Edgar Filing: BANKATLANTIC BANCORP INC

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2011

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

For the transition period from to

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

incorporation or organization)

(I.R.S. Employer

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. x YES ¨ 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). x YES ¨ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” 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 x NO

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


Title of Each Class		Outstanding at November 10, 2011
Class A Common Stock, par value $0.01 per share		15,434,564
Class B Common Stock, par value $0.01 per share		195,045

TABLE OF CONTENTS

Part I. FINANCIAL INFORMATION


		Page

Reference

Item 1. Financial Statements			3-39

	Consolidated Statements of Financial Condition – September 30, 2011 and December 31, 2010 - Unaudited		3

	Consolidated Statements of Operations - For the Three and Nine Months Ended September 30, 2011 and 2010 - Unaudited		4

	Consolidated Statements of Equity and Comprehensive Income – For the Three and Nine Months Ended September 30, 2011 and 2010 - Unaudited		5

	Consolidated Statements of Cash Flows - For the Nine Months Ended September 30, 2011 and 2010 - Unaudited		6-7

	Notes to Consolidated Financial Statements - Unaudited		8-39

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		39-61

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		62

Item 4.	Controls and Procedures		62

Part II. OTHER INFORMATION

Item 1.	Legal Proceedings		63

Item 1A.	Risk Factors		63

Item 6.	Exhibits		64

	Signatures		65

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - UNAUDITED


(In thousands, except share data)	September 30, 2011			December 31, 2010
ASSETS
Cash and due from banks	$	99,612			97,930
Interest bearing deposits in other banks		574,398			455,538
Securities available for sale, at fair value		84,487			424,391
Investment securities		—			1,500
Tax certificates, net of allowance of $7,535 and $8,811		56,268			89,789
Federal Home Loan Bank (“FHLB”) stock, at cost which approximates fair value		25,223			43,557
Loans held for sale		47,596			29,765
Loans receivable, net of allowance for loan losses of $130,719 and $162,139		2,545,143			3,018,179
Accrued interest receivable		15,711			22,010
Real estate held for sale		4,145			5,436
Real estate owned		92,751			74,488
Investments in unconsolidated companies		11,656			10,361
Office properties and equipment, net		142,591			151,414
Assets held for sale		1,768			37,334
Goodwill		13,081			13,081
Prepaid FDIC deposit insurance assessment		14,633			22,008
Other assets		11,591			12,652

Total assets	$	3,740,654			4,509,433

LIABILITIES AND EQUITY
Liabilities:
Deposits
Interest bearing deposits	$	2,464,633			2,759,608
Non-interest bearing deposits		857,582			792,260
Deposits held for sale		—			341,146

Total deposits		3,322,215			3,893,014

Advances from FHLB		—			170,000
Securities sold under agreements to repurchase		—			21,524
Short-term borrowings		960			1,240
Subordinated debentures		22,000			22,000
Junior subordinated debentures		333,333			322,385
Other liabilities		55,025			64,527

Total liabilities		3,733,533			4,494,690

Commitments and contingencies (Note 11)
Equity:
BankAtlantic Bancorp’s stockholders’ equity
Preferred stock, $.01 par value, 10,000,000 shares authorized; none issued and outstanding		—			—
Class A common stock, $.01 par value, authorized 25,000,000 shares; issued and outstanding 15,434,564 and 12,319,064 shares		154			123
Class B common stock, $.01 par value, authorized 1,800,000 shares; issued and outstanding 195,045 and 195,045 shares		2			2
Additional paid-in capital		329,790			317,863
Accumulated deficit		(309,226	)		(297,615	)
Accumulated other comprehensive loss		(13,664	)		(6,088	)

Total BankAtlantic Bancorp equity		7,056			14,285
Noncontrolling interest		65			458

Total equity		7,121			14,743

Total liabilities and equity	$	3,740,654			4,509,433

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED


(In thousands, except share and per share data)	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
Interest income:
Interest and fees on loans	$	30,313			38,356			98,464			119,888
Interest and dividends on taxable securities		2,097			3,075			7,638			9,810
Interest on tax exempt securities		145			139			785			139
Interest on tax certificates		1,027			2,837			3,480			5,707

Total interest income		33,582			44,407			110,367			135,544

Interest expense:
Interest on deposits		3,174			4,877			11,516			17,955
Interest on advances from FHLB		—			106			153			1,065
Interest on securities sold under agreements to repurchase and short-term borrowings		—			8			9			23
Interest on subordinated debentures		4,127			4,107			12,215			11,789

Total interest expense		7,301			9,098			23,893			30,832

Net interest income		26,281			35,309			86,474			104,712
Provision for loan losses		17,901			24,410			56,422			103,718

Net interest income after provision for loan losses		8,380			10,899			30,052			994

Non-interest income:
Service charges on deposits		10,165			15,214			33,423			45,764
Other service charges and fees		6,129			7,495			20,206			22,612
Securities activities, net		6,959			(552	)		5,435			2,898
Income from unconsolidated companies		482			293			1,295			719
(Loss) gain on sale of Tampa branches		(34	)		—			38,622			—
Other		2,136			4,911			9,073			10,355

Total non-interest income		25,837			27,361			108,054			82,348

Non-interest expense:
Employee compensation and benefits		17,116			23,549			56,137			74,082
Occupancy and equipment		10,019			13,263			34,092			40,590
Advertising and promotion		1,587			2,026			4,805			6,209
Professional fees		6,230			6,209			10,884			13,920
Check losses		559			763			1,521			1,716
Supplies and postage		758			983			2,615			2,902
Telecommunication		388			702			1,409			1,898
Cost associated with debt redemption		—			—			1,125			60
Provision for tax certificates		969			885			2,769			3,752
Impairments (reversals) on loans held for sale		(145	)		—			2,339			—
Employee termination costs (reversals)		2			2,103			(191	)		2,103
Lease termination costs (reversals)		—			1,093			(1,442	)		1,308
Impairment of assets held for sale		—			4,469			—			4,469
Impairment of real estate held for sale		—			—			353			1,511
Impairment of real estate owned		3,464			500			12,294			1,864
FDIC deposit insurance assessment		2,132			2,314			7,618			7,103
Other		3,054			4,548			13,179			16,683

Total non-interest expense		46,133			63,407			149,507			180,170

Loss before income taxes		(11,916	)		(25,147	)		(11,401	)		(96,828	)
(Benefit) provision for income taxes		(122	)		37			(121	)		127

Net loss		(11,794	)		(25,184	)		(11,280	)		(96,955	)
Less: net loss (income) attributable to noncontrolling interest		254			(225	)		(331	)		(672	)

Net loss attributable to BankAtlantic Bancorp	$	(11,540	)		(25,409	)		(11,611	)		(97,627	)

Basic loss per share	$	(0.74	)		(2.09	)		(0.84	)		(9.11	)

Diluted loss per share	$	(0.74	)		(2.09	)		(0.84	)		(9.11	)

Basic weighted average number of common shares outstanding		15,626,874			12,156,703			13,754,966			10,712,964

Diluted weighted average number of common and common equivalent shares outstanding		15,626,874			12,156,703			13,754,966			10,712,964

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY AND COMPREHENSIVE INCOME

For the Nine Months Ended September 30, 2010 and 2011-Unaudited


(In thousands)	Comprehensive (loss)			Common Stock		Additional Paid-in Capital		Accumulated (Deficit)			Accumulated Other Comprehensive (loss)			BankAtlantic Bancorp Equity			Non- Controlling Interest			Total Equity
BALANCE, DECEMBER 31, 2009	$				99		296,832		(153,434	)		(1,926	)		141,571			—			141,571
Net loss		(97,627	)		—		—		(97,627	)		—			(97,627	)		672			(96,955	)
Net unrealized losses on securities available for sale		(1,281	)		—		—		—			(1,281	)		(1,281	)		—			(1,281	)

Comprehensive loss	$	(98,908	)

Cumulative effect of change in accounting principle					—		—		—			—			—			307			307
Non-controlling interest distributions					—		—		—			—			—			(559	)		(559	)
Issuance of Class A common stock					27		19,574		—			—			19,601			—			19,601
Share based compensation expense					—		1,398		—			—			1,398			—			1,398

BALANCE, SEPTEMBER 30, 2010	$				126		317,804		(251,061	)		(3,207	)		63,662			420			64,082


BALANCE, DECEMBER 31, 2010	$				125		317,863		(297,615	)		(6,088	)		14,285			458			14,743
Net loss		(11,611	)		—		—		(11,611	)		—			(11,611	)		331			(11,280	)
Net unrealized losses on securities available for sale		(7,576	)		—		—		—			(7,576	)		(7,576	)		—			(7,576	)

Comprehensive loss	$	(19,187	)

Non-controlling interest distributions					—		—		—			—			—			(724	)		(724	)
Issuance of Class A Common Stock					31		10,970		—			—			11,001			—			11,001
Share based compensation expense					—		957		—			—			957			—			957

BALANCE, SEPTEMBER 30, 2011	$				156		329,790		(309,226	)		(13,664	)		7,056			65			7,121

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED


	For the Nine Months Ended September 30,
(In thousands)	2011			2010
Net cash provided by operating activities	$	58,405			115,942

Investing activities:
Proceeds from redemption of tax certificates		52,161			99,558
Purchase of tax certificates		(21,604	)		(97,285	)
Purchase of securities available for sale		—			(248,332	)
Proceeds from sales of securities available for sale		90,979			57,616
Proceeds from maturities of securities available for sale		247,602			70,674
Purchase of interest bearing deposits in other banks		—			(47,990	)
Proceeds from maturities of interest bearing deposits		34,003			—
Net repayments of loans		306,259			283,226
Proceeds from the sales of loans transferred to held for sale		27,793			29,421
Improvements to real estate owned		—			(945	)
Proceeds from sales of real estate owned		21,485			18,899
Purchases of office property and equipment		(1,623	)		(2,949	)
Disposals of office property and equipment		1,287			507
Redemptions of FHLB stock		18,334			3,492
Net cash outflow from sale of Tampa branches		(257,255	)		—

Net cash provided by investing activities		519,421			165,892

Financing activities:
Net decrease in deposits		(247,584	)		(132,039	)
Net repayments of FHLB advances		(170,020	)		(102,068	)
Decrease in short-term borrowings		(21,804	)		(6,323	)
Repayment of bonds payable		—			(45	)
Prepayments of bonds payable		—			(661	)
Net proceeds from issuance of Class A common stock		11,001			19,601
Noncontrolling interest distributions		(724	)		(559	)

Net cash used in financing activities		(429,131	)		(222,094	)

Increase in cash and cash equivalents		148,695			59,740
Cash and cash equivalents at the beginning of period		507,908			234,797
Change in cash and cash equivalents held for sale		5,850			(4,902	)

Cash and cash equivalents at end of period	$	662,453			289,635

(Continued)

See Notes to Consolidated Financial Statements - Unaudited

BANKATLANTIC BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED


	For the Nine Months Ended September 30,
(In thousands)	2011		2010
Cash paid/received for:
Interest on borrowings and deposits	$	12,918		20,413
Income tax payments (refunds)		84		(31,692	)
Supplementary disclosure of non-cash investing and financing activities:
Loans and tax certificates transferred to REO		49,188		40,942
Long-lived assets held-for-use transferred to assets held for sale		—		1,919
Long-lived assets held-for-sale transferred to assets held for use		—		1,239
Transfers to assets held for sale:
Cash		—		4,902
Office properties and equipment		—		32,307
Securities purchased pending settlement		—		5,239
The change in assets and liabilities as of January 1, 2010 upon the consolidation of a factoring joint venture:
Increase in loans receivable		—		(3,214	)
Decrease in investment in unconsolidated subsidiaries		—		3,256
Increase in other assets		—		(367	)
Increase in other liabilities		—		18
Increase in noncontrolling interest		—		307

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 “Parent Company”) is a unitary savings bank holding company organized under the laws of the State of Florida. The Parent Company’s principal asset is its investment in BankAtlantic and its subsidiaries. The Parent Company and its subsidiaries, including BankAtlantic and its subsidiaries may also be referred to as the “Company”, “we,” “us,” or “our”. The Company has two reportable segments, BankAtlantic and the Parent Company.

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 broad network of community branches located in Florida.

The Company’s consolidated financial statements have been prepared on a going concern basis, which reflects the realization of assets and the repayments of liabilities in the normal course of business.

All significant inter-company balances and transactions have been eliminated in consolidation. Throughout this document, the term “fair value” in each case is an estimate of fair value as discussed herein.

In management’s opinion, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) as are necessary for a fair statement of the Company’s consolidated financial condition at September 30, 2011, the consolidated results of operations for the three and nine months ended September 30, 2011 and 2010, and the consolidated stockholders’ equity and comprehensive loss and cash flows for the nine months ended September 30, 2011 and 2010. The results of operations for the three and nine months ended September 30, 2011 are not necessarily indicative of results of operations that may be expected for the year ended December 31, 2011. The consolidated financial statements and related notes are presented as permitted by Form 10-Q and should be read in conjunction with the consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

On November 1, 2011, the Company entered into a definitive agreement to sell BankAtlantic to BB&T Corporation. See Note 13. “Subsequent Events” for a description of the proposed transaction.

On October 14, 2011, the Company completed a one-for-five reverse stock split. Where appropriate, amounts throughout this document have been adjusted to reflect this reverse stock split. Certain amounts for prior years have been reclassified to conform to the revised financial statement presentation for 2011.

The principal amounts of loans in the Company’s residential loan portfolios set forth in the table in Note 6 to the Company’s financial statements in the Company’s Form 10-K for the year ended December 31, 2010 were incorrectly identified as reflecting loan-to-value ratios obtained as of the first quarter of 2010 when in fact the amounts instead reflected loan-to-value ratios as of the date of loan origination. The table below labeled “As Corrected” reflects loan-to-value ratios of the Company’s residential loans as of December 31, 2010 based on valuations obtained during the first quarter of 2010. The table below labeled “As Reported” reflects the table contained in the Form 10-K for the year ended December 31, 2010 which reflects loan-to-value ratios of the Company’s residential loans as of the date of loan origination.


	As Reported As of December 31, 2010				As Corrected As of December 31, 2010
(in thousands) Loan-to-value ratios	Residential Interest Only		Residential Amortizing		Residential Interest Only		Residential Amortizing
Ratios not available	$	—		78,031		59,520		185,610
=<60%		107,063		144,744		47,605		145,075
60.1% - 70%		118,679		103,891		33,005		49,732
70.1% - 80%		290,840		309,925		37,808		48,586
80.1% - 90%		17,055		23,982		47,574		47,039
>90.1%		16,609		13,212		324,734		197,743

Total	$	550,246		673,785		550,246		673,785

BankAtlantic Bancorp, Inc. and Subsidiaries

2. Regulatory and Liquidity Considerations

Regulatory Considerations

On February 23, 2011, the Parent Company and BankAtlantic each entered into a Stipulation and Consent to Issuance of Order to Cease and Desist with the Office of Thrift Supervision (“OTS”), the Parent Company’s and BankAtlantic’s primary regulator on that date. The Parent Company and BankAtlantic were historically regulated and subject to regular examination by the Office of Thrift Supervision (“OTS”). Since July 21, 2011, the regulatory oversight of the Parent Company is under the Federal Reserve Bank (“FRB”) and the regulatory oversight of BankAtlantic is under the Office of the Comptroller of the Currency (“OCC”) as a result of the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank Act”). The Order to Cease and Desist to which the Parent Company is subject is referred to as the “Company Order,” the Order to Cease and Desist to which BankAtlantic is subject is referred to as the “Bank Order” and the Company Order and Bank Order are referred to collectively as the “Orders.” The OTS issued the Orders due to the Company’s losses over the past three years, high levels of classified assets and inadequate levels of capital based on BankAtlantic’s risk profile as determined by the OTS following its examination. The Parent Company submitted written plans to the OTS that address, among other things, BankAtlantic’s capital and set forth the Parent Company’s business plan for the year ending December 31, 2011. In addition, under the terms of the Company Order, the Parent Company is prohibited from taking certain actions without receiving the prior written non-objection of the FRB, including, without limitation, declaring or paying any dividends or other capital distributions and incurring certain indebtedness. The Parent Company is also required to ensure BankAtlantic’s compliance with the terms of the Bank Order as well as all applicable laws, rules, regulations and agency guidance.

Pursuant to the terms of the Bank Order, BankAtlantic is required to maintain a tier 1 (core) capital ratio equal to or greater than 8% and a total risk-based capital ratio equal to or greater than 14%. At September 30, 2011, BankAtlantic had a tier 1 (core) capital ratio of 8.29% and a total risk-based capital ratio of 14.96%. Under the terms of the Bank Order, BankAtlantic has revised certain of its plans, programs and policies and submitted to the OTS certain written plans, including a capital plan, a business plan and a plan to reduce BankAtlantic’s delinquent loans and non-performing assets. If BankAtlantic fails to comply with the capital plan and/or fails to maintain the increased capital ratio requirements, or upon any written request from the OCC, BankAtlantic is required to submit a contingency plan, which must detail actions which BankAtlantic would, in its case, take to either merge with or be acquired by another banking institution. BankAtlantic will not be required to implement such contingency plan until such time as it receives written notification from the OCC to do so. In addition, the Bank Order requires BankAtlantic to limit its asset growth and restricts BankAtlantic from originating or purchasing new commercial real estate loans or entering into certain material agreements, in each case without receiving the prior written non-objection of the OCC. Separately, the OTS confirmed that it has no objection to BankAtlantic originating loans to facilitate the sale of certain assets or the renewal, extension or modification of existing commercial real estate loans, subject in each case to compliance with applicable regulations and bank policies. The Bank Order prohibits the payment of dividends and other distributions without the prior written non-objection of the OCC. The Orders also include certain restrictions on compensation paid to the senior executive officers of the Parent Company and BankAtlantic, and restrictions on agreements with affiliates.

The Parent Company and BankAtlantic will seek to maintain the higher capital requirements of the Bank Order through efforts that may include the issuance of the Company’s Class A Common Stock through a public or private offering or through initiatives to maintain or improve its regulatory capital position including operating strategies to increase revenues and to reduce non-interest expenses, asset balances and non-performing loans. There can be no assurance that the Parent Company or BankAtlantic will be able to execute these or other strategies in order to maintain BankAtlantic’s new minimum regulatory capital levels.

Each Order became effective on February 23, 2011 and will remain in effect until terminated, modified or suspended by the OCC, as it relates to the Bank Order, or the FRB, as it relates to the Company Order. No fines or penalties were imposed in connection with either Order. While the Orders formalize steps that the Company believes are already underway, if there is any material failure by the Parent Company or BankAtlantic to comply with the terms of the Orders, or if unanticipated market factors emerge, and/or if the Company is unable to successfully execute its plans, or comply with other regulatory requirements, then the regulators could take further action, which could include the imposition of fines and/or additional enforcement actions. Enforcement actions broadly available to regulators include the issuance of a capital directive, removal of officers and/or directors, institution of proceedings for receivership or conservatorship, and termination of deposit insurance. Any such action would have a material adverse effect on the Company’s business, results of operations and financial position.

BankAtlantic Bancorp, Inc. and Subsidiaries

The consummation of the sale of BankAtlantic pursuant to the Company’s November 1, 2011 agreement with BB&T is expected to result in the termination of the requirements and restrictions of both the Company Order and the Bank Order.

Liquidity Considerations

Both the Parent Company and BankAtlantic actively manage liquidity and cash flow needs. The Parent Company had cash of $2.2 million as of September 30, 2011. The Parent Company does not have debt maturing until March 2032 and has the ability to defer interest payments on its junior subordinated debentures until December 2013; however, based on current interest rates, accrued and unpaid interest of approximately $74.0 million would be due in December 2013 if interest is deferred until that date. The Company has agreed, pursuant to the November 1, 2011 agreement with BB&T, to pay the outstanding deferred interest (approximately $39.1 million at September 30, 2011) in connection with the closing of the transaction. The Parent Company’s operating expenses for the year ended December 31, 2010 were $6.4 million and were $4.0 million during the nine months ended September 30, 2011. BankAtlantic’s liquidity is dependent, in part, on its ability to maintain or increase deposit levels and the availability of its lines of credit borrowings with the Federal Home Loan Bank (“FHLB”), as well as the Treasury and Federal Reserve lending programs.

As of September 30, 2011, BankAtlantic had $674 million of cash and short-term investments and approximately $623 million of available unused borrowings, consisting of $547 million of unused FHLB line of credit capacity, $41 million of unpledged securities and $35 million of available borrowing capacity at the Federal Reserve. However, such available borrowings are subject to regular reviews and may be terminated, suspended or reduced at any time at the discretion of the issuing institution or based on the availability of qualifying collateral. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets, adverse litigation or regulatory actions, or deterioration in BankAtlantic’s financial condition may reduce the amounts it is able to borrow, make borrowings unavailable or make terms of the borrowings and deposits less favorable. As a result, BankAtlantic’s cost of funds could increase and the availability of funding sources could decrease. Based on current and expected liquidity needs and sources, the Company expects to be able to meet its obligations at least through September 30, 2012.

BankAtlantic Bancorp, Inc. and Subsidiaries

3. Fair Value Measurement

The following table presents major categories of the Company’s assets measured at fair value on a recurring basis at September 30, 2011 and December 31, 2010 (in thousands):


			Fair Value Measurements Using
Description	As of September 30, 2011		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mortgage-backed securities	$	12,384		—		12,384		—
REMICs (1)		38,833		—		38,833		—
Municipal bonds		31,303		—		31,303		—
Taxable securities		640		—		640		—
Equity securities		1,327		1,327		—		—

Total	$	84,487		1,327		83,160		—


			Fair Value Measurements Using
Description	As of December 31, 2010		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Mortgage-backed securities	$	112,042		—		112,042		—
REMICs (1)		68,841		—		68,841		—
Agency bonds		60,143		—		60,143		—
Municipal bonds		162,123		—		162,123		—
Taxable securities		19,922				19,922		—
Foreign currency put options		24		24		—		—
Equity securities		1,296		1,296		—		—

Total	$	424,391		1,320		423,071		—

(1)	Real estate mortgage investment conduits (“REMICs”) are pass-through entities that hold residential loans. Investors in these entities are issued ownership interests in the entities in the form of a bond. The securities are guaranteed by government agencies.

There were no recurring liabilities measured at fair value in the Company’s financial statements as of September 30, 2011 and December 31, 2010.

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

The fair values of agency bonds, municipal bonds, taxable bonds, mortgage-backed securities and REMICs 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.

Equity securities are generally fair valued using the market approach and quoted market prices (Level 1) or matrix pricing (Level 2) with inputs obtained from independent pricing sources, if available. We also obtain non-binding broker quotes to validate fair values obtained from matrix pricing.

The fair value of foreign currency put options was obtained using the market approach and quoted market prices using Level 1 inputs as of December 31, 2010.

BankAtlantic Bancorp, Inc. and Subsidiaries

The following table presents major categories of assets measured at fair value on a non-recurring basis as of September 30, 2011 (in thousands):


	Fair Value Measurements Using
Description	September 30, 2011		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments (1) For the Nine Months Ended
Loans measured for impairment using the fair value of the underlying collateral	$	244,765		—		—		244,765		33,641
Impairment of real estate owned		72,601		—		—		72,601		12,294
Impairment real estate held for sale		4,145		—		—		4,145		353
Impairment of loans held for sale		39,110		—		—		39,110		6,190

Total	$	360,621		—		—		360,621		52,478

(1)	Total impairments represent the amount recognized during the nine months ended September 30, 2011 on assets that were held and measured at fair value as of September 30, 2011.

The following table presents major categories of assets measured at fair value on a non-recurring basis as of September 30, 2010 (in thousands):


	Fair Value Measurements Using
Description	September 30, 2010		Quoted prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Impairments (1) For the Nine Months Ended
Loans measured for impairment using the fair value of the collateral	$	304,275		—		—		304,275		93,649
Impaired real estate owned		10,437		—		—		10,437		1,864
Impairment real estate held for sale		13,964		—		—		13,964		4,469
Impairment of loans held for sale		3,490		—		—		3,490		1,532

Total	$	332,166		—		—		332,166		101,514

(1)	Total impairments represent the amount of loss recognized during the nine months ended September 30, 2010 on assets that were held and measured at fair value as of September 30, 2010.

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 to assist in measuring non-homogenous impaired loans. These appraisals generally use the market or income approach valuation technique and use market observable data to formulate an opinion of the fair value of the loan’s collateral. However, the appraiser uses professional judgment in determining the fair value of the collateral or properties, 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 sales prices may reflect prices of sales contracts not closed, and the amount of time required to sell out the

BankAtlantic Bancorp, Inc. and Subsidiaries

real estate project may be derived from current appraisals of similar projects. Consequently, the calculation of the fair value of the collateral uses Level 3 inputs. The Company generally uses third party broker price opinions or an automated valuation service to measure the fair value of the collateral for impaired homogenous loans in the establishment of specific reserves or charge-offs when these loans become 120 days delinquent. These third party valuations from real estate professionals also use Level 3 inputs in the determination of the fair values.

Impaired Real Estate Owned and Impairment of 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 appraisers or brokers use professional judgments 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. Consequently, the fair values of the properties are considered Level 3 measurements.

Loans Held for Sale

Loans held for sale are valued using an income approach with Level 3 inputs as market quotes or sale transactions of similar loans are generally not available. The fair value is estimated by discounting forecasted cash flows using a discount rate that reflects the risks inherent in the loans held for sale portfolio. For non-performing loans held for sale, the forecasted cash flows are based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure or sale.

Financial Disclosures about Fair Value of Financial Instruments


	September 30, 2011				December 31, 2010
(in thousands)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets:
Cash and due from banks	$	99,612		99,612		97,930		97,930
Interest bearing deposits in other banks		574,398		574,398		455,538		455,538
Securities available for sale		84,487		84,487		424,367		424,367
Derivatives		—		—		24		24
Investment securities		—		—		1,500		1,500
Tax certificates		56,268		55,390		89,789		90,738
Federal home loan bank stock		25,223		25,223		43,557		43,557
Loans receivable including loans held for sale, net		2,592,739		2,305,381		3,047,944		2,698,348
Financial liabilities:
Deposits		3,322,215		3,321,353		3,893,014		3,895,631
Short term borrowings		960		960		22,764		22,764
Advances from FHLB		—		—		170,000		170,038
Subordinated debentures		22,000		21,925		22,000		21,759
Junior subordinated debentures		333,333		145,782		322,385		107,274

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, the Company may not 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.

BankAtlantic Bancorp, Inc. and Subsidiaries

Interest bearing deposits in other banks include $11.6 million of certificates of deposit guaranteed by the FDIC with maturities of less than one year. Due to the FDIC guarantee and the short maturity of these certificates of deposit, the fair value of these deposits approximates the carrying value.

Fair values are estimated for loan portfolios with similar financial characteristics. Loans are segregated by category, and each loan category is further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories.

The fair value of performing loans is calculated by using an income approach with Level 3 inputs. These fair values are 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 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.

As permitted by applicable accounting guidance, the fair value of deposits with no stated maturity, such as non-interest bearing demand deposits, savings and NOW accounts, and money market and checking accounts, is shown in the above table at 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 is 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 value of BankAtlantic’s subordinated debentures was based on discounted values of contractual cash flows at a market discount rate adjusted for non-performance risk.

In determining the fair value of all of the Company’s junior subordinated debentures, the Company used NASDAQ price quotes available with respect to its $71.9 million of publicly traded trust preferred securities related to its junior subordinated debentures (“public debentures”). However, $261.4 million of the outstanding trust preferred securities related to its junior subordinated debentures are not traded, but are privately held in pools (“private debentures”) and with no trading markets, sales history, liquidity or readily determinable source for valuation. We have deferred the payment of interest with respect to all of our junior subordinated debentures as permitted by the terms of these securities. Based on the deferral status and the lack of liquidity and ability of a holder to actively sell such private debentures, the fair value of these private debentures may be subject to a greater discount to par and have a lower fair value than indicated by the public debenture price quotes. However, due to their private nature and the lack of a trading market, fair value of the private debentures was not readily determinable at September 30, 2011 and December 31, 2010, and as a practical alternative, 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.

BankAtlantic Bancorp, Inc. and Subsidiaries

4. Securities Available for Sale

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


	As of September 30, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Government agency securities:
Mortgage-backed securities	$	11,590		794		—		12,384
REMICS (1)		37,472		1,361		—		38,833

Total		49,062		2,155		—		51,217


Investment Securities:
Municipal Bonds		31,298		5		—		31,303
Taxable securities		640		—		—		640
Equity securities		1,260		68		1		1,327

Total investment securities		33,198		73		1		33,270

Total	$	82,260		2,228		1		84,487


	As of December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value

Government agency securities:
Mortgage-backed securities	$	105,219		6,823		—		112,042
Agency bonds		60,000		143		—		60,143
REMICs (1)		66,034		2,807		—		68,841

Total		231,253		9,773		—		241,026


Investment Securities:
Municipal bonds		162,113		33		23		162,123
Taxable securities		19,936		8		22		19,922
Equity securities		1,260		39		3		1,296

Total investment securities		183,309		80		48		183,341

Derivatives		24		—		—		24

Total	$	414,586		9,853		48		424,391

(1)	Real estate mortgage investment conduits (“REMICs”) are pass-through entities that hold residential loans. Investors in these entities are issued ownership interests in the entities in the form of a bond. The securities are guaranteed by government agencies.

BankAtlantic Bancorp, Inc. and Subsidiaries

The following table shows the gross unrealized losses and fair value of the Company’s securities available for sale with unrealized losses that are deemed temporary, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, at September 30, 2011 and December 31, 2010 (in thousands):


	As of September 30, 2011
	Less Than 12 Months				12 Months or Greater					Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Equity securities	$	—		—		9		(1	)		9		(1	)


	As of December 31, 2010
	Less Than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Municipal Bonds	$	90,413		(23	)		—		—			90,413		(23	)
Taxable Securities		15,155		(22	)		—		—			15,155		(22	)
Equity securities		—		—			7		(3	)		7		(3	)

Total	$	105,568		(45	)		7		(3	)		105,575		(48	)

The unrealized losses on municipal bonds and taxable securities outstanding less than 12 months were primarily the result of interest rate changes. As of December 31, 2010, the Company expected to receive cash proceeds in an amount equal to its entire investment in municipal bonds and taxable securities upon maturity.

The unrealized losses on the equity securities at September 30, 2011 and December 31, 2010 are insignificant. Accordingly, the Company does not consider these investments other-than-temporarily impaired at September 30, 2011 and December 31, 2010.

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


	Debt Securities Available for Sale
September 30, 2011 (1)	Amortized Cost		Estimated Fair Value
Due within one year	$	31,937		31,942
Due after one year, but within five years		114		115
Due after five years, but within ten years		15,856		16,446
Due after ten years		33,092		34,655

Total	$	80,999		83,158

(1)	Scheduled maturities in the above table are based on contractual maturities which may vary significantly from actual maturities due to prepayments.

BankAtlantic Bancorp, Inc. and Subsidiaries

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


	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
	2011		2010			2011			2010
Gross gains on securities sales	$	6,959		—			5,460			3,138

Proceeds from sales of securities		90,979		10,705			90,979			57,616

Gross losses on foreign currency put options		—		(543	)		(24	)		(234	)

Management reviews its investments for other-than-temporary declines in value quarterly. As a consequence of the review during 2011, the company recognized $1.5 million in other-than-temporary declines in value related to a private equity investment in an unrelated financial institution.

5. Restructuring Charges and Exit Activities

Restructuring charges and exit activities relate to employee termination costs, lease contracts executed for branch expansion and impairment of real estate acquired for branch expansion. The following table provides information regarding liabilities associated with restructuring charges and exit activities (in thousands):


	Termination Benefits Liability			Contract Liability			Total Liability
Balance at January 1, 2010	$	10			3,681			3,691
Expenses incurred		2,103			1,308			3,411
Amounts paid or amortized		(809	)		(417	)		(1,226	)

Balance at September 30, 2010	$	1,304			4,572			5,876


Balance at January 1, 2011		2,438			5,876			8,314
Expenses recovered		(191	)		(1,442	)		(1,633	)
Amounts paid or amortized		(2,220	)		(2,846	)		(5,066	)

Balance at September 30, 2011	$	27			1,588			1,615

Beginning in December 2007, BankAtlantic terminated leases or sought to sublease properties that it had previously leased for future branch expansion. Liabilities were recorded for costs associated with these operating leases. These liabilities were measured at fair value and are accreted to rent expense until the leases are terminated or subleased. BankAtlantic is actively seeking tenants for potential sub-leases or unrelated third parties to assume the lease obligations. During the nine months ended September 30, 2011, BankAtlantic terminated four operating leases and recovered $1.4 million of prior period lease termination costs. There were no lease terminations during the nine months ended September 30, 2010. During the nine months ended September 30, 2010, the Company recognized $1.3 million of contract termination liabilities in connection with operating leases executed for future branch expansion.

During the nine months ended September 30, 2011 and 2010, BankAtlantic recognized impairments on real estate acquired for branch expansion of $0.4 million and $1.5 million, respectively.

BankAtlantic Bancorp, Inc. and Subsidiaries

6. Loans Receivable

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


	September 30, 2011			December 31, 2010
Commercial non-real estate	$	114,962			135,588
Commercial real estate:
Residential		102,933			133,155
Land		25,629			58,040
Owner occupied		88,048			111,097
Other		497,640			592,538
Small Business:
Real estate		188,083			203,479
Non-real estate		94,021			99,190
Consumer:
Consumer - home equity		560,057			604,228
Consumer other		12,867			16,068
Deposit overdrafts		2,061			3,091
Residential:
Residential-interest only		404,182			550,246
Residential-amortizing		582,984			671,948

Total gross loans		2,673,467			3,178,668

Adjustments:
Premiums, discounts and net deferred fees		2,395			1,650
Allowance for loan losses		(130,719	)		(162,139	)

Loans receivable — net	$	2,545,143			3,018,179

Loans held for sale	$	47,596			29,765

Loans held for sale as of September 30, 2011 consisted of $20.6 million of residential loans, $26.5 million of commercial real estate loans and $0.5 million of residential loans originated for sale. Loans held for sale as of December 31, 2010 consisted of $27.9 million of commercial real estate loans transferred from held-for-investment to held-for-sale classification during 2010 and $1.8 million of residential loans originated for sale. The Company transfers loans to held-for-sale when, based on the current economic environment and related market conditions, it does not have the intent to hold those loans for the foreseeable future. The Company recognized gains of $22,000 and $6,000 on the sale of loans held for sale for the three and nine months ended September 30, 2011, respectively, compared to $28,000 and $169,000 of gains on the sale of loans held for sale during the three and nine months ended September 30, 2010, respectively.

BankAtlantic Bancorp, Inc. and Subsidiaries

The recorded investment (unpaid principal balance less charge-offs and deferred fees) of non-accrual loans receivable and loans held for sale was (in thousands):


Loan Class	September 30, 2011		December 31, 2010
Commercial non-real estate	$	18,250		17,659
Commercial real estate:
Residential		73,231		95,482
Land		15,345		27,260
Owner occupied		4,300		4,870
Other		106,247		128,658
Small business:
Real estate		10,266		8,928
Non-real estate		1,442		1,951
Consumer		14,202		14,120
Residential:
Residential-interest only		38,044		38,900
Residential-amortizing		43,243		47,639

Total	$	324,570		385,467

An age analysis of the past due recorded investment in loans receivable and loans held for sale as of September 30, 2011 and December 31, 2010 was as follows (in thousands):


September 30, 2011	31-59 Days Past Due		60-89 Days Past Due		90 Days or More (1)		Total Past Due		Current		Total Loans Receivable
Commercial non-real estate	$	1,048		424		16,686		18,158		96,804		114,962
Commercial real estate:
Residential		—		—		43,625		43,625		70,525		114,150
Land		—		—		13,358		13,358		21,410		34,768
Owner occupied		973		—		4,162		5,135		84,386		89,521
Other		—		—		41,119		41,119		463,588		504,707
Small business:
Real estate		2,174		878		8,585		11,637		176,446		188,083
Non-real estate		76		173		90		339		93,682		94,021
Consumer		5,378		4,262		14,203		23,843		551,141		574,984
Residential:
Residential-interest only		4,253		3,742		32,488		40,483		371,441		411,924
Residential-amortizing		3,984		5,393		43,711		53,088		543,250		596,338

Total	$	17,886		14,872		218,027		250,785		2,472,673		2,723,458

BankAtlantic Bancorp, Inc. and Subsidiaries


December 31, 2010	31-59 Days Past Due		60-89 Days Past Due		90 Days or More (1)		Total Past Due		Current		Total Loans Receivable
Commercial non-real estate	$	—		—		13,498		13,498		122,090		135,588
Commercial real estate:
Residential		4,700		—		53,791		58,491		84,325		142,816
Land		—		—		23,803		23,803		34,237		58,040
Owner occupied		—		—		3,862		3,862		107,235		111,097
Other		—		6,043		54,940		60,983		551,472		612,455
Small business:
Real estate		1,530		2,059		6,670		10,259		193,220		203,479
Non-real estate		—		67		25		92		99,098		99,190
Consumer		6,396		6,009		14,120		26,525		596,862		623,387
Residential:
Interest only		4,907		6,164		38,900		49,971		500,275		550,246
Amortizing		6,091		5,926		47,487		59,504		614,281		673,785

Total	$	23,624		26,268		257,096		306,988		2,903,095		3,210,083

(1)	The Company had a $2.5 million commercial non-real estate loan greater than 90 days past due and accruing interest as of September 30, 2011. The Company had no loans greater than 90 days past due and accruing interest as of December 31, 2010.

The activity in the allowance for loan losses by portfolio segment for the three months ended September 30, 2011 was as follows (in thousands):


	Commercial Non-Real Estate			Commercial Real Estate			Small Business			Consumer			Residential			Total

Allowance for Loan Losses:
Beginning balance	$	11,017			68,054			9,853			24,999			23,720			137,643
Charge-offs:		(7,563	)		(5,787	)		(2,321	)		(6,555	)		(3,489	)		(25,715	)
Recoveries:		1			21			316			644			543			1,525
Provision:		7,770			6,122			109			3,858			42			17,901
Transfer to held for sale:		—			(635	)		—			—			—			(635	)

Ending balance	$	11,225			67,775			7,957			22,946			20,816			130,719

Ending balance individually evaluated for impairment	$	9,791			49,380			821			1,519			5,661			67,172
Ending balance collectively evaluated for impairment		1,434			18,395			7,136			21,427			15,155			63,547

Total	$	11,225			67,775			7,957			22,946			20,816			130,719


Loans receivables:
Ending balance individually evaluated for impairment	$	20,989			280,082			18,956			27,167			64,390			411,584
Ending balance collectively evaluated for impairment	$	93,973			434,168			263,148			547,818			922,776			2,261,883

Total	$	114,962			714,250			282,104			574,985			987,166			2,673,467

Purchases of loans	$	—			—			—			—			—			—

Proceeds from loan sales	$	—			—			—						2,823			2,823

Transfer to held for sale	$	—			6,242			—			—			—			6,242

BankAtlantic Bancorp, Inc. and Subsidiaries

The activity in the allowance for loan losses by portfolio segment for the nine months ended September 30, 2011 was as follows (in thousands):


	Commercial Non-Real Estate			Commercial Real Estate			Small Business			Consumer			Residential			Total

Allowance for Loan Losses:
Beginning balance	$	10,786			83,859			11,514			32,043			23,937			162,139
Charge-offs:		(8,151	)		(31,939	)		(6,942	)		(20,748	)		(17,267	)		(85,047	)
Recoveries:		849			814			829			1,544			1,109			5,145
Provision:		7,741			17,291			2,556			10,107			18,727			56,422
Transfer to held for sale:		—			(2,250	)		—			—			(5,690	)		(7,940	)

Ending balance	$	11,225			67,775			7,957			22,946			20,816			130,719

Purchases of loans	$	—			—			—			—			13,680			13,680

Proceeds from loan sales	$	—			27,793			—			—			15,546			43,339

Transfer to held for sale	$	—			37,136			—			—			25,072			62,208

Activity in the allowance for loan losses for the three and nine months ended September 30, 2010 was as follows (in thousands):


	For the Three Months Ended September 30, 2010			For the Nine Months Ended September 30, 2010
Balance, beginning of period	$	187,862			187,218

Loans charged-off		(27,309	)		(107,899	)
Recoveries of loans previously charged-off		984			2,910

Net charge-offs		(26,325	)		(104,989	)
Provision for loan losses		24,410			103,718

Balance, end of period	$	185,947			185,947

Impaired Loans — Loans are considered impaired when, based on current information and events, the Company believes it is probable that it will be unable to collect all amounts due according to the contractual terms of the loan agreement. For a loan that has been restructured, the contractual terms of the loan agreement refer to the contractual terms specified by the original loan agreement, not the contractual terms specified by the restructured agreement. Impairment is evaluated based on past due status for consumer and residential loans. Impairment is evaluated as part of the Company’s on-going credit monitoring process for commercial and small business loans which results in the evaluation for impairment of all criticized loans. Factors considered in determining if a loan is impaired are past payment history, strength of the borrower or guarantors, and cash flow associated with the collateral or business. If a loan is impaired, a specific valuation allowance is allocated, if necessary, based on the present value of estimated future cash flows using the loan’s existing interest rate or at the fair value of collateral less cost to sell if the loan is collateral dependent. BankAtlantic generally measures loans for impairment using the fair value of collateral less cost to sell method. Interest payments on impaired loans for all loan classes are recognized on a cash basis, unless collectability of the principal and interest amount is probable, in which case interest is recognized on an accrual basis. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Impaired loans held for sale are measured for impairment based on the estimated fair value of the collateral less cost to sell adjusted for foreclosure expenses and other operating expenses of the underlying collateral until foreclosure and sale.

BankAtlantic Bancorp, Inc. and Subsidiaries

Impaired loans as of September 30, 2011 and December 31, 2010 were as follows (in thousands):


	As of September 30, 2011						As of December 31, 2010
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance

With an allowance recorded:
Commercial non-real estate	$	16,858		16,858		9,791		16,809		16,809		9,850
Commercial real estate:
Residential		72,235		91,117		23,789		81,731		87,739		21,298
Land		4,430		4,430		1,599		15,209		15,209		8,156
Owner occupied		—		—		—		1,695		1,695		335
Other		101,646		102,148		23,992		95,693		96,873		33,197
Small business:
Real estate		6,855		6,855		93		2,602		2,602		1,733
Non-real estate		1,354		1,354		728		1,779		1,779		1,203
Consumer		17,513		18,866		1,519		3,729		5,029		1,791
Residential:
Residential-interest only		13,787		17,748		2,594		31,805		39,451		6,741
Residential-amortizing		16,269		20,463		3,067		24,619		28,712		5,293

Total with allowance recorded	$	250,947		279,839		67,172		275,671		295,898		89,597

With no related allowance recorded:
Commercial non-real estate	$	5,079		5,667		—		1,497		1,497		—
Commercial real estate:
Residential		24,688		65,850		—		44,835		116,092		—
Land		10,915		31,841		—		14,039		43,846		—
Owner occupied		5,738		6,728		—		3,922		3,922		—
Other		81,008		112,960		—		81,370		97,203		—
Small business:
Real estate		10,265		11,845		—		15,727		16,499		—
Non-real estate		480		778		—		172		197		—
Consumer		9,655		12,513		—		23,029		27,146		—
Residential:
Residential-interest only		19,582		32,428		—		7,427		10,078		—
Residential-amortizing		34,196		44,848		—		25,664		31,797		—

Total with no allowance recorded	$	201,606		325,458		—		217,682		348,277		—


Commercial non-real estate	$	21,937		22,525		9,791		18,306		18,306		9,850
Commercial real estate		300,660		415,074		49,380		338,494		462,579		62,986
Small business		18,954		20,832		821		20,280		21,077		2,936
Consumer		27,168		31,379		1,519		26,758		32,175		1,791
Residential		83,834		115,487		5,661		89,515		110,038		12,034

Total	$	452,553		605,297		67,172		493,353		644,175		89,597

BankAtlantic Bancorp, Inc. and Subsidiaries

Average recorded investment and interest income recognized on impaired loans as of September 30, 2011 were (in thousands):


	For the Three Months Ended September 30, 2011				For the Nine Months Ended September 30, 2011
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized

With an allowance recorded:
Commercial non-real estate	$	16,280		35		16,119		220
Commercial real estate:
Residential		80,285		518		84,055		1,432
Land		4,870		—		7,594		—
Owner occupied		945		—		1,938		—
Other		93,735		453		99,475		989
Small business:
Real estate		7,646		—		6,469		—
Non-real estate		1,644		—		1,754		—
Consumer		17,807		—		14,148		—
Residential:
Residential-interest only		12,577		—		18,604		—
Residential-amortizing		15,576		—		17,893		—

Total with allowance recorded	$	251,365		1,006		268,049		2,641

With no related allowance recorded:
Commercial non-real estate	$	12,823		—		7,517		—
Commercial real estate:
Residential		21,339		87		27,982		387
Land		13,737		—		14,557		—
Owner occupied		5,929		22		4,924		53
Other		81,005		589		80,637		1,700
Small business:
Real estate		9,736		117		11,165		310
Non-real estate		462		11		475		31
Consumer		9,833		106		13,005		319
Residential:
Residential-interest only		21,361		—		17,622		—
Residential-amortizing		34,334		30		31,439		88

Total with no allowance recorded	$	210,559		962		209,323		2,888


Commercial non-real estate	$	29,103		35		23,636		220
Commercial real estate		301,845		1,669		321,162		4,561
Small business		19,488		128		19,863		341
Consumer		27,640		106		27,153		319
Residential		83,848		30		85,558		88

Total	$	461,924		1,968		477,372		5,529

Impaired loans without specific valuation allowances represent loans that were written-down to the fair value of the collateral less cost to sell, loans in which the collateral value less cost to sell was greater than the carrying value of the loan, loans in which the present value of the cash flows discounted at the loans’ effective interest rate were equal to or greater than the carrying value of the loans, or large groups of smaller-balance homogeneous loans that were collectively measured for impairment.

The Company monitors collateral dependent loans and performs an impairment analysis on these loans quarterly. Generally, a full appraisal is obtained when a real estate loan is initially evaluated for impairment and an updated full

BankAtlantic Bancorp, Inc. and Subsidiaries

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, 2011 was $268.7 million of collateral dependent loans, of which $143.0 million were measured for impairment using current appraisals and $115.2 million were measured by adjusting appraisals greater than six months old, as appropriate, to reflect changes in market conditions subsequent to the last appraisal date. Appraised values with respect to 20 loans which did not have current appraisals were adjusted down by an aggregate amount of $4.8 million to reflect the change in market conditions since the appraisal date.

As of September 30, 2011, impaired loans with specific valuation allowances had been previously written down by $30.9 million and impaired loans without specific valuation allowances had been previously written down by $94.7 million. BankAtlantic had commitments to lend $2.6 million of additional funds on impaired loans as of September 30, 2011.

Credit Quality Information

Management monitors delinquency trends, net charge-off levels of classified loans, impaired loans and general economic conditions nationwide and in Florida in an effort to assess loan credit quality. The Company uses a risk grading matrix to monitor credit quality for commercial and small business loans. Risk grades are assigned to each commercial and small business loan upon origination. The loan officers monitor the risk grades and these risk grades are reviewed periodically by a third party consultant. The Company assigns risk grades on a scale of 1 to 13. A general description of the risk grades is as follows:

Grades 1 to 7 – The loans in these risk grades are generally well protected by the current net worth and paying capacity of the borrower or guarantors or by the fair value, less cost to sell, of the underlying collateral.

Grades 8 to 9 – Not used

Grade 10 – These loans are considered to have potential weaknesses that deserve management’s close attention. While these loans do not expose the Company to immediate risk of loss, if left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan.

Grade 11 – These loans are considered to be inadequately protected by the current sound net worth and paying capacity of the borrower or guarantors or by the collateral pledged, if any. Loans in this grade have well-defined weaknesses that jeopardize the liquidation of the loan and there is a distinct possibility that the Company may sustain some credit loss if the weaknesses are not corrected.

Grade 12 – These loans are considered to have all the weaknesses of a Grade 11 with the added characteristic that the weaknesses make collection of the Company’s investment in the loan highly questionable and improbable on the basis of currently known facts, conditions and fair values of the collateral.

Grade 13 – These loans, or portions thereof, are considered uncollectible and of such little value that continuance on the Company’s books as an asset is not warranted without the establishment of a specific valuation allowance or a charge-off. Such loans are generally charged down or completely charged off.

BankAtlantic Bancorp, Inc. and Subsidiaries

The following table presents risk grades for commercial and small business loans including loans held for sale as of September 30, 2011 and December 31, 2010 (in thousands):


September 30, 2011	Commercial Non-Real Estate		Commercial Residential		Commercial Land		Owner Occupied Commercial Real Estate		Other Commercial Real Estate		Small Business Real Estate		Small Business Non-real Estate
Grade:
Grades 1 to 7	$	67,938		16,107		19,423		82,967		236,784		161,946		80,956
Grades 10		10,569		1,334		—		—		89,535		2,910		4,438
Grades 11		36,455		96,709		15,345		6,554		178,388		23,227		8,627

Total (1)	$	114,962		114,150		34,768		89,521		504,707		188,083		94,021


December 31, 2010	Commercial Non-Real Estate		Commercial Residential		Commercial Land		Owner Occupied Commercial Real Estate		Other Commercial Real Estate		Small Business Real Estate		Small Business Non-real Estate
Grade:
Grades 1 to 7	$	81,789		16,250		27,387		101,855		314,402		169,979		84,584
Grades 10		12,827		7,572		956		704		119,508		3,098		3,665
Grades 11		40,972		118,994		29,697		8,538		178,545		30,402		10,941

Total (1)	$	135,588		142,816		58,040		111,097		612,455		203,479		99,190

(1)	There were no loans risk graded 12 or 13 as of September 30, 2011 or December 31, 2010.

The Company monitors the credit quality of residential loans through loan-to-value ratios of the underlying collateral. Elevated loan-to-value ratios indicate the likelihood of increased credit losses upon default which results in higher loan portfolio credit risk.

The loan-to-value ratios of the Company’s residential loans were as follows (in thousands):


	As of September 30, 2011 ₍₁₎				As Corrected ₍₃₎ As of December 31, 2010
Loan-to-value ratios	Residential Interest Only		Residential Amortizing		Residential Interest Only		Residential Amortizing
Ratios not available ₍₂₎	$	136,460		317,695		59,520		185,610
=<60%		22,307		77,146		47,605		145,075
60.1% - 70%		11,409		32,246		33,005		49,732
70.1% - 80%		26,970		32,947		37,808		48,586
80.1% - 90%		28,799		27,889		47,574		47,039
>90.1%		185,827		109,395		324,734		197,743

Total	$	411,772		597,318		550,246		673,785

(1)	Current loan-to-value ratios (“LTV”) for the majority of the portfolio were obtained as of the second quarter of 2011 based on automated valuation models.

(2)

Ratios not available consisted of property addresses not in the automated valuation database, and $77.3 million and $78.0 million as of September 30, 2011 and December 31, 2010, respectively, of loans originated under the community reinvestment act program that are not monitored based on loan-to-value.

(3)

The principal amounts of the Company’s residential loans set forth in the table in Note 6 to the Company’s financial statements in the Company’s Form 10-K for the year ended December 31, 2010 were incorrectly identified as reflecting loan-to-value ratios obtained as of the first quarter of 2010 when in fact the amounts instead reflected loan-to-value ratios as of the date of loan origination. The above table labeled “As Corrected” reflects loan-to-value ratios as of December 31, 2010 based on first quarter of 2010 valuations.

BankAtlantic Bancorp, Inc. and Subsidiaries

The Company monitors the credit quality of its portfolio of consumer loans secured by real estate utilizing loan–to- value ratios at origination. The Company’s experience indicates that default rates are significantly lower with loans that have lower loan-to-value ratios at origination.

The loan-to-value ratios at loan origination of the Company’s consumer loans secured by real estate were as follows (in thousands):


	Consumer Home Equity
Loan-to-value ratios	September 30, 2011		December 31, 2010
<70%	$	342,109		363,653
70.1% - 80%		99,701		106,180
80.1% - 90%		64,469		72,529
90.1% -100%		41,815		48,537
>100%		11,963		13,329

Total	$	560,057		604,228

The Company monitors the credit quality of its consumer non-real estate loans based on loan delinquencies.

The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules, extending loan maturities, deferring loan payment until the loan maturity date and other actions intended to minimize potential losses. The majority of concessions for consumer loans were changing monthly payments from interest and principal payments to interest only payments as well as deferring monthly loan payments until the loan maturity date. Commercial real estate and non-real estate loan concessions were primarily below market interest rates based on the risk profile of the loan and extensions of maturity dates. Residential and small business loan concessions were offered mainly reduction of monthly payments by extending the amortization period and/or deferring monthly payments.

There was no financial effects of consumer and residential troubled debt restructured loans as the affected loans were generally on non-accrual status and measured for impairment before the restructuring. The financial effects of commercial and small business troubled debt restructured loans was the establishment of specific valuation allowances, if any, from the general allowance for those loans that were not already put on nonaccrual status. There was an impact to the allowance for loan losses as a result of the concessions made, which generally results in the expectation of lower future cash flows.

Effective July 1, 2011, the Company adopted the provisions of Accounting Standards Update (“ASU”) No. 2011-02, and reassessed all loan modifications effected since January 1, 2011 for identification of troubled debt restructurings under the new guidance. No additional loans were identified as troubled debt restructurings during the nine months ended September 30, 2011 based on the reassessment.

BankAtlantic Bancorp, Inc. and Subsidiaries

Troubled debt restructurings during the three and nine months ended September 30, 2011 were as follows (dollars in thousands):


	For the Three Months Ended September 30, 2011				For the Nine Months Ended September 30, 2011
	Number		Recorded Investment		Number		Recorded Investment
Troubled Debt Restructurings
Commercial non-real estate		3	$	2,771		6	$	4,982
Commercial real estate:
Residential		2		11,822		8		32,565
Land		—		—		—		—
Owner occupied		—		—		1		692
Other		2		1,462		9		52,460
Small business:
Real estate		4		1,314		4		1,314
Non-real estate		—		—		—		—
Consumer		2		111		6		571
Residential:
Residential-interest only		—		—		1		547
Residential-amortizing		7		1,626		19		3,321

Total Troubled Debt Restructured		20	$	19,106		54	$	96,452

The following table represents the recorded investment of loans that were modified in troubled debt restructurings during the preceding 12 month period and experienced a payment default during the three or nine months ended September 30, 2011 (dollars in thousands).


	For the Three Months Ended September 30, 2011				For the Nine Months Ended September 30, 2011
	Number		Recorded Investment (1)		Number		Recorded Investment (2)
Troubled Debt Restructurings which have subsequently defaulted:
Commercial non-real estate		—	$	—		—	$	—
Commercial real estate:
Residential		—		—		2		6,869
Land		—		—		1		3,458
Owner occupied		—		—		3		1,473
Other		—		—		1		6,102
Small business:
Real estate		1		598		2		754
Non-real estate		—		—		—		—
Consumer		2		227		11		1,004
Residential:
Residential-interest only		—		—		1		547
Residential-amortizing		1		64		6		1,135

Total Troubled Debt Restructured		4	$	889		27	$	21,342

(1)	For the three months ended September 30, 2011, the table represents defaults on loans that were first modified between July 1, 2010 and September 30, 2011.

(2)	For the nine months ended September 30, 2011, the table represents defaults on loans that were first modified between January 1, 2010 and September 30, 2011.

BankAtlantic considers a troubled debt restructured loan to have subsequently defaulted when it becomes 31 days past due after the date the loan was restructured.

BankAtlantic Bancorp, Inc. and Subsidiaries

7. Tampa Branch Sale

In August 2010, BankAtlantic announced that it had decided to focus on its core markets in South Florida and BankAtlantic began seeking a buyer for its 19 branches located in the Tampa, Florida area. In January 2011, BankAtlantic agreed to sell its 19 branches and 2 related facilities in the Tampa area and the associated deposits to an unrelated financial institution and on June 3, 2011, BankAtlantic completed the Tampa branch sale. The purchasing financial institution paid a 10% premium for the deposits plus the net book value of the acquired real estate and substantially all of the fixed assets associated with the branches and facilities.

The following summarizes the assets sold, liabilities transferred and cash outflows associated with the branches and facilities sold (in thousands):


	Amount
Assets Sold:
Property and equipment	$	28,626

Total assets sold		28,626

Liabilities Transferred:
Deposits		324,320
Other liabilities		183

Total liabilities transferred		324,503

Net liabilities transferred		(295,877	)
Gain on sale of Tampa branches		40,615
Transaction costs		(1,993	)

Net cash outflows from sale of branches	$	(257,255	)

The assets and liabilities associated with the Tampa branches as of December 31, 2010 were as follows (in thousands):


ASSETS
Cash and cash equivalents	$	5,850
Office properties and equipment		31,484

Total assets held for sale	$	37,334


LIABILITIES
Interest bearing deposits	$	255,630
Non-interest bearing deposits		85,516

Total deposits		341,146
Accrued interest payable		87

Total liabilities held for sale	$	341,233

8. Share-based Compensation and Common Stock

Share-based Compensation

In February 2010, the Board of Directors granted to employees 320,000 restricted Class A Common Stock awards (“RSAs”) under the BankAtlantic Bancorp, Inc. 2005 Restricted Stock and Option Plan. The Board of Directors also granted 15,000 RSAs to employees of BFC Financial Corporation (“BFC”) that perform services for the Company. The RSAs vest pro-rata over four years and had a fair value of $6.20 per share at the grant date.

BankAtlantic Bancorp, Inc. and Subsidiaries

The following is a summary of the Company’s non-vested RSAs activity:


	Class A Non-vested Restricted Stock			Weighted Average Grant date Fair Value
Outstanding at December 31, 2009		3,960		$	210.55
Vested		(1,980	)		95.55
Forfeited		(14,000	)		6.20
Granted		335,000			6.20

Outstanding at September 30, 2010		322,980		$	8.15


Outstanding at December 31, 2010		313,780		$	7.40
Vested		(87,130	)		8.68
Forfeited		(14,000	)		6.20
Granted		—			—

Outstanding at September 30, 2011		212,650		$	6.94

Common Stock

On May 2, 2011, the Company announced its intention to pursue a rights offering for up to $30 million of Class A Common Stock. Under the terms of the rights offering, holders of the Company’s Class A Common Stock and Class B Common Stock as of May 12, 2011 had the right to purchase a pro-rata number of shares of Class A Common Stock at a subscription price of $3.75 per share. The Company completed the rights offering on June 16, 2011 and issued 3,025,905 shares of its Class A Common Stock to existing shareholders. The Company used the net proceeds of $11.0 million to fund part of its $20 million capital contribution to BankAtlantic in June 2011.

On October 14, 2011, the Company completed a one-for-five reverse stock split. Where appropriate, amounts throughout this document have been adjusted to reflect this reverse stock split.

9. Related Parties

The Company, BFC and Bluegreen Corp. (“Bluegreen”) may be deemed to be under common control. The controlling shareholder of the Company and Bluegreen is BFC. 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 directors of Bluegreen. The Company, BFC and Bluegreen share certain office premises and employee services, pursuant to the agreements described below.

In March 2008, BankAtlantic entered into an agreement with BFC to provide information technology support in exchange for monthly payments by BFC to BankAtlantic. In May 2008, BankAtlantic also entered into a lease agreement with BFC under which BFC pays 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.

During the second quarter of 2010, BankAtlantic and the Parent Company entered into a real estate advisory service agreement with BFC for assistance relating to the work-out of loans and the sale of real estate owned. BFC is compensated $12,500 per month by each of BankAtlantic and the Parent Company and, if BFC’s efforts result in net recoveries of any non-performing loan or the sale of real estate owned, it will receive a fee equal to 1% of the net value recovered. During the three and nine months ended September 30, 2011, the Company incurred $0.1 million and $0.4 million, respectively, of real estate advisory service fees under this agreement.

BankAtlantic Bancorp, Inc. and Subsidiaries

The table below shows the effect of service arrangements with related parties on the Company’s consolidated statements of operations for the three and nine months ended September 30, 2011 and 2010 (in thousands):


	For the Three Months Ended September 30						For the Nine Months Ended September 30
	2011			2010			2011			2010
Non-interest income:	$	103			140			312			428
Non-interest expense:
Employee compensation and benefits		(10	)		(18	)		(42	)		(64	)
Other - back-office support		(426	)		(635	)		(1,398	)		(1,801	)

Net effect of affiliate transactions before income taxes	$	(333	)		(513	)		(1,128	)		(1,437	)

The Company, in prior periods, issued options to acquire shares of the Company’s Class A Common Stock to employees of BFC. Additionally, employees of the Company have transferred to affiliated companies and the Company has elected, in accordance with the terms of the Company’s stock option plans, not to cancel the stock options held by those former employees. The Company also issues options and restricted stock awards to BFC employees that perform services for the Company. During the year ended December 31, 2010, the Company granted 15,000 restricted Class A Common Stock awards to BFC employees that perform services for the Company. These stock awards vest pro-rata over a four year period. The Company recorded $10,000, and $42,000 of expenses relating to all options and restricted stock awards held by employees of affiliated companies for the three and nine months ended September 30, 2011, compared to expenses of $18,000 and $64,000 during the three and nine months ended September 30, 2010, respectively.

Options and non-vested restricted stock outstanding to BFC employees consisted of the following as of September 30, 2011:


	Class A		Weighted
	Common		Average
	Stock		Price
Options outstanding		6,999	$	311.03
Non-vested restricted stock		11,250		—

BFC had deposits at BankAtlantic totaling $0.4 million and $1.8 million as of September 30, 2011 and December 31, 2010, respectively. The Company recognized nominal interest expense in connection with the above deposits. These deposits were on the same general terms as offered to unaffiliated third parties.

BankAtlantic Bancorp, Inc. and Subsidiaries

10. Segment Reporting

Operating segments are defined as components of an enterprise about which separate financial information is available that is regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Reportable segments consist of one or more operating segments with similar economic characteristics, products and services, production processes, types of customers, distribution systems and regulatory environments. The information provided for Segment Reporting is based on internal reports utilized by management. Results of operations are reported through two reportable segments: BankAtlantic and the Parent Company. BankAtlantic activities consist of the banking operations of BankAtlantic and the Parent Company activities consist of equity and debt financings, capital management and acquisition related expenses. Additionally, effective March 31, 2008, a wholly-owned subsidiary of the Parent Company purchased non-performing loans from BankAtlantic. As a consequence, the Parent Company’s activities also include the management of non-performing loans and the operating results of the asset work-out subsidiary.

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


Reportable Segment		Operating Segments Aggregated

BankAtlantic		Banking operations
Parent Company		BankAtlantic Bancorp’s operations, costs of acquisitions, asset and capital management and financing activities

The accounting policies of the segments are generally the same as those described in the summary of significant accounting policies in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010. Intersegment transactions are eliminated in consolidation.

The Company evaluates segment performance based on segment net income from continuing operations after tax.

BankAtlantic Bancorp, Inc. and Subsidiaries

The table below is segment information for segment net income from continuing operations for the three and nine ended months September 30, 2011 and 2010 (in thousands):


For the Three Months Ended:	BankAtlantic			Parent Company			Adjusting and Elimination Entries			Segment Total
September 30, 2011:
Interest income	$	33,535			47			—			33,582
Interest expense		(3,403	)		(3,898	)		—			(7,301	)
(Provision) for loan losses		(17,754	)		(147	)		—			(17,901	)
Non-interest income		25,343			809			(315	)		25,837
Non-interest expense		(45,916	)		(532	)		315			(46,133	)

Segments loss before income taxes		(8,195	)		(3,721	)		—			(11,916	)
Benefit for income tax		(122	)		—			—			(122	)

Segment net loss	$	(8,073	)		(3,721	)		—			(11,794	)

Total assets	$	3,707,048			341,423			(307,817	)		3,740,654


For the Three Months Ended:	BankAtlantic			Parent Company			Adjusting and Elimination Entries			Segment Total
September 30, 2010:
Interest income	$	44,331			80			(4	)		44,407
Interest expense		(5,230	)		(3,872	)		4			(9,098	)
(Provision) for loan losses		(23,012	)		(1,398	)		—			(24,410	)
Non-interest income		27,035			576			(250	)		27,361
Non-interest expense		(60,756	)		(2,901	)		250			(63,407	)

Segments loss before income taxes		(17,632	)		(7,515	)		—			(25,147	)
Provision for income tax		(37	)		—			—			(37	)

Segment net loss	$	(17,669	)		(7,515	)		—			(25,184	)

Total assets	$	4,485,476			384,778			(342,518	)		4,527,736

BankAtlantic Bancorp, Inc. and Subsidiaries


For the Nine Months Ended	BankAtlantic			Parent Company			Adjusting and Elimination Entries			Segment Total
September 30, 2011:
Interest income	$	110,177			196			(6	)		110,367
Interest expense		(12,363	)		(11,536	)		6			(23,893	)
(Provision) for loan losses		(55,780	)		(642	)		—			(56,422	)
Non-interest income		108,330			648			(924	)		108,054
Non-interest expense		(143,961	)		(6,470	)		924			(149,507	)

Segments income (loss) before income taxes		6,403			(17,804	)		—			(11,401	)
Benefit for income tax		121			—			—			121

Segment net income (loss)	$	6,524			(17,804	)		—			(11,280	)


For the Nine Months Ended	BankAtlantic			Parent Company			Adjusting and Elimination Entries			Segment Total
September 30, 2010:
Interest income	$	135,317			239			(12	)		135,544
Interest expense		(19,749	)		(11,095	)		12			(30,832	)
(Provision) for loan losses		(98,680	)		(5,038	)		—			(103,718	)
Non-interest income		81,563			1,545			(760	)		82,348
Non-interest expense		(172,992	)		(7,938	)		760			(180,170	)

Segments loss before income taxes		(74,541	)		(22,287	)		—			(96,828	)
Provision for income tax		(127	)		—			—			(127	)

Segment net loss	$	(74,668	)		(22,287	)		—			(96,955	)

BankAtlantic Bancorp, Inc. and Subsidiaries

11. Commitments and Contingencies

Financial instruments with off-balance sheet risk were (in thousands):


	September 30,		December 31,
	2011		2010
Commitments to sell fixed rate residential loans	$	6,298		14,408
Commitments to originate loans held for sale		5,783		12,571
Commitments to originate loans held to maturity		17,655		10,693
Commitments to purchase residential loans		—		2,590
Commitments to extend credit, including the undisbursed portion of loans in process		335,757		357,730
Standby letters of credit		6,613		9,804
Commercial lines of credit		68,361		77,144

Standby letters of credit are conditional commitments issued by BankAtlantic to guarantee the performance of a customer to a third party. BankAtlantic’s standby letters of credit are generally issued to customers in the construction industry guaranteeing project performance. These types of standby letters of credit had a maximum exposure of $5.7 million at September 30, 2011. BankAtlantic also issues standby letters of credit to commercial lending customers guaranteeing the payment of goods and services. These types of standby letters of credit had a maximum exposure of $0.9 million at September 30, 2011. These guarantees are primarily issued to support public and private borrowing arrangements and have maturities of one year or less. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. BankAtlantic may hold certificates of deposit and residential and commercial liens as collateral for such commitments. Included in other liabilities at September 30, 2011 and December 31, 2010 were $34,000 of unearned guarantee fees. There were no obligations associated with these guarantees recorded in the financial statements.

The Company and its subsidiaries are parties to lawsuits as plaintiff or defendant involving its bank operations, lending and tax certificates. Although the Company believes it has meritorious defenses in all current legal actions, the outcome of litigation and regulatory matters and timing of ultimate resolution are inherently difficult to predict and uncertain.

Reserves are accrued in matters for which it is probable that a loss will be incurred and the amount of such loss can be reasonably estimated. The Company accrued $3.4 million related to these matters as of September 30, 2011. The $3.4 million accrual includes a $2.7 million settlement in October 2011 of a matter related to our tax certificate operations. The actual costs of resolving pending legal claims may be substantially higher or lower than the amounts accrued for these claims.

A range of reasonably possible losses is estimated for matters in which it is reasonably possible that a loss has been incurred or that a loss is probable but not reasonably estimable. Management currently estimates the aggregate range of reasonably possible losses as $0.8 million to $3.6 million in excess of the accrued liability relating to these legal matters. This estimated range of reasonably possible losses represents the estimated possible losses over the life of such legal matters, which may span a currently indeterminable number of years, and is based on information currently available. The matters underlying the estimated range will change from time to time, and actual results may vary significantly from this estimate. Therefore, those matters for which a reasonable estimate is not possible are not included within this estimated range and this estimated range does not represent the Company’s maximum loss exposure.

In certain matters we are unable to estimate the loss or reasonable range of loss until additional developments in the case provide information sufficient to support an assessment of the loss or range of loss. Frequently in these matters the claims are broad and the plaintiffs have not quantified or factually supported the claim.

We believe that liabilities arising from litigation and regulatory matters, discussed below, in excess of the amounts currently accrued, if any, will not have a material impact to the Company’s financial statements. However, due to the significant uncertainties involved in these legal matters, we may incur losses in excess of accrued amounts and an adverse outcome in these matters could be material to the Company’s financial statements.

BankAtlantic Bancorp, Inc. and Subsidiaries

The following is a description of ongoing litigation and regulatory matters:

Class action securities litigation

In October 2007, the Company and current or former officers of the Company were named in a lawsuit which alleged that during the period of November 9, 2005 through October 25, 2007, the Company and the named officers knowingly and/or recklessly made misrepresentations of material fact regarding BankAtlantic and specifically BankAtlantic’s loan portfolio and allowance for loan losses. The Complaint asserted claims for violations of the Securities Exchange Act of 1934 and Rule 10b-5 and sought unspecified damages. On November 18, 2010, a jury returned a verdict awarding $2.41 per share to shareholders who purchased shares of the Company’s Class A Common Stock during the period of April 26, 2007 to October 26, 2007 who retained those shares until the end of the period. The jury rejected the plaintiffs’ claim for the six month period from October 19, 2006 to April 25, 2007. Prior to the beginning of the trial, the plaintiffs abandoned any claim for any prior period. On April 25, 2011, the Court granted defendants’ post-trial motion for judgment as a matter of law and vacated the jury verdict, resulting in a judgment in favor of all defendants on all claims. The plaintiffs have appealed the Court’s order setting aside the jury verdict.

In July 2008, the Company, certain officers and Directors were named in a lawsuit which alleged that the individual defendants breached their fiduciary duties by engaging in certain lending practices with respect to the Company’s Commercial Real Estate Loan Portfolio. The Complaint further alleged that the Company’s public filings and statements did not fully disclose the risks associated with the Commercial Real Estate Loan Portfolio and sought damages on behalf of the Company. In July 2011, the case was dismissed and the parties exchanged mutual releases and neither the individual defendants nor the Company made any monetary payments in connection with the dismissal.

Class Action Overdraft Processing Litigation

In November 2010, the two pending class action complaints against BankAtlantic associated with overdraft fees were consolidated. The Complaint, which asserts claims for breach of contract and breach of the duty of good faith and fair dealing, alleges that BankAtlantic improperly re-sequenced debit card transactions from largest to smallest, improperly assessed overdraft fees on positive balances, and improperly imposed sustained overdraft fees on customers. BankAtlantic has filed a motion to dismiss which is pending with the Court.

Office of Thrift Supervision Overdraft Processing Examination

As previously disclosed, the Office of Thrift Supervision advised BankAtlantic that it had determined that BankAtlantic had engaged in deceptive and unfair practices in violation of Section 5 of the Federal Trade Commission Act relating to certain of BankAtlantic’s deposit-related products. On June 2, 2011, the OTS concluded that BankAtlantic engaged in certain deceptive and unfair practices in violation of Section 5 of the Federal Trade Commission Act and OTS regulations and requested that BankAtlantic submit a restitution plan for OTS’s consideration. The OTS also advised BankAtlantic that BankAtlantic could be subject to civil money penalties. BankAtlantic believes it has complied with all applicable laws and OTS guidelines and on July 5, 2011, BankAtlantic filed an appeal of the OTS positions. That appeal is now before the OCC which will review the issues under its processes and guidelines.

Securities and Exchange Commission Investigation

The Company has received a notice of investigation from the Securities and Exchange Commission (“SEC”) Miami Regional Office and subpoenas for information. The subpoenas requested a broad range of documents relating to, among other matters, recent and pending litigation to which the Company is or was a party, certain of the Company’s non-performing, non-accrual and charged-off loans, the Company’s cost saving measures, loan classifications, BankAtlantic Bancorp’s asset workout subsidiary, and the Orders with the OTS entered into by the Parent Company and BankAtlantic. Various current and former employees also received subpoenas for documents and testimony.

The Miami regional office staff of the SEC has indicated that it is recommending that the SEC bring a civil action against the Company alleging that the Company violated certain provisions of federal securities laws, including Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 there under. The Company has also been informed that its chief executive officer received a similar communication. In communications between the Company’s counsel and the Miami regional office staff, the Company has learned that the basis for the recommended actions included many of the same arguments brought in the private class action securities litigation concluded at the district court level in favor of the Company and the individual defendants. In addition, the Miami regional office staff raised issues relating to the classification and valuation of certain loans included in the Company’s financial information for the last quarter of 2007 and

BankAtlantic Bancorp, Inc. and Subsidiaries

in its annual report on Form 10-K for the 2007 fiscal year. The Company and its CEO responded to the issues raised by the Miami regional office staff in June 2011. If litigation is brought, the SEC may seek remedies including an injunction against future violations of federal securities laws, civil money penalties and an officer and director bar. The Company believes that it has fulfilled all of its obligations under securities laws and, if such actions are brought by the SEC against the Company and/or any of its officers, such actions will be vigorously defended.

Concentration of Credit Risk

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

BankAtlantic also purchases residential loans located throughout the country. The majority of these residential loans are jumbo residential loans. A jumbo loan has a principal amount above the industry-standard definition of conventional conforming loan limits. These loans could potentially have outstanding loan balances significantly higher than related collateral values in distressed areas of the country as a result of the decline in real estate values in residential housing markets. Also included in this purchased residential loan portfolio are interest-only loans. The structure of these loans results in possible increases in a borrower’s loan payments when the contractually required repayments change due to interest rate movement and the required amortization of the principal amount. These payment increases could affect a borrower’s ability to meet the debt service on or repay the loan and lead to increased defaults and losses. At September 30, 2011, BankAtlantic’s residential loan portfolio included $411.9 million of interest-only loans, which represents 44.3% of the residential loan portfolio. Interest-only residential loans scheduled to become fully amortizing during the three months ended December 31, 2011 and during the year ended December 31, 2012 total $15.8 million and $38.7 million, respectively. If market conditions in the areas where the collateral for our residential loans is located do not improve or deteriorate further, or the borrowers are not in a position to make any increased payments due under the terms of their loans, BankAtlantic may be exposed to additional losses in this portfolio.

BankAtlantic Bancorp, Inc. and Subsidiaries

12. Earnings per Share

The following table reconciles the numerators and denominators of the basic and diluted earnings per share computation for the three and nine months ended September 30, 2011 and 2010 (in thousands, except share data):


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
Basic loss per share:
Numerator:
Net loss	$	(11,794	)		(25,184	)		(11,280	)		(96,955	)
Less: net loss (income) attributable to non-controlling interest		254			(225	)		(331	)		(672	)

Net loss attributable to BankAtlantic Bancorp, Inc.	$	(11,540	)		(25,409	)		(11,611	)		(97,627	)

Denominator:
Basic weighted average number of common shares outstanding		15,626,874			12,156,703			13,754,966			10,712,964

Basic loss per share	$	(0.74	)		(2.09	)		(0.84	)		(9.11	)

Diluted loss per share
Numerator:
Net loss	$	(11,794	)		(25,184	)		(11,280	)		(96,955	)
Less: net loss (income) attributable to non-controlling interest		254			(225	)		(331	)		(672	)

Net loss attributable to BankAtlantic Bancorp, Inc.	$	(11,540	)		(25,409	)		(11,611	)		(97,627	)

Denominator:
Basic weighted average number of common shares outstanding		15,626,874			12,156,703			13,754,966			10,712,964

Diluted income loss per share	$	(0.74	)		(2.09	)		(0.84	)		(9.11	)

During the three and nine months ended September 30, 2011 and 2010, 93,101 and 142,753, respectively, of options to acquire shares of Class A Common Stock were anti-dilutive. Restricted non-vested Class A Common Stock outstanding of 212,650 and 322,980 were anti-dilutive for the three and nine months ended September 30, 2011, and 2010, respectively.

13. Subsequent Event

On November 1, 2011, the Company entered into a definitive agreement to sell its wholly owned subsidiary, BankAtlantic, to BB&T Corporation (“BB&T”). In acquiring BankAtlantic, based on September 30, 2011 balances, BB&T will acquire approximately $2.1 billion in loans and assume approximately $3.3 billion in deposits. The deposit premium, estimated to be $301 million based on the September 30, 2011 balances, represents 9.05% of total deposits and 10.32% of non-CD deposits at September 30, 2011. The deposit premium will be increased or decreased based upon the average daily closing balance of non-CD deposits during a specified pre-closing period provided that the deposit premium will not exceed $315.9 million.

BankAtlantic Bancorp, Inc. and Subsidiaries

As part of the transaction, BankAtlantic will distribute to the Company specifically identified assets, including certain performing and non-performing loans and tax certificates, real estate owned, and related reserves as well as previously written off assets which in the aggregate was recorded on the balance sheet of BankAtlantic at approximately $623.6 million as of September 30, 2011. At September 30, 2011, the assets to be distributed included approximately $271.3 million of performing loans, $315.2 million of non-performing loans, of which $96.5 million were paying as agreed, $18.7 million in tax certificates, all rights to BankAtlantic’s judgments, previously written off assets and claims, $83.4 million of real estate owned, and reserves related to these assets totaling $81.9 million. At the closing of the transaction, the sum of the deposit premium and the net asset value of BankAtlantic as calculated pursuant to the terms of the agreement as of the closing after giving effect to the distribution of the assets described above will be paid in cash. If the sum is a positive number it will be paid by BB&T to the Company, and if the sum is a negative number it will be paid by the Company to BB&T. The agreement also requires that the Company pay all accrued deferred interest to its Trust Preferred Securities holders at the next scheduled payment date subsequent to closing. Closing of the transaction is subject to receipt of required regulatory approvals and other customary closing conditions.

14. Goodwill

Goodwill of $13.1 million included on the Company’s statement of financial condition as of September 30, 2011 and December 31, 2010 associated with BankAtlantic’s capital services reporting unit was tested for potential impairment on September 30, 2011 (our annual testing date) and was determined not to be impaired. As of September 30, 2011, BankAtlantic’s capital services reporting unit’s implied goodwill was $43.2 million which exceeded the capital services goodwill by $30.1 million. If market conditions do not improve or deteriorate further, BankAtlantic may incur goodwill impairment charges in future periods.

15. New Accounting Pronouncements

Update Number 2011-08 – Intangibles – Goodwill and Other (Topic 350): Testing Goodwill for Impairment. This accounting standard update allows entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. Under this option, an entity is no longer required to calculate the fair value of a reporting unit unless the entity determines, based on that qualitative assessment, that it is more likely than not that the reporting unit’s fair value is less than its carrying amount. This accounting standard update is effective for annual and interim goodwill impairment tests performed beginning January 1, 2012. The Company believes that this update will not have a material impact on our financial statements.

Update Number 2011-05 – Comprehensive Income (Topic 220): Presentation of Comprehensive Income. This update makes available the option to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The update did not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. However, the update eliminated the presentation of other comprehensive income as part of the statement of changes in stockholders’ equity. This update is for the first interim period beginning after December 15, 2011, and must be applied retrospectively. The Company believes that the new guidance will not have a material effect on the Company’s financial statements.

Update Number 2011-4 – Fair Value Measurement (Topic 820). Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This guidance clarifies the FASB’s intent regarding the highest and best use valuation premise and also provides guidance on measuring the fair value of an instrument classified in shareholders’ equity, the treatment of premiums and discounts in fair value measurements and measuring fair value of financial instruments that are managed within a portfolio. This standard also expands the disclosure requirements related to fair value measurements, including a requirement to disclose valuation processes and sensitivity of the fair value measurements to changes in unobservable inputs for fair value measurements categorized within Level 3 of the fair value hierarchy and categorization by level of the fair value hierarchy for items that are not measured at fair value in the statement of financial position but for which the fair value measurement is required to be disclosed. The effective date of this update is for the first interim period beginning after December 15, 2011, and early application is not permitted. The Company is evaluating the impact of the adoption of this standard.

On July 1, 2011, the Company implemented Update Number 2011-02 – Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring (“TDR”). This update to Receivables (Topic

BankAtlantic Bancorp, Inc. and Subsidiaries

310) provides guidance for a creditor’s evaluation of whether a loan modification constitutes a TDR. A modification of debt constitutes a TDR when the creditor, for economic reasons related to the debtor’s financial difficulties, grants a concession to the borrower. This update provides guidance on determining whether a debtor is having financial difficulties and whether a creditor has granted a concession. The implementation of this new accounting guidance did not have a material effect on the Company’s financial statements.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The objective of the following discussion is to provide an understanding of the financial condition and results of operations of BankAtlantic Bancorp, Inc. and its subsidiaries (the “Company”, which may also be referred to as “we,” “us,” or “our”) for the three and nine months ended September 30, 2011. The principal assets of BankAtlantic Bancorp consist of its ownership in BankAtlantic, a federal savings bank headquartered in Fort Lauderdale, Florida, and its subsidiaries (“BankAtlantic”).

This document contains forward-looking statements based on current expectations that involve a number of risks and uncertainties. All opinions, forecasts, projections, future plans or other statements, other than statements of historical fact, are forward-looking statements and include words or phrases such as “believes,” “will,” “expects,” “anticipates,” “intends,” “estimates,” “our view,” “we see,” “would” and words and phrases of similar import. The forward looking statements in this document are also forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and involve substantial risks and uncertainties. We can give no assurance that such expectations will prove to have been correct. Actual results could differ materially as a result of a variety of risks and uncertainties, many of which are outside of the control of management. These risks and uncertainties include, but are not limited to the impact of economic, competitive and other factors affecting the Company and its operations, markets, products and services, including the impact of the changing regulatory environment, a continued or deepening recession, continued decreases in real estate values, and increased unemployment or sustained high unemployment rates on our business generally, BankAtlantic’s regulatory capital ratios, the ability of our borrowers to service their obligations and of our customers to maintain account balances and the value of collateral securing our loans; credit risks and loan losses, and the related sufficiency of the allowance for loan losses, including the impact of the economy and real estate market values on the credit quality of our loans (including those held in the asset workout subsidiary of the Company); the risk that loan losses have not peaked and risks of additional charge-offs, impairments and required increases in our allowance for loan losses; the impact of regulatory proceedings and litigation including but not limited to proceedings and litigation relating to overdraft fees; risks associated with maintaining compliance with the Cease and Desist Orders entered into by the Company and BankAtlantic, including risks that BankAtlantic will not maintain required capital levels, that compliance will adversely impact operations, and that failing to comply with regulatory mandates will result in the imposition of additional regulatory requirements and/or fines; changes in interest rates and the effects of, and changes in, trade, monetary and fiscal policies and laws including their impact on the bank’s net interest margin; adverse conditions in the stock market, the public debt market and other financial and credit markets and the impact of such conditions on our activities and our ability to raise capital; and the risks associated with the impact of periodic valuation testing of goodwill, deferred tax assets and other assets. Past performance and perceived trends may not be indicative of future results. In addition, this document contains forward looking statements relating to an agreement between the Company and BB&T Corporation to sell BankAtlantic, which are subject to risks and uncertainties including, but not limited to the risk that a transaction between BB&T and BankAtlantic Bancorp may not be completed on a timely basis, on anticipated terms, or at all; BankAtlantic Bancorp’s and/or BankAtlantic’s business or net asset values may be negatively affected by the pendency of the proposed transaction or otherwise; that regulatory approvals may not be received; that the transaction may not be as advantageous to BankAtlantic Bancorp as expected. In addition to the risks and factors identified above, reference is also made to other risks and factors detailed in reports filed by the Company with the Securities and Exchange Commission, including the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, and the Quarterly Report on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011. The Company cautions that the foregoing factors are not exclusive.

Critical Accounting Policies

Management views critical accounting policies as accounting policies that are important to the understanding of our financial statements and also involve estimates and judgments about inherently uncertain matters. In preparing the financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated statements of financial condition and assumptions that affect the recognition of income and expenses on the consolidated statements of operations for the periods presented. Actual results could differ significantly from those estimates. Material estimates that are

BankAtlantic Bancorp, Inc. and Subsidiaries

particularly susceptible to significant changes in future periods relate to the determination of the allowance for loan losses, evaluation of goodwill and other intangible assets for impairment, the valuation of securities as well as the determination of other-than-temporary declines in value, the valuation of real estate acquired in connection with foreclosure or in satisfaction of loans, the amount of the deferred tax asset valuation allowance, accounting for uncertain tax positions, accounting for contingencies, and assumptions used in the valuation of stock based compensation. The four accounting policies that we have identified as critical accounting policies are: (i) allowance for loan losses; (ii) valuation of securities as well as the determination of other-than-temporary declines in value; (iii) impairment of long-lived assets including real estate owned and goodwill; and (iv) the accounting for deferred tax asset valuation allowance. For a more detailed discussion of these critical accounting policies see “Critical Accounting Policies” appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010.

Consolidated Results of Operations

Loss from continuing operations from each of the Company’s reportable segments was as follows (in thousands):


	For the Three Months Ended September 30,
	2011			2010			Change
BankAtlantic	$	(8,073	)		(17,669	)		9,596
Parent Company		(3,721	)		(7,515	)		3,794

Loss from continuing operations	$	(11,794	)		(25,184	)		13,390

For the Three Months Ended September 30, 2011 Compared to the Same 2010 Period:

BankAtlantic’s improved performance during the 2011 third quarter compared to the same 2010 quarter primarily was the result of a decrease in the provision for loan losses and lower operating expenses partially offset by a decline in net interest income and non-interest income.

The decrease in the provision for loan losses primarily reflects a slowing in the amount of loans migrating to a delinquency or non-accrual status compared to prior periods. The decrease in the provision for loan losses resulted in a reduction in the allowance for loan losses. Loans delinquent 31 to 89 days declined from $47.2 million as of September 30, 2010 to $30.5 million at September 30, 2011.

The decrease in non-interest expenses reflects lower compensation and occupancy expenses associated with the consolidation of back-office facilities, workforce reductions, normal attrition and elimination of expenses associated with BankAtlantic’s Tampa operations as a result of the completion of the Tampa branch sale on June 3, 2011. Additionally, BankAtlantic recognized $2.0 million of real estate owned sale gains during the 2011 quarter compared to $0.4 million of gains during the same 2010 quarter. The $2.0 million of real estate owned sale gains in the 2011 quarter included the sale of a commercial property for a $1.6 million gain. Also, asset impairments were lower during the 2011 quarter compared to the same 2010 period. BankAtlantic recognized during the 2010 quarter $4.5 million of impairments on assets transferred to held-for-sale in connection with the decision to pursue the sale of the Tampa branches, $2.0 million of employee severance associated with a July 2010 workforce reduction, $0.4 million of impairments on REO and a $1.1 million increase in lease termination liability compared to $3.0 million in REO impairments during the 2011 quarter. The improvement in non-interest expenses for the 2011 quarter compared to the same 2010 period was partially offset by an increase in professional fees associated with legal fees related to tax certificate litigation which was settled during September 2011 for $2.7 million.

The lower net interest income resulted primarily from a significant reduction in earning assets and an increasing proportion of investments in cash at the Federal Reserve Bank. BankAtlantic reduced its asset balances in order to improve liquidity and regulatory capital ratios.

The decrease in non-interest income primarily resulted from lower service charges and from foreign currency exchange losses, partially offset by gains on the sales of mortgage-backed securities.

The lower service charges on deposit accounts primarily reflect lower overdraft fees during the period. The decrease in overdraft fee income reflects the decline in the total number of accounts which incurred overdraft fees. We believe that the decline in the number of accounts incurring overdraft fees reflects efforts to attract customers who maintain deposit accounts with higher balances, regulatory and other changes in our overdraft policies, and changes in customer

BankAtlantic Bancorp, Inc. and Subsidiaries

behavior. BankAtlantic revised its overdraft policies during the first quarter of 2011 to, among other things, institute a daily limit on the number of overdraft fees a customer will be charged, eliminate an overdraft fee for transactions that result in a small overdrawn balance at the end of the business day, and lower the amount of overdraft protection provided to a customer. Furthermore, during the third quarter of 2011, BankAtlantic revised its overdraft policy whereby electronic transactions are now processed in chronological order and checks are processed in serial number order instead of in the order of largest to smallest. We anticipate that this trend will continue and that our overdraft fee income will be lower in future periods. Also, services charges from ATM interchange and surcharge income declined for the 2011 quarter compared to the same 2010 periods due to lower volume of transactions primarily associated with the Tampa branch sale.

During the 2011 BankAtlantic recognized $0.8 million of foreign exchange losses associated with foreign currency in ATM machines on-board cruise ships compared to $0.8 million of gains during the same 2010 quarter

The above non-interest income declines were partially offset by $7.0 million of gains from the sale of $82.8 million of mortgage-backed securities. The securities were sold as part of our overall balance sheet management aimed at improving liquidity and BankAtlantic’s regulatory capital ratios.

The decrease in the Parent Company’s loss for the 2011 quarter compared to the same 2010 quarter resulted primarily from a $1.3 million reduction in the provision for loan losses, lower compensation expenses and lower professional fees partially offset by impairments of real estate owned. The reduction in compensation expense related to the elimination of bonuses and the reduction in salaries during 2011. The lower provision resulted from lower charge-offs during the 2011 quarter compared to the same 2010 quarter. The decline in professional fees reflects a $0.9 million litigation recovery in connection with a loan participation dispute and elevated legal fees during 2010 associated with responding to a Securities and Exchange Commission notice of investigation.

For the Nine Months Ended September 30, 2011 Compared to the Same 2010 Period:


	For the Nine Months Ended September 30,
(in thousands)	2011			2010			Change
BankAtlantic	$	6,524			(74,668	)		81,192
Parent Company		(17,804	)		(22,287	)		4,483

Loss from continuing operations	$	(11,280	)		(96,955	)		85,675

BankAtlantic’s improved performance during the nine months ended September 30, 2011 compared to the same 2010 period resulted primarily from the sale of 19 Tampa branches and related facilities to PNC Bank for a net gain of $38.6 million, a $42.9 million decline in the provision for loan losses and a $29.0 million decline in operating expenses. The above improvements in BankAtlantic’s results of operations were partially offset by declines in net interest income and service charges on deposit accounts. The changes in the above items were primarily the result of the items discussed above for the three months ended September 30, 2011.

The decrease in the Parent Company’s loss for the nine months ended September 30, 2011 compared to the same 2010 period resulted primarily from the items discussed above for the three months ended September 30, 2011 compared to the same 2010 period partially offset by a $1.5 million impairment of an equity security and $2.7 million increase in impairment of real estate owned associated with updated property valuations.

BankAtlantic Bancorp, Inc. and Subsidiaries

BankAtlantic Results of Operations

Net interest income


	Average Balance Sheet - Yield / Rate Analysis For the Three Months Ended
	September 30, 2011							September 30, 2010
	Average Balance		Revenue/ Expense		Yield/ Rate			Average Balance		Revenue/ Expense		Yield/ Rate
(dollars in thousands)
Total loans	$	2,791,139		30,267		4.34		$	3,485,826		38,299		4.39
Investments		727,578		3,268		1.80			748,289		6,032		3.22

Interest earning assets		3,518,717		33,535		3.81	%		4,234,115		44,331		4.19	%

Goodwill and core deposit intangibles		13,815							15,028
Other non-interest earning assets		245,795							255,074

Total Assets	$	3,778,327						$	4,504,217


Deposits:
Savings	$	445,273		212		0.19	%	$	444,981		250		0.22	%
NOW		1,206,452		1,096		0.36			1,484,558		1,441		0.39
Money market		420,628		611		0.58			404,406		551		0.54
Certificates of deposit		432,345		1,255		1.15			689,664		2,635		1.52

Total interest bearing deposits		2,504,698		3,174		0.50			3,023,609		4,877		0.64

Short-term borrowed funds		1,036		—		—			36,885		12		0.13
Advances from FHLB		—		—		—			106,685		106		0.39
Long-term debt		22,000		228		4.11			22,000		235		4.24

Total interest bearing liabilities		2,527,734		3,402		0.53			3,189,179		5,230		0.65

Demand deposits		884,386							907,272
Non-interest bearing other liabilities		44,323							56,525

Total liabilities		3,456,443							4,152,976
Stockholder’s equity		321,884							351,241

Total liabilities and stockholder’s equity	$	3,778,327						$	4,504,217

Net interest income/

Net interest spread			$	30,133		3.28	%				39,101		3.54	%


Margin
Interest income/interest earning assets						3.81	%						4.19	%
Interest expense/interest earning assets						0.38							0.49

Net interest margin						3.43	%						3.70	%

For the Three Months Ended September 30, 2011 Compared to the Same 2010 Period:

The decrease in net interest income resulted primarily from a reduction in earning assets, an increase in cash balances invested in lower yielding short-term investments and a reduction in the net interest margin.

The average balance of earning assets declined by $715.4 million for the three months ended September 30, 2011 compared to the same 2010 period. The decline in average earning assets reflects a significant reduction in the origination and purchase of loans, lower agency securities balances as a result of repayments and securities sales, and reduced purchases of tax certificates. BankAtlantic also experienced significant residential loan repayments due to a substantial number of loan refinancings associated with low residential mortgage interest rates during 2010 and for the nine months ended September 30, 2011 as well as normal loan amortization payments. Residential loan average balances declined from $1.36 billion for the three months ended September 30, 2010 to $1.04 billion during the same 2011 quarter. Also, BankAtlantic ceased

BankAtlantic Bancorp, Inc. and Subsidiaries

originating commercial real estate loans contributing to average commercial real estate balances declining from $1.04 billion for the three months ended September 30, 2010 to $751 million for the same 2011 period. BankAtlantic also slowed the origination of consumer loans and average balances of these loans declined from $654 million during the 2010 third quarter to $588 million during the 2011 third quarter.

The decrease in average investment balances primarily reflects a decline in mortgage-backed securities and REMICs as well as lower balances in agency bonds, municipal bonds and taxable securities. The lower REMIC and mortgage-backed securities balance reflects the sale of $82.8 million of securities during the three months ended September 30, 2011 and repayments. The lower balances in other securities resulted from repayments at maturity. The above declines in investment securities were partially offset by higher interest bearing cash balances at the Federal Reserve Bank. The average balances at the Federal Reserve Bank were $393.3 million for the 2011 third quarter compared to $190.8 million for the 2010 third quarter.

The net interest margin declined due to a change in our interest earning asset mix from higher yielding loans and mortgage-backed securities to lower yielding cash balances at the Federal Reserve Bank. The decline in interest earning asset yields was partially offset by a decline in interest bearing liability interest rates.

The decline in interest bearing liability interest rates primarily resulted from a decline in the average interest rates on deposits. The lower average rates on deposits reflect the low interest rate environment and a significant reduction in certificate of deposit balances. During 2011, BankAtlantic reduced its brokered deposits, prepaid $110 million of institution certificates of deposit and reduced public fund balances. Certificates of deposit accounts generally bear higher rates of interest than other deposit accounts.


	Average Balance Sheet - Yield / Rate Analysis For the Nine Months Ended
	September 30, 2011							September 30, 2010
	Average Balance		Revenue/ Expense		Yield/ Rate			Average Balance		Revenue/ Expense		Yield/ Rate
(dollars in thousands)

Total loans	$	2,945,466		98,312		4.45		$	3,608,848		119,717		4.42
Investments		962,537		11,865		1.64			667,397		15,600		3.12

Total interest earning assets		3,908,003		110,177		3.76	%		4,276,245		135,317		4.22	%

Goodwill and core deposit intangibles		14,115							15,342
Other non-interest earning assets		262,316							290,558

Total Assets	$	4,184,434						$	4,582,145


Deposits:
Savings	$	464,106		743		0.21	%	$	438,707		855		0.26	%
NOW		1,378,280		3,903		0.38			1,492,442		5,444		0.49
Money market		406,261		1,579		0.52			384,024		1,810		0.63
Certificates of deposit		564,735		5,291		1.25			796,375		9,846		1.65

Total interest bearing deposits		2,813,382		11,516		0.55			3,111,548		17,955		0.77

Short-term borrowed funds		15,363		15		0.13			36,633		35		0.13
Advances from FHLB		58,700		153		0.35			93,410		1,065		1.52
Long-term debt		22,000		679		4.13			22,167		694		4.19

Total interest bearing liabilities		2,909,445		12,363		0.57			3,263,758		19,749		0.81

Demand deposits		927,038							896,080
Non-interest bearing other liabilities		48,606							55,266

Total liabilities		3,885,089							4,215,104
Stockholder’s equity		299,345							367,041

Total liabilities and stockholder’s equity	$	4,184,434						$	4,582,145

Net interest income/

Net interest spread			$	97,814		3.19	%				115,568		3.41	%


Margin
Interest income/interest earning assets						3.76	%						4.22	%
Interest expense/interest earning assets						0.42							0.62

Net interest margin						3.34	%						3.60	%

For the Nine Months Ended September 30, 2011 Compared to the Same 2010 Period:

The decrease in net interest income was primarily the result of the items discussed above for the three months ended September 30, 2011 compared to the same 2010 period. The lower net interest income reflects a significant decline in

BankAtlantic Bancorp, Inc. and Subsidiaries

average earning assets and a change in the earning asset mix from higher yielding loans to lower yielding securities and cash balances at the Federal Reserve Bank, partially offset by a decline in interest rates on interest-bearing liabilities. The decline in interest rates on interest-bearing liabilities reflects lower deposit interest rates for the 2011 nine month period compared to the 2010 nine month period as well as lower FHLB advance borrowing interest rates. The lower FHLB advance interest rates resulted from BankAtlantic replacing its intermediate term FHLB advances with short-term advances which typically have lower interest rates. BankAtlantic had no FHLB advance borrowings at September 30, 2011.

Asset Quality

The activity in BankAtlantic’s allowance for loan losses was as follows (in thousands):


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011			2010
Balance, beginning of period	$	137,643			180,635			161,309			173,588

Charge-offs:
Residential		(3,489	)		(4,619	)		(17,267	)		(14,033	)
Commercial real estate		(5,787	)		(5,969	)		(30,610	)		(41,447	)
Commercial non-mortgage		(7,563	)		—			(8,151	)		—
Consumer		(6,555	)		(9,881	)		(20,748	)		(32,474	)
Small business		(2,321	)		(2,402	)		(6,942	)		(5,464	)

Total Charge-offs		(25,715	)		(22,871	)		(83,718	)		(93,418	)
Recoveries of loans previously charged-off		1,505			984			5,121			2,910

Net (charge-offs)		(24,210	)		(21,887	)		(78,597	)		(90,508	)
Transfer to held for sale		(635	)		—			(7,941	)		—
Provision for loan losses		17,754			23,012			55,781			98,680

Balance, end of period	$	130,552			181,760			130,552			181,760

Residential loan charge-offs decreased during the three months ended September 30, 2011 compared to the same 2010 period. We believe that the lower charge-offs reflect declining interest-only loan balances as we have historically experienced a higher percentage of charge-offs associated with interest-only residential loans as compared to amortizing residential loans. The higher residential charge-offs during the nine months ended September 30, 2011 compared to the same 2010 period reflect a decline in property values. We believe the property value declines resulted primarily from a lack of available residential loan financing, appraisals not supporting negotiated sales prices and higher residential property inventory resulting from foreclosures nationally.

Commercial real estate loan charge-offs declined during the three and nine months ended September 30, 2011 primarily due to lower charge-offs in BankAtlantic’s commercial residential loan portfolio. During the three months ended September 30, 2011, BankAtlantic recognized $3.4 million of charge-offs related to commercial residential loans, $1.6 million related to commercial other loans, $0.6 million related to commercial owner occupied loans and $0.2 million related to commercial land loans. During the nine months ended September 30, 2011, BankAtlantic recognized $14.3 million of charge-offs related to commercial other loans, $8.5 million related to commercial residential loans, $0.8 million related to commercial owner occupied loans and $7.0 million related to commercial land loans. During the three months ended September 30, 2010, BankAtlantic recognized $4.5 million of charge-offs related to commercial residential loans, $1.3 million related to commercial other loans and $0.1 million related to commercial land loans. During the nine months ended September 30, 2010, BankAtlantic recognized $35.3 million of charge-offs related to commercial residential loans, $5.8 million related to commercial other loans and $0.2 million related to commercial land loans. Historically, the majority of BankAtlantic’s charge-offs were related to commercial residential loans and the balances in the commercial residential portfolio have declined from $266.2 million at December 31, 2009 to $156.8 million at September 30, 2010 to $114.2 million at September 30, 2011.

Included in the commercial non-mortgage charge-offs for the three and nine months ended September 30, 2011 was a charge-off of $7.5 million relating to a factoring joint venture that ceased operations in September 2011. BankAtlantic did not have interests in joint ventures as of September 30, 2011.

BankAtlantic Bancorp, Inc. and Subsidiaries

We believe that the decline in consumer loan charge-offs during the three and nine months ended September 30, 2011 compared to the same 2010 periods reflects a stabilization of Florida market trends. Additionally, during 2008 BankAtlantic reduced the origination of and utilized more restrictive underwriting criteria for home equity loans. As a consequence, loan delinquencies and charge-offs have declined as loan balances of loans originated prior to 2008 have declined.

Small business loan charge-offs during the three and nine months ended September 30, 2011 were primarily non-real estate loans to businesses in the real estate industry.

The decrease in the provision for loan losses for the three and nine months ended September 30, 2011 compared to the same 2010 periods resulted primarily from lower loan delinquencies, a decline in loans migrating to non-accrual status and lower commercial and consumer charge-offs.

During the three months ended September 30, 2011, BankAtlantic transferred $6.2 million of commercial loans to held for sale with a view toward selling the loans in the foreseeable future. In connection with that transfer, BankAtlantic recorded the loans at the lower of cost or fair value resulting in $0.6 million in impairments and a corresponding reduction in the allowance for loan losses. During the nine months ended September 30, 2011, BankAtlantic transferred $25.1 million of residential and $8.7 million of commercial real estate non-accrual loans to loans held for sale resulting in $7.9 million reduction in the allowance for loan losses.

While we believe we have seen some positive trends in both the Florida and national economy which may indicate that credit losses may decline in future periods, if the housing and real estate industries do not improve or if general economic conditions do not continue to improve in Florida and nationwide, the credit quality of our loan portfolio may deteriorate and additional provisions for loan losses will be required. Additionally, we have a significant amount of variable interest rate loans in our portfolio and a substantial increase in interest rates in the future would increase the interest payments required on variable interest rate loans which could have an adverse effect on the credit quality of those loans.

BankAtlantic Bancorp, Inc. and Subsidiaries

At the indicated dates, BankAtlantic’s non-performing assets, loans contractually past due 90 days or more and still accruing, performing impaired loans and troubled debt restructured loans were as follows (in thousands):


	As of
	September 30, 2011			December 31, 2010
NON-PERFORMING ASSETS
Tax certificates	$	2,416			3,636
Residential (1)		81,287			86,538
Commercial real estate (2)		190,715			243,299
Commercial non-mortgage		17,302			16,123
Small business		11,708			10,879
Consumer		14,202			14,120

Total non-accrual assets (3)		317,630			374,595

REPOSSESSED ASSETS:
Residential real estate		12,673			16,418
Commercial real estate		66,981			44,136
Small business real estate		3,252			3,693
Consumer real estate		454			81

Total repossessed assets		83,360			64,328

Total non-performing assets	$	400,990			438,923

Total non-performing assets as a percentage of:
Total assets		10.82	%		9.82	%

Loans, tax certificates and real estate owned		14.03	%		13.08	%

TOTAL ASSETS	$	3,707,048			4,469,168

TOTAL LOANS, TAX CERTIFICATES AND NET REAL ESTATE OWNED	$	2,858,743			3,355,711

Allowance for loan losses	$	130,552			161,309

Tax certificates	$	56,268			89,789

Allowance for tax certificate losses	$	7,535			8,811

OTHER ACCRUING IMPAIRED LOANS
Contractually past due 90 days or more (4)	$	2,500			—
Performing impaired loans (5)		—			11,880
Troubled debt restructured loans		125,482			96,006
TOTAL OTHER ACCRUING

IMPAIRED LOANS	$	127,982			107,886

(1)	Includes $38.0 million and $38.9 million of interest-only residential loans as of September 30, 2011 and December 31, 2010, respectively.

(2)	Excluded from the above table as of September 30, 2011 and December 31, 2010 were $9.4 million and $14.5 million, respectively, of commercial residential loans that were transferred to a work-out subsidiary of the Parent Company in March 2008.

(3)	Includes $125.6 million and $143.8 million of troubled debt restructured loans as of September 30, 2011 and December 31, 2010, respectively.

(4)	BankAtlantic believes that it will ultimately collect the principal and interest associated with these loans; however, the timing of the payments may not be in accordance with the contractual terms of the loan agreement.

(5)	These loans were performing in accordance with their respective modified terms.

The decline in non-performing assets at September 30, 2011 compared to December 31, 2010 reflects lower residential and commercial real estate non-accrual loans partially offset by higher commercial real estate owned balances.

The decline in commercial real estate non-accrual loans primarily resulted from a decline in loans migrating to a non-accrual status. During the nine months ended September 30, 2011, $51.5 million of loans migrated to a non-accrual status while $170.2 million of loans migrated to non-accrual during the same 2010 period. Additionally, two non-accrual loans with an aggregate book value of $11.7 million were sold and $36.5 million of commercial real estate non-accrual loans were transferred to real estate owned during the nine months ended September 30, 2011.

BankAtlantic Bancorp, Inc. and Subsidiaries

The decline in residential non-accrual loans was primarily the result of charge-offs and fair value adjustments associated with non-accrual residential loans transferred to loans held for sale. Also contributing to lower non-accrual residential loans was a decline in delinquencies. Residential loans past due 30 to 90 days declined from $23.1 million at December 31, 2010 to $16.6 million at September 30, 2011. However, residential loan credit quality is dependent on economic conditions, specifically unemployment and property values. If economic conditions deteriorate, we would anticipate higher residential non-accrual loan balances and real estate owned in subsequent periods.

The higher balance of repossessed assets at September 30, 2011 compared to December 31, 2010 resulted primarily from foreclosures of commercial real estate loans. During the nine months ended September 30, 2011, BankAtlantic transferred $49.0 million of loans to real estate owned and sold $18.6 million of real estate owned properties. During the nine months ended September 30, 2010, BankAtlantic transferred $40.7 million of loans to real estate owned and sold $19.2 million of real estate owned properties. As non-accrual loans migrate into repossessed assets in the future, we expect repossessed assets as well as sales of real estate owned to increase.

BankAtlantic’s accruing troubled debt restructured loans at September 30, 2011 increased by 31% compared to accruing troubled debt restructured loans at December 31, 2010. The increase was primarily due to the restructuring of six commercial real estate loans aggregating $40.9 million. In response to current market conditions, BankAtlantic generally decides, on a case-by-case basis, whether to modify loans for borrowers experiencing financial difficulties and has modified the terms of certain commercial, small business, residential and consumer home equity loans. Generally, the concessions made to borrowers experiencing financial difficulties have included among others, the reduction of contractual interest rates and, in some cases, forgiveness of a portion of loan principal upon satisfactory performance under the modified terms, conversion of amortizing loans to interest only payments or the deferral of some interest payments until the maturity date of the loan. Loans that are not delinquent at the date of modification are generally not placed on non-accrual. Modified non-accrual loans are generally not returned to an accruing status and BankAtlantic does not reset days past due on delinquent modified loans until the borrower demonstrates a sustained period of performance under the modified terms, which is generally performance over a six month period.

BankAtlantic’s troubled debt restructured loans by loan type were as follows (in thousands):


	As of September 30, 2011				As of December 31, 2010
	Non-accrual		Accruing		Non-accrual		Accruing
Commercial	$	110,323		102,724		130,783		70,990
Small business		3,753		7,247		2,990		9,401
Consumer		999		12,965		3,070		12,638
Residential		10,480		2,546		6,917		2,977

Total	$	125,555		125,482		143,760		96,006

BankAtlantic Bancorp, Inc. and Subsidiaries

BankAtlantic’s commercial loan portfolio includes large loan balance lending relationships. Six relationships accounted for 53.6% of our $208.0 million of non-accrual commercial loans as of September 30, 2011. The following table outlines general information about these six relationships as of September 30, 2011 (in thousands):


Relationships	Unpaid Principal Balance		Recorded Investment (3)		Specific Reserves		Date loan Originated	Date Placed on Nonaccrual	Default Date (2)	Loan Class	Date of Last Full Appraisal
Commercial Land Developers
Relationship No. 1	$	11,960		11,904		7,467	Q2-2005	Q4-2010	(1)	Land	Q1-2011
Relationship No. 2		27,522		26,210		11,432	Q1-1995	Q4-2009	Q4-2009	Land	Q1-2011
Relationship No. 3		10,279		10,279		4,681	Q1-2005	Q4-2010	(1)	Land	Q4-2010

Total	$	49,761		48,393		23,580

Commercial Non-Residential Developers
Relationship No. 4	$	25,334		25,203		8,958	Q3-2006	Q2-2010	(1)	Other	Q2-2011
Relationship No. 5		18,428		18,319		4,849	Q1-2007	Q3-2010	(1)	Other	Q2-2011
Relationship No. 6		19,650		19,650		3,835	Q4-2007	Q3-2011	(1)	Other	Q2-2011

Total	$	63,412		63,172		17,642

Total of Large Relationships	$	113,173		111,565		41,222

(1)	The loan is currently not in default.

(2)	The default date is defined as the date of the initial missed payment prior to default.

(3)	Recorded investment is the “Unpaid Principal Balance” less charge-offs.

The following table presents our purchased residential loans by year of origination segregated by amortizing and interest only loans at September 30, 2011 (dollars in thousands):


	Amortizing Purchased Residential Loans
Year of Origination	Unpaid Principal		Recorded Investment		LTV at Origination			Current LTV (1)			FICO Scores at Origination		Current FICO Scores (2)		Amount Delinquent		Debt Ratios at Origination (3)
2007	$	31,833		29,498		65.84	%		132.26	%		735		731		5,316		32.85	%
2006		41,375		39,601		73.26	%		113.30	%		729		702		6,094		36.98	%
2005		59,749		55,854		73.65	%		114.32	%		725		708		9,571		35.33	%
2004		255,620		252,079		69.06	%		81.97	%		731		722		24,409		34.75	%
Prior to 2004		113,991		113,570		68.59	%		57.86	%		730		724		6,122		34.35	%


	Interest Only Purchased Residential Loans
Year of Origination	Unpaid Principal		Recorded Investment		LTV at Origination			Current LTV (1)			FICO Scores at Origination		Current FICO Scores (2)		Amount Delinquent		Debt Ratios at Origination (3)
2007	$	62,431		57,780		72.67	%		124.47	%		750		744		12,721		34.31	%
2006		140,597		131,597		73.80	%		120.37	%		740		737		26,514		34.87	%
2005		126,747		124,692		71.44	%		110.93	%		738		746		8,849		34.82	%
2004		47,337		45,766		71.21	%		102.24	%		747		704		6,794		31.79	%
Prior to 2004		52,496		52,089		58.70	%		71.29	%		742		725		2,166		31.54	%

BankAtlantic Bancorp, Inc. and Subsidiaries

The following table presents our purchased residential loans by geographic area segregated by amortizing and interest-only loans at September 30, 2011 (dollars in thousands):


	Amortizing Purchased Residential Loans
State	Unpaid Principal		Recorded Investment		LTV at Origination			Current LTV (1)			FICO Scores at Origination		Current FICO Scores (2)		Amount Delinquent		Debt Ratios at Origination (3)
Arizona	$	12,055		11,784		70.51	%		94.11	%		743		740		1,079		31.85	%
California		130,520		127,084		69.37	%		85.95	%		733		727		15,117		35.35	%
Florida		74,702		71,269		70.25	%		100.59	%		720		701		12,438		34.74	%
Nevada		7,895		7,855		73.10	%		141.43	%		741		737		347		36.19	%
Other States		305,339		300,551		69.68	%		82.05	%		731		724		22,748		33.97	%


	Interest Only Purchased Residential Loans
State	Unpaid Principal		Recorded Investment		LTV at Origination			Current LTV (1)			FICO Scores at Origination		Current FICO Scores (2)		Amount Delinquent		Debt Ratios at Origination (3)
Arizona	$	13,007		11,995		71.04	%		138.36	%		758		748		2,297		30.67	%
California		122,494		118,189		71.56	%		108.09	%		744		736		16,460		33.77	%
Florida		29,358		26,126		68.31	%		127.12	%		745		721		8,354		31.08	%
Nevada		6,377		4,349		73.07	%		162.60	%		735		631		4,557		33.34	%
Other States		258,371		251,264		70.67	%		108.23	%		739		742		25,376		34.68	%

(1)	Current loan-to-values (“LTV”) for the majority of the portfolio were obtained as of the second quarter of 2011 from automated valuation models.

(2)	Current FICO scores based on borrowers for which FICO scores were available as of the second quarter of 2011.

(3)	Debt ratio is defined as the portion of the borrower’s income that goes towards debt service.

The table below presents the allocation of the allowance for loan losses (“ALL”) by various loan classifications, the percent of allowance to each loan category (“ALL to gross loans percent”) and the percentage of loans in each category to total loans (“Loans to gross loans percent”). The allowance shown in the table should not be interpreted as an indication that charge-offs in future periods will occur in these amounts or percentages or that the allowance accurately reflects future charge-off amounts or trends (dollars in thousands):


	September 30, 2011								December 31, 2010
	ALL by category		ALL to gross loans in each category			Loans by category to gross loans			ALL by category		ALL to gross loans in each category			Loans by category to gross loans
Commercial non-mortgage	$	11,225		9.85	%		4.22	%	$	10,786		8.05	%		4.14	%
Commercial real estate		67,608		9.11			27.48			83,029		8.70			29.46
Small business		7,957		2.82			10.45			11,514		3.80			9.35
Residential real estate		20,817		2.11			36.56			23,937		1.96			37.80
Consumer		22,945		3.99			21.29			32,043		5.14			19.25

Total allowance for loan losses	$	130,552		4.83	%		100.00	%	$	161,309		4.98	%		100.00	%

BankAtlantic Bancorp, Inc. and Subsidiaries

Included in the allowance for loan losses as of September 30, 2011 and December 31, 2010 were specific reserves by loan type as follows (in thousands):


	September 30, 2011		December 31, 2010
Commercial non-mortgage	$	9,755		9,020
Commercial real estate		49,249		62,986
Small business		821		2,936
Consumer		1,519		1,791
Residential		5,661		12,034

Total	$	67,005		88,767

The decrease in the allowance for loan losses at September 30, 2011 compared to December 31, 2010 resulted primarily from a decline in specific valuation allowances on commercial real estate and residential loans. The commercial real estate specific valuation allowance decline reflects a slowdown of loans migrating to an impaired classification. The residential loan specific valuation allowance decline reflects the reduction in allowances associated with $25.1 million of non-performing loans transferring to loans held for sale as well as reductions in allowances associated with foreclosed residential loan activity. The general reserve for consumer loans was reduced by $8.8 million due primarily to improvement in delinquency and charge-off trends as well as declining balances of loans originated prior to 2008. Residential loan general reserves increased by $3.3 million reflecting higher than historical charge-offs and declining collateral values.

BankAtlantic’s Non-Interest Income


	For the Three Months									For the Nine Months
	Ended September 30,									Ended September 30,
(in thousands)	2011			2010			Change			2011		2010		Change
Service charges on deposits	$	10,165			15,214			(5,049	)		33,423		45,764		(12,341	)
Other service charges and fees		6,129			7,495			(1,366	)		20,206		22,612		(2,406	)
Securities activities, net		6,959			(543	)		7,502			6,935		2,898		4,037
Gain on sale of Tampa branches		(34	)		—			(34	)		38,622		—		38,622
Other		2,123			4,869			(2,746	)		9,143		10,289		(1,146	)

Non-interest income	$	25,342			27,035			(1,693	)		108,329		81,563		26,766

The lower revenues from service charges on deposits during the three and nine months ended September 30, 2011 compared to the same 2010 periods resulted primarily from lower overdraft fee income. This decrease in overdraft fee income reflects the loss of deposit accounts associated with the sale of the Tampa branches as well as a decline in the total number of accounts which incurred overdraft fees. We believe that the decline in the number of accounts incurring overdraft fees reflects our efforts to attract customers who maintain deposit accounts with higher balances, regulatory and other changes in overdraft policies and changes in customer behavior. The Federal Reserve adopted new overdraft rules (effective July 1, 2010 for new customers and August 15, 2010 for existing customers), which among other requirements, prohibit banks from automatically enrolling customers in overdraft protection programs for point-of-sale and ATM transactions. Additionally, Congress has established a consumer protection agency which may further limit the assessment of overdraft fees. In response to the changing industry practices and regulations, during the fourth quarter of 2010, BankAtlantic began converting certain deposit products to fee-based accounts that encourage higher checking account balances or higher account activity in order to eliminate or reduce fees. Additionally, during the first quarter of 2011, BankAtlantic revised its overdraft policies instituting a daily limit on the number of overdraft fees a customer will be charged, eliminating an overdraft fee for transactions that result in a small overdrawn balance at the end of the business day, and lowering the amount of overdraft protection provided to a customer. Furthermore, during the third quarter of 2011, BankAtlantic revised its overdraft policy whereby electronic transactions are now processed in chronological order and checks are processed in serial number order instead of in the order of largest to smallest. We anticipate that this trend of lower overdraft fee income may continue; however, at a slower rate of decline in future periods.

BankAtlantic Bancorp, Inc. and Subsidiaries

The decrease in other service charges and fees during the three and nine months ended September 30, 2011 compared to the same 2010 periods resulted primarily from lower ATM interchange and surcharge income primarily related to lower transaction volume associated with the Tampa branch sale.

Securities activities, net during the three and nine months ended September 30, 2011 includes $7.0 million of gains from the sale of $82.8 million of agency securities. The securities were sold to improve liquidity and BankAtlantic’s regulatory capital ratios. During the nine months ended September 30, 2010, BankAtlantic sold $47.1 million of agency securities for a $3.1 million gain. The net proceeds of $43.8 million from the sales were used to pay down FHLB advance borrowings.

In June 2010, BankAtlantic entered into a foreign currency derivative contract as an economic hedge of foreign currency in cruise ship ATMs and recognized a $0.5 million and $0.2 million unrealized loss in connection with these derivative contracts during the three and nine months ended September 30, 2010. BankAtlantic recognized a $24,000 loss in connection with these derivative contracts during the nine months ended September 30, 2011.

In June 2011, BankAtlantic sold 19 branches and 2 related facilities in the Tampa area and the associated deposits to an unrelated financial institution and recognized a $38.6 million gain. The loss during the three months ended September 30, 2011 represents additional transaction costs.

Other non-interest income consisted of the following (in thousands):


	For the Three Months								For the Nine Months
	Ended September 30,								Ended September 30,
	2011			2010		Change			2011			2010		Change
Broker commissions	$	817			1,114		(297	)		2,725			2,987		(262	)
Safe deposit box rental		255			303		(48	)		822			933		(111	)
Income from leases		237			316		(79	)		762			847		(85	)
Fee income		765			587		178			2,179			1,672		507
Foreign exchange (losses) gains		(797	)		753		(1,550	)		(237	)		92		(329	)
Other		846			1,796		(950	)		2,892			3,758		(866	)

Total other income	$	2,123			4,869		(2,746	)		9,143			10,289		(1,146	)

The increase in fee income for the three and nine months ended September 30, 2011 compared to the same 2010 period primarily resulted from coin counter fees at BankAtlantic branches which increased by $0.1 million and $0.4 million, respectively.

Foreign exchange gains and losses represent the change in foreign currency exchange rates associated with foreign currency in ATMs on-board cruise ships.

Included in other income during the three and nine months ended September 30, 2010 was $1.0 million from BankAtlantic’s on-line banking service provider as a result of business interruption issues relating to the conversion to the service provider’s products.

BankAtlantic Bancorp, Inc. and Subsidiaries

BankAtlantic’s Non-Interest Expense


	For the Three Months									For the Nine Months
	Ended September 30,									Ended September 30,
(in thousands)	2011			2010			Change			2011			2010		Change
Employee compensation and benefits	$	16,611			22,475			(5,864	)		54,592			71,103		(16,511	)
Occupancy and equipment		10,019			13,263			(3,244	)		34,092			40,589		(6,497	)
Advertising and promotion		1,511			1,917			(406	)		4,615			5,972		(1,357	)
Check losses		559			763			(204	)		1,521			1,716		(195	)
Professional fees		7,056			4,942			2,114			10,567			11,727		(1,160	)
Supplies and postage		758			929			(171	)		2,507			2,789		(282	)
Telecommunication		386			697			(311	)		1,402			1,881		(479	)
Provision for tax certificates		969			885			84			2,769			3,752		(983	)
Cost associated with debt redemption		—			—			—			1,125			60		1,065
Impairment of loans held for sale		(145	)		—			(145	)		1,562			—		1,562
Impairment of real estate held for sale		—			—			—			353			1,511		(1,158	)
Employee termination costs		2			2,103			(2,101	)		(191	)		2,103		(2,294	)
Lease termination costs (reversals)		—			1,093			(1,093	)		(1,442	)		1,308		(2,750	)
Impairment of assets held for sale		—			4,469			(4,469	)		—			4,469		(4,469	)
Impairment of real estate owned		3,020			434			2,586			9,574			1,098		8,476
FDIC deposit insurance assessment		2,132			2,314			(182	)		7,618			7,799		(181	)
(Gain) loss on sale of real estate		(2,023	)		(442	)		(1,581	)		(2,663	)		334		(2,997	)
Amortization of intangible assets		295			309			(14	)		899			912		(13	)
Other		4,766			4,605			161			15,059			13,869		1,190

Total non-interest expense	$	45,916			60,756			(14,840	)		143,959			172,992		(29,033	)

The decline in employee compensation and benefits during the three and nine months ended September 30, 2011 compared to the same 2010 period resulted primarily from workforce reductions, normal attrition and the transfer of employees to the purchaser of the Tampa branches in June 2011. The number of full-time equivalent employees declined from 1,532 as of December 31, 2009 to 1,055 as of September 30, 2011 (a 31% reduction in the workforce) with the Tampa branch sale affecting approximately 130 employees. Additionally, bonuses were $0.5 million and $2.1 million lower during the 2011 three and nine months periods compared to the same 2010 periods, respectively. The decline in the workforce also resulted in reduced benefit costs compared to 2010, relating primarily to health insurance and payroll taxes.

The decline in occupancy and equipment for the three and nine months ended September 30, 2011 compared to the same 2010 periods resulted primarily from the sale of the Tampa branches, consolidation of back-office facilities, and the termination of leases executed for branch expansion during prior periods.

The decrease in advertising and business promotion expense during the three and nine months ended September 30, 2011 compared to the same 2010 periods related primarily to BankAtlantic focusing its marketing efforts more on customer relationships and less on advertising and media and direct mail promotions.

The decrease in check losses for the three and nine months ended September 30, 2011 compared to the same 2010 period resulted from revisions to our overdraft policies limiting the number of overdrafts per day and the dollar amount of overdrafts.

The increase in professional fees during the three months ended September 30, 2011 compared to the same 2010 period primarily resulted from legal fees related to a tax certificate litigation matter which was settled during September 2011 for $2.7 million.

BankAtlantic Bancorp, Inc. and Subsidiaries

The decline in professional fees during the nine months ended September 30, 2011 compared to the same 2010 period resulted primarily from higher insurance reimbursements in connection with class action securities litigation during 2011 compared to same 2010 period.

The decline in supplies and postage during the three and nine months ended September 30, 2011 was primarily the result of the Tampa branch sale.

The reduction in telecommunication costs during the three months ended September 30, 2011 compared to the same 2010 periods resulted primarily from the Tampa branch sale. The lower telecommunication costs during the nine months ended September 30, 2011 compared to 2010 also reflected higher call center volume associated with the implementation of a new on-line banking product during 2010.

The provision for tax certificate losses during the three and nine months ended September 30, 2011 reflects higher charge-offs of out-of-state tax certificates partially offset by tax certificate reserve reductions associated with declining portfolio balances. We have significantly reduced the acquisition of out-of-state tax certificates and have concentrated the majority of our tax certificate acquisitions in Florida.

The costs associated with debt redemptions during the nine months ended September 30, 2011 reflect prepayment penalties on the early repayment of $85 million of institutional time deposits, $40.0 million of FHLB advance obligations and $25 million of public fund time deposits.

The impairment (reversals) of loans held for sale represents lower of cost or market adjustments on loans classified as held for sale. The impairment or reversals resulted primarily from property values obtained from updated valuations of the underlying loan collateral.

Impairments on real estate held for sale during the nine months ended September 30, 2011 and 2010 represents updated valuations on properties originally acquired for store expansion.

Employee termination costs during the three and nine months ended September 30, 2010 were the result of workforce reductions in July 2010.

Lease termination costs (reversals) represent lease contracts, net of deferred rent reversals, originally executed for branch expansion. During the nine months ended September 30, 2011, BankAtlantic terminated five leases and recognized a recovery of $1.4 million. Lease termination costs for the three and nine months ended September 30, 2010 represents additional impairment on lease contracts due to updated valuations. BankAtlantic is attempting to sublease or terminate lease contracts executed in connection with its branch expansion in prior periods and could recognize losses associated with these operating leases in subsequent periods as these leases are measured at fair value.

The impairment of assets held for sale relates to a management decision to pursue the sale of BankAtlantic’s Tampa branches in August 2010. As a consequence, BankAtlantic reclassified its Tampa office properties and equipment to held-for-sale and recognized $4.5 million of impairments at the transfer date.

Impairment of real estate owned during the three and nine months ended September 30, 2011 reflects updated valuations on properties. Included in the amounts during the nine months ended September 30, 2011 was a $5.2 million impairment related to one property and $1.5 million of impairments related to two properties.

The increase in the gain on real estate sales during the three months ended September 30, 2011 reflects a $1.6 million gain on the sale of a commercial real estate property.

The increase in other non-interest expense during the three and nine months ended September 30, 2011 compared to the same 2010 periods was primarily the result of higher foreclosure costs and increased operating costs on foreclosed properties.

BankAtlantic Bancorp, Inc. and Subsidiaries

Parent Company Results of Operations


	For the Three Months									For the Nine Months
	Ended September 30,									Ended September 30,
(in thousands)	2011			2010			Change			2011			2010			Change
Net interest (expense)	$	(3,851	)		(3,792	)		(59	)		(11,340	)		(10,856	)		(484	)
Provision for loan losses		(148	)		(1,398	)		1,250			(643	)		(5,038	)		4,395

Net interest (expense) after provision for loan losses		(3,999	)		(5,190	)		1,191			(11,983	)		(15,894	)		3,911
Non-interest income		809			576			233			648			1,545			(897	)
Non-interest expense		531			2,901			(2,370	)		6,469			7,938			(1,469	)

Parent Company (loss)	$	(3,721	)		(7,515	)		3,794			(17,804	)		(22,287	)		4,483

Net interest expense increased during the three and nine months ended September 30, 2011 compared to the same 2010 periods as a result of higher average debenture balances partially offset by lower average interest rates. The average balances on junior subordinated debentures increased from $316 million and $312 million during the three and nine months ended September 30, 2010 to $330 million and $327 million during the same 2011 periods, respectively. The increase in average debenture balances resulted from the deferral of interest which began in March 2009. Average rates on junior subordinated debentures decreased from 4.90% and 4.73% during the three and nine months ended September 30, 2010 to 4.68% and 4.72% during the same 2011 periods, respectively. Also included in net interest expense during the three and nine months ended September 30, 2011 was $46,000 and $152,000, respectively, of interest income on two performing loans as well as $0 and $38,000, respectively, of investment dividend income associated with an equity security. Interest income on performing loans during the three and nine months ended September 30, 2010 was $60,000 and $172,000, respectively, and dividend income from the equity security was $19,000 and $56,000, respectively. We ceased receiving dividends on the equity security during the second quarter of 2011.

Non-interest income during the three and nine months ended September 30, 2011 reflects equity earnings from the Parent Company’s investment in statutory business trusts that issue trust preferred securities of $0.5 million and $1.3 million compared to $0.3 million and $0.7 million, respectively, for the same 2010 periods. Also included in non-interest income during the three and nine months ended September 30, 2011 was $0.3 million and $1.0 million of fees for executive services provided to BankAtlantic compared to $0.3 million and $0.8 million during the same periods during 2010, respectively. During the nine months ended September 30, 2011, the Company recognized$1.5 million impairment on an equity security. There were no impairments of investment securities during the nine months ended September 30, 2010.

The decrease in non-interest expense during the quarter ended September 30, 2011 compared to the same 2010 quarter reflects a $0.9 million gain from a loan participation litigation settlement, $0.6 million of lower employee compensation expenses and $1.1 million of lower legal fees. The decrease in employee compensation and benefits reflects lower stock based compensation expenses, the elimination of bonuses during 2011 and salary reductions. The lower legal fees during 2011 related to elevated legal costs during 2010 associated with responding to a Securities and Exchange Commission notice of investigation. The above declines in non-interest expenses were partially offset by a $0.4 million increase in impairments of real estate owned for the three months ended September 30, 2011 compared to the same 2010 quarter.

The decrease in non-interest expense during the nine months ended September 30, 2011 compared to the same 2010 period resulted primarily from the items discussed above. The decrease in non-interest expense was partially offset by $3.5 million of impairments of real estate owned during 2011 compared to $0.8 million of impairments during the 2010 period.

BankAtlantic Bancorp, Inc. and Subsidiaries

In March 2008, BankAtlantic transferred non-performing loans to a work-out subsidiary of the Parent Company. The composition of these loans as of September 30, 2011 and December 31, 2010 was as follows (in thousands):


	September 30,			December 31,
	2011			2010
Nonaccrual loans:
Commercial non-real estate:	$	948			1,536
Commercial real estate:
Residential		4,976			8,985
Land		3,432			3,987

Total non-accrual loans		9,356			14,508
Allowance for loan losses		(167	)		(830	)

Non-accrual loans, net		9,189			13,678
Performing other commercial loans		2,529			2,811

Loans receivable, net	$	11,718			16,489

Real estate owned	$	9,391			10,160

During the nine months ended September 30, 2011, the Parent Company foreclosed on a $1.5 million commercial residential loan, charged-off $1.3 million of loans, recognized $0.8 million lower of cost or market adjustments on loans held for sale, and sold a $1.7 million loan for a $99,000 loss. The work-out subsidiary also received $0.3 million of loan principal repayments during the nine months ended September 30, 2011.

The Parent Company’s non-accrual loans include large loan balance lending relationships. Two relationships account for 82.1% of the $9.4 million of non-accrual loans held by the Parent Company at September 30, 2011. The following table outlines general information about these relationships as of September 30, 2011 (in thousands):

Relationships

Unpaid
Principal
Balance

Recorded
Investment (3)

Specific
Reserves

Date loan
Originated

Date Placed
on Nonaccrual

Default
Date

Collateral
Type

Date of Last
Full Appraisal

Commercial Business

Relationship No. 1 (1)

5,604

4,381

167

Q4-2005

Q4-2007

Land

Q4-2010

Residential Land Developers

Relationship No. 2 (2)

20,000

3,296

—

Q1-2005

Q4-2007

Q1-2008

Residential

Q4-2010

Total Residential Land Developers

20,000

3,296

—

Total

25,604

7,677

167

(1)	During 2011, the Company recognized partial charge-offs on relationship No. 1 aggregating $1.2 million.

(2)	During 2008, 2009, 2010 and 2011, the Company recognized partial charge-offs and lower of cost or market adjustments on relationship No. 2 aggregating $16.4 million.

(3)	Recorded investment is the “Unpaid Principal Balance” less charge-offs and deferred fees.

The loans that comprise the above relationships are all collateral dependent. As such, we established specific reserves, recognized partial charge-offs or calculated lower of cost or market adjustments on these loans based on the fair value of the underlying collateral less costs to sell. The fair value of the collateral was determined using third party appraisals for all relationships. Management performs quarterly impairment analyses on these credit relationships subsequent to the date of the appraisal and may reduce appraised values if market conditions significantly deteriorate subsequent to the appraisal date. However, our policy is generally to obtain a full appraisal within one year from the date of the prior appraisal, unless the loan is in the process of foreclosure. A full appraisal is generally obtained at the date of foreclosure.

BankAtlantic Bancorp, Inc. and Subsidiaries

The activity in the Parent Company’s allowance for loan losses was as follows (in thousands):


	For the Three Months					For the Nine Months
	Ended September 30,					Ended September 30,
	2011		2010			2011			2010
Balance, beginning of period	$	—		7,227			830			13,630

Loans charged-off		—		(4,438	)		(1,305	)		(14,481	)
Recoveries of loans previously charged-off		20		—			—			—

Net recoveries (charge-offs)		20		(4,438	)		(1,305	)		(14,481	)
Provision for loan losses		147		1,398			642			5,038

Balance, end of period	$	167		4,187			167			4,187

The $1.3 million of charge-offs during the nine months ended September 30, 2011 were comprised of a $1.2 million charge-off of a commercial land loan and a $0.1 million charge-off of a commercial residential loan. The Parent Company reversed a $0.8 million specific valuation allowance related to the commercial land loan charged-off during the nine months ended September 30, 2011 and established a $167,000 specific valuation allowance on a land loan due to an updated property valuation.

The $4.4 million of charge-offs during the three months ended September 30, 2010 included a $2.1 million charge-off of a commercial residential loan. Specific valuation allowances of $2.7 million were established on these loans during prior periods. The remaining charge-offs during the nine months ended September 30, 2010 primarily related to three loans. A $2.7 million charge-off was taken with respect to one loan upon the foreclosure and sale of the collateral. Another loan was charged-off by $5.7 million and the entire balance of $1.2 million of a third loan was charged-off upon the sale of the remaining collateral. The Parent Company had established specific valuation allowances of $8.6 million on these three loans in prior periods.

BankAtlantic Bancorp Consolidated Financial Condition

Total assets at September 30, 2011 were $3.7 billion compared to $4.5 billion at December 31, 2010. The significant asset reduction resulted primarily as a result of the sale of BankAtlantic’s Tampa branches and the related assumption of deposits by the purchaser and as a result of the use of cash flows from BankAtlantic’s loan and investment portfolio to repay wholesale borrowings. Total assets were also reduced in connection with achieving the higher capital requirements as of June 30, 2011 required by the Bank Order. The changes in components of total assets from December 31, 2010 to September 30, 2011 are summarized below:

•

Increase in interest bearing deposits in other banks primarily resulting from higher cash balances at the Federal Reserve Bank associated with cash management activities partially offset by cash outflows as part of the sale of the Tampa branches;

•

Decrease in securities available for sale reflecting repayments of short-term agency, mortgage-backed and municipal securities as well as mortgage-backed securities sales;

•

Decrease in investment securities resulting from an impairment of an equity security held by the Parent Company;

•

Decrease in tax certificate balances primarily resulting from redemptions partially offset by $21.6 million of tax certificate purchases;

•

Decline in FHLB stock balances resulting from redemptions relating to the repayment of FHLB advances;

•

Increase in loans held for sale associated primarily with the transfer of non-performing commercial and residential loans to held for sale;

•

Decrease in loans receivable balances associated with $79.9 million of net-charge-offs, $49.0 million of loans transferred to real estate owned, $27.8 million of loan sales, and repayments of loans in the ordinary course of business;

•

Decrease in accrued interest receivables resulting primarily from lower loan and tax certificate balances;

•

Decrease in real estate held for sale associated with the sale of a property acquired for branch expansion;

•

Decrease in office properties and equipment resulting primarily from depreciation; and

BankAtlantic Bancorp, Inc. and Subsidiaries

•

Reduction in assets held for sale resulting from the sale of the Tampa branches to PNC.

Total liabilities at September 30, 2011 were $3.7 billion compared to $4.5 billion at December 31, 2010. The changes in components of total liabilities from December 31, 2010 to September 30, 2011 are summarized below:

•

A decrease in interest bearing deposit account balances reflecting the prepayment of institutional and public fund time deposits as well as a reduction in time deposit accounts associated with the low interest rate environment and competitive money market account interest rates;

•

Increase in non-interest bearing deposits due primarily to higher average balances per customer account and the transfer of $12.2 million of customer reverse repurchase agreements to non-interest bearing deposits in connection with the discontinuation of the customer reverse repurchase agreement product;

•

Decrease in deposits held for sale associated with the Tampa branch sale;

•

Lower FHLB advances and short term borrowings due to repayments;

•

Increase in junior subordinated debentures liability due to interest deferrals; and

•

Decrease in other liabilities primarily due to contributions to the deferred benefit pension plan.

Liquidity and Capital Resources

BankAtlantic Bancorp, Inc.

On November 1, 2011, the Company entered into a definitive agreement to sell its wholly owned subsidiary, BankAtlantic, to BB&T Corporation (“BB&T”). In acquiring BankAtlantic, based on September 30, 2011 balances, BB&T will acquire approximately $2.1 billion in loans and assume approximately $3.3 billion in deposits. The deposit premium estimated to be $301 million based on the September 30, 2011 balances, represents 9.05% of total deposits and 10.32% of non-CD deposits at September 30, 2011. The deposit premium will be increased or decreased based upon the average daily closing balance of non-CD deposits during a specified pre-closing period provided that the deposit premium will not exceed $315.9 million.

As part of the transaction, BankAtlantic will distribute to the Company specifically identified assets, including certain performing and non-performing loans and tax certificates, real estate owned, and related reserves, which in the aggregate was recorded on the balance sheet of BankAtlantic at approximately $623.6 million as of September 30, 2011. At September 30, 2011, the assets to be distributed included approximately $271.3 million of performing loans, $315.2 million of non-performing loans, of which $96.5 million were paying as agreed, $18.7 million in tax certificates, $83.4 million of real estate owned, and reserves related to these assets totaling $81.9 million. At the closing of the transaction, the sum of the deposit premium and the net asset value of BankAtlantic as calculated pursuant to the terms of the agreement as of the closing after giving effect to the distribution of the assets described above will be paid in cash. If the sum is a positive number it will be paid by BB&T to the Company, and if the sum is a negative number it will be paid by the Company to BB&T. The agreement also requires that the Company pay all accrued deferred interest to its Trust Preferred Securities holders at the next scheduled payment date subsequent to closing. Closing of the transaction is subject to receipt of required regulatory approvals and other customary closing conditions.

On October 21, 2011, the Company received notification from NYSE Regulation, Inc. that the Company is currently below the continued listing criteria established by the New York Stock Exchange (“NYSE”) because, as of October 14, 2011, the Company’s average market capitalization for the preceding 30-day trading period was $48.9 million. Listed companies with shareholders equity of less than $50 million, such as the Company, are required to maintain an average market capitalization of at least $50 million for any consecutive 30-day trading period. The NYSE’s market capitalization and equity requirements are based on the Company’s publicly traded Class A Common Stock. Under the NYSE’s rules, the Company is required to submit a business plan (the “Plan”) to the NYSE within 45 days after the date of the Notice, in which the Company must advise the NYSE of the actions it expects to take in order to comply with the NYSE’s continued listing standards within 18 months after the date of the Notice. The Company’s Class A Common Stock will continue to be listed and traded on the NYSE during this period, subject to the NYSE’s acceptance of the Plan, and the Company’s compliance with the Plan and the other continued listing standards of the NYSE. The Company expects to work with the NYSE with respect to curing the deficiency, and the Company’s market capitalization at November 7, 2011 was $78.2 million. Additionally, the Parent Company expects that it will meet the NYSE listing criteria upon completion of the sale of BankAtlantic to BB&T in accordance with the terms of the agreement described above. The market price of the Company’s Class A Common Stock is subject to significant volatility and it may decrease in the future and cause the Company to fail to comply with the NYSE requirements for continued listing.

BankAtlantic Bancorp, Inc. and Subsidiaries

Currently, the Parent Company’s principal source of liquidity is its cash and funds obtained from its wholly-owned work-out subsidiary. The Parent Company also may obtain funds through the issuance of equity and debt securities and through dividends, although no dividends from BankAtlantic are anticipated or contemplated for the foreseeable future. The Parent Company has used its funds to contribute capital to its subsidiaries, and fund operations, including funding servicing costs and real estate owned operating expenses of its wholly-owned work-out subsidiary. At September 30, 2011, BankAtlantic Bancorp had approximately $333.3 million of junior subordinated debentures outstanding with maturities ranging from 2032 through 2037. The aggregate annual interest obligations on this indebtedness totaled approximately $15.0 million based on interest rates at September 30, 2011, which are generally indexed to three-month LIBOR. In order to preserve liquidity in the current economic environment, the Parent Company elected in February 2009 to commence deferring interest payments on all of its outstanding junior subordinated debentures and to cease paying cash dividends on its common stock. The terms of the junior subordinated debentures and the trust documents allow the Parent Company to defer payments of interest for up to 20 consecutive quarterly periods without default or penalty. During the deferral period, the respective trusts have suspended the declaration and payment of dividends on the trust preferred securities. The deferral election began as of March 2009, and regularly scheduled quarterly interest payments aggregating $39.1 million that would otherwise have been paid during the 33 months ended September 30, 2011 were deferred. The Parent Company has the ability under the junior subordinated debentures to continue to defer interest payments for up to another 9 consecutive quarterly periods through ongoing appropriate notices to each of the trustees, and will make a decision each quarter as to whether to continue the deferral of interest. During the deferral period, interest will continue to accrue on the junior subordinated debentures at the stated coupon rate, including on the deferred interest, and the Parent Company will continue to record the interest expense associated with the junior subordinated debentures. During the deferral period, the Parent Company may not, among other things and with limited exceptions, pay cash dividends on or repurchase its common stock nor make any payment on outstanding debt obligations that rank equally with or junior to the junior subordinated debentures. The Parent Company may end the deferral period by paying all accrued and unpaid interest. If the Parent Company continues to defer interest on its junior subordinated debentures through the year ended December 31, 2013, it will owe an aggregate of approximately $74.0 million of unpaid interest based on average interest rates as of September 30, 2011. The Company’s financial condition could be adversely affected if interest payments continue to be deferred. If the sale of BankAtlantic to BB&T is consummated pursuant to the November 1, 2011 agreement, the Parent Company will pay the outstanding deferred interest in connection with the closing. See “Item 1. Financial Statements - Note 13 to the Notes to Consolidated Financial Statements – Unaudited” for a description of the Company’s commitment to pay the outstanding deferred interest in connection with the consummation of the BB&T transaction.

The Parent Company has not received dividends from BankAtlantic since the year ended December 31, 2008. The ability of BankAtlantic to pay dividends or make other distributions to the Parent Company in subsequent periods is subject to regulatory approval as provided in the Bank Order. It is unlikely that the regulators will approve a dividend from BankAtlantic based on BankAtlantic’s results and other matters set forth in the Bank Order. As such, the Parent Company does not expect to receive cash dividends from BankAtlantic for the foreseeable future. The Parent Company may receive dividends from its asset work-out subsidiary upon the monetizing of the subsidiaries’ non-performing loans and real estate owned. However, the Parent Company may not be able to monetize the loans or real estate owned on acceptable terms, if at all.

In February 2010, the Company filed a registration statement with the Securities and Exchange Commission registering to offer, from time to time, up to $75 million of Class A Common Stock, preferred stock, subscription rights, warrants or debt securities. A description of the securities offered and the expected use of the net proceeds from any sales will be outlined in a prospectus supplement if and when offered. On June 16, 2011, the Company completed its rights offering under the registration statement issuing 3,025,905 shares of Class A Common Stock for net proceeds of $11.0 million. As a result of the completion of a $20 million rights offering during the year ended December 31, 2010 and the $11.3 million rights offering in June 2011, $43.7 million of securities remain available for future issuance under this registration statement. The Parent Company utilized the proceeds from the June 2011 rights offering plus $9.0 million in cash to make a $20 million capital contribution to BankAtlantic.

The Parent Company is generally required to provide BankAtlantic with managerial assistance and capital. Any such financing could be sought through public or private offerings, in privately negotiated transactions or otherwise. Any financing involving the issuance of our Class A Common Stock or securities convertible or exercisable for our Class A Common Stock could be highly dilutive for our existing shareholders. Such financing may not be available to us on favorable terms or at all.

BankAtlantic Bancorp, Inc. and Subsidiaries

The Parent Company has the following cash and investments that it believes provide a source for potential liquidity at September 30, 2011.


	As of September 30, 2011
(in thousands)	Carrying Value		Gross Unrealized Appreciation		Gross Unrealized Depreciation		Estimated Fair Value
Cash and cash equivalents	$	2,195		—		—		2,195
Securities available for sale		10		—		1		9

Total	$	2,205		—		1		2,204

The non-performing loans transferred to the wholly-owned subsidiary of the Company may also provide a potential source of liquidity through workouts, repayments of the loans or sales of interests in the subsidiary. The balance of these loans and real estate owned at September 30, 2011 was $21.3 million. During the nine months ended September 30, 2011, the Parent Company received net cash flows of $2.1 million from its work-out subsidiary. The Parent Company does not have debt maturing until March 2032 and has the ability to defer interest payments on its junior subordinated debentures until December 2013.

BankAtlantic Liquidity and Capital Resources

BankAtlantic’s primary sources of funds are deposits; principal repayments of loans, tax certificates and securities available for sale; proceeds from the sale of loans, securities available for sale and real estate owned; proceeds from advances from FHLB; Treasury and Federal Reserve lending programs; interest payments on loans and securities; capital contributions from the Parent Company and other funds generated by operations. These funds are primarily utilized to fund loan disbursements and purchases, deposit outflows, repayments of advances from FHLB and other borrowings, purchases of tax certificates and securities available for sale, acquisitions of properties and equipment, and operating expenses. BankAtlantic’s liquidity will depend on its ability to generate sufficient cash to support loan demand, to meet deposit withdrawals, and to pay operating expenses. BankAtlantic’s securities portfolio provides an internal source of liquidity through its short-term investments as well as scheduled maturities and interest payments. Loan repayments and loan sales also provide an internal source of liquidity. BankAtlantic maintained excess cash balances during the nine months ended September 30, 2011 in order to fund the June 2011 sale of the Tampa branch network and improve liquidity and its risk-based regulatory capital ratios. BankAtlantic’s liquidity is also dependent, in part, on its ability to maintain or increase deposit levels and availability under lines of credit and Treasury and Federal Reserve lending programs. BankAtlantic’s ability to increase or maintain deposits is impacted by competition from other financial institutions and alternative investments as well as the current low interest rate environment. Such competition, an increase in interest rates or an increase in liquidity needs, may require BankAtlantic to offer higher interest rates to maintain deposits, which may not be successful in generating deposits, and which would increase its cost of funds or reduce its net interest income. BankAtlantic is restricted by banking regulators from offering interest rates on its deposits which are significantly higher than market area rates.

BankAtlantic’s unused lines of credit decreased from $843 million as of December 31, 2010 to $623 million as of September 30, 2011 due to lower loan and securities available for sale collateral balances partially offset by lower FHLB advance balances. The FHLB has granted BankAtlantic a line of credit capped at 30% of assets subject to available collateral, with a maximum term of ten years. BankAtlantic utilized its FHLB line of credit to obtain an $85.0 million letter of credit primarily securing public deposits as of September 30, 2011. There were no FHLB borrowings outstanding as of September 30, 2011. The line of credit is secured by a blanket lien on BankAtlantic’s residential mortgage loans and certain commercial real estate and consumer home equity loans. BankAtlantic’s unused available borrowings under this line of credit were approximately $547 million at September 30, 2011. An additional source of liquidity for BankAtlantic is its securities portfolio. As of September 30, 2011, BankAtlantic had $41 million of unpledged securities that could be sold or pledged for additional borrowings with the FHLB, the Federal Reserve or other financial institutions. BankAtlantic is a participating institution in the Federal Reserve Treasury Investment Program for up to $1.5 million in funding and at September 30, 2011 BankAtlantic had $1.0 million of short-term borrowings outstanding under this program. BankAtlantic is also eligible to participate in the Federal Reserve’s discount window program under its secondary credit program. The amount that can be borrowed under this program is dependent on the delivery of collateral to the Federal Reserve, and BankAtlantic had unused available borrowings of approximately $34.7 million as of September 30, 2011, with no amounts

BankAtlantic Bancorp, Inc. and Subsidiaries

outstanding under this program at September 30, 2011. We are not permitted to incur day-light overdrafts in our Federal Reserve bank account and accordingly, our intent is to continue to maintain sufficient funds at the Federal Reserve to support intraday activity BankAtlantic’s current lines of credit may not be available when needed as these lines of credit are subject to periodic review and may be terminated or reduced at the discretion of the issuing institutions or reduced based on availability of qualifying collateral. Additionally, interest rate changes, additional collateral requirements, disruptions in the capital markets, deterioration in BankAtlantic’s financial condition, litigation or regulatory action may make borrowings unavailable or make terms of the borrowings and deposits less favorable. There is a risk that our cost of funds will increase and that the borrowing capacity from funding sources may decrease, all of these factors could have material adverse effect on BankAtlantic’s liquidity.

At September 30, 2011, BankAtlantic had no securities sold under agreements to repurchase outstanding. During the second quarter of 2011, BankAtlantic discontinued entering into repurchase agreements with its customers and transferred $12.2 million of securities sold under repurchase agreements to non-interest bearing deposits in June 2011. Additionally, BankAtlantic had total cash on hand with other financial institutions of $574.4 million at September 30, 2011.

Included in deposits at September 30, 2011 was $6.0 million in brokered deposits. BankAtlantic is currently restricted by its regulators from acquiring additional brokered deposits or renewing its existing brokered deposits, and expects the balance of its brokered deposits to continue to decline.

BankAtlantic’s liquidity may be affected by unforeseen demands on cash. Our objective in managing liquidity is to maintain sufficient resources of available liquid assets to address our funding needs. Multiple market disruptions and regulatory actions may make it more difficult for us and for financial institutions in general to borrow money. We cannot predict with any degree of certainty how long these adverse market conditions may continue, nor can we anticipate the degree to which such market conditions may impact our operations. Deterioration in the performance of other financial institutions may adversely impact the ability of all financial institutions to access liquidity. Further deterioration in the financial markets or adverse regulatory actions may further impact us or result in additional market-wide liquidity problems, and affect our liquidity position. We believe BankAtlantic has improved its liquidity position during the year ended December 31, 2010 and the nine months ended September 30, 2011 by paying down borrowings and reducing assets.

BankAtlantic’s commitment to originate loans was $23.4 million at September 30, 2011 compared to $49.3 million of commitments to originate loans at September 30, 2010. At September 30, 2011, total loan commitments represented approximately 0.92% of net loans receivable.

BankAtlantic’s actual capital amounts and ratios are presented in the table below and are compared to the prompt corrective action (“PCA”) “well capitalized” requirements and the capital requirements set forth in the Bank Order (dollars in thousands):


	Actual					PCA Defined Well Capitalized					Bank Order Requirements
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2011:
Total risk-based capital	$	358,517		14.96	%	$	239,606		10.00	%	$	335,448		14.00	%
Tier I risk-based capital	$	306,059		12.77	%	$	143,764		6.00	%
Tangible capital	$	306,059		8.29	%	$	55,371		1.50	%
Tier 1/Core capital	$	306,059		8.29	%	$	184,750		5.00	%	$	295,313		8.00	%
As of December 31, 2010:
Total risk-based capital	$	334,601		11.72	%	$	285,541		10.00	%
Tier I risk-based capital	$	276,362		9.68	%	$	171,325		6.00	%
Tangible capital	$	276,362		6.22	%	$	66,672		1.50	%
Tier 1/Core capital	$	276,362		6.22	%	$	222,240		5.00	%

Pursuant to the Bank Order, BankAtlantic was required to attain by June 30, 2011 and maintain a Tier 1/Core capital ratio equal to or greater than 8% and a total risk-based capital ratio equal to or greater than 14%. BankAtlantic historically maintained its regulatory capital ratios at levels that exceeded prompt corrective action “well capitalized” requirements; however, based on BankAtlantic’s risk profile, the OTS raised its regulatory capital requirements above the

BankAtlantic Bancorp, Inc. and Subsidiaries

“well capitalized” amounts. The Parent Company and BankAtlantic will seek to maintain the higher capital requirements under the Bank Order through efforts that may include the issuance of the Parent Company’s Class A Common Stock through a public or private offering. Additionally, BankAtlantic may continue to seek to reduce its asset size in order to improve its regulatory capital ratios, although this may make it more difficult to achieve profitability. The Company may not be successful in raising additional capital in subsequent periods upon favorable terms, or at all. The inability to raise capital or otherwise continue to meet regulatory requirements in the future would have a material adverse impact on the Company’s business, results of operations and financial condition. See “Item 1. Financial Statements - Note 13 to the Notes to Consolidated Financial Statements – Unaudited” for a description of the November 1, 2011 agreement to sell BankAtlantic to BB&T Corporation.

The Company’s Contractual Obligations and Off Balance Sheet Arrangements as of September 30, 2011 were (in thousands):


	Payments Due by Period (1)(2)
Contractual Obligations	Total		Less than 1 year		1-3 years		4-5 years		After 5 years
Time deposits	$	409,167		326,432		65,171		16,050		1,514
Long-term debt		355,333		—		61,138		—		294,195
Operating lease obligations held for sublease		15,010		706		1,286		1,292		11,726
Operating lease obligations held for use		31,564		5,161		8,218		4,931		13,254
Pension obligation		18,443		1,496		3,155		3,545		10,247
Other obligations		11,406		3,406		6,400		1,600		—

Total contractual cash obligations	$	840,923		337,201		145,368		27,418		330,936

(1)	Payments due by period are based on contractual maturities

(2)	The above table excludes interest payments on interest bearing liabilities

BankAtlantic Bancorp, Inc. and Subsidiaries

Item 3. Quantitative and Qualitative Disclosures about Market Risk

The discussion contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010, under Item 7A, “Quantitative and Qualitative Disclosures about Market Risk,” provides quantitative and qualitative disclosures about the Company’s primary market risk, which is interest rate risk.

The majority of BankAtlantic’s assets and liabilities are monetary in nature. As a result, the earnings and growth of BankAtlantic are significantly affected by interest rates, which are subject to the influence of economic conditions generally, both domestic and foreign, and also to the monetary and fiscal policies of the United States and its agencies, particularly the Federal Reserve Board. The nature and timing of any changes in such policies or general economic conditions and their effect on BankAtlantic are unpredictable. Changes in interest rates can impact BankAtlantic’s net interest income as well as the valuation of its assets and liabilities. BankAtlantic’s interest rate risk position did not significantly change during the nine months ended September 30, 2011. For a discussion on the effect of changing interest rates on BankAtlantic’s earnings during the nine months ended September 30, 2011, see Item 2. “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Net Interest Income.”

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective as of September 30, 2011 to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter ended September 30, 2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

BankAtlantic Bancorp, Inc. and Subsidiaries

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

Except as described below, there have been no material changes or developments in the material pending legal proceedings involving the Company from the descriptions contained in Item 3 of the Company’s Annual report on Form 10-K for the year ended December 31, 2010 and Part II – Item 1. – “Legal Proceedings.” of the Company’s quarterly reports on Form 10-Q for the periods ended March 31, 2011 and June 30, 2011.

D.W. Hugo, individually and on behalf of Nominal Defendant BankAtlantic Bancorp, Inc. vs. BankAtlantic Bancorp, Inc., Alan B. Levan, Jarett S. Levan, Jay C. McClung, Marcia K. Snyder, Valerie Toalson, James A. White, John E. Abdo, D. Keith Cobb, Steven M. Coldren, and David A. Lieberman, Case No. 0:08-cv-61018-UU, United States District Court, Southern District of Florida

In July 2008, the Company, certain officers and Directors were named in a lawsuit which alleges that the individual defendants breached their fiduciary duties by engaging in certain lending practices with respect to the Company’s Commercial Real Estate Loan Portfolio. The Complaint further alleges that the Company’s public filings and statements did not fully disclose the risks associated with the Commercial Real Estate Loan Portfolio and sought damages on behalf of the Company. In July 2011, the case was dismissed and the parties exchanged mutual releases and neither the defendants nor the Company made any monetary payments in connection with the dismissal.

Item 1A. Risk Factors.

There have been no material changes from the risk factors disclosed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2010 as supplemented by Item 1A Risk Factors in the Company’s Quarterly Report on Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011, except for the addition of the following risk factor.

The transaction between BB&T and BankAtlantic Bancorp may not be completed on a timely basis, on anticipated terms, or at all, and there are uncertainties and risks to BankAtlantic Bancorp associated with consummating the transaction.

As described in Note 13, on November 1, 2011, the Company entered into a Stock Purchase Agreement (the “Agreement”) with BB&T Corporation (“BB&T”) which provides for the sale to BB&T of all of the shares of capital stock of BankAtlantic, the Company’s wholly owned banking subsidiary. Consummation of the transaction is subject to receipt of required regulatory approvals, which may not be timely received or may impose conditions unacceptable to the parties, and to other customary closing conditions. If closing of the transaction is delayed beyond July 31, 2012, either party may cancel the Agreement. Further, pursuant to the terms of the Agreement, the Company is, in connection with the closing, required to fund amounts necessary to pay the outstanding deferred interest on the Company’s trust preferred securities as well as possible amounts to BB&T depending on the non-CD deposit levels and the shareholders’ equity of BankAtlantic at that time. We may not have available liquidity to make such payments and may need to raise funds through equity or debt financings which may not be available on reasonable terms or at all. While the consummation of the transaction is anticipated to significantly improve the stockholders’ equity of BankAtlantic Bancorp, the net book value of the assets to be retained by BankAtlantic Bancorp as part of the transaction are subject to impairment, and may not in the future be monetized at the values ascribed to them. The proposed sale of BankAtlantic may create uncertainty for its shareholders, which may adversely affect our ability to retain key employees. BankAtlantic Bancorp’s shareholders or holders of trust preferred securities may bring litigation against the Company based on the transaction, either before or after consummation of the transaction, which could result in, among other things, the termination of the transaction or acceleration of the amounts outstanding under the trust preferred securities. Additionally, as a result of the announcement of the transaction, the future trading price of our Class A Common Stock may be volatile and could be subject to wide price fluctuations.

BankAtlantic Bancorp, Inc. and Subsidiaries

Item 6. Exhibits


Exhibit 31.1		Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2		Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit 101		Interactive data Files

BankAtlantic Bancorp, Inc. and Subsidiaries

Signatures

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

BANKATLANTIC BANCORP, INC.


November 14, 2011	By:	/s/ Alan B. Levan
Date		Alan B. Levan
		Chief Executive Officer/Chairman/President

November 14, 2011	By:	/s/ Valerie C. Toalson
Date		Valerie C. Toalson
		Executive Vice President, Chief Financial Officer