza Fusion investment.
          Prior to the consolidation of Bluegreen into our consolidated financial statements on November 16, 2009, we accounted for our investment in Bluegreen under the equity method of accounting. Our interest in Bluegreen’s earnings during the three and nine months ended September 30, 2009 was $11.8 million and $28.8 million, respectively (after the amortization of approximately $10.6 million and $24.5 million for the three and nine months ended September 30, 2009, respectively, related to the change in the basis as a result of other-than-temporary impairment charges on this investment). During the three and nine months ended September 30, 2009, we recorded $10.8 million and $31.2 million, respectively, of other-than-temporary impairment charges relating to our equity method investment in Bluegreen.
          During the nine months ended September 30, 2009, we recorded impairment charges of $2.4 million on our investment in Office Depot’s common stock. The Company sold its remaining shares of Office Depot’s common stock during the fourth quarter of 2009.
          During the second quarter of 2010, we recognized a tax benefit of approximately $5.4 million resulting from an expected additional tax refund due to a recent change in IRS guidance, approximately $1.1 million of which we anticipate paying to the Levitt and Sons’ estate. The $1.1 million was recorded in the (loss) gain on settlement of investment in Woodbridge’s subsidiary and is subject to change pending a final review of the $5.4 million expected tax refund by the IRS. The gain on settlement of investment in Woodbridge’s subsidiary during the nine months ended September 30, 2009 reflected the reversal into income of the loss in excess of investment in Levitt and Sons after the settlement of Levitt and Sons’ bankruptcy was finalized. The reversal resulted in a $40.4 million gain on a consolidated basis in the first quarter of 2009, of which $27 million was recorded in the BFC Activities segment.
2008 and 2007 Step acquisitions – Purchase Accounting
          BFC’s acquisitions in 2008 and 2007 of additional shares of BankAtlantic Bancorp’s and Woodbridge’s Class A Common Stock, respectively, were accounted for as step acquisitions under the purchase method of accounting then in effect. Accordingly, the assets and liabilities acquired were revalued to reflect market values at the respective dates of acquisition. The discounts and premiums arising as a result of such revaluations are generally being accreted or amortized, net of tax, over the remaining life of the assets and liabilities. The net impact of such accretion, amortization and other effects of purchase accounting increased our consolidated net loss for the three and nine months ended September 30, 2010 by approximately $31,000 and $93,000, respectively, and increased our consolidated net loss for the three and nine months ended September 30, 2009 by approximately $5.8 million and $5.1 million, respectively.
BFC Activities- Liquidity and Capital Resources
          As of September 30, 2010 and December 31, 2009, we had cash, cash equivalents and short-term investments totaling approximately $34 million and $45 million, respectively. The decrease in cash, cash equivalents and short-term investments was due to BFC’s operating and general and administrative expenses and to the purchase of shares of BankAtlantic Bancorp’s Class A Common Stock in BankAtlantic Bancorp’s 2010 Rights Offering. This

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BFC Activities
decrease was offset in part by the receipt of an income tax refund of approximately $29.2 million, resulting from recent tax law changes as discussed below.
          BFC acquired an aggregate of 10,000,000 shares of BankAtlantic Bancorp’s Class A Common Stock in the Rights Offering for an aggregate purchase price of $15.0 million. BFC exercised its basic subscription rights to purchase 5,986,865 shares, and the remaining 4,013,135 shares were acquired by BFC pursuant to its over-subscription request. The shares acquired in the Rights Offering increased BFC’s ownership interest in BankAtlantic Bancorp by approximately 8% to 45% and BFC’s voting interest in BankAtlantic Bancorp by approximately 5% to 71%.
          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp, Bluegreen, Woodbridge and Core are not direct obligations of BFC and generally are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC, absent a dividend or distribution from those entities. BFC’s principal sources of liquidity are its available cash, short-term investments, dividends or distributions from our subsidiaries and dividends from Benihana. As discussed further in this report, recent tax law changes have resulted in the receipt of significant tax refunds. We have received approximately $29.2 million of tax refunds and expect to receive an additional approximately $10.8 million when the final review is completed by the Internal Revenue Service. Pursuant to the Levitt and Sons’ bankruptcy settlement agreement, we agreed that a portion of the tax refund attributable to the Debtors Estate for periods prior to the bankruptcy would be paid to the estate, and it is estimated that approximately $11.8 million will be paid to the estate pursuant to this agreement.
          We will use our available funds to fund operations and meet our obligations. We may also use available funds to make additional investments in the companies within our consolidated group, invest in equity securities and other investments, or repurchase shares of our common stock pursuant to our share repurchase program.
          Since March 2009, BFC has not received cash dividends from BankAtlantic Bancorp and does not expect to receive cash dividends from BankAtlantic Bancorp for the foreseeable future because BankAtlantic Bancorp is currently prohibited from paying dividends on its common stock. Furthermore, certain of Bluegreen’s credit facilities contain terms which might limit the payment of cash dividends.
          BFC, on a parent company only basis, has committed that it will not, without the prior written non-objection of the OTS, (i) incur, issue, renew or roll over any current lines of credit, guarantee the debt of any other entity or otherwise incur any additional debt or (ii) declare or make any dividends or other capital distributions.
          We believe that our current financial condition and credit relationships, together with anticipated cash flows from operating activities and other sources of funds, including tax refunds and proceeds from the disposition of certain properties or investments, will provide for anticipated near-term liquidity needs. With respect to long-term liquidity requirements, in addition to the foregoing, BFC may also seek to raise funds through the issuance of long-term secured or unsecured indebtedness, equity and/or debt securities or through the sale of assets; however, there is no assurance that any of these alternatives will be available to BFC on attractive terms, or at all.
          On September 21, 2009, our Board of Directors approved a share repurchase program which authorizes the repurchase of up to 20,000,000 shares of Class A and Class B Common Stock at an aggregate cost of no more than $10 million. The share repurchase program replaced our $10 million repurchase program that our Board of Directors approved in October 2006 which placed a limitation on the number of shares which could be repurchased under the program at 1,750,000 shares of Class A Common Stock. The current program, like the prior program, authorizes management, at its discretion, to repurchase shares from time to time subject to market conditions and other factors. No shares were repurchased during the nine months ended September 30, 2010 or the year ended December 31, 2009.
          The development activities at Carolina Oak, which is within Tradition Hilton Head, were suspended in the fourth quarter of 2008 as a result of, among other things, an overall softening of demand for new homes and a decline in the overall economy. In 2009, the housing industry continued to face significant challenges and Woodbridge made the decision to cease all activities at Carolina Oak. In the fourth quarter of 2009, we reviewed the inventory of real estate at Carolina Oak for impairment and, as a result, recorded a $16.7 million impairment charge to adjust the carrying amount of Carolina Oak’s inventory to its fair value of $10.8 million. Woodbridge is the obligor under a $37.2 million loan that is collateralized by the Carolina Oak property. During 2009, the lender declared the loan to be in default and filed an action for foreclosure. While there may have been an issue with respect to compliance with certain covenants in the loan agreements, we do not believe that an event of default had occurred as was alleged. Woodbridge continues to seek satisfactory conclusion with regard to the debt; however, the outcome of these efforts and the litigation is uncertain.

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BFC Activities
          During 2008, Woodbridge entered into a settlement agreement, as amended (the “Settlement Agreement”), with the Debtors and the Joint Committee of Unsecured Creditors (the “Joint Committee”) appointed in the Chapter 11 cases related to the Levitt and Sons bankruptcy filing. Pursuant to the Settlement Agreement, among other things, (i) Woodbridge agreed to pay $8 million to the Debtors’ bankruptcy estates, establish a $4.5 million release fund to be disbursed to third party creditors in exchange for a third party release and injunction, pay an additional $300,000 to a deposit holders fund and waive and release substantially all of the claims it had against the Debtors, including its administrative expense claims through July 2008, and (ii) the Debtors (joined by the Joint Committee) agreed to waive and release any claims they had against Woodbridge and its affiliates. The Settlement Agreement also provided that if, within one year after the Bankruptcy Court’s confirmation of the Settlement Agreement, Section 172 of the Internal Revenue Code was amended to permit a carry back of tax losses from calendar years 2007 or 2008 to one or more years preceding calendar year 2005, then Woodbridge would share a portion of any resulting tax refund with the Debtors and the Joint Committee based on an agreed upon formula. The Settlement Agreement was subject to a number of conditions, including the approval of the Bankruptcy Court. On February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Joint Committee. That order also approved the settlement pursuant to the Settlement Agreement. No appeal or rehearing of the Bankruptcy Court’s order was timely filed by any party, and the settlement was consummated on March 3, 2009, at which time payment was made in accordance with the terms and conditions of the Settlement Agreement. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the Settlement Agreement) was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary.
          In November 2009, the Workers, Homeownership, and Business Assistance Act of 2009 (the “Act”) was enacted. The Act extended the net operating loss (“NOL”) carry-back period from two years to up to five years for the 2008 and the 2009 tax years and, as a result, allows us to increase our NOL carryback period to as much as five years for NOLs generated in 2008 or 2009 and obtain refunds of taxes paid in the newly included carryback years. The amount of the expected refund to the Company has been determined to be approximately $40.0 million, of which approximately $29.2 million has been received. The balance of the tax refund claim of approximately $10.8 million will most likely be paid when the Internal Revenue Service completes its review. As described above, under the terms of the Settlement Agreement, a portion of the refund will be payable to the Levitt and Sons estate. Accordingly, in the fourth quarter of 2009, we accrued approximately $10.7 million in connection with the portion of the tax refund which may be payable to the Debtors Estate pursuant to the Settlement Agreement. The gain on settlement of investment in subsidiary of $40.4 million recorded in the first quarter of 2009 was reduced by the $10.7 million accrual recorded in the fourth quarter of 2009 resulting in a $29.7 million gain on settlement of investment in subsidiary for the year ended December 31, 2009. Additionally, in the second quarter of 2010, we increased the $10.7 million accrual by approximately $1.1 million, representing the portion of an additional tax refund which we expect to receive due to a recent change in Internal Revenue Service guidance that will likely be required to be paid to the Debtors Estate pursuant to the Settlement Agreement. As of September 30, 2010, we have a liability of approximately $11.8 million, representing the portion of tax refunds to be shared with the Debtors Estate pursuant to the settlement agreement. As of September 30, 2010, $8.4 million of the $11.8 million portion of the tax refund to be paid to the Debtors Estate was received and placed in an escrow account. The $8.4 million amount is included as restricted cash in the Company’s Consolidated Statement of Financial Condition.
          As discussed above, on September 21, 2009, BFC and Woodbridge consummated their previously announced merger pursuant to which Woodbridge merged with BFC. In connection with the merger, Dissenting Holders who collectively held approximately 4.2 million shares of Woodbridge’s Class A Common Stock exercised their appraisal rights and are entitled to receive an amount equal to the fair value of their shares calculated in accordance with Florida law. The Dissenting Holders have rejected Woodbridge’s offer of $1.10 per share and requested payment for their shares based on their respective fair value estimates of Woodbridge’s Class A Common Stock. In December 2009, the Company recorded a $4.6 million liability with a corresponding reduction to additional paid-in capital representing, in the aggregate, Woodbridge’s offer to the Dissenting Holders. However, the appraisal rights litigation is currently ongoing and its outcome is uncertain. There is no assurance as to the amount of cash that we will be required to pay to the Dissenting Holders, which amount may be greater than the $4.6 million that we have accrued.
          The Company owns 800,000 shares of Benihana’s Convertible Preferred Stock, which it purchased for $25.00 per share. The Convertible Preferred Stock is convertible into Benihana’s common stock. Based on the number of currently outstanding shares of Benihana’s capital stock, the Convertible Preferred Stock, if converted, would represent an approximate 19% voting interest and an approximate 9% economic interest in Benihana’s capital stock. The Company has the right to receive cumulative quarterly dividends on its shares of Benihana’s Convertible

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Preferred Stock at an annual rate equal to 5% or $1.25 per share, payable on the last day of each calendar quarter. It is anticipated that the Company will continue to receive approximately $250,000 per quarter in dividends on Benihana’s Convertible Preferred Stock. The Convertible Preferred Stock is subject to mandatory redemption of $20 million plus accumulated dividends on July 2, 2014 unless we elect to extend the mandatory redemption date to a date not later than July 2, 2024.
          On June 21, 2004, the Company sold 15,000 shares of its 5% Preferred Stock to an investor group in a private offering. The Company’s 5% Preferred Stock has a stated value of $1,000 per share. The shares of 5% Preferred Stock may be redeemed at the option of the Company, from time to time, at redemption prices ranging from $1,025 per share for the year 2010 to $1,000 per share for the year 2015 and thereafter. The 5% Preferred Stock liquidation preference is equal to its stated value of $1,000 per share plus any accumulated and unpaid dividends or an amount equal to the applicable redemption price in a voluntary liquidation or winding up of the Company. Holders of the 5% Preferred Stock have no voting rights, except as provided by Florida law, and are entitled to receive, when and as declared by the Company’s Board of Directors, cumulative quarterly cash dividends on each such share at a rate per annum of 5% of the stated value from the date of issuance. Since June 2004, the Company has paid quarterly dividends on the 5% Preferred Stock of $187,500. On December 17, 2008, the Company amended certain of the previously designated relative rights, preferences and limitations of the Company’s 5% Preferred Stock. The amendment eliminated the right of the holders of the 5% Preferred Stock to convert their shares of Preferred Stock into shares of the Company’s Class A Common Stock. The amendment also requires the Company to redeem shares of the 5% Preferred Stock with the net proceeds it receives in the event (i) the Company sells any of its shares of Benihana’s Convertible Preferred Stock, (ii) the Company sells any shares of Benihana’s Common Stock received upon conversion of Benihana’s Convertible Preferred Stock or (iii) Benihana redeems any shares of its Convertible Preferred Stock owned by the Company. Additionally, in the event the Company defaults on its obligation to make dividend payments on its 5% Preferred Stock, the amendment entitles the holders of the 5% Preferred Stock, in place of the Company, to receive directly from Benihana certain payments on the shares of Benihana’s Convertible Preferred Stock owned by the Company or on the shares of Benihana’s Common Stock received by the Company upon conversion of Benihana’s Convertible Preferred Stock.
          A wholly-owned subsidiary of BFC/CCC has a 10% interest in a limited liability company that owns two commercial properties in Hillsborough County, Florida. At September 30, 2010 and December 31, 2009, the carrying amount of this investment was approximately $665,000 and $690,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the commercial properties in November 2006, BFC and the unaffiliated member each guaranteed the payment of up to a maximum of $5.0 million for certain environmental indemnities and specific obligations that are not related to the financial performance of the assets. BFC and the unaffiliated member also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates.
          A wholly-owned subsidiary of BFC/CCC has a 50% limited partner interest in a limited partnership that has a 10% interest in a limited liability company that owns an office building in Tampa, Florida. At September 30, 2010 and December 31, 2009, the carrying amount of this investment was approximately $306,000 and $319,000, respectively, which is included in investments in unconsolidated affiliates in the Company’s Consolidated Statements of Financial Condition. In connection with the purchase of the office building by the limited liability company in June 2007, BFC guaranteed the payment of certain environmental indemnities and specific obligations that are not related to the financial performance of the asset up to a maximum of $15.0 million, or $25.0 million in the event of any petition or involuntary proceeding under the U.S. Bankruptcy Code or similar state insolvency laws or in the event of any transfer of interests not in accordance with the loan documents. BFC and the unaffiliated members also entered into a cross indemnification agreement which limits BFC’s obligations under the guarantee to acts of BFC and its affiliates.
          No amounts are recorded in the Company’s financial statements for the obligations associated with the above guarantees based on the potential indemnification by unaffiliated members and the limit of the specific obligations to non-financial matters.

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Real Estate
Real Estate Operations Segment
          The Real Estate Operations segment includes the subsidiaries through which Woodbridge historically conducted its real estate business activities. These activities are concentrated in Florida and South Carolina and have included the development and sale of land, the construction and sale of single family homes and townhomes and the leasing of commercial properties and office space, and include the operations of Core, Carolina Oak, which engaged in homebuilding activities in South Carolina prior to the suspension of those activities in the fourth quarter of 2008, and Cypress Creek Holdings, which engages in leasing activities.
          Woodbridge’s operations historically were concentrated in the real estate industry which is cyclical in nature. During 2009 and the nine months ended September 30, 2010, the real estate markets continued to experience a significant downturn. Demand for residential and commercial inventory in Florida and South Carolina remained weak and land sales continued to decline. The decrease in land sales and continued cash flow deficits contributed to, among other things, the deterioration of Core’s liquidity. As a result, Core severely limited its development expenditures in Tradition, Florida and completely discontinued development activity in Tradition Hilton Head. The value of Core’s assets were significantly impaired, resulting in impairment charges relating to those assets of $78.0 million during 2009, which included $13.6 million of impairment charges related to assets held for sale. Core is currently in default under the terms of all of its indebtedness having an aggregate outstanding principal amount of $139.4 million. See “Core’s Liquidity and Capital Resources” below for more information regarding the status of Core’s outstanding indebtedness.
          As a consequence of the reduced activity at Core and in light of current market conditions, management made the decision to further reduce Core’s headcount by 41 employees in 2009 and recorded severance charges of approximately $1.3 million in the fourth quarter of 2009.
Real Estate Operations
                                                 
    Three Months Ended     Nine Months Ended  
    September 30,     September 30,  
(In thousands)   2010     2009     Change     2010     2009     Change  
         
Revenues:
                                               
Sales of real estate
  $       130       (130 )     2,455       3,285       (830 )
Other revenues
    294       512       (218 )     1,228       1,789       (561 )
 
                                   
Total revenues
    294       642       (348 )     3,683       5,074       (1,391 )
 
                                   
 
                                               
Costs and expenses:
                                               
Cost of sales of real estate
          18,144       (18,144 )     2,175       20,106       (17,931 )
Selling, general and administrative expenses
    3,054       3,480       (426 )     7,515       12,129       (4,614 )
Interest expense
    6,573       1,259       5,314       10,423       3,965       6,458  
 
                                   
Total costs and expenses
    9,627       22,883   &n