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 June 30, 2009

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

BFC Financial Corporation

(Exact name of registrant as specified in its charter)

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

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

(954) 940-4900

(Registrant’s telephone number, including area code)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

YES þ      NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

YES 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.

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

YES o      NO þ

The number of shares outstanding of each of the registrant’s classes of common stock as of the latest practicable date is as follows:

Class A Common Stock of $.01 par value, 38,275,112 shares outstanding as of August 3, 2009.
Class B Common Stock of $.01 par value, 6,854,381 shares outstanding as of August 3, 2009.

 

 

BFC Financial Corporation

TABLE OF CONTENTS

PART I.		FINANCIAL INFORMATION
		Item 1.		Financial Statements:
				Consolidated Statements of Financial Condition as of June 30, 2009 and December 31, 2008 — Unaudited			3
				Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2009 and 2008 — Unaudited			4
				Consolidated Statements of Comprehensive Loss for the Three and Six Months Ended June 30, 2009 and 2008 — Unaudited			6
				Consolidated Statement of Changes in Equity as of June 30, 2009 — Unaudited			7
				Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2009 and 2008 — Unaudited			8
				Notes to Unaudited Consolidated Financial Statements			9
		Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			46
		Item 3.		Quantitative and Qualitative Disclosures about Market Risk			90
		Item 4T.		Controls and Procedures			92
PART II.		OTHER INFORMATION
		Item 1.		Legal Proceedings			93
		Item 1A.		Risk Factors			94
		Item 4.		Submission of Matters to a Vote of Security Holders			94
		Item 6.		Exhibits			94
		SIGNATURES
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3

PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

BFC Financial Corporation
Consolidated Statements of Financial Condition- Unaudited
(In thousands, except share data)

		June 30,				December 31,
		2009				2008
ASSETS
Cash and cash equivalents		$	271,873				278,937
Restricted cash			7,845				21,288
Securities available for sale and other financial instruments (at fair value)			459,171				722,698
Investment securities at cost or amortized cost (fair value:
$53,294 in 2009 and $12,475 in 2008)			52,315				12,008
Tax certificates, net of allowance of $7,036 in 2009 and $6,064 in 2008			179,110				213,534
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value			48,751				54,607
Residential loans held for sale			7,694				3,461
Loans receivable, net of allowance for loan losses $172,220 in 2009 and $137,257 in 2008			4,021,067				4,314,184
Accrued interest receivable			35,370				41,817
Real estate held for development and sale			270,958				268,763
Real estate owned			34,317				19,045
Investments in unconsolidated affiliates			40,583				41,386
Properties and equipment, net			304,291				315,347
Goodwill and other intangible assets, net			35,363				44,986
Other assets			44,289				43,521
Total assets		$	5,812,997				6,395,582
LIABILITIES AND EQUITY
Liabilities:
Interest bearing deposits		$	3,252,601				3,178,105
Non-interest bearing deposits			802,446				741,691
Total deposits			4,055,047				3,919,796
Advances from FHLB			597,252				967,491
Federal funds purchased and other short term borrowings			5,553				238,339
Securities sold under agreements to repurchase			19,515				41,387
Subordinated debentures, mortgage notes payable and mortgage-backed bonds			286,245				287,772
Junior subordinated debentures			383,325				376,104
Loss in excess of investment in Woodbridge’s subsidiary			—				52,887
Other liabilities			129,080				125,356
Total liabilities			5,476,017				6,009,132
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 in 2009 and 2008 with a redemption value of $1,000 per share			11,029				11,029
Equity:
Class A common stock of $.01 par value, authorized 100,000,000 shares; issued and outstanding 38,275,112 in 2009 and 38,254,389 in 2008			382				382
Class B common stock of $.01 par value, authorized 20,000,000 shares; issued and outstanding 6,854,381 in 2009 and 6,875,104 in 2008			69				69
Additional paid-in capital			124,728				123,562
Accumulated deficit			(32,050	)			(8,848	)
Accumulated other comprehensive income (loss)			3,398				(2,298	)
Total BFC Financial Corporation (“BFC”) shareholders’ equity			96,527				112,867
Noncontrolling interests			229,424				262,554
Total equity			325,951				375,421
Total liabilities and equity		$	5,812,997				6,395,582

See accompanying notes to unaudited consolidated financial statements.

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

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Revenues
BFC Activities:
Interest and dividend income		$	256				340				514				755
Securities activities, net			—				103				—				103
Other income			274				388				438				1,646
			530				831				952				2,504
Financial Services:
Interest and dividend income			57,479				78,487				120,387				162,219
Service charges on deposits			19,347				24,466				38,032				48,480
Other service charges and fees			8,059				7,121				15,084				14,554
Securities activities, net			692				8,965				5,132				4,227
Other income			3,279				2,931				5,929				5,533
			88,856				121,970				184,564				235,013
Real Estate Development:
Sales of real estate			1,767				2,395				3,194				2,549
Interest and dividend income			157				616				404				2,071
Securities activities, net			—				1,178				—				1,178
Other income			3,157				2,891				6,347				5,981
			5,081				7,080				9,945				11,779
Total revenues			94,467				129,881				195,461				249,296
Costs and Expenses
BFC Activities:
Employee compensation and benefits			2,117				2,344				4,313				5,504
Other expenses			737				851				1,438				1,778
			2,854				3,195				5,751				7,282
Financial Services:
Interest expense			20,814				32,875				45,573				73,950
Provision for loan losses			43,494				47,247				87,771				90,135
Employee compensation and benefits			25,935				33,181				54,741				68,336
Occupancy and equipment			14,842				16,172				29,753				32,558
Advertising and promotion			1,979				3,662				4,811				8,557
Restructuring charges and exit activities			1,406				5,762				3,281				5,597
Cost associated with debt redemption			1,441				1				2,032				2
Provision for tax certificates losses			1,414				924				2,900				807
Impairment of goodwill			—				—				8,541				—
Impairment of real estate owned			411				190				623				240
FDIC special assessment			2,428				—				2,428				—
Other expenses			12,737				13,416				26,039				26,980
			126,901				153,430				268,493				307,162
Real Estate Development:
Cost of sales of real estate			1,301				1,760				1,994				1,848
Interest expense, net of interest capitalized			3,747				2,478				6,520				5,389
Selling, general and administrative expenses			9,945				12,530				20,284				24,981
			14,993				16,768				28,798				32,218
Total costs and expenses			144,748				173,393				303,042				346,662
Equity in earnings from unconsolidated affiliates			10,755				1,443				17,250				3,246
Impairment of unconsolidated affiliates			—				—				(20,401	)			—
Impairment of investments			—				—				(2,396	)			—
Gain on settlement of investment in Woodbridge’s subsidiary			—				—				40,369				—
Loss from continuing operations before income taxes			(39,526	)			(42,069	)			(72,759	)			(94,120	)
Benefit for income taxes			—				(15,326	)			—				(34,279	)
Loss from continuing operations			(39,526	)			(26,743	)			(72,759	)			(59,841	)
Discontinued operations, less income tax provision of $0 and $705 for 2009 and 2008			—				—				4,201				1,019
Net loss			(39,526	)			(26,743	)			(68,558	)			(58,822	)
Less: Net loss attributable to noncontrolling interests			26,617				21,826				45,246				48,034
Net loss attributable to BFC			(12,909	)			(4,917	)			(23,312	)			(10,788	)
5% Preferred stock dividends			(187	)			(187	)			(375	)			(375	)
Net loss allocable to common stock		$	(13,096	)			(5,104	)			(23,687	)			(11,163	)

(Continued)

See accompanying notes to unaudited consolidated financial statements.

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

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Basic and Diluted (Loss) Earnings Per Common Share Attributable to BFC (Note 20):
Basic (Loss) Earnings Per Common Share
Loss per share from continuing operations		$	(0.29	)			(0.11	)			(0.55	)			(0.25	)
Earnings per share from discontinued operations			—				—				0.03				—
Net loss per common share		$	(0.29	)			(0.11	)			(0.52	)			(0.25	)
Diluted (Loss) Earnings Per Common Share
Loss per share from continuing operations		$	(0.29	)			(0.11	)			(0.55	)			(0.25	)
Earnings per share from discontinued operations			—				—				0.03				—
Net loss per common share		$	(0.29	)			(0.11	)			(0.52	)			(0.25	)
Basic weighted average number of common shares outstanding			45,126				45,112				45,120				45,108
Diluted weighted average number of common and common equivalent shares outstanding			45,126				45,112				45,120				45,108

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation
Consolidated Statements of Comprehensive Loss — Unaudited
(In thousands)

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Net loss		$	(39,526	)			(26,743	)			(68,558	)			(58,822	)
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) on securities available for sale			6,705				(6,284	)			13,721				(12,025	)
Benefit for income taxes			—				(2,935	)			—				(5,149	)
			6,705				(3,349	)			13,721				(6,876	)
Unrealized gains (losses) associated with investment in unconsolidated affiliates			132				(799	)			605				(1,226	)
Benefit for income taxes			—				(247	)			—				(412	)
			132				(552	)			605				(814	)
Pro-rata share of cumulative impact of accounting changes recognized by Bluegreen Corporation on retained interests in notes receivable sold			(1,251	)			—				(1,251	)			—
Benefit for income taxes			—				—				—				—
			(1,251	)			—				(1,251	)			—
Reclassification adjustments of realized net gains included in net loss			(693	)			(6,010	)			(2,737	)			(3,974	)
Less: Provision for income taxes			—				(2,029	)			—				(1,243	)
			(693	)			(3,981	)			(2,737	)			(2,731	)
Total other comprehensive income (loss), net of tax			4,893				(7,882	)			10,338				(10,421	)
Comprehensive loss			(34,633	)			(34,625	)			(58,220	)			(69,243	)
Less: Comprehensive loss attributable to noncontrolling interests			25,864				28,634				40,604				56,804
Comprehensive loss attributable to BFC		$	(8,769	)			(5,991	)			(17,616	)			(12,439	)

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation
Consolidated Statement of Changes in Equity — Unaudited
For the Six Months Ended June 30, 2009
(In thousands)

																										Accumulated
																										Other				Total				Non-
		Shares of Common								Class A				Class B				Additional				Accu-				Compre-				BFC				controlling
		Stock Outstanding								Common				Common				Paid-in				mulated				hensive				Shareholders’				Interests in				Total
		Class A				Class B				Stock				Stock				Capital				Deficit				(Loss) Income				Equity				Subsidiaries				Equity
Balance, December 31, 2008			38,254				6,875			$	382			$	69			$	123,562			$	(8,848	)		$	(2,298	)		$	112,867			$	262,554			$	375,421
Net loss			—				—				—				—				—				(23,312	)			—				(23,312	)			(45,246	)			(68,558	)
Transfer of common stock			21				(21	)			—				—				—				—				—				—				—				—
Pro rata share of the cumulative effect of accounting changes recognized by Bluegreen on retained interests in notes receivable sold (a)			—				—				—				—				—				485				—				485				1,575				2,060
Other comprehensive income			—				—				—				—				—				—				5,696				5,696				4,642				10,338
Noncontrolling interests net effect of subsidiaries’ capital transactions			—				—				—				—				—				—				—				—				5,899				5,899
Net effect of subsidiaries’ capital transactions attributable to BFC			—				—				—				—				732				—				—				732				—				732
Cash dividends on the 5% Preferred Stock			—				—				—				—				—				(375	)			—				(375	)			—				(375	)
Share-based compensation related to stock options and restricted stock			—				—				—				—				434				—				—				434				—				434
Balance, June 30, 2009			38,275				6,854			$	382			$	69			$	124,728			$	(32,050	)		$	3,398			$	96,527			$	229,424			$	325,951

See accompanying notes to unaudited consolidated financial statements.

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

		For the Six Months Ended
		June 30,
		2009				2008
Net cash provided by (used in) operating activities		$	11,017				(21,004	)
Investing activities:
Proceeds from redemption and maturities of investment securites and tax certificates			98,569				82,519
Purchase of investment securities and tax certificates			(107,816	)			(311,011	)
Purchase of securities available for sale			—				(288,231	)
Proceeds from sales of securities available for sale			205,679				365,490
Proceeds from maturities of securities available for sale			80,047				99,473
Decrease in restricted cash			13,443				1,478
Cash paid in settlement of Woodbridge’s subsidiary bankruptcy			(12,430	)			—
Purchases of FHLB stock			(2,295	)			(31,140	)
Redemption of FHLB stock			8,151				19,486
Investments in unconsolidated affiliates			(630	)			139
Distributions from unconsolidated affiliates			398				2,021
Net decrease (increase) in loans			185,352				(20,787	)
Proceeds from the sale of loans receivable			5,427				10,100
Adjustment to acquisition of Pizza Fusion			3,000				—
Improvements to real estate owned			(577	)			(19	)
Proceeds from sales of real estate owned			1,372				1,054
Net additions to office properties and equipment			(1,928	)			(5,669	)
Net cash outflows from the sale of Central Florida branches			—				(4,491	)
Net cash provided by (used in) investing activities			475,762				(79,588	)
Financing activities:
Net increase (decrease) in deposits			135,251				(49,628	)
Prepayments of FHLB advances			(526,032	)			—
Net proceeds (repayments) of FHLB advances			154,000				260,000
Decrease in securities sold under agreements to repurchase			(21,872	)			1,994
Decrease in federal funds purchased			(232,786	)			(33,975	)
Repayment of notes and bonds payable			(1,656	)			(23,075	)
Proceeds from notes and bonds payable			132				7,283
Preferred stock dividends paid			(375	)			(375	)
Proceeds from issuance of BankAtlantic Bancorp Class A common stock			—				104
Purchase and retirement of Woodbridge Class A common stock			(13	)			—
BankAtlantic Bancorp cash dividends paid to non-BFC shareholders			(198	)			(432	)
Venture partnership distribution paid to non-BFC interest holder			—				(410	)
Payment of Woodbridge debt issuance costs			(294	)			(124	)
Net cash (used in) provided by financing activities			(493,843	)			161,362
(Decrease) increase in cash and cash equivalents			(7,064	)			60,770
Cash and cash equivalents at the beginning of period			278,937				332,155
Cash and cash equivalents at end of period		$	271,873				392,925
Supplemental cash flow information:
Interest paid on borrowings and deposits		$	54,641				83,340
Supplementary disclosure of non-cash investing and financing activities:
Loans and tax certificates transferred to REO			16,403				4,266
Increase (decrease) in BFC accumulated other comprehensive income, net of taxes			5,696				(1,651	)
Net increase in equity from the effect of subsidiaries’ capital transactions to BFC, net of income taxes			732				329
Net increase in shareholders’ equity resulting from the cumulative impact of accounting changes recognized by Bluegreen on retained interests in notes receivable sold			485				—

See accompanying notes to unaudited consolidated financial statements.

BFC Financial Corporation
Notes to Unaudited Consolidated Financial Statements

1. Presentation of Interim Financial Statements

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

          On July 2, 2009, the Company entered into a definitive merger agreement with Woodbridge. Subject to the terms and conditions of the agreement, Woodbridge will become a wholly-owned subsidiary of BFC and Woodbridge’s shareholders (other than BFC) will become shareholders of BFC. See Note 25 for further information regarding the merger agreement and the proposed merger.

          As a holding company with controlling positions in BankAtlantic Bancorp and Woodbridge, BFC is required under generally accepted accounting principles (“GAAP”) to consolidate the financial results of these companies. As a consequence, the financial information of both entities is presented on a consolidated basis in BFC’s financial statements. However, except as otherwise noted, the debts and obligations of BankAtlantic Bancorp and Woodbridge are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent its pro rata share in a dividend or distribution.

          BFC’s ownership in BankAtlantic Bancorp and Woodbridge as of June 30, 2009 was as follows:

										Percent
		Shares				Percent of				of
		Owned				Ownership				Vote
BankAtlantic Bancorp
Class A Common Stock			2,389,697				23.28	%			12.34	%
Class B Common Stock			975,225				100.00	%			47.00	%
Total			3,364,922				29.94	%			59.34	%
Woodbridge Holdings Corporation
Class A Common Stock			3,735,392				22.45	%			11.90	%
Class B Common Stock			243,807				100.00	%			47.00	%
Total			3,979,199				23.57	%			58.90	%

          BankAtlantic Bancorp is a unitary savings bank holding company organized under the laws of the State of Florida. BankAtlantic Bancorp’s principal asset is its investment in BankAtlantic and its subsidiaries. BankAtlantic, is a federal savings bank headquartered in Fort Lauderdale, Florida.

          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. Included in the Company’s consolidated statement of operations in discontinued operations for the six months ended June 30, 2009 and 2008 was $4.2 million and $1.1 million of earn-out consideration, respectively.

          Historically, Woodbridge’s operations were primarily within the real estate industry; however, Woodbridge’s has pursued investments and acquisitions within or outside of the real estate industry, as well as the continued development of master-planned communities. Woodbridge engages in business activities through its Land Division, which currently consists of the operations of Core Communities, LLC (“Core Communities” or “Core”), which develops master-planned communities, and through its Other Operations segment (“Woodbridge Other Operations”), which currently includes the other operations of Woodbridge, such as the consolidated operations of Pizza Fusion Holdings, Inc. (“Pizza Fusion”) which is a quick service organic restaurant franchisor, the consolidated

operations of Carolina Oak Homes, LLC (“Carolina Oak”), which engaged in homebuilding activities in South Carolina prior to the suspension of those activities in the fourth quarter of 2008, and the activities of Cypress Creek Capital Holdings, LLC (“Cypress Creek Capital”) and Snapper Creek Equity Management, LLC (“Snapper Creek”). An equity investment in Bluegreen Corporation (“Bluegreen”), a publicly-traded timeshare operator, and an investment in Office Depot, Inc. (“Office Depot”), a publicly-traded office supply company, are also included in the Woodbridge Other Operations segment.

          Prior to November 9, 2007, Woodbridge also conducted homebuilding operations through Levitt and Sons, LLC (“Levitt and Sons”), which comprised Woodbridge’s Homebuilding Division. Woodbridge’s Homebuilding Division consisted of two reportable operating segments, the Primary Homebuilding segment and the Tennessee Homebuilding segment. As previously reported, on November 9, 2007, Levitt and Sons and substantially all of its subsidiaries (the “Debtors”) filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the “Chapter 11 Cases”) in the United States Bankruptcy Court for the Southern District of Florida (the “Bankruptcy Court”). In connection with the filing of the Chapter 11 Cases, Woodbridge deconsolidated Levitt and Sons as of November 9, 2007, eliminating all future operations of Levitt and Sons from Woodbridge’s financial results of operations. As a result of the deconsolidation of Levitt and Sons, Woodbridge recorded its interest in Levitt and Sons under the cost method of accounting.

          As previously reported, on February 20, 2009, the Bankruptcy Court entered an order confirming a plan of liquidation jointly proposed by Levitt and Sons and the Official Committee of Unsecured Creditors. That order also approved the settlement pursuant to the settlement agreement that was entered into on June 27, 2008. No appeal or rehearing of the Bankruptcy Court’s order was timely filed by any party, and the settlement was consummated on March 3, 2009, at which time, payment was made in accordance with the terms and conditions of the settlement agreement. Under cost method accounting, the cost of settlement and the related $52.9 million liability (less $500,000 which was determined as the settlement holdback and remained as an accrual pursuant to the settlement agreement, was recognized into income in the first quarter of 2009, resulting in a $40.4 million gain on settlement of investment in subsidiary. See Note 24 for further information regarding the bankruptcy of Levitt and Sons.

          The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP for interim financial information. Accordingly, they do not include all of the information and disclosures required by GAAP for complete financial statements. In management’s opinion, the accompanying consolidated financial statements contain such adjustments as are necessary for a fair statement of the Company’s consolidated financial condition at June 30, 2009 and December 31, 2008; the consolidated results of operations and comprehensive loss for the three and six months ended June 30, 2009 and 2008, the consolidated cash flows and the changes in consolidated equity for the six months ended June 30, 2009. Operating results for the three and six months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ending December 31, 2009. These consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 which the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 were revised in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on July 20, 2009 to reflect the implementation of the change in accounting for noncontrolling interests adopted on January 1, 2009. All significant inter-company balances and transactions have been eliminated in consolidation.

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

Revisions and Reclassifications

          On January 1, 2009, the Company adopted the change in accounting for noncontrolling interests and, accordingly, the Company reflected the new presentation of noncontrolling interests as a separate item in the equity section in the Company’s Consolidated Statements of Financial Condition. The Company also reflected the amount attributable to noncontrolling interests and the amount attributable to BFC to be separately presented in the Company’s Consolidated Statements of Operations, Consolidated Statements of Comprehensive Loss and Consolidated Statement of Changes in Equity. The change in accounting for noncontrolling interests was applied prospectively with the exception of the financial statements presentation and required disclosures, which were applied retrospectively for all periods presented.

          In 2007, Core Communities began soliciting bids from several potential buyers to purchase assets associated with two of Core’s commercial leasing projects (the “Projects”). As the criteria for assets held for sale had been met in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for

the Impairment or Disposal of Long-Lived Assets” (“SFAS No. 144”), the assets were reclassified to assets held for sale and the liabilities related to those assets were reclassified to liabilities related to assets held for sale. The results of operations for these assets were reclassified as discontinued operations. During the fourth quarter of 2008, Woodbridge determined that given the difficulty in predicting the timing or probability of a sale of the assets associated with the Projects as a result of, among other things, the economic downturn and disruptions in the credit markets, the requirements of SFAS No. 144 necessary to classify these assets as held for sale and to be included in discontinued operations were no longer met and Woodbridge could not assert the Projects could be sold within a year. Therefore, the results of operations for these Projects were reclassified back into continuing operations for prior periods to conform to the current periods’ presentation.

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

Recently Adopted Accounting Standards

          In December 2007, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—An Amendment of ARB No. 51” (“SFAS 160”). SFAS 160 established new accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement required the recognition of a noncontrolling interest (minority interest) as equity in the consolidated financial statements and separate from the parent’s equity. SFAS 160 also established accounting and reporting standards for the amount of consolidated net income attributable to the parent and to the noncontrolling interest. SFAS 160 clarified that changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, SFAS 160 required that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated. Such gain or loss is measured using the fair value of the noncontrolling equity investment on the deconsolidation date. SFAS 160 also included expanded disclosure requirements regarding the interests of the parent and its noncontrolling interest. SFAS 160 was effective for fiscal years, and interim periods within those fiscal years, beginning on or after December 15, 2008. Earlier adoption was prohibited. The Company adopted SFAS 160 on January 1, 2009.

          In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) significantly changed the accounting for business combinations. Under SFAS 141(R), subject to limited exceptions, an acquiring entity will be required to recognize all the assets acquired and liabilities assumed in a transaction at the acquisition-date fair value. Additionally, due diligence and transaction costs incurred to effect a business combination will be expensed as incurred, as opposed to being capitalized as part of the acquisition purchase price. SFAS No. 141(R) also includes a substantial number of new disclosure requirements. The adoption of SFAS No. 141(R) on January 1, 2009 did not impact the Company’s unaudited consolidated financial statements, but will impact the accounting for any future acquisitions.

          In May 2009, the FASB issued FAS No. 165, “Subsequent Events” (“FAS 165”). FAS 165 addresses the accounting and disclosures of subsequent events not addressed in other pronouncements. This statement establishes new terminology for the “Type I” and “Type II” concepts naming them “Recognized” and “Unrecognized” subsequent events, respectively. FAS 165 also requires the disclosure of the date through which subsequent events have been evaluated and whether the date is the date the financial statements were issued or the date the financial statements were available to be issued. The application of this pronouncement is effective for fiscal years and interim periods beginning after June 15, 2009. The Company has adopted this pronouncement and has evaluated subsequent events through the issuance date of the financial statements on August 11, 2009.

          In April 2009, the FASB issued three related FASB Staff Positions (“FSPs”): (i) FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability have Significantly Decreased and Identifying Transactions That Are Not Orderly” (“FSP FAS 157-4”), (ii) FSP FAS 115-2 and FSP

FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments” (“FSP FAS 115-2/FAS 124-2”), and (iii) FSP FAS No. 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (“FSP FAS 107-1/APB 28-1”), each of which is effective for interim and annual periods ending after June 15, 2009. FSP FAS 157-4 provides guidance on how to determine the fair value of assets and liabilities under SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”) in the current economic environment and reemphasizes that the objective of a fair value measurement remains an exit price. If the Company was to conclude that there has been a significant decrease in the volume and level of activity of the asset or liability in relation to normal market activities, quoted market values may not be representative of fair value and the Company may conclude that a change in valuation technique or the use of multiple valuation techniques may be appropriate. FSP FAS 115-2/FAS 124-2 modifies the requirements for recognizing other-than-temporarily impaired debt securities and revises the existing impairment model for such securities, by modifying the current intent and ability indicator in determining whether a debt security is other-than-temporarily impaired. FSP FAS 107-1/APB 28-1 enhances the disclosure of instruments under the scope of SFAS No. 157 for both interim and annual periods. The adoption of these FSPs did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

2. Liquidity

BFC

          Except as otherwise noted, the debts and obligations of BankAtlantic Bancorp and Woodbridge are not direct obligations of BFC and are non-recourse to BFC. Similarly, the assets of those entities are not available to BFC absent its pro rata share in a dividend or distribution. BFC has incurred operating cash flow deficits which have been financed with available working capital. BFC expects to meet its liquidity requirements generally through existing cash balances and cash dividends from Benihana and, if necessary with respect to its long-term liquidity requirements, through secured and unsecured indebtedness, future issuances of equity and/or debt securities, and, the sale of assets; however, there is no assurance that any of these alternatives will be available to BFC on attractive terms, or at all, particularly if the adverse current economic and financial market conditions continue.

BankAtlantic Bancorp and BankAtlantic

          BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and availability under its lines of credit, and Treasury and Federal Reserve lending programs. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets or deterioration in BankAtlantic’s financial condition may make terms of the borrowings and deposits less favorable. As a result, there is a risk that BankAtlantic’s cost of funds will increase or that the availability of funding sources may decrease. As of June 30, 2009, BankAtlantic had available unused borrowings and cash of approximately $825 million consisting primarily of $247 million of unused FHLB line of credit capacity, $246 million of unpledged securities, $119 million of available borrowing capacity at the Federal Reserve and $213 million of cash. However, such available borrowings are subject to periodic reviews and they may be terminated or limited at any time.

          As of June 30, 2009, BankAtlantic’s capital was in excess of all regulatory “well capitalized” levels. However, the OTS, at its discretion, can at any time require an institution to maintain capital amounts and ratios above the established “well capitalized” requirements based on its view of the risk profile of the specific institution. If higher capital requirements are imposed, BankAtlantic could be required to raise additional capital. There is no assurance that additional capital will not be necessary, or that BankAtlantic Bancorp or BankAtlantic would be successful in raising additional capital in subsequent periods on favorable terms or at all. BankAtlantic Bancorp’s inability to raise capital or be deemed “well capitalized” could have a material adverse impact on BFC’s and BankAtlantic Bancorp’s financial condition and results.

Core Communities

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

          Certain of Core’s debt facilities contain financial covenants generally requiring certain net worth, liquidity and loan to value ratios. In January of 2009, Core was advised by one of its lenders that the lender had received an external appraisal on the land that serves as collateral for a development mortgage note payable, which had an outstanding balance of $86.4 million at June 30, 2009. The appraised value would suggest the potential for a re-margining payment to bring the note payable back in line with the minimum loan-to-value requirement. The lender is conducting its internal review procedures, including the determination of the appraised value. As of the date of this filing, Core is in discussion with the lender to restructure the loan which may eliminate any re-margining requirements; however, there is no assurance that these discussions will be successful or that re-margining payments will not otherwise be required in the future.

          As discussed above, the operations of Core have been negatively impacted by the deterioration of the real estate market and Core may be required to make re-margining payments under certain of its debt facilities. These factors have caused substantial doubt to be raised regarding Core’s ability to continue as a going concern if Woodbridge chooses not to provide Core with the cash needed to meet its obligations when and if they arise. Core’s results are reported separately for segment purposes as the Land Division segment in Note 5. The financial information provided in the Land Division segment and in the unaudited consolidated financial statements has been prepared assuming that Core will meet its obligations and continue as a going concern. As a result, the unaudited consolidated financial statements and the financial information provided for the Land Division do not include any adjustments that might result from the outcome of this uncertainty.

3. Fair Value Measurement

          The following table presents major categories of the Company’s assets measured at fair value on a recurring basis at June 30, 2009 and December 31, 2008 (in thousands):

						Fair Value Measurements at June 30, 2009 Using
						Quoted prices in
						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
		June 30.				Assets				Inputs				Inputs
Description		2009				(Level 1)				(Level 2)				(Level 3)
Securities Available for Sale:
Mortgage-backed securities		$	293,141				—				293,141				—
REMICS (1)			137,591				—				137,591				—
Bonds			250				—				—				250
Benihana’s Convertible Preferred Stock			20,511				—				—				20,511
Other equity securities (2)			7,678				7,468				—				210
Total securities available for sale at fair value		$	459,171				7,468				430,732				20,971

						Fair Value Measurements at December 31, 2008 Using:
						Quoted prices in
						Active Markets				Significant Other				Significant
						for Identical				Observable				Unobservable
		December 31,				Assets				Inputs				Inputs
Description		2008				(Level 1)				(Level 2)				(Level 3)
Securities Available for Sale:
Mortgage-backed securities		$	532,873				—				532,873				—
REMICS			166,351				—				166,351				—
Bonds			250				—				—				250
Benihana’s Convertible Preferred Stock			16,426				—				—				16,426
Other equity securities (2)			6,798				5,210				—				1,588
Total securities available for sale at fair value		$	722,698				5,210				699,224				18,264

          There were no liabilities measured at fair value on a recurring basis in the Company’s financial statements at June 30, 2009 and December 31, 2008.

          The following table presents major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June 30, 2009 (in thousands):

		Three Months Ended June 30, 2009
						Benihana
						Convertible				Equity
		Bonds				Preferred Stock				Securities				Total
Beginning Balance		$	250				16,384				1,252				17,886
Total gains and losses (realized/unrealized)
Included in earnings			—				—				(1,378	)			(1,378	)
Included in other comprehensive income			—				4,127				336				4,463
Purchases, issuances, and settlements			—				—				—				—
Transfers in and/or out of Level 3			—								—				—
Ending balance		$	250				20,511				210				20,971

		Six Months Ended June 30, 2009
						Benihana
						Convertible				Equity
		Bonds				Preferred Stock				Securities				Total
Beginning Balance		$	250				16,426				1,588				18,264
Total gains and losses (realized/unrealized)
Included in earnings			—				—				(1,378	)			(1,378	)
Included in other comprehensive income			—				4,085				—				4,085
Purchases, issuances, and settlements			—				—				—				—
Transfers in and/or out of Level 3			—				—				—				—
Ending balance		$	250				20,511				210				20,971

          The loss of $1.4 million associated with equity securities was included in Financial Services securities activities, net in the Company’s statements of operations for the three and six months ended June 30, 2009 and which represents an other-than-temporary impairment associated with a decline in value related to an equity investment in an unrelated financial institution.

          The following table presents major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended June 30, 2008 (in thousands):

						Stifel				Equity
		Bonds				Warrants				Securities				Total
Beginning Balance		$	481				8,805				4,348				13,634
Total gains and losses (realized/unrealized)
Included in earnings			—				4,452				—				4,452
Included in other comprehensive income			1				—				(976	)			(975	)
Purchases, issuances, and settlements			—				—				—				—
Transfers in and/or out of Level 3			—				—				—				—
Ending balance, June 30, 2008		$	482				13,257				3,372				17,111

          The entire $4.5 million of gains included in earnings for the three months ended June 30, 2008 represents changes in unrealized gains relating to assets still held at June 30, 2008.

          The following table presents major categories of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2008 (in thousands):

						Stifel				Equity
		Bonds				Warrants				Securities				Total
Beginning Balance		$	681				10,661				5,133				16,475
Total gains and losses (realized/unrealized)
Included in earnings			—				2,596				—				2,596
Included in other comprehensive income			1				—				(1,761	)			(1,760	)
Purchases, issuances, and settlements			(200	)			—				—				(200	)
Transfers in and/or out of Level 3			—				—				—				—
Ending balance, June 30, 2008		$	482				13,257				3,372				17,111

          The entire $2.6 million of gains included in earnings for the six months ended June 30, 2008 represents changes in unrealized gains relating to assets still held at June 30, 2008.

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

          Mortgage-Backed Securities and REMIC’s

          The fair values of 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 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 reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness of the fair values obtained from independent pricing sources. BankAtlantic 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.

          Bonds and Other Equity Securities

          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 to value bonds and equity securities, 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 we have developed or based on observable market data that we adjusted based on our judgment of the factors we believe a market participant would use to value the securities (Level 3).

          Benihana’s Convertible Preferred Stock

          The 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, as if converted, that BFC owns in Benihana’s Convertible Preferred Stock.

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

		Fair Value Measurements at June 30, 2009
						Quoted prices in
						Active Markets				Significant				Significant
						for Identical				Other Observable				Unobservable
		June 30,				Assets				Inputs				Inputs				Total
Description		2009				(Level 1)				(Level 2)				(Level 3)				Impairments
Loans measured for impairment using the fair value of the collateral		$	177,326				—				—				177,326			$	37,744
Impaired real estate owned			2,955				—				—				2,955				623
Impaired real estate held for sale			2,130				—				—				2,130				33
Impaired goodwill			—				—				—				—				8,541
Investment in Bluegreen			23,984				23,984				—				—				20,401
Total		$	206,395				23,984				—				182,411			$	67,342

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

          Loans Measured For Impairment

          Impaired loans are generally valued based on the fair value of the underlying collateral. Third party appraisals of the collateral are primarily used to assist in measuring impairment. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the fair value of the loan’s collateral. However, the appraiser uses professional judgment in determining the fair value of the collateral and these values may also be adjusted for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, judgment on market conditions is used to adjust the most current appraisal. The comparable sales prices used in the valuation of the collateral may reflect prices of sales contracts not closed, and the amount of time required to sell out the real estate project may be derived from current appraisals of similar projects. As a consequence, the fair value of the collateral is considered a Level 3 valuation.

          Impaired Real Estate Owned and Real Estate Held for Sale

          Generally, real estate is valued using third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an opinion of the fair value of the properties. However, the appraiser or brokers use professional judgment in determining the fair value of the properties, and we may also adjust these values for changes in market conditions subsequent to the valuation date. As a consequence of using broker price opinions and adjustments to appraisals, the fair values of the properties are considered a Level 3 valuation.

          Impaired Goodwill

          Goodwill impairment charges relating to BankAtlantic Bancorp’s tax certificates and investments reporting units in the aggregate amount of $8.5 million, net of purchase accounting adjustment from the 2008 step acquisition in the amount of approximately $0.6 million, was recorded during the six months ended June 30, 2009. The remaining goodwill on the Company’s statement of financial condition primarily relates to BankAtlantic Bancorp’s capital services reporting unit. The goodwill associated with this reporting unit was determined not to be impaired as of June 30, 2009. In determining the fair value of the reporting units, BankAtlantic Bancorp used discounted cash flow valuation techniques. This method requires assumptions for expected cash flows and applicable discount rates. The aggregate fair value of all reporting units derived from the above valuation methodology was compared to BankAtlantic Bancorp’s market capitalization adjusted for a control premium in order to determine the reasonableness of the financial model output. A control premium represents the value an investor would pay above minority interest transaction prices in order to obtain a controlling interest in the respective company. BankAtlantic Bancorp used financial projections over a period of time considered necessary to achieve a steady state of cash flows for each reporting unit. The primary assumptions in the projections were anticipated loan, tax certificates and securities growth, interest rates and revenue growth. The discount rates were estimated based on the Capital Asset

Pricing Model, which considers the risk-free interest rate, market risk premium, beta, and unsystematic risk and size premium adjustments specific to a particular reporting unit. The estimated fair value of a reporting unit is highly sensitive to changes in the discount rate and terminal value assumptions and, accordingly, minor changes in these assumptions could impact significantly 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 a reporting unit to be below its carrying value. As a result of the significant judgments used in determining the fair value of the reporting units, the fair values of the reporting units are considered a Level 3 valuation.

Financial Disclosures about Fair Value of Financial Instruments

		June 30, 2009								December 31, 2008
		Carrying				Fair				Carrying				Fair
		Amount				Value				Amount				Value
Financial assets:
Cash and cash equivalents		$	271,873				271,873				278,937				278,937
Restricted cash			7,845				7,845				21,288				21,288
Securities available for sale			459,171				459,171				722,698				722,698
Investment securities			52,315				53,294				12,008				12,475
Tax Certificates			179,110				185,483				213,534				224,434
Federal home loan bank stock			48,751				48,751				54,607				54,607
Loans receivable including loans held for sale, net			4,041,217				3,659,724				4,317,645				3,950,557
Financial liabilities:
Deposits		$	4,055,047				4,045,715				3,919,796				3,919,810
Short term borrowings			25,068				25,068				279,726				279,777
Advances from FHLB			597,252				605,809				967,491				983,582
Subordinated debentures, mortgage and notes payable			286,245				272,409				287,772				266,851
Junior subordinated debentures			383,325				122,661				376,104				152,470

          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 Company would receive the estimated value upon sale or disposition of the asset or pay 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.

          Fair values are estimated for loan portfolios with similar financial characteristics. Loans 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 average maturity is based on BankAtlantic’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 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 was based on discounted expected cash flows using discount rates that take into account the risk of the cash flows of tax certificates relative to alternative investments.

          The fair value of Federal Home Loan Bank stock is its carrying amount.

          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 considered the same as book value. The fair value of certificates of deposit is based on an income approach with Level 3 inputs. The fair value is calculated by the discounted value of contractual cash flows with the discount rate estimated using current rates offered by BankAtlantic for similar remaining maturities.

          The fair value of short term borrowings was calculated using the income approach with Level 2 inputs. The Company discounts contractual cash flows 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 subordinated debentures and mortgage and notes payable were based on discounted values of contractual cash flows at a credit adjusted market discount rate.

          The fair value on $57.1 million of junior subordinated debentures was obtained from NASDAQ price quotes as of June 30, 2009 and December 31, 2008. The fair value of the remaining junior subordinated debentures was obtained using a market approach by obtaining price quotes from other obligors that we believe may have similar risk profiles in the market (Level 3).

Concentration of Credit Risk

          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 real estate value declines in the housing market. Also, included in this purchased residential loan portfolio are interest-only loans. These loans result in possible future increases in a borrower’s loan payments when the contractually required repayments increase 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 June 30, 2009, BankAtlantic’s residential loan portfolio included $895.3 million of interest-only loans with 29% of the principal amount of these loans secured by collateral located in California. BankAtlantic manages this credit risk by purchasing interest-only loans originated to borrowers that it believes to be credit worthy, with loan-to-value and total debt to income ratios at origination within agency guidelines.

          BankAtlantic has a high concentration of consumer home equity and commercial loans in the State of Florida. Real estate values and general economic conditions have significantly deteriorated from the origination dates of the loans. If the market conditions in Florida do not improve or deteriorate further BankAtlantic may be exposed to significant credit losses.

4. Noncontrolling Interests

          The following table summarizes the noncontrolling interests held by others in the Company’s subsidiaries at June 30, 2009 and December 31, 2008 (in thousands):

		June 30,				December 31,
		2009				2008
BankAtlantic Bancorp		$	116,699				170,888
Woodbridge			108,790				91,389
Other subsidiaries			3,935				277
		$	229,424				262,554

          The following table summarizes the noncontrolling interests loss (earnings) recognized by others with respect to the Company’s subsidiaries for the three and six months ended June 30, 2009 and 2008 (in thousands):

		For the Three Months Ended								For the Six Months Ended
		June 30,								June 30,
		2009				2008				2009				2008
Noncontrolling Interests-Continuing Operations:
BankAtlantic Bancorp		$	26,868				14,806				59,517				33,585
Woodbridge			(518	)			7,094				(11,814	)			15,368
Other subsidiaries			267				(74	)			486				(62	)
		$	26,617				21,826				48,189				48,891
Noncontrolling Interests-Discontinued Operations:
BankAtlantic Bancorp		$	—				—				(2,943	)			(857	)
Woodbridge			—				—				—				—
Other subsidiaries			—				—				—				—
		$	—				—				(2,943	)			(857	)
Net Loss (Income) Attributable to Noncontrolling Interests		$	26,617				21,826				45,246				48,034