UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission files number 001-13133

BankAtlantic Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Florida		65-0507804
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)
2100 West Cypress Creek Road
Fort Lauderdale, Florida		33309
(Address of principal executive offices)		(Zip Code)

(954) 940-5000
(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, and (2) has been subject to such filing requirements for the past 90 days. þ YES      o NO

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). þ YES      o NO

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o YES      þ NO

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of the latest practicable date.

				Outstanding at
	Title of Each Class			November 3, 2009
	Class A Common Stock, par value $0.01 per share				48,264,842
	Class B Common Stock, par value $0.01 per share				975,225

 

 

TABLE OF CONTENTS

Reference		Page
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements			3-24
Consolidated Statements of Financial Condition — September 30, 2009 and December 31, 2008 - Unaudited			3
Consolidated Statements of Operations — For the Three Months and Nine Ended September 30, 2009 and 2008 - Unaudited			4
Consolidated Statements of Stockholders’ Equity and Comprehensive Income — For the Nine Months Ended September 30, 2009 and 2008 - Unaudited			5
Consolidated Statements of Cash Flows — For the Nine Months Ended September 30, 2009 and 2008 - Unaudited			6
Notes to Consolidated Financial Statements — Unaudited			7-24
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			25-44
Item 3. Quantitative and Qualitative Disclosures about Market Risk			45
Item 4. Controls and Procedures			45
Part II. OTHER INFORMATION
Item 1. Legal Proceedings			46
Item 1A. Risk Factors			47
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			47
Item 6. Exhibits			48
Signatures			48
EX-31.1
EX-31.2
EX-32.1
EX-32.2

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

		September 30,				December 31,
(In thousands, except share data)		2009				2008
ASSETS
Cash and cash equivalents		$	207,921				158,957
Securities available for sale (at fair value)			355,511				701,845
Investment securities at cost or amortized cost (approximate fair value: $3,768 and $2,503)			2,036				2,036
Tax certificates, net of allowance of $6,881 and $6,064			138,401				213,534
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value			48,751				54,607
Residential loans held for sale			5,038				3,461
Loans receivable, net of allowance for loan losses of $184,662 and $137,257			3,840,799				4,323,190
Accrued interest receivable			33,215				41,817
Real estate held for development and sale			17,218				18,383
Real estate owned			37,075				19,045
Investments in unconsolidated subsidiaries			11,022				10,552
Office properties and equipment, net			205,248				216,978
Goodwill and other intangibles			16,139				26,244
Other assets			22,815				23,908
Total assets		$	4,941,189				5,814,557
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities:
Deposits
Interest bearing deposits		$	3,149,730				3,178,105
Non-interest bearing deposits			809,749				741,691
Total deposits			3,959,479				3,919,796
Advances from FHLB			342,016				967,028
Securities sold under agreement to repurchase			33,437				46,084
Federal funds purchased and other short term borrowings			2,759				238,339
Subordinated debentures and mortgage-backed bonds			22,738				22,864
Junior subordinated debentures			304,944				294,195
Other liabilities			86,374				82,283
Total liabilities			4,751,747				5,570,589
Commitments and contingencies (See Note 10)
Stockholders’ equity:
Class A common stock, issued and outstanding 48,245,042 and 10,258,057 shares			483				103
Class B common stock, issued and outstanding 975,225 and 975,225 shares			10				10
Additional paid-in capital			295,755				218,974
Accumulated (deficit) retained earnings			(100,970	)			32,667
Total stockholders’ equity before accumulated other comprehensive loss			195,278				251,754
Accumulated other comprehensive loss			(5,836	)			(7,786	)
Total stockholders’ equity			189,442				243,968
Total liabilities and stockholders’ equity		$	4,941,189				5,814,557

See Notes to Consolidated Financial Statements — Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

		For the Three Months								For the Nine Months
		Ended September 30,								Ended September 30,
(In thousands, except share and per share data)		2009				2008				2009				2008
Interest income:
Interest and fees on loans		$	45,028				60,843				142,453				190,562
Interest and dividends on securities			4,927				11,448				20,038				35,457
Interest on tax certificates			3,793				8,893				11,046				17,384
Total interest income			53,748				81,184				173,537				243,403
Interest expense:
Interest on deposits			9,420				15,552				33,934				48,653
Interest on advances from FHLB			2,494				13,401				14,740				40,780
Interest on short term borrowings			9				330				200				2,334
Interest on debentures and bonds payable			3,973				5,484				12,791				16,987
Total interest expense			15,896				34,767				61,665				108,754
Net interest income			37,852				46,417				111,872				134,649
Provision for loan losses			63,586				31,214				151,357				121,349
Net interest (loss) income after provision for loan losses			(25,734	)			15,203				(39,485	)			13,300
Non-interest income:
Service charges on deposits			19,767				23,924				57,799				72,404
Other service charges and fees			7,355				7,309				22,439				21,863
Securities activities, net			4,774				1,132				9,906				5,359
Other			3,711				2,831				10,094				10,085
Total non-interest income			35,607				35,196				100,238				109,711
Non-interest expense:
Employee compensation and benefits			24,876				31,679				79,617				100,015
Occupancy and equipment			14,553				15,996				44,306				48,554
Advertising and business promotion			1,549				3,430				6,360				11,987
Check losses			1,146				2,094				2,981				6,913
Professional fees			3,470				3,160				9,491				8,139
Supplies and postage			1,035				1,080				3,038				3,368
Telecommunication			353				753				1,637				3,586
Cost associated with debt redemption			5,431				—				7,463				2
Provision for tax certificates losses			(198	)			2,839				2,702				3,646
Impairment of goodwill			—				—				9,124				—
Impairment of real estate held for sale			1,131				—				1,165				1,746
Impairment of real estate owned			137				1,002				760				1,242
Restructuring charges and exit activities			461				(480	)			3,708				3,421
FDIC special assessment			—				—				2,428				—
Other			8,014				7,097				23,026				19,803
Total non-interest expense			61,958				68,650				197,806				212,422
Loss from continuing operations before income taxes			(52,085	)			(18,251	)			(137,053	)			(89,411	)
Provision (benefit) for income taxes			3				(7,269	)			3				(34,502	)
Loss from continuing operations			(52,088	)			(10,982	)			(137,056	)			(54,909	)
Discontinued operations (less applicable income tax provision of $0, $2,649, $0 and $3,252)			(500	)			4,919				3,701				6,040
Net loss		$	(52,588	)			(6,063	)			(133,355	)			(48,869	)
Basic loss per share
Continuing operations		$	(3.45	)			(0.73	)			(9.08	)			(3.64	)
Discontinued operations			(0.03	)			0.33				0.24				0.40
Basic loss per share		$	(3.48	)			(0.40	)			(8.84	)			(3.24	)
Diluted loss per share
Continuing operations		$	(3.45	)			(0.73	)			(9.08	)			(3.64	)
Discontinued operations			(0.03	)			0.33				0.24				0.40
Diluted loss per share		$	(3.48	)			(0.40	)			(8.84	)			(3.24	)
Basic weighted average number of common shares outstanding			15,096,420				15,082,493				15,093,164				15,076,980
Diluted weighted average number of common and common equivalent shares outstanding			15,096,420				15,082,493				15,093,164				15,076,980

See Notes to Consolidated Financial Statements — Unaudited

BankAtlantic Bancorp, Inc.

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

																		Accumulated
																		Other
		Compre-								Additional				Retained				Compre-
		hensive				Common				Paid-in				Earnings				hensive
(In thousands)		Income				Stock				Capital				(Deficit)				Income (Loss)				Total
BALANCE, DECEMBER 31, 2007		$					113				217,140				236,150				5,918				459,321
Net loss			(48,869	)			—				—				(48,869	)			—				(48,869	)
Net unrealized losses on securities available for sale			(11,476	)			—				—				—				(11,476	)			(11,476	)
Comprehensive loss		$	(60,345	)
Dividends on Class A common stock							—				—				(771	)			—				(771	)
Dividends on Class B common stock							—				—				(74	)			—				(74	)
Issuance of Class A common stock upon exercise of stock options							—				103				—				—				103
Tax effect relating to share-based compensation							—				(42	)			—				—				(42	)
Share based compensation expense							—				2,041				—				—				2,041
BALANCE, SEPTEMBER 30, 2008		$					113				219,242				186,436				(5,558	)			400,233
BALANCE, DECEMBER 31, 2008		$					113				218,974				32,667				(7,786	)			243,968
Net loss			(133,355	)			—				—				(133,355	)			—				(133,355	)
Net unrealized gains on securities available for sale			1,950				—				—				—				1,950				1,950
Comprehensive loss		$	(131,405	)
Dividends on Class A common stock							—				—				(257	)			—				(257	)
Dividends on Class B common stock							—				—				(25	)			—				(25	)
Issuance of Class A common stock							380				74,885												75,265
Share based compensation expense							—				1,896				—				—				1,896
BALANCE, SEPTEMBER 30, 2009		$					493				295,755				(100,970	)			(5,836	)			189,442

See Notes to Consolidated Financial Statements — Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

		For the Nine Months
		Ended September 30,
(In thousands)		2009				2008
Net cash provided by operating activities		$	60,276			$	63,098
Investing activities:
Proceeds from redemption of investment securities			—				14,365
Proceeds from redemption of tax certificates			135,527				252,946
Purchase of tax certificates			(63,730	)			(363,013	)
Purchase of securities available for sale			(50,947	)			(254,263	)
Proceeds from sales of securities available for sale			303,821				356,199
Proceeds from maturities of securities available for sale			113,743				121,040
Purchases of FHLB stock			(2,295	)			(45,810	)
Redemption of FHLB stock			8,151				42,661
Investments in unconsolidated subsidiaries			(766	)			—
Distributions from unconsolidated subsidiaries			296				2,165
Net decrease (increase) in loans			305,467				(16,552	)
Proceeds from the sale of loans receivable			5,427				10,100
Improvements to real estate owned			(1,018	)			(19	)
Proceeds from sales of real estate owned			3,715				2,533
Net additions to office properties and equipment			(2,544	)			(6,652	)
Net cash outflows from the sale of Central Florida stores			—				(4,491	)
Net cash provided by investing activities			754,847				111,209
Financing activities:
Net increase (decrease) in deposits			39,683				(60,696	)
Prepayment of FHLB advances			(1,159,463	)			—
Net proceeds from FHLB advances			527,000				71,000
Decrease in securities sold under agreements to repurchase			(12,647	)			(11,915	)
Decrease in federal funds purchased			(235,580	)			(58,975	)
Repayment of notes and bonds payable			(135	)			(613	)
Proceeds from issuance of Class A common stock			75,265				103
Common stock dividends			(282	)			(845	)
Net cash used in financing activities			(766,159	)			(61,941	)
Increase in cash and cash equivalents			48,964				112,366
Cash and cash equivalents at the beginning of period			158,957				124,574
Cash and cash equivalents at end of period		$	207,921			$	236,940

See Notes to Consolidated Financial Statements — Unaudited

BankAtlantic Bancorp, Inc. and Subsidiaries

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — UNAUDITED

1. Presentation of Interim Financial Statements

     BankAtlantic Bancorp, Inc. (the “Company”) is a unitary savings bank holding company organized under the laws of the State of Florida. The Company’s principal asset is its investment in BankAtlantic and its subsidiaries. The Company has two reportable segments, BankAtlantic and the Parent Company. On February 28, 2007, the Company completed the sale to Stifel Financial Corp. (“Stifel”) of Ryan Beck Holdings, Inc. (“Ryan Beck”), a subsidiary engaged in retail and institutional brokerage and investment banking. Under the terms of the Ryan Beck sales agreement, the Company received additional consideration based on Ryan Beck revenues over the two year period following the closing of the sale and the Company also indemnified Stifel against certain losses arising out of activities of Ryan Beck prior to its sale. Included in the Company’s consolidated statement of operations in discontinued operations for the three and nine months ended September 30, 2009 and 2008 was earn-out consideration net of indemnification reserves.

     BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, provides traditional retail banking services and a wide range of commercial banking products and related financial services through a network of over 100 branches or “stores” located in Florida.

     All significant inter-company balances and transactions have been eliminated in consolidation. The Company has evaluated subsequent events through the issuance date of the financial statements on November 9, 2009.

     In management’s opinion, the accompanying consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Company’s consolidated financial condition at September 30, 2009 and December 31, 2008, the consolidated results of operations for the three and nine months ended September 30, 2009 and 2008, and the consolidated stockholders’ equity and comprehensive income and cash flows for the nine months ended September 30, 2009 and 2008. The results of operations for the three and nine months ended September 30, 2009 are not necessarily indicative of results of operations that may be expected for the year ended December 31, 2009. The consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the notes to the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.

     Certain amounts for prior periods have been reclassified to conform to the statement presentation for 2009. The Company adjusted the number of common shares outstanding for prior periods for the issuance of Class A common stock in September 2009.

     Liquidity - BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and borrowing 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 reduce the amounts it is able to borrow or make terms of the borrowings and deposits less favorable. As a result, there is a risk that the cost of funds will increase or that the availability of funding sources may decrease. As of September 30, 2009, BankAtlantic had $208 million of cash and available unused borrowings of approximately $706 million, consisting of $407 million of unused FHLB line of credit capacity, $191 million of unpledged securities, and $108 million of available borrowing capacity at the Federal Reserve. However, such available borrowings are subject to periodic reviews and they may be terminated, suspended or reduced at any time.

     Regulatory Capital - As of September 30, 2009, BankAtlantic’s capital was in excess of all regulatory “well capitalized” levels. However, the Office of Thrift Supervision (“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 the Company or BankAtlantic would be successful in raising additional capital in subsequent periods on favorable terms or at all. The Company’s inability to raise capital, if required, could have a material adverse impact on the Company’s financial condition and results.

BankAtlantic Bancorp, Inc. and Subsidiaries

2. Fair Value Measurement

     The accounting guidance defines fair value as the price that would be received on the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The guidance also defines valuation techniques and a fair value hierarchy to prioritize the inputs used in valuation techniques. There are three main valuation techniques to measuring fair value of assets and liabilities: the market approach, the income approach and the cost approach. The input fair value hierarchy has three broad levels and gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

     The valuation techniques are summarized below:

     The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities.

     The income approach uses financial models to convert future amounts to a single present amount. These valuation techniques include present value and option-pricing models.

     The cost approach is based on the amount that currently would be required to replace the service capacity of an asset. This technique is often referred to as current replacement costs.

     The input fair value hierarchy is summarized below:

     Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at each reporting date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and is used to measure fair value whenever available.

     Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include: Quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers (for example, some brokered markets), or in which little information is released publicly (for example, a principal-to-principal market); and inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates).

     Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are only used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

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

As of September 30, 2009		Carrying				Fair Value
Description		Amount				(Level 1)				(Level 2)				(Level 3)
Mortgage-backed securities		$	230,737				—				230,737				—
REMICS (1)			123,561				—				123,561				—
Bonds			250				—				—				250
Equity securities			963				799				—				164
Total		$	355,511				799				354,298				414

BankAtlantic Bancorp, Inc. and Subsidiaries

As of December 31, 2008		Carrying				Fair Value
Description		Amount				(Level 1)				(Level 2)				(Level 3)
Mortgage-backed securities		$	532,873				—				532,873				—
REMICS (1)			166,351				—				166,351				—
Bonds			250				—				—				250
Equity securities			2,371				783				—				1,588
Total		$	701,845				783				699,224				1,838

     There were no liabilities measured at fair value on a recurring basis in the Company’s financial statements at September 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 nine months ended September 30, 2009 (in thousands):

						Equity
		Bonds				Securities				Total
For the Three Months Ended September 30, 2009:
Beginning Balance		$	250				210				460
Total gains and losses (realized/unrealized)
Included in earnings			—				—				—
Included in other comprehensive income			—				(46	)			(46	)
Purchases, issuances, and settlements			—				—				—
Transfers in and/or out of Level 3			—				—				—
Ending balance		$	250				164				414

						Equity
		Bonds				Securities				Total
For the Nine Months Ended September 30, 2009:
Beginning Balance		$	250				1,588				1,838
Total gains and losses (realized/unrealized)
Included in earnings			—				(1,378	)			(1,378	)
Included in other comprehensive income			—				(46	)			(46	)
Purchases, issuances, and settlements			—				—				—
Transfers in and/or out of Level 3			—				—				—
Ending balance		$	250				164				414

     The $1.4 million loss included in securities activities, net in the Company’s statement of operations for the nine months ended September 30, 2009 represents an other-than-temporary impairment associated with a decline in value related to an equity investment in an unrelated financial institution.

BankAtlantic Bancorp, Inc. and Subsidiaries

     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 nine months ended September 30, 2008 (in thousands):

						Stifel				Equity
		Bonds				Warrants				Securities				Total
For the Three Months Ended September 30, 2008:
Beginning Balance		$	482				13,257				3,372				17,111
Total gains and losses (realized/unrealized)
Included in earnings (or changes in net assets)			—				1,108				—				1,108
Included in other comprehensive Income			—				—				320				320
Purchases, issuances, and settlements			(200	)			(14,365	)			—				(14,565	)
Transfers in and/or out of Level 3			—				—				—				—
Ending balance		$	282				—				3,692				3,974

						Stifel				Equity
		Bonds				Warrants				Securities				Total
For the Nine Months Ended September 30, 2008:
Beginning Balance		$	681				10,661				5,133				16,475
Total gains and losses (realized/unrealized)
Included in earnings (or changes in net assets)			—				3,704				—				3,704
Included in other comprehensive Income			1				—				(1,441	)			(1,440	)
Purchases, issuances, and settlements			(400	)			(14,365	)			—				(14,765	)
Transfers in and/or out of Level 3			—				—				—				—
Ending balance		$	282				—				3,692				3,974

     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 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 the Company 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, the Company reviews fair value estimates obtained from brokers, investment advisors and others to determine the reasonableness of the fair values obtained from independent pricing sources. The Company 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 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. We also obtain non-binding broker quotes to validate fair values obtained from matrix pricing. However, for certain equity and debt securities in which observable market inputs cannot be obtained, we value these securities 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).

BankAtlantic Bancorp, Inc. and Subsidiaries

     The following table presents major categories of assets measured at fair value on a non-recurring basis for the nine months ended September 30, 2009 (in thousands):

		Carrying				Fair Value												Total
Description		Amount				(Level 1)				(Level 2)				(Level 3)				Impairments
Loans measured for impairment using the fair value of the collateral		$	219,173				—				—				219,173				78,710
Impaired real estate owned			4,373				—				—				4,373				760
Impaired real estate held for sale			11,330				—				—				11,330				1,164
Impaired goodwill			—				—				—				—				9,124
Total		$	234,876				—				—				234,876				89,758

     There were 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. The Company primarily uses third party appraisals of the collateral 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 we may also adjust these values for changes in market conditions subsequent to the appraisal date. When current appraisals are not available for certain loans, we use our judgment on market conditions 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

     Real estate is generally valued using third party appraisals or broker price opinions. These appraisals generally use the market approach valuation technique and use market observable data to formulate an opinion of the fair value of the properties. However, the appraiser or brokers use professional judgment in determining the fair value of the properties and we may also adjust these values for changes in market conditions subsequent to the valuation date when current appraisals are not available. 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

     The Company recognized goodwill impairment in its tax certificates and investments reporting units during the nine months ended September 30, 2009. The remaining goodwill on the Company’s statement of financial condition relates to the Company’s capital services reporting unit. The goodwill associated with this reporting unit was determined to not be impaired as of September 30, 2009. In determining the fair value of the reporting units, the Company 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 the Company’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. The Company 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 the reporting unit to be below its carrying value. As a result of the significant judgments used in determining the fair value of the reporting units, the fair values of the reporting units are considered a Level 3 valuation.

BankAtlantic Bancorp, Inc. and Subsidiaries

Financial Disclosures about Fair Value of Financial Instruments

		September 30, 2009								December 31, 2008
		Carrying				Fair				Carrying				Fair
(In Thousands)		Amount				Value				Amount				Value
Financial assets:
Cash and cash equivalents		$	207,921				207,921				158,957				158,957
Securities available for sale			355,511				355,511				701,845				701,845
Investment securities			2,036				3,768				2,036				2,503
Tax certificates			138,401				138,876				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			3,845,837				3,490,972				4,326,651				3,959,563
Financial liabilities:
Deposits		$	3,959,479				3,954,309				3,919,796				3,919,810
Short term borrowings			36,196				36,196				284,423				284,474
Advances from FHLB			342,016				344,221				967,028				983,119
Subordinated debentures and notes payable			22,738				19,747				22,864				21,550
Junior subordinated debentures			304,944				115,879				294,195				142,086

     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 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.

     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.

     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 take into account the risk of the cash flows of tax certificates relative to alternative investments.

     The fair value of FHLB 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.

BankAtlantic Bancorp, Inc. and Subsidiaries

     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 value of BankAtlantic’s subordinated debentures was based on discounted values of contractual cash flows at a credit adjusted market discount rate.

     In connection with determining the fair value of all of the Company’s junior subordinated debentures as of September 30, 2009, the Company solely utilized the NASDAQ price quotes available with respect to its $60.8 million of publicly traded debentures (“public debentures”). However, $244.1 million of its outstanding debentures are not traded, but are held in pools and privately with no liquidity or readily determinable source for valuation (“private debentures”). 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, 2009, and as a practical expedient, management used the NASDAQ price quotes of the public debentures to value all of the outstanding junior subordinated debentures whether privately held or public traded. As of December 31, 2008, the Company estimated the fair value of its junior subordinated debentures using the income approach by discounting estimated cash flows at a market discount rate.

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 markets. Also included in this purchased residential loan portfolio are interest-only loans. The structure of 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 September 30, 2009, BankAtlantic’s residential loan portfolio included $823.2 million of interest-only loans, which represents 53% of the residential portfolio with 29% of the principal amount of these interest-only loans secured by collateral located in California. BankAtlantic has attempted to manage 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 in this portfolio.

BankAtlantic Bancorp, Inc. and Subsidiaries

	3.		Securities Available for Sale
			The following tables summarize securities available for sale (in thousands):

		September 30, 2009
						Gross				Gross
		Amortized				Unrealized				Unrealized				Estimated
		Cost				Gains				Losses				Fair Value
Mortgage-Backed Securities:
Mortgage-backed securities		$	221,075				9,662				—				230,737
Real estate mortgage investment conduits (1)			119,363				4,198				—				123,561
Total mortgage-backed securities			340,438				13,860				—				354,298
Investment Securities:
Other bonds			250				—				—				250
Equity securities			969				42				48				963
Total investment securities			1,219				42				48				1,213
Total		$	341,657				13,902				48				355,511

		December 31, 2008
						Gross				Gross
		Amortized				Unrealized				Unrealized				Estimated
		Cost				Gains				Losses				Fair Value
Mortgage-Backed Securities:
Mortgage-backed securities		$	521,895				11,017				39				532,873
Real estate mortgage investment conduits (1)			165,449				1,846				944				166,351
Total mortgage-backed securities			687,344				12,863				983				699,224
Investment Securities:
Other bonds			250				—				—				250
Equity securities			2,347				24				—				2,371
Total investment securities			2,597				24				—				2,621
Total		$	689,941				12,887				983				701,845

     There were no gross unrealized losses related to the Company’s debt securities available for sale as of September 30, 2009. The following table shows the gross unrealized losses and fair value of the Company’s debt 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 December 31, 2008 (in thousands):

		As of December 31, 2008
		Less Than 12 Months								12 Months or Greater								Total
		Fair				Unrealized				Fair				Unrealized				Fair				Unrealized
		Value				Losses				Value				Losses				Value				Losses
Mortgage-backed securities		$	4,736				(39	)			—				—				4,736				(39	)
Real estate mortgage investment conduits			—				—				27,426				(944	)			27,426				(944	)
Total available for sale securities:		$	4,736				(39	)			27,426				(944	)			32,162				(983	)

          Unrealized losses on securities at December 31, 2008 were caused by changes in interest rates. These securities are guaranteed by government agencies and are of high credit quality. Since these securities are of high credit quality, management believes that these securities may recover their losses in the foreseeable future. Further,

BankAtlantic Bancorp, Inc. and Subsidiaries

management does not currently intend to sell these debt securities and believes it will not be required to sell these debt securities before the price recovers. Accordingly, the Company does not consider these investments other-than-temporarily impaired at December 31, 2008.

     The scheduled maturities of debt securities available for sale were (in thousands):

		Debt Securities
		Available for Sale
						Estimated
		Amortized				Fair
September 30, 2009 (1) (2)		Cost				Value
Due within one year		$	254				254
Due after one year, but within five years			32				33
Due after five years, but within ten years			32,072				32,317
Due after ten years			308,330				321,944
Total		$	340,688				354,548

Included in securities activities, net were (in thousands):

		For the Three Months								For the Nine Months
		Ended September 30,								Ended September 30,
		2009				2008				2009				2008
Gross gains on securities sales		$	4,774				23				11,284				7,462
Gross losses on securities sales		$	—				—				—				4,660
Proceeds from sales of securities		$	98,115				9,609				303,821				351,199

     Management reviews its investments portfolio for other-than-temporary declines in value quarterly. As a consequence of the review during the 2009 and 2008 nine month periods, the Company recognized $1.4 million and $1.1 million, respectively, in other-than-temporary declines in value related to an equity investment in an unrelated financial institution, respectively.

     The change in net unrealized holding gains or losses on securities available for sale, included as a separate component of stockholders’ equity, was as follows (in thousands):

		For the Nine Months
		Ended September 30,
		2009				2008
Net change in other comprehensive income on securities available for sale		$	1,950				(17,839	)
Change in deferred tax (benefit) provision on net unrealized gains (losses) on securities available for sale			—				(6,363	)
Change in stockholders’ equity from net unrealized gains (losses) on securities available for sale		$	1,950				(11,476	)

     In April 2009, the FASB amended the guidance for the recognition and presentation of other-than-temporary impairments of debt securities. Under this guidance, if we do not have the intention to sell and it is more-likely-than-not we will not be required to sell the debt security, the guidance requires segregating the difference between fair value and amortized cost into credit loss and losses related to all other factors with only the credit loss recognized in earnings and all other losses recorded to other comprehensive income. Where our intent is to sell the debt security or where it is

BankAtlantic Bancorp, Inc. and Subsidiaries

more-likely-than-not that we will be required to sell the debt security, the entire difference between the fair value and the amortized cost basis is recognized in earnings. The new guidance also requires disclosure of the reasons for recognizing a portion of impairment in other comprehensive income and the methodology and significant inputs used to calculate the credit loss component. We adopted the new guidance effective April 1, 2009. As of the adoption date, we held no debt securities for which an other-than-temporary impairment was previously recognized. As a consequence, we did not recognize a cumulative effect adjustment upon the adoption of this new guidance.

4. Discontinued Operations

     On February 28, 2007, the Company 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 the Company to indemnify Stifel for certain losses arising out of activities of Ryan Beck prior to the sale and asserted through September 30, 2009. The contingent earn-out payments were accounted for when earned as additional proceeds from the sale of Ryan Beck common stock. The Company has a $0.5 million receivable from Stifel as a result of Stifel withholding $0.5 million of earn-out consideration for potential indemnification claims pending the final analysis of any related liabilities. The Company received additional earn-out consideration of $7.6 million and $9.3 million, respectively, during the three and nine months ended September 30, 2008 and recognized $0 and $4.2 million, respectively of additional earn-out consideration during the three and nine months ended September 30, 2009. Based on information provided by Stifel to date, management does not believe that it is obligated to indemnify Stifel under the Ryan Beck sales agreement; however, the issue of a possible indemnification claim remains unresolved and accordingly a reserve for the receivable was established.

5. Restructuring Charges and Exit Activities

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

		Employee
		Termination
		Benefits				Contract				Total
		Liability				Liability				Liability
Balance at January 1, 2008		$	102				990				1,092
Expenses incurred			2,191				361				2,552
Amounts paid or amortized			(1,697	)			(379	)			(2,076	)
Balance at September 30, 2008		$	596				972				1,568
Balance at January 1, 2009		$	171				1,462				1,633
Expense incurred			2,024				1,666				3,690
Amounts paid or amortized			(2,066	)			(105	)			(2,171	)
Balance at September 30, 2009		$	129				3,023				3,152

     In April 2008, the Company reduced its workforce by approximately 124 associates, or 6%. The Company incurred $2.1 million of employee termination costs which was included in the Company’s consolidated statements of operations for the three and nine months ended September 30, 2008.

     In March 2009, the Company further reduced its workforce by approximately 130 associates, or 7%, impacting back-office functions as well as our community banking and commercial lending business units. The Company 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.

     During the nine months ended September 30, 2008, the Company incurred $0.4 million of contract liabilities in connection with the termination of back-office operating leases. During the nine months ended September 30, 2009, the Company recognized an additional $1.7 million of contract termination liabilities in connection with operating leases relating to future store expansion. The additional contract liability reflects declining commercial real estate values during the period.

BankAtlantic Bancorp, Inc. and Subsidiaries

6. Loans Receivable

     The loan portfolio consisted of the following (in thousands):

		September 30,				December 31,
		2009				2008
Real estate loans:
Residential		$	1,634,483			$	1,929,616
Builder land loans			63,120				84,453
Land acquisition and development			203,255				226,484
Land acquisition, development and construction			34,682				60,730
Construction and development			203,719				229,856
Commercial			721,489				709,523
Consumer — home equity			681,285				718,950
Small business			214,098				218,694
Other loans:
Commercial business			148,956				144,554
Small business — non-mortgage			97,801				108,230
Consumer loans			13,307				16,406
Deposit overdrafts			6,775				9,730
Total gross loans			4,022,970				4,457,226
Adjustments:
Premiums, discounts and net deferred fees			2,491				3,221
Allowance for loan losses			(184,662	)			(137,257	)
Loans receivable, net		$	3,840,799			$	4,323,190
Loans held for sale		$	5,038			$	3,461

     Loans held for sale at September 30, 2009 and December 31, 2008 are loans originated through the assistance of an independent mortgage company. The mortgage company provides processing and closing assistance to BankAtlantic. Pursuant to an agreement between the parties, the mortgage company purchases the loans from BankAtlantic within a defined period of time after the date of funding. BankAtlantic earns interest income during the period of ownership. Gains from the sale of loans held for sale were $134,000 and $397,000 for the three and nine months ended September 30, 2009, respectively, and were $42,000 and $247,000 for the three and nine months ended September 30, 2008, respectively.

     Undisbursed loans in process consisted of the following components (in thousands):

		September 30,				December 31,
		2009				2008
Construction and development		$	42,629			$	124,332
Commercial			41,945				38,930
Total undisbursed loans in process		$	84,574			$	163,262

BankAtlantic Bancorp, Inc. and Subsidiaries

     Allowance for Loan Losses (in thousands):

		For the Three Months								For the Nine Months
		Ended September 30,								Ended September 30,
		2009				2008				2009				2008
Balance, beginning of period		$	172,220				106,126				137,257				94,020
Loans charged-off			(51,506	)			(23,487	)			(105,767	)			(102,135	)
Recoveries of loans previously charged-off			362				284				1,815				903
Net (charge-offs)			(51,144	)			(23,203	)			(103,952	)			(101,232	)
Provision for loan losses			63,586				31,214				151,357				121,349
Balance, end of period		$	184,662				114,137				184,662				114,137

     The following summarizes impaired loans (in thousands):

		September 30, 2009								December 31, 2008
		Gross								Gross
		Recorded				Specific				Recorded				Specific
		Investment				Allowances				Investment				Allowances
Impaired loans with specific valuation allowances		$	242,796				78,752				174,710				41,192
Impaired loans without specific valuation allowances			271,224				—				138,548				—
Total		$	514,020				78,752				313,258				41,192

     Impaired loans without specific valuation allowances represent loans that were charged-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.

     The Company continuously monitors collateral dependent loans and performs an impairment analysis on these loans quarterly. A full appraisal is obtained when a real estate loan becomes adversely classified 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, 2009 was $324.5 million of collateral dependent loans, of which $225.6 million were measured for impairment using current appraisals and $98.9 million were measured by adjusting appraisals to reflect changes in market conditions subsequent to the appraisal date. Appraised values were adjusted down by an aggregate amount of $20.2 million to reflect current market conditions on 12 loans due to property value declines since the last appraisal dates.

     As of September 30, 2009, impaired loans with specific valuation allowances had been previously charged down by $59.5 million and impaired loans without specific valuation allowances had been previously charged down by $40.3 million. As of December 31, 2008, impaired loans with specific valuation allowances had been previously charged down by $21.9 million and impaired loans without specific valuation allowances had been previously charged down by $29.5 million.

BankAtlantic Bancorp, Inc. and Subsidiaries

     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				For the Nine
		Months Ended				Months Ended
		September 30, 2009				September 30, 2009
Contracted interest income		$	6,313				17,826
Interest income recognized			1,425				2,861
Foregone interest income		$	4,888				14,965

7. Goodwill

     The Company tests goodwill for potential impairment annually or during interim periods if impairment indicators exist. In response to deteriorating economic and real estate market conditions and the effects that the external environment had on BankAtlantic’s business units, BankAtlantic, in the first quarter of 2009, continued to reduce its asset balances and borrowings with a view toward improving its regulatory capital ratios and revised its projected operating results to reflect a smaller organization in subsequent periods. Additionally, BankAtlantic Bancorp’s market capitalization continued to decline as the average closing price of the Company’s Class A common stock on the NYSE for the month of March 2009 was $1.57 compared to $4.23 for the month of December 2008, a decline of 63%. Management believed that the foregoing factors indicated that the fair value of its reporting units might have declined below their carrying amounts, and, accordingly, an interim goodwill impairment test was performed as of March 31, 2009.

     Based on the results of the interim goodwill impairment evaluation, the Company recorded an impairment charge of $9.1 million during the three months ended March 31, 2009. The entire amount of goodwill relating to the Company’s tax certificate ($4.7 million) and investment ($4.4 million) reporting units was determined to be impaired. Goodwill of $13.1 million associated with the Company’s capital services reporting unit was determined to not be impaired.

     Management performed its annual goodwill impairment test as of September 30, 2009 and determined that goodwill of $13.1 million associated with its capital services reporting unit was not impaired. The goodwill impairment recognized during 2009 generally reflects the ongoing adverse conditions in the financial services industry, the decline of the Company’s market capitalization below its tangible book value and the Company’s decision to reduce the size of certain reporting units in order to enhance liquidity and improve its regulatory capital ratios. If market conditions do not improve or deteriorate further, the Company may recognize additional goodwill impairment charges in future periods.

8. Related Parties

     The Company, Woodbridge Holdings LLC (“Woodbridge”, the successor by merger to Woodbridge Holdings Corporation which was formerly Levitt Corporation) and Bluegreen Corp. (“Bluegreen”) may be deemed to be under common control. The controlling shareholder of the Company and Woodbridge is BFC Financial Corp. (“BFC”), and Woodbridge owns 31% of the outstanding common stock of Bluegreen. Shares of BFC’s capital stock representing a majority of the voting power are owned or controlled by the Company’s Chairman and Vice Chairman, both of whom are also directors of the Company, executive officers and directors of BFC and Woodbridge, and directors of Bluegreen. The Company, BFC, Woodbridge and Bluegreen share certain office premises and employee services, pursuant to the agreements described below.

     In March 2008, BankAtlantic entered into an agreement with Woodbridge to provide information technology support in exchange for monthly payments by Woodbridge to BankAtlantic. In May 2008, BankAtlantic also entered into a lease agreement with BFC under which BFC will pay BankAtlantic monthly rent for office space in BankAtlantic’s corporate headquarters.

     The Company maintains service agreements with BFC, pursuant to which BFC provides human resources, risk management and investor relations services to the Company. BFC is compensated for these services based on its cost.

BankAtlantic Bancorp, Inc. and Subsidiaries

     The table below shows the effect of service arrangements on the Company’s consolidated statement of operations for the three and nine months ended September 30, 2009 and 2008 (in thousands):

		For the Three Months Ended								For the Nine Months Ended
		September 30,								September 30,
		2009				2008				2009				2008
Non-interest income:
Other — office facilities		$	143				138				403				315
Non-interest expense:
Employee compensation benefits			(29	)			(15	)			(87	)			(103	)
Other — back-office support			(407	)			(405	)			(1,313	)			(1,180	)
Net effect of affiliate transactions before income taxes		$	(293	)			(282	)			(997	)			(968	)